[Congressional Record Volume 147, Number 111 (Thursday, August 2, 2001)]
[House]
[Pages H5213-H5315]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
[[Page H5213]]
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House of Representatives
{time} 1715
BIPARTISAN PATIENT PROTECTION ACT
(Continued)
Who are jurors? Jurors are our neighbors, our voters. They are the
American people. Trust them. When it comes to understanding what it
costs to be deprived of a full and healthy life, jurors know what it
means. They have more wisdom than lawyers, than doctors, and I dare say
than Members of Congress.
Mr. STARK. Mr. Chairman, I yield 30 seconds to the gentleman from
Maryland (Mr. Cardin).
Mr. CARDIN. Mr. Chairman, I was listening to my colleagues on the
other side of the aisle talk about what this bill does. The Ganske-
Dingell bill provides real patient protection, whether it is access to
emergency care, specialists, whether it is primary care.
The Norwood amendment takes away those rights because there is no
enforcement. There is no reason why HMOs will provide these particular
protections. It is the opponents of the Ganske-Dingell bill that are
telling Members that this Norwood amendment will perfect it.
What it does is take away the protections in the underlying bill. We
should reject the Norwood amendment.
Mr. STARK. Mr. Chairman, I yield 45 seconds to the gentleman from
Wisconsin (Mr. Kind).
(Mr. KIND asked and was given permission to revise and extend his
remarks.)
Mr. KIND. Mr. Chairman, the debate today is not about the
technicalities of a complicated piece of legislation: who has the
rebuttal presumption, what the standard of care should be, whether
patients are going to be suing in Federal court for this issue or State
court for that.
This issue boils down to one simple proposition. If someone is in the
business of making medical decisions that affect the health, welfare
and lives of patients, that individual should be held to the same
standard of responsibility as anyone else involved in that process,
period. No exceptions. No carve-outs. No special treatments based on
political contributions made in this place. That is what is at stake at
the end of today's debate.
Mr. Chairman, I urge my colleagues to reject the Norwood special
treatment amendment and instead pass a fair Patients' Bill of Rights.
Mr. STARK. Mr. Chairman, I yield 30 seconds to the gentleman from
Iowa (Mr. Ganske).
Mr. GANSKE. Mr. Chairman, here is what two law professors from New
Jersey say:
``In preempting State law, the Norwood amendment goes beyond conduct
that involves negligent medical judgment to a particular patient's
case. The amendment may, by virtue of the words `based on,' stipulate
that State malpractice law does not apply to any treatment decision
made by a managed care organization, whether it be negligent, reckless,
willful or wanton.
``For example, no State cause of action can be maintained against a
designated decision-maker for his decision to discharge a patient early
from a hospital even if the likely result of that discharge would be
the patient's death. In short, all forms of vicarious liability under
State law would be preempted under the Norwood amendment.''
Mr. STARK. Mr. Chairman, I yield myself the balance of my time.
Mr. Chairman, I will conclude by saying that we are in a sad state of
affairs when we have dentists writing law and lawyers practicing
medicine, and Congressmen trying to run HMOs. I have a list of 704
organizations that support the original Ganske-Dingell bill without the
poison pill amendments.
There is not a health care professional organization in this country
that does not support this bill, and the dental organization of the
gentleman from Georgia (Mr. Norwood) supports the original bill. Why
should we vote against those people that give us medical care? Do we
know better? Is there somebody in this audience who would tell me of
any medical profession that does not support the original bill and
oppose the Norwood amendment?
If we are going to legislate to protect patients, let us make sure
that we do it right and support the original Ganske-Dingell bill.
Mr. BOEHNER. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, the Ganske-Dingell bill would subject employers and
unions, including many small businesses that voluntarily provide health
benefits to their employees, to new lawsuits with unlimited damages and
no protection from frivolous lawsuits.
I think it is pretty clear that Americans want a Patients' Bill of
Rights. I think they have made it very clear, as well, that they do not
want unlimited lawsuits. Expanding liability for small employers and
unions who voluntarily offer health plans is wrong-headed and
dangerous, and in my view, will cause millions of Americans to lose
their coverage.
Mr. Chairman, all of us who serve in this body come from different
walks of life. We have doctors that serve in the House. They happen to
be split on both sides of this particular issue. We have our share of
lawyers that occupy this body as our colleagues, and we have lawyers on
both sides of this particular issue.
In my own case, I come to the halls of Congress as a small business
person, someone who has in fact hired people, someone who has had to
run a business, and someone who offered a health plan to my employees.
I can tell my colleagues, as I have said year after year, debate after
debate on this particular subject that if the underlying bill were
[[Page H5214]]
to pass as is and to become law, immediately I, as an employer, would
eliminate the health benefits for my employees. Why? Because I would be
subject to more increased litigation.
Every employer in America, and most of their employees as well,
understand all of the litigation that is occurring in this country is
causing prices to go up, and in many cases, causing businesses to go
out of business.
One little lawsuit under that underlying bill that would be allowed
could put under many, many small employers. Today, when new employers
are the lifeblood of our economy, why would we want to increase the
liability that we put on them?
Mr. Chairman, I think that we need to find a balanced approach, and I
think the President, working with the gentleman from Georgia (Mr.
Norwood), deserves an enormous amount of credit from all of us. The
President put his prestige out on the line. He worked hard to come to
some compromise that he would be willing to sign into law.
I am a little surprised at my colleagues across the aisle who have
rejected the hand of the President over the last 6 months, and then
today continue to reject the idea of trying to find some common ground
and moving ahead.
What do they want to do? Do what we have done for the last 6 years,
and we are going to get the same result. Nothing. I think the President
deserves an awful lot of credit for ending the legislative gridlock on
this issue. What do we have to fear? Nothing, because we are going to
go to conference with the Senate which has a different bill. We have an
opportunity to try to resolve the differences between the two bodies.
That is the nature of our institution.
What we ought to do today is get behind the compromise bill that is
going to be before us, support the Norwood amendment, support the bill
on final passage, and let us work out our differences with the Senate.
As we do, not only will Congress be winners, but more importantly, the
American people will be great winners because they will have better
access to health care, more patient protections; and regardless of
which version of liability becomes law, they will have greater remedies
in the law than they have today.
Even the amendment of the gentleman from Georgia (Mr. Norwood), which
is being criticized here as being inadequate, goes far beyond what we
have in law today. If Members want to help patients, why not accept his
amendment? Give patients additional remedies and help them get the kind
of quality health care that the American people want.
Ms. SOLIS. Mr. Chairman, this body has a chance to enact a real
patient's bill of rights to protect people from the harmful decisions
made by their health insurance plans.
All of us have heard from constituents who are fed up at being told
by their health plans that they can't have access to the health care
they need even through they pay their insurance premiums for this care
in the first place!
So you would think all of us could agree that it's time to do
something.
Instead, my Republican colleagues want to pass a bill that does
nothing.
In fact, the bill supported by President Bush would roll back
important patient protections already in place in my home state of
California.
In California, we enacted a law that says to consumers--if your
health plan interferes with the quality of the medical care you
receive, you have a legal right to stop them through the courts.
If you are injured because your health insurance company delays or
refuses you health care--you have a legal right to sue them through the
courts.
It's just that simple.
But President Bush wants to take away my constituents' right to have
protection from the bad decisions of their health insurance companies.
And he wants to call that managed care reform, I call it an HMO
Protection Bill.
Well that's not right.
I urge my colleagues to reject any attempt to weaken the patient's
bill of rights and to support real reform of health insurance
companies.
Mrs. McCARTHY of New York. Mr. Chairman, the last 24-hours of
gameplaying with people's lives by the leadership has left a huge mark
on the House of Representatives. I don't think our forefathers would be
proud of the political games that have been played up here.
Let's look at the score of the game. This week, special interest
groups have two wins, and the American people have zero.
Yesterday, with the Energy Bill, oil companies won.
Today, with the so-called Patient's Bill of Rights, insurance
companies will win.
Under the House leadership deal on the so-called Patient's Bill of
Rights, many of our constituents are going to have their health care
needs compromised.
However, there are a few good things about the bill. Language that
I've been working on to protect health care workers is included. I
spent 30 years as a nurse, and I speak from experience.
When a health care worker blows the whistle on workplace abuses, they
shouldn't have to fear retaliation,
For example, a nurse might be tempted to remain silent when they see
a patient's quality of care being compromised.
Nurses should feel 100 percent confident that they can come forward
without facing retaliation from their employer. No one should feel that
their job is in jeopardy because they speak up for patient safety.
Also, my language ensuring hospitals get paid on time by HMOs is
included.
Not only have HMOs been neglecting patient care, but they are also
well-practiced in their denial and delay of payments to hospitals,
medical group practices, doctors and other health care professionals.
Health care providers shouldn't be stuck in the middle for a bitter
struggle between quality patient care and insurance company
regulations.
But despite these good provisions, it's clear that special interests
are the real winners in this deal.
How many more examples of special interest control must this esteemed
body suffer through before doing something to change it?
I'm sure of one thing--we need campaign finance reform to get the
special interests out of Congress.
Oppose the Norwood amendment.
Support the Ganske-Dingell bill. It puts patients' interests before
special interests.
Ms. KILPATRICK. Mr. Chairman, I rise today to speak in favor of
Representative Ganske's Bipartisan Patients' Bill of Rights and to
oppose the amendment substitute being offered. When we started this
debate several years ago, we were trying to find a way to protect
patients and help them to receive access to quality health care.
Somehow we have strayed from our original purpose and have started
trying to protect HMO's. There is something wrong with this picture.
The people of this country want security in knowing that the health
care they receive is based on sound practice, not on an employer's or
health care plan's bottom line. The people of this country deserve to
have this assurance. I question whether or not those who oppose the
Ganske bill would want for their families to face what so many of our
constituents face everyday--uphill battles against HMO's in an attempt
to receive the treatment their doctor has prescribed for them.
Several of my colleagues plan to offer amendments to the Ganske bill
that will remove the very essence of the Patients' Bill of Rights. The
amendments they plan to propose are being touted as ones that will make
this a true compromise bill. It is not compromise in my eyes. If these
amendments pass, the name of the bill will remain the same, but the
substance of the bill will be worthless.
There are three ``poison pill amendments.'' The amendments being
offered on the floor today will cost the American people millions of
dollars. The underlying bill, as introduced by Representative Ganske,
includes ways to pay for the costs of this bill. The alternative plan
does not pay for these costs. We are talking about costs that total
over $20 million. Where is this money going to come from? Shall we just
continue drawing down on the Medicare and Social Security Trust Funds?
The amendments being offered to this bill will also supersede the
rights of the states. Thirty nine states, including Michigan, already
have their own tort laws that work and work well. Under the alternative
being offered, federal law will prevail. It will even preempt state
remedies previously provided by the Supreme Court. In states that have
no damage caps, they would be forced to accept the damage limitations
provided by the alternative.
Under Representative Ganske's bill, individuals have the right to
have their case reviewed by an external review board. This makes sense.
However, the alternative plan makes it almost impossible for a patient
to prove his or her case in court. A patient must demonstrate the
decision of the external review entity was completely unreasonable. It
would not matter if the external reviewers were not familiar with the
latest medical evidence, or if the reviewers did not consider all the
facts of the patient's case. This review process is a medical one. It
is vital that a patient have access to this review process, but it does
not provide the due process protections that a court does. Patients
should have access to the courts. To do otherwise is just
[[Page H5215]]
one more attempt to protect HMO's and insurers at the expense of
patients.
I ask my colleagues to carefully consider the amendments and the
final bill that we are being asked to vote on today. Vote against the
``poison pill amendments'' and support a true Patients' Bill of Rights.
Make HMO's accountable for their actions, just as we hold doctors and
hospitals accountable. Vote yes for Representative Ganske's bill, a
bill that will protect patients, not HMO's and the insurance industry.
Ms. BERKLEY. Mr. Chairman, I rise today in support of H.R. 2563, the
Bipartisan Patient Protection Act.
This bill is important because it provides direct access to necessary
medical care without administrative barriers for our nation's citizens.
It allows doctors, not bureaucrats to make medical decisions.
The time has come in America to give doctors the right to make
decisions about what kind of treatments their patients receive, how
long they stay in the hospital, what type of care is given.
This bill will provide our constituents with the kind of medical care
they need, when they need it and they won't have to jump through hoops
to get it.
This legislation is long overdue. Let's do the right thing and pass
this bill.
Mrs. MINK of Hawaii. Mr. Chairman, I rise today deeply disappointed
in the total sellout of a meaningful patients' bill of rights.
For years, a bipartisan coalition of lawmakers have been working
together to reform the managed care industry and develop a genuine
patients' bill of rights.
A growing number of Americans get their health insurance through
managed care plans. Although these plans enable many employers to
provide affordable, high quality health benefits, various groups and
individuals have expressed frustration with HMO's denial of necessary
services and lack of an appeals process. A strong patients' bill of
rights puts medical decision making back into the hands of doctors and
patients and holds managed care plans accountable for failure to allow
needed health care.
Today we are confronted by a compromise reached between
Representative Norwood and the President, which no longer protects
patients' health care rights.
A patients' bill of rights must allow a patient to sue their health
plan for any injuries they receive if they were denied proper medical
care. Of course, the lawsuit could only occur after an independent
medical reviewer considers the patient's medical condition along with
the most up-to-date medical knowledge and apply it to the individual's
specific case.
A patients' bill of rights must close the loophole that allows HMOs
to be the only industry that is protected from lawsuits.
But the agreement reached between President Bush and Representative
Norwood does neither of these things.
Their agreement changes the external review process to prohibit the
independent medical reviewer from modifying the health plans' decision.
The reviewer will not even have access to the information they need in
order to make a proper decision. The amendment also wipes away any
current state laws relating to corporate liability of HMOs when they
are acting as health care providers. This amendment preempts laws that
states have passed in regards to patient protections. On the surface,
the Norwood amendment allows consumers to sue in state court. But upon
further examination, one realizes that consumers will never see state
court. All cases will be brought to federal court because the amendment
states that an action against an HMO may not be removed from federal
court; only the action against an employer can be removed from federal
court. Their amendment also sets unreasonably low caps on damages.
The Norwood amendment rips apart an otherwise good bill. The real
Ganske-Norwood-Dingell-Berry bill would allow all insured Americans the
option of seeing the doctor of their choice. This means women would
have direct access to obstetric and gynecological care. Women
desperately need ob-gyn care without first having to receive a referral
and/or prior authorization.
The bipartisan Ganske-Dingell-Norwood bill would protect women who
have mastectomies and lymph node dissections. After undergoing these
procedures, women would be able to consult with their doctor on how
long they need to stay in the hospital without the fear that their
health plan will not cover their entire hospital stay.
The bill would also provide access to: emergency room care, without
prior authorizations; guaranteed access to health care specialists;
access to pediatric specialists; and access to approved FDA clinical
trials for patients with life-threatening or serious illnesses.
But the liability provisions agreed to by the President and
Representative Norwood overshadow all of these things. I simply cannot
support a patients' bill of right that does not give individuals the
full right to sue HMOs. The only way to hold HMOs fully accountable is
to allow consumers a right of redress.
A bill of rights is an empty promise if it lacks the procedure
necessary to enforce it.
This has become a bill of rights for HMO's!
This ``Compromise'' bill is a bitter retreat and forces me to vote
No.
Ms. BALDWIN. Mr. Chairman, families in Wisconsin are anxious about
the state of their health care. Too often, profit takes priority over
patient need. Patients are losing faith that they can count on their
health insurance plans to provide the care that they were promised when
they enrolled and paid their premiums.
As Members of Congress, we have all tried to help our constituents
who were denied care by HMOs. We have all heard their heartbreaking
stories. Just this morning, I heard from a constituent of mine whose
12-year-old daughter, Francesca, has Cerebal Palsy. His daughter
requires surgery to halt deterioration of her walking abilities so that
she will not have to be dependent upon a wheelchair.
This father asked his HMO to allow his daughter to have surgery at a
particular hospital that is not a provider in their plan because the
hospital that is a provider in their plan no longer employs a
specialist in this type of treatment. Instead of giving this father a
referral, the HMO recommended that he switch plans. No one should fear
that their insurance company would abandon them when they need it most.
I urge my colleagues to support the Ganske-Dingell bill and oppose
these three amendments that will serve to deprive Americans of the
patient protections they deserve.
Make no mistake about it, if these amendments pass, the bill should
be renamed the HMO Bill of Rights.
Mr. UDALL of New Mexico. Mr. Chairman. The overwhelming majority of
Americans view patients' rights legislation as a priority and strongly
support meaningful patient protection legislation. This issue has been
debated for many years now and the time for Congress to act is long
overdue.
Today, however, we have the opportunity to make up for lost time and
provide sound, responsible managed care reforms and meaningful
protections for patients and their doctors. We can do this by passing
the Ganske-Dingell Patients Protection bill.
This legislation ensures that physicians, not HMO bureaucrats, are
making the medical decisions that affect patient's lives. This
legislation provides for strong and effective internal and independent
external review of claim denials. This legislation allows patients to
hold their insurance companies and HMO's accountable for harm as a
result of bureaucratic negligence, malfeasance, or incompetence.
This legislation, Mr. Chairman, has my strong support for all of
these reasons that I just mentioned.
However, should this House pass the Norwood amendment or any of the
other amendments later today, this legislation will be turned from the
Patients Protection Act to the HMO Protection Act and will lose my
support.
The Norwood Amendment carves out special protection for HMO's, rolls
back patient protections and tramples states rights. I cannot support
such an amendment, nor any bill that contains such an amendment.
The time for a meaningful patient's protection act is long overdue.
Let's not waste the opportunity we have today by passing a bill that
protects HMO's instead of patients. I urge my colleagues to support
H.R. 2563, and oppose any amendments that would weaken critically
important patient protections. The time for meaningful patient
protection is now. Vote ``yes'' on H.R. 2563 and against weakening
amendments.
Mr. PAUL. Mr. Chairman, I appreciate the opportunity to explain why I
oppose all versions of the Patients' Bill of Rights. Once again
Congress is staging a phony debate over which form of statism to
embrace, instead of asking the fundamental question over whether
Congress should be interfering in this area at all, much less examine
how previous interferences in the health care market created the
problems which these proposals claim to address.
The proper way to examine health care issues is to apply the same
economic and constitutional principles that one would apply to every
other issue. As an M.D., I know that when I advise on medical
legislation that I may be tempted to allow my emotional experience as a
physician to influence my views. But, nevertheless, I am acting in the
role as legislator and politician.
The M.D. degree grants no wisdom as to the correct solution to our
managed-care mess. The most efficient manner to deliver medical
services, as it is with all goods and services, is through the free
market. Economic principles determine efficiencies of markets, even the
health care market, not our emotional experiences dealing with managed
care.
The fundamental economic principle is that true competition assures
that the consumer gets the best deal at the best price possible by
putting pressure on the providers. This principle applies equally to
health care as it
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does to other goods and services. However, over the past fifty years,
Congress has systematically destroyed the market in health care. HMOs
themselves are the result of conscious government policy aimed at
correcting distortions in the health care market caused by Congress.
The story behind the creation of the HMOs is a classic illustration of
how the unintended consequences of government policies provide a
justification for further expansions of government power. During the
early seventies, Congress embraced HMOs in order to address concerns
about rapidly escalating health care costs.
However, it was previous Congressional action which caused health
care costs to spiral by removing control over the health care dollar
from consumers and thus eliminating any incentive for consumers to pay
attention to prices when selecting health care. Because the consumer
had the incentive to monitor health care prices stripped away and
because politicians were unwilling to either give up power by giving
individuals control over their health care or take responsibility for
rationing care, a third way to control costs had to be created. Thus,
the Nixon Administration, working with advocates of nationalized
medicine, crafted legislation providing federal subsidies to HMOs and
preempting state laws forbidding physicians to sign contracts to deny
care to their patients. This legislation also mandated that health
plans offer an HMO option in addition to traditional fee-for-service
coverage. Federal subsidies, preemption of state law, and mandates on
private business hardly sound like the workings of the free market.
Instead, HMOs are the result of the same Nixon-era corporatist, big
government mindset that produced wage-and-price controls.
I am sure many of my colleagues will think it ironic that many of the
supporters of Nixon's plan to foist HMOs on the American public are
today among the biggest supporters of the ``patients' rights''
legislation. However, this is not really surprising because both the
legislation creating HMOs and the Patients' Bill of Rights reflect the
belief that individuals are incapable of providing for their own health
care needs and therefore government must control health care. The only
real difference between our system of medicine and the Canadian
``single payer'' system is that in America, Congress contracted out the
job of rationing health care resources to the HMOs.
No one can take a back seat to me regarding the disdain I hold for
the HMO's role in managed care. This entire unnecessary level of
corporatism that rakes off profits and undermines care is a creature of
government interference in health care. These non-market institutions
and government could have only gained control over medical care through
a collusion of organized medicine, politicians, and the HMO profiteers
in an effort to provide universal health care. No one suggests that we
should have universal food, housing, TV, computer and automobile
programs; and yet, many of the poor to much better getting these
services through the marketplace as prices are driven down through
competition.
We all should become suspicious when it is declared we need a new
Bill of Rights, such as a Taxpayers' Bill of Rights, or now a Patients'
Bill of Rights. Why do more Members not ask why the original Bill of
Rights is not adequate in protecting all rights and enabling the market
to provide all services? In fact, if Congress respected the
Constitution we would not even be debating this bill, and we would have
never passed any of the special-interest legislation that created and
empowered the HMOs in the first place!
Mr. Chairman, the legislation before us is flawed not only in its
effect but in the very premise that individuals have a federally-
enforceable ``right'' to health care. Mixing the concept of rights with
the delivery of services is dangerous. The whole notion that patient's
``rights'' can be enhanced by more edicts by the federal government is
preposterous.
Disregard for constitutional limitations on government, ignorance of
the basic principles of economics combined with the power of special
interests influencing government policy has brought us this managed-
care monster. If we pursue a course of more government management in an
effort to balance things, we are destined to make the system much
worse. If government mismanagement in an area that the government
should not be managing at all is the problem, another level of
bureaucracy, no matter how well intended, will not be helpful. The law
of unintended consequences will prevail and the principle of government
control over providing a service will be further entrenched in the
Nation's psyche. The choice in actually is government-provided medical
care and its inevitable mismanagement or medical care provided by a
market economy.
Many members of Congress have convinced themselves that they can
support a ``watered-down'' Patients' Bill of Rights which will allow
them to appease the supporters of nationalized medicine without
creating the negative consequences of the unmodified Patients' Bill of
Rights, while even some supporters of the most extreme versions of this
legislation say they will oppose any further steps to increase the
power of government over health care. These well-intentioned members
ignore the economic fact that partial government involvement is not
possible. It inevitably leads to total government control. A vote for
any version of a Patients' Bill of Rights is a 100 percent endorsement
of the principle of government management of the health care system.
Those who doubt they are endorsing government control of medicine by
voting for a modified Patients' Bill of Rights should consider that
even after this legislation is ``watered-down'' it will still give the
federal government the power to control the procedures for resolving
disputes for every health plan in the country, as well as mandating a
laundry list of services that health plans must offer to their
patients. The new and improved Patients' Bill of Rights will still
drive up the costs of health care, causing many to lose their insurance
and lead to yet more cries for government control of health care to
address the unintended consequences of this legislation.
Of course, the real power over health care will lie with the
unelected bureaucrats who will implement and interpret these broad and
vague mandates. Federal bureaucrats already have too much power over
health care. Today, physicians struggle with over 132,000 pages of
Medicare regulations. To put that in perspective, I ask my colleagues
to consider that the IRS code is ``mere'' 17,000 pages. Many physicians
pay attorneys as much as $7,000 for a compliance plan to guard against
mistakes in filing government forms, a wise investment considering even
an innocent mistake can result in fines of up to $25,000. In case
doctors are not terrorized enough by the federal bureaucracy, HCFA has
requested authority to carry guns on their audits!
In addition to the Medicare regulations, doctors must contend with
FDA regulations (which delay the arrival and raise the costs of new
drugs), insurance company paperwork, and the increasing criminalization
of medicine through legislation such as the Health Insurance
Portability Act (HIPPA) and the medical privacy regulations which could
criminalize conversations between doctors and nurses.
Instead of this phony argument between those who believe their form
of nationalized medicine is best for patients and those whose only
objection to nationalized medicine is its effect on entrenched
corporate interests, we ought to consider getting rid of the laws that
created this medical management crisis. The ERISA law requiring
businesses to provide particular programs for their employees should be
repealed. The tax codes should give equal tax treatment to everyone
whether working for a large corporation, small business, or self
employed. Standards should be set by insurance companies, doctors,
patients, and HMOs working out differences through voluntary contracts.
For years it was known that some insurance policies excluded certain
care. This was known up front and was considered an acceptable practice
since it allowed certain patients to receive discounts. The federal
government should defer to state governments to deal with the
litigation crisis and the need for contract legislation between
patients and medical providers. Health care providers should be free to
combine their efforts to negotiate effectively with HMOs and insurance
companies without running afoul of federal anti-trust laws--or being
subject to regulation by the National Labor Relations Board (NLRB).
Of course, in a truly free market, HMOs and pre-paid care could and
would exist--there would be no prohibition against it. The Kaiser
system was not exactly a creature of the government as it the current
unnatural HMO-government-created chaos we have today.
Congress should also remove all federally-imposed roadblocks to
making pharmaceuticals available to physicians and patients. Government
regulations are a major reason why many Americans find it difficult to
afford prescription medicines. It is time to end the days when
Americans suffer because the Food and Drug Administration (FDA)
prevented them from getting access to medicines that where available
and affordable in other parts of the world!
While none of the proposed ``Patients' Bill of Rights'' addresses the
root cause of the problems in our nation's health care system, the
amendment offered by the gentleman from Kentucky does expend individual
control over health care by making Medical Savings Accounts (MSAs)
available to everyone. This is the most important thing Congress can do
to get market forces operating immediately and improve health care.
When MSAs make patient motivation to save and shop a major force to
reduce cost, physicians would once again negotiate fees downward with
patients--unlike today where the reimbursement is never too high and
hospital and MD bills are always at the maximum levels allowed. MSAs
would help satisfy the American's people's desire to control their own
health care and provide incentives for consumers to take more
responsibility for their care.
[[Page H5217]]
There is nothing wrong with charity hospitals and possibly the
churches once again providing care for the needy rather than through
government paid programs which only maximizes costs. States can
continue to introduce competition by allowing various trained
individuals to provide the services that once were only provided by
licensed MDs. We don't have to continue down the path of socialized
medical care, especially in America where free markets have provided so
much for so many.
In conclusion, Mr. Chairman, I urge my colleagues to reject the phony
Patients' Bill of Rights which will only increase the power of the
federal government, cause more Americans to lose their health care or
receive substandard care, and thus set the groundwork for the next
round of federal intervention. Instead. I ask my colleagues to embrace
an agenda of returning control over health care to the American people
by putting control over the health care dollar back into the hands of
the individual and repealing those laws and regulations which distort
the health care market. We should have more faith in freedom and more
fear of the politicians and bureaucrats who think all can be made well
by simply passing a Patients' Bill of Rights.
Mr. CUNNINGHAM. Mr. Chairman, I rise today to add my voice in support
of the passage of a strong Patient's Bill of Rights. Congress has been
working for several years to improve the delivery of health care to
everyone in America. As a cancer survivor, I know how important it is
to have good quality health care available when you need it.
I believe that for the most part, Americans who currently have
health insurance are happy with their providers. Unfortunately, too
many Americans can not afford the health care they need, and sadly,
there are extreme cases where some Americans are the victims of fraud
or abuse that prevent them from accessing the care that they are paying
for.
I am committed to ensuring that America maintains the world's best
health care system by enacting reforms giving people more choices, and
more access to high quality health care. That is why I rise today in
support of the Patients' Bill of Rights agreement reached by President
George W. Bush and Congressman Charlie Norwood, as well as in support
of an amendment to expand Medical Savings Accounts (MSA) and allow for
the creation of Association Health Plans (AHP).
I am proud to support a Patients' Bill of Rights that will empower
individuals and doctors to make health care choices, without the
interference of government bureaucrats or trial lawyers. I support the
Bush/Norwood agreement because it ensures that the American people will
have swift recourse when an insurance company bean-counter decides to
practice medicine.
There are a lot of people who say that when your insurance company
denies coverage, you should be able to run them straight into court.
Let's stop and think about that for a minute--when an individual is
denied coverage by an insurance company, what is it that they really
want? Coverage for life saving medical care! Lawsuits don't get you
medical care. Lawsuits drag on in court for years, and line the pockets
of trial lawyers. Lawsuits won't provide care for sick patients. The
bottom line is that lawsuits don't save lives--but an independent
medical review process will.
While we are working to improve health care for those who have
insurance, we must also take action to bring this high quality care to
those who cannot currently afford insurance. I support the inclusion of
a provision to give millions of Americans the best patient protections
of all--health care coverage. I hope that today an amendment will
prevail to expand Medical Savings Accounts, and allow for the creation
of Association Health Plans. Association Health Plans will allow small
businesses and the self-employed the same purchasing clout and
administrative savings that large, multi-state employers and labor
unions currently enjoy. This provision will expand health care coverage
for thousands of employees of small businesses who cannot currently
afford to provide coverage to its employees.
I urge my colleagues to join me in supporting the passage of the
Bush/Norwood agreement on Patients' Rights which balances the need for
affordable health insurance with the need for real patient protections.
Mr. ETHERIDGE. Mr. Chairman, I rise today in support of H.R. 2563,
the Patients Bill of Rights, and in opposition to all ``poison pill''
amendments and in particular the Norwood amendment.
Like many of my colleagues in this House, I strongly support the
Patients Bill of Rights. In fact, the Ganske-Dingell Patients Bill of
Rights provides strong patient protections. It ensures access to
emergency room care, allows for clinical trials, provides for
continuity of care, and holds managed care plans legally responsible
for their actions. But, today we have been asked to consider a new
amendment to this bill. This amendment, if passed, would gut the spirit
of the Ganske-Dingell bill.
The Norwood amendment would give HMO's a rebuttable presumption in
court, which means that if an HMO follows its procedures in the review
process, the patient bringing a suit would be held to a higher standard
of evidence that separates HMO's from any other industry, business, or
individual in America. Mr. Speaker, that higher standard prevents a
patient from making a case in court. That is unfair and it is wrong.
We must hold HMO's and health insurance companies accountable for
their actions, and I will oppose any amendment that protects HMO's and
prevents patients from getting the care they need. If this amendment
passes, I will oppose the amended bill because it will become
unenforceable and will let HMO's off the hook. A right that is
unenforceable is no right at all.
Mr. Chairman, I have consistently supported a patient's bill of
rights that is strong and enforceable. Today, I am afraid, the House
majority is going to pass an insurance company's bill of rights.
Maintaining health security is one of the primary challenges facing
North Carolina's working families today. Families deserve to know that
they can count on affordable high quality health care in their managed
care plans. Making crucial decisions about a patient's health care
should be the responsibility of the doctor and the patient--not some
insurance company accountant.
Today's debate is about patients. They are the Americans we hear
about in the news and in our communities who are sick and hurting. A
real patients bill of rights provides these Americans with access to
the care they need and holds managed care plans legally accountable for
decisions that lead to serious injury or death. The Republican
leadership supports the Norwood amendment because it will send this
bill to a conference. And we all know what that means, Mr. Chairman.
The Patient's Bill of Rights will die there.
America needs a Patients Bill of Rights. Our families are depending
on us to give them that right today in this House. The only way we can
ensure that they will get that right--the right to clinical trials,
emergency room care, and to hold HMO's accountable for their
decisions--is to oppose all of the ``poison pill'' amendments proposed
today and support the real patient's bill of rights. The Republican
bill is a fraud. It is a sham bill.
I urge all of my colleagues to support H.R. 2563, and ask that they
join me in opposing the Norwood amendment and other poison pills that
will kill a bill that America's patients desperately need.
Mr. COYNE. Mr. Chairman, it is time for Congress to enact a true
patient protection bill. American families have already waited far too
long for us to pass common-sense consumer protections.
Today, millions of Americans workers have no employer-provided health
insurance, and over half of American Workers who do have employer-
provided health insurance have no choice of health plan. The only
health care coverage provided to those workers is a plan chosen by
their employers. This plan may or may not address their health care
needs and the health care needs of their families. Under current law,
many of those workers and their families have no place to turn if they
are harmed by decisions which are made by their insurance companies.
We need to pass a true consumer protection bill that would guarantee
basic health rights for these workers. Families should be able to see
specialists when they need to, appeal unfair denials, and seek
emergency care when they experience severe pain. Doctors should be free
to tell their patients all the options and to make medical decisions
without fear of retribution from health plans. Health plans should be
accountable if they make medical decisions, just as doctors are now.
Some would suggest that enacting true patient protection legislation
undermines our long-held goal of health coverage for all Americans.
They say that patient protection legislation could cause health
insurance costs to rise and then families may become uninsured. They
would have us believe that a health insurance plan that protects basic
health care rights is out of reach for the average American. That is
wrong. It is our responsibility to find a better way to help the
uninsured than telling them to buy bad health coverage, coverage which
may not be there when they need it.
Unfortunately, an unfair process to debate a meaningful patient
protection bill has been set up by the Leadership of the House of
Representatives today and this action effectively kills any chance of
enacting a real patient protection bill. The bill being debated today
contains numerous loopholes and fails to enact proper patient
protections and rights. It fails to hold health plans accountable by
the same standards that are applied to physicians for negligent
decisions. All actions against health plans would be determined
exclusively under a new federal law with no ability to apply state law.
As well, when an injured patient does go to court to seek remedy,
certain provisions in the legislation will tip the scales of justice in
favor of the health plan. This bill also contains
[[Page H5218]]
week enforcement provisions that dramatically limits the ability of
consumers to seek recourse for inadequate care, injury, or death.
Furthermore, it forces patients to pursue remedies in an external
appeals process that is neither independent or fair.
I would urge my colleagues to vote against all of the amendments. If
any of the amendments are adopted, I would then urge a ``no'' vote on
final passage. I hope that we can work together in the future to enact
a true bipartisan patient protection bill.
Mr. TOWNS. Mr. Chairman, I rise in opposition to the amendment
offered by the gentleman from Georgia. I strongly support the Ganske-
Dingell-Berry Bipartisan Patient Protection Act without the Norwood-
Bush ``COMPROMISE'' or any other poison pill amendments.
For the past five years, we have been fighting for true patient
protection legislation only to be thwarted at every turn by a lethal
combination of parliamentary maneuvers and political posturing. The
Norwood-Bush Compromise is just another maneuver designed to water down
real patient protection legislation.
Mr. Chairman, it is time that we return medical decisions to the
people qualified to make them. It is time that we stop limiting the
drugs available to patients based on an accountants' formula. It is
time that we return to the American people the right to choose their
own healthcare providers. The Ganske-Dingell-Berry Bipartisan Patient
Protection Act stops protecting the HMO's and provides true patient
protection. I support protecting patients while the amendments before
us today will give all of the rights to HMO's at the expense of
patients. The only thing that the Norwood-Bush ``Compromise''
compromises is a patient's access to quality care. I support the
Ganske-Dingell-Berry Bipartisan Patient Protection Act because I
believe that it offers patients the protection they need. Access and
accountability must be the cornerstones of any true patient protection
plan and Ganske-Dingell-Berry will ensure that accountability.
Don't fall for cheap imitations; the Ganske-Dingell-Berry Bipartisan
Patient Protection Act is strong, enforceable patient protection
legislation.
The American people are crying out for patient protection. We cannot
continue to have a healthcare system that claims to offer the best
healthcare in the world and yet allows business decision makers the
right to limit access to top quality care. I urge my colleagues to
provide true patient protection and vote for the Ganske-Dingell-Berry
Bipartisan Patient Protection Act without amendments.
Mr. PASCRELL. Mr. Chairman, I stand before you to remind everyone
here why we must pass the patients Bill of Rights today. It is because
we must protect all Americans from the fate that befell Mr. Robert
Frank Leone of Glen Ridge, N.J.--a constituent of mine.
Every year, Mr. Leone was denied a chest x-ray by his HMO despite his
request. When he eventually displayed symptoms of illness, his Doctor
acquiesced and his cancer was diagnosed.
Mr. Leone had non-small cell lung cancer that spread to his brain.
His wife Victoria was told that he had only 2 months to live.
After successful treatment with radiation, Mr. Leone and his wife had
to beg his doctors for a referral for physical therapy.
As a result of physical therapy, Mr. Leone regained much of his
strength and quality of life.
But his HMO cut his physical therapy sessions as soon as he started
to feel better. They said it was no longer necessary. They said it was
``preventative.''
As a result of losing his physical therapy, Mr. Leone's health began
fading. Soon he could no longer walk without assistance.
Despite pleas form his wife, his HMO refused to restore Mr. Leon's
physical therapy benefit. Instead, they suggested he join a health
club. And that his wife Victoria should become his physical therapist!
But Victoria is legally disabled!
Mr. Leone became depressed and was hospitalized and died in the
hospital March 30, 1999.
I call him an HMO casualty.
If his doctor had given him a chest x-ray when he requested it,
instead of denying the benefit to save money--his cancer would have
been diagnosed before it had spread to his brain.
If the HMO had not limited Mr. Leone's access to physical therapy, he
would have continued his improvement and would probably have not sunk
into depression.
If an appeals process had been in effect, Mr. Leone and his wife
could have appealed both of these denials of care.
Simply put, Mr. Leone died because the HMO was not liable for its
actions. And because the HMO was not liable they could deny him care to
save money and not be held accountable.
Today on the floor we are voting on H.R. 2563 to protect patients
just like Mr. Leone.
But then there is this Norwood amendment.
Well, you don't have to be Columbo to recognize that the Norwood
amendment is here to take the teeth out of this crucial legislation.
The Norwood amendment creates several roadblocks that would prevent
patients form receiving benefits that already exist.
Additionally, the Norwood amendment supercedes state laws and forces
state courts to apply federal tort law.
In fact, this amendment creates a federal cause of action for
negligence where none exited before!
I am particularly interested in safeguarding strong state laws that
protect patients because my state of New Jersey just recently
instituted a strong patients' bill of rights that would be preempted by
the Norwood amendment!
New Jersey's new patients' rights' law is much broader in scope than
even the Ganske bill we are discussing here today. It covers
traditional HMOs, as well as health insurance plans that are not
covered by ERISA.
How can I go home and tell my constituents that the strong patients'
bill of rights recently made into law in New Jersey will never have the
opportunity to benefit our residents?
And that is not the only problem presented in this amendment.
The Norwood amendment creates a presumption in favor of the HMO that
the patient must overcome in order to win in court.
This flies in the face of due process, a premise upon which our
country is founded. It offends me to the core that this amendment not
only restricts access to state law by patients but then adds an
additional hurdle to their burden of proof once in court.
If the Norwood amendment had been law when Mrs. Leone was taking care
of her husband, these additional obstacles would have made this
heartbreaking experience even more painful. She would have had no
access to her own state's laws, no fair due process, and a limited
amount of damages to seek.
I shake my head whenever I think of how we could have saved Mr.
Leone's life if we had only passed the Ganske bill 5 years ago.
Let's not let any more Americans die at the hands of corporations
whose sole concern is the bottom line not the patients' health.
I urge all of you in joining me to vote in favor of H.R. 2563 and
against the Norwood amendment. Do it for Mr. Leone and all for the
future patients who we could save with this important vote.
Mr. BALDACCI. Mr. Chairman, I have long supported the efforts of Mr.
Norwood to reform managed care. Unfortunately, I cannot support my
friend's lastest legislative effort on this issue. Instead, I remain
strongly in favor of the Ganske-Dingell-Berry bill, H.R. 2563. This is
the only Patients' Bill of Rights legislation we are considering today
with sufficient enforcement provisions. Without strong accountability,
the landmark patient protections we agree are necessary will be
rendered meaningless.
The Norwood amendment, based on his agreement with President Bush, is
an empty shell, tipping the balance back to the insurance companies and
away from patients. This Norwood plan is significantly weaker than the
bill passed by the Senate.
Congressman Norwood's amendment places unacceptable limits on a
patient's ability to hold his or her plan accountable. Self-funded
plans may only be sued in federal courts. This provision limits access
to state courts for many Americans covered under employer-sponsored
health insurance plans. Even when a patient can seek a resolution
through state court, they can only do so under federal rules, which are
more restrictive for plaintiffs.
Patients have a larger burden to bear under the Norwood language.
They can sue if an independent reviewer decides against them, but the
legal presumption would be that the external review was correct. Under
this scheme, the burden of proof is placed on the patient, who must
meet a higher legal standard of proof than when he or she appealed to
the review panel.
The liability provisions of this amendment are so complex and
convoluted that they will only serve to dissuade patients from seeking
resolution to their grievances.
Under the Norwood amendment, doctors will continue to be held to
tougher state malpractice standards than HMOs. Managed care plans will
still play by different rules than the physicians whose decisions these
companies overrule. This is not acceptable.
Americans deserve better than this shallow version of patients'
rights legislation. I urge my colleagues to soundly reject the Norwood
Amendment and to support the Ganske legislation.
MR. EVANS. Mr. Chairman, today we have the opportunity to pass a
strong, enforceable Patients' Bill of Rights. A bill that would return
medical decisions to patients and their doctors. A bill that would
strip HMOs of their unprecedented protections which allow them to make
decisions about patients' care while being held accountable to no one.
A bill that puts quality health care above the bottom line of insurance
companies.
[[Page H5219]]
I hope that we will pass these new patients' rights protections
today. But these rights are meaningless without the ability to enforce
them. The Ganske-Dingell Patients' Bill of Rights is the only measure
that protest these rights.
The so-called compromise, hastily crafted by the President and Mr.
Norwood, renders these rights hollow. It effectively eliminates any
incentive for HMOs to put the care of patients first. The limited
damages that could be awarded once a HMO is found liable for the actual
injury or death of a patient are not effective checks on irresponsible
conduct. They are financially inconsequential compared to their
enormous profit margins. It is the equivalent of a slap on the wrist.
Americans deserve better. They deserve the rights that we have
promised them and an avenue of recourse when those rights are violated.
I urge my colleagues to support the real Patients' Bill of Rights, not
a skeleton of what could have been.
Mr. THORNBERRY. Mr. Chairman, I will vote for the Patient Protection
Act legislation that the House is considering.
I voted for a similar bill two years ago because I believe that if an
insurance company makes health care decisions like a doctor, it should
be held responsible like a doctor. I still support a responsible
patients rights bill.
We are all aware of the concerns over this measure: concerns that it
could drive up healthcare costs, encourage more litigation, and result
in even more people becoming uninsured, particularly in rural areas. I
am especially concerned about how this bill will affect patient
protection laws that have been enacted in Texas and other states around
the country.
While I am not satisfied that this measure, as written fully
addresses my concerns, I will vote for this bill to move it to
Conference where, hopefully, many of these problems can be resolved. I
stand ready to vote against the measure when it returns to the House
floor if this does not occur.
It is my sincere hope, though, that this will not happen, and we will
be able to reach agreement on a bill that responsibly strengthens
patients' rights which the President will be able to sign into law.
Mrs. MALONEY of New York. Mr. Chairman, I rise in strong support of
the Patients' Bill of Rights. It is a measure that embodies much of the
spirit of our original Bill of Rights. It improves the lives of
millions of Americans by guaranteeing their basic rights as health care
patients. The Bipartisan Patient Protection Act enjoys strong support
from the American people and grants all 167 million privately insured
Americans the fundamental protections they deserve.
The bill we are debating today, H.R. 2563, was forged by the hard
work of Messrs. Dingell, Ganske, Norwood, Berry and many others. The
base bill will make the health of patients, and not the wants of
managed care insurers, the top priority. If a patient is harmed by HMO
negligence, he or she should be able to seek legal redress; under this
legislation the patient will be able to do just that. The Patients'
Bill of Rights will guarantee these protections and do much more to
improve the lives of millions of our citizens--all without increasing
healthcare costs significantly.
We also have before us three amendments. They are three amendments
that are poison pills to the underlying bill and I cannot support them.
The Norwood amendment weakens the strong and sensible Dingell-Ganske
bill. It holds HMOs to a lesser standard than doctors and hospitals and
it undermines state patient protections. The Thomas-Fletcher amendment
fully expands Medical Savings Accounts and would allow associations to
offer health insurance to their members without critical state
insurance standards. This amendment could actually cause more people to
become uninsured. The Thomas-Boehner amendment preempts state medical
malpractice and tort law. The bottom line: these amendments do not
strengthen the base bill, but weaken it. If these amendments pass, I
will vote ``no'' on final passage.
Protecting patients' rights inherently benefits women and their
families because women are the primary healthcare consumers. More
specifically, the underlying legislation gives American women direct
access to an obstetrician-gynecologist and gives families direct access
to specialists, such as pediatricians, without a referral. Women need
regular, accessible OB/GYN care. They do not need the added expense and
hassle of having to get a ``permission slip'' from their managed care
insurer.
I am fortunate to represent a state that has enacted very
comprehensive regulations that mandate direct-access to OB/GYNs without
a gatekeeper's pre-approval. But, the Norwood amendment would roll-back
state protections. I support the underlying bill because we must have a
federal standard. Why? Look at the numbers: 15 states limit the number
of times a women see her OB/GYN; another 12 prohibit or restrict a
woman's direct access to follow-up care, even if this care is covered
by her health plan; and a full 38 prohibit or restrict an OB/GYN's
ability to refer a woman for necessary OB/GYN-related specialty care.
Obstetric and gynecological care is integral to women's health. As
things stand now, women in some states receive better care than others.
It's time we made direct access to OB/GYNs a fundamental patient
protection enjoyed by all women enrolled in managed care plans.
The Bipartisan Patient Protection Act protects the health and well-
being of not just women, but all Americans. Every American will have
the right to choose his or her own doctor, and will not be forced to
see one chosen by an HMO bureaucrat. Under this legislation, doctors,
not health insurance companies, will decide which treatments,
procedures and specialists are necessary.
In addition, the legislation--absent any amendments--will give
patients the peace of mind that all external reviews will be conducted
by independent, qualified physicians. If a plan denies coverage, the
patient will be able to appeal the decision to a doctor, not an
insurance clerk. And if the plan continues to deny coverage, the
patient can demand a review by an unbiased, independent medical
specialist, whose decision is legally binding.
Image if you or someone you love is injured by the decision of an
HMO. It is only fair that he or she should be able to hold that HMO
accountable. We would all rather get the care we and our families need
to begin with than go to court in the end, but we should have the right
to do so if administrative course of redress are exhausted. Under the
Dingell-Ganske bill--absent any amendments--disputes involving medical
judgments will be subject to applicable state laws; if the case
involves an administrative benefit decision, the patient will be able
to seek limited compensation in federal courts under federal law.
Employers need not fear this bill. They will be protected from
liability in either federal or state courts, unless they directly
participate in a decision that causes irreparable harm or death.
Indeed, employers can completely ensure that they will be fully
protected from liability by choosing a ``designated decision-maker'' to
assume all liability.
The critics of the Bipartisan Patient Protection Act also claim that
these common-sense liability provisions will cost too much. In fact,
the Congressional Budget Office reported that the liability provisions
will cost only about 23 cents per employee per month. The entire bill
is projected to increase premiums 4.2% over 5 years. That translates to
a mere $1.20 per month. Isn't quality, protect healthcare worth the
added price of a cup of coffee?
By allowing direct-access to OB/GYNs and pediatricians, authorizing
physicians and not HMOs to make medical decisions, and establishing
avenues for legal recourse, the Bipartisan Patients Protection Act puts
the health of patients first. It will make a real difference in the
quality of lives of millions of Americans. And that is what the work we
do here is all about.
I urge my colleagues to vote against the three poison pill amendments
and for a clean Dingell-Ganske-Norwood-Berry bill.
Ms. ROYBAL-ALLARD. Mr. Chairman, I rise in reluctant opposition to
the Ganske-Dingell-Norwood-Berry Patients' Bill of Rights.
We missed an enormous opportunity today, because H.R. 2563--the
Ganske-Dingell bill--could have been the giant first step to bring
much-needed reform to our current health care system.
Simply speaking, the current system is stacked against patients,
placing important decision-making authority in the hands of corporate
bureaucrats. Today, we had the opportunity to give back the power to
patients and their doctors.
Instead, the Republican-controlled House chose to adopt changes that
have put patient protections in jeopardy. By stacking the deck against
patients in the appeals process, and by placing caps on damages, we
avoid providing any meaningful remedy to those who are injured by a
negligent HMO. We essentially turn the system on its head and assume
that the doctors and patients are the guilty ones, unless they can
prove otherwise.
Mr. Chairman, I represent a district that is 87% Hispanic. Recent
studies tell us that two-thirds of privately insured Latinos are
enrolled in managed care. The Ganske-Dingell-Norwood-Berry reform bill
could have had a tremendous positive impact on my constituents. And it
could have helped ensure that people across the country, such as my
constituents, had better access to prescription drugs, emergency care
and medical specialists. But we have fallen short today.
I certainly hope that at conference we can make improvements to this
bill that will put patients before the insurance companies. If we
succeed in addressing the unfairness in this bill, we can then take the
next step to address the needs of countless numbers of low-income
workers who have no health coverage whatsoever; and the 1.2 million
eligible adults and children in California who, according to a recent
article in the Los Angeles Times, do not access California public
health care programs.
[[Page H5220]]
To truly reform health care in our nation for all Americans, we must
continue to work to extend coverage to the working poor, and to ensure
that those who are eligible for existing health care benefits receive
them.
Adequate, affordable, and accessible health care should be a right,
not a privilege. The House had the change to take a significant step
forward today in addressing the health care problems in our nation. But
instead of taking a step forward, we have taken a step backward.
Ms. SCHAKOWSKY. Mr. Chairman, I rise in opposition to H.R. 2563, the
Patient Protection Act. This bill has been so damaged by the amendments
passed today, that it should be a violation of truth in advertising
laws to call it a patient protection bill. It is no longer a law
designed to curb HMO abuses--it has become a bill that leaves HMOs in
charge of health care decision-making and preempting state laws
designed to protect patients. It is a bill that is no longer deserving
of its title and is no longer deserving of our support. It's an
Insurance Industry Protection Act.
Earlier today, the House passed the Thomas amendment to establish
Association Health Plans. Despite the arguments of its proponents, AHPs
are not a step forward. Instead, AHPs will take critical state
protections away from consumers and make access to health care worse
for millions of Americans.
I believe that we need to make health care more affordable and
accessible to small businesses and their employees. I support
purchasing coops and pooling arrangements. But I could not support this
amendment. Why? Because it would do more harm than good. By preempting
state regulations designed to lower premiums and protect consumers, it
would move us backwards not forward.
First, it would actually raise premiums for the majority of small
businesses. The Congressional Budget Office estimates that 80 percent
of small business employees could face premium increases as companies
with healthier employees opt out of the small group market. With market
fragmentation, small firms with older workers, women of child-bearing
age, and workers with ongoing health problems would wind up paying
more.
Second, as a result, those small businesses facing higher premiums
would drop coverage. The CBO estimates that 10,000 employees--those
with the highest health are needs--would lose coverage. An Urban
Institute estimate is that one percent of all small firms would lose
coverage.
Third, even insured consumers could face higher costs and reduced
access because AHPs would be allowed to ignore state minimum benefit
requirements. In Illinois, those minimum benefits include annual pap
smears, prosthetic devices, mental health services, cancer screening,
education on diabetes self-management, and length of stay protections
for mastectomy patients. Consumer' Union opposes AHPs because ``health
insurance policies would be less likely to cover potentially life-
saving benefits such as mammography screening, cervical cancer
screening, and drug abuse treatment.'' AHPs will lead to bare-bones
coverage that leaves patients with higher medical bills or forces them
to go without care.
Fourth, consumers enrolled in AHPs would have no place to go for
protection, since state regulation is preempted and the U.S. Department
of Labor lacks the resources or the will to respond to individual
consumer complaints.
The National Governors Association, the National Conference of State
Legislatures, and the National Association of Insurance Commissioners
said it best when they wrote to us opposing this bill. They wrote:
``AHPs would fragment and destabilize the small group market, resulting
in higher premiums for many small businesses. AHPs would be exempt from
the state solvency requirements, patient protections, and oversight and
thus place consumers at risk.''
I also strongly oppose the Norwood liability amendment. Many of us
won election last November because we promised that we would give
patients meaningful protections. We promised that we would curb HMO
abuses that are injuring and killing people on a daily basis.
We promised that we would let medical professionals make medical
decisions. We told doctors, nurses and other health care professionals
that we would free them from managed care bureaucracy so that they can
provide quality care to their patients. This amendment means that we
will not be keeping those promises.
This amendment is a ruse. Behind all the fine print, it has one
underlying objective: to continue the accountability shield that
immunizes HMOs from responsibility when they deny care or limit care or
restrict access to specialists. This amendment means that there is
absolutely no guarantee that patient protections will be enforced. HMOs
will be left in charge, free to continue to override doctors' decisions
and deny care with virtual impunity.
This amendment provides special treatment for HMOs. It gives HMOs
unique legal protections--protections denied every other industry in
this country--so that they can continue to operate with immunity.
Mr. Chairman, we have done a disservice to patients and those who
care for them by passing these amendments. There is an old labor song
that asks the question: whose side are you on? Unfortunately, this
amended bill sides with the HMOs--not patients.
Mr. HONDA. Mr. Chairman, I rise today in strong opposition to H.R.
2563, the so-called Bipartisan Patient Protection Act, as amended.
Patient protection is common sense legislation that America needs and
deserves. The original bill, as proposed, provided much needed security
for the 160 million Americans who receive their health coverage through
managed care. It gave healthcare consumers the same protections offered
in other industries. It provided accountability, minimum standards of
care, and broader access to health-care options for Americans citizens.
Recently, a constituent of mine, Andrew B. Steffan of Campbell,
California has had an outrageous experience, showing exactly why this
important legislation is needed.
This past April, Mr. Steffan experienced difficulty breathing and
chest discomfort and was transported by ambulance to Good Samaritan
Hospital in San Jose. In the ambulance he was monitored by EKG and was
administered oxygen to help him breath, and nitroglycerin for his chest
pain. He was later diagnosed with coronary heart disease and congestive
heart failure.
I can only begin to imagine the fear and anxiety experienced by Mr.
Steffan and his family on that day.
What is even more incomprehensible are the problems faced by Mr.
Steffan after his hospitalization. His insurance determined, after the
fact, that he should have been transported to the hospital by ``other
means'' and refused to pay, despite the fact that the attending
physician at the hospital stated that he needed to be transported
because he required cardiac monitoring.
How can an insurance professional determine after the fact that an
ambulance ride was or was not necessary? Moreover, how can a health-
care provider refuse to cover basic emergency services that a normal
person would consider necessary? It is bad enough when serious health
problems develop. One should not have to deal with a larger problem
from one's insurance company.
The need for this type of legislation is inarguable. However, the
Norwood Amendment, agreed to in a secret handshake deal with the
President, has sabotaged any chance for real medical reform.
This amendment, which takes us backward, not forward, contains
numerous provisions which enable managed care providers to never face
the consequences of their actions.
Under the amended bill, HMOs are held to a different standard than
doctors and hospitals. While HMOs would be shielded, with a limit of
$1.5 million for punitive damages, doctors and hospitals would be hung
out to dry. It allows insurance companies to make bad decisions and
never be held accountable.
Under the Norwood Amendment, the injured patient must prove that
``the delay in receiving, or failure to receive, benefits is the
proximate cause of personal injury to, or death of, the participant or
beneficiary.'' In any medical malpractice case--unlike a running a red
light being the proximate cause of the ensuing accident--there is
rarely, if ever, a single cause of the injury.
The amendment overturns the good work done by states in protecting
patients.
Furthermore, certain cases can be removed to the federal courts,
where it is much more difficult for patients to achieve justice.
Yes, America's citizens need healthcare protection. But a sham,
ineffective bill is not the answer. What good are patient protections
if these rights cannot be effectively enforced in court?
I urge my colleagues to follow the lead of the other body and pass
forceful, effective, meaningful legislation.
Mr. RUSH. Mr. Chairman, like many of my colleagues, I have been a
staunch advocate for patients' rights. I have looked forward to the day
when this House would once again pass a strong patients' bill of rights
which would bring back responsibility and accountability to the
relationship between HMOs and their patients.
The Bipartisan Patient Protection Act, H.R. 2563, as originally
brought to the Floor today by Representative John Dingell and
Representative Greg Ganske was a model of bipartisanship and fairness.
The bill brought equality to the patient and HMO relationship by
providing for an internal and external review process of denials of
care and permitting patients to sue their HMOs in state and federal
courts. To ensure that the pendulum did not swing too far to one side,
the bill also capped punitive damages at $5 million. Further, to
protect employers from frivolous suits, the bill only held employers
liable if they administered their plan themselves. Clearly, the
[[Page H5221]]
bill as it was originally intended provided patients the means they
needed to protect their right to quality care.
Unfortunately, with the adoption of Representative Norwood's
amendment, the Bipartisan Patient Protection Act was stripped of its
provisions allowing patients to sue their HMOs for the unfair denial of
needed health care. Patients will now find themselves in an even more
hostile and unresponsive environment.
It is for this reason that I must regrettably rise in opposition to
the Bipartisan Patient Protection Act as amended by Representative
Charles Norwood. I can only hope that the changes made to the
Bipartisan Patient Protection Act can be revisited in conference.
Mr. GILMAN. Mr. Chairman, I rise today in support of H.R. 2563, the
Bipartisan Patient Protection Act of 2001, otherwise known as the
Ganske-Dingell-Norwood bill. Over the past 6 years, I have worked with
my colleagues, Dr. Ganske, Mr. Dingell and Dr. Norwood, on trying to
bring a comprehensive, bipartisan patient protection bill to the floor,
and I believe that H.R. 2563 is this bill.
The Ganske-Dingell bill will provide individuals with managed care
insurance plans, with an unprecedented amount of protections,
including: the right to choose their own doctor, access to specialists,
gag clause protections, information disclosure and access to emergency
services. Moreover, the passage of this bill will mark the first time
that patients throughout the nation will have the ability to hold their
HMOs accountable for injuries or deaths which result from denials or
delays of claims by the HMO.
H.R. 2563, has the support of over 800 organizations, including the
American Medical Association, American Cancer Society, American Heart
Association, National Breast Cancer Coalition, Patient Access to
Responsible Care and National Health Association. These organizations
recognize that the Ganske-Dingell bill is going to provide the
necessary protections against abuses by the managed care industry.
I applaud the efforts of Representatives Ganske, Dingell, Norwood and
Berry for bring this important measure to the floor and for their
dedication to this issue through the years.
Moreover, I commend Dr. Norwood for his continued commitment to
ensuring that a Patients' Bill of Rights passes the House and has the
opportunity to receive full and fair consideration by the Congress and
the President. I understand that he has given his best efforts to
negotiate a sound amendment which will have the opportunity to be
reviewed and reconsidered in the legislative process.
Having said that, I do have concerns with the amendment introduced by
Representative Norwood.
Foremost, the Norwood amendment fails to hold health plans
accountable by the same standards that apply to physicians for
negligent medical decisions. Rather than defer to state statutory law
and hundreds of years of common law, the Norwood amendment would create
a new status of health plans that injure or kill patients by their
negligent treatment decisions. All actions against health plans would
be determined exclusively under a new federal law while doctors and
hospitals would be subject to less stringent state laws.
Additionally, the Norwood amendment includes a provision that grants
health plans a ``rebuttable presumption'' in court when the external
review panel has found in their favor. A patient would now be forced to
prove that the decision of the external review panel was unreasonable,
rather than only providing that the HMO was responsible for serious
injury or death.
The most difficult portion of the Norwood amendment is that it strips
the states of the rights they currently enjoy. It fails to recognize
those states that already have external review systems and not allowing
them to remain in place. Under Ganske-Dingell, states that already have
a substantially similar, if not superior external review system in
place, would be able to continue overseeing these systems. Ganske-
Dingell sets a federal standard and allows states to provide additional
protections if they choose to, while the Norwood amendment mandates a
federal cap which prohibits states from providing additional
protections.
States like New York, which currently has a superior external review
process compared to the regulations outlined in Norwood, would be
forced to follow an inferior external review system.
I hoped to come to the floor today to support a bipartisan proposal
that had the full backing of all 4 sponsors of H.R. 2563, the House
leadership and the White House.
Unfortunately, we have come to a cross roads. Our sponsors are in
disagreement, the President has pledged, for his reasons, to veto the
Ganske-Dingell-Norwood bill in its present form, the Minority has begun
to politicize this issue to the detriment of real reform, and we are
now forced to make a decision between passing a Patient's Bill of
Rights or passing up the opportunity to allow myself, Dr. Ganske, Dr.
Norwood, Mr. Dingell, Mr. Berry and other Members of Congress to
pressure the Senate and the White House in conference to remedy those
provisions which weaken this measure.
In light of this unfortunate situation, I will not kill our
opportunity to continue our work on behalf of patient's throughout our
nation and pass a bi-partisan Patient's Bill of Rights.
I call on my colleagues, the Senate, and the President to recognize
that this is an unfinished work and I look forward to working with all
concerned so that after five long years we can finally complete this
important measure.
Mr. ROSS. Mr. Chairman we need a real Patients Bill of Rights--one
that truly takes the medical decisions out of the hands of the big
health insurance company bureaucrats and the big HMOs and puts them
back where they belong with physicians, nurses, and patients; one that
allows patients to hold their HMOs accountable when they make bad
medical decisions. That's what our constituents are asking for. That's
what the Ganske-Dingell-Berry bill would do.
I'm sick and tired of the scare tactics the big health insurance
companies and the big HMOs have been using with our small business
owners. I own a small business with 15 employees back home. We provide
health insurance to our employees. And I can tell you, the scare
tactics that these HMOs are putting out in regard to increased premiums
and potential lawsuits are simply that--scare tactics.
The state of Texas has this law on the books, and it is working. It's
making the big HMOs accountable to their patients on the front end, and
that is why there have only been 17 lawsuits filed in the state of
Texas--a very large state-- since the law was enacted in 1997.
The Norwood Compromise overrides states like Texas who already have
patient protection laws on their books. It rolls back patient
protections and shields HMOs from the consequences of their own bad
medical decisions, unlike doctors and hospitals, who will be left to
defend themselves.
This is not a patient bill of rights. This is an HMO and health
insurance companies' bill of rights. Mr. Chairman, I urge my colleagues
to reject this legislation written by the big HMOs for the big HMOs. I
urge my colleagues to vote against final passage of this measure.
Mr. UDALL of Colorado. Mr. Chairman, since being elected to Congress,
I have worked hard for a meaningful Patient's Bill of Rights. But I
cannot support the White House proposal that was crafted in the wee
hours of the night because it favors HMOs over patients.
This proposal is bad for Colorado. Patients will not have the full
right to sue their HMO if it unfairly denies them access to critical
medical care. And worse yet, the White House proposal overrides strong
patients' rights laws already enacted in Colorado. When I served in the
Colorado State House, we put in lots of hard work on a bipartisan basis
to enact strong, meaningful patient protections. This deal will wipe
away those protections with one fell swoop. We should keep our strong
state protections in tact and not let the weaker federal laws take
precedence.
So Mr. Chairman, I stand with the American Medical Association and
the millions of Americans who will be greatly harmed by this
legislation. I am disappointed that the Republican Leadership has
worked with the White House to strike a deal that is acceptable to the
President and unacceptable to patients and doctors. They have hijacked
a good bill and filled it with protections for special interests. I
hope that the House-Senate conference committee will come up with a
bill that reflects the McCain bill that was approved in the Senate
earlier this year.
Ms. LEE. Mr. Chairman, I am deeply disappointed in how the
Republicans have stripped and completely weakened H.R. 2563, the
Bipartisan Ganske-Dingell Patient Protection Act of 2001. This Patient
Bill of Rights originally included strong patient protections that
would have ensured timely access to high quality health care for the
millions of Americans with private health insurance.
This bill was a bipartisan effort to protect our patients but some
Republicans decided to add some terrible provisions that protected HMOs
over individuals. The original Patients Bill of Rights, the one I
supported, would have given individuals more access to emergency
medical services, access to specialty care, access to essential
medication, access to clinical trials, and direct access to
pediatricians as well as Ob-Gyn care. This bill would have also
protected the doctor-patient relationships by ensuring health
professionals are free to provide information about a patient's medical
treatment options.
H.R. 2563 did address the importance of allowing patients to appeal
their health plans' decision as well as holding HMOs accountable for
their actions. This bill would have established an independent, speedy
external review process for patients dissatisfied with the results of
the internal review. H.R. 2563 would
[[Page H5222]]
have allowed individuals the right to sue when a medical judgment
resulted in injury or death.
The Republicans offered three amendments of which two passed to the
Patient Protection Act that severely weakened major provisions. The
first amendment fully expands medical savings accounts (MSA) which only
benefit wealthier and healthier people. This provision will directly
increase health care costs for those who remain in traditional
insurance and managed care plans.
The second Republican amendment weakens enforcement provisions found
within H.R. 2563, makes it nearly impossible to pursue cases in state
court, and stacks the deck against patients who have been harmed by
insurance companies.
Now that these two poisonous amendments have been attached to H.R.
2563, I can no longer support this bill because patients will no longer
be protected. Individuals throughout our nation have been growing more
and more frustrated with an inadequate health care system that does not
listen to the needs of our people. The original bill would have
provided many protections that are essential to upholding our patients'
rights. But unfortunately, the bill was completely stripped by the
Republicans who want to protect HMO insurance groups over average
Americans.
I was a stronger supporter of this bill but I now have to vote
against this proposal. It's a shame that we cannot pass a real
patients' bill of rights, and it's a shame that we are not addressing
the 44 million individuals without any kind of health care coverage. I
believe we need to provide all individuals access to affordable health
care in order to improve our overall quality of life and health. This
Congress should support a real Patients' bill of Rights and quality
health care for everyone in this country. Today, this Congress did
neither.
Mr. BACA. Mr. Chairman, we are about to engage in a battle to protect
patients' rights, our rights and the rights of our loved ones. I
believe that every American, those in the 42nd district of California,
those across the Nation are all entitled to quality health care.
We can no longer take for granted that HMOs will let doctors base
decisions on our health needs. We can no longer assume that HMOs care
about our health concerns over the companies' bottom line.
The bottom line is that HMOs care only about one thing: Profits!
Profits! Profits! Profits! instead of health needs! health needs!
health needs! health needs!
Too often today, HMOs are not making sound decisions about the health
needs of our families, our children, our parents and grandparents!
We must shift priorities away from money and back to the patient!
Away from HMOS and back to our doctors!
This debate is about taking care of the American people that invest
in our country every day! It is about working mothers in San Bernardino
with sick children at home. It is about a husband or wife in Rialto
having to take time off work to see a doctor only to be referred to
another doctor.
This is about direct access for women to see an ob-gyn, for your
child to see a pediatrician, to emergency care specialists, this is a
matter of life or death!
Let's not forget about those who have dedicated their lives to our
health and happiness, our parents, our grandparents, the elderly.
This can no longer be about profits! This is about healing the sick!
This is about making sure that the health needs of every American are
taken care of.
Health care should be the least of our worries! You shouldn't have to
worry about losing your job, you shouldn't have to worry about losing
your home because your health plan wouldn't cover you in your time of
need!
This is America. We care about everyone in America. We should not
have to live in fear. The American people should not live in fear of
sickness, the American people do not deserve to fear needing medical
attention!
The least we can do is guarantee better health care for working
Americans than the health care provided to those in our prison systems!
That is why I joined a bipartisan coalition, to co-sponsor H.R. 2563,
the Patient Protection Act, a strong, enforceable patients' bill of
rights, the only real patients' bill of rights. I will fight against
efforts to weaken this bill with amendments negotiated in the dead of
night.
President Bush claims he is committed to working on a bipartisan
basis for the good of our people. Here is his chance! This is not a
partisan issue, it is about protecting patients' rights to quality
health care. It is really about the health of our country! ``Read my
lips'' were his Dad's famous words. I urge the president to cut the
lipservice, prove your commitment to bipartisanship! Commit to
America's health Mr. President, not to the health of HMOs, not to the
health of your friends in big business!
This patients' bill of rights is the medicine to cure the out-of-
control greed of the HMOs. I urge you to hold HMOs accountable, to
fight for patients' rights!
Remember who we are talking about. We are talking about the health of
our children, our parents and our neighbors. I urge you to vote for the
Patient Protection Act, H.R. 2563, without amendments that weaken
patient protection.
The CHAIRMAN. All time for general debate has expired.
Pursuant to the rule, the bill is considered read for amendment under
the 5-minute rule.
The text of H.R. 2563 is as follows:
H.R. 2563
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 ``Bipartisan
Patient Protection Act''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--IMPROVING MANAGED CARE
Subtitle A--Utilization Review; Claims; and Internal and External
Appeals
Sec. 101. Utilization review activities.
Sec. 102. Procedures for initial claims for benefits and prior
authorization determinations.
Sec. 103. Internal appeals of claims denials.
Sec. 104. Independent external appeals procedures.
Sec. 105. Health care consumer assistance fund.
Subtitle B--Access to Care
Sec. 111. Consumer choice option.
Sec. 112. Choice of health care professional.
Sec. 113. Access to emergency care.
Sec. 114. Timely access to specialists.
Sec. 115. Patient access to obstetrical and gynecological care.
Sec. 116. Access to pediatric care.
Sec. 117. Continuity of care.
Sec. 118. Access to needed prescription drugs.
Sec. 119. Coverage for individuals participating in approved clinical
trials.
Sec. 120. Required coverage for minimum hospital stay for mastectomies
and lymph node dissections for the treatment of breast
cancer and coverage for secondary consultations.
Subtitle C--Access to Information
Sec. 121. Patient access to information.
Subtitle D--Protecting the Doctor-Patient Relationship
Sec. 131. Prohibition of interference with certain medical
communications.
Sec. 132. Prohibition of discrimination against providers based on
licensure.
Sec. 133. Prohibition against improper incentive arrangements.
Sec. 134. Payment of claims.
Sec. 135. Protection for patient advocacy.
Subtitle E--Definitions
Sec. 151. Definitions.
Sec. 152. Preemption; State flexibility; construction.
Sec. 153. Exclusions.
Sec. 154. Treatment of excepted benefits.
Sec. 155. Regulations.
Sec. 156. Incorporation into plan or coverage documents.
Sec. 157. Preservation of protections.
TITLE II--APPLICATION OF QUALITY CARE STANDARDS TO GROUP HEALTH PLANS
AND HEALTH INSURANCE COVERAGE 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.
Sec. 203. Cooperation between Federal and State authorities.
TITLE III--APPLICATION OF PATIENT PROTECTION STANDARDS TO FEDERAL
HEALTH INSURANCE PROGRAMS
Sec. 301. Application of patient protection standards to Federal health
insurance programs.
TITLE IV--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974
Sec. 401. Application of patient protection standards to group health
plans and group health insurance coverage under the
Employee Retirement Income Security Act of 1974.
Sec. 402. Availability of civil remedies.
Sec. 403. Limitation on certain class action litigation.
Sec. 404. Limitations on actions.
Sec. 405. Cooperation between Federal and State authorities.
Sec. 406. Sense of the Senate concerning the importance of certain
unpaid services.
TITLE V--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986
Subtitle A--Application of Patient Protection Provisions
Sec. 501. Application of requirements to group health plans under the
Internal Revenue Code of 1986.
Sec. 502. Conforming enforcement for women's health and cancer rights.
Subtitle B--Health Care Coverage Access Tax Incentives
Sec. 511. Expanded availability of Archer MSAs.
[[Page H5223]]
Sec. 512. Deduction for 100 percent of health insurance costs of self-
employed individuals.
Sec. 513. Credit for health insurance expenses of small businesses.
Sec. 514. Certain grants by private foundations to qualified health
benefit purchasing coalitions.
Sec. 515. State grant program for market innovation.
TITLE VI--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION
Sec. 601. Effective dates.
Sec. 602. Coordination in implementation.
Sec. 603. Severability.
TITLE VII--MISCELLANEOUS PROVISIONS
Sec. 701. No impact on Social Security Trust Fund.
Sec. 702. Customs user fees.
Sec. 703. Fiscal year 2002 medicare payments.
Sec. 704. Sense of Senate with respect to participation in clinical
trials and access to specialty care.
Sec. 705. Sense of the Senate regarding fair review process.
Sec. 706. Annual review.
Sec. 707. Definition of born-alive infant.
TITLE I--IMPROVING MANAGED CARE
Subtitle A--Utilization Review; Claims; and Internal and External
Appeals
SEC. 101. UTILIZATION REVIEW ACTIVITIES.
(a) Compliance With Requirements.--
(1) In general.--A group health plan, and a health
insurance issuer that provides 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 and section 102.
(2) 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.
(3) Utilization review defined.--For purposes of this
section, the terms ``utilization review'' and ``utilization
review activities'' mean procedures used to monitor or
evaluate the use or coverage, 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.
(b) Written Policies and Criteria.--
(1) Written policies.--A utilization review program shall
be conducted consistent with written policies and procedures
that govern all aspects of the program.
(2) Use of written criteria.--
(A) In general.--Such a program shall utilize written
clinical review criteria developed with input from a range of
appropriate actively practicing health care professionals, as
determined by the plan, pursuant to the program. Such
criteria shall include written clinical review criteria that
are based on valid clinical evidence where available and 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.
(B) Continuing use of standards in retrospective review.--
If a health care service has been specifically pre-authorized
or approved for a participant, beneficiary, or enrollee 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 enrollee during the same course of treatment.
(C) Review of sample of claims denials.--Such a program
shall provide for a periodic evaluation of the clinical
appropriateness of at least a sample of denials of claims for
benefits.
(c) Conduct of Program Activities.--
(1) Administration by health care professionals.--A
utilization review program shall be administered by qualified
health care professionals who shall oversee review decisions.
(2) Use of qualified, independent personnel.--
(A) In general.--A utilization review program shall provide
for the conduct of utilization review activities only through
personnel who are qualified and have received appropriate
training in the conduct of such activities under the program.
(B) 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 encourages denials of claims for benefits.
(C) Prohibition of conflicts.--Such a program shall not
permit a health care professional who is providing health
care services to an individual to perform utilization review
activities in connection with the health care services being
provided to the individual.
(3) Accessibility of review.--Such a program shall provide
that appropriate personnel performing utilization review
activities under the program, including the utilization
review administrator, 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.
(4) 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 an individual
more frequently than is reasonably required to assess whether
the services under review are medically necessary and
appropriate.
SEC. 102. PROCEDURES FOR INITIAL CLAIMS FOR BENEFITS AND
PRIOR AUTHORIZATION DETERMINATIONS.
(a) Procedures of Initial Claims for Benefits.--
(1) In general.--A group health plan, and a health
insurance issuer offering health insurance coverage, shall--
(A) make a determination on an initial claim for benefits
by a participant, beneficiary, or enrollee (or authorized
representative) regarding payment or coverage for items or
services under the terms and conditions of the plan or
coverage involved, including any cost-sharing amount that the
participant, beneficiary, or enrollee is required to pay with
respect to such claim for benefits; and
(B) notify a participant, beneficiary, or enrollee (or
authorized representative) and the treating health care
professional involved regarding a determination on an initial
claim for benefits made under the terms and conditions of the
plan or coverage, including any cost-sharing amounts that the
participant, beneficiary, or enrollee may be required to make
with respect to such claim for benefits, and of the right of
the participant, beneficiary, or enrollee to an internal
appeal under section 103.
(2) Access to information.--
(A) Timely provision of necessary information.--With
respect to an initial claim for benefits, the participant,
beneficiary, or enrollee (or authorized representative) and
the treating health care professional (if any) shall provide
the plan or issuer with access to information requested by
the plan or issuer that is necessary to make a determination
relating to the claim. Such access shall be provided not
later than 5 days after the date on which the request for
information is received, or, in a case described in
subparagraph (B) or (C) of subsection (b)(1), by such earlier
time as may be necessary to comply with the applicable
timeline under such subparagraph.
(B) Limited effect of failure on plan or issuer's
obligations.--Failure of the participant, beneficiary, or
enrollee to comply with the requirements of subparagraph (A)
shall not remove the obligation of the plan or issuer to make
a decision in accordance with the medical exigencies of the
case and as soon as possible, based on the available
information, and failure to comply with the time limit
established by this paragraph shall not remove the obligation
of the plan or issuer to comply with the requirements of this
section.
(3) Oral requests.--In the case of a claim for benefits
involving an expedited or concurrent determination, a
participant, beneficiary, or enrollee (or authorized
representative) may make an initial claim for benefits
orally, but a group health plan, or health insurance issuer
offering health insurance coverage, may require that the
participant, beneficiary, or enrollee (or authorized
representative) provide written confirmation of such request
in a timely manner on a form provided by the plan or issuer.
In the case of such an oral request for benefits, the making
of the request (and the timing of such request) shall be
treated as the making at that time of a claim for such
benefits without regard to whether and when a written
confirmation of such request is made.
(b) Timeline for Making Determinations.--
(1) Prior authorization determination.--
(A) In general.--A group health plan, and a health
insurance issuer offering health insurance coverage, shall
make a prior authorization determination on a claim for
benefits (whether oral or written) in accordance with the
medical exigencies of the case and as soon as possible, but
in no case later than 14 days from the date on which the plan
or issuer receives information that is reasonably necessary
to enable the plan or issuer to make a determination on the
request for prior authorization and in no case later than 28
days after the date of the claim for benefits is received.
(B) Expedited determination.--Notwithstanding subparagraph
(A), a group health plan, and a health insurance issuer
offering health insurance coverage, shall expedite a prior
authorization determination on a claim for benefits described
in such subparagraph when a request for such an expedited
determination is made by a participant, beneficiary, or
enrollee (or authorized representative) at any time during
the process for making a determination and a health care
professional certifies, with the request, that a
determination under the procedures described in subparagraph
(A) would seriously jeopardize the life or health of the
participant, beneficiary, or enrollee or the ability of the
participant, beneficiary, or enrollee to maintain or
regain maximum function. Such determination shall be made
in accordance with the medical exigencies of the case and
as soon as possible, but in no case later than
[[Page H5224]]
72 hours after the time the request is received by the
plan or issuer under this subparagraph.
(C) Ongoing care.--
(i) Concurrent review.--
(I) In general.--Subject to clause (ii), in the case of a
concurrent review of ongoing care (including
hospitalization), which results in a termination or reduction
of such care, the plan or issuer must provide by telephone
and in printed form notice of the concurrent review
determination to the individual or the individual's designee
and the individual's health care provider in accordance with
the medical exigencies of the case and as soon as possible,
with sufficient time prior to the termination or reduction to
allow for an appeal under section 103(b)(3) to be completed
before the termination or reduction takes effect.
(II) Contents of notice.--Such notice shall include, with
respect to ongoing health care items and services, the number
of ongoing services approved, the new total of approved
services, the date of onset of services, and the next review
date, if any, as well as a statement of the individual's
rights to further appeal.
(ii) Rule of construction.--Clause (i) shall not be
construed as requiring plans or issuers to provide coverage
of care that would exceed the coverage limitations for such
care.
(2) Retrospective determination.--A group health plan, and
a health insurance issuer offering health insurance coverage,
shall make a retrospective determination on a claim for
benefits in accordance with the medical exigencies of the
case and as soon as possible, but not later than 30 days
after the date on which the plan or issuer receives
information that is reasonably necessary to enable the plan
or issuer to make a determination on the claim, or, if
earlier, 60 days after the date of receipt of the claim for
benefits.
(c) Notice of a Denial of a Claim for Benefits.--Written
notice of a denial made under an initial claim for benefits
shall be issued to the participant, beneficiary, or enrollee
(or authorized representative) and the treating health care
professional in accordance with the medical exigencies of the
case and as soon as possible, but in no case later than 2
days after the date of the determination (or, in the case
described in subparagraph (B) or (C) of subsection (b)(1),
within the 72-hour or applicable period referred to in such
subparagraph).
(d) Requirements of Notice of Determinations.--The written
notice of a denial of a claim for benefits determination
under subsection (c) shall be provided in printed form and
written in a manner calculated to be understood by the
participant, beneficiary, or enrollee and shall include--
(1) the specific reasons for the determination (including a
summary of the clinical or scientific evidence used in making
the determination);
(2) the procedures for obtaining additional information
concerning the determination; and
(3) notification of the right to appeal the determination
and instructions on how to initiate an appeal in accordance
with section 103.
(e) Definitions.--For purposes of this part:
(1) Authorized representative.--The term ``authorized
representative'' means, with respect to an individual who is
a participant, beneficiary, or enrollee, any health care
professional or other person acting on behalf of the
individual with the individual's consent or without such
consent if the individual is medically unable to provide such
consent.
(2) Claim for benefits.--The term ``claim for benefits''
means any request for coverage (including authorization of
coverage), for eligibility, or for payment in whole or in
part, for an item or service under a group health plan or
health insurance coverage.
(3) Denial of claim for benefits.--The term ``denial''
means, with respect to a claim for benefits, a denial (in
whole or in part) of, or a failure to act on a timely basis
upon, the claim for benefits and includes a failure to
provide benefits (including items and services) required to
be provided under this title.
(4) Treating health care professional.--The term ``treating
health care professional'' means, with respect to services to
be provided to a participant, beneficiary, or enrollee, a
health care professional who is primarily responsible for
delivering those services to the participant, beneficiary, or
enrollee.
SEC. 103. INTERNAL APPEALS OF CLAIMS DENIALS.
(a) Right to Internal Appeal.--
(1) In general.--A participant, beneficiary, or enrollee
(or authorized representative) may appeal any denial of a
claim for benefits under section 102 under the procedures
described in this section.
(2) Time for appeal.--
(A) In general.--A group health plan, and a health
insurance issuer offering health insurance coverage, shall
ensure that a participant, beneficiary, or enrollee (or
authorized representative) has a period of not less than 180
days beginning on the date of a denial of a claim for
benefits under section 102 in which to appeal such denial
under this section.
(B) Date of denial.--For purposes of subparagraph (A), the
date of the denial shall be deemed to be the date as of which
the participant, beneficiary, or enrollee knew of the denial
of the claim for benefits.
(3) Failure to act.--The failure of a plan or issuer to
issue a determination on a claim for benefits under section
102 within the applicable timeline established for such a
determination under such section is a denial of a claim for
benefits for purposes this subtitle as of the date of the
applicable deadline.
(4) Plan waiver of internal review.--A group health plan,
or health insurance issuer offering health insurance
coverage, may waive the internal review process under this
section. In such case the plan or issuer shall provide notice
to the participant, beneficiary, or enrollee (or authorized
representative) involved, the participant, beneficiary, or
enrollee (or authorized representative) involved shall be
relieved of any obligation to complete the internal review
involved, and may, at the option of such participant,
beneficiary, enrollee, or representative proceed directly to
seek further appeal through external review under section 104
or otherwise.
(b) Timelines for Making Determinations.--
(1) Oral requests.--In the case of an appeal of a denial of
a claim for benefits under this section that involves an
expedited or concurrent determination, a participant,
beneficiary, or enrollee (or authorized representative) may
request such appeal orally. A group health plan, or health
insurance issuer offering health insurance coverage, may
require that the participant, beneficiary, or enrollee (or
authorized representative) provide written confirmation of
such request in a timely manner on a form provided by the
plan or issuer. In the case of such an oral request for an
appeal of a denial, the making of the request (and the timing
of such request) shall be treated as the making at that time
of a request for an appeal without regard to whether and when
a written confirmation of such request is made.
(2) Access to information.--
(A) Timely provision of necessary information.--With
respect to an appeal of a denial of a claim for benefits, the
participant, beneficiary, or enrollee (or authorized
representative) and the treating health care professional (if
any) shall provide the plan or issuer with access to
information requested by the plan or issuer that is
necessary to make a determination relating to the appeal.
Such access shall be provided not later than 5 days after
the date on which the request for information is received,
or, in a case described in subparagraph (B) or (C) of
paragraph (3), by such earlier time as may be necessary to
comply with the applicable timeline under such
subparagraph.
(B) Limited effect of failure on plan or issuer's
obligations.--Failure of the participant, beneficiary, or
enrollee to comply with the requirements of subparagraph (A)
shall not remove the obligation of the plan or issuer to make
a decision in accordance with the medical exigencies of the
case and as soon as possible, based on the available
information, and failure to comply with the time limit
established by this paragraph shall not remove the obligation
of the plan or issuer to comply with the requirements of this
section.
(3) Prior authorization determinations.--
(A) In general.--Except as provided in this paragraph or
paragraph (4), a group health plan, and a health insurance
issuer offering health insurance coverage, shall make a
determination on an appeal of a denial of a claim for
benefits under this subsection in accordance with the medical
exigencies of the case and as soon as possible, but in no
case later than 14 days from the date on which the plan or
issuer receives information that is reasonably necessary to
enable the plan or issuer to make a determination on the
appeal and in no case later than 28 days after the date the
request for the appeal is received.
(B) Expedited determination.--Notwithstanding subparagraph
(A), a group health plan, and a health insurance issuer
offering health insurance coverage, shall expedite a prior
authorization determination on an appeal of a denial of a
claim for benefits described in subparagraph (A), when a
request for such an expedited determination is made by a
participant, beneficiary, or enrollee (or authorized
representative) at any time during the process for making a
determination and a health care professional certifies, with
the request, that a determination under the procedures
described in subparagraph (A) would seriously jeopardize the
life or health of the participant, beneficiary, or enrollee
or the ability of the participant, beneficiary, or enrollee
to maintain or regain maximum function. Such determination
shall be made in accordance with the medical exigencies of
the case and as soon as possible, but in no case later than
72 hours after the time the request for such appeal is
received by the plan or issuer under this subparagraph.
(C) Ongoing care determinations.--
(i) In general.--Subject to clause (ii), in the case of a
concurrent review determination described in section
102(b)(1)(C)(i)(I), which results in a termination or
reduction of such care, the plan or issuer must provide
notice of the determination on the appeal under this section
by telephone and in printed form to the individual or the
individual's designee and the individual's health care
provider in accordance with the medical exigencies of the
case and as soon as possible, with sufficient time prior to
the termination or reduction to allow for an external appeal
[[Page H5225]]
under section 104 to be completed before the termination or
reduction takes effect.
(ii) Rule of construction.--Clause (i) shall not be
construed as requiring plans or issuers to provide coverage
of care that would exceed the coverage limitations for such
care.
(4) Retrospective determination.--A group health plan, and
a health insurance issuer offering health insurance coverage,
shall make a retrospective determination on an appeal of a
denial of a claim for benefits in no case later than 30 days
after the date on which the plan or issuer receives necessary
information that is reasonably necessary to enable the plan
or issuer to make a determination on the appeal and in no
case later than 60 days after the date the request for the
appeal is received.
(c) Conduct of Review.--
(1) In general.--A review of a denial of a claim for
benefits under this section shall be conducted by an
individual with appropriate expertise who was not involved in
the initial determination.
(2) Peer review of medical decisions by health care
professionals.--A review of an appeal of a denial of a claim
for benefits that is based on a lack of medical necessity and
appropriateness, or based on an experimental or
investigational treatment, or requires an evaluation of
medical facts--
(A) shall be made by a physician (allopathic or
osteopathic); or
(B) in a claim for benefits provided by a non-physician
health professional, shall be made by reviewer (or reviewers)
including at least one practicing non-physician health
professional of the same or similar specialty;
with appropriate expertise (including, in the case of a
child, appropriate pediatric expertise) and acting within the
appropriate scope of practice within the State in which the
service is provided or rendered, who was not involved in the
initial determination.
(d) Notice of Determination.--
(1) In general.--Written notice of a determination made
under an internal appeal of a denial of a claim for benefits
shall be issued to the participant, beneficiary, or enrollee
(or authorized representative) and the treating health care
professional in accordance with the medical exigencies of the
case and as soon as possible, but in no case later than 2
days after the date of completion of the review (or, in the
case described in subparagraph (B) or (C) of subsection
(b)(3), within the 72-hour or applicable period referred to
in such subparagraph).
(2) Final determination.--The decision by a plan or issuer
under this section shall be treated as the final
determination of the plan or issuer on a denial of a claim
for benefits. The failure of a plan or issuer to issue a
determination on an appeal of a denial of a claim for
benefits under this section within the applicable timeline
established for such a determination shall be treated as a
final determination on an appeal of a denial of a claim for
benefits for purposes of proceeding to external review under
section 104.
(3) Requirements of notice.--With respect to a
determination made under this section, the notice described
in paragraph (1) shall be provided in printed form and
written in a manner calculated to be understood by the
participant, beneficiary, or enrollee and shall include--
(A) the specific reasons for the determination (including a
summary of the clinical or scientific evidence used in making
the determination);
(B) the procedures for obtaining additional information
concerning the determination; and
(C) notification of the right to an independent external
review under section 104 and instructions on how to initiate
such a review.
SEC. 104. INDEPENDENT EXTERNAL APPEALS PROCEDURES.
(a) Right to External Appeal.--A group health plan, and a
health insurance issuer offering health insurance coverage,
shall provide in accordance with this section participants,
beneficiaries, and enrollees (or authorized representatives)
with access to an independent external review for any denial
of a claim for benefits.
(b) Initiation of the Independent External Review
Process.--
(1) Time to file.--A request for an independent external
review under this section shall be filed with the plan or
issuer not later than 180 days after the date on which the
participant, beneficiary, or enrollee receives notice of the
denial under section 103(d) or notice of waiver of internal
review under section 103(a)(4) or the date on which the plan
or issuer has failed to make a timely decision under section
103(d)(2) and notifies the participant or beneficiary that it
has failed to make a timely decision and that the beneficiary
must file an appeal with an external review entity within 180
days if the participant or beneficiary desires to file such
an appeal.
(2) Filing of request.--
(A) In general.--Subject to the succeeding provisions of
this subsection, a group health plan, or health insurance
issuer offering health insurance coverage, may--
(i) except as provided in subparagraph (B)(i), require that
a request for review be in writing;
(ii) limit the filing of such a request to the participant,
beneficiary, or enrollee involved (or an authorized
representative);
(iii) except if waived by the plan or issuer under section
103(a)(4), condition access to an independent external review
under this section upon a final determination of a denial of
a claim for benefits under the internal review procedure
under section 103;
(iv) except as provided in subparagraph (B)(ii), require
payment of a filing fee to the plan or issuer of a sum that
does not exceed $25; and
(v) require that a request for review include the consent
of the participant, beneficiary, or enrollee (or authorized
representative) for the release of necessary medical
information or records of the participant, beneficiary, or
enrollee to the qualified external review entity only for
purposes of conducting external review activities.
(B) Requirements and exception relating to general rule.--
(i) Oral requests permitted in expedited or concurrent
cases.--In the case of an expedited or concurrent external
review as provided for under subsection (e), the request for
such review may be made orally. A group health plan, or
health insurance issuer offering health insurance coverage,
may require that the participant, beneficiary, or enrollee
(or authorized representative) provide written confirmation
of such request in a timely manner on a form provided by the
plan or issuer. Such written confirmation shall be treated as
a consent for purposes of subparagraph (A)(v). In the case of
such an oral request for such a review, the making of the
request (and the timing of such request) shall be treated as
the making at that time of a request for such a review
without regard to whether and when a written confirmation of
such request is made.
(ii) Exception to filing fee requirement.--
(I) Indigency.--Payment of a filing fee shall not be
required under subparagraph (A)(iv) where there is a
certification (in a form and manner specified in guidelines
established by the appropriate Secretary) that the
participant, beneficiary, or enrollee is indigent (as defined
in such guidelines).
(II) Fee not required.--Payment of a filing fee shall not
be required under subparagraph (A)(iv) if the plan or issuer
waives the internal appeals process under section 103(a)(4).
(III) Refunding of fee.--The filing fee paid under
subparagraph (A)(iv) shall be refunded if the determination
under the independent external review is to reverse or modify
the denial which is the subject of the review.
(IV) Collection of filing fee.--The failure to pay such a
filing fee shall not prevent the consideration of a request
for review but, subject to the preceding provisions of this
clause, shall constitute a legal liability to pay.
(c) Referral to Qualified External Review Entity Upon
Request.--
(1) In general.--Upon the filing of a request for
independent external review with the group health plan, or
health insurance issuer offering health insurance coverage,
the plan or issuer shall immediately refer such request, and
forward the plan or issuer's initial decision (including the
information described in section 103(d)(3)(A)), to a
qualified external review entity selected in accordance with
this section.
(2) Access to plan or issuer and health professional
information.--With respect to an independent external review
conducted under this section, the participant, beneficiary,
or enrollee (or authorized representative), the plan or
issuer, and the treating health care professional (if any)
shall provide the external review entity with information
that is necessary to conduct a review under this section, as
determined and requested by the entity. Such information
shall be provided not later than 5 days after the date on
which the request for information is received, or, in a case
described in clause (ii) or (iii) of subsection (e)(1)(A), by
such earlier time as may be necessary to comply with the
applicable timeline under such clause.
(3) Screening of requests by qualified external review
entities.--
(A) In general.--With respect to a request referred to a
qualified external review entity under paragraph (1) relating
to a denial of a claim for benefits, the entity shall refer
such request for the conduct of an independent medical review
unless the entity determines that--
(i) any of the conditions described in clauses (ii) or
(iii) of subsection (b)(2)(A) have not been met;
(ii) the denial of the claim for benefits does not involve
a medically reviewable decision under subsection (d)(2);
(iii) the denial of the claim for benefits relates to a
decision regarding whether an individual is a participant,
beneficiary, or enrollee who is enrolled under the terms and
conditions of the plan or coverage (including the
applicability of any waiting period under the plan or
coverage); or
(iv) the denial of the claim for benefits is a decision as
to the application of cost-sharing requirements or the
application of a specific exclusion or express limitation on
the amount, duration, or scope of coverage of items or
services under the terms and conditions of the plan or
coverage unless the decision is a denial described in
subsection (d)(2).
Upon making a determination that any of clauses (i) through
(iv) applies with respect to the request, the entity shall
determine that the denial of a claim for benefits involved is
not eligible for independent medical review under subsection
(d), and shall provide notice in accordance with subparagraph
(C).
(B) Process for making determinations.--
[[Page H5226]]
(i) No deference to prior determinations.--In making
determinations under subparagraph (A), there shall be no
deference given to determinations made by the plan or issuer
or the recommendation of a treating health care professional
(if any).
(ii) Use of appropriate personnel.--A qualified external
review entity shall use appropriately qualified personnel to
make determinations under this section.
(C) Notices and general timelines for determination.--
(i) Notice in case of denial of referral.--If the entity
under this paragraph does not make a referral to an
independent medical reviewer, the entity shall provide notice
to the plan or issuer, the participant, beneficiary, or
enrollee (or authorized representative) filing the request,
and the treating health care professional (if any) that the
denial is not subject to independent medical review. Such
notice--
(I) shall be written (and, in addition, may be provided
orally) in a manner calculated to be understood by a
participant or enrollee;
(II) shall include the reasons for the determination;
(III) include any relevant terms and conditions of the plan
or coverage; and
(IV) include a description of any further recourse
available to the individual.
(ii) General timeline for determinations.--Upon receipt of
information under paragraph (2), the qualified external
review entity, and if required the independent medical
reviewer, shall make a determination within the overall
timeline that is applicable to the case under review as
described in subsection (e), except that if the entity
determines that a referral to an independent medical reviewer
is not required, the entity shall provide notice of such
determination to the participant, beneficiary, or enrollee
(or authorized representative) within such timeline and
within 2 days of the date of such determination.
(d) Independent Medical Review.--
(1) In general.--If a qualified external review entity
determines under subsection (c) that a denial of a claim for
benefits is eligible for independent medical review, the
entity shall refer the denial involved to an independent
medical reviewer for the conduct of an independent medical
review under this subsection.
(2) Medically reviewable decisions.--A denial of a claim
for benefits is eligible for independent medical review if
the benefit for the item or service for which the claim is
made would be a covered benefit under the terms and
conditions of the plan or coverage but for one (or more) of
the following determinations:
(A) Denials based on medical necessity and
appropriateness.--A determination that the item or service is
not covered because it is not medically necessary and
appropriate or based on the application of substantially
equivalent terms.
(B) Denials based on experimental or investigational
treatment.--A determination that the item or service is not
covered because it is experimental or investigational or
based on the application of substantially equivalent terms.
(C) Denials otherwise based on an evaluation of medical
facts.--A determination that the item or service or condition
is not covered based on grounds that require an evaluation of
the medical facts by a health care professional in the
specific case involved to determine the coverage and extent
of coverage of the item or service or condition.
(3) Independent medical review determination.--
(A) In general.--An independent medical reviewer under this
section shall make a new independent determination with
respect to whether or not the denial of a claim for a benefit
that is the subject of the review should be upheld, reversed,
or modified.
(B) Standard for determination.--The independent medical
reviewer's determination relating to the medical necessity
and appropriateness, or the experimental or investigational
nature, or the evaluation of the medical facts, of the item,
service, or condition involved shall be based on the medical
condition of the participant, beneficiary, or enrollee
(including the medical records of the participant,
beneficiary, or enrollee) and valid, relevant scientific
evidence and clinical evidence, including peer-reviewed
medical literature or findings and including expert opinion.
(C) No coverage for excluded benefits.--Nothing in this
subsection shall be construed to permit an independent
medical reviewer to require that a group health plan, or
health insurance issuer offering health insurance coverage,
provide coverage for items or services for which benefits are
specifically excluded or expressly limited under the plan or
coverage in the plain language of the plan document (and
which are disclosed under section 121(b)(1)(C)).
Notwithstanding any other provision of this Act, any
exclusion of an exact medical procedure, any exact time limit
on the duration or frequency of coverage, and any exact
dollar limit on the amount of coverage that is specifically
enumerated and defined (in the plain language of the plan or
coverage documents) under the plan or coverage offered by a
group health plan or health insurance issuer offering health
insurance coverage and that is disclosed under section
121(b)(1) shall be considered to govern the scope of the
benefits that may be required: Provided, That the terms and
conditions of the plan or coverage relating to such an
exclusion or limit are in compliance with the requirements of
law.
(D) Evidence and information to be used in medical
reviews.--In making a determination under this subsection,
the independent medical reviewer shall also consider
appropriate and available evidence and information, including
the following:
(i) The determination made by the plan or issuer with
respect to the claim upon internal review and the evidence,
guidelines, or rationale used by the plan or issuer in
reaching such determination.
(ii) The recommendation of the treating health care
professional and the evidence, guidelines, and rationale used
by the treating health care professional in reaching such
recommendation.
(iii) Additional relevant evidence or information obtained
by the reviewer or submitted by the plan, issuer,
participant, beneficiary, or enrollee (or an authorized
representative), or treating health care professional.
(iv) The plan or coverage document.
(E) Independent determination.--In making determinations
under this section, a qualified external review entity and an
independent medical reviewer shall--
(i) consider the claim under review without deference to
the determinations made by the plan or issuer or the
recommendation of the treating health care professional (if
any); and
(ii) consider, but not be bound by, the definition used by
the plan or issuer of ``medically necessary and
appropriate'', or ``experimental or investigational'', or
other substantially equivalent terms that are used by the
plan or issuer to describe medical necessity and
appropriateness or experimental or investigational nature of
the treatment.
(F) Determination of independent medical reviewer.--An
independent medical reviewer shall, in accordance with the
deadlines described in subsection (e), prepare a written
determination to uphold, reverse, or modify the denial under
review. Such written determination shall include--
(i) the determination of the reviewer;
(ii) the specific reasons of the reviewer for such
determination, including a summary of the clinical or
scientific evidence used in making the determination; and
(iii) with respect to a determination to reverse or modify
the denial under review, a timeframe within which the plan or
issuer must comply with such determination.
(G) Nonbinding nature of additional recommendations.--In
addition to the determination under subparagraph (F), the
reviewer may provide the plan or issuer and the treating
health care professional with additional recommendations in
connection with such a determination, but any such
recommendations shall not affect (or be treated as part of)
the determination and shall not be binding on the plan or
issuer.
(e) Timelines and Notifications.--
(1) Timelines for independent medical review.--
(A) Prior authorization determination.--
(i) In general.--The independent medical reviewer (or
reviewers) shall make a determination on a denial of a claim
for benefits that is referred to the reviewer under
subsection (c)(3) in accordance with the medical exigencies
of the case and as soon as possible, but in no case later
than 14 days after the date of receipt of information under
subsection (c)(2) if the review involves a prior
authorization of items or services and in no case later than
21 days after the date the request for external review is
received.
(ii) Expedited determination.--Notwithstanding clause (i)
and subject to clause (iii), the independent medical reviewer
(or reviewers) shall make an expedited determination on a
denial of a claim for benefits described in clause (i), when
a request for such an expedited determination is made by a
participant, beneficiary, or enrollee (or authorized
representative) at any time during the process for making a
determination, and a health care professional certifies, with
the request, that a determination under the timeline
described in clause (i) would seriously jeopardize the life
or health of the participant, beneficiary, or enrollee or the
ability of the participant, beneficiary, or enrollee to
maintain or regain maximum function. Such determination shall
be made in accordance with the medical exigencies of the case
and as soon as possible, but in no case later than 72 hours
after the time the request for external review is received by
the qualified external review entity.
(iii) Ongoing care determination.--Notwithstanding clause
(i), in the case of a review described in such clause that
involves a termination or reduction of care, the notice of
the determination shall be completed not later than 24 hours
after the time the request for external review is received by
the qualified external review entity and before the end of
the approved period of care.
(B) Retrospective determination.--The independent medical
reviewer (or reviewers) shall complete a review in the case
of a retrospective determination on an appeal of a denial of
a claim for benefits that is referred to the reviewer under
subsection (c)(3) in no case later than 30 days after the
date of receipt of information under subsection (c)(2) and in
no case later than 60 days after the date the request for
external review is received by the qualified external review
entity.
(2) Notification of determination.--The external review
entity shall ensure that the plan or issuer, the participant,
beneficiary, or enrollee (or authorized representative) and
the treating health care professional (if
[[Page H5227]]
any) receives a copy of the written determination of the
independent medical reviewer prepared under subsection
(d)(3)(F). Nothing in this paragraph shall be construed as
preventing an entity or reviewer from providing an initial
oral notice of the reviewer's determination.
(3) Form of notices.--Determinations and notices under this
subsection shall be written in a manner calculated to be
understood by a participant.
(f) Compliance.--
(1) Application of determinations.--
(A) External review determinations binding on plan.--The
determinations of an external review entity and an
independent medical reviewer under this section shall be
binding upon the plan or issuer involved.
(B) Compliance with determination.--If the determination of
an independent medical reviewer is to reverse or modify the
denial, the plan or issuer, upon the receipt of such
determination, shall authorize coverage to comply with the
medical reviewer's determination in accordance with the
timeframe established by the medical reviewer.
(2) Failure to comply.--
(A) In general.--If a plan or issuer fails to comply with
the timeframe established under paragraph (1)(B) with respect
to a participant, beneficiary, or enrollee, where such
failure to comply is caused by the plan or issuer, the
participant, beneficiary, or enrollee may obtain the items or
services involved (in a manner consistent with the
determination of the independent external reviewer) from any
provider regardless of whether such provider is a
participating provider under the plan or coverage.
(B) Reimbursement.--
(i) In general.--Where a participant, beneficiary, or
enrollee obtains items or services in accordance with
subparagraph (A), the plan or issuer involved shall provide
for reimbursement of the costs of such items or services.
Such reimbursement shall be made to the treating health care
professional or to the participant, beneficiary, or enrollee
(in the case of a participant, beneficiary, or enrollee who
pays for the costs of such items or services).
(ii) Amount.--The plan or issuer shall fully reimburse a
professional, participant, beneficiary, or enrollee under
clause (i) for the total costs of the items or services
provided (regardless of any plan limitations that may apply
to the coverage of such items or services) so long as the
items or services were provided in a manner consistent with
the determination of the independent medical reviewer.
(C) Failure to reimburse.--Where a plan or issuer fails to
provide reimbursement to a professional, participant,
beneficiary, or enrollee in accordance with this paragraph,
the professional, participant, beneficiary, or enrollee may
commence a civil action (or utilize other remedies available
under law) to recover only the amount of any such
reimbursement that is owed by the plan or issuer and any
necessary legal costs or expenses (including attorney's fees)
incurred in recovering such reimbursement.
(D) Available remedies.--The remedies provided under this
paragraph are in addition to any other available remedies.
(3) Penalties against authorized officials for refusing to
authorize the determination of an external review entity.--
(A) Monetary penalties.--
(i) In general.--In any case in which the determination of
an external review entity is not followed by a group health
plan, or by a health insurance issuer offering health
insurance coverage, any person who, acting in the capacity of
authorizing the benefit, causes such refusal may, in the
discretion of a court of competent jurisdiction, be liable
to an aggrieved participant, beneficiary, or enrollee for
a civil penalty in an amount of up to $1,000 a day from
the date on which the determination was transmitted to the
plan or issuer by the external review entity until the
date the refusal to provide the benefit is corrected.
(ii) Additional penalty for failing to follow timeline.--In
any case in which treatment was not commenced by the plan in
accordance with the determination of an independent external
reviewer, the Secretary shall assess a civil penalty of
$10,000 against the plan and the plan shall pay such penalty
to the participant, beneficiary, or enrollee involved.
(B) Cease and desist order and order of attorney's fees.--
In any action described in subparagraph (A) brought by a
participant, beneficiary, or enrollee with respect to a group
health plan, or a health insurance issuer offering health
insurance coverage, in which a plaintiff alleges that a
person referred to in such subparagraph has taken an action
resulting in a refusal of a benefit determined by an external
appeal entity to be covered, or has failed to take an action
for which such person is responsible under the terms and
conditions of the plan or coverage and which is necessary
under the plan or coverage for authorizing a benefit, the
court shall cause to be served on the defendant an order
requiring the defendant--
(i) to cease and desist from the alleged action or failure
to act; and
(ii) to pay to the plaintiff a reasonable attorney's fee
and other reasonable costs relating to the prosecution of the
action on the charges on which the plaintiff prevails.
(C) Additional civil penalties.--
(i) In general.--In addition to any penalty imposed under
subparagraph (A) or (B), the appropriate Secretary may assess
a civil penalty against a person acting in the capacity of
authorizing a benefit determined by an external review entity
for one or more group health plans, or health insurance
issuers offering health insurance coverage, for--
(I) any pattern or practice of repeated refusal to
authorize a benefit determined by an external appeal entity
to be covered; or
(II) any pattern or practice of repeated violations of the
requirements of this section with respect to such plan or
coverage.
(ii) Standard of proof and amount of penalty.--Such penalty
shall be payable only upon proof by clear and convincing
evidence of such pattern or practice and shall be in an
amount not to exceed the lesser of--
(I) 25 percent of the aggregate value of benefits shown by
the appropriate Secretary to have not been provided, or
unlawfully delayed, in violation of this section under such
pattern or practice; or
(II) $500,000.
(D) Removal and disqualification.--Any person acting in the
capacity of authorizing benefits who has engaged in any such
pattern or practice described in subparagraph (C)(i) with
respect to a plan or coverage, upon the petition of the
appropriate Secretary, may be removed by the court from such
position, and from any other involvement, with respect to
such a plan or coverage, and may be precluded from returning
to any such position or involvement for a period determined
by the court.
(4) Protection of legal rights.--Nothing in this subsection
or subtitle shall be construed as altering or eliminating any
cause of action or legal rights or remedies of participants,
beneficiaries, enrollees, and others under State or Federal
law (including sections 502 and 503 of the Employee
Retirement Income Security Act of 1974), including the right
to file judicial actions to enforce rights.
(g) Qualifications of Independent Medical Reviewers.--
(1) In general.--In referring a denial to 1 or more
individuals to conduct independent medical review under
subsection (c), the qualified external review entity shall
ensure that--
(A) each independent medical reviewer meets the
qualifications described in paragraphs (2) and (3);
(B) with respect to each review at least 1 such reviewer
meets the requirements described in paragraphs (4) and (5);
and
(C) compensation provided by the entity to the reviewer is
consistent with paragraph (6).
(2) Licensure and expertise.--Each independent medical
reviewer shall be a physician (allopathic or osteopathic) or
health care professional who--
(A) is appropriately credentialed or licensed in 1 or more
States to deliver health care services; and
(B) typically treats the condition, makes the diagnosis, or
provides the type of treatment under review.
(3) Independence.--
(A) In general.--Subject to subparagraph (B), each
independent medical reviewer in a case shall--
(i) not be a related party (as defined in paragraph (7));
(ii) not have a material familial, financial, or
professional relationship with such a party; and
(iii) not otherwise have a conflict of interest with such a
party (as determined under regulations).
(B) Exception.--Nothing in subparagraph (A) shall be
construed to--
(i) prohibit an individual, solely on the basis of
affiliation with the plan or issuer, from serving as an
independent medical reviewer if--
(I) a non-affiliated individual is not reasonably
available;
(II) the affiliated individual is not involved in the
provision of items or services in the case under review;
(III) the fact of such an affiliation is disclosed to the
plan or issuer and the participant, beneficiary, or enrollee
(or authorized representative) and neither party objects; and
(IV) the affiliated individual is not an employee of the
plan or issuer and does not provide services exclusively or
primarily to or on behalf of the plan or issuer;
(ii) prohibit an individual who has staff privileges at the
institution where the treatment involved takes place from
serving as an independent medical reviewer merely on the
basis of such affiliation if the affiliation is disclosed to
the plan or issuer and the participant, beneficiary, or
enrollee (or authorized representative), and neither party
objects; or
(iii) prohibit receipt of compensation by an independent
medical reviewer from an entity if the compensation is
provided consistent with paragraph (6).
(4) Practicing health care professional in same field.--
(A) In general.--In a case involving treatment, or the
provision of items or services--
(i) by a physician, a reviewer shall be a practicing
physician (allopathic or osteopathic) of the same or similar
specialty, as a physician who, acting within the appropriate
scope of practice within the State in which the service is
provided or rendered, typically treats the condition,
makes the diagnosis, or provides the type of treatment
under review; or
(ii) by a non-physician health care professional, a
reviewer (or reviewers) shall include at least one practicing
non-physician health care professional of the same or similar
specialty as the non-physician health
[[Page H5228]]
care professional who, acting within the appropriate scope of
practice within the State in which the service is provided or
rendered, typically treats the condition, makes the
diagnosis, or provides the type of treatment under review.
(B) Practicing defined.--For purposes of this paragraph,
the term ``practicing'' means, with respect to an individual
who is a physician or other health care professional that the
individual provides health care services to individual
patients on average at least 2 days per week.
(5) Pediatric expertise.--In the case of an external review
relating to a child, a reviewer shall have expertise under
paragraph (2) in pediatrics.
(6) Limitations on reviewer compensation.--Compensation
provided by a qualified external review entity to an
independent medical reviewer in connection with a review
under this section shall--
(A) not exceed a reasonable level; and
(B) not be contingent on the decision rendered by the
reviewer.
(7) Related party defined.--For purposes of this section,
the term ``related party'' means, with respect to a denial of
a claim under a plan or coverage relating to a participant,
beneficiary, or enrollee, any of the following:
(A) The plan, plan sponsor, or issuer involved, or any
fiduciary, officer, director, or employee of such plan, plan
sponsor, or issuer.
(B) The participant, beneficiary, or enrollee (or
authorized representative).
(C) The health care professional that provides the items or
services involved in the denial.
(D) The institution at which the items or services (or
treatment) involved in the denial are provided.
(E) The manufacturer of any drug or other item that is
included in the items or services involved in the denial.
(F) Any other party determined under any regulations to
have a substantial interest in the denial involved.
(h) Qualified External Review Entities.--
(1) Selection of qualified external review entities.--
(A) Limitation on plan or issuer selection.--The
appropriate Secretary shall implement procedures--
(i) to assure that the selection process among qualified
external review entities will not create any incentives for
external review entities to make a decision in a biased
manner; and
(ii) for auditing a sample of decisions by such entities to
assure that no such decisions are made in a biased manner.
No such selection process under the procedures implemented by
the appropriate Secretary may give either the patient or the
plan or issuer any ability to determine or influence the
selection of a qualified external review entity to review the
case of any participant, beneficiary, or enrollee.
(B) State authority with respect to qualified external
review entities for health insurance issuers.--With respect
to health insurance issuers offering health insurance
coverage in a State, the State may provide for external
review activities to be conducted by a qualified external
appeal entity that is designated by the State or that is
selected by the State in a manner determined by the State to
assure an unbiased determination.
(2) Contract with qualified external review entity.--Except
as provided in paragraph (1)(B), the external review process
of a plan or issuer under this section shall be conducted
under a contract between the plan or issuer and 1 or more
qualified external review entities (as defined in paragraph
(4)(A)).
(3) Terms and conditions of contract.--The terms and
conditions of a contract under paragraph (2) shall--
(A) be consistent with the standards the appropriate
Secretary shall establish to assure there is no real or
apparent conflict of interest in the conduct of external
review activities; and
(B) provide that the costs of the external review process
shall be borne by the plan or issuer.
Subparagraph (B) shall not be construed as applying to the
imposition of a filing fee under subsection (b)(2)(A)(iv) or
costs incurred by the participant, beneficiary, or enrollee
(or authorized representative) or treating health care
professional (if any) in support of the review, including the
provision of additional evidence or information.
(4) Qualifications.--
(A) In general.--In this section, the term ``qualified
external review entity'' means, in relation to a plan or
issuer, an entity that is initially certified (and
periodically recertified) under subparagraph (C) as meeting
the following requirements:
(i) The entity has (directly or through contracts or other
arrangements) sufficient medical, legal, and other expertise
and sufficient staffing to carry out duties of a qualified
external review entity under this section on a timely basis,
including making determinations under subsection (b)(2)(A)
and providing for independent medical reviews under
subsection (d).
(ii) The entity is not a plan or issuer or an affiliate or
a subsidiary of a plan or issuer, and is not an affiliate or
subsidiary of a professional or trade association of plans or
issuers or of health care providers.
(iii) The entity has provided assurances that it will
conduct external review activities consistent with the
applicable requirements of this section and standards
specified in subparagraph (C), including that it will not
conduct any external review activities in a case unless the
independence requirements of subparagraph (B) are met with
respect to the case.
(iv) The entity has provided assurances that it will
provide information in a timely manner under subparagraph
(D).
(v) The entity meets such other requirements as the
appropriate Secretary provides by regulation.
(B) Independence requirements.--
(i) In general.--Subject to clause (ii), an entity meets
the independence requirements of this subparagraph with
respect to any case if the entity--
(I) is not a related party (as defined in subsection
(g)(7));
(II) does not have a material familial, financial, or
professional relationship with such a party; and
(III) does not otherwise have a conflict of interest with
such a party (as determined under regulations).
(ii) Exception for reasonable compensation.--Nothing in
clause (i) shall be construed to prohibit receipt by a
qualified external review entity of compensation from a plan
or issuer for the conduct of external review activities under
this section if the compensation is provided consistent
with clause (iii).
(iii) Limitations on entity compensation.--Compensation
provided by a plan or issuer to a qualified external review
entity in connection with reviews under this section shall--
(I) not exceed a reasonable level; and
(II) not be contingent on any decision rendered by the
entity or by any independent medical reviewer.
(C) Certification and recertification process.--
(i) In general.--The initial certification and
recertification of a qualified external review entity shall
be made--
(I) under a process that is recognized or approved by the
appropriate Secretary; or
(II) by a qualified private standard-setting organization
that is approved by the appropriate Secretary under clause
(iii).
In taking action under subclause (I), the appropriate
Secretary shall give deference to entities that are under
contract with the Federal Government or with an applicable
State authority to perform functions of the type performed by
qualified external review entities.
(ii) Process.--The appropriate Secretary shall not
recognize or approve a process under clause (i)(I) unless the
process applies standards (as promulgated in regulations)
that ensure that a qualified external review entity--
(I) will carry out (and has carried out, in the case of
recertification) the responsibilities of such an entity in
accordance with this section, including meeting applicable
deadlines;
(II) will meet (and has met, in the case of
recertification) appropriate indicators of fiscal integrity;
(III) will maintain (and has maintained, in the case of
recertification) appropriate confidentiality with respect to
individually identifiable health information obtained in the
course of conducting external review activities; and
(IV) in the case of recertification, shall review the
matters described in clause (iv).
(iii) Approval of qualified private standard-setting
organizations.--For purposes of clause (i)(II), the
appropriate Secretary may approve a qualified private
standard-setting organization if such Secretary finds that
the organization only certifies (or recertifies) external
review entities that meet at least the standards required for
the certification (or recertification) of external review
entities under clause (ii).
(iv) Considerations in recertifications.--In conducting
recertifications of a qualified external review entity under
this paragraph, the appropriate Secretary or organization
conducting the recertification shall review compliance of the
entity with the requirements for conducting external review
activities under this section, including the following:
(I) Provision of information under subparagraph (D).
(II) Adherence to applicable deadlines (both by the entity
and by independent medical reviewers it refers cases to).
(III) Compliance with limitations on compensation (with
respect to both the entity and independent medical reviewers
it refers cases to).
(IV) Compliance with applicable independence requirements.
(V) Compliance with the requirement of subsection (d)(1)
that only medically reviewable decisions shall be the subject
of independent medical review and with the requirement of
subsection (d)(3) that independent medical reviewers may not
require coverage for specifically excluded benefits.
(v) Period of certification or recertification.--A
certification or recertification provided under this
paragraph shall extend for a period not to exceed 2 years.
(vi) Revocation.--A certification or recertification under
this paragraph may be revoked by the appropriate Secretary or
by the organization providing such certification upon a
showing of cause. The Secretary, or organization, shall
revoke a certification or deny a recertification with respect
to an entity if there is a showing that the entity has
[[Page H5229]]
a pattern or practice of ordering coverage for benefits that
are specifically excluded under the plan or coverage.
(vii) Petition for denial or withdrawal.--An individual may
petition the Secretary, or an organization providing the
certification involves, for a denial of recertification or a
withdrawal of a certification with respect to an entity under
this subparagraph if there is a pattern or practice of such
entity failing to meet a requirement of this section.
(viii) Sufficient number of entities.--The appropriate
Secretary shall certify and recertify a number of external
review entities which is sufficient to ensure the timely and
efficient provision of review services.
(D) Provision of information.--
(i) In general.--A qualified external review entity shall
provide to the appropriate Secretary, in such manner and at
such times as such Secretary may require, such information
(relating to the denials which have been referred to the
entity for the conduct of external review under this section)
as such Secretary determines appropriate to assure compliance
with the independence and other requirements of this section
to monitor and assess the quality of its external review
activities and lack of bias in making determinations. Such
information shall include information described in clause
(ii) but shall not include individually identifiable medical
information.
(ii) Information to be included.--The information described
in this subclause with respect to an entity is as follows:
(I) The number and types of denials for which a request for
review has been received by the entity.
(II) The disposition by the entity of such denials,
including the number referred to a independent medical
reviewer and the reasons for such dispositions (including the
application of exclusions), on a plan or issuer-specific
basis and on a health care specialty-specific basis.
(III) The length of time in making determinations with
respect to such denials.
(IV) Updated information on the information required to be
submitted as a condition of certification with respect to the
entity's performance of external review activities.
(iii) Information to be provided to certifying
organization.--
(I) In general.--In the case of a qualified external review
entity which is certified (or recertified) under this
subsection by a qualified private standard-setting
organization, at the request of the organization, the
entity shall provide the organization with the information
provided to the appropriate Secretary under clause (i).
(II) Additional information.--Nothing in this subparagraph
shall be construed as preventing such an organization from
requiring additional information as a condition of
certification or recertification of an entity.
(iv) Use of information.--Information provided under this
subparagraph may be used by the appropriate Secretary and
qualified private standard-setting organizations to conduct
oversight of qualified external review entities, including
recertification of such entities, and shall be made available
to the public in an appropriate manner.
(E) Limitation on liability.--No qualified external review
entity having a contract with a plan or issuer, and no person
who is employed by any such entity or who furnishes
professional services to such entity (including as an
independent medical reviewer), shall be held by reason of the
performance of any duty, function, or activity required or
authorized pursuant to this section, to be civilly liable
under any law of the United States or of any State (or
political subdivision thereof) if there was no actual malice
or gross misconduct in the performance of such duty,
function, or activity.
(5) Report.--Not later than 12 months after the general
effective date referred to in section 601, the General
Accounting Office shall prepare and submit to the appropriate
committees of Congress a report concerning--
(A) the information that is provided under paragraph
(3)(D);
(B) the number of denials that have been upheld by
independent medical reviewers and the number of denials that
have been reversed by such reviewers; and
(C) the extent to which independent medical reviewers are
requiring coverage for benefits that are specifically
excluded under the plan or coverage.
SEC. 105. HEALTH CARE CONSUMER ASSISTANCE FUND.
(a) Grants.--
(1) In general.--The Secretary of Health and Human Services
(referred to in this section as the ``Secretary'') shall
establish a fund, to be known as the ``Health Care Consumer
Assistance Fund'', to be used to award grants to eligible
States to carry out consumer assistance activities (including
programs established by States prior to the enactment of this
Act) designed to provide information, assistance, and
referrals to consumers of health insurance products.
(2) State eligibility.--To be eligible to receive a grant
under this subsection a State shall prepare and submit to the
Secretary an application at such time, in such manner, and
containing such information as the Secretary may require,
including a State plan that describes--
(A) the manner in which the State will ensure that the
health care consumer assistance office (established under
paragraph (4)) will educate and assist health care consumers
in accessing needed care;
(B) the manner in which the State will coordinate and
distinguish the services provided by the health care consumer
assistance office with the services provided by Federal,
State and local health-related ombudsman, information,
protection and advocacy, insurance, and fraud and abuse
programs;
(C) the manner in which the State will provide information,
outreach, and services to underserved, minority populations
with limited English proficiency and populations residing in
rural areas;
(D) the manner in which the State will oversee the health
care consumer assistance office, its activities, product
materials and evaluate program effectiveness;
(E) the manner in which the State will ensure that funds
made available under this section will be used to supplement,
and not supplant, any other Federal, State, or local funds
expended to provide services for programs described under
this section and those described in subparagraphs (C) and
(D);
(F) the manner in which the State will ensure that health
care consumer office personnel have the professional
background and training to carry out the activities of the
office; and
(G) the manner in which the State will ensure that
consumers have direct access to consumer assistance personnel
during regular business hours.
(3) Amount of grant.--
(A) In general.--From amounts appropriated under subsection
(b) for a fiscal year, the Secretary shall award a grant to a
State in an amount that bears the same ratio to such amounts
as the number of individuals within the State covered under a
group health plan or under health insurance coverage offered
by a health insurance issuer bears to the total number of
individuals so covered in all States (as determined by the
Secretary). Any amounts provided to a State under this
subsection that are not used by the State shall be remitted
to the Secretary and reallocated in accordance with this
subparagraph.
(B) Minimum amount.--In no case shall the amount provided
to a State under a grant under this subsection for a fiscal
year be less than an amount equal to 0.5 percent of the
amount appropriated for such fiscal year to carry out this
section.
(C) Non-federal contributions.--A State will provide for
the collection of non-Federal contributions for the operation
of the office in an amount that is not less than 25 percent
of the amount of Federal funds provided to the State under
this section.
(4) Provision of funds for establishment of office.--
(A) In general.--From amounts provided under a grant under
this subsection, a State shall, directly or through a
contract with an independent, nonprofit entity with
demonstrated experience in serving the needs of health care
consumers, provide for the establishment and operation of a
State health care consumer assistance office.
(B) Eligibility of entity.--To be eligible to enter into a
contract under subparagraph (A), an entity shall demonstrate
that it has the technical, organizational, and professional
capacity to deliver the services described in subsection (b)
to all public and private health insurance participants,
beneficiaries, enrollees, or prospective enrollees.
(C) Existing state entity.--Nothing in this section shall
prevent the funding of an existing health care consumer
assistance program that otherwise meets the requirements of
this section.
(b) Use of Funds.--
(1) By state.--A State shall use amounts provided under a
grant awarded under this section to carry out consumer
assistance activities directly or by contract with an
independent, non-profit organization. An eligible entity may
use some reasonable amount of such grant to ensure the
adequate training of personnel carrying out such activities.
To receive amounts under this subsection, an eligible entity
shall provide consumer assistance services, including--
(A) the operation of a toll-free telephone hotline to
respond to consumer requests;
(B) the dissemination of appropriate educational materials
on available health insurance products and on how best to
access health care and the rights and responsibilities of
health care consumers;
(C) the provision of education on effective methods to
promptly and efficiently resolve questions, problems, and
grievances;
(D) the coordination of educational and outreach efforts
with health plans, health care providers, payers, and
governmental agencies;
(E) referrals to appropriate private and public entities to
resolve questions, problems and grievances; and
(F) the provision of information and assistance, including
acting as an authorized representative, regarding internal,
external, or administrative grievances or appeals procedures
in nonlitigative settings to appeal the denial, termination,
or reduction of health care services, or the refusal to pay
for such services, under a group health plan or health
insurance coverage offered by a health insurance issuer.
(2) Confidentiality and access to information.--
(A) State entity.--With respect to a State that directly
establishes a health care consumer assistance office, such
office shall establish and implement procedures and protocols
in accordance with applicable Federal and State laws.
(B) Contract entity.--With respect to a State that, through
contract, establishes a
[[Page H5230]]
health care consumer assistance office, such office shall
establish and implement procedures and protocols, consistent
with applicable Federal and State laws, to ensure the
confidentiality of all information shared by a participant,
beneficiary, enrollee, or their personal representative and
their health care providers, group health plans, or health
insurance insurers with the office and to ensure that no such
information is used by the office, or released or disclosed
to State agencies or outside persons or entities without the
prior written authorization (in accordance with section
164.508 of title 45, Code of Federal Regulations) of the
individual or personal representative. The office may,
consistent with applicable Federal and State confidentiality
laws, collect, use or disclose aggregate information that is
not individually identifiable (as defined in section 164.501
of title 45, Code of Federal Regulations). The office shall
provide a written description of the policies and procedures
of the office with respect to the manner in which health
information may be used or disclosed to carry out consumer
assistance activities. The office shall provide health care
providers, group health plans, or health insurance issuers
with a written authorization (in accordance with section
164.508 of title 45, Code of Federal Regulations) to allow
the office to obtain medical information relevant to the
matter before the office.
(3) Availability of services.--The health care consumer
assistance office of a State shall not discriminate in the
provision of information, referrals, and services regardless
of the source of the individual's health insurance coverage
or prospective coverage, including individuals covered under
a group health plan or health insurance coverage offered by a
health insurance issuer, the medicare or medicaid programs
under title XVIII or XIX of the Social Security Act (42
U.S.C. 1395 and 1396 et seq.), or under any other Federal or
State health care program.
(4) Designation of responsibilities.--
(A) Within existing state entity.--If the health care
consumer assistance office of a State is located within an
existing State regulatory agency or office of an elected
State official, the State shall ensure that--
(i) there is a separate delineation of the funding,
activities, and responsibilities of the office as compared to
the other funding, activities, and responsibilities of the
agency; and
(ii) the office establishes and implements procedures and
protocols to ensure the confidentiality of all information
shared by a participant, beneficiary, or enrollee or their
personal representative and their health care providers,
group health plans, or health insurance issuers with the
office and to ensure that no information is disclosed to the
State agency or office without the written authorization of
the individual or their personal representative in accordance
with paragraph (2).
(B) Contract entity.--In the case of an entity that enters
into a contract with a State under subsection (a)(3), the
entity shall provide assurances that the entity has no
conflict of interest in carrying out the activities of the
office and that the entity is independent of group health
plans, health insurance issuers, providers, payers, and
regulators of health care.
(5) Subcontracts.--The health care consumer assistance
office of a State may carry out activities and provide
services through contracts entered into with 1 or more
nonprofit entities so long as the office can demonstrate that
all of the requirements of this section are complied with by
the office.
(6) Term.--A contract entered into under this subsection
shall be for a term of 3 years.
(c) Report.--Not later than 1 year after the Secretary
first awards grants under this section, and annually
thereafter, the Secretary shall prepare and submit to the
appropriate committees of Congress a report concerning the
activities funded under this section and the effectiveness of
such activities in resolving health care-related problems and
grievances.
(d) Authorization of Appropriations.--There are authorized
to be appropriated such sums as may be necessary to carry out
this section.
Subtitle B--Access to Care
SEC. 111. CONSUMER CHOICE OPTION.
(a) In General.--If--
(1) a health insurance issuer providing health insurance
coverage in connection with a group health plan offers to
enrollees health insurance coverage which provides for
coverage of services (including physician pathology services)
only if such services are furnished through health care
professionals and providers who are members of a network of
health care professionals and providers who have entered into
a contract with the issuer to provide such services, or
(2) a group health plan offers to participants or
beneficiaries health benefits which provide for coverage of
services only if such services are furnished through health
care professionals and providers who are members of a network
of health care professionals and providers who have entered
into a contract with the plan to provide such services,
then the issuer or plan shall also offer or arrange to be
offered to such enrollees, participants, or beneficiaries (at
the time of enrollment and during an annual open season as
provided under subsection (c)) the option of health insurance
coverage or health benefits which provide for coverage of
such services which are not furnished through health care
professionals and providers who are members of such a network
unless such enrollees, participants, or beneficiaries are
offered such non-network coverage through another group
health plan or through another health insurance issuer in the
group market.
(b) Additional Costs.--The amount of any additional premium
charged by the health insurance issuer or group health plan
for the additional cost of the creation and maintenance of
the option described in subsection (a) and the amount of any
additional cost sharing imposed under such option shall be
borne by the enrollee, participant, or beneficiary unless it
is paid by the health plan sponsor or group health plan
through agreement with the health insurance issuer.
(c) Open Season.--An enrollee, participant, or beneficiary,
may change to the offering provided under this section only
during a time period determined by the health insurance
issuer or group health plan. Such time period shall occur at
least annually.
SEC. 112. CHOICE OF HEALTH CARE PROFESSIONAL.
(a) Primary Care.--If a group health plan, or a health
insurance issuer that offers health insurance coverage,
requires or provides for designation by a participant,
beneficiary, or enrollee of a participating primary care
provider, then the plan or issuer shall permit each
participant, beneficiary, and enrollee to designate any
participating primary care provider who is available to
accept such individual.
(b) Specialists.--
(1) In general.--Subject to paragraph (2), 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 and
appropriate specialty care, pursuant to appropriate referral
procedures, from any qualified participating health care
professional who is available to accept such individual for
such care.
(2) Limitation.--Paragraph (1) shall not apply to specialty
care if the plan or issuer clearly informs participants,
beneficiaries, and enrollees of the limitations on choice of
participating health care professionals with respect to such
care.
(3) Construction.--Nothing in this subsection shall be
construed as affecting the application of section 114
(relating to access to specialty care).
SEC. 113. ACCESS TO EMERGENCY CARE.
(a) Coverage of Emergency Services.--
(1) In general.--If a group health plan, or health
insurance coverage offered by a health insurance issuer,
provides or covers any benefits with respect to services in
an emergency department of a hospital, the plan or issuer
shall cover emergency services (as defined in paragraph
(2)(B))--
(A) without the need for any prior authorization
determination;
(B) whether 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--
(i) by a nonparticipating health care provider with or
without prior authorization, or
(ii) by a participating health care provider without prior
authorization,
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 with prior authorization; and
(D) without regard to any other term or condition of such
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.--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, with respect to an emergency medical condition--
(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 such emergency medical
condition, 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.
(C) Stabilize.--The term ``to stabilize'', with respect to
an emergency medical condition (as defined in subparagraph
(A)), has the meaning given in section 1867(e)(3) of the
Social Security Act (42 U.S.C. 1395dd(e)(3)).
(b) Reimbursement for Maintenance Care and Post-
Stabilization Care.--A group health plan, and health
insurance coverage offered by a health insurance issuer, must
provide reimbursement for maintenance care and post-
stabilization care in accordance with the requirements of
section 1852(d)(2) of
[[Page H5231]]
the Social Security Act (42 U.S.C. 1395w-22(d)(2)). Such
reimbursement shall be provided in a manner consistent with
subsection (a)(1)(C).
(c) Coverage of Emergency Ambulance Services.--
(1) In general.--If a group health plan, or health
insurance coverage provided by a health insurance issuer,
provides any benefits with respect to ambulance services and
emergency services, the plan or issuer shall cover emergency
ambulance services (as defined in paragraph (2)) furnished
under the plan or coverage under the same terms and
conditions under subparagraphs (A) through (D) of subsection
(a)(1) under which coverage is provided for emergency
services.
(2) Emergency ambulance services.--For purposes of this
subsection, the term ``emergency ambulance services'' means
ambulance services (as defined for purposes of section
1861(s)(7) of the Social Security Act) furnished to transport
an individual who has an emergency medical condition (as
defined in subsection (a)(2)(A)) to a hospital for the
receipt of emergency services (as defined in subsection
(a)(2)(B)) in a case in which the emergency services are
covered under the plan or coverage pursuant to subsection
(a)(1) and a prudent layperson, with an average knowledge of
health and medicine, could reasonably expect that the absence
of such transport would result in placing the health of the
individual in serious jeopardy, serious impairment of bodily
function, or serious dysfunction of any bodily organ or part.
SEC. 114. TIMELY ACCESS TO SPECIALISTS.
(a) Timely Access.--
(1) In general.--A group health plan and a health insurance
issuer offering health insurance coverage shall ensure that
participants, beneficiaries, and enrollees receive timely
access to specialists who are appropriate to the condition
of, and accessible to, the participant, beneficiary, or
enrollee, when such specialty care is a covered benefit under
the plan or coverage.
(2) Rule of construction.--Nothing in paragraph (1) shall
be construed--
(A) to require the coverage under a group health plan or
health insurance coverage of benefits or services;
(B) to prohibit a plan or issuer from including providers
in the network only to the extent necessary to meet the needs
of the plan's or issuer's participants, beneficiaries, or
enrollees; or
(C) to override any State licensure or scope-of-practice
law.
(3) Access to certain providers.--
(A) In general.--With respect to specialty care under this
section, if a participating specialist is not available and
qualified to provide such care to the participant,
beneficiary, or enrollee, the plan or issuer shall provide
for coverage of such care by a nonparticipating
specialist.
(B) Treatment of nonparticipating providers.--If a
participant, beneficiary, or enrollee receives care from a
nonparticipating specialist pursuant to subparagraph (A),
such specialty care shall be provided at no additional cost
to the participant, beneficiary, or enrollee beyond what the
participant, beneficiary, or enrollee would otherwise pay for
such specialty care if provided by a participating
specialist.
(b) Referrals.--
(1) Authorization.--Subject to subsection (a)(1), a group
health plan or health insurance issuer may require an
authorization in order to obtain coverage for specialty
services under this section. Any such authorization--
(A) shall be for an appropriate duration of time or number
of referrals, including an authorization for a standing
referral where appropriate; and
(B) may not be refused solely because the authorization
involves services of a nonparticipating specialist (described
in subsection (a)(3)).
(2) Referrals for ongoing special conditions.--
(A) In general.--Subject to subsection (a)(1), a group
health plan and a health insurance issuer shall permit a
participant, beneficiary, or enrollee who has an ongoing
special condition (as defined in subparagraph (B)) to receive
a referral to a specialist for the treatment of such
condition and such specialist may authorize such referrals,
procedures, tests, and other medical services with respect to
such condition, or coordinate the care for such condition,
subject to the terms of a treatment plan (if any) referred to
in subsection (c) with respect to the condition.
(B) Ongoing special condition defined.--In this subsection,
the term ``ongoing special condition'' means a condition or
disease that--
(i) is life-threatening, degenerative, potentially
disabling, or congenital; and
(ii) requires specialized medical care over a prolonged
period of time.
(c) Treatment Plans.--
(1) In general.--A group health plan or health insurance
issuer may require that the specialty care be provided--
(A) pursuant to a treatment plan, but only if the treatment
plan--
(i) is developed by the specialist, in consultation with
the case manager or primary care provider, and the
participant, beneficiary, or enrollee, and
(ii) is approved by the plan or issuer in a timely manner,
if the plan or issuer requires such approval; and
(B) in accordance with applicable quality assurance and
utilization review standards of the plan or issuer.
(2) Notification.--Nothing in paragraph (1) shall be
construed as prohibiting a plan or issuer from requiring the
specialist to provide the plan or issuer with regular updates
on the specialty care provided, as well as all other
reasonably necessary medical information.
(d) Specialist Defined.--For purposes of this section, the
term ``specialist'' means, with respect to the condition of
the participant, beneficiary, or enrollee, a health care
professional, facility, or center 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.
SEC. 115. PATIENT ACCESS TO OBSTETRICAL AND GYNECOLOGICAL
CARE.
(a) General Rights.--
(1) Direct access.--A group health plan, and a health
insurance issuer offering health insurance coverage,
described in subsection (b) may not require authorization or
referral by the plan, issuer, or any person (including a
primary care provider described in subsection (b)(2)) in the
case of a female participant, beneficiary, or enrollee who
seeks coverage for obstetrical or gynecological care provided
by a participating health care professional who specializes
in obstetrics or gynecology.
(2) Obstetrical and gynecological care.--A group health
plan and a health insurance issuer described in subsection
(b) shall treat the provision of obstetrical and
gynecological care, and the ordering of related obstetrical
and gynecological items and services, pursuant to the direct
access described under paragraph (1), by a participating
health care professional who specializes in obstetrics or
gynecology as the authorization of the primary care provider.
(b) Application of Section.--A group health plan, or health
insurance issuer offering health insurance coverage,
described in this subsection is a group health plan or
coverage that--
(1) provides coverage for obstetric or gynecologic care;
and
(2) requires the designation by a participant, beneficiary,
or enrollee of a participating primary care provider.
(c) Construction.--Nothing in subsection (a) shall be
construed to--
(1) waive any exclusions of coverage under the terms and
conditions of the plan or health insurance coverage with
respect to coverage of obstetrical or gynecological care; or
(2) preclude the group health plan or health insurance
issuer involved from requiring that the obstetrical or
gynecological provider notify the primary care health care
professional or the plan or issuer of treatment decisions.
SEC. 116. ACCESS TO PEDIATRIC CARE.
(a) Pediatric Care.--In the case of a person who has a
child who is a participant, beneficiary, or enrollee under a
group health plan, or health insurance coverage offered by a
health insurance issuer, if the plan or issuer requires or
provides for the designation of a participating primary care
provider for the child, the plan or issuer shall permit such
person to designate a physician (allopathic or osteopathic)
who specializes in pediatrics as the child's primary care
provider if such provider participates in the network of the
plan or issuer.
(b) Construction.--Nothing in subsection (a) shall be
construed to waive any exclusions of coverage under the terms
and conditions of the plan or health insurance coverage with
respect to coverage of pediatric care.
SEC. 117. CONTINUITY OF CARE.
(a) Termination of Provider.--
(1) In general.--If--
(A) a contract between a group health plan, or a health
insurance issuer offering health insurance coverage, and a
treating health care provider is terminated (as defined in
paragraph (e)(4)), or
(B) benefits or coverage provided by a health care provider
are terminated because of a change in the terms of provider
participation in such plan or coverage,
the plan or issuer shall meet the requirements of paragraph
(3) with respect to each continuing care patient.
(2) 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 paragraph (1) (and the succeeding provisions of this
section) shall apply under the plan in the same manner as if
there had been a contract between the plan and the provider
that had been terminated, but only with respect to benefits
that are covered under the plan after the contract
termination.
(3) Requirements.--The requirements of this paragraph are
that the plan or issuer--
(A) notify the continuing care patient involved, or arrange
to have the patient notified pursuant to subsection (d)(2),
on a timely basis of the termination described in paragraph
(1) (or paragraph (2), if applicable) and the right to elect
continued transitional care from the provider under this
section;
(B) provide the patient with an opportunity to notify the
plan or issuer of the patient's need for transitional care;
and
(C) subject to subsection (c), permit the patient to elect
to continue to be covered with
[[Page H5232]]
respect to the course of treatment by such provider with the
provider's consent during a transitional period (as provided
for under subsection (b)).
(4) Continuing care patient.--For purposes of this section,
the term ``continuing care patient'' means a participant,
beneficiary, or enrollee who--
(A) is undergoing a course of treatment for a serious and
complex condition from the provider at the time the plan or
issuer receives or provides notice of provider, benefit, or
coverage termination described in paragraph (1) (or paragraph
(2), if applicable);
(B) is undergoing a course of institutional or inpatient
care from the provider at the time of such notice;
(C) is scheduled to undergo non-elective surgery from the
provider at the time of such notice;
(D) is pregnant and undergoing a course of treatment for
the pregnancy from the provider at the time of such notice;
or
(E) is or was determined to be terminally ill (as
determined under section 1861(dd)(3)(A) of the Social
Security Act) at the time of such notice, but only with
respect to a provider that was treating the terminal illness
before the date of such notice.
(b) Transitional Periods.--
(1) Serious and complex conditions.--The transitional
period under this subsection with respect to a continuing
care patient described in subsection (a)(4)(A) shall extend
for up to 90 days (as determined by the treating health care
professional) from the date of the notice described in
subsection (a)(3)(A).
(2) Institutional or inpatient care.--The transitional
period under this subsection for a continuing care patient
described in subsection (a)(4)(B) shall extend until the
earlier of--
(A) the expiration of the 90-day period beginning on the
date on which the notice under subsection (a)(3)(A) is
provided; or
(B) the date of discharge of the patient from such care or
the termination of the period of institutionalization, or, if
later, the date of completion of reasonable follow-up care.
(3) Scheduled non-elective surgery.--The transitional
period under this subsection for a continuing care patient
described in subsection (a)(4)(C) shall extend until the
completion of the surgery involved and post-surgical follow-
up care relating to the surgery and occurring within 90 days
after the date of the surgery.
(4) Pregnancy.--The transitional period under this
subsection for a continuing care patient described in
subsection (a)(4)(D) shall extend through the provision of
post-partum care directly related to the delivery.
(5) Terminal illness.--The transitional period under this
subsection for a continuing care patient described in
subsection (a)(4)(E) shall extend for the remainder of the
patient's life for care that is directly related to the
treatment of the terminal illness or its medical
manifestations.
(c) Permissible Terms and Conditions.--A group health plan
or health insurance issuer may condition coverage of
continued treatment by a provider under this section upon the
provider agreeing to the following terms and conditions:
(1) The treating health care provider agrees to accept
reimbursement from the plan or issuer and continuing care
patient involved (with respect to cost-sharing) at the rates
applicable prior to the start of the transitional period as
payment in full (or, in the case described in subsection
(a)(2), at the rates applicable under the replacement plan or
coverage after the date of the termination of the contract
with the group health plan or health insurance issuer) and
not to impose cost-sharing with respect to the patient in an
amount that would exceed the cost-sharing that could have
been imposed if the contract referred to in subsection (a)(1)
had not been terminated.
(2) The treating health care provider agrees to adhere to
the quality assurance standards of the plan or issuer
responsible for payment under paragraph (1) and to provide to
such plan or issuer necessary medical information related to
the care provided.
(3) The treating health care provider agrees otherwise to
adhere to such plan's or issuer's policies and procedures,
including procedures regarding referrals and obtaining prior
authorization and providing services pursuant to a treatment
plan (if any) approved by the plan or issuer.
(d) Rules of Construction.--Nothing in this section shall
be construed--
(1) to require the coverage of benefits which would not
have been covered if the provider involved remained a
participating provider; or
(2) with respect to the termination of a contract under
subsection (a) to prevent a group health plan or health
insurance issuer from requiring that the health care
provider--
(A) notify participants, beneficiaries, or enrollees of
their rights under this section; or
(B) provide the plan or issuer with the name of each
participant, beneficiary, or enrollee who the provider
believes is a continuing care patient.
(e) Definitions.--In this section:
(1) Contract.--The term ``contract'' includes, with respect
to a plan or issuer and a treating health care provider, a
contract between such plan or issuer and an organized network
of providers that includes the treating health care provider,
and (in the case of such a contract) the contract between the
treating health care provider and the organized network.
(2) Health care provider.--The term ``health care
provider'' or ``provider'' means--
(A) any individual who is engaged in the delivery of health
care services in a State and who is required by State law or
regulation to be licensed or certified by the State to engage
in the delivery of such services in the State; and
(B) any entity that is engaged in the delivery of health
care services in a State and that, if it is required by State
law or regulation to be licensed or certified by the State to
engage in the delivery of such services in the State, is so
licensed.
(3) Serious and complex condition.--The term ``serious and
complex condition'' means, with respect to a participant,
beneficiary, or enrollee under the plan or coverage--
(A) in the case of an acute illness, a condition that is
serious enough to require specialized medical treatment to
avoid the reasonable possibility of death or permanent harm;
or
(B) in the case of a chronic illness or condition, is an
ongoing special condition (as defined in section
114(b)(2)(B)).
(4) Terminated.--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
for failure to meet applicable quality standards or for
fraud.
SEC. 118. ACCESS TO NEEDED PRESCRIPTION DRUGS.
(a) In General.--To the extent that a group health plan, or
health insurance coverage offered by a health insurance
issuer, provides coverage for benefits with respect to
prescription drugs, and limits such coverage to drugs
included in a formulary, the plan or issuer shall--
(1) ensure the participation of physicians and pharmacists
in developing and reviewing such formulary;
(2) provide for disclosure of the formulary to providers;
and
(3) in accordance with the applicable quality assurance and
utilization review standards of the plan or issuer, provide
for exceptions from the formulary limitation when a non-
formulary alternative is medically necessary and appropriate
and, in the case of such an exception, apply the same cost-
sharing requirements that would have applied in the case of a
drug covered under the formulary.
(b) Coverage of Approved Drugs and Medical Devices.--
(1) In general.--A group health plan (and health insurance
coverage offered in connection with such a plan) that
provides any coverage of prescription drugs or medical
devices shall not deny coverage of such a drug or device on
the basis that the use is investigational, if the use--
(A) in the case of a prescription drug--
(i) is included in the labeling authorized by the
application in effect for the drug pursuant to subsection (b)
or (j) of section 505 of the Federal Food, Drug, and Cosmetic
Act, without regard to any postmarketing requirements that
may apply under such Act; or
(ii) is included in the labeling authorized by the
application in effect for the drug under section 351 of the
Public Health Service Act, without regard to any
postmarketing requirements that may apply pursuant to such
section; or
(B) in the case of a medical device, is included in the
labeling authorized by a regulation under subsection (d) or
(3) of section 513 of the Federal Food, Drug, and Cosmetic
Act, an order under subsection (f) of such section, or an
application approved under section 515 of such Act, without
regard to any postmarketing requirements that may apply under
such Act.
(2) Construction.--Nothing in this subsection shall be
construed as requiring a group health plan (or health
insurance coverage offered in connection with such a plan) to
provide any coverage of prescription drugs or medical
devices.
SEC. 119. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED
CLINICAL TRIALS.
(a) Coverage.--
(1) 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
subsection (b)), the plan or issuer--
(A) may not deny the individual participation in the
clinical trial referred to in subsection (b)(2);
(B) subject to subsection (c), may not deny (or limit or
impose additional conditions on) the coverage of routine
patient costs for items and services furnished in connection
with participation in the trial; and
(C) may not discriminate against the individual on the
basis of the enrollee's participation in such trial.
(2) Exclusion of certain costs.--For purposes of paragraph
(1)(B), routine patient costs do not include the cost of the
tests or measurements conducted primarily for the purpose of
the clinical trial involved.
(3) Use of in-network providers.--If one or more
participating providers is participating in a clinical trial,
nothing in paragraph (1) 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.
[[Page H5233]]
(b) Qualified Individual Defined.--For purposes of
subsection (a), 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:
(1)(A) The individual has a life-threatening or serious
illness for which no standard treatment is effective.
(B) The individual is eligible to participate in an
approved clinical trial according to the trial protocol with
respect to treatment of such illness.
(C) The individual's participation in the trial offers
meaningful potential for significant clinical benefit for the
individual.
(2) Either--
(A) 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 paragraph
(1); or
(B) 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
paragraph (1).
(c) Payment.--
(1) In general.--Under this section a group health plan and
a health insurance issuer shall provide for payment for
routine patient costs described in subsection (a)(2) but is
not required to pay for costs of items and services that are
reasonably expected (as determined by the appropriate
Secretary) to be paid for by the sponsors of an approved
clinical trial.
(2) Payment rate.--In the case of covered items and
services provided by--
(A) a participating provider, the payment rate shall be at
the agreed upon rate; or
(B) a nonparticipating provider, the payment rate shall be
at the rate the plan or issuer would normally pay for
comparable services under subparagraph (A).
(d) Approved Clinical Trial Defined.--
(1) In general.--In this section, the term ``approved
clinical trial'' means a clinical research study or clinical
investigation--
(A) 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, including a qualified nongovernmental
research entity to which the National Cancer Institute has
awarded a center support grant;
(iii) either of the following if the conditions described
in paragraph (2) are met--
(I) the Department of Veterans Affairs;
(II) the Department of Defense; or
(B) approved by the Food and Drug Administration.
(2) Conditions for departments.--The conditions described
in this paragraph, 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 appropriate Secretary determines--
(A) to be comparable to the system of peer review of
studies and investigations used by the National Institutes of
Health; and
(B) assures unbiased review of the highest ethical
standards by qualified individuals who have no interest in
the outcome of the review.
(e) Construction.--Nothing in this section shall be
construed to limit a plan's or issuer's coverage with respect
to clinical trials.
SEC. 120. REQUIRED COVERAGE FOR MINIMUM HOSPITAL STAY FOR
MASTECTOMIES AND LYMPH NODE DISSECTIONS FOR THE
TREATMENT OF BREAST CANCER AND COVERAGE FOR
SECONDARY CONSULTATIONS.
(a) Inpatient Care.--
(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 treatment of breast
cancer is provided for a period of time as is determined by
the attending physician, in consultation with the patient, to
be medically necessary and appropriate following--
(A) a mastectomy;
(B) a lumpectomy; or
(C) a lymph node dissection for the treatment of breast
cancer.
(2) Exception.--Nothing in this section shall be construed
as requiring the provision of inpatient coverage if the
attending physician and patient determine that a shorter
period of hospital stay is medically appropriate.
(b) Prohibition on Certain Modifications.--In implementing
the requirements of this section, a group health plan, and a
health insurance issuer providing health insurance coverage,
may not modify the terms and conditions of coverage based on
the determination by a participant, beneficiary, or enrollee
to request less than the minimum coverage required under
subsection (a).
(c) Secondary Consultations.--
(1) In general.--A group health plan, and a health
insurance issuer providing health insurance coverage, that
provides coverage with respect to medical and surgical
services provided in relation to the diagnosis and treatment
of cancer shall ensure that full coverage is provided for
secondary consultations by specialists in the appropriate
medical fields (including pathology, radiology, and oncology)
to confirm or refute such diagnosis. Such plan or issuer
shall ensure that full coverage is provided for such
secondary consultation whether such consultation is based on
a positive or negative initial diagnosis. In any case in
which the attending physician certifies in writing that
services necessary for such a secondary consultation are not
sufficiently available from specialists operating under the
plan or coverage with respect to whose services coverage is
otherwise provided under such plan or by such issuer, such
plan or issuer shall ensure that coverage is provided with
respect to the services necessary for the secondary
consultation with any other specialist selected by the
attending physician for such purpose at no additional cost to
the individual beyond that which the individual would have
paid if the specialist was participating in the network of
the plan or issuer.
(2) Exception.--Nothing in paragraph (1) shall be construed
as requiring the provision of secondary consultations where
the patient determines not to seek such a consultation.
(d) Prohibition on Penalties or Incentives.--A group health
plan, and a health insurance issuer providing health
insurance coverage, may not--
(1) penalize or otherwise reduce or limit the reimbursement
of a provider or specialist because the provider or
specialist provided care to a participant, beneficiary, or
enrollee in accordance with this section;
(2) provide financial or other incentives to a physician or
specialist to induce the physician or specialist to keep the
length of inpatient stays of patients following a mastectomy,
lumpectomy, or a lymph node dissection for the treatment of
breast cancer below certain limits or to limit referrals for
secondary consultations; or
(3) provide financial or other incentives to a physician or
specialist to induce the physician or specialist to refrain
from referring a participant, beneficiary, or enrollee for a
secondary consultation that would otherwise be covered by the
plan or coverage involved under subsection (c).
Subtitle C--Access to Information
SEC. 121. PATIENT ACCESS TO INFORMATION.
(a) Requirement.--
(1) Disclosure.--
(A) In general.--A group health plan, and a health
insurance issuer that provides coverage in connection with
health insurance coverage, shall provide for the disclosure
to participants, beneficiaries, and enrollees--
(i) of the information described in subsection (b) at the
time of the initial enrollment of the participant,
beneficiary, or enrollee under the plan or coverage;
(ii) of such information on an annual basis--
(I) in conjunction with the election period of the plan or
coverage if the plan or coverage has such an election period;
or
(II) in the case of a plan or coverage that does not have
an election period, in conjunction with the beginning of the
plan or coverage year; and
(iii) of information relating to any material reduction to
the benefits or information described in such subsection or
subsection (c), in the form of a notice provided not later
than 30 days before the date on which the reduction takes
effect.
(B) Participants, beneficiaries, and enrollees.--The
disclosure required under subparagraph (A) shall be
provided--
(i) jointly to each participant, beneficiary, and enrollee
who reside at the same address; or
(ii) in the case of a beneficiary or enrollee who does not
reside at the same address as the participant or another
enrollee, separately to the participant or other enrollees
and such beneficiary or enrollee.
(2) Provision of information.--Information shall be
provided to participants, beneficiaries, and enrollees under
this section at the last known address maintained by the plan
or issuer with respect to such participants, beneficiaries,
or enrollees, to the extent that such information is provided
to participants, beneficiaries, or enrollees via the United
States Postal Service or other private delivery service.
(b) Required Information.--The informational materials to
be distributed under this section shall include for each
option available under the group health plan or health
insurance coverage the following:
(1) Benefits.--A description of the covered benefits,
including--
(A) any in- and out-of-network benefits;
(B) specific preventive services covered under the plan or
coverage if such services are covered;
(C) any specific exclusions or express limitations of
benefits described in section 104(d)(3)(C);
(D) any other benefit limitations, including any annual or
lifetime benefit limits and any monetary limits or limits on
the number of visits, days, or services, and any specific
coverage exclusions; and
(E) any definition of medical necessity used in making
coverage determinations by the plan, issuer, or claims
administrator.
(2) Cost sharing.--A description of any cost-sharing
requirements, including--
(A) any premiums, deductibles, coinsurance, copayment
amounts, and liability for balance billing, for which the
participant, beneficiary, or enrollee will be responsible
under each option available under the plan;
(B) any maximum out-of-pocket expense for which the
participant, beneficiary, or enrollee may be liable;
[[Page H5234]]
(C) any cost-sharing requirements for out-of-network
benefits or services received from nonparticipating
providers; and
(D) any additional cost-sharing or charges for benefits and
services that are furnished without meeting applicable plan
or coverage requirements, such as prior authorization or
precertification.
(3) Disenrollment.--Information relating to the
disenrollment of a participant, beneficiary, or enrollee.
(4) Service area.--A description of the plan or issuer's
service area, including the provision of any out-of-area
coverage.
(5) Participating providers.--A directory of participating
providers (to the extent a plan or issuer provides coverage
through a network of providers) that includes, at a minimum,
the name, address, and telephone number of each participating
provider, and information about how to inquire whether a
participating provider is currently accepting new patients.
(6) Choice of primary care provider.--A description of any
requirements and procedures to be used by participants,
beneficiaries, and enrollees in selecting, accessing, or
changing their primary care provider, including providers
both within and outside of the network (if the plan or issuer
permits out-of-network services), and the right to select a
pediatrician as a primary care provider under section 116 for
a participant, beneficiary, or enrollee who is a child if
such section applies.
(7) Preauthorization requirements.--A description of the
requirements and procedures to be used to obtain
preauthorization for health services, if such
preauthorization is required.
(8) Experimental and investigational treatments.--A
description of the process for determining whether a
particular item, service, or treatment is considered
experimental or investigational, and the circumstances under
which such treatments are covered by the plan or issuer.
(9) Specialty care.--A description of the requirements and
procedures to be used by participants, beneficiaries, and
enrollees in accessing specialty care and obtaining referrals
to participating and nonparticipating specialists, including
any limitations on choice of health care professionals
referred to in section 112(b)(2) and the right to timely
access to specialists care under section 114 if such section
applies.
(10) Clinical trials.--A description of the circumstances
and conditions under which participation in clinical trials
is covered under the terms and conditions of the plan or
coverage, and the right to obtain coverage for approved
clinical trials under section 119 if such section applies.
(11) Prescription drugs.--To the extent the plan or issuer
provides coverage for prescription drugs, a statement of
whether such coverage is limited to drugs included in a
formulary, a description of any provisions and cost-sharing
required for obtaining on- and off-formulary medications, and
a description of the rights of participants, beneficiaries,
and enrollees in obtaining access to access to prescription
drugs under section 118 if such section applies.
(12) Emergency services.--A summary of the rules and
procedures for accessing emergency services, including the
right of a participant, beneficiary, or enrollee to obtain
emergency services under the prudent layperson standard under
section 113, if such section applies, and any educational
information that the plan or issuer may provide regarding the
appropriate use of emergency services.
(13) Claims and appeals.--A description of the plan or
issuer's rules and procedures pertaining to claims and
appeals, a description of the rights (including deadlines for
exercising rights) of participants, beneficiaries, and
enrollees under subtitle A in obtaining covered benefits,
filing a claim for benefits, and appealing coverage decisions
internally and externally (including telephone numbers and
mailing addresses of the appropriate authority), and a
description of any additional legal rights and remedies
available under section 502 of the Employee Retirement Income
Security Act of 1974 and applicable State law.
(14) Advance directives and organ donation.--A description
of procedures for advance directives and organ donation
decisions if the plan or issuer maintains such procedures.
(15) Information on plans and issuers.--The name, mailing
address, and telephone number or numbers of the plan
administrator and the issuer to be used by participants,
beneficiaries, and enrollees seeking information about plan
or coverage benefits and services, payment of a claim, or
authorization for services and treatment. Notice of whether
the benefits under the plan or coverage are provided under a
contract or policy of insurance issued by an issuer, or
whether benefits are provided directly by the plan sponsor
who bears the insurance risk.
(16) Translation services.--A summary description of any
translation or interpretation services (including the
availability of printed information in languages other than
English, audio tapes, or information in Braille) that are
available for non-English speakers and participants,
beneficiaries, and enrollees with communication disabilities
and a description of how to access these items or services.
(17) Accreditation information.--Any information that is
made public by accrediting organizations in the process of
accreditation if the plan or issuer is accredited, or any
additional quality indicators (such as the results of
enrollee satisfaction surveys) that the plan or issuer makes
public or makes available to participants, beneficiaries, and
enrollees.
(18) Notice of requirements.--A description of any rights
of participants, beneficiaries, and enrollees that are
established by the Bipartisan Patient Protection Act
(excluding those described in paragraphs (1) through (17)) if
such sections apply. The description required under this
paragraph may be combined with the notices of the type
described in sections 711(d), 713(b), or 606(a)(1) of the
Employee Retirement Income Security Act of 1974 and with any
other notice provision that the appropriate Secretary
determines may be combined, so long as such combination does
not result in any reduction in the information that would
otherwise be provided to the recipient.
(19) Availability of additional information.--A statement
that the information described in subsection (c), and
instructions on obtaining such information (including
telephone numbers and, if available, Internet websites),
shall be made available upon request.
(20) Designated decisionmakers.--A description of the
participants and beneficiaries with respect to whom each
designated decisionmaker under the plan has assumed liability
under section 502(o) of the Employee Retirement Income
Security Act of 1974 and the name and address of each such
decisionmaker.
(c) Additional Information.--The informational materials to
be provided upon the request of a participant, beneficiary,
or enrollee shall include for each option available under a
group health plan or health insurance coverage the following:
(1) Status of providers.--The State licensure status of the
plan or issuer's participating health care professionals and
participating health care facilities, and, if available, the
education, training, specialty qualifications or
certifications of such professionals.
(2) Compensation methods.--A summary description by
category of the applicable methods (such as capitation, fee-
for-service, salary, bundled payments, per diem, or a
combination thereof) used for compensating prospective or
treating health care professionals (including primary care
providers and specialists) and facilities in connection with
the provision of health care under the plan or coverage.
(3) Prescription drugs.--Information about whether a
specific prescription medication is included in the formulary
of the plan or issuer, if the plan or issuer uses a defined
formulary.
(4) Utilization review activities.--A description of
procedures used and requirements (including circumstances,
timeframes, and appeals rights) under any utilization review
program under sections 101 and 102, including any drug
formulary program under section 118.
(5) External appeals information.--Aggregate information on
the number and outcomes of external medical reviews, relative
to the sample size (such as the number of covered lives)
under the plan or under the coverage of the issuer.
(d) Manner of Disclosure.--The information described in
this section shall be disclosed in an accessible medium and
format that is calculated to be understood by a participant
or enrollee.
(e) Rules of Construction.--Nothing in this section shall
be construed to prohibit a group health plan, or a health
insurance issuer in connection with health insurance
coverage, from--
(1) distributing any other additional information
determined by the plan or issuer to be important or necessary
in assisting participants, beneficiaries, and enrollees in
the selection of a health plan or health insurance coverage;
and
(2) complying with the provisions of this section by
providing information in brochures, through the Internet or
other electronic media, or through other similar means, so
long as--
(A) the disclosure of such information in such form is in
accordance with requirements as the appropriate Secretary may
impose, and
(B) in connection with any such disclosure of information
through the Internet or other electronic media--
(i) the recipient has affirmatively consented to the
disclosure of such information in such form,
(ii) the recipient is capable of accessing the information
so disclosed on the recipient's individual workstation or at
the recipient's home,
(iii) the recipient retains an ongoing right to receive
paper disclosure of such information and receives, in advance
of any attempt at disclosure of such information to him or
her through the Internet or other electronic media, notice in
printed form of such ongoing right and of the proper software
required to view information so disclosed, and
(iv) the plan administrator appropriately ensures that the
intended recipient is receiving the information so disclosed
and provides the information in printed form if the
information is not received.
Subtitle D--Protecting the Doctor-Patient Relationship
SEC. 131. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL
COMMUNICATIONS.
(a) General Rule.--The provisions of any contract or
agreement, or the operation of
[[Page H5235]]
any contract or agreement, between a group health plan or
health insurance issuer in relation to health insurance
coverage (including any partnership, association, or other
organization that enters into or administers such a contract
or agreement) and a health care provider (or group of health
care providers) shall not prohibit or otherwise restrict a
health care professional from advising such a participant,
beneficiary, or enrollee who is a patient of the professional
about the health status of the individual or medical care or
treatment for the individual's condition or disease,
regardless of whether benefits for such care or treatment are
provided under the plan or coverage, if the professional is
acting within the lawful scope of practice.
(b) Nullification.--Any contract provision or agreement
that restricts or prohibits medical communications in
violation of subsection (a) shall be null and void.
SEC. 132. PROHIBITION OF DISCRIMINATION AGAINST PROVIDERS
BASED ON LICENSURE.
(a) In General.--A group health plan, and a health
insurance issuer with respect to health insurance coverage,
shall not discriminate with respect to participation or
indemnification as to any provider who is acting within the
scope of the provider's license or certification under
applicable State law, solely on the basis of such license or
certification.
(b) Construction.--Subsection (a) shall not be construed--
(1) as requiring the coverage under a group health plan or
health insurance coverage of a particular benefit or service
or to prohibit a plan or issuer from including providers only
to the extent necessary to meet the needs of the plan's or
issuer's participants, beneficiaries, or enrollees or from
establishing any measure designed to maintain quality and
control costs consistent with the responsibilities of the
plan or issuer;
(2) to override any State licensure or scope-of-practice
law; or
(3) as requiring a plan or issuer that offers network
coverage to include for participation every willing provider
who meets the terms and conditions of the plan or issuer.
SEC. 133. PROHIBITION AGAINST IMPROPER INCENTIVE
ARRANGEMENTS.
(a) 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 1852(j)(4) of the Social Security Act) unless the
requirements described in clauses (i), (ii)(I), and (iii) of
subparagraph (A) of such section are met with respect to such
a plan.
(b) Application.--For purposes of carrying out paragraph
(1), any reference in section 1852(j)(4) of the Social
Security Act to the Secretary, a Medicare+Choice
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.
(c) Construction.--Nothing in this section shall be
construed as prohibiting all capitation and similar
arrangements or all provider discount arrangements.
SEC. 134. PAYMENT OF CLAIMS.
A group health plan, and a health insurance issuer offering
health insurance coverage, shall provide for prompt payment
of claims submitted for health care services or supplies
furnished to a participant, beneficiary, or enrollee with
respect to benefits covered by the plan or issuer, in a
manner that is no less protective than the provisions of
section 1842(c)(2) of the Social Security Act (42 U.S.C.
1395u(c)(2)).
SEC. 135. PROTECTION FOR PATIENT ADVOCACY.
(a) Protection for Use of Utilization Review and Grievance
Process.--A group health plan, and a health insurance issuer
with respect to the provision of health insurance coverage,
may not retaliate against a participant, beneficiary,
enrollee, or health care provider based on the participant's,
beneficiary's, enrollee's or provider's use of, or
participation in, a utilization review process or a grievance
process of the plan or issuer (including an internal or
external review or appeal process) under this title.
(b) Protection for Quality Advocacy by Health Care
Professionals.--
(1) In general.--A group health plan and a health insurance
issuer may not retaliate or discriminate against a protected
health care professional because the professional in good
faith--
(A) discloses information relating to the care, services,
or conditions affecting one or more participants,
beneficiaries, or enrollees of the plan or issuer to an
appropriate public regulatory agency, an appropriate private
accreditation body, or appropriate management personnel of
the plan or issuer; or
(B) initiates, cooperates, or otherwise participates in an
investigation or proceeding by such an agency with respect to
such care, services, or conditions.
If an institutional health care provider is a participating
provider with such a plan or issuer or otherwise receives
payments for benefits provided by such a plan or issuer, the
provisions of the previous sentence shall apply to the
provider in relation to care, services, or conditions
affecting one or more patients within an institutional health
care provider in the same manner as they apply to the plan or
issuer in relation to care, services, or conditions provided
to one or more participants, beneficiaries, or enrollees; and
for purposes of applying this sentence, any reference to a
plan or issuer is deemed a reference to the institutional
health care provider.
(2) Good faith action.--For purposes of paragraph (1), a
protected health care professional is considered to be acting
in good faith with respect to disclosure of information or
participation if, with respect to the information disclosed
as part of the action--
(A) the disclosure is made on the basis of personal
knowledge and is consistent with that degree of learning and
skill ordinarily possessed by health care professionals with
the same licensure or certification and the same experience;
(B) the professional reasonably believes the information to
be true;
(C) the information evidences either a violation of a law,
rule, or regulation, of an applicable accreditation standard,
or of a generally recognized professional or clinical
standard or that a patient is in imminent hazard of loss of
life or serious injury; and
(D) subject to subparagraphs (B) and (C) of paragraph (3),
the professional has followed reasonable internal procedures
of the plan, issuer, or institutional health care provider
established for the purpose of addressing quality concerns
before making the disclosure.
(3) Exception and special rule.--
(A) General exception.--Paragraph (1) does not protect
disclosures that would violate Federal or State law or
diminish or impair the rights of any person to the continued
protection of confidentiality of communications provided by
such law.
(B) Notice of internal procedures.--Subparagraph (D) of
paragraph (2) shall not apply unless the internal procedures
involved are reasonably expected to be known to the health
care professional involved. For purposes of this
subparagraph, a health care professional is reasonably
expected to know of internal procedures if those procedures
have been made available to the professional through
distribution or posting.
(C) Internal procedure exception.--Subparagraph (D) of
paragraph (2) also shall not apply if--
(i) the disclosure relates to an imminent hazard of loss of
life or serious injury to a patient;
(ii) the disclosure is made to an appropriate private
accreditation body pursuant to disclosure procedures
established by the body; or
(iii) the disclosure is in response to an inquiry made in
an investigation or proceeding of an appropriate public
regulatory agency and the information disclosed is limited to
the scope of the investigation or proceeding.
(4) Additional considerations.--It shall not be a violation
of paragraph (1) to take an adverse action against a
protected health care professional if the plan, issuer, or
provider taking the adverse action involved demonstrates that
it would have taken the same adverse action even in the
absence of the activities protected under such paragraph.
(5) Notice.--A group health plan, health insurance issuer,
and institutional health care provider shall post a notice,
to be provided or approved by the Secretary of Labor, setting
forth excerpts from, or summaries of, the pertinent
provisions of this subsection and information pertaining to
enforcement of such provisions.
(6) Constructions.--
(A) Determinations of coverage.--Nothing in this subsection
shall be construed to prohibit a plan or issuer from making a
determination not to pay for a particular medical treatment
or service or the services of a type of health care
professional.
(B) Enforcement of peer review protocols and internal
procedures.--Nothing in this subsection shall be construed to
prohibit a plan, issuer, or provider from establishing and
enforcing reasonable peer review or utilization review
protocols or determining whether a protected health care
professional has complied with those protocols or from
establishing and enforcing internal procedures for the
purpose of addressing quality concerns.
(C) Relation to other rights.--Nothing in this subsection
shall be construed to abridge rights of participants,
beneficiaries, enrollees, and protected health care
professionals under other applicable Federal or State laws.
(7) Protected health care professional defined.--For
purposes of this subsection, the term ``protected health care
professional'' means an individual who is a licensed or
certified health care professional and who--
(A) with respect to a group health plan or health insurance
issuer, is an employee of the plan or issuer or has a
contract with the plan or issuer for provision of services
for which benefits are available under the plan or issuer; or
(B) with respect to an institutional health care provider,
is an employee of the provider or has a contract or other
arrangement with the provider respecting the provision of
health care services.
Subtitle E--Definitions
SEC. 151. DEFINITIONS.
(a) Incorporation of General Definitions.--Except as
otherwise provided, the provisions of section 2791 of the
Public Health Service Act shall apply for purposes of this
title in the same manner as they apply for purposes of title
XXVII of such Act.
[[Page H5236]]
(b) Secretary.--Except as otherwise provided, the term
``Secretary'' means the Secretary of Health and Human
Services, in consultation with the Secretary of Labor and the
term ``appropriate Secretary'' means the Secretary of Health
and Human Services in relation to carrying out this title
under sections 2706 and 2751 of the Public Health Service Act
and the Secretary of Labor in relation to carrying out this
title under section 714 of the Employee Retirement Income
Security Act of 1974.
(c) Additional Definitions.--For purposes of this title:
(1) Applicable authority.--The term ``applicable
authority'' means--
(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 this title, 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 provision under section
2722(a)(2) or 2761(a)(2) of the Public Health Service Act.
(2) Enrollee.--The term ``enrollee'' means, with respect to
health insurance coverage offered by a health insurance
issuer, an individual enrolled with the issuer to receive
such coverage.
(3) Group health plan.--The term ``group health plan'' has
the meaning given such term in section 733(a) of the Employee
Retirement Income Security Act of 1974, except that such term
includes a employee welfare benefit plan treated as a
group health plan under section 732(d) of such Act or
defined as such a plan under section 607(1) of such Act.
(4) Health care professional.--The term ``health care
professional'' means an individual who is licensed,
accredited, or certified under State law to provide specified
health care services and who is operating within the scope of
such licensure, accreditation, or certification.
(5) Health care provider.--The term ``health care
provider'' includes a physician or other health care
professional, as well as an institutional or other facility
or agency that provides health care services and that is
licensed, accredited, or certified to provide health care
items and services under applicable State law.
(6) Network.--The term ``network'' means, with respect to a
group health plan or health insurance issuer offering health
insurance coverage, the participating health care
professionals and providers through whom the plan or issuer
provides health care items and services to participants,
beneficiaries, or enrollees.
(7) 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 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.
(8) Participating.--The term ``participating'' means, with
respect to a health care provider that provides health care
items and services to a participant, beneficiary, or enrollee
under 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.
(9) Prior authorization.--The term ``prior authorization''
means the process of obtaining prior approval from a health
insurance issuer or group health plan for the provision or
coverage of medical services.
(10) Terms and conditions.--The term ``terms and
conditions'' includes, with respect to a group health plan or
health insurance coverage, requirements imposed under this
title with respect to the plan or coverage.
SEC. 152. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.
(a) Continued Applicability of State Law With Respect to
Health Insurance Issuers.--
(1) In general.--Subject to paragraph (2), this title 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
or otherwise) except to the extent that such standard or
requirement prevents the application of a requirement of this
title.
(2) Continued preemption with respect to group health
plans.--Nothing in this title 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.--In applying this section, a State law
that provides for equal access to, and availability of, all
categories of licensed health care providers and services
shall not be treated as preventing the application of any
requirement of this title.
(b) Application of Substantially Compliant State Laws.--
(1) In general.--In the case of a State law that imposes,
with respect to health insurance coverage offered by a health
insurance issuer and with respect to a group health plan that
is a non-Federal governmental plan, a requirement that
substantially complies (within the meaning of subsection (c))
with a patient protection requirement (as defined in
paragraph (3)) and does not prevent the application of other
requirements under this Act (except in the case of other
substantially compliant requirements), in applying the
requirements of this title under section 2707 and 2753 (as
applicable) of the Public Health Service Act (as added by
title II), subject to subsection (a)(2)--
(A) the State law shall not be treated as being superseded
under subsection (a); and
(B) the State law shall apply instead of the patient
protection requirement otherwise applicable with respect to
health insurance coverage and non-Federal governmental plans.
(2) Limitation.--In the case of a group health plan covered
under title I of the Employee Retirement Income Security Act
of 1974, paragraph (1) shall be construed to apply only with
respect to the health insurance coverage (if any) offered in
connection with the plan.
(3) Definitions.--In this section:
(A) Patient protection requirement.--The term ``patient
protection requirement'' means a requirement under this
title, and includes (as a single requirement) a group or
related set of requirements under a section or similar unit
under this title.
(B) Substantially compliant.--The terms ``substantially
compliant'', substantially complies'', or ``substantial
compliance'' with respect to a State law, mean that the State
law has the same or similar features as the patient
protection requirements and has a similar effect.
(c) Determinations of Substantial Compliance.--
(1) Certification by states.--A State may submit to the
Secretary a certification that a State law provides for
patient protections that are at least substantially compliant
with one or more patient protection requirements. Such
certification shall be accompanied by such information as may
be required to permit the Secretary to make the determination
described in paragraph (2)(A).
(2) Review.--
(A) In general.--The Secretary shall promptly review a
certification submitted under paragraph (1) with respect to a
State law to determine if the State law substantially
complies with the patient protection requirement (or
requirements) to which the law relates.
(B) Approval deadlines.--
(i) Initial review.--Such a certification is considered
approved unless the Secretary notifies the State in writing,
within 90 days after the date of receipt of the
certification, that the certification is disapproved (and the
reasons for disapproval) or that specified additional
information is needed to make the determination described in
subparagraph (A).
(ii) Additional information.--With respect to a State that
has been notified by the Secretary under clause (i) that
specified additional information is needed to make the
determination described in subparagraph (A), the Secretary
shall make the determination within 60 days after the date on
which such specified additional information is received by
the Secretary.
(3) Approval.--
(A) In general.--The Secretary shall approve a
certification under paragraph (1) unless--
(i) the State fails to provide sufficient information to
enable the Secretary to make a determination under paragraph
(2)(A); or
(ii) the Secretary determines that the State law involved
does not provide for patient protections that substantially
comply with the patient protection requirement (or
requirements) to which the law relates.
(B) State challenge.--A State that has a certification
disapproved by the Secretary under subparagraph (A) may
challenge such disapproval in the appropriate United States
district court.
(C) Deference to states.--With respect to a certification
submitted under paragraph (1), the Secretary shall give
deference to the State's interpretation of the State law
involved with respect to the patient protection involved.
(D) Public notification.--The Secretary shall--
(i) provide a State with a notice of the determination to
approve or disapprove a certification under this paragraph;
(ii) promptly publish in the Federal Register a notice that
a State has submitted a certification under paragraph (1);
(iii) promptly publish in the Federal Register the notice
described in clause (i) with respect to the State; and
(iv) annually publish the status of all States with respect
to certifications.
(4) Construction.--Nothing in this subsection shall be
construed as preventing the certification (and approval of
certification) of a State law under this subsection solely
because it provides for greater protections for patients than
those protections otherwise required to establish substantial
compliance.
(5) Petitions.--
(A) Petition process.--Effective on the date on which the
provisions of this Act become effective, as provided for in
section 601, a group health plan, health insurance issuer,
participant, beneficiary, or enrollee may submit a petition
to the Secretary for an advisory opinion as to whether or not
a standard or requirement under a State law applicable to the
plan, issuer, participant, beneficiary, or enrollee that is
not the subject of a certification under this subsection, is
superseded under subsection (a)(1) because such standard or
requirement prevents the application of a requirement of this
title.
[[Page H5237]]
(B) Opinion.--The Secretary shall issue an advisory opinion
with respect to a petition submitted under subparagraph (A)
within the 60-day period beginning on the date on which such
petition is submitted.
(d) 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) State.--The term ``State'' includes a State, the
District of Columbia, Puerto Rico, the Virgin Islands, Guam,
American Samoa, the Northern Mariana Islands, any political
subdivisions of such, or any agency or instrumentality of
such.
SEC. 153. EXCLUSIONS.
(a) No Benefit Requirements.--Nothing in this title shall
be construed to require a group health plan or a health
insurance issuer offering health insurance coverage to
include specific items and services under the terms of such a
plan or coverage, other than those provided under the terms
and conditions of such plan or coverage.
(b) Exclusion From Access to Care Managed Care Provisions
for Fee-for-Service Coverage.--
(1) In general.--The provisions of sections 111 through 117
shall not apply to a group health plan or health insurance
coverage if the only coverage offered under the plan or
coverage is fee-for-service coverage (as defined in paragraph
(2)).
(2) Fee-for-service coverage defined.--For purposes of this
subsection, the term ``fee-for-service coverage'' means
coverage under a group health plan or health insurance
coverage that--
(A) reimburses hospitals, health professionals, and other
providers on a fee-for-service basis without placing the
provider at financial risk;
(B) does not vary reimbursement for such a provider based
on an agreement to contract terms and conditions or the
utilization of health care items or services relating to such
provider;
(C) allows access to any provider that is lawfully
authorized to provide the covered services and that agrees to
accept the terms and conditions of payment established under
the plan or by the issuer; and
(D) for which the plan or issuer does not require prior
authorization before providing for any health care services.
SEC. 154. TREATMENT OF EXCEPTED BENEFITS.
(a) In General.--The requirements of this title and the
provisions of sections 502(a)(1)(C), 502(n), and 514(d) of
the Employee Retirement Income Security Act of 1974 (added by
section 402) shall not apply to excepted benefits (as defined
in section 733(c) of such Act), other than benefits described
in section 733(c)(2)(A) of such Act, in the same manner as
the provisions of part 7 of subtitle B of title I of such Act
do not apply to such benefits under subsections (b) and (c)
of section 732 of such Act.
(b) Coverage of Certain Limited Scope Plans.--Only for
purposes of applying the requirements of this title under
sections 2707 and 2753 of the Public Health Service Act,
section 714 of the Employee Retirement Income Security Act of
1974, and section 9813 of the Internal Revenue Code of 1986,
the following sections shall be deemed not to apply:
(1) Section 2791(c)(2)(A) of the Public Health Service Act.
(2) Section 733(c)(2)(A) of the Employee Retirement Income
Security Act of 1974.
(3) Section 9832(c)(2)(A) of the Internal Revenue Code of
1986.
SEC. 155. 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 title. 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
title.
SEC. 156. INCORPORATION INTO PLAN OR COVERAGE DOCUMENTS.
The requirements of this title with respect to a group
health plan or health insurance coverage are, subject to
section 154, deemed to be incorporated into, and made a part
of, such plan or the policy, certificate, or contract
providing such coverage and are enforceable under law as if
directly included in the documentation of such plan or such
policy, certificate, or contract.
SEC. 157. PRESERVATION OF PROTECTIONS.
(a) In General.--The rights under this Act (including the
right to maintain a civil action and any other rights under
the amendments made by this Act) may not be waived, deferred,
or lost pursuant to any agreement not authorized under this
Act.
(b) Exception.--Subsection (a) shall not apply to an
agreement providing for arbitration or participation in any
other nonjudicial procedure to resolve a dispute if the
agreement is entered into knowingly and voluntarily by the
parties involved after the dispute has arisen or is pursuant
to the terms of a collective bargaining agreement. Nothing in
this subsection shall be construed to permit the waiver of
the requirements of sections 103 and 104 (relating to
internal and external review).
TITLE II--APPLICATION OF QUALITY CARE STANDARDS TO GROUP HEALTH PLANS
AND HEALTH INSURANCE COVERAGE UNDER THE 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. 2707. PATIENT PROTECTION STANDARDS.
``Each group health plan shall comply with patient
protection requirements under title I of the Bipartisan
Patient Protection Act, 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) 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 2707)'' after ``requirements of such
subparts''.
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 2752 the following new
section:
``SEC. 2753. PATIENT PROTECTION STANDARDS.
``Each health insurance issuer shall comply with patient
protection requirements under title I of the Bipartisan
Patient Protection Act with respect to individual health
insurance coverage it offers, and such requirements shall be
deemed to be incorporated into this subsection.''.
SEC. 203. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
Part C of title XXVII of the Public Health Service Act (42
U.S.C. 300gg-91 et seq.) is amended by adding at the end the
following:
``SEC. 2793. COOPERATION BETWEEN FEDERAL AND STATE
AUTHORITIES.
``(a) Agreement with States.--A State may enter into an
agreement with the Secretary for the delegation to the State
of some or all of the Secretary's authority under this title
to enforce the requirements applicable under title I of the
Bipartisan Patient Protection Act with respect to health
insurance coverage offered by a health insurance issuer and
with respect to a group health plan that is a non-Federal
governmental plan.
``(b) Delegations.--Any department, agency, or
instrumentality of a State to which authority is delegated
pursuant to an agreement entered into under this section may,
if authorized under State law and to the extent consistent
with such agreement, exercise the powers of the Secretary
under this title which relate to such authority.''.
TITLE III--APPLICATION OF PATIENT PROTECTION STANDARDS TO FEDERAL
HEALTH INSURANCE PROGRAMS
SEC. 301. APPLICATION OF PATIENT PROTECTION STANDARDS TO
FEDERAL HEALTH INSURANCE PROGRAMS.
(a) Sense of Congress.--It is the sense of Congress that
enrollees in Federal health insurance programs should have
the same rights and privileges as those afforded under title
I and under the amendments made by title IV to participants
and beneficiaries under group health plans.
(b) Conforming Federal Health Insurance Programs.--It is
the sense of Congress that the President should require, by
executive order, the Federal official with authority over
each Federal health insurance program, to the extent
feasible, to take such steps as are necessary to implement
the rights and privileges described in subsection (a) with
respect to such program.
(c) GAO Report on Additional Steps Required.--Not later
than 1 year after the date of the enactment of this Act, the
Comptroller General of the United States shall submit to
Congress a report on statutory changes that are required to
implement such rights and privileges in a manner that is
consistent with the missions of the Federal health insurance
programs and that avoids unnecessary duplication or
disruption of such programs.
(d) Federal Health Insurance Program.--In this section, the
term ``Federal health insurance program'' means a Federal
program that provides creditable coverage (as defined in
section 2701(c)(1) of the Public Health Service Act) and
includes a health program of the Department of Veterans
Affairs.
TITLE IV--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974
SEC. 401. APPLICATION OF PATIENT PROTECTION STANDARDS TO
GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE
COVERAGE UNDER THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974.
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. 714. 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
Bipartisan Patient Protection Act (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.--
[[Page H5238]]
``(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 Bipartisan Patient Protection Act 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 111 (relating to consumer choice option).
``(B) Section 112 (relating to choice of health care
professional).
``(C) Section 113 (relating to access to emergency care).
``(D) Section 114 (relating to timely access to
specialists).
``(E) Section 115 (relating to patient access to
obstetrical and gynecological care).
``(F) Section 116 (relating to access to pediatric care).
``(G) Section 117 (relating to continuity of care), but
only insofar as a replacement issuer assumes the obligation
for continuity of care.
``(H) Section 118 (relating to access to needed
prescription drugs).
``(I) Section 119 (relating to coverage for individuals
participating in approved clinical trials).
``(J) Section 120 (relating to required coverage for
minimum hospital stay for mastectomies and lymph node
dissections for the treatment of breast cancer and coverage
for secondary consultations).
``(K) Section 134 (relating to payment of claims).
``(2) Information.--With respect to information required to
be provided or made available under section 121 of the
Bipartisan Patient Protection 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 available (or provides
and makes available) such information.
``(3) Internal appeals.--With respect to the internal
appeals process required to be established under section 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 process and system (and is not liable for the
issuer's failure to provide for such process and system), if
the issuer is obligated to provide for (and provides for)
such process and system.
``(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 104 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 the Bipartisan Patient Protection Act, the group health
plan shall not be liable for such violation unless the plan
caused such violation:
``(A) Section 131 (relating to prohibition of interference
with certain medical communications).
``(B) Section 132 (relating to prohibition of
discrimination against providers based on licensure).
``(C) Section 133 (relating to prohibition against improper
incentive arrangements).
``(D) Section 135 (relating to protection for patient
advocacy).
``(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.
``(7) Treatment of substantially compliant state laws.--For
purposes of applying this subsection in connection with
health insurance coverage, any reference in this subsection
to a requirement in a section or other provision in the
Bipartisan Patient Protection Act with respect to a health
insurance issuer is deemed to include a reference to a
requirement under a State law that substantially complies (as
determined under section 152(c) of such Act) with the
requirement in such section or other provisions.
``(8) Application to certain prohibitions against
retaliation.--With respect to compliance with the
requirements of section 135(b)(1) of the Bipartisan Patient
Protection Act, for purposes of this subtitle the term `group
health plan' is deemed to include a reference to an
institutional health care provider.
``(c) Enforcement of Certain Requirements.--
``(1) Complaints.--Any protected health care professional
who believes that the professional has been retaliated or
discriminated against in violation of section 135(b)(1) of
the Bipartisan Patient Protection Act may file with the
Secretary a complaint within 180 days of the date of the
alleged retaliation or discrimination.
``(2) Investigation.--The Secretary shall investigate such
complaints and shall determine if a violation of such section
has occurred and, if so, shall issue an order to ensure that
the protected health care professional does not suffer any
loss of position, pay, or benefits in relation to the plan,
issuer, or provider involved, as a result of the violation
found by the Secretary.
``(d) Conforming Regulations.--The Secretary shall issue
regulations to coordinate the requirements on group health
plans and health insurance issuers under this section with
the requirements imposed under the other provisions of this
title. In order to reduce duplication and clarify the rights
of participants and beneficiaries with respect to information
that is required to be provided, such regulations shall
coordinate the information disclosure requirements under
section 121 of the Bipartisan Patient Protection Act with the
reporting and disclosure requirements imposed under part 1,
so long as such coordination does not result in any reduction
in the information that would otherwise be provided to
participants and beneficiaries.''.
(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 A
of title I of the Bipartisan Patient Protection Act, and
compliance with regulations promulgated by the Secretary, 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 714''.
(2) The table of contents in section 1 of such Act is
amended by inserting after the item relating to section 713
the following new item:
``Sec. 714. 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 135(b))'' after
``part 7''.
SEC. 402. AVAILABILITY OF CIVIL REMEDIES.
(a) Availability of Federal Civil Remedies in Cases Not
Involving Medically Reviewable Decisions.--
(1) In general.--Section 502 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1132) is amended by
adding at the end the following new subsections:
``(n) Cause of Action Relating to Provision of Health
Benefits.--
``(1) In general.--In any case in which--
``(A) a person who is a fiduciary of a group health plan, a
health insurance issuer offering health insurance coverage in
connection with the plan, or an agent of the plan, issuer, or
plan sponsor, upon consideration of a claim for benefits of a
participant or beneficiary under section 102 of the
Bipartisan Patient Protection Act (relating to procedures for
initial claims for benefits and prior authorization
determinations) or upon review of a denial of such a claim
under section 103 of such Act (relating to internal appeal of
a denial of a claim for benefits), fails to exercise ordinary
care in making a decision--
``(i) regarding whether an item or service is covered under
the terms and conditions of the plan or coverage,
``(ii) regarding whether an individual is a participant or
beneficiary who is enrolled under the terms and conditions of
the plan or coverage (including the applicability of any
waiting period under the plan or coverage), or
``(iii) as to the application of cost-sharing requirements
or the application of a specific exclusion or express
limitation on the amount, duration, or scope of coverage of
items or services under the terms and conditions of the plan
or coverage, and
``(B) such failure is a proximate cause of personal injury
to, or the death of, the participant or beneficiary,
such plan, plan sponsor, or issuer shall be liable to the
participant or beneficiary (or the estate of such participant
or beneficiary) for economic and noneconomic damages (but not
exemplary or punitive damages) in connection with such
personal injury or death.
``(2) Cause of action must not involve medically reviewable
decision.--
``(A) In general.--A cause of action is established under
paragraph (1)(A) only if the decision referred to in
paragraph (1)(A) does not include a medically reviewable
decision.
``(B) Medically reviewable decision.--For purposes of this
subsection, the term `medically reviewable decision' means a
denial of a claim for benefits under the plan which is
described in section 104(d)(2) of the Bipartisan Patient
Protection Act (relating to medically reviewable decisions).
``(3) Limitation regarding certain types of actions saved
from preemption of state law.--A cause of action is not
established under paragraph (1)(A) in connection with a
failure described in paragraph (1)(A) to the extent that a
cause of action under State law (as defined in section
514(c)) for such failure would not be preempted under section
514.
``(4) Definitions and related rules.--For purposes of this
subsection.--
``(A) Ordinary care.--The term `ordinary care' means, with
respect to a determination on a claim for benefits, that
degree of care, skill, and diligence that a reasonable and
[[Page H5239]]
prudent individual would exercise in making a fair
determination on a claim for benefits of like kind to the
claims involved.
``(B) Personal injury.--The term `personal injury' means a
physical injury and includes an injury arising out of the
treatment (or failure to treat) a mental illness or disease.
``(C) Claim for benefits; denial.--The terms `claim for
benefits' and `denial of a claim for benefits' have the
meanings provided such terms in section 102(e) of the
Bipartisan Patient Protection Act.
``(D) Terms and conditions.--The term `terms and
conditions' includes, with respect to a group health plan or
health insurance coverage, requirements imposed under title I
of the Bipartisan Patient Protection Act.
``(E) Treatment of excepted benefits.--Under section 154(a)
of the Bipartisan Patient Protection Act, the provisions of
this subsection and subsection (a)(1)(C) do not apply to
certain excepted benefits.
``(5) Exclusion of employers and other plan sponsors.--
``(A) Causes of action against employers and plan sponsors
precluded.--Subject to subparagraph (B), paragraph (1)(A)
does not authorize a cause of action against an employer or
other plan sponsor maintaining the plan (or against an
employee of such an employer or sponsor acting within the
scope of employment).
``(B) Certain causes of action permitted.--Notwithstanding
subparagraph (A), a cause of action may arise against an
employer or other plan sponsor (or against an employee of
such an employer or sponsor acting within the scope of
employment) under paragraph (1)(A), to the extent there was
direct participation by the employer or other plan sponsor
(or employee) in the decision of the plan under section 102
of the Bipartisan Patient Protection Act upon consideration
of a claim for benefits or under section 103 of such Act upon
review of a denial of a claim for benefits.
``(C) Direct participation.--
``(i) In general.--For purposes of subparagraph (B), the
term `direct participation' means, in connection with a
decision described in paragraph (1)(A), the actual making of
such decision or the actual exercise of control in making
such decision.
``(ii) Rules of construction.--For purposes of clause (i),
the employer or plan sponsor (or employee) shall not be
construed to be engaged in direct participation because of
any form of decisionmaking or other conduct that is merely
collateral or precedent to the decision described in
paragraph (1)(A) on a particular claim for benefits of a
participant or beneficiary, including (but not limited to)--
``(I) any participation by the employer or other plan
sponsor (or employee) in the selection of the group health
plan or health insurance coverage involved or the third party
administrator or other agent;
``(II) any engagement by the employer or other plan sponsor
(or employee) in any cost-benefit analysis undertaken in
connection with the selection of, or continued maintenance
of, the plan or coverage involved;
``(III) any participation by the employer or other plan
sponsor (or employee) in the process of creating, continuing,
modifying, or terminating the plan or any benefit under the
plan, if such process was not substantially focused solely on
the particular situation of the participant or beneficiary
referred to in paragraph (1)(A); and
``(IV) any participation by the employer or other plan
sponsor (or employee) in the design of any benefit under the
plan, including the amount of copayment and limits connected
with such benefit.
``(iii) Irrelevance of certain collateral efforts made by
employer or plan sponsor.--For purposes of this subparagraph,
an employer or plan sponsor shall not be treated as engaged
in direct participation in a decision with respect to any
claim for benefits or denial thereof in the case of any
particular participant or beneficiary solely by reason of--
``(I) any efforts that may have been made by the employer
or plan sponsor to advocate for authorization of coverage for
that or any other participant or beneficiary (or any group of
participants or beneficiaries), or
``(II) any provision that may have been made by the
employer or plan sponsor for benefits which are not covered
under the terms and conditions of the plan for that or any
other participant or beneficiary (or any group of
participants or beneficiaries).
``(D) Application to certain plans.--
``(i) In general.--Notwithstanding any other provision of
this subsection, no group health plan described in clause
(ii) (or plan sponsor of such a plan) shall be liable under
paragraph (1) for the performance of, or the failure to
perform, any non-medically reviewable duty under the plan.
``(ii) Definition.--A group health plan described in this
clause is--
``(I) a group health plan that is self-insured and self
administered by an employer (including an employee of such an
employer acting within the scope of employment); or
``(II) a multiemployer plan as defined in section 3(37)(A)
(including an employee of a contributing employer or of the
plan, or a fiduciary of the plan, acting within the scope of
employment or fiduciary responsibility) that is self-
insured and self-administered.
``(6) Exclusion of physicians and other health care
professionals.--
``(A) In general.--No treating physician or other treating
health care professional of the participant or beneficiary,
and no person acting under the direction of such a physician
or health care professional, shall be liable under paragraph
(1) for the performance of, or the failure to perform, any
non-medically reviewable duty of the plan, the plan sponsor,
or any health insurance issuer offering health insurance
coverage in connection with the plan.
``(B) Definitions.--For purposes of subparagraph (A)--
``(i) Health care professional.--The term `health care
professional' means an individual who is licensed,
accredited, or certified under State law to provide specified
health care services and who is operating within the scope of
such licensure, accreditation, or certification.
``(ii) Non-medically reviewable duty.--The term `non-
medically reviewable duty' means a duty the discharge of
which does not include the making of a medically reviewable
decision.
``(7) Exclusion of hospitals.--No treating hospital of the
participant or beneficiary shall be liable under paragraph
(1) for the performance of, or the failure to perform, any
non-medically reviewable duty (as defined in paragraph
(6)(B)(ii)) of the plan, the plan sponsor, or any health
insurance issuer offering health insurance coverage in
connection with the plan.
``(8) Rule of construction relating to exclusion from
liability of physicians, health care professionals, and
hospitals.--Nothing in paragraph (6) or (7) shall be
construed to limit the liability (whether direct or
vicarious) of the plan, the plan sponsor, or any health
insurance issuer offering health insurance coverage in
connection with the plan.
``(9) Requirement of exhaustion.--
``(A) In general.--A cause of action may not be brought
under paragraph (1) in connection with any denial of a claim
for benefits of any individual until all administrative
processes under sections 102 and 103 of the Bipartisan
Patient Protection Act (if applicable) have been exhausted.
``(B) Exception for needed care.--A participant or
beneficiary may seek relief exclusively in Federal court
under subsection 502(a)(1)(B) prior to the exhaustion of
administrative remedies under sections 102, 103, or 104 of
the Bipartisan Patient Protection Act (as required under
subparagraph (A)) if it is demonstrated to the court that the
exhaustion of such remedies would cause irreparable harm to
the health of the participant or beneficiary. Notwithstanding
the awarding of relief under subsection 502(a)(1)(B) pursuant
to this subparagraph, no relief shall be available as a
result of, or arising under, paragraph (1)(A) or paragraph
(10)(B), with respect to a participant or beneficiary, unless
the requirements of subparagraph (A) are met.
``(C) Receipt of benefits during appeals process.--Receipt
by the participant or beneficiary of the benefits involved in
the claim for benefits during the pendency of any
administrative processes referred to in subparagraph (A) or
of any action commenced under this subsection--
``(i) shall not preclude continuation of all such
administrative processes to their conclusion if so moved by
any party, and
``(ii) shall not preclude any liability under subsection
(a)(1)(C) and this subsection in connection with such claim.
The court in any action commenced under this subsection shall
take into account any receipt of benefits during such
administrative processes or such action in determining the
amount of the damages awarded.
``(D) Admissible.--Any determination made by a reviewer in
an administrative proceeding under section 103 of the
Bipartisan Patient Protection Act shall be admissible in any
Federal court proceeding and shall be presented to the trier
of fact.
``(10) Statutory damages.--
``(A) In general.--The remedies set forth in this
subsection (n) shall be the exclusive remedies for causes of
action brought under this subsection.
``(B) Assessment of civil penalties.--In addition to the
remedies provided for in paragraph (1) (relating to the
failure to provide contract benefits in accordance with the
plan), a civil assessment, in an amount not to exceed
$5,000,000, payable to the claimant may be awarded in any
action under such paragraph if the claimant establishes by
clear and convincing evidence that the alleged conduct
carried out by the defendant demonstrated bad faith and
flagrant disregard for the rights of the participant or
beneficiary under the plan and was a proximate cause of the
personal injury or death that is the subject of the claim.
``(11) Limitation on attorneys' fees.--
``(A) In general.--Notwithstanding any other provision of
law, or any arrangement, agreement, or contract regarding an
attorney's fee, the amount of an attorney's contingency fee
allowable for a cause of action brought pursuant to this
subsection shall not exceed \1/3\ of the total amount of the
plaintiff's recovery (not including the reimbursement of
actual out-of-pocket expenses of the attorney).
``(B) Determination by district court.--The last Federal
district court in which the action was pending upon the final
disposition, including all appeals, of the action shall have
jurisdiction to review the attorney's fee to ensure that the
fee is a reasonable one.
[[Page H5240]]
``(12) Limitation of action.--Paragraph (1) shall not apply
in connection with any action commenced after 3 years after
the later of--
``(A) the date on which the plaintiff first knew, or
reasonably should have known, of the personal injury or death
resulting from the failure described in paragraph (1), or
``(B) the date as of which the requirements of paragraph
(9) are first met.
``(13) Tolling provision.--The statute of limitations for
any cause of action arising under State law relating to a
denial of a claim for benefits that is the subject of an
action brought in Federal court under this subsection shall
be tolled until such time as the Federal court makes a final
disposition, including all appeals, of whether such claim
should properly be within the jurisdiction of the Federal
court. The tolling period shall be determined by the
applicable Federal or State law, whichever period is greater.
``(14) Purchase of insurance to cover liability.--Nothing
in section 410 shall be construed to preclude the purchase by
a group health plan of insurance to cover any liability or
losses arising under a cause of action under subsection
(a)(1)(C) and this subsection.
``(15) Exclusion of directed recordkeepers.--
``(A) In general.--Subject to subparagraph (C), paragraph
(1) shall not apply with respect to a directed recordkeeper
in connection with a group health plan.
``(B) Directed recordkeeper.--For purposes of this
paragraph, the term `directed recordkeeper' means, in
connection with a group health plan, a person engaged in
directed recordkeeping activities pursuant to the specific
instructions of the plan or the employer or other plan
sponsor, including the distribution of enrollment information
and distribution of disclosure materials under this Act or
title I of the Bipartisan Patient Protection Act and whose
duties do not include making decisions on claims for
benefits.
``(C) Limitation.--Subparagraph (A) does not apply in
connection with any directed recordkeeper to the extent that
the directed recordkeeper fails to follow the specific
instruction of the plan or the employer or other plan
sponsor.
``(16) Exclusion of health insurance agents.--Paragraph (1)
does not apply with respect to a person whose sole
involvement with the group health plan is providing advice or
administrative services to the employer or other plan sponsor
relating to the selection of health insurance coverage
offered in connection with the plan.
``(17) No effect on state law.--No provision of State law
(as defined in section 514(c)(1)) shall be treated as
superseded or otherwise altered, amended, modified,
invalidated, or impaired by reason of the provisions of
subsection (a)(1)(C) and this subsection.
``(18) Relief from liability for employer or other plan
sponsor by means of designated decisionmaker.--
``(A) In general.--Notwithstanding the direct participation
(as defined in paragraph (5)(C)(i)) of an employer or plan
sponsor, in any case in which there is (or is deemed under
subparagraph (B) to be) a designated decisionmaker under
subparagraph (B) that meets the requirements of subsection
(o)(1) for an employer or other plan sponsor--
``(i) all liability of such employer or plan sponsor
involved (and any employee of such employer or sponsor acting
within the scope of employment) under this subsection in
connection with any participant or beneficiary shall be
transferred to, and assumed by, the designated decisionmaker,
and
``(ii) with respect to such liability, the designated
decisionmaker shall be substituted for the employer or
sponsor (or employee) in the action and may not raise any
defense that the employer or sponsor (or employee) could not
raise if such a decisionmaker were not so deemed.
``(B) Automatic designation.--A health insurance issuer
shall be deemed to be a designated decisionmaker for purposes
of subparagraph (A) with respect to the participants and
beneficiaries of an employer or plan sponsor, whether or not
the employer or plan sponsor makes such a designation, and
shall be deemed to have assumed unconditionally all liability
of the employer or plan sponsor under such designation in
accordance with subsection (o), unless the employer or plan
sponsor affirmatively enters into a contract to prevent the
service of the designated decisionmaker.
``(C) Treatment of certain trust funds.--For purposes of
this paragraph, the terms `employer' and `plan sponsor', in
connection with the assumption by a designated decisionmaker
of the liability of employer or other plan sponsor pursuant
to this paragraph, shall be construed to include a trust fund
maintained pursuant to section 302 of the Labor Management
Relations Act, 1947 (29 U.S.C. 186) or the Railway Labor Act
(45 U.S.C. 151 et seq.).
``(19) Previously provided services.--
``(A) in general.--Except as provided in this paragraph, a
cause of action shall not arise under paragraph (1) where the
denial involved relates to an item or service that has
already been fully provided to the participant or beneficiary
under the plan or coverage and the claim relates solely to
the subsequent denial of payment for the provision of such
item or service.
``(B) Exception.--Nothing in subparagraph (A) shall be
construed to--
``(i) prohibit a cause of action under paragraph (1) where
the nonpayment involved results in the participant or
beneficiary being unable to receive further items or services
that are directly related to the item or service involved in
the denial referred to in subparagraph (A) or that are part
of a continuing treatment or series of procedures; or
``(ii) limit liability that otherwise would arise from the
provision of the item or services or the performance of a
medical procedure.
``(20) Exemption from personal liability for individual
members of boards of directors, joint boards of trustees,
etc.--Any individual who is--
``(A) a member of a board of directors of an employer or
plan sponsor; or
``(B) a member of an association, committee, employee
organization, joint board of trustees, or other similar group
of representatives of the entities that are the plan sponsor
of plan maintained by two or more employers and one or more
employee organizations;
shall not be personally liable under this subsection for
conduct that is within the scope of employment or of plan-
related duties of the individuals unless the individual acts
in a fraudulent manner for personal enrichment.
``(o) Requirements for Designated Decisionmakers of Group
Health Plans.--
``(1) In general.--For purposes of subsection (n)(18) and
section 514(d)(9), a designated decisionmaker meets the
requirements of this paragraph with respect to any
participant or beneficiary if--
``(A) such designation is in such form as may be prescribed
in regulations of the Secretary,
``(B) the designated decisionmaker--
``(i) meets the requirements of paragraph (2),
``(ii) assumes unconditionally all liability of the
employer or plan sponsor involved (and any employee of such
employer or sponsor acting within the scope of employment)
either arising under subsection (n) or arising in a cause of
action permitted under section 514(d) in connection with
actions (and failures to act) of the employer or plan sponsor
(or employee) occurring during the period in which the
designation under subsection (n)(18) or section 514(d)(9) is
in effect relating to such participant and beneficiary,
``(iii) agrees to be substituted for the employer or plan
sponsor (or employee) in the action and not to raise any
defense with respect to such liability that the employer or
plan sponsor (or employee) may not raise, and
``(iv) where paragraph (2)(B) applies, assumes
unconditionally the exclusive authority under the group
health plan to make medically reviewable decisions under the
plan with respect to such participant or beneficiary, and
``(C) the designated decisionmaker and the participants and
beneficiaries for whom the decisionmaker has assumed
liability are identified in the written instrument required
under section 402(a) and as required under section 121(b)(19)
of the Bipartisan Patient Protection Act.
Any liability assumed by a designated decisionmaker pursuant
to this subsection shall be in addition to any liability that
it may otherwise have under applicable law.
``(2) Qualifications for designated decisionmakers.--
``(A) In general.--Subject to subparagraph (B), an entity
is qualified under this paragraph to serve as a designated
decisionmaker with respect to a group health plan if the
entity has the ability to assume the liability described in
paragraph (1) with respect to participants and beneficiaries
under such plan, including requirements relating to the
financial obligation for timely satisfying the assumed
liability, and maintains with the plan sponsor and the
Secretary certification of such ability. Such
certification shall be provided to the plan sponsor or
named fiduciary and to the Secretary upon designation
under subsection (n)(18)(B) or section 517(d)(9)(B) and
not less frequently than annually thereafter, or if such
designation constitutes a multiyear arrangement, in
conjunction with the renewal of the arrangement.
``(B) Special qualification in the case of certain
reviewable decisions.--In the case of a group health plan
that provides benefits consisting of medical care to a
participant or beneficiary only through health insurance
coverage offered by a single health insurance issue, such
issuer is the only entity that may be qualified under this
paragraph to serve as a designated decisionmaker with respect
to such participant or beneficiary, and shall serve as the
designated decisionmaker unless the employer or other plan
sponsor acts affirmatively to prevent such service.
``(3) Requirements relating to financial obligations.--For
purposes of paragraph (2)(A), the requirements relating to
the financial obligation of an entity for liability shall
include--
``(A) coverage of such entity under an insurance policy or
other arrangement, secured and maintained by such entity, to
effectively insure such entity against losses arising from
professional liability claims, including those arising from
its service as a designated decisionmaker under this part; or
``(B) evidence of minimum capital and surplus levels that
are maintained by such entity to cover any losses as a result
of liability arising from its service as a designated
decisionmaker under this part.
[[Page H5241]]
The appropriate amounts of liability insurance and minimum
capital and surplus levels for purposes of subparagraphs (A)
and (B) shall be determined by an actuary using sound
actuarial principles and accounting practices pursuant to
established guidelines of the American Academy of Actuaries
and in accordance with such regulations as the Secretary may
prescribe and shall be maintained throughout the term for
which the designation is in effect. The provisions of this
paragraph shall not apply in the case of a designated
decisionmaker that is a group health plan, plan sponsor, or
health insurance issuer and that is regulated under Federal
law or a State financial solvency law.
``(4) Limitation on appointment of treating physicians.--A
treating physician who directly delivered the care,
treatment, or provided the patient service that is the
subject of a cause of action by a participant or beneficiary
under subsection (n) or section 514(d) may not be designated
as a designated decisionmaker under this subsection with
respect to such participant or beneficiary.''.
(2) Conforming amendment.--Section 502(a)(1) of such Act
(29 U.S.C. 1132(a)(1)) is amended--
(A) by striking ``or'' at the end of subparagraph (A);
(B) in subparagraph (B), by striking ``plan;'' and
inserting ``plan, or''; and
(C) by adding at the end the following new subparagraph:
``(C) for the relief provided for in subsection (n) of this
section.''.
(b) Rules Relating to ERISA Preemption.--Section 514 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1144) is amended--
(1) by redesignating subsection (d) as subsection (f); and
(2) by inserting after subsection (c) the following new
subsections:
``(d) Preemption Not To Apply to Causes of Action Under
State Law Involving Medically Reviewable Decision.--
``(1) Non-preemption of certain causes of action.--
``(A) In general.--Except as provided in this subsection,
nothing in this title (including section 502) shall be
construed to supersede or otherwise alter, amend, modify,
invalidate, or impair any cause of action under State law of
a participant or beneficiary under a group health plan (or
the estate of such a participant or beneficiary) against the
plan, the plan sponsor, any health insurance issuer offering
health insurance coverage in connection with the plan, or any
managed care entity in connection with the plan to recover
damages resulting from personal injury or for wrongful death
if such cause of action arises by reason of a medically
reviewable decision.
``(B) Medically reviewable decision.--For purposes of
subparagraph (A), the term `medically reviewable decision'
means a denial of a claim for benefits under the plan which
is described in section 104(d)(2) of the Bipartisan Patient
Protection Act (relating to medically reviewable decisions).
``(C) Limitation on punitive damages.--
``(i) In general.--Except as provided in clauses (ii) and
(iii), with respect to a cause of action described in
subparagraph (A) brought with respect to a participant or
beneficiary, State law is superseded insofar as it provides
any punitive, exemplary, or similar damages if, as of the
time of the personal injury or death, all the requirements of
the following sections of the Bipartisan Patient Protection
Act were satisfied with respect to the participant or
beneficiary:
``(I) Section 102 (relating to procedures for initial
claims for benefits and prior authorization determinations).
``(II) Section 103 of such Act (relating to internal
appeals of claims denials).
``(III) Section 104 of such Act (relating to independent
external appeals procedures).
``(ii) Exception for certain actions for wrongful death.--
Clause (i) shall not apply with respect to an action for
wrongful death if the applicable State law provides (or has
been construed to provide) for damages in such an action
which are only punitive or exemplary in nature.
``(iii) Exception for willful or wanton disregard for the
rights or safety of others.--Clause (i) shall not apply with
respect to any cause of action described in subparagraph (A)
if, in such action, the plaintiff establishes by clear and
convincing evidence that conduct carried out by the defendant
with willful or wanton disregard for the rights or safety of
others was a proximate cause of the personal injury or
wrongful death that is the subject of the action.
``(2) Definitions and related rules.--For purposes of this
subsection and subsection (e)--
``(A) Treatment of excepted benefits.--Under section 154(a)
of the Bipartisan Patient Protection Act, the provisions of
this subsection do not apply to certain excepted benefits.
``(B) Personal injury.--The term `personal injury' means a
physical injury and includes an injury arising out of the
treatment (or failure to treat) a mental illness or disease.
``(C) Claim for benefit; denial.--The terms `claim for
benefits' and `denial of a claim for benefits' shall have the
meaning provided such terms under section 102(e) of the
Bipartisan Patient Protection Act.
``(D) Managed care entity.--
``(i) In general.--The term `managed care entity' means, in
connection with a group health plan and subject to clause
(ii), any entity that is involved in determining the manner
in which or the extent to which items or services (or
reimbursement therefor) are to be provided as benefits under
the plan.
``(ii) Treatment of treating physicians, other treating
health care professionals, and treating hospitals.--Such term
does not include a treating physician or other treating
health care professional (as defined in section
502(n)(6)(B)(i)) of the participant or beneficiary and also
does not include a treating hospital insofar as it is acting
solely in the capacity of providing treatment or care to the
participant or beneficiary. Nothing in the preceding sentence
shall be construed to preempt vicarious liability of any
plan, plan sponsor, health insurance issuer, or managed care
entity.
``(3) Exclusion of employers and other plan sponsors.--
``(A) Causes of action against employers and plan sponsors
precluded.--Subject to subparagraph (B), paragraph (1) does
not apply with respect to--
``(i) any cause of action against an employer or other plan
sponsor maintaining the plan (or against an employee of such
an employer or sponsor acting within the scope of
employment), or
``(ii) a right of recovery, indemnity, or contribution by a
person against an employer or other plan sponsor (or such an
employee) for damages assessed against the person pursuant to
a cause of action to which paragraph (1) applies.
``(B) Certain causes of action permitted.--Notwithstanding
subparagraph (A), paragraph (1) applies with respect to any
cause of action that is brought by a participant or
beneficiary under a group health plan (or the estate of such
a participant or beneficiary) to recover damages resulting
from personal injury or for wrongful death against any
employer or other plan sponsor maintaining the plan (or
against an employee of such an employer or sponsor acting
within the scope of employment) if such cause of action
arises by reason of a medically reviewable decision, to the
extent that there was direct participation by the employer or
other plan sponsor (or employee) in the decision.
``(C) Direct participation.--
``(i) Direct participation in decisions.--For purposes of
subparagraph (B), the term `direct participation' means, in
connection with a decision described in subparagraph (B), the
actual making of such decision or the actual exercise of
control in making such decision or in the conduct
constituting the failure.
``(ii) Rules of construction.--For purposes of clause (i),
the employer or plan sponsor (or employee) shall not be
construed to be engaged in direct participation because of
any form of decisionmaking or other conduct that is merely
collateral or precedent to the decision described in
subparagraph (B) on a particular claim for benefits of a
particular participant or beneficiary, including (but not
limited to)--
``(I) any participation by the employer or other plan
sponsor (or employee) in the selection of the group health
plan or health insurance coverage involved or the third party
administrator or other agent;
``(II) any engagement by the employer or other plan sponsor
(or employee) in any cost-benefit analysis undertaken in
connection with the selection of, or continued maintenance
of, the plan or coverage involved;
``(III) any participation by the employer or other plan
sponsor (or employee) in the process of creating, continuing,
modifying, or terminating the plan or any benefit under the
plan, if such process was not substantially focused solely on
the particular situation of the participant or beneficiary
referred to in paragraph (1)(A); and
``(IV) any participation by the employer or other plan
sponsor (or employee) in the design of any benefit under the
plan, including the amount of copayment and limits connected
with such benefit.
``(iv) Irrelevance of certain collateral efforts made by
employer or plan sponsor.--For purposes of this subparagraph,
an employer or plan sponsor shall not be treated as engaged
in direct participation in a decision with respect to any
claim for benefits or denial thereof in the case of any
particular participant or beneficiary solely by reason of--
``(I) any efforts that may have been made by the employer
or plan sponsor to advocate for authorization of coverage for
that or any other participant or beneficiary (or any group of
participants or beneficiaries), or
``(II) any provision that may have been made by the
employer or plan sponsor for benefits which are not covered
under the terms and conditions of the plan for that or any
other participant or beneficiary (or any group of
participants or beneficiaries).
``(4) Requirement of exhaustion.--
``(A) In general.--Except as provided in subparagraph (D),
a cause of action may not be brought under paragraph (1) in
connection with any denial of a claim for benefits of any
individual until all administrative processes under sections
102, 103, and 104 of the Bipartisan Patient Protection Act
(if applicable) have been exhausted.
``(B) Late manifestation of injury.--
``(i) In general.--A participant or beneficiary shall not
be precluded from pursuing a review under section 104 of the
Bipartisan Patient Protection Act regarding an injury that
such participant or beneficiary has experienced if the
external review entity first
[[Page H5242]]
determines that the injury of such participant or beneficiary
is a late manifestation of an earlier injury.
``(ii) Definition.--In this subparagraph, the term `late
manifestation of an earlier injury' means an injury sustained
by the participant or beneficiary which was not known, and
should not have been known, by such participant or
beneficiary by the latest date that the requirements of
subparagraph (A) should have been met regarding the claim for
benefits which was denied.
``(C) Exception for needed care.--A participant or
beneficiary may seek relief exclusively in Federal court
under subsection 502(a)(1)(B) prior to the exhaustion of
administrative remedies under sections 102, 103, or 104 of
the Bipartisan Patient Protection Act (as required under
subparagraph (A)) if it is demonstrated to the court that the
exhaustion of such remedies would cause irreparable harm to
the health of the participant or beneficiary. Notwithstanding
the awarding of relief under subsection 502(a)(1)(B) pursuant
to this subparagraph, no relief shall be available as a
result of, or arising under, paragraph (1)(A) unless the
requirements of subparagraph (A) are met.
``(D) Failure to review.--
``(i) In general.--If the external review entity fails to
make a determination within the time required under section
104(e)(1)(A)(i), a participant or beneficiary may bring an
action under section 514(d) after 10 additional days after
the date on which such time period has expired and the filing
of such action shall not affect the duty of the independent
medical reviewer (or reviewers) to make a determination
pursuant to section 104(e)(1)(A)(i).
``(ii) Expedited determination.--If the external review
entity fails to make a determination within the time required
under section 104(e)(1)(A)(ii), a participant or beneficiary
may bring an action under this subsection and the filing of
such an action shall not affect the duty of the independent
medical reviewer (or reviewers) to make a determination
pursuant to section 104(e)(1)(A)(ii).
``(E) Receipt of benefits during appeals process.--Receipt
by the participant or beneficiary of the benefits involved in
the claim for benefits during the pendency of any
administrative processes referred to in subparagraph (A) or
of any action commenced under this subsection--
``(i) shall not preclude continuation of all such
administrative processes to their conclusion if so moved by
any party, and
``(ii) shall not preclude any liability under subsection
(a)(1)(C) and this subsection in connection with such claim.
``(F) Admissible.--Any determination made by a reviewer in
an administrative proceeding under section 104 of the
Bipartisan Patient Protection Act shall be admissible in any
Federal or State court proceeding and shall be presented to
the trier of fact.
``(5) Tolling provision.--The statute of limitations for
any cause of action arising under section 502(n) relating to
a denial of a claim for benefits that is the subject of an
action brought in State court shall be tolled until such time
as the State court makes a final disposition, including all
appeals, of whether such claim should properly be within the
jurisdiction of the State court. The tolling period shall be
determined by the applicable Federal or State law, whichever
period is greater.
``(6) Exclusion of directed recordkeepers.--
``(A) In general.--Subject to subparagraph (C), paragraph
(1) shall not apply with respect to a directed recordkeeper
in connection with a group health plan.
``(B) Directed recordkeeper.--For purposes of this
paragraph, the term `directed recordkeeper' means, in
connection with a group health plan, a person engaged in
directed recordkeeping activities pursuant to the specific
instructions of the plan or the employer or other plan
sponsor, including the distribution of enrollment information
and distribution of disclosure materials under this Act or
title I of the Bipartisan Patient Protection Act and whose
duties do not include making decisions on claims for
benefits.
``(C) Limitation.--Subparagraph (A) does not apply in
connection with any directed recordkeeper to the extent that
the directed recordkeeper fails to follow the specific
instruction of the plan or the employer or other plan
sponsor.
``(7) Construction.--Nothing in this subsection shall be
construed as--
``(A) saving from preemption a cause of action under State
law for the failure to provide a benefit for an item or
service which is specifically excluded under the group health
plan involved, except to the extent that--
``(i) the application or interpretation of the exclusion
involves a determination described in section 104(d)(2) of
the Bipartisan Patient Protection Act, or
``(ii) the provision of the benefit for the item or service
is required under Federal law or under applicable State law
consistent with subsection (b)(2)(B);
``(B) preempting a State law which requires an affidavit or
certificate of merit in a civil action;
``(C) affecting a cause of action or remedy under State law
in connection with the provision or arrangement of excepted
benefits (as defined in section 733(c)), other than those
described in section 733(c)(2)(A); or
``(D) affecting a cause of action under State law other
than a cause of action described in paragraph (1)(A).
``(8) Purchase of insurance to cover liability.--Nothing in
section 410 shall be construed to preclude the purchase by a
group health plan of insurance to cover any liability or
losses arising under a cause of action described in paragraph
(1)(A).
``(9) Relief from liability for employer or other plan
sponsor by means of designated decisionmaker.--
``(A) In general.--Paragraph (1) shall not apply with
respect to any cause of action described in paragraph (1)(A)
under State law insofar as such cause of action provides for
liability with respect to a participant or beneficiary of an
employer or plan sponsor (or an employee of such employer or
sponsor acting within the scope of employment), if with
respect to the employer or plan sponsor there is (or is
deemed under subparagraph (B) to be) a designated
decisionmaker that meets the requirements of section
502(o)(1) with respect to such participant or beneficiary.
Such paragraph (1) shall apply with respect to any cause of
action described in paragraph (1)(A) under State law against
the designated decisionmaker of such employer or other plan
sponsor with respect to the participant or beneficiary.
``(B) Automatic designation.--A health insurance issuer
shall be deemed to be a designated decisionmaker for purposes
of subparagraph (A) with respect to the participants and
beneficiaries of an employer or plan sponsor, whether or not
the employer or plan sponsor makes such a designation, and
shall be deemed to have assumed unconditionally all liability
of the employer or plan sponsor under such designation in
accordance with subsection (o), unless the employer or plan
sponsor affirmatively enters into a contract to prevent the
service of the designated decisionmaker.
``(C) Treatment of certain trust funds.--For purposes of
this paragraph, the terms `employer' and `plan sponsor', in
connection with the assumption by a designated decisionmaker
of the liability of employer or other plan sponsor pursuant
to this paragraph, shall be construed to include a trust fund
maintained pursuant to section 302 of the Labor Management
Relations Act, 1947 (29 U.S.C. 186) or the Railway Labor Act
(45 U.S.C. 151 et seq.).
``(10) Previously provided services.--
``(A) In general.--Except as provided in this paragraph, a
cause of action shall not arise under paragraph (1) where the
denial involved relates to an item or service that has
already been fully provided to the participant or beneficiary
under the plan or coverage and the claim relates solely to
the subsequent denial of payment for the provision of such
item or service.
``(B) Exception.--Nothing in subparagraph (A) shall be
construed to--
``(i) prohibit a cause of action under paragraph (1) where
the nonpayment involved results in the participant or
beneficiary being unable to receive further items or services
that are directly related to the item or service involved in
the denial referred to in subparagraph (A) or that are part
of a continuing treatment or series of procedures;
``(ii) prohibit a cause of action under paragraph (1)
relating to quality of care; or
``(iii) limit liability that otherwise would arise from the
provision of the item or services or the performance of a
medical procedure.
``(11) Exemption from personal liability for individual
members of boards of directors, joint boards of trustees,
etc.--Any individual who is--
``(A) a member of a board of directors of an employer or
plan sponsor; or
``(B) a member of an association, committee, employee
organization, joint board of trustees, or other similar group
of representatives of the entities that are the plan sponsor
of plan maintained by two or more employers and one or more
employee organizations;
shall not be personally liable under this subsection for
conduct that is within the scope of employment or of plan-
related duties of the individuals unless the individual acts
in a fraudulent manner for personal enrichment.
``(12) Choice of law.--A cause of action brought under
paragraph (1) shall be governed by the law (including choice
of law rules) of the State in which the plaintiff resides.
``(13) Limitation on attorneys' fees.--
``(A) In general.--Notwithstanding any other provision of
law, or any arrangement, agreement, or contract regarding an
attorney's fee, the amount of an attorney's contingency fee
allowable for a cause of action brought under paragraph (1)
shall not exceed \1/3\ of the total amount of the plaintiff's
recovery (not including the reimbursement of actual out-of-
pocket expenses of the attorney).
``(B) Determination by court.--The last court in which the
action was pending upon the final disposition, including all
appeals, of the action may review the attorney's fee to
ensure that the fee is a reasonable one.
``(C) No preemption of state law.--Subparagraph (A) shall
not apply with respect to a cause of action under paragraph
(1) that is brought in a State that has a law or framework of
laws with respect to the amount of an attorney's contingency
fee that may be incurred for the representation of a
participant or beneficiary (or the estate of such participant
or beneficiary) who brings such a cause of action.
``(e) Rules of Construction Relating to Health Care.--
Nothing in this title shall be construed as--
[[Page H5243]]
``(1) affecting any State law relating to the practice of
medicine or the provision of, or the failure to provide,
medical care, or affecting any action (whether the liability
is direct or vicarious) based upon such a State law,
``(2) superseding any State law permitted under section
152(b)(1)(A) of the Bipartisan Patient Protection Act, or
``(3) affecting any applicable State law with respect to
limitations on monetary damages.
``(f) No Right of Action for Recovery, Indemnity, or
Contribution by Issuers Against Treating Health Care
Professionals and Treating Hospitals.--In the case of any
care provided, or any treatment decision made, by the
treating health care professional or the treating hospital of
a participant or beneficiary under a group health plan which
consists of medical care provided under such plan, any cause
of action under State law against the treating health care
professional or the treating hospital by the plan or a health
insurance issuer providing health insurance coverage in
connection with the plan for recovery, indemnity, or
contribution in connection with such care (or any medically
reviewable decision made in connection with such care) or
such treatment decision is superseded.''.
(c) Effective Date.--The amendments made by this section
shall apply to acts and omissions (from which a cause of
action arises) occurring on or after the applicable effective
under section 601.
SEC. 403. LIMITATION ON CERTAIN CLASS ACTION LITIGATION.
Section 502 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1132), as amended by section 402, is
further amended by adding at the end the following:
``(p) Limitation on Class Action Litigation.--
``(1) In general.--Any claim or cause of action that is
maintained under this section in connection with a group
health plan, or health insurance coverage issued in
connection with a group health plan, as a class action,
derivative action, or as an action on behalf of any group of
2 or more claimants, may be maintained only if the class, the
derivative claimant, or the group of claimants is limited to
the participants or beneficiaries of a group health plan
established by only 1 plan sponsor. No action maintained by
such class, such derivative claimant, or such group of
claimants may be joined in the same proceeding with any
action maintained by another class, derivative claimant, or
group of claimants or consolidated for any purpose with any
other proceeding. In this paragraph, the terms `group health
plan' and `health insurance coverage' have the meanings given
such terms in section 733.
``(2) Effective date.--This subsection shall apply to all
civil actions that are filed on or after January 1, 2002.''.
SEC. 404. LIMITATIONS ON ACTIONS.
Section 502 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1132) (as amended by section 402(a)) is
amended further by adding at the end the following new
subsection:
``(q) Limitations on Actions Relating to Group Health
Plans.--
``(1) In general.--Except as provided in paragraph (2), no
action may be brought under subsection (a)(1)(B), (a)(2), or
(a)(3) by a participant or beneficiary seeking relief based
on the application of any provision in section 101, subtitle
B, or subtitle D of title I of the Bipartisan Patient
Protection Act (as incorporated under section 714).
``(2) Certain actions allowable.--An action may be brought
under subsection (a)(1)(B), (a)(2), or (a)(3) by a
participant or beneficiary seeking relief based on the
application of section 101, 113, 114, 115, 116, 117,
118(a)(3), 119, or 120 of the Bipartisan Patient Protection
Act (as incorporated under section 714) to the individual
circumstances of that participant or beneficiary, except
that--
``(A) such an action may not be brought or maintained as a
class action; and
``(B) in such an action, relief may only provide for the
provision of (or payment of) benefits, items, or services
denied to the individual participant or beneficiary involved
(and for attorney's fees and the costs of the action, at the
discretion of the court) and shall not provide for any other
relief to the participant or beneficiary or for any relief to
any other person.
``(3) Other provisions unaffected.--Nothing in this
subsection shall be construed as affecting subsections
(a)(1)(C) and (n) or section 514(d).
``(4) Enforcement by secretary unaffected.--Nothing in this
subsection shall be construed as affecting any action brought
by the Secretary.''.
SEC. 405. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
Subpart C of part 7 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1191 et seq.) is amended by adding at the end the following
new section:
``SEC. 735. COOPERATION BETWEEN FEDERAL AND STATE
AUTHORITIES.
``(a) Agreement with States.--A State may enter into an
agreement with the Secretary for the delegation to the State
of some or all of the Secretary's authority under this title
to enforce the requirements applicable under title I of the
Bipartisan Patient Protection Act with respect to health
insurance coverage offered by a health insurance issuer and
with respect to a group health plan that is a non-Federal
governmental plan.
``(b) Delegations.--Any department, agency, or
instrumentality of a State to which authority is delegated
pursuant to an agreement entered into under this section may,
if authorized under State law and to the extent consistent
with such agreement, exercise the powers of the Secretary
under this title which relate to such authority.''.
SEC. 406. SENSE OF THE SENATE CONCERNING THE IMPORTANCE OF
CERTAIN UNPAID SERVICES.
It is the sense of the Senate that the court should
consider the loss of a nonwage earning spouse or parent as an
economic loss for the purposes of this section. Furthermore,
the court should define the compensation for the loss not as
minimum services, but, rather, in terms that fully compensate
for the true and whole replacement cost to the family.
TITLE V--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986
Subtitle A--Application of Patient Protection Provisions
SEC. 501. APPLICATION TO GROUP HEALTH PLANS UNDER THE
INTERNAL REVENUE CODE OF 1986.
Subchapter B of chapter 100 of the Internal Revenue Code of
1986 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 patients' bill of rights.'';
and
(2) by inserting after section 9812 the following:
``SEC. 9813. STANDARD RELATING TO PATIENTS' BILL OF RIGHTS.
``A group health plan shall comply with the requirements of
title I of the Bipartisan Patient Protection Act (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.''.
SEC. 502. CONFORMING ENFORCEMENT FOR WOMEN'S HEALTH AND
CANCER RIGHTS.
Subchapter B of chapter 100 of the Internal Revenue Code of
1986, as amended by section 501, is further amended--
(1) in the table of sections, by inserting after the item
relating to section 9813 the following new item:
``Sec. 9814. Standard relating to women's health and cancer rights.'';
and
(2) by inserting after section 9813 the following:
``SEC. 9814. STANDARD RELATING TO WOMEN'S HEALTH AND CANCER
RIGHTS.
``The provisions of section 713 of the Employee Retirement
Income Security Act of 1974 (as in effect as of the date of
the enactment of this section) shall apply to group health
plans as if included in this subchapter.''.
Subtitle B--Health Care Coverage Access Tax Incentives
SEC. 511. EXPANDED AVAILABILITY OF ARCHER MSAS.
(a) Extension of Program.--Paragraphs (2) and (3)(B) of
section 220(i) of the Internal Revenue Code of 1986 (defining
cut-off year) are each amended by striking ``2002'' each
place it appears and inserting ``2004''.
(b) Increase In Number of Permitted Account Participants.--
(1) In general.--Subsection (j) of section 220 of such Code
is amended by redesignating paragraphs (3), (4), and (5) as
paragraphs (4), (5), and (6) and by inserting after paragraph
(2) the following new paragraph:
``(3) Determination of whether limit exceeded for years
after 2001.--
``(A) In general.--The numerical limitation for any year
after 2001 is exceeded if the sum of--
``(i) the number of Archer MSA returns filed on or before
April 15 of such calendar year for taxable years ending with
or within the preceding calendar year, plus
``(ii) the Secretary's estimate (determined on the basis of
the returns described in clause (i)) of the number of Archer
MSA returns for such taxable years which will be filed after
such date, exceeds 1,000,000. For purposes of the preceding
sentence, the term `Archer MSA return' means any return on
which any exclusion is claimed under section 106(b) or any
deduction is claimed under this section.
``(B) Alternative computation of limitation.--The numerical
limitation for any year after 2001 is also exceeded if the
sum of--
``(i) 90 percent of the sum determined under subparagraph
(A) for such calendar year, plus
``(ii) the product of 2.5 and the number of medical savings
accounts established during the portion of such year
preceding July 1 (based on the reports required under
paragraph (5)) for taxable years beginning in such year,
exceeds 1,000,000''.
(2) Conforming amendments.--
(A) Clause (ii) of section 220(j)(2)(B) of such Code is
amended by striking ``paragraph (4)'' and inserting
``paragraph (5)''.
(B) Subparagraph (A) of section 220(j)(4) of such Code is
amended by striking ``and 2001'' and inserting ``2001, 2002,
and 2003''.
(c) Increase in Size of Eligible Employers.--Subparagraph
(A) of section 220(c)(4) of such Code is amended by striking
``50 or fewer employees'' and inserting ``100 or fewer
employees''.
[[Page H5244]]
(d) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
(e) GAO Study.--Not later than 1 year after the date of the
enactment of this Act, the Comptroller General of the United
States shall prepare and submit a report to the Committee on
Ways and Means of the House of Representatives and the
Committee on Finance of the Senate on the impact of Archer
MSAs on the cost of conventional insurance (especially in
those areas where there are higher numbers of such accounts)
and on adverse selection and health care costs.
SEC. 512. DEDUCTION FOR 100 PERCENT OF HEALTH INSURANCE COSTS
OF SELF-EMPLOYED INDIVIDUALS.
(a) In General.--Paragraph (1) of section 162(l) of the
Internal Revenue Code of 1986 is amended to read as follows:
``(1) Allowance of deduction.--In the case of an individual
who is an employee within the meaning of section 401(c)(1),
there shall be allowed as a deduction under this section an
amount equal to 100 percent of the amount paid during the
taxable year for insurance which constitutes medical care for
the taxpayer and the taxpayer's spouse and dependents.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2001.
SEC. 513. CREDIT FOR HEALTH INSURANCE EXPENSES OF SMALL
BUSINESSES.
(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. 45E. SMALL BUSINESS HEALTH INSURANCE EXPENSES.
``(a) General Rule.--For purposes of section 38, in the
case of a small employer, the health insurance credit
determined under this section for the taxable year is an
amount equal to the applicable percentage of the expenses
paid by the taxpayer during the taxable year for health
insurance coverage for such year provided under a new health
plan for employees of such employer.
``(b) Applicable Percentage.--For purposes of subsection
(a), the applicable percentage is--
``(1) in the case of insurance purchased as a member of a
qualified health benefit purchasing coalition (as defined in
section 9841), 30 percent, and
``(2) in the case of insurance not described in paragraph
(1), 20 percent.
``(c) Limitations.--
``(1) Per employee dollar limitation.--The amount of
expenses taken into account under subsection (a) with respect
to any employee for any taxable year shall not exceed--
``(A) $2,000 in the case of self-only coverage, and
``(B) $5,000 in the case of family coverage.
In the case of an employee who is covered by a new health
plan of the employer for only a portion of such taxable year,
the limitation under the preceding sentence shall be an
amount which bears the same ratio to such limitation
(determined without regard to this sentence) as such portion
bears to the entire taxable year.
``(2) Period of coverage.--Expenses may be taken into
account under subsection (a) only with respect to coverage
for the 4-year period beginning on the date the employer
establishes a new health plan.
``(d) Definitions.--For purposes of this section--
``(1) Health insurance coverage.--The term `health
insurance coverage' has the meaning given such term by
section 9832(b)(1).
``(2) New health plan.--
``(A) In general.--The term `new health plan' means any
arrangement of the employer which provides health insurance
coverage to employees if--
``(i) such employer (and any predecessor employer) did not
establish or maintain such arrangement (or any similar
arrangement) at any time during the 2 taxable years ending
prior to the taxable year in which the credit under this
section is first allowed, and
``(ii) such arrangement provides health insurance coverage
to at least 70 percent of the qualified employees of such
employer.
``(B) Qualified employee.--
``(i) In general.--The term `qualified employee' means any
employee of an employer if the annual rate of such employee's
compensation (as defined in section 414(s)) exceeds $10,000.
``(ii) Treatment of certain employees.--The term `employee'
shall include a leased employee within the meaning of section
414(n).
``(3) Small employer.--The term `small employer' has the
meaning given to such term by section 4980D(d)(2); except
that only qualified employees shall be taken into account.
``(e) Special Rules.--
``(1) Certain rules made applicable.--For purposes of this
section, rules similar to the rules of section 52 shall
apply.
``(2) Amounts paid under salary reduction arrangements.--No
amount paid or incurred pursuant to a salary reduction
arrangement shall be taken into account under subsection (a).
``(f) Termination.--This section shall not apply to
expenses paid or incurred by an employer with respect to any
arrangement established on or after January 1, 2010.''.
(b) Credit To Be Part of General Business Credit.--Section
38(b) of such Code (relating to current year business credit)
is amended by striking ``plus'' at the end of paragraph (12),
by striking the period at the end of paragraph (13) and
inserting ``, plus'', and by adding at the end the following:
``(14) in the case of a small employer (as defined in
section 45E(d)(3)), the health insurance credit determined
under section 45E(a).''.
(c) No Carrybacks.--Subsection (d) of section 39 of such
Code (relating to carryback and carryforward of unused
credits) is amended by adding at the end the following:
``(10) No carryback of section 45e credit before effective
date.--No portion of the unused business credit for any
taxable year which is attributable to the employee health
insurance expenses credit determined under section 45E may be
carried back to a taxable year ending before the date of the
enactment of section 45E.''.
(d) Denial of Double Benefit.--Section 280C of such Code is
amended by adding at the end the following new subsection:
``(d) Credit for Small Business Health Insurance
Expenses.--
``(1) In general.--No deduction shall be allowed for that
portion of the expenses (otherwise allowable as a deduction)
taken into account in determining the credit under section
45E for the taxable year which is equal to the amount of the
credit determined for such taxable year under section 45E(a).
``(2) Controlled groups.--Persons treated as a single
employer under subsection (a) or (b) of section 52 shall be
treated as 1 person for purposes of this section.''.
(e) Clerical Amendment.--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. 45E. Small business health insurance expenses.''.
(f) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred in taxable years
beginning after December 31, 2001, for arrangements
established after the date of the enactment of this Act.
SEC. 514. CERTAIN GRANTS BY PRIVATE FOUNDATIONS TO QUALIFIED
HEALTH BENEFIT PURCHASING COALITIONS.
(a) In General.--Section 4942 of the Internal Revenue Code
of 1986 (relating to taxes on failure to distribute income)
is amended by adding at the end the following:
``(k) Certain Qualified Health Benefit Purchasing Coalition
Distributions.--
``(1) In general.--For purposes of subsection (g), sections
170, 501, 507, 509, and 2522, and this chapter, a qualified
health benefit purchasing coalition distribution by a private
foundation shall be considered to be a distribution for a
charitable purpose.
``(2) Qualified health benefit purchasing coalition
distribution.--For purposes of paragraph (1)--
``(A) In general.--The term `qualified health benefit
purchasing coalition distribution' means any amount paid or
incurred by a private foundation to or on behalf of a
qualified health benefit purchasing coalition (as defined in
section 9841) for purposes of payment or reimbursement of
amounts paid or incurred in connection with the establishment
and maintenance of such coalition.
``(B) Exclusions.--Such term shall not include any amount
used by a qualified health benefit purchasing coalition (as
so defined)--
``(i) for the purchase of real property,
``(ii) as payment to, or for the benefit of, members (or
employees or affiliates of such members) of such coalition,
or
``(iii) for any expense paid or incurred more than 48
months after the date of establishment of such coalition.
``(3) Termination.--This subsection shall not apply--
``(A) to qualified health benefit purchasing coalition
distributions paid or incurred after December 31, 2009, and
``(B) with respect to start-up costs of a coalition which
are paid or incurred after December 31, 2010.''.
(b) Qualified Health Benefit Purchasing Coalition.--
(1) In general.--Chapter 100 of such Code (relating to
group health plan requirements) is amended by adding at the
end the following new subchapter:
``Subchapter D--Qualified Health Benefit Purchasing Coalition
``Sec. 9841. Qualified health benefit purchasing coalition.
``SEC. 9841. QUALIFIED HEALTH BENEFIT PURCHASING COALITION.
``(a) In General.--A qualified health benefit purchasing
coalition is a private not-for-profit corporation which--
``(1) sells health insurance through State licensed health
insurance issuers in the State in which the employers to
which such coalition is providing insurance are located, and
``(2) establishes to the Secretary, under State
certification procedures or other procedures as the Secretary
may provide by regulation, that such coalition meets the
requirements of this section.
``(b) Board of Directors.--
``(1) In general.--Each purchasing coalition under this
section shall be governed by a Board of Directors.
``(2) Election.--The Secretary shall establish procedures
governing election of such Board.
``(3) Membership.--The Board of Directors shall--
``(A) be composed of representatives of the members of the
coalition, in equal number,
[[Page H5245]]
including small employers and employee representatives of
such employers, but
``(B) not include other interested parties, such as service
providers, health insurers, or insurance agents or brokers
which may have a conflict of interest with the purposes of
the coalition.
``(c) Membership of Coalition.--
``(1) In general.--A purchasing coalition shall accept all
small employers residing within the area served by the
coalition as members if such employers request such
membership.
``(2) Other members.--The coalition, at the discretion of
its Board of Directors, may be open to individuals and large
employers.
``(3) Voting.--Members of a purchasing coalition shall have
voting rights consistent with the rules established by the
State.
``(d) Duties of Purchasing Coalitions.--Each purchasing
coalition shall--
``(1) enter into agreements with small employers (and, at
the discretion of its Board, with individuals and other
employers) to provide health insurance benefits to employees
and retirees of such employers,
``(2) where feasible, enter into agreements with 3 or more
unaffiliated, qualified licensed health plans, to offer
benefits to members,
``(3) offer to members at least 1 open enrollment period of
at least 30 days per calendar year,
``(4) serve a significant geographical area and market to
all eligible members in that area, and
``(5) carry out other functions provided for under this
section.
``(e) Limitation on Activities.--A purchasing coalition
shall not--
``(1) perform any activity (including certification or
enforcement) relating to compliance or licensing of health
plans,
``(2) assume insurance or financial risk in relation to any
health plan, or
``(3) perform other activities identified by the State as
being inconsistent with the performance of its duties under
this section.
``(f) Additional Requirements for Purchasing Coalitions.--
As provided by the Secretary in regulations, a purchasing
coalition shall be subject to requirements similar to the
requirements of a group health plan under this chapter.
``(g) Relation to Other Laws.--
``(1) Preemption of state fictitious group laws.--
Requirements (commonly referred to as fictitious group laws)
relating to grouping and similar requirements for health
insurance coverage are preempted to the extent such
requirements impede the establishment and operation of
qualified health benefit purchasing coalitions.
``(2) Allowing savings to be passed through.--Any State law
that prohibits health insurance issuers from reducing
premiums on health insurance coverage sold through a
qualified health benefit purchasing coalition to reflect
administrative savings is preempted. This paragraph shall not
be construed to preempt State laws that impose restrictions
on premiums based on health status, claims history, industry,
age, gender, or other underwriting factors.
``(3) No waiver of hipaa requirements.--Nothing in this
section shall be construed to change the obligation of health
insurance issuers to comply with the requirements of title
XXVII of the Public Health Service Act with respect to health
insurance coverage offered to small employers in the small
group market through a qualified health benefit purchasing
coalition.
``(h) Definition of Small Employer.--For purposes of this
section--
``(1) In general.--The term `small employer' means, with
respect to any calendar year, any employer if such employer
employed an average of at least 2 and not more than 50
qualified employees on business days during either of the 2
preceding calendar years. For purposes of the preceding
sentence, a preceding calendar year may be taken into account
only if the employer was in existence throughout such year.
``(2) Employers not in existence in preceding year.--In the
case of an employer which was not in existence throughout the
1st preceding calendar year, the determination under
paragraph (1) shall be based on the average number of
qualified employees that it is reasonably expected such
employer will employ on business days in the current calendar
year.''.
(2) Conforming amendment.--The table of subchapters for
chapter 100 of such Code is amended by adding at the end the
following item:
``Subchapter D. Qualified health benefit purchasing coalition.''.
(c) Effective Date.--The amendment made by subsection (a)
shall apply to taxable years beginning after December 31,
2001.
SEC. 515. STATE GRANT PROGRAM FOR MARKET INNOVATION.
(a) In General.--The Secretary of Health and Human Services
(in this section referred to as the ``Secretary'') shall
establish a program (in this section referred to as the
``program'') to award demonstration grants under this section
to States to allow States to demonstrate the effectiveness of
innovative ways to increase access to health insurance
through market reforms and other innovative means. Such
innovative means may include (and are not limited to) any of
the following:
(1) Alternative group purchasing or pooling arrangements,
such as purchasing cooperatives for small businesses,
reinsurance pools, or high risk pools.
(2) Individual or small group market reforms.
(3) Consumer education and outreach.
(4) Subsidies to individuals, employers, or both, in
obtaining health insurance.
(b) Scope; Duration.--The program shall be limited to not
more than 10 States and to a total period of 5 years,
beginning on the date the first demonstration grant is made.
(c) Conditions for Demonstration Grants.--
(1) In general.--The Secretary may not provide for a
demonstration grant to a State under the program unless the
Secretary finds that under the proposed demonstration grant--
(A) the State will provide for demonstrated increase of
access for some portion of the existing uninsured population
through a market innovation (other than merely through a
financial expansion of a program initiated before the date of
the enactment of this Act);
(B) the State will comply with applicable Federal laws;
(C) the State will not discriminate among participants on
the basis of any health status-related factor (as defined in
section 2791(d)(9) of the Public Health Service Act), except
to the extent a State wishes to focus on populations that
otherwise would not obtain health insurance because of such
factors; and
(D) the State will provide for such evaluation, in
coordination with the evaluation required under subsection
(d), as the Secretary may specify.
(2) Application.--The Secretary shall not provide a
demonstration grant under the program to a State unless--
(A) the State submits to the Secretary such an application,
in such a form and manner, as the Secretary specifies;
(B) the application includes information regarding how the
demonstration grant will address issues such as governance,
targeted population, expected cost, and the continuation
after the completion of the demonstration grant period; and
(C) the Secretary determines that the demonstration grant
will be used consistent with this section.
(3) Focus.--A demonstration grant proposal under section
need not cover all uninsured individuals in a State or all
health care benefits with respect to such individuals.
(d) Evaluation.--The Secretary shall enter into a contract
with an appropriate entity outside the Department of Health
and Human Services to conduct an overall evaluation of the
program at the end of the program period. Such evaluation
shall include an analysis of improvements in access, costs,
quality of care, or choice of coverage, under different
demonstration grants.
(e) Option To Provide for Initial Planning Grants.--
Notwithstanding the previous provisions of this section,
under the program the Secretary may provide for a portion of
the amounts appropriated under subsection (f) (not to exceed
$5,000,000) to be made available to any State for initial
planning grants to permit States to develop demonstration
grant proposals under the previous provisions of this
section.
(f) Authorization of Appropriations.--There are authorized
to be appropriated $100,000,000 for each fiscal year to carry
out this section. Amounts appropriated under this subsection
shall remain available until expended.
(g) State Defined.--For purposes of this section, the term
``State'' has the meaning given such term for purposes of
title XIX of the Social Security Act.
TITLE VI--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION
SEC. 601. EFFECTIVE DATES.
(a) Group Health Coverage.--
(1) In general.--Subject to paragraph (2) and subsection
(d), the amendments made by sections 201(a), 401, 403, 501,
and 502 (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 October 1, 2002
(in this section referred to as the ``general effective
date'').
(2) Treatment of collective bargaining agreements.--In the
case of a group health plan maintained pursuant to one or
more collective bargaining agreements between employee
representatives and one or more employers ratified before the
date of the enactment of this Act, the amendments made by
sections 201(a), 401, 403, 501, and 502 (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
agreements relating to the plan terminates (excluding any
extension thereof agreed to after the date of the enactment
of this Act); or
(B) the general effective date;
but shall apply not later than 1 year after 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.--Subject to
subsection (d), 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.
[[Page H5246]]
(c) 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, 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 regarding 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 required data, 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.
(d) Transition for Notice Requirement.--The disclosure of
information required under section 121 of this Act shall
first be provided pursuant to--
(1) subsection (a) with respect to a group health plan that
is maintained as of the general effective date, not later
than 30 days before the beginning of the first plan year to
which title I applies in connection with the plan under such
subsection; or
(2) subsection (b) with respect to a individual health
insurance coverage that is in effect as of the general
effective date, not later than 30 days before the first date
as of which title I applies to the coverage under such
subsection.
SEC. 602. COORDINATION IN IMPLEMENTATION.
The Secretary of Labor and the Secretary of Health and
Human Services shall ensure, through the execution of an
interagency memorandum of understanding among such
Secretaries, that--
(1) regulations, rulings, and interpretations issued by
such Secretaries relating to the same matter over which such
Secretaries have responsibility under the provisions of this
Act (and the amendments made thereby) are administered so as
to have the same effect at all times; and
(2) coordination of policies relating to enforcing the same
requirements through such Secretaries in order to have a
coordinated enforcement strategy that avoids duplication
of enforcement efforts and assigns priorities in
enforcement.
SEC. 603. SEVERABILITY.
If any provision of this Act, an amendment made by this
Act, or the application of such provision or amendment to any
person or circumstance is held to be unconstitutional, the
remainder of this Act, the amendments made by this Act, and
the application of the provisions of such to any person or
circumstance shall not be affected thereby.
TITLE VII--MISCELLANEOUS PROVISIONS
SEC. 701. NO IMPACT ON SOCIAL SECURITY TRUST FUND.
(a) In General.--Nothing in this Act (or an amendment made
by this Act) shall be construed to alter or amend the Social
Security Act (or any regulation promulgated under that Act).
(b) Transfers.--
(1) Estimate of secretary.--The Secretary of the Treasury
shall annually estimate the impact that the enactment of this
Act has on the income and balances of the trust funds
established under section 201 of the Social Security Act (42
U.S.C. 401).
(2) Transfer of funds.--If, under paragraph (1), the
Secretary of the Treasury estimates that the enactment of
this Act has a negative impact on the income and balances of
the trust funds established under section 201 of the Social
Security Act (42 U.S.C. 401), the Secretary shall transfer,
not less frequently than quarterly, from the general revenues
of the Federal Government an amount sufficient so as to
ensure that the income and balances of such trust funds are
not reduced as a result of the enactment of such Act.
SEC. 702. CUSTOMS USER FEES.
Section 13031(j)(3) of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) is amended
by striking ``2003'' and inserting ``2011, except that fees
may not be charged under paragraphs (9) and (10) of such
subsection after March 31, 2006''.
SEC. 703. FISCAL YEAR 2002 MEDICARE PAYMENTS.
Notwithstanding any other provision of law, any letter of
credit under part B of title XVIII of the Social Security Act
(42 U.S.C. 1395j et seq.) that would otherwise be sent to the
Treasury or the Federal Reserve Board on September 30, 2002,
by a carrier with a contract under section 1842 of that Act
(42 U.S.C. 1395u) shall be sent on October 1, 2002.
SEC. 704. SENSE OF SENATE WITH RESPECT TO PARTICIPATION IN
CLINICAL TRIALS AND ACCESS TO SPECIALTY CARE.
(a) Findings.--The Senate finds the following:
(1) Breast cancer is the most common form of cancer among
women, excluding skin cancers.
(2) During 2001, 182,800 new cases of female invasive
breast cancer will be diagnosed, and 40,800 women will die
from the disease.
(3) In addition, 1,400 male breast cancer cases are
projected to be diagnosed, and 400 men will die from the
disease.
(4) Breast cancer is the second leading cause of cancer
death among all women and the leading cause of cancer death
among women between ages 40 and 55.
(5) This year 8,600 children are expected to be diagnosed
with cancer.
(6) 1,500 children are expected to die from cancer this
year.
(7) There are approximately 333,000 people diagnosed with
multiple sclerosis in the United States and 200 more cases
are diagnosed each week.
(8) Parkinson's disease is a progressive disorder of the
central nervous system affecting 1,000,000 in the United
States.
(9) An estimated 198,100 men will be diagnosed with
prostate cancer this year.
(10) 31,500 men will die from prostate cancer this year. It
is the second leading cause of cancer in men.
(11) While information obtained from clinical trials is
essential to finding cures for diseases, it is still research
which carries the risk of fatal results. Future efforts
should be taken to protect the health and safety of adults
and children who enroll in clinical trials.
(12) While employers and health plans should be responsible
for covering the routine costs associated with federally
approved or funded clinical trials, such employers and health
plans should not be held legally responsible for the design,
implementation, or outcome of such clinical trials,
consistent with any applicable State or Federal liability
statutes.
(b) Sense of the Senate.--It is the sense of the Senate
that--
(1) men and women battling life-threatening, deadly
diseases, including advanced breast or ovarian cancer, should
have the opportunity to participate in a federally approved
or funded clinical trial recommended by their physician;
(2) an individual should have the opportunity to
participate in a federally approved or funded clinical trial
recommended by their physician if--
(A) that individual--
(i) has a life-threatening or serious illness for which no
standard treatment is effective;
(ii) is eligible to participate in a federally approved or
funded clinical trial according to the trial protocol with
respect to treatment of the illness;
(B) that individual's participation in the trial offers
meaningful potential for significant clinical benefit for the
individual; and
(C) either--
(i) the referring physician is a participating health care
professional and has concluded that the individual's
participation in the 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 the trial would be appropriate,
based upon the individual meeting the conditions described in
subparagraph (A);
(3) a child with a life-threatening illness, including
cancer, should be allowed to participate in a federally
approved or funded clinical trial if that participation meets
the requirements of paragraph (2);
(4) a child with a rare cancer should be allowed to go to a
cancer center capable of providing high quality care for that
disease; and
(5) a health maintenance organization's decision that an
in-network physician without the necessary expertise can
provide care for a seriously ill patient, including a woman
battling cancer, should be appealable to an independent,
impartial body, and that this same right should be available
to all Americans in need of access to high quality specialty
care.
SEC. 705. SENSE OF THE SENATE REGARDING FAIR REVIEW PROCESS.
(a) Findings.--The Senate finds the following:
(1) A fair, timely, impartial independent external appeals
process is essential to any meaningful program of patient
protection.
(2) The independence and objectivity of the review
organization and review process must be ensured.
(3) It is incompatible with a fair and independent appeals
process to allow a health maintenance organization to select
the review organization that is entrusted with providing a
neutral and unbiased medical review.
(4) The American Arbitration Association and arbitration
standards adopted under chapter 44 of title 28, United States
Code (28 U.S.C. 651 et seq.) both prohibit, as inherently
unfair, the right of one party to a dispute to choose the
judge in that dispute.
(b) Sense of the Senate.--It is the sense of the Senate
that--
(1) every patient who is denied care by a health
maintenance organization or other health insurance company
should be entitled to a fair, speedy, impartial appeal to a
review organization that has not been selected by the health
plan;
[[Page H5247]]
(2) the States should be empowered to maintain and develop
the appropriate process for selection of the independent
external review entity;
(3) a child battling a rare cancer whose health maintenance
organization has denied a covered treatment recommended by
its physician should be entitled to a fair and impartial
external appeal to a review organization that has not been
chosen by the organization or plan that has denied the care;
and
(4) patient protection legislation should not pre-empt
existing State laws in States where there already are strong
laws in place regarding the selection of independent review
organizations.
SEC. 706. ANNUAL REVIEW.
(a) In General.--Not later than 24 months after the general
effective date referred to in section 601(a)(1), and annually
thereafter for each of the succeeding 4 calendar years (or
until a repeal is effective under subsection (b)), the
Secretary of Health and Human Services shall request that the
Institute of Medicine of the National Academy of Sciences
prepare and submit to the appropriate committees of Congress
a report concerning the impact of this Act, and the
amendments made by this Act, on the number of individuals in
the United States with health insurance coverage.
(b) Limitation With Respect to Certain Plans.--If the
Secretary, in any report submitted under subsection (a),
determines that more than 1,000,000 individuals in the United
States have lost their health insurance coverage as a result
of the enactment of this Act, as compared to the number of
individuals with health insurance coverage in the 12-month
period preceding the date of enactment of this Act, section
402 of this Act shall be repealed effective on the date that
is 12 month after the date on which the report is submitted,
and the submission of any further reports under subsection
(a) shall not be required.
(c) Funding.--From funds appropriated to the Department of
Health and Human Services for fiscal years 2003 and 2004, the
Secretary of Health and Human Services shall provide for such
funding as the Secretary determines necessary for the conduct
of the study of the National Academy of Sciences under this
section.
SEC. 707. DEFINITION OF BORN-ALIVE INFANT.
(a) In General.--Chapter 1 of title 1, United States Code,
is amended by adding at the end the following:
``Sec. 8. `Person', `human being', `child', and `individual'
as including born-alive infant
``(a) In determining the meaning of any Act of Congress, or
of any ruling, regulation, or interpretation of the various
administrative bureaus and agencies of the United States, the
words `person', `human being', `child', and `individual',
shall include every infant member of the species homo sapiens
who is born alive at any stage of development.
``(b) As used in this section, the term `born alive', with
respect to a member of the species homo sapiens, means the
complete expulsion or extraction from his or her mother of
that member, at any stage of development, who after such
expulsion or extraction breathes or has a beating heart,
pulsation of the umbilical cord, or definite movement of
voluntary muscles, regardless of whether the umbilical cord
has been cut, and regardless of whether the expulsion or
extraction occurs as a result of natural or induced labor,
caesarean section, or induced abortion.
``(c) Nothing in this section shall be construed to affirm,
deny, expand, or contract any legal status or legal right
applicable to any member of the species homo sapiens at any
point prior to being born alive as defined in this
section.''.
(b) Clerical Amendment.--The table of sections at the
beginning of chapter 1 of title 1, United States Code, is
amended by adding at the end the following new item:
``8. `Person', `human being', `child', and `individual' as including
born-alive infant.''.
The CHAIRMAN. No amendment is in order except those printed in House
Report 107-184. Each amendment may be offered only in the order
printed, may be offered only by a Member designated in the report,
shall be considered read, debatable for the time specified in the
report, equally divided and controlled by the proponent and an
opponent, shall not be subject to amendment, and shall not be subject
to a demand for division of the question.
It is now in order to consider Amendment No. 1 printed in House
Report 107-184.
Amendment No. 1 Offered by Mr. Thomas
Mr. THOMAS. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 1 offered by Mr. Thomas:
Insert before section 401 the following heading (and
conform the table of contents accordingly):
Subtitle A--General Provisions
In section 301(a), insert ``subtitle A of'' before ``title
IV''.
Add at the end of title IV the following new subtitle (and
conform the table of contents accordingly):
Subtitle B--Association Health Plans
SEC. 421. RULES GOVERNING ASSOCIATION HEALTH PLANS.
(a) In General.--Subtitle B of title I of the Employee
Retirement Income Security Act of 1974 is amended by adding
after part 7 the following new part:
``Part 8--Rules Governing Association Health Plans
``SEC. 801. ASSOCIATION HEALTH PLANS.
``(a) In General.--For purposes of this part, the term
`association health plan' means a group health plan whose
sponsor is (or is deemed under this part to be) described in
subsection (b).
``(b) Sponsorship.--The sponsor of a group health plan is
described in this subsection if such sponsor--
``(1) is organized and maintained in good faith, with a
constitution and bylaws specifically stating its purpose and
providing for periodic meetings on at least an annual basis,
as a bona fide trade association, a bona fide industry
association (including a rural electric cooperative
association or a rural telephone cooperative association), a
bona fide professional association, or a bona fide chamber of
commerce (or similar bona fide business association,
including a corporation or similar organization that operates
on a cooperative basis (within the meaning of section 1381 of
the Internal Revenue Code of 1986)), for substantial purposes
other than that of obtaining or providing medical care;
``(2) is established as a permanent entity which receives
the active support of its members and requires for membership
payment on a periodic basis of dues or payments necessary to
maintain eligibility for membership in the sponsor; and
``(3) does not condition membership, such dues or payments,
or coverage under the plan on the basis of health status-
related factors with respect to the employees of its members
(or affiliated members), or the dependents of such employees,
and does not condition such dues or payments on the basis of
group health plan participation.
Any sponsor consisting of an association of entities which
meet the requirements of paragraphs (1), (2), and (3) shall
be deemed to be a sponsor described in this subsection.
``SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH PLANS.
``(a) In General.--The applicable authority shall prescribe
by regulation, through negotiated rulemaking, a procedure
under which, subject to subsection (b), the applicable
authority shall certify association health plans which apply
for certification as meeting the requirements of this part.
``(b) Standards.--Under the procedure prescribed pursuant
to subsection (a), in the case of an association health plan
that provides at least one benefit option which does not
consist of health insurance coverage, the applicable
authority shall certify such plan as meeting the requirements
of this part only if the applicable authority is satisfied
that the applicable requirements of this part are met (or,
upon the date on which the plan is to commence operations,
will be met) with respect to the plan.
``(c) Requirements Applicable to Certified Plans.--An
association health plan with respect to which certification
under this part is in effect shall meet the applicable
requirements of this part, effective on the date of
certification (or, if later, on the date on which the plan is
to commence operations).
``(d) Requirements for Continued Certification.--The
applicable authority may provide by regulation, through
negotiated rulemaking, for continued certification of
association health plans under this part.
``(e) Class Certification for Fully Insured Plans.--The
applicable authority shall establish a class certification
procedure for association health plans under which all
benefits consist of health insurance coverage. Under such
procedure, the applicable authority shall provide for the
granting of certification under this part to the plans in
each class of such association health plans upon appropriate
filing under such procedure in connection with plans in such
class and payment of the prescribed fee under section 807(a).
``(f) Certification of Self-Insured Association Health
Plans.--An association health plan which offers one or more
benefit options which do not consist of health insurance
coverage may be certified under this part only if such plan
consists of any of the following:
``(1) a plan which offered such coverage on the date of the
enactment of the Bipartisan Patient Protection Act,
``(2) a plan under which the sponsor does not restrict
membership to one or more trades and businesses or industries
and whose eligible participating employers represent a broad
cross-section of trades and businesses or industries, or
``(3) a plan whose eligible participating employers
represent one or more trades or businesses, or one or more
industries, consisting of any of the following: agriculture;
equipment and automobile dealerships; barbering and
cosmetology; certified public accounting practices; child
care; construction; dance, theatrical and orchestra
productions; disinfecting and pest control; financial
services; fishing; foodservice establishments; hospitals;
labor organizations; logging; manufacturing (metals); mining;
medical and dental practices; medical laboratories;
professional consulting services; sanitary services;
[[Page H5248]]
transportation (local and freight); warehousing; wholesaling/
distributing; or any other trade or business or industry
which has been indicated as having average or above-average
risk or health claims experience by reason of State rate
filings, denials of coverage, proposed premium rate levels,
or other means demonstrated by such plan in accordance with
regulations which the Secretary shall prescribe through
negotiated rulemaking.
``SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF
TRUSTEES.
``(a) Sponsor.--The requirements of this subsection are met
with respect to an association health plan if the sponsor has
met (or is deemed under this part to have met) the
requirements of section 801(b) for a continuous period of not
less than 3 years ending with the date of the application for
certification under this part.
``(b) Board of Trustees.--The requirements of this
subsection are met with respect to an association health plan
if the following requirements are met:
``(1) Fiscal control.--The plan is operated, pursuant to a
trust agreement, by a board of trustees which has complete
fiscal control over the plan and which is responsible for all
operations of the plan.
``(2) Rules of operation and financial controls.--The board
of trustees has in effect rules of operation and financial
controls, based on a 3-year plan of operation, adequate to
carry out the terms of the plan and to meet all requirements
of this title applicable to the plan.
``(3) Rules governing relationship to participating
employers and to contractors.--
``(A) In general.--Except as provided in subparagraphs (B)
and (C), the members of the board of trustees are individuals
selected from individuals who are the owners, officers,
directors, or employees of the participating employers or who
are partners in the participating employers and actively
participate in the business.
``(B) Limitation.--
``(i) General rule.--Except as provided in clauses (ii) and
(iii), no such member is an owner, officer, director, or
employee of, or partner in, a contract administrator or other
service provider to the plan.
``(ii) Limited exception for providers of services solely
on behalf of the sponsor.--Officers or employees of a sponsor
which is a service provider (other than a contract
administrator) to the plan may be members of the board if
they constitute not more than 25 percent of the membership of
the board and they do not provide services to the plan other
than on behalf of the sponsor.
``(iii) Treatment of providers of medical care.--In the
case of a sponsor which is an association whose membership
consists primarily of providers of medical care, clause (i)
shall not apply in the case of any service provider described
in subparagraph (A) who is a provider of medical care under
the plan.
``(C) Certain plans excluded.--Subparagraph (A) shall not
apply to an association health plan which is in existence on
the date of the enactment of the Bipartisan Patient
Protection Act.
``(D) Sole authority.--The board has sole authority under
the plan to approve applications for participation in the
plan and to contract with a service provider to administer
the day-to-day affairs of the plan.
``(c) Treatment of Franchise Networks.--In the case of a
group health plan which is established and maintained by a
franchiser for a franchise network consisting of its
franchisees--
``(1) the requirements of subsection (a) and section
801(a)(1) shall be deemed met if such requirements would
otherwise be met if the franchiser were deemed to be the
sponsor referred to in section 801(b), such network were
deemed to be an association described in section 801(b), and
each franchisee were deemed to be a member (of the
association and the sponsor) referred to in section 801(b);
and
``(2) the requirements of section 804(a)(1) shall be deemed
met.
The Secretary may by regulation, through negotiated
rulemaking, define for purposes of this subsection the terms
`franchiser', `franchise network', and `franchisee'.
``(d) Certain Collectively Bargained Plans.--
``(1) In general.--In the case of a group health plan
described in paragraph (2)--
``(A) the requirements of subsection (a) and section
801(a)(1) shall be deemed met;
``(B) the joint board of trustees shall be deemed a board
of trustees with respect to which the requirements of
subsection (b) are met; and
``(C) the requirements of section 804 shall be deemed met.
``(2) Requirements.--A group health plan is described in
this paragraph if--
``(A) the plan is a multiemployer plan; or
``(B) the plan is in existence on April 1, 2001, and would
be described in section 3(40)(A)(i) but solely for the
failure to meet the requirements of section 3(40)(C)(ii).
``(3) Construction.--A group health plan described in
paragraph (2) shall only be treated as an association health
plan under this part if the sponsor of the plan applies for,
and obtains, certification of the plan as an association
health plan under this part.
``SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.
``(a) Covered Employers and Individuals.--The requirements
of this subsection are met with respect to an association
health plan if, under the terms of the plan--
``(1) each participating employer must be--
``(A) a member of the sponsor,
``(B) the sponsor, or
``(C) an affiliated member of the sponsor with respect to
which the requirements of subsection (b) are met,
except that, in the case of a sponsor which is a professional
association or other individual-based association, if at
least one of the officers, directors, or employees of an
employer, or at least one of the individuals who are partners
in an employer and who actively participates in the business,
is a member or such an affiliated member of the sponsor,
participating employers may also include such employer; and
``(2) all individuals commencing coverage under the plan
after certification under this part must be--
``(A) active or retired owners (including self-employed
individuals), officers, directors, or employees of, or
partners in, participating employers; or
``(B) the beneficiaries of individuals described in
subparagraph (A).
``(b) Coverage of Previously Uninsured Employees.--In the
case of an association health plan in existence on the date
of the enactment of the Bipartisan Patient Protection Act, an
affiliated member of the sponsor of the plan may be offered
coverage under the plan as a participating employer only if--
``(1) the affiliated member was an affiliated member on the
date of certification under this part; or
``(2) during the 12-month period preceding the date of the
offering of such coverage, the affiliated member has not
maintained or contributed to a group health plan with respect
to any of its employees who would otherwise be eligible to
participate in such association health plan.
``(c) Individual Market Unaffected.--The requirements of
this subsection are met with respect to an association health
plan if, under the terms of the plan, no participating
employer may provide health insurance coverage in the
individual market for any employee not covered under the plan
which is similar to the coverage contemporaneously provided
to employees of the employer under the plan, if such
exclusion of the employee from coverage under the plan is
based on a health status-related factor with respect to the
employee and such employee would, but for such exclusion on
such basis, be eligible for coverage under the plan.
``(d) Prohibition of Discrimination Against Employers and
Employees Eligible To Participate.--The requirements of this
subsection are met with respect to an association health plan
if--
``(1) under the terms of the plan, all employers meeting
the preceding requirements of this section are eligible to
qualify as participating employers for all geographically
available coverage options, unless, in the case of any such
employer, participation or contribution requirements of the
type referred to in section 2711 of the Public Health Service
Act are not met;
``(2) upon request, any employer eligible to participate is
furnished information regarding all coverage options
available under the plan; and
``(3) the applicable requirements of sections 701, 702, and
703 are met with respect to the plan.
``SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS,
CONTRIBUTION RATES, AND BENEFIT OPTIONS.
``(a) In General.--The requirements of this section are met
with respect to an association health plan if the following
requirements are met:
``(1) Contents of governing instruments.--The instruments
governing the plan include a written instrument, meeting the
requirements of an instrument required under section
402(a)(1), which--
``(A) provides that the board of trustees serves as the
named fiduciary required for plans under section 402(a)(1)
and serves in the capacity of a plan administrator (referred
to in section 3(16)(A));
``(B) provides that the sponsor of the plan is to serve as
plan sponsor (referred to in section 3(16)(B)); and
``(C) incorporates the requirements of section 806.
``(2) Contribution rates must be nondiscriminatory.--
``(A) The contribution rates for any participating small
employer do not vary on the basis of the claims experience of
such employer and do not vary on the basis of the type of
business or industry in which such employer is engaged.
``(B) Nothing in this title or any other provision of law
shall be construed to preclude an association health plan, or
a health insurance issuer offering health insurance coverage
in connection with an association health plan, from--
``(i) setting contribution rates based on the claims
experience of the plan; or
``(ii) varying contribution rates for small employers in a
State to the extent that such rates could vary using the same
methodology employed in such State for regulating premium
rates in the small group market with respect to health
insurance coverage offered in connection with bona fide
associations (within the meaning of section 2791(d)(3) of the
Public Health Service Act),
subject to the requirements of section 702(b) relating to
contribution rates.
``(3) Floor for number of covered individuals with respect
to certain plans.--If any benefit option under the plan does
not consist of health insurance coverage, the
[[Page H5249]]
plan has as of the beginning of the plan year not fewer than
1,000 participants and beneficiaries.
``(4) Marketing requirements.--
``(A) In general.--If a benefit option which consists of
health insurance coverage is offered under the plan, State-
licensed insurance agents shall be used to distribute to
small employers coverage which does not consist of health
insurance coverage in a manner comparable to the manner in
which such agents are used to distribute health insurance
coverage.
``(B) State-licensed insurance agents.--For purposes of
subparagraph (A), the term `State-licensed insurance agents'
means one or more agents who are licensed in a State and are
subject to the laws of such State relating to licensure,
qualification, testing, examination, and continuing education
of persons authorized to offer, sell, or solicit health
insurance coverage in such State.
``(5) Regulatory requirements.--Such other requirements as
the applicable authority determines are necessary to carry
out the purposes of this part, which shall be prescribed by
the applicable authority by regulation through negotiated
rulemaking.
``(b) Ability of Association Health Plans To Design Benefit
Options.--Subject to section 514(e), nothing in this part or
any provision of State law (as defined in section 514(c)(1))
shall be construed to preclude an association health plan, or
a health insurance issuer offering health insurance coverage
in connection with an association health plan, from
exercising its sole discretion in selecting the specific
items and services consisting of medical care to be included
as benefits under such plan or coverage, except (subject to
section 514) in the case of any law to the extent that it (1)
prohibits an exclusion of a specific disease from such
coverage, or (2) is not preempted under section 731(a)(1)
with respect to matters governed by section 711 or 712.
``SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS FOR
SOLVENCY FOR PLANS PROVIDING HEALTH BENEFITS IN
ADDITION TO HEALTH INSURANCE COVERAGE.
``(a) In General.--The requirements of this section are met
with respect to an association health plan if--
``(1) the benefits under the plan consist solely of health
insurance coverage; or
``(2) if the plan provides any additional benefit options
which do not consist of health insurance coverage, the plan--
``(A) establishes and maintains reserves with respect to
such additional benefit options, in amounts recommended by
the qualified actuary, consisting of--
``(i) a reserve sufficient for unearned contributions;
``(ii) a reserve sufficient for benefit liabilities which
have been incurred, which have not been satisfied, and for
which risk of loss has not yet been transferred, and for
expected administrative costs with respect to such benefit
liabilities;
``(iii) a reserve sufficient for any other obligations of
the plan; and
``(iv) a reserve sufficient for a margin of error and other
fluctuations, taking into account the specific circumstances
of the plan; and
``(B) establishes and maintains aggregate and specific
excess /stop loss insurance and solvency indemnification,
with respect to such additional benefit options for which
risk of loss has not yet been transferred, as follows:
``(i) The plan shall secure aggregate excess /stop loss
insurance for the plan with an attachment point which is not
greater than 125 percent of expected gross annual claims. The
applicable authority may by regulation, through negotiated
rulemaking, provide for upward adjustments in the amount of
such percentage in specified circumstances in which the plan
specifically provides for and maintains reserves in excess of
the amounts required under subparagraph (A).
``(ii) The plan shall secure specific excess /stop loss
insurance for the plan with an attachment point which is at
least equal to an amount recommended by the plan's qualified
actuary. The applicable authority may by regulation, through
negotiated rulemaking, provide for adjustments in the amount
of such insurance in specified circumstances in which the
plan specifically provides for and maintains reserves in
excess of the amounts required under subparagraph (A).
``(iii) The plan shall secure indemnification insurance for
any claims which the plan is unable to satisfy by reason of a
plan termination.
Any regulations prescribed by the applicable authority
pursuant to clause (i) or (ii) of subparagraph (B) may allow
for such adjustments in the required levels of excess /stop
loss insurance as the qualified actuary may recommend, taking
into account the specific circumstances of the plan.
``(b) Minimum Surplus in Addition to Claims Reserves.--In
the case of any association health plan described in
subsection (a)(2), the requirements of this subsection are
met if the plan establishes and maintains surplus in an
amount at least equal to--
``(1) $500,000, or
``(2) such greater amount (but not greater than $2,000,000)
as may be set forth in regulations prescribed by the
applicable authority through negotiated rulemaking, based on
the level of aggregate and specific excess /stop loss
insurance provided with respect to such plan.
``(c) Additional Requirements.--In the case of any
association health plan described in subsection (a)(2), the
applicable authority may provide such additional requirements
relating to reserves and excess /stop loss insurance as the
applicable authority considers appropriate. Such requirements
may be provided by regulation, through negotiated rulemaking,
with respect to any such plan or any class of such plans.
``(d) Adjustments for Excess /Stop Loss Insurance.--The
applicable authority may provide for adjustments to the
levels of reserves otherwise required under subsections (a)
and (b) with respect to any plan or class of plans to take
into account excess /stop loss insurance provided with
respect to such plan or plans.
``(e) Alternative Means of Compliance.--The applicable
authority may permit an association health plan described in
subsection (a)(2) to substitute, for all or part of the
requirements of this section (except subsection
(a)(2)(B)(iii)), such security, guarantee, hold-harmless
arrangement, or other financial arrangement as the applicable
authority determines to be adequate to enable the plan to
fully meet all its financial obligations on a timely basis
and is otherwise no less protective of the interests of
participants and beneficiaries than the requirements for
which it is substituted. The applicable authority may take
into account, for purposes of this subsection, evidence
provided by the plan or sponsor which demonstrates an
assumption of liability with respect to the plan. Such
evidence may be in the form of a contract of indemnification,
lien, bonding, insurance, letter of credit, recourse under
applicable terms of the plan in the form of assessments of
participating employers, security, or other financial
arrangement.
``(f) Measures To Ensure Continued Payment of Benefits by
Certain Plans in Distress.--
``(1) Payments by certain plans to association health plan
fund.--
``(A) In general.--In the case of an association health
plan described in subsection (a)(2), the requirements of this
subsection are met if the plan makes payments into the
Association Health Plan Fund under this subparagraph when
they are due. Such payments shall consist of annual payments
in the amount of $5,000, and, in addition to such annual
payments, such supplemental payments as the Secretary may
determine to be necessary under paragraph (2). Payments under
this paragraph are payable to the Fund at the time determined
by the Secretary. Initial payments are due in advance of
certification under this part. Payments shall continue to
accrue until a plan's assets are distributed pursuant to a
termination procedure.
``(B) Penalties for failure to make payments.--If any
payment is not made by a plan when it is due, a late payment
charge of not more than 100 percent of the payment which was
not timely paid shall be payable by the plan to the Fund.
``(C) Continued duty of the secretary.--The Secretary shall
not cease to carry out the provisions of paragraph (2) on
account of the failure of a plan to pay any payment when due.
``(2) Payments by secretary to continue excess /stop loss
insurance coverage and indemnification insurance coverage for
certain plans.--In any case in which the applicable authority
determines that there is, or that there is reason to believe
that there will be: (A) a failure to take necessary
corrective actions under section 809(a) with respect to an
association health plan described in subsection (a)(2); or
(B) a termination of such a plan under section 809(b) or
810(b)(8) (and, if the applicable authority is not the
Secretary, certifies such determination to the Secretary),
the Secretary shall determine the amounts necessary to make
payments to an insurer (designated by the Secretary) to
maintain in force excess /stop loss insurance coverage or
indemnification insurance coverage for such plan, if the
Secretary determines that there is a reasonable expectation
that, without such payments, claims would not be satisfied by
reason of termination of such coverage. The Secretary shall,
to the extent provided in advance in appropriation Acts, pay
such amounts so determined to the insurer designated by the
Secretary.
``(3) Association health plan fund.--
``(A) In general.--There is established on the books of the
Treasury a fund to be known as the `Association Health Plan
Fund'. The Fund shall be available for making payments
pursuant to paragraph (2). The Fund shall be credited with
payments received pursuant to paragraph (1)(A), penalties
received pursuant to paragraph (1)(B); and earnings on
investments of amounts of the Fund under subparagraph (B).
``(B) Investment.--Whenever the Secretary determines that
the moneys of the fund are in excess of current needs, the
Secretary may request the investment of such amounts as the
Secretary determines advisable by the Secretary of the
Treasury in obligations issued or guaranteed by the United
States.
``(g) Excess /Stop Loss Insurance.--For purposes of this
section--
``(1) Aggregate excess /stop loss insurance.--The term
`aggregate excess /stop loss insurance' means, in connection
with an association health plan, a contract--
``(A) under which an insurer (meeting such minimum
standards as the applicable authority may prescribe by
regulation through negotiated rulemaking) provides for
payment to the plan with respect to aggregate
[[Page H5250]]
claims under the plan in excess of an amount or amounts
specified in such contract;
``(B) which is guaranteed renewable; and
``(C) which allows for payment of premiums by any third
party on behalf of the insured plan.
``(2) Specific excess /stop loss insurance.--The term
`specific excess /stop loss insurance' means, in connection
with an association health plan, a contract--
``(A) under which an insurer (meeting such minimum
standards as the applicable authority may prescribe by
regulation through negotiated rulemaking) provides for
payment to the plan with respect to claims under the plan in
connection with a covered individual in excess of an amount
or amounts specified in such contract in connection with such
covered individual;
``(B) which is guaranteed renewable; and
``(C) which allows for payment of premiums by any third
party on behalf of the insured plan.
``(h) Indemnification Insurance.--For purposes of this
section, the term `indemnification insurance' means, in
connection with an association health plan, a contract--
``(1) under which an insurer (meeting such minimum
standards as the applicable authority may prescribe through
negotiated rulemaking) provides for payment to the plan with
respect to claims under the plan which the plan is unable to
satisfy by reason of a termination pursuant to section 809(b)
(relating to mandatory termination);
``(2) which is guaranteed renewable and noncancellable for
any reason (except as the applicable authority may prescribe
by regulation through negotiated rulemaking); and
``(3) which allows for payment of premiums by any third
party on behalf of the insured plan.
``(i) Reserves.--For purposes of this section, the term
`reserves' means, in connection with an association health
plan, plan assets which meet the fiduciary standards under
part 4 and such additional requirements regarding liquidity
as the applicable authority may prescribe through negotiated
rulemaking.
``(j) Solvency Standards Working Group.--
``(1) In general.--Within 90 days after the date of the
enactment of the Bipartisan Patient Protection Act, the
applicable authority shall establish a Solvency Standards
Working Group. In prescribing the initial regulations under
this section, the applicable authority shall take into
account the recommendations of such Working Group.
``(2) Membership.--The Working Group shall consist of not
more than 15 members appointed by the applicable authority.
The applicable authority shall include among persons invited
to membership on the Working Group at least one of each of
the following:
``(A) a representative of the National Association of
Insurance Commissioners;
``(B) a representative of the American Academy of
Actuaries;
``(C) a representative of the State governments, or their
interests;
``(D) a representative of existing self-insured
arrangements, or their interests;
``(E) a representative of associations of the type referred
to in section 801(b)(1), or their interests; and
``(F) a representative of multiemployer plans that are
group health plans, or their interests.
``SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED
REQUIREMENTS.
``(a) Filing Fee.--Under the procedure prescribed pursuant
to section 802(a), an association health plan shall pay to
the applicable authority at the time of filing an application
for certification under this part a filing fee in the amount
of $5,000, which shall be available in the case of the
Secretary, to the extent provided in appropriation Acts, for
the sole purpose of administering the certification
procedures applicable with respect to association health
plans.
``(b) Information To Be Included in Application for
Certification.--An application for certification under this
part meets the requirements of this section only if it
includes, in a manner and form which shall be prescribed by
the applicable authority through negotiated rulemaking, at
least the following information:
``(1) Identifying information.--The names and addresses
of--
``(A) the sponsor; and
``(B) the members of the board of trustees of the plan.
``(2) States in which plan intends to do business.--The
States in which participants and beneficiaries under the plan
are to be located and the number of them expected to be
located in each such State.
``(3) Bonding requirements.--Evidence provided by the board
of trustees that the bonding requirements of section 412 will
be met as of the date of the application or (if later)
commencement of operations.
``(4) Plan documents.--A copy of the documents governing
the plan (including any bylaws and trust agreements), the
summary plan description, and other material describing the
benefits that will be provided to participants and
beneficiaries under the plan.
``(5) Agreements with service providers.--A copy of any
agreements between the plan and contract administrators and
other service providers.
``(6) Funding report.--In the case of association health
plans providing benefits options in addition to health
insurance coverage, a report setting forth information with
respect to such additional benefit options determined as of a
date within the 120-day period ending with the date of the
application, including the following:
``(A) Reserves.--A statement, certified by the board of
trustees of the plan, and a statement of actuarial opinion,
signed by a qualified actuary, that all applicable
requirements of section 806 are or will be met in accordance
with regulations which the applicable authority shall
prescribe through negotiated rulemaking.
``(B) Adequacy of contribution rates.--A statement of
actuarial opinion, signed by a qualified actuary, which sets
forth a description of the extent to which contribution rates
are adequate to provide for the payment of all obligations
and the maintenance of required reserves under the plan for
the 12-month period beginning with such date within such 120-
day period, taking into account the expected coverage and
experience of the plan. If the contribution rates are not
fully adequate, the statement of actuarial opinion shall
indicate the extent to which the rates are inadequate and the
changes needed to ensure adequacy.
``(C) Current and projected value of assets and
liabilities.--A statement of actuarial opinion signed by a
qualified actuary, which sets forth the current value of the
assets and liabilities accumulated under the plan and a
projection of the assets, liabilities, income, and expenses
of the plan for the 12-month period referred to in
subparagraph (B). The income statement shall identify
separately the plan's administrative expenses and claims.
``(D) Costs of coverage to be charged and other expenses.--
A statement of the costs of coverage to be charged, including
an itemization of amounts for administration, reserves, and
other expenses associated with the operation of the plan.
``(E) Other information.--Any other information as may be
determined by the applicable authority, by regulation through
negotiated rulemaking, as necessary to carry out the purposes
of this part.
``(c) Filing Notice of Certification With States.--A
certification granted under this part to an association
health plan shall not be effective unless written notice of
such certification is filed with the applicable State
authority of each State in which at least 25 percent of the
participants and beneficiaries under the plan are located.
For purposes of this subsection, an individual shall be
considered to be located in the State in which a known
address of such individual is located or in which such
individual is employed.
``(d) Notice of Material Changes.--In the case of any
association health plan certified under this part,
descriptions of material changes in any information which was
required to be submitted with the application for the
certification under this part shall be filed in such form and
manner as shall be prescribed by the applicable authority by
regulation through negotiated rulemaking. The applicable
authority may require by regulation, through negotiated
rulemaking, prior notice of material changes with respect to
specified matters which might serve as the basis for
suspension or revocation of the certification.
``(e) Reporting Requirements for Certain Association Health
Plans.--An association health plan certified under this part
which provides benefit options in addition to health
insurance coverage for such plan year shall meet the
requirements of section 103 by filing an annual report under
such section which shall include information described in
subsection (b)(6) with respect to the plan year and,
notwithstanding section 104(a)(1)(A), shall be filed with the
applicable authority not later than 90 days after the close
of the plan year (or on such later date as may be prescribed
by the applicable authority). The applicable authority may
require by regulation through negotiated rulemaking such
interim reports as it considers appropriate.
``(f) Engagement of Qualified Actuary.--The board of
trustees of each association health plan which provides
benefits options in addition to health insurance coverage and
which is applying for certification under this part or is
certified under this part shall engage, on behalf of all
participants and beneficiaries, a qualified actuary who shall
be responsible for the preparation of the materials
comprising information necessary to be submitted by a
qualified actuary under this part. The qualified actuary
shall utilize such assumptions and techniques as are
necessary to enable such actuary to form an opinion as to
whether the contents of the matters reported under this
part--
``(1) are in the aggregate reasonably related to the
experience of the plan and to reasonable expectations; and
``(2) represent such actuary's best estimate of anticipated
experience under the plan.
The opinion by the qualified actuary shall be made with
respect to, and shall be made a part of, the annual report.
``SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.
``Except as provided in section 809(b), an association
health plan which is or has been certified under this part
may terminate (upon or at any time after cessation of
accruals in benefit liabilities) only if the board of
trustees--
``(1) not less than 60 days before the proposed termination
date, provides to the participants and beneficiaries a
written notice of intent to terminate stating that such
termination is intended and the proposed termination date;
[[Page H5251]]
``(2) develops a plan for winding up the affairs of the
plan in connection with such termination in a manner which
will result in timely payment of all benefits for which the
plan is obligated; and
``(3) submits such plan in writing to the applicable
authority.
Actions required under this section shall be taken in such
form and manner as may be prescribed by the applicable
authority by regulation through negotiated rulemaking.
``SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMINATION.
``(a) Actions To Avoid Depletion of Reserves.--An
association health plan which is certified under this part
and which provides benefits other than health insurance
coverage shall continue to meet the requirements of section
806, irrespective of whether such certification continues in
effect. The board of trustees of such plan shall determine
quarterly whether the requirements of section 806 are met. In
any case in which the board determines that there is reason
to believe that there is or will be a failure to meet such
requirements, or the applicable authority makes such a
determination and so notifies the board, the board shall
immediately notify the qualified actuary engaged by the plan,
and such actuary shall, not later than the end of the next
following month, make such recommendations to the board for
corrective action as the actuary determines necessary to
ensure compliance with section 806. Not later than 30 days
after receiving from the actuary recommendations for
corrective actions, the board shall notify the applicable
authority (in such form and manner as the applicable
authority may prescribe by regulation through negotiated
rulemaking) of such recommendations of the actuary for
corrective action, together with a description of the actions
(if any) that the board has taken or plans to take in
response to such recommendations. The board shall thereafter
report to the applicable authority, in such form and
frequency as the applicable authority may specify to the
board, regarding corrective action taken by the board until
the requirements of section 806 are met.
``(b) Mandatory Termination.--In any case in which--
``(1) the applicable authority has been notified under
subsection (a) of a failure of an association health plan
which is or has been certified under this part and is
described in section 806(a)(2) to meet the requirements of
section 806 and has not been notified by the board of
trustees of the plan that corrective action has restored
compliance with such requirements; and
``(2) the applicable authority determines that there is a
reasonable expectation that the plan will continue to fail to
meet the requirements of section 806,
the board of trustees of the plan shall, at the direction of
the applicable authority, terminate the plan and, in the
course of the termination, take such actions as the
applicable authority may require, including satisfying any
claims referred to in section 806(a)(2)(B)(iii) and
recovering for the plan any liability under subsection
(a)(2)(B)(iii) or (e) of section 806, as necessary to ensure
that the affairs of the plan will be, to the maximum extent
possible, wound up in a manner which will result in timely
provision of all benefits for which the plan is obligated.
``SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOLVENT
ASSOCIATION HEALTH PLANS PROVIDING HEALTH
BENEFITS IN ADDITION TO HEALTH INSURANCE
COVERAGE.
``(a) Appointment of Secretary as Trustee for Insolvent
Plans.--Whenever the Secretary determines that an association
health plan which is or has been certified under this part
and which is described in section 806(a)(2) will be unable to
provide benefits when due or is otherwise in a financially
hazardous condition, as shall be defined by the Secretary by
regulation through negotiated rulemaking, the Secretary
shall, upon notice to the plan, apply to the appropriate
United States district court for appointment of the Secretary
as trustee to administer the plan for the duration of the
insolvency. The plan may appear as a party and other
interested persons may intervene in the proceedings at the
discretion of the court. The court shall appoint such
Secretary trustee if the court determines that the
trusteeship is necessary to protect the interests of the
participants and beneficiaries or providers of medical care
or to avoid any unreasonable deterioration of the financial
condition of the plan. The trusteeship of such Secretary
shall continue until the conditions described in the first
sentence of this subsection are remedied or the plan is
terminated.
``(b) Powers as Trustee.--The Secretary, upon appointment
as trustee under subsection (a), shall have the power--
``(1) to do any act authorized by the plan, this title, or
other applicable provisions of law to be done by the plan
administrator or any trustee of the plan;
``(2) to require the transfer of all (or any part) of the
assets and records of the plan to the Secretary as trustee;
``(3) to invest any assets of the plan which the Secretary
holds in accordance with the provisions of the plan,
regulations prescribed by the Secretary through negotiated
rulemaking, and applicable provisions of law;
``(4) to require the sponsor, the plan administrator, any
participating employer, and any employee organization
representing plan participants to furnish any information
with respect to the plan which the Secretary as trustee may
reasonably need in order to administer the plan;
``(5) to collect for the plan any amounts due the plan and
to recover reasonable expenses of the trusteeship;
``(6) to commence, prosecute, or defend on behalf of the
plan any suit or proceeding involving the plan;
``(7) to issue, publish, or file such notices, statements,
and reports as may be required by the Secretary by regulation
through negotiated rulemaking or required by any order of the
court;
``(8) to terminate the plan (or provide for its termination
in accordance with section 809(b)) and liquidate the plan
assets, to restore the plan to the responsibility of the
sponsor, or to continue the trusteeship;
``(9) to provide for the enrollment of plan participants
and beneficiaries under appropriate coverage options; and
``(10) to do such other acts as may be necessary to comply
with this title or any order of the court and to protect the
interests of plan participants and beneficiaries and
providers of medical care.
``(c) Notice of Appointment.--As soon as practicable after
the Secretary's appointment as trustee, the Secretary shall
give notice of such appointment to--
``(1) the sponsor and plan administrator;
``(2) each participant;
``(3) each participating employer; and
``(4) if applicable, each employee organization which, for
purposes of collective bargaining, represents plan
participants.
``(d) Additional Duties.--Except to the extent inconsistent
with the provisions of this title, or as may be otherwise
ordered by the court, the Secretary, upon appointment as
trustee under this section, shall be subject to the same
duties as those of a trustee under section 704 of title 11,
United States Code, and shall have the duties of a fiduciary
for purposes of this title.
``(e) Other Proceedings.--An application by the Secretary
under this subsection may be filed notwithstanding the
pendency in the same or any other court of any bankruptcy,
mortgage foreclosure, or equity receivership proceeding, or
any proceeding to reorganize, conserve, or liquidate such
plan or its property, or any proceeding to enforce a lien
against property of the plan.
``(f) Jurisdiction of Court.--
``(1) In general.--Upon the filing of an application for
the appointment as trustee or the issuance of a decree under
this section, the court to which the application is made
shall have exclusive jurisdiction of the plan involved and
its property wherever located with the powers, to the extent
consistent with the purposes of this section, of a court of
the United States having jurisdiction over cases under
chapter 11 of title 11, United States Code. Pending an
adjudication under this section such court shall stay, and
upon appointment by it of the Secretary as trustee, such
court shall continue the stay of, any pending mortgage
foreclosure, equity receivership, or other proceeding to
reorganize, conserve, or liquidate the plan, the sponsor, or
property of such plan or sponsor, and any other suit against
any receiver, conservator, or trustee of the plan, the
sponsor, or property of the plan or sponsor. Pending such
adjudication and upon the appointment by it of the Secretary
as trustee, the court may stay any proceeding to enforce a
lien against property of the plan or the sponsor or any other
suit against the plan or the sponsor.
``(2) Venue.--An action under this section may be brought
in the judicial district where the sponsor or the plan
administrator resides or does business or where any asset of
the plan is situated. A district court in which such action
is brought may issue process with respect to such action in
any other judicial district.
``(g) Personnel.--In accordance with regulations which
shall be prescribed by the Secretary through negotiated
rulemaking, the Secretary shall appoint, retain, and
compensate accountants, actuaries, and other professional
service personnel as may be necessary in connection with the
Secretary's service as trustee under this section.
``SEC. 811. STATE ASSESSMENT AUTHORITY.
``(a) In General.--Notwithstanding section 514, a State may
impose by law a contribution tax on an association health
plan described in section 806(a)(2), if the plan commenced
operations in such State after the date of the enactment of
the Bipartisan Patient Protection Act.
``(b) Contribution Tax.--For purposes of this section, the
term `contribution tax' imposed by a State on an association
health plan means any tax imposed by such State if--
``(1) such tax is computed by applying a rate to the amount
of premiums or contributions, with respect to individuals
covered under the plan who are residents of such State, which
are received by the plan from participating employers located
in such State or from such individuals;
``(2) the rate of such tax does not exceed the rate of any
tax imposed by such State on premiums or contributions
received by insurers or health maintenance organizations for
health insurance coverage offered in such State in connection
with a group health plan;
``(3) such tax is otherwise nondiscriminatory; and
``(4) the amount of any such tax assessed on the plan is
reduced by the amount of any tax or assessment otherwise
imposed by the State on premiums, contributions, or both
received by insurers or health maintenance organizations for
health insurance coverage,
[[Page H5252]]
aggregate excess /stop loss insurance (as defined in section
806(g)(1)), specific excess /stop loss insurance (as defined
in section 806(g)(2)), other insurance related to the
provision of medical care under the plan, or any combination
thereof provided by such insurers or health maintenance
organizations in such State in connection with such plan.
``SEC. 812. DEFINITIONS AND RULES OF CONSTRUCTION.
``(a) Definitions.--For purposes of this part--
``(1) Group health plan.--The term `group health plan' has
the meaning provided in section 733(a)(1) (after applying
subsection (b) of this section).
``(2) Medical care.--The term `medical care' has the
meaning provided in section 733(a)(2).
``(3) Health insurance coverage.--The term `health
insurance coverage' has the meaning provided in section
733(b)(1).
``(4) Health insurance issuer.--The term `health insurance
issuer' has the meaning provided in section 733(b)(2).
``(5) Applicable authority.--
``(A) In general.--Except as provided in subparagraph (B),
the term `applicable authority' means, in connection with an
association health plan--
``(i) the State recognized pursuant to subsection (c) of
section 506 as the State to which authority has been
delegated in connection with such plan; or
``(ii) if there if no State referred to in clause (i), the
Secretary.
``(B) Exceptions.--
``(i) Joint authorities.--Where such term appears in
section 808(3), section 807(e) (in the first instance),
section 809(a) (in the second instance), section 809(a) (in
the fourth instance), and section 809(b)(1), such term means,
in connection with an association health plan, the Secretary
and the State referred to in subparagraph (A)(i) (if any) in
connection with such plan.
``(ii) Regulatory authorities.--Where such term appears in
section 802(a) (in the first instance), section 802(d),
section 802(e), section 803(d), section 805(a)(5), section
806(a)(2), section 806(b), section 806(c), section 806(d),
paragraphs (1)(A) and (2)(A) of section 806(g), section
806(h), section 806(i), section 806(j), section 807(a) (in
the second instance), section 807(b), section 807(d), section
807(e) (in the second instance), section 808 (in the matter
after paragraph (3)), and section 809(a) (in the third
instance), such term means, in connection with an association
health plan, the Secretary.
``(6) Health status-related factor.--The term `health
status-related factor' has the meaning provided in section
733(d)(2).
``(7) Individual market.--
``(A) In general.--The term `individual market' means the
market for health insurance coverage offered to individuals
other than in connection with a group health plan.
``(B) Treatment of very small groups.--
``(i) In general.--Subject to clause (ii), such term
includes coverage offered in connection with a group health
plan that has fewer than 2 participants as current employees
or participants described in section 732(d)(3) on the first
day of the plan year.
``(ii) State exception.--Clause (i) shall not apply in the
case of health insurance coverage offered in a State if such
State regulates the coverage described in such clause in the
same manner and to the same extent as coverage in the small
group market (as defined in section 2791(e)(5) of the Public
Health Service Act) is regulated by such State.
``(8) Participating employer.--The term `participating
employer' means, in connection with an association health
plan, any employer, if any individual who is an employee of
such employer, a partner in such employer, or a self-employed
individual who is such employer (or any dependent, as defined
under the terms of the plan, of such individual) is or was
covered under such plan in connection with the status of such
individual as such an employee, partner, or self-employed
individual in relation to the plan.
``(9) Applicable state authority.--The term `applicable
State authority' means, with respect to a health insurance
issuer in a State, the State insurance commissioner or
official or officials designated by the State to enforce the
requirements of title XXVII of the Public Health Service Act
for the State involved with respect to such issuer.
``(10) Qualified actuary.--The term `qualified actuary'
means an individual who is a member of the American Academy
of Actuaries or meets such reasonable standards and
qualifications as the Secretary may provide by regulation
through negotiated rulemaking.
``(11) Affiliated member.--The term `affiliated member'
means, in connection with a sponsor--
``(A) a person who is otherwise eligible to be a member of
the sponsor but who elects an affiliated status with the
sponsor,
``(B) in the case of a sponsor with members which consist
of associations, a person who is a member of any such
association and elects an affiliated status with the sponsor,
or
``(C) in the case of an association health plan in
existence on the date of the enactment of the Bipartisan
Patient Protection Act, a person eligible to be a member of
the sponsor or one of its member associations.
``(12) Large employer.--The term `large employer' means, in
connection with a group health plan with respect to a plan
year, an employer who employed an average of at least 51
employees on business days during the preceding calendar year
and who employs at least 2 employees on the first day of the
plan year.
``(13) Small employer.--The term `small employer' means, in
connection with a group health plan with respect to a plan
year, an employer who is not a large employer.
``(b) Rules of Construction.--
``(1) Employers and employees.--For purposes of determining
whether a plan, fund, or program is an employee welfare
benefit plan which is an association health plan, and for
purposes of applying this title in connection with such plan,
fund, or program so determined to be such an employee welfare
benefit plan--
``(A) in the case of a partnership, the term `employer' (as
defined in section 3(5)) includes the partnership in relation
to the partners, and the term `employee' (as defined in
section 3(6)) includes any partner in relation to the
partnership; and
``(B) in the case of a self-employed individual, the term
`employer' (as defined in section 3(5)) and the term
`employee' (as defined in section 3(6)) shall include such
individual.
``(2) Plans, funds, and programs treated as employee
welfare benefit plans.--In the case of any plan, fund, or
program which was established or is maintained for the
purpose of providing medical care (through the purchase of
insurance or otherwise) for employees (or their dependents)
covered thereunder and which demonstrates to the Secretary
that all requirements for certification under this part would
be met with respect to such plan, fund, or program if such
plan, fund, or program were a group health plan, such plan,
fund, or program shall be treated for purposes of this title
as an employee welfare benefit plan on and after the date of
such demonstration.''.
(b) Conforming Amendments to Preemption Rules.--
(1) Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)) is
amended by adding at the end the following new subparagraph:
``(E) The preceding subparagraphs of this paragraph do not
apply with respect to any State law in the case of an
association health plan which is certified under part 8.''.
(2) Section 514 of such Act (29 U.S.C. 1144), as amended by
section 142, is amended--
(A) in subsection (b)(4), by striking ``Subsection (a)''
and inserting ``Subsections (a) and (e)'';
(B) in subsection (b)(5), by striking ``subsection (a)'' in
subparagraph (A) and inserting ``subsection (a) of this
section and subsections (a)(2)(B) and (b) of section 805'',
and by striking ``subsection (a)'' in subparagraph (B) and
inserting ``subsection (a) of this section or subsection
(a)(2)(B) or (b) of section 805'';
(C) by redesignating subsection (e) as subsection (f); and
(D) by inserting after subsection (d) the following new
subsection:
``(e)(1) Except as provided in subsection (b)(4), the
provisions of this title shall supersede any and all State
laws insofar as they may now or hereafter preclude, or have
the effect of precluding, a health insurance issuer from
offering health insurance coverage in connection with an
association health plan which is certified under part 8.
``(2) Except as provided in paragraphs (4) and (5) of
subsection (b) of this section--
``(A) In any case in which health insurance coverage of any
policy type is offered under an association health plan
certified under part 8 to a participating employer operating
in such State, the provisions of this title shall supersede
any and all laws of such State insofar as they may preclude a
health insurance issuer from offering health insurance
coverage of the same policy type to other employers operating
in the State which are eligible for coverage under such
association health plan, whether or not such other employers
are participating employers in such plan.
``(B) In any case in which health insurance coverage of any
policy type is offered under an association health plan in a
State and the filing, with the applicable State authority, of
the policy form in connection with such policy type is
approved by such State authority, the provisions of this
title shall supersede any and all laws of any other State in
which health insurance coverage of such type is offered,
insofar as they may preclude, upon the filing in the same
form and manner of such policy form with the applicable State
authority in such other State, the approval of the filing in
such other State.
``(3) For additional provisions relating to association
health plans, see subsections (a)(2)(B) and (b) of section
805.
``(4) For purposes of this subsection, the term
`association health plan' has the meaning provided in section
801(a), and the terms `health insurance coverage',
`participating employer', and `health insurance issuer' have
the meanings provided such terms in section 811,
respectively.''.
(3) Section 514(b)(6)(A) of such Act (29 U.S.C.
1144(b)(6)(A)) is amended--
(A) in clause (i)(II), by striking ``and'' at the end;
(B) in clause (ii), by inserting ``and which does not
provide medical care (within the meaning of section
733(a)(2)),'' after ``arrangement,'', and by striking
``title.'' and inserting ``title, and''; and
(C) by adding at the end the following new clause:
``(iii) subject to subparagraph (E), in the case of any
other employee welfare benefit plan which is a multiple
employer welfare
[[Page H5253]]
arrangement and which provides medical care (within the
meaning of section 733(a)(2)), any law of any State which
regulates insurance may apply.''.
(4) Section 514(e) of such Act (as redesignated by
paragraph (2)(C)) is amended--
(A) by striking ``Nothing'' and inserting ``(1) Except as
provided in paragraph (2), nothing''; and
(B) by adding at the end the following new paragraph:
``(2) Nothing in any other provision of law enacted on or
after the date of the enactment of the Bipartisan Patient
Protection Act shall be construed to alter, amend, modify,
invalidate, impair, or supersede any provision of this title,
except by specific cross-reference to the affected
section.''.
(c) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C.
102(16)(B)) is amended by adding at the end the following new
sentence: ``Such term also includes a person serving as the
sponsor of an association health plan under part 8.''.
(d) Disclosure of Solvency Protections Related to Self-
Insured and Fully Insured Options Under Association Health
Plans.--Section 102(b) of such Act (29 U.S.C. 102(b)) is
amended by adding at the end the following: ``An association
health plan shall include in its summary plan description, in
connection with each benefit option, a description of the
form of solvency or guarantee fund protection secured
pursuant to this Act or applicable State law, if any.''.
(e) Savings Clause.--Section 731(c) of such Act is amended
by inserting ``or part 8'' after ``this part''.
(f) Report to the Congress Regarding Certification of Self-
Insured Association Health Plans.--Not later than January 1,
2006, the Secretary of Labor shall report to the Committee on
Education and the Workforce of the House of Representatives
and the Committee on Health, Education, Labor, and Pensions
of the Senate the effect association health plans have had,
if any, on reducing the number of uninsured individuals.
(g) Clerical Amendment.--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 734
the following new items:
``Part 8--Rules Governing Association Health Plans
``Sec. 801. Association health plans.
``Sec. 802. Certification of association health plans.
``Sec. 803. Requirements relating to sponsors and boards of trustees.
``Sec. 804. Participation and coverage requirements.
``Sec. 805. Other requirements relating to plan documents, contribution
rates, and benefit options.
``Sec. 806. Maintenance of reserves and provisions for solvency for
plans providing health benefits in addition to health
insurance coverage.
``Sec. 807. Requirements for application and related requirements.
``Sec. 808. Notice requirements for voluntary termination.
``Sec. 809. Corrective actions and mandatory termination.
``Sec. 810. Trusteeship by the Secretary of insolvent association
health plans providing health benefits in addition to
health insurance coverage.
``Sec. 811. State assessment authority.
``Sec. 812. Definitions and rules of construction.''.
SEC. 422. CLARIFICATION OF TREATMENT OF SINGLE EMPLOYER
ARRANGEMENTS.
Section 3(40)(B) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1002(40)(B)) is amended--
(1) in clause (i), by inserting ``for any plan year of any
such plan, or any fiscal year of any such other
arrangement;'' after ``single employer'', and by inserting
``during such year or at any time during the preceding 1-year
period'' after ``control group'';
(2) in clause (iii)--
(A) by striking ``common control shall not be based on an
interest of less than 25 percent'' and inserting ``an
interest of greater than 25 percent may not be required as
the minimum interest necessary for common control''; and
(B) by striking ``similar to'' and inserting ``consistent
and coextensive with'';
(3) by redesignating clauses (iv) and (v) as clauses (v)
and (vi), respectively; and
(4) by inserting after clause (iii) the following new
clause:
``(iv) in determining, after the application of clause (i),
whether benefits are provided to employees of two or more
employers, the arrangement shall be treated as having only
one participating employer if, after the application of
clause (i), the number of individuals who are employees and
former employees of any one participating employer and who
are covered under the arrangement is greater than 75 percent
of the aggregate number of all individuals who are employees
or former employees of participating employers and who are
covered under the arrangement;''.
SEC. 423. CLARIFICATION OF TREATMENT OF CERTAIN COLLECTIVELY
BARGAINED ARRANGEMENTS.
(a) In General.--Section 3(40)(A)(i) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1002(40)(A)(i)) is amended to read as follows:
``(i)(I) under or pursuant to one or more collective
bargaining agreements which are reached pursuant to
collective bargaining described in section 8(d) of the
National Labor Relations Act (29 U.S.C. 158(d)) or paragraph
Fourth of section 2 of the Railway Labor Act (45 U.S.C. 152,
paragraph Fourth) or which are reached pursuant to labor-
management negotiations under similar provisions of State
public employee relations laws, and (II) in accordance with
subparagraphs (C), (D), and (E);''.
(b) Limitations.--Section 3(40) of such Act (29 U.S.C.
1002(40)) is amended by adding at the end the following new
subparagraphs:
``(C) For purposes of subparagraph (A)(i)(II), a plan or
other arrangement shall be treated as established or
maintained in accordance with this subparagraph only if the
following requirements are met:
``(i) The plan or other arrangement, and the employee
organization or any other entity sponsoring the plan or other
arrangement, do not--
``(I) utilize the services of any licensed insurance agent
or broker for soliciting or enrolling employers or
individuals as participating employers or covered individuals
under the plan or other arrangement; or
``(II) pay any type of compensation to a person, other than
a full time employee of the employee organization (or a
member of the organization to the extent provided in
regulations prescribed by the Secretary through negotiated
rulemaking), that is related either to the volume or number
of employers or individuals solicited or enrolled as
participating employers or covered individuals under the plan
or other arrangement, or to the dollar amount or size of the
contributions made by participating employers or covered
individuals to the plan or other arrangement;
except to the extent that the services used by the plan,
arrangement, organization, or other entity consist solely of
preparation of documents necessary for compliance with the
reporting and disclosure requirements of part 1 or
administrative, investment, or consulting services unrelated
to solicitation or enrollment of covered individuals.
``(ii) As of the end of the preceding plan year, the number
of covered individuals under the plan or other arrangement
who are neither--
``(I) employed within a bargaining unit covered by any of
the collective bargaining agreements with a participating
employer (nor covered on the basis of an individual's
employment in such a bargaining unit); nor
``(II) present employees (or former employees who were
covered while employed) of the sponsoring employee
organization, of an employer who is or was a party to any of
the collective bargaining agreements, or of the plan or other
arrangement or a related plan or arrangement (nor covered on
the basis of such present or former employment);
does not exceed 15 percent of the total number of individuals
who are covered under the plan or arrangement and who are
present or former employees who are or were covered under the
plan or arrangement pursuant to a collective bargaining
agreement with a participating employer. The requirements of
the preceding provisions of this clause shall be treated as
satisfied if, as of the end of the preceding plan year, such
covered individuals are comprised solely of individuals who
were covered individuals under the plan or other arrangement
as of the date of the enactment of the Bipartisan Patient
Protection Act and, as of the end of the preceding plan year,
the number of such covered individuals does not exceed 25
percent of the total number of present and former employees
enrolled under the plan or other arrangement.
``(iii) The employee organization or other entity
sponsoring the plan or other arrangement certifies to the
Secretary each year, in a form and manner which shall be
prescribed by the Secretary through negotiated rulemaking
that the plan or other arrangement meets the requirements of
clauses (i) and (ii).
``(D) For purposes of subparagraph (A)(i)(II), a plan or
arrangement shall be treated as established or maintained in
accordance with this subparagraph only if--
``(i) all of the benefits provided under the plan or
arrangement consist of health insurance coverage; or
``(ii)(I) the plan or arrangement is a multiemployer plan;
and
``(II) the requirements of clause (B) of the proviso to
clause (5) of section 302(c) of the Labor Management
Relations Act, 1947 (29 U.S.C. 186(c)) are met with respect
to such plan or other arrangement.
``(E) For purposes of subparagraph (A)(i)(II), a plan or
arrangement shall be treated as established or maintained in
accordance with this subparagraph only if--
``(i) the plan or arrangement is in effect as of the date
of the enactment of the Bipartisan Patient Protection Act; or
``(ii) the employee organization or other entity sponsoring
the plan or arrangement--
``(I) has been in existence for at least 3 years; or
``(II) demonstrates to the satisfaction of the Secretary
that the requirements of subparagraphs (C) and (D) are met
with respect to the plan or other arrangement.''.
(c) Conforming Amendments to Definitions of Participant and
Beneficiary.--Section 3(7) of such Act (29 U.S.C. 1002(7)) is
amended by adding at the end the following new sentence:
``Such term includes an individual who is a covered
individual described in paragraph (40)(C)(ii).''.
[[Page H5254]]
SEC. 424. ENFORCEMENT PROVISIONS RELATING TO ASSOCIATION
HEALTH PLANS.
(a) Criminal Penalties for Certain Willful
Misrepresentations.--Section 501 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1131) is amended--
(1) by inserting ``(a)'' after ``Sec. 501.''; and
(2) by adding at the end the following new subsection:
``(b) Any person who willfully falsely represents, to any
employee, any employee's beneficiary, any employer, the
Secretary, or any State, a plan or other arrangement
established or maintained for the purpose of offering or
providing any benefit described in section 3(1) to employees
or their beneficiaries as--
``(1) being an association health plan which has been
certified under part 8;
``(2) having been established or maintained under or
pursuant to one or more collective bargaining agreements
which are reached pursuant to collective bargaining described
in section 8(d) of the National Labor Relations Act (29
U.S.C. 158(d)) or paragraph Fourth of section 2 of the
Railway Labor Act (45 U.S.C. 152, paragraph Fourth) or which
are reached pursuant to labor-management negotiations under
similar provisions of State public employee relations laws;
or
``(3) being a plan or arrangement with respect to which the
requirements of subparagraph (C), (D), or (E) of section
3(40) are met;
shall, upon conviction, be imprisoned not more than 5 years,
be fined under title 18, United States Code, or both.''.
(b) Cease Activities Orders.--Section 502 of such Act (29
U.S.C. 1132), as amended by sections 141 and 143, is further
amended by adding at the end the following new subsection:
``(p) Association Health Plan Cease and Desist Orders.--
``(1) In general.--Subject to paragraph (2), upon
application by the Secretary showing the operation,
promotion, or marketing of an association health plan (or
similar arrangement providing benefits consisting of medical
care (as defined in section 733(a)(2))) that--
``(A) is not certified under part 8, is subject under
section 514(b)(6) to the insurance laws of any State in which
the plan or arrangement offers or provides benefits, and is
not licensed, registered, or otherwise approved under the
insurance laws of such State; or
``(B) is an association health plan certified under part 8
and is not operating in accordance with the requirements
under part 8 for such certification,
a district court of the United States shall enter an order
requiring that the plan or arrangement cease activities.
``(2) Exception.--Paragraph (1) shall not apply in the case
of an association health plan or other arrangement if the
plan or arrangement shows that--
``(A) all benefits under it referred to in paragraph (1)
consist of health insurance coverage; and
``(B) with respect to each State in which the plan or
arrangement offers or provides benefits, the plan or
arrangement is operating in accordance with applicable State
laws that are not superseded under section 514.
``(3) Additional equitable relief.--The court may grant
such additional equitable relief, including any relief
available under this title, as it deems necessary to protect
the interests of the public and of persons having claims for
benefits against the plan.''.
(c) Responsibility for Claims Procedure.--Section 503 of
such Act (29 U.S.C. 1133), as amended by section 301(b), is
amended by adding at the end the following new subsection:
``(c) Association Health Plans.--The terms of each
association health plan which is or has been certified under
part 8 shall require the board of trustees or the named
fiduciary (as applicable) to ensure that the requirements of
this section are met in connection with claims filed under
the plan.''.
SEC. 425. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
Section 506 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1136) is amended by adding at the end the
following new subsection:
``(c) Consultation With States With Respect to Association
Health Plans.--
``(1) Agreements with states.--The Secretary shall consult
with the State recognized under paragraph (2) with respect to
an association health plan regarding the exercise of--
``(A) the Secretary's authority under sections 502 and 504
to enforce the requirements for certification under part 8;
and
``(B) the Secretary's authority to certify association
health plans under part 8 in accordance with regulations of
the Secretary applicable to certification under part 8.
``(2) Recognition of primary domicile state.--In carrying
out paragraph (1), the Secretary shall ensure that only one
State will be recognized, with respect to any particular
association health plan, as the State to with which
consultation is required. In carrying out this paragraph, the
Secretary shall take into account the places of residence of
the participants and beneficiaries under the plan and the
State in which the trust is maintained.''.
SEC. 426. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.
(a) Effective Date.--The amendments made by sections 421,
424, and 425 shall take effect one year from the date of
enactment. The amendments made by sections 422 and 423 shall
take effect on the date of the enactment of this Act. The
Secretary of Labor shall first issue all regulations
necessary to carry out the amendments made by this subtitle
within one year from the date of enactment. Such regulations
shall be issued through negotiated rulemaking.
(b) Exception.--Section 801(a)(2) of the Employee
Retirement Income Security Act of 1974 (added by section 421)
does not apply in connection with an association health plan
(certified under part 8 of subtitle B of title I of such Act)
existing on the date of the enactment of this Act, if no
benefits provided thereunder as of the date of the enactment
of this Act consist of health insurance coverage (as defined
in section 733(b)(1) of such Act).
(c) Treatment of Certain Existing Health Benefits
Programs.--
(1) In general.--In any case in which, as of the date of
the enactment of this Act, an arrangement is maintained in a
State for the purpose of providing benefits consisting of
medical care for the employees and beneficiaries of its
participating employers, at least 200 participating employers
make contributions to such arrangement, such arrangement has
been in existence for at least 10 years, and such arrangement
is licensed under the laws of one or more States to provide
such benefits to its participating employers, upon the filing
with the applicable authority (as defined in section
812(a)(5) of the Employee Retirement Income Security Act of
1974 (as amended by this subtitle)) by the arrangement of an
application for certification of the arrangement under part 8
of subtitle B of title I of such Act--
(A) such arrangement shall be deemed to be a group health
plan for purposes of title I of such Act;
(B) the requirements of sections 801(a)(1) and 803(a)(1) of
the Employee Retirement Income Security Act of 1974 shall be
deemed met with respect to such arrangement;
(C) the requirements of section 803(b) of such Act shall be
deemed met, if the arrangement is operated by a board of
directors which--
(i) is elected by the participating employers, with each
employer having one vote; and
(ii) has complete fiscal control over the arrangement and
which is responsible for all operations of the arrangement;
(D) the requirements of section 804(a) of such Act shall be
deemed met with respect to such arrangement; and
(E) the arrangement may be certified by any applicable
authority with respect to its operations in any State only if
it operates in such State on the date of certification.
The provisions of this subsection shall cease to apply with
respect to any such arrangement at such time after the date
of the enactment of this Act as the applicable requirements
of this subsection are not met with respect to such
arrangement.
(2) Definitions.--For purposes of this subsection, the
terms ``group health plan'', ``medical care'', and
``participating employer'' shall have the meanings provided
in section 812 of the Employee Retirement Income Security Act
of 1974, except that the reference in paragraph (7) of such
section to an ``association health plan'' shall be deemed a
reference to an arrangement referred to in this subsection.
Amend section 511 to read as follows (and conform the table
of contents accordingly):
SEC. 511. EXPANSION OF AVAILABILITY OF ARCHER MEDICAL SAVINGS
ACCOUNTS.
(a) Repeal of Limitations on Number of Medical Savings
Accounts.--
(1) In general.--Subsections (i) and (j) of section 220 of
the Internal Revenue Code of 1986 are hereby repealed.
(2) Conforming amendments.--
(A) Paragraph (1) of section 220(c) of such Code is amended
by striking subparagraph (D).
(B) Section 138 of such Code is amended by striking
subsection (f).
(b) Availability Not Limited to Accounts for Employees of
Small Employers and Self-employed Individuals.--
(1) In general.--Subparagraph (A) of section 220(c)(1) of
such Code (relating to eligible individual) is amended to
read as follows:
``(A) In general.--The term `eligible individual' means,
with respect to any month, any individual if--
``(i) such individual is covered under a high deductible
health plan as of the 1st day of such month, and
``(ii) such individual is not, while covered under a high
deductible health plan, covered under any health plan--
``(I) which is not a high deductible health plan, and
``(II) which provides coverage for any benefit which is
covered under the high deductible health plan.''.
(2) Conforming amendments.--
(A) Section 220(c)(1) of such Code is amended by striking
subparagraph (C).
(B) Section 220(c) of such Code is amended by striking
paragraph (4) (defining small employer) and by redesignating
paragraph (5) as paragraph (4).
(C) Section 220(b) of such Code is amended by striking
paragraph (4) (relating to deduction limited by compensation)
and by redesignating paragraphs (5), (6), and (7) as
paragraphs (4), (5), and (6), respectively.
(c) Increase in Amount of Deduction Allowed for
Contributions to Medical Savings Accounts.--
(1) In general.--Paragraph (2) of section 220(b) of such
Code is amended to read as follows:
``(2) Monthly limitation.--The monthly limitation for any
month is the amount
[[Page H5255]]
equal to \1/12\ of the annual deductible (as of the first day
of such month) of the individual's coverage under the high
deductible health plan.''.
(2) Conforming amendment.--Clause (ii) of section
220(d)(1)(A) of such Code is amended by striking ``75 percent
of''.
(d) Both Employers and Employees May Contribute to Medical
Savings Accounts.--Paragraph (4) of section 220(b) of such
Code (as redesignated by subsection (b)(2)(C)) is amended to
read as follows:
``(4) Coordination with exclusion for employer
contributions.--The limitation which would (but for this
paragraph) apply under this subsection to the taxpayer for
any taxable year shall be reduced (but not below zero) by the
amount which would (but for section 106(b)) be includible in
the taxpayer's gross income for such taxable year.''.
(e) Reduction of Permitted Deductibles Under High
Deductible Health Plans.--
(1) In general.--Subparagraph (A) of section 220(c)(2) of
such Code (defining high deductible health plan) is amended--
(A) by striking ``$1,500'' in clause (i) and inserting
``$1,000''; and
(B) by striking ``$3,000'' in clause (ii) and inserting
``$2,000''.
(2) Conforming amendment.--Subsection (g) of section 220 of
such Code is amended to read as follows:
``(g) Cost-of-Living Adjustment.--
``(1) In general.--In the case of any taxable year
beginning in a calendar year after 1998, each dollar amount
in subsection (c)(2) shall be increased by an amount equal
to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which such taxable
year begins by substituting `calendar year 1997' for
`calendar year 1992' in subparagraph (B) thereof.
``(2) Special rules.--In the case of the $1,000 amount in
subsection (c)(2)(A)(i) and the $2,000 amount in subsection
(c)(2)(A)(ii), paragraph (1)(B) shall be applied by
substituting `calendar year 2000' for `calendar year 1997'.
``(3) Rounding.--If any increase under paragraph (1) or (2)
is not a multiple of $50, such increase shall be rounded to
the nearest multiple of $50.''.
(f) Providing Incentives for Preferred Provider
Organizations To Offer Medical Savings Accounts.--
(1) Preventive care coverage permitted.--Clause (ii) of
section 220(c)(2)(B) of such Code is amended by striking
``preventive care if'' and all that follows and inserting
``preventive care.''
(2) Treatment of network services.--Subparagraph (B) of
section 220(c)(2) of such Code is amended by adding at the
end the following new clause:
``(iii) Treatment of network services.--In the case of a
health plan which provides benefits for services provided by
providers in a network (as defined in section 161 of the
Patient's Bill of Rights Act of 2001) and which would
(without regard to services provided by providers outside the
network) be a high deductible health plan, such plan shall
not fail to be a high deductible health plan because--
``(I) the annual deductible for services provided by
providers outside the network exceeds the applicable maximum
dollar amount in clause (i) or (ii), or
``(II) the annual out-of-pocket expenses required to be
paid for services provided by providers outside the network
exceeds the applicable dollar amount in clause (iii).
The annual deductible taken into account under subsection
(b)(2) with respect to a plan to which the preceding sentence
applies shall be the annual deductible for services provided
by providers within the network.''
(g) Medical Savings Accounts May Be Offered Under Cafeteria
Plans.--Subsection (f) of section 125 of such Code is amended
by striking ``106(b),''.
(h) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2001.
The CHAIRMAN. Pursuant to House Resolution 219, the gentleman from
California (Mr. Thomas) and a Member opposed each will control 20
minutes.
The Chair recognizes the gentleman from California (Mr. Thomas).
Mr. THOMAS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, this amendment has two major provisions, one dealing
with an attempt, since we know that the Patients' Bill of Rights and
the expenses associated with the albeit appropriate and necessary
structural procedure of due process and potential litigation will cost
additional dollars and, therefore, will have some negative impact on
the number of folks who are insured, we believe that it is necessary to
go forward. That is why this amendment is offered.
This amendment contains two significant provisions that we believe
will significantly enhance the opportunity to retain the insurance that
is available for individuals for health insurance today and, perhaps,
even enhance it based upon the creative approach in this amendment.
The first provisions are called medical savings accounts, and in
honor of the former chairman of the Committee on Ways and Means, these
have become known as Archer MSAs.
The problem with the Archer MSAs was that they were not permanent.
They were not a viable insurance product, and notwithstanding recent
polls that show that up to 90 percent of Americans believe these are
necessary and appropriate, especially among that group that is the
least insured with health insurance, the 18- to 29-year-olds who have
that 91 percent desirability for this insurance, the structure of MSAs
has been such that it does not work.
Mr. Chairman, this amendment refines medical savings accounts to
produce a viable insurance product.
Mr. Chairman, I reserve the balance of my time.
Mr. THOMAS. Mr. Chairman, I ask unanimous consent to yield the
balance of my time to the gentleman from Texas (Mr. Sam Johnson) to
control the time.
The CHAIRMAN. Is there objection to the request of the gentleman from
California?
There was no objection.
The CHAIRMAN. The gentleman from California (Mr. Stark) claims the
time in opposition.
Mr. STARK. Mr. Chairman, I ask unanimous consent to allocate 10
minutes to the gentleman from New Jersey (Mr. Andrews).
The CHAIRMAN. Is there objection to the request of the gentleman from
California?
There was no objection.
Mr. STARK. Mr. Chairman, I yield 2 minutes to myself.
Mr. Chairman, this is an old dead horse which for some reason has
been revived again. Medical savings accounts have not worked in the
private market and did not work when they were offered to Medicare
beneficiaries. They did not sell one policy under Medicare. This
provision comes with a price tag of nearly $5 billion over 10 years,
and all that can be said is, ``There they go again, the Republicans
giving a tax cut to the very rich.''
Mr. Chairman, the American Academy of Actuaries said the greatest
savings from MSAs will be for the employees who have little or no
health expenditures; and the greatest losses will be for those
employees with substantial health care expenditures. Those with high
expenditures are primarily older employees and pregnant women.
The Wall Street Journal article explaining the lack of demand for
MSAs stated that consumers using MSAs must generally pay full price for
medical services, while managed care plans get discounts of 30 to 60
percent. MSAs discourage preventive care, which leads to more serious
health costs. MSAs do not work.
Mr. Chairman, why we should be increasing the ability of very rich
people to have a second IRA and deny health care or raise the cost of
health care for other workers escapes me. This is an amendment,
laughable at best, proposed by people who think that they can buy some
more votes by pandering to the very rich by giving away more tax
deductions.
{time} 1730
I might say that in the previous debate today, people talked about
raising the cost of health insurance. There is not one credible,
independent study ever conducted that shows the number of uninsured
Americans would go up if we passed the Patients' Bill of Rights. I
challenge the Republicans to show me such a study.
Mr. SAM JOHNSON of Texas. Mr. Chairman, I yield 1 minute to the
gentlewoman from New York (Mrs. Kelly).
Mrs. KELLY. Mr. Chairman, I rise today in strong support of the
amendment offered by my colleagues. There are millions of Americans
without health coverage, and they live in every one of our districts.
We hear from them every day. One provision that is poised to have a
tremendous impact on reducing the number of uninsured is association
health plans.
I have heard some of my colleagues contend that AHPs are bad for
women. Bad for women? How is affordable health coverage bad for women?
Association health plans offer another tool for women to access
affordable health insurance. Currently, small business owners, their
families and their employees make up over 60 percent of the uninsured.
Over half of these people are women. This is a no-brainer. AHPs are
[[Page H5256]]
good for women. In fact, AHPs are strongly supported by the National
Association of Women Business Owners, Women Impacting Public Policy, in
addition to a host of other groups committed to increasing access to
health care for hardworking women Americans.
Many small businesses do not have the ability to negotiate affordable
health care prices the way big companies can. I think we should give
them an opportunity to level this playing field.
I urge all of my colleagues to remember the women and uninsured of
America and adopt this amendment.
Mr. STARK. Mr. Chairman, I yield myself such time as I may consume. I
ask the gentlewoman from New York if she would care to respond to a
question and answer for me if she knows of any women's group in the
United States that endorses this outside of perhaps the Eagle Forum.
Mrs. KELLY. If the gentleman will yield, Mr. Chairman, I am sorry,
perhaps the gentleman was not listening. Yes. The National Association
of Women Business Owners and the Women Impacting Public Policy both.
That is only two. There are others.
Mr. STARK. There are?
Mrs. KELLY. Yes.
Mr. STARK. Which others?
Mrs. KELLY. I do not have a list of them in my hand, but there are
others.
Mr. STARK. I thank the gentlewoman.
Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from Wisconsin
(Mr. Kleczka).
Mr. KLECZKA. Mr. Chairman, I rise in strong opposition to this
amendment, especially the portion dealing with medical savings
accounts. What are those? We all know about retirement savings
accounts, IRAs; we know about education savings accounts putting money
away for your child's education. Now we have medical savings accounts.
My question to the proponents is, where are individuals going to get
all this money to slug into these various accounts? You have got to pay
the mortgage, your gas bill, your heat bill and now you are supposed to
have all this money left over to give to your IRA, your education IRA
and then a medical IRA.
Mr. Chairman, if this passes and becomes law, this is the death knell
for employer-sponsored insurance. I say that because only the healthy
and the wealthy will be able to put money into medical savings
accounts, leaving the rest of us and the sick, to pull the wagon. What
will happen is rates will go up, employers will cancel their plan and
say, You will have to go into a medical savings account. I can't afford
this anymore.
Just to prove my point, the author of the amendment, Mr. Thomas the
chairman of the Committee on Ways and Means, said in March of 1998,
that it would be not surprising if a health care package uses the Tax
Code to get rid of the employer-sponsored insurance system.''
Mr. Chairman, we see it is right here today and if this passes, say
good-bye to your employer-sponsored health insurance because the rates
are going to be too high for employers to keep it. Again, this plan is
for the healthy and wealthy.
Mr. SAM JOHNSON of Texas. Mr. Chairman, I yield 1 minute to the
gentleman from Georgia (Mr. Norwood).
Mr. NORWOOD. I thank the gentleman for yielding time.
Mr. Chairman, it is interesting to follow the previous speaker,
because medical savings accounts hold the best promise for allowing
Americans to break out of managed care entirely and take control of
their own health care for the first time in many years. I do not have
time to go into this a lot, but some of the most serious, real problems
faced today by medical savings account companies is that a far higher
mix of seriously ill patients are flocking into MSAs than other health
plans, to the point that negative selection is currently hurting MSAs,
not traditional insurance. The reason so many people with preexisting
conditions are flocking to MSAs is that MSAs provide freedom, freedom
to get the drug your doctor ordered, freedom to see your specialist
without seeking permission from anyone or to have to file an appeal for
an overturn.
I urge my colleagues to support this amendment for medical savings
accounts because I think that it will help all of us do one of the
things I have been trying to do all along, is get away from managed
care.
Mr. STARK. Mr. Chairman, I am happy to yield 1\1/2\ minutes to the
distinguished gentleman from Maryland (Mr. Cardin).
Mr. CARDIN. Mr. Chairman, as the sponsor of the amendment pointed
out, this amendment deals with two points: one is medical savings
accounts, the other is association health plans. I want to deal with
the second issue, because I think it will have the unintended
consequence of actually increasing the number of uninsured, not
increasing the number of insured.
Let me just give you an example. In my State of Maryland, we have
already had small market reform. Small companies can already join a
state-regulated plan that is much less expensive than on the open
market. If we are to adopt the associated health plan that is in this
amendment, it will be the death knell for the small market reform in
the State of Maryland.
Maryland is not alone. Other States have done the same thing. The
reason quite frankly is the success of the Maryland small market reform
is based upon all small employers coming into the Maryland plan, not
picking and choosing between different plans. If we allow the
associated health plans, that means there will be less companies
insured in the State of Maryland. Do not take my word for it; take the
word of Steve Larsen, the insurance commissioner for the State of
Maryland, who is urging us not to pass this amendment and points out
that the National Association of Insurance Commissioners oppose this
amendment.
I would urge my colleagues to reject this amendment because it will
increase the number of uninsured and reduce the opportunity for small
companies in this country.
Mr. SAM JOHNSON of Texas. Mr. Chairman, I yield 1\1/2\ minutes to the
gentleman from Wisconsin (Mr. Ryan).
Mr. RYAN of Wisconsin. Mr. Chairman, I thank the gentleman for
yielding time. I am curious as I watch this debate over medical savings
accounts from the other side, if you are so much against MSAs, then why
do you expand MSAs in your own bill? The Ganske-Dingell bill has
medical savings accounts expansion and extension of them in their own
legislation. So if they are so rotten, why are you advocating them in
your own legislation?
Mr. Chairman, what this bill is about is whether or not we are going
to improve the quality of health care for all Americans. That is the
sole purpose of this bill. What this amendment gives us a chance to do
is determine whether or not we can also improve the accessibility and
affordability of health care. We all know that health care is getting
too expensive, that it is inaccessible for too many people. This bill
will do many great things to improve the quality of health care, but we
need to work on making it more affordable for working families and we
need to make it more accessible.
Association health plans, which is also in this amendment which is
being ignored right now, allows the small little guy, the small
businesses to band together to jointly purchase health insurance so
they can get that big volume discount purchasing power that the big
companies have. That is what we are accomplishing in this. We are
giving small businesses, where 85 percent of the working family works
for, the chance to get the same kind of health insurance deals that
large corporations do, making health care more accessible and more
affordable. Medical savings accounts as validated in the opposition's
bill also expands freedom of choice in health care.
Mr. STARK. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from
California (Mr. Becerra).
Mr. BECERRA. Mr. Chairman, I thank the gentleman for yielding me this
time.
My wife always tells me that as she was going through medical school,
the axiom that they always were told to remember was ``do no harm.'' If
you are going to go out there and be a physician and treat people,
remember that if nothing else, you try to do no harm.
I do not understand why, if that is what doctors rely upon as they
continue their career and their practice to try to heal and help, why
we all of a
[[Page H5257]]
sudden have to go against all those good physicians, all those good
health care providers who are saying, please, do no harm to the
Patients' Bill of Rights that we had, the same bill that last year got
some 270 votes from the same Chamber. Why did we have to go into the
back room and do this harm through these damaging three amendments that
we have here before us? Why is it that we have to strip the
accountability from the bill that would make sure that HMOs and
insurance plans provide what patients want, the accountability. If you
do harm to them, they have the right to go after you to get a remedy.
Why is it that we strip away from those patients who are injured or
perhaps even killed the ability to go after those who committed
malpractice? Why? This is our chance to tell the American public that
we believe, just as doctors do, that we should do no harm.
We have a great base bill before us. We should follow what we did
last year. We should have the bipartisan vote that gave us 271 people
in this same House of Representatives to vote for it and move forward
and have what the American people want, a bill that will do no harm.
Unfortunately, these amendments are killer, poison amendments. Please
vote against all three of these amendments that are coming up and vote
for the Dingell bill which is the true Patients' Bill of Rights.
Mr. SAM JOHNSON of Texas. Mr. Chairman, I yield 1 minute to the
gentleman from Pennsylvania (Mr. English), a member of the Committee on
Ways and Means.
Mr. ENGLISH. Mr. Chairman, in 1996 Congress provided patients with
options to save for their health care needs and manage their own health
care needs by creating medical savings accounts. But certain
limitations placed on those accounts never allowed patients to fully
realize the promise of MSAs.
Today, I urge my colleagues to make those accounts permanent and
repeal the limitations put on them by supporting this amendment, this
pro-consumer amendment. This amendment allows any size company to offer
MSAs and also allows individuals to purchase MSAs, giving more people
the power to choose the health care professionals, services and
products that best meet their needs as individuals. It allows MSAs to
be offered under cafeteria plans that will greatly expand the number of
consumers that can be reached by MSAs and treat MSAs like other health
care plans.
Many insurers have been reluctant to offer medical savings accounts
because the cap limits the size of the market in which MSAs can be
offered. We would repeal that cap. That is fundamentally pro-consumer
legislation.
Mr. STARK. Mr. Chairman, I am happy to yield 2\1/2\ minutes to the
gentleman from North Dakota (Mr. Pomeroy), a former insurance
commissioner of that fine State.
Mr. POMEROY. Mr. Chairman, I thank the gentleman for yielding time.
Back home we say you can take a pig, put lipstick on it, smell it and
call it Monique, but it is still a pig. AHPs, association health plans,
contained in this bill are just another iteration of what has been
tried in the past and failed in the past to the disadvantage of small
employers and their employees: multiple employer trusts in the early
1980s, giving way to multiple employer welfare arrangements in the late
1980s.
What these were were efforts to have unregulated insurance pools
across small employers managed by associations. The net result, no
regulation, no adequate oversight in terms of capitalization of these
programs; and while the premiums were cheap, when the claims came in,
the companies were not there. It is not just a matter of having a
policy for purposes of having access to coverage. You want to make sure
you actually have a solvent entity to pay the claim when you send in
the bill. That is the problem about deregulating these association
health plans. We have learned this lesson once. We have learned this
lesson twice. Why, oh why, oh why on a bill that we are trying to
increase consumer protections would the majority ask us to learn it yet
a third time to the disadvantage again of small employers and the
people covered in those programs?
There is another adverse feature to association health plans and that
is that it busts up the risk pool. The way health insurance works is
you get a whole lot of folks, healthy ones, medium healthy ones, sick
ones, you put all their risks together and then you have a mechanism
that can pay claims on those who incur medical services. This would
segment out by attracting disproportionately healthy groups least
likely to incur medical services. Everybody else would be in groups
that are aging, groups whose health experience was deteriorating, and
the premiums would be skyrocketing.
{time} 1745
Do not take my word for it, because the Congressional Budget Office
has evaluated this, and the Congressional Budget Office said if AHPs
were enacted, four in five workers in small firms, 20 million
Americans, would actually receive a rate increase. Only 4.6 million
would receive a rate decrease. Why would you have rates go up by a
feature of four to one in order to advance Association Health Plans?
It is a bad idea. It is not consumer protection, it is consumer harm.
Reject that amendment.
Mr. SAM JOHNSON of Texas. Mr. Chairman, our opinion is that those
health plans give people insurance, and they do lower the cost.
Mr. Chairman, I yield 30 seconds to the gentlewoman from Connecticut
(Mrs. Johnson), a member of the Committee on Ways and Means.
Mrs. JOHNSON of Connecticut. Mr. Chairman, I just would like to point
out to my colleagues that in this bill there are solvency standards and
a number of reforms that were not in there a number of years ago. What
is exciting about the Association Health Plan option is it provides to
small businesses the opportunity to offer health plans out from under
State mandates, which is exactly what the larger employers have done.
My constituents tell me that if they could organize their small
business plans under the ERISA law, they could lower premiums 10
percent.
Mr. STARK. Mr. Chairman, I yield myself the balance of my time.
The CHAIRMAN. The gentleman from California is recognized for 30
seconds.
Mr. STARK. Mr. Chairman, the gentleman from North Dakota (Mr.
Pomeroy) asked, ``Why would anybody do this?'' I would answer that the
one need just to look at Golden Rule Financial's contributions to find
the answer: soft money, 1997 to 1998, $314,000 to the Republicans, and
not a penny to the Democrats. Under this amendment, Golden Rule
Insurance Company, the main company that benefits from MSAs, will get
$5 billion over the next 10 years.
You guys are selling out too cheap to these lobbyists. You have taken
their $300,000 and given them a bill worth 5 billion. That is what the
Republicans are doing in this bill. They have sold out to the special
interests; they have sold out to the insurance companies. Shame on you.
Mr. SAM JOHNSON of Texas. Shame on the trial lawyers who are trying
to win millions of dollars on your bill.
Mr. Chairman, I yield 1 minute to the gentleman from South Dakota
(Mr. Thune).
Mr. THUNE. Mr. Chairman, I thank the gentleman for yielding me time.
Let me say, Mr. Chairman, that we need strong patient protection
legislation. We have before us a bill that will do that, will provide
access to emergency room, access to clinical trials, direct access for
women to OB-Gyn and access to the courts for wrongful treatment.
But this amendment does something more. This amendment improves this
legislation by expanding access to health care. There are 86,000 people
in my State of South Dakota who do not have health care. Medical
savings accounts and association health plans are a means by which our
small businesses can make health care more affordable and more
accessible to more people.
This is a good amendment, Mr. Chairman. We need to act on this
amendment, act on this legislation, provide strong patient protection
for people in this country, but also do something to address those who
are uninsured, the many people across this country and those in my
State of South Dakota who do not have access to health care today.
Let us enact the Thomas-Lipinski-Fletcher amendment and give more
[[Page H5258]]
people more access to health care that is affordable by increasing and
expanding MSAs and association health plans.
Mr. ANDREWS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, this amendment is very much in keeping in theme with
the message today from the majority, which is illusions. The Norwood
amendment creates the illusion of holding HMOs accountable for their
misconduct, and we will discuss that in greater detail in the next
amendment. This amendment creates the illusion of covering more of the
uninsured Americans with health insurance. It is a remarkable miss of
the target that we should be aiming at.
We hear a lot about the 43 million uninsured Americans. It is
curious, first of all, that we never hear much from the majority party
about the 43 million uninsured Americans in April when we are doing the
budget resolution. It only seems to come up when the patients' bill of
rights comes up and they need a justification for their position.
First of all, AHPs. The theory behind AHPs is that employers are
going to enjoy a reduction in their premiums; and, therefore, more
employers are going to buy health insurance and more individuals are
going to be covered. That just does not square with the objective
analyses that have been done of the AHP concept. One of them was done
by the Congressional Budget Office, whose researchers concluded that
AHPs would not reduce overall health insurance costs. The CBO found
that four in five workers would see their health insurance costs
increase under this amendment, under AHP legislation, because of
disruption in health insurance markets. So the illusion that premiums
would go down is not the fact.
The second problem with AHPs is that it really is a race for the
bottom. It preempts and therefore repeals the consumer protection
legislation adopted by States all across the country, legislation that
requires a minimum length of stay after a C-section for a woman who has
given birth, legislation that requires a minimum length of stay after a
radical mastectomy. All of these consumer protections are repealed when
the AHPs go in.
Maybe there is some argument that prices would go down, that if you
eliminate quality standards and fiduciary standard, you could make it
very cheap, but it would not be worth the money that people pay. So the
argument that more people are going to be insured by AHPs just does not
square with the facts. It does not square with the study by Rand
researchers Steve Long and Susan Marque, who found that existing AHPs
have not reduced insurance costs for participants.
The next idea that is going to get more people insured is individual
health savings accounts. This is remarkable. The theory behind this is
that a person making $21,000 or $22,000 a year who works full-time and
has no health insurance is going to put all of this extra income that
she has into one of these medical savings accounts at the end of the
week, and that all of this extra income that she generates is going to
pile up and provide her with the health benefit that her employer is
either unable or unwilling to afford.
I would be curious as to how anyone in the majority could explain to
us where this additional income is going to come from? I would invite
the majority, I would yield to anyone over there, to tell me what
present data tells us about who is participating in MSAs now, what the
medium income of the participant is, how many people are participating
in MSAs, whether they are in the bottom 30 percent of the wage earners
in the country, since most of the uninsured working people in this
country are in the bottom 30 percent of wage earners.
So this is a remarkable idea. We are giving low-income, full-time
working people the right to put away money that they do not have. We
perhaps should also introduce an amendment giving them the right to
purchase a Rolls Royce, or a condominium at an expensive resort. It is
about as useful to them, because they do not have the money to put
away.
Mr. FLETCHER. Mr. Chairman, will the gentleman yield?
Mr. ANDREWS. I yield to the gentleman from Kentucky.
Mr. FLETCHER. Mr. Chairman, would the gentleman please explain to me
why MSA expansion is in your bill, and why the patient protections in
that bill will not protect those patients in MSAs?
Mr. ANDREWS. Mr. Chairman, reclaiming my time, because it was
necessary to build a majority coalition to pass the bill, which we
would have done had the leadership brought it to the floor when it was
originally promised.
Mr. Chairman, the problem with this amendment is it suffers the
illusion, the continuing illusion, that we are going to cover more
people. You want to cover more people? Put more money in the S-chip
program. Repeal just a little piece of the tax cut that passed a couple
of months ago and put more money into the program that has enrolled
millions of children, and could enroll their parents, if we extended
that. That is the way to enroll more people in health insurance.
You want to enroll more people in health insurance? Let seniors 55
and over buy into Medicare at their own expense. You want to cover more
people by health insurance? Expand Medicaid reimbursement to the
States. That is the way to do it; not this fraud, not this illusion
that is before us today.
Mr. Chairman, I reserve the balance of my time.
Mr. SAM JOHNSON of Texas. Mr. Chairman, I yield myself 2 minutes.
Mr. Chairman, MSAs are important for more than half of the 43 million
small business owners, their employees and their families, and in spite
of what you say, the truth is that working-class people do use MSAs,
and I am going to quote you.
``All three of us are working middle-class mothers, two of us are
single moms, and we all have medical savings accounts that provide
health insurance for our families. Our message to people in Washington
is plain, unmistakable English that MSAs work.''
Mr. ANDREWS. Mr. Chairman, will the gentleman yield?
Mr. SAM JOHNSON of Texas. I yield to the gentleman from New Jersey.
Mr. ANDREWS. Mr. Chairman, I wonder if the gentleman could tell us
the source of the quote he just read?
Mr. SAM JOHNSON of Texas. Mr. Chairman, reclaiming my time, I will
get it to the gentleman. I will tell him what he tells me: I will send
it to you in writing.
Mr. Chairman, let me say that it is unfortunate that the base bill we
are considering does just the opposite of providing insurance for our
people. We believe that creating association health plans and expanding
medical savings accounts guarantees the access they need. Working
together, it helps employees and employers lower the cost of health
insurance and gets the benefits they may not have had.
Increasing access to Medical Savings Accounts would help those people
struggling to make ends meet. Medical savings accounts empower people
to save their own money, tax free, for medical expenses in conjunction
with a high deductible health plan. Health expenses can break the
family budget. MSAs help cushion the blow. They help people get the
care they need from a doctor of their choice or a hospital of their
choice. The base bill does not do that.
It is time to focus on the uninsured, focus on access and
affordability. This amendment is good for America and the 43 million
Americans who do not have health insurance.
Do what is right. Vote for this amendment.
Mr. Chairman, I yield the rest of my time to the gentleman from
Kentucky (Mr. Fletcher) and ask unanimous consent that he be allowed to
control the time.
The CHAIRMAN. Is there objection to the request of the gentleman from
Texas?
There was no objection.
Mr. ANDREWS. Mr. Chairman, I am pleased to yield 2 minutes to the
gentleman from Ohio (Mr. Brown).
Mr. BROWN of Ohio. Mr. Chairman, I thank the gentleman for yielding.
Mr. Chairman, it is ironic that the gentleman from California
(Chairman Thomas) calls this amendment the access amendment. It is also
disingenuous.
This amendment would reduce access to health insurance, not increase
it. The gentleman from California (Chairman Thomas) knows that. He
knows
[[Page H5259]]
this amendment has nothing to do with access; it has everything to do
with helping a few individuals in a few businesses at the expense of
the rest of us. It has everything to do with campaign contributions, as
the gentleman from California (Mr. Stark) pointed out earlier.
Association health plans and MSAs make health insurance less
expensive for a few healthy individuals and a few employers, while
costs rise for every other individual and every other employer.
Association health plans skim low-risk businesses from the rest of the
insurance pool. Every other bill carries a larger burden when more risk
is spread over fewer groups.
Medical savings accounts, they can be a great deal when you are 100
percent healthy. When you are sick, they turn into an expensive
disappointment. The Congressional Research Service estimates that
commercial insurance premiums will increase 2 percent or more if
association plans are permitted.
Iris Lav and Emmett Keeler, two highly respected health services
researchers, say that premiums for conventional insurance could more
than double if MSA use becomes widespread.
Last night at midnight, the gentleman from California (Chairman
Thomas) sold this House a bill of goods, $27 billion in tax giveaways
to the Nation's oil companies. I ask my colleagues, do not buy it
again. A real patients' bill of rights is not going to blow the top off
insurance premiums, but association health plans and medical savings
accounts, sweetheart deals for the fortunate few, certainly will.
I urge Members to vote against the ill-conceived Thomas amendment.
Mr. FLETCHER. Mr. Chairman, I yield 2 minutes to the gentleman from
Ohio (Mr. Boehner), Chairman of the Committee on Education and the
Workforce.
Mr. BOEHNER. Mr. Chairman, let me once again congratulate my
colleague, the gentleman from Kentucky (Mr. Fletcher), for his
tremendous job in helping to move this entire process along this year.
He has spent weeks and months, I might add, trying to build consensus
for how do we break the gridlock and how do we move a real patients'
bill of rights.
Now, my colleague, who was just here opposing association health
plans and medical savings accounts, it should not surprise any of us,
because he is one of the larger promoters of a single payer national
health care system. My goodness, if we get people insured by private
insurance, which is what most people want, there will not be any need
for a single payer system.
{time} 1800
In 1992, when this issue of health care began to be a big issue in
America, we were worried about those 36 million Americans who had no
health insurance. We remember the 1992 presidential campaign. We
remember 1993, when we had this big effort of having a national health
insurance plan, a card for every American. Then Americans stood up and
said no, no, please, we do not want that. Our own health insurance is
very good.
Then, over the last 6 years, all we have done is talk about patients'
rights, and while they are important and we need to deal with them, let
us admit that the far bigger problem in America today are the 43
million Americans who have no health insurance at all. All these
patient protections, all the consumer protections my colleague just
talked about mean absolutely nothing to those Americans who have no
health insurance.
What we want to do under this amendment is make it easier for small
businesses to offer health insurance for their employees, because 80
percent of those 43 million Americans have jobs, they have full-time
jobs, and they work for smaller employers who do not have the ability
to create large pools. But by allowing them to work in an association,
whether it be the NFIB, whether it be the Association of American
Florists, and create larger pools, they will get lower rates, they will
have a better opportunity at getting health insurance. And why should
we not help them?
Mr. FLETCHER. Mr. Chairman, I yield 1 minute to the gentleman from
California (Mr. Dooley), who has cosponsored the Small Business
Fairness Act, which is the bill on association health plans.
Mr. DOOLEY of California. Mr. Chairman, I rise in support of the
association health plan proposal before us.
The number one problem in health care facing Americans is not their
problems with their managed care organization; the number one problem
facing Americans today is the fact that we have 43 million of our
citizens who are uninsured.
I represent a district in the Central Valley of California, one of
the lowest income areas, one that has a lot of families that are farm
workers. It is predominantly Latino in its makeup. Association health
plans hold the promise of allowing associations to come together to
offer these families and the children of these farm worker families a
health insurance policy that otherwise would not be available to them.
Mr. Chairman, we have to come to understand that what we are trying
to do here is to provide a mechanism for farmers and small business
people to come together, to come together so that they can offer a plan
that is similar to what Boeing, Microsoft and GM are offering to their
employees. This holds the promise of ensuring that some of those 43
million people, some of whom are living in my district, some of whom
have the lowest incomes, will have access to a quality health insurance
plan that otherwise they would be denied.
Mr. FLETCHER. Mr. Chairman, I yield 2 minutes to the gentleman from
Texas (Mr. Armey), our majority leader.
Mr. ARMEY. Mr. Chairman, I thank the gentleman for yielding me this
time.
Mr. Chairman, I would like to thank the gentleman from Kentucky (Mr.
Fletcher) for offering this amendment. I would also like to thank the
gentleman from Illinois (Mr. Hastert), the Speaker of the House; the
gentleman from California (Mr. Thomas); the gentleman from Illinois
(Mr. Lipinski); the gentlewoman from Connecticut (Mrs. Johnson); and
the gentleman from Georgia (Mr. Norwood) for their leadership and their
continuing strong commitments to the Archer Medical Savings Accounts.
Mr. Chairman, patients need more than a bill of rights, they need a
declaration of independence. Millions of American families today find
themselves trapped in HMOs that they did not choose and they do not
like. This amendment offers them a get-out-of-jail-free card. It offers
them hope, gives them options that help them find peace of mind and
more control over their health care treatments. It begins to address
the basic unfairness in the Tax Code that created the HMO trap in the
first place.
There are too many people in this debate, Mr. Chairman, I believe,
who have nothing to say except patients should have a right to sue
their HMO. But I submit that, before that, they should have a right to
fire their HMO.
Mr. Chairman, this is America. We should have the freedom to take our
business wherever we choose. Unfortunately, today's Tax Code denies
that freedom to millions of American families, especially the poor and
minorities and especially Hispanics.
If we really care about the uninsured, if we really care about the
waitresses, the house painters, the field workers and the others shut
out of affordable health care today, then we must make the taxation of
health benefits fair for everyone, regardless of where they work or how
much they make. By making Archer Medical Savings Accounts available to
everyone, this amendment starts us down the road towards basic tax
fairness.
Medical savings accounts can be a godsend for the uninsured.
According to the IRS, one-third of the MSAs sold under the current
pilot project have been purchased by folks who have otherwise been
uninsured for at least the previous 6 months. Imagine how many
uninsured people we could help if MSAs were given a fair shot in the
marketplace, as this amendment would do.
Mr. Chairman, this is an amendment with a heart. It would be
heartless to defeat it.
Mr. ANDREWS. Mr. Chairman, I yield myself such time as I may consume.
Under the budget rules of the House of Representatives, when someone
brings a bill to the floor that would reduce revenue flow of the
Treasury,
[[Page H5260]]
they normally have to show where it is going to be paid for. This
amendment was given an exception to that, so it is not subject to a
point of order.
I wonder if anyone on the majority side could tell us where the $5
billion over the next 10 years is going to come from to pay for this
bill.
Mr. Chairman, I yield to anyone on the majority side to tell us where
the $5 billion is going to come from.
Mr. THOMAS. Mr. Chairman, I thank the gentleman for yielding.
I would tell the gentleman we have a golden opportunity today to find
more than $2 billion of the amount that the gentleman indicated,
because as the gentleman well notes, the medical malpractice amendment
that will be up after we pass the Norwood amendment is scored by the
appropriate scoring agencies as saving almost $2 billion.
Mr. ANDREWS. Mr. Chairman, reclaiming my time, I wonder where the
other $3 billion might come from, the other $3 billion.
Mr. THOMAS. Mr. Chairman, will the gentleman yield?
Mr. ANDREWS. I yield to the gentleman from California.
Mr. THOMAS. Mr. Chairman, we have a number of other measures that we
will move along. As chairman of the Committee on Ways and Means, I can
assure the gentleman that $3 billion over 10 years is not that large an
amount of money to find, and as chairman of the Committee on Ways and
Means, I pledge to the gentleman, we will find it.
If that is the gentleman's concern about not supporting the
amendment, I hope he now supports it.
Mr. ANDREWS. Mr. Chairman, will the gentleman from California (Mr.
Thomas) do it by raising other revenues by $3 billion, by raising
taxes?
Mr. THOMAS. Mr. Chairman, if the gentleman would again yield, I would
tell the gentleman there is no need for $3 billion to raise taxes.
There are a number of administrative changes, cleaning up provisions
that are already in the law that the gentleman was instrumental in
putting on the books, where we can find savings of far more than that.
Mr. ANDREWS. Mr. Chairman, reclaiming my time, I look forward to
that.
Mr. Chairman, I reserve the balance of my time.
Mr. FLETCHER. Mr. Chairman, I yield 30 seconds to the gentleman from
Georgia (Mr. Isakson).
Mr. ISAKSON. Mr. Chairman, I rise on behalf of those 43 million
people who are America's salesmen, America's independent contractors,
America's retail clerks, America's small businessmen and women, and I
would ask each of those who oppose this to ask yourself this question
before they vote: Why should we deny 43 million Americans the patients'
rights, that those we are fighting for already enjoy, by not giving
them better access to health care coverage which would otherwise not be
available?
Mr. FLETCHER. Mr. Chairman, I yield 1 minute to the gentleman from
Illinois (Mr. Phelps).
Mr. PHELPS. Mr. Chairman, I thank the gentleman for yielding me this
time.
Mr. Chairman, I rise today in support of this important amendment,
which I have cosponsored. While we are discussing the Patients' Bill of
Rights, it is important to remember that one of the major problems
facing our great Nation today is the problem of the uninsured.
As a member of the Committee on Small Business, I know the positive
effect that association health plans and medical savings plans can have
on employees and employers of small businesses across the Nation. Of
the 43 million uninsured in America, 60 percent of those either own or
work in small business.
Small business employers need the opportunity to offer their
employees a strong benefits package at a reasonably low cost. AHPs
allow small businesses to join together across State lines to obtain
the accessibility, affordability and choice in the health care
marketplace now available to employees in large companies and organized
labor unions.
Medical savings accounts are extremely beneficial because they
actually allow individuals to be in control of their own health care,
allowing them to decide how they want their money to be spent. More
than one-third of the people who currently participate in MSAs were
previously uninsured. It only makes sense to provide greater access to
the uninsured, and AHPs and MSAs help do this.
Mr. FLETCHER. Mr. Chairman, I yield 30 seconds to the gentleman from
Illinois (Mr. Manzullo), chairman of the Committee on Small Business.
(Mr. MANZULLO asked and was given permission to revise and extend
remarks.)
Mr. MANZULLO. Mr. Chairman, as chairman of the Committee on Small
Business, I receive thousands of letters from small employers, many
from northern Illinois, who are struggling with surging health care
costs for their employees. We call this ``Health Care Horror Stories
from America's Small Employers.''
Today, we have an opportunity to protect patients' rights and improve
the quality of health care. This amendment allows small employers the
ability to bring down health insurance costs for themselves and their
employees by joining association health plans, similar to the way that
labor unions pool their members to lower premiums for their insurance.
We cannot possibly believe we are protecting patients if more small
entrepreneurs stop paying for coverage.
Mr. Chairman, I encourage the adoption of this amendment.
As Chairman of the Committee on Small Business, I am troubled by the
fact that of the 43 million Americans with no health insurance, more
than 60 percent are the families of small entrepreneurs and their
employees.
I have received thousands of letters from small employers--many from
the northern Illinois district I represent--who are struggling with
surging health care costs for their employees.
Geoff Brook is one of my constituents who offers health care coverage
to his employees at Energy Dynamics, Inc. in Machesney Park, Illinois.
The last three years especially, premiums have skyrocketed and Geoff
has reluctantly been forced to cancel coverage for the families of his
employees and raise deductibles for his employees themselves. He
recently received a notice from his insurance company that his
employees' premiums were going to increase another 34 percent for the
coming year. ``As the owner of a 20-year-old small business with 18
employees, I can tell you that employee health insurance is already at
the point where any further rate increases will cause us to discontinue
coverage for our employees,'' Geoff said.
Mark O'Donnell is another of my constituents who employs 35 people at
Kenwood Electrical Systems, Inc. in Rockford, Illinois. Mark writes,
``Our health insurance costs were raised 43 percent last year and 34
percent this year and there is nothing we can do about it. We have a
real problem here.''
And Linda Taylor, who owns Taylor Auto Parts with her husband, Larry,
in Woodstock, Illinois, writes, ``Health care costs and insurance are
draining us. Last year, we had a 14 percent increase and had to change
to $1,000 deductibles. Now, the costs are going up 21 percent again. I
truthfully do not know how to handle this latest increase,'' said
Linda, who provides health care coverage to four employees.
This is not a unique problem in my district. Access to healthcare is
a problem our small entrepreneurs face each year they have decide
between paying escalating premiums and dropping coverage of their
employees. Large health plans may spread the increased costs over their
large applicant pools without much of a change in enrollment. A large
business or union health plan enrollee might spend slightly more on
healthcare, but it will probably not push them out of the health care
system.
The small entrepreneur and his or her employees, however, struggle
with radical increases in health care premiums. Especially for a
business with fewer than 50 employees, its health care premiums
skyrocket when a member of the small enrollee pool becomes ill or
injured. When the husband of a Chrysler employee goes to an emergency
room, the Chrysler health insurance plan easily spreads out the cost,
but for a small auto mechanic, the cost of his employee's trip to the
emergency room forces a small group of workers to shoulder a
significant burden.
Fortunately, today, we have an opportunity to protect patients'
rights and improve the quality of health care without causing more
Americans to lose their health insurance. This imperative amendment
will give small employers hope to bring down health insurance costs for
themselves and their employees by joining Association Health Plans and
through expanded use of Medical Savings Accounts.
Association Health Plans (AHPs) will provide greater choice and
access to affordable, high quality, private sector health insurance for
millions of working families employed in small businesses.
[[Page H5261]]
AHPs empower small business owners, who currently cannot afford to
offer health insurance to their employees, to access health insurance
through trade and professional associations and Chambers of Commerce.
In other words, AHPs allow national trade and professional
associations, like the National Federation of Independent Business, the
National Restaurant Association or the U.S. Chamber of Commerce, to
sponsor health care plans. The small business owners who are members of
the associations can buy into these plans for themselves and their
employees.
These associations would cover very large groups, would enjoy large
economies of scale to that of a large business or union, and could
offer self-funded plans that would not have to provide any margin for
insurance company profits.
AHPs give small businesses and the self-employed the freedom to
design more affordable benefit options and offer their workers access
to health care coverage. These new coverage options promote greater
competition, lower costs and new choices in health insurance markets.
By allowing individuals and small employers to join together, AHPs
promote the same economies of scale and purchasing clout that workers
in large companies currently realize.
Expansion of Medical Savings Accounts (MSAs) will make insurance more
affordable for businesses with qualifying high deductible plans.
Expansion of MSAs will encourage more individuals to place tax-
deductible funds into savings accounts for use in routine medical care
while still allowing a wide choice among doctors.
Initially created by Health Insurance Portability and Accountability
Act of 1996, MSAs have not been fully utilized by their target sector.
However, enacting simple reforms and expansions will allow more small
businesses to cut down on their healthcare costs. These provisions
include repealing limits on the number of MSAs, making active accounts
generally available to anyone with qualifying high deductible
insurance, allowing contributions up to the amount of the insurance
deductible, allowing contributions to be made both by employers and
account owners, lowering minimum insurance deductibles for single and
family coverage, allowing use under cafeteria plans, and allowing plans
not to have a deductible for preventive care, even if this is not
required by state law.
AHP and MSA legislation will not directly offset the increased costs
of healthcare when a Patients' Bill of Rights is enacted. However,
small businesses are the sector most likely to cease offering insurance
because of increase costs, and AHP and MSA legislation will allow these
groups to access and afford quality healthcare.
We cannot possibly believe we are protecting patients if more small
entrepreneurs stop paying for coverage--which will happen with rising
premiums. Association Health Plan and Medical Savings Account
provisions are the only responsible way to protect patients.
Mr. ANDREWS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, the record shows that this amendment will not
substantially increase coverage. The association health plans will not
substantially reduce premiums; therefore, more employers will not be
enticed to buy in. MSAs are not going to work for low- and modest-
income people who do not have money to put into the MSAs.
This is an illusion, much like the Norwood amendment that we are
going to debate next. I urge the defeat of the amendment.
Mr. Chairman, I yield back the balance of my time.
Mr. FLETCHER. Mr. Chairman, I yield 1 minute to the gentleman from
California (Mr. Cunningham).
Mr. CUNNINGHAM. Mr. Chairman, the gentleman on the other side cannot
hide the truth. Associated health care plans, if you have a union or
large business that has maybe 3,000 or 4,000 employees, they can go to
a health care organization and negotiate lower rates because it spreads
out the risk.
We are asking that maybe all the bakers get together, all the barbers
get together, little groups that can form into larger groups so that
they can negotiate those health care plans with lower rates. If we have
lower rates, we are going to have more people access into them, so the
gentleman is just flat wrong.
Another gentleman talked about taxes. The gentleman from Missouri
(Mr. Gephardt) just last week said he wants to raise taxes. In 1993, he
was proud of it. They raised taxes on the middle class. We want to give
it back to the American people for medical savings accounts, not have
campaign finance fund-raisers with Jane Fonda.
Mr. FLETCHER. Mr. Chairman, I yield 30 seconds to the gentleman from
Indiana (Mr. Pence).
(Mr. PENCE asked and was given permission to revise and extend his
remarks.)
Mr. PENCE. Mr. Chairman, I rise in strong support of the amendment
and of Indiana's small business owners. For too long they have lacked
access to affordable health care options to offer their employees.
The answer, Mr. Chairman, is fairness. Large corporations and labor
unions can offer health insurance across State lines under a single
uniform code and reap all of the benefits of the economies of scale.
Congress today in this amendment must level the playing field for small
business.
Let us grant small businesses the same rights as Fortune 500
companies. Association health plans are the answer, and I urge my
colleagues to support this amendment.
Mr. FLETCHER. Mr. Chairman, I yield myself such time as I may
consume.
Mr. Chairman, as we look at the problem facing America and health
care, the most daunting problem we have are the 43 million that are
uninsured. The majority of those uninsured are working individuals. The
majority of those working individuals are in small businesses. What we
do with association health plans is allow those small businesses to
come together, to insure themselves across the Nation.
Mr. Chairman, this last year when I was going across my district, I
talked to farmers that were paying on the individual market for their
family up to $800 and 900 a month. That was unaffordable for them. Now,
imagine if the American Farm Bureau could provide a plan and pool
across the Nation and offer that individual farmer a policy for his
family that was 30 percent, maybe more than that, reduced from what he
is paying now; what impact would that have on the farmers across this
country?
{time} 1815
Or the other 81 or number of organizations, associations that we have
supporting this bill, because their associations should be able to
offer their members a plan just like unions do, multi-employer plans
now.
So I think in addition to that, when we combine this to the Ganske-
Dingell bill and hopefully the Norwood amendment, we provide all the
patient protections that ensure that patients get not only this pooled
health care plan that will reduce costs, but we provide them the
patient protections that everyone will get across this Nation including
the accountability.
I want to encourage my colleagues to vote for this measure to improve
the health care in America and provide more insurance for Americans.
Mrs. MORELLA. Mr. Chairman, while I want to increase health insurance
access for all Americans, Association Health Plans (AHPs) are not the
way to do it.
The provisions put forth in this amendment would exempt AHPs from
State laws requiring the coverage of services for women, children, and
other vulnerable groups. In my State of Maryland, AHPs would be exempt
from requirements for insurance plans to cover maternity care,
pediatric services for children, mammography and cervical cancer
screening, contraceptives, nurse midwives, mastectomy stays and breast
reconstruction.
Exempting AHPs from State insurance reform laws is also bad public
policy. The National Governors Associations, National Conference of
State Legislatures, and the National Association of Insurance
Commissioners have written in staunch opposition to these ``access''
provisions.
Moreover, this proposal will harm many workers, while doing little to
address the amount of uninsured individuals. The Congressional Budget
Office (CBO) projected that 20 million people would experience a
premium rate increase under this proposal, while only 5 million would
see their rates decline. The CBO also found that any premium reductions
by AHPs would stem from attracting healthier members from State
insurance pools, which by the way, Medical Savings Accounts also end up
doing, and eliminate State required health care benefits.
In 1974, Congress passed a law creating an exemption for AHPs. It was
an unmitigated disaster. A report by the former chief counsel of the
Senate Permanent Subcommittee on Investigations has noted that the
current AHP exemption repeats the historical mistakes of the original
1974 exemption. Congress had to pass a law several years later
returning regulatory authority to the States. Let's not make the same
mistake twice.
[[Page H5262]]
The CHAIRMAN. All time for debate on this amendment has expired.
The question is on the amendment offered by the gentleman from
California (Mr. Thomas).
The question was taken; and the Chairman announced that the ayes
appeared to have it.
Recorded Vote
Mr. ANDREWS. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 236,
noes 194, not voting 4, as follows:
[Roll No. 328]
YEAS--236
Aderholt
Akin
Armey
Bachus
Baker
Ballenger
Barcia
Barr
Bartlett
Barton
Bass
Bereuter
Biggert
Bilirakis
Blunt
Boehlert
Boehner
Bonilla
Bono
Brady (TX)
Brown (SC)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Cannon
Cantor
Capito
Castle
Chabot
Chambliss
Coble
Collins
Combest
Condit
Cooksey
Cox
Cramer
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis, Jo Ann
Davis, Tom
Deal
DeLay
DeMint
Diaz-Balart
Dooley
Doolittle
Dreier
Duncan
Dunn
Ehlers
Emerson
English
Everett
Ferguson
Flake
Fletcher
Foley
Forbes
Fossella
Frelinghuysen
Gallegly
Gekas
Gibbons
Gilchrest
Gillmor
Gilman
Goode
Goodlatte
Goss
Graham
Granger
Graves
Green (WI)
Greenwood
Grucci
Gutknecht
Hall (TX)
Hansen
Harman
Hart
Hastert
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hilleary
Hobson
Hoekstra
Horn
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Isakson
Istook
Jenkins
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
Kerns
King (NY)
Kingston
Kirk
Knollenberg
Kolbe
LaHood
Largent
Larsen (WA)
Larson (CT)
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (KY)
Lucas (OK)
Maloney (CT)
Manzullo
Mascara
McCrery
McHugh
McInnis
McKeon
Mica
Miller (FL)
Miller, Gary
Moran (KS)
Moran (VA)
Murtha
Myrick
Nethercutt
Ney
Northup
Norwood
Nussle
Osborne
Ose
Otter
Oxley
Paul
Pence
Peterson (MN)
Peterson (PA)
Petri
Phelps
Pickering
Pitts
Platts
Pombo
Portman
Pryce (OH)
Putnam
Quinn
Radanovich
Ramstad
Regula
Rehberg
Reynolds
Riley
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryan (WI)
Ryun (KS)
Saxton
Scarborough
Schaffer
Schrock
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Skeen
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Souder
Stearns
Stump
Sununu
Sweeney
Tancredo
Tauzin
Taylor (NC)
Terry
Thomas
Thompson (CA)
Thornberry
Thune
Tiahrt
Tiberi
Toomey
Traficant
Upton
Vitter
Walden
Walsh
Wamp
Watkins (OK)
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson
Wolf
Young (AK)
Young (FL)
NAYS--194
Abercrombie
Ackerman
Allen
Andrews
Baca
Baird
Baldacci
Baldwin
Barrett
Becerra
Bentsen
Berkley
Berman
Berry
Bishop
Blagojevich
Blumenauer
Bonior
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brown (FL)
Brown (OH)
Capps
Capuano
Cardin
Carson (IN)
Carson (OK)
Clay
Clayton
Clement
Clyburn
Conyers
Costello
Coyne
Crowley
Cummings
Davis (CA)
Davis (FL)
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Doggett
Doyle
Edwards
Ehrlich
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank
Frost
Gephardt
Gonzalez
Gordon
Green (TX)
Gutierrez
Hall (OH)
Hastings (FL)
Hill
Hilliard
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick
Kind (WI)
Kleczka
Kucinich
LaFalce
Lampson
Langevin
Lantos
Lee
Levin
Lewis (GA)
Lofgren
Lowey
Luther
Maloney (NY)
Markey
Matheson
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McDermott
McGovern
McIntyre
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Millender-McDonald
Miller, George
Mink
Mollohan
Moore
Morella
Nadler
Napolitano
Neal
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Rivers
Rodriguez
Roemer
Ross
Rothman
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Schakowsky
Schiff
Scott
Serrano
Sherman
Shows
Skelton
Slaughter
Snyder
Solis
Spratt
Stark
Stenholm
Strickland
Stupak
Tanner
Tauscher
Taylor (MS)
Thompson (MS)
Thurman
Tierney
Towns
Turner
Udall (CO)
Udall (NM)
Velazquez
Visclosky
Waters
Watson (CA)
Watt (NC)
Waxman
Weiner
Wexler
Woolsey
Wu
Wynn
NOT VOTING--4
Ganske
Issa
Lipinski
Spence
{time} 1840
Messrs. BERMAN, INSLEE, BAIRD, and SHOWS changed their vote from
``aye'' to ``no.''
Mrs. ROUKEMA and Ms. HARMAN changed their vote from ``no'' to
``aye.''
So the amendment was agreed to.
The result of the vote was announced as above recorded.
Mr. ISSA. Mr. Chairman, on rollcall No. 328, I was inadvertently
detained. Had I been present, I would have voted ``aye''.
The CHAIRMAN. It is now in order to consider amendment No. 2 printed
in House Report 107-184.
Amendment No. 2 Offered by Mr. Norwood
Mr. NORWOOD. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 2 offered by Mr. Norwood:
Amend section 402 to read as follows:
SEC. 402. AVAILABILITY OF CIVIL REMEDIES.
(a) In General.--Section 502 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1132) is amended by
adding at the end the following:
``(n) Cause of Action Relating to Claims for Health
Benefits.--
``(1) Cause of action.--
``(A) In general.--With respect to an action commenced by a
participant or beneficiary (or the estate of the participant
or beneficiary) in connection with a claim for benefits under
a group health plan, if--
``(i) a designated decisionmaker described in paragraph (2)
fails to exercise ordinary care--
``(I) in making a determination denying the claim for
benefits under section 503A (relating to an initial claim for
benefits),
``(II) in making a determination denying the claim for
benefits under section 503B (relating to an internal appeal),
or
``(III) in failing to authorize coverage in compliance with
the written determination of an independent medical reviewer
under section 503C(d)(3)(F) that reverses a determination
denying the claim for benefits, and
``(ii) the delay in receiving, or failure to receive,
benefits attributable to the failure described in clause (i)
is the proximate cause of personal injury to, or death of,
the participant or beneficiary,
such designated decisionmaker shall be liable to the
participant or beneficiary (or the estate) for economic and
noneconomic damages in connection with such failure and such
injury or death (subject to paragraph (4)).
``(B) Rebuttable presumption.--In the case of a cause of
action under subparagraph (A)(i)(I) or (A)(i)(II), if an
independent medical reviewer under section 503C(d) or
503C(e)(4)(B) upholds the determination denying the claim for
benefits involved, there shall be a presumption (rebuttable
by clear and convincing evidence) that the designated
decisionmaker exercised ordinary care in making such
determination.
``(2) Designated decisionmaker.--
``(A) Appointment.--
``(i) In general.--The plan sponsor or named fiduciary of a
group health plan shall, in accordance with this paragraph
with respect to a participant or beneficiary, designate a
person that meets the requirements of subparagraph (B) to
serve as a designated decisionmaker with respect to the cause
of action described in paragraph (1), except that--
``(I) with respect to health insurance coverage offered in
connection with a group health plan, the health insurance
issuer shall be the designated decisionmaker unless the plan
sponsor and the issuer specifically agree in writing (on a
form to be prescribed by the Secretary) to substitute another
person as the designated decisionmaker; or
``(II) with respect to the designation of a person other
than a plan sponsor or health insurance issuer, such person
shall satisfy the requirements of subparagraph (D).
``(ii) Plan documents.--The designated decisionmaker shall
be specifically designated as such in the written instruments
of the plan (under section 402(a)) and be identified as
required under section 121(b)(15) of the Bipartisan Patient
Protection Act.
``(B) Requirements.--For purposes of this paragraph, a
designated decisionmaker meets the requirements of this
subparagraph
[[Page H5263]]
with respect to any participant or beneficiary if--
``(i) such designation is in such form as may be specified
in regulations prescribed by the Secretary,
``(ii) the designated decisionmaker--
``(I) meets the requirements of subparagraph (C),
``(II) assumes unconditionally all liability arising under
this subsection in connection with actions and failures to
act described in subparagraph (A) (whether undertaken by the
designated decisionmaker or the employer, plan, plan sponsor,
or employee or agent thereof) during the period in which the
designation under this paragraph is in effect relating to
such participant or beneficiary, and
``(III) where subparagraph (C)(ii) applies, assumes
unconditionally the exclusive authority under the group
health plan to make determinations on claims for benefits
(irrespective of whether they constitute medically reviewable
determinations) under the plan with respect to such
participant or beneficiary, and
``(iii) the designated decisionmaker and the participants
and beneficiaries for whom the decisionmaker has assumed
liability are identified in the written instrument required
under section 402(a) and as required under section 121(b)(15)
of the Bipartisan Patient Protection Act.
Any liability assumed by a designated decisionmaker pursuant
to this paragraph shall be in addition to any liability that
it may otherwise have under applicable law.
``(C) Qualifications for designated decisionmakers.--
``(i) In general.--Subject to clause (ii), an entity is
qualified under this subparagraph to serve as a designated
decisionmaker with respect to a group health plan if the
entity has the ability to assume the liability described in
subparagraph (A) with respect to participants and
beneficiaries under such plan, including requirements
relating to the financial obligation for timely satisfying
the assumed liability, and maintains with the plan sponsor
certification of such ability. Such certification shall be
provided to the plan sponsor or named fiduciary upon
designation under this paragraph and not less frequently than
annually thereafter, or if such designation constitutes a
multiyear arrangement, in conjunction with the renewal of the
arrangement.
``(ii) Special qualification in the case of certain
reviewable decisions.--In the case of a group health plan
that provides benefits consisting of medical care to a
participant or beneficiary only through health insurance
coverage offered by a health insurance issuer, such issuer is
the only entity that may be qualified under this subparagraph
to serve as a designated decisionmaker with respect to such
participant or beneficiary, and shall serve as the designated
decisionmaker unless the employer or other plan sponsor acts
affirmatively to prevent such service.
``(D) Requirements relating to financial obligations.--For
purposes of subparagraphs (A)(i)(II) and (C)(i), the
requirements relating to the financial obligation of an
entity for liability shall include--
``(i) coverage of such entity under an insurance policy or
other arrangement, secured and maintained by such entity, to
effectively insure such entity against losses arising from
professional liability claims, including those arising from
its service as a designated decisionmaker under this
subsection; or
``(ii) evidence of minimum capital and surplus levels that
are maintained by such entity to cover any losses as a result
of liability arising from its service as a designated
decisionmaker under this subsection.
The appropriate amounts of liability insurance and minimum
capital and surplus levels for purposes of clauses (i) and
(ii) shall be determined by an actuary using sound actuarial
principles and accounting practices pursuant to established
guidelines of the American Academy of Actuaries and in
accordance with such regulations as the Secretary may
prescribe and shall be maintained throughout the term for
which the designation is in effect. The provisions of this
subparagraph shall not apply in the case of a designated
decisionmaker that is a group health plan, plan sponsor, or
health insurance issuer and that is regulated under Federal
law or a State financial solvency law.
``(E) Limitation on appointment of treating physicians.--A
treating physician who directly delivered the care or
treatment or provided services which is the subject of a
cause of action by a participant or beneficiary under
paragraph (1) may not be appointed (or deemed to be
appointed) as a designated decisionmaker under this paragraph
with respect to such participant or beneficiary.
``(F) Failure to appoint.--With respect to any cause of
action under paragraph (1) relating to a denial of a claim
for benefits where a designated decisionmaker has not been
appointed in accordance with this paragraph, the plan sponsor
or named fiduciary responsible for determinations under
section 503 shall be deemed to be the designated
decisionmaker.
``(G) Effect of appointment.--The appointment of a
designated decisionmaker in accordance with this paragraph
shall not affect the liability of the appointing plan sponsor
or named fiduciary for the failure of the plan sponsor or
named fiduciary to comply with any other requirement of this
title.
``(H) Treatment of certain trust funds.--For purposes of
this subsection, the terms `employer' and `plan sponsor', in
connection with the assumption by a designated decisionmaker
of the liability of employer or other plan sponsor pursuant
to this paragraph, shall be construed to include a trust fund
maintained pursuant to section 302 of the Labor Management
Relations Act, 1947 (29 U.S.C. 186) or the Railway Labor Act
(45 U.S.C. 151 et seq.).
``(3) Requirement of exhaustion of independent medical
review.--
``(A) In general.--Paragraph (1) shall apply only if--
``(i) a final determination denying a claim for benefits
under section 503B has been referred for independent medical
review under section 503C(d) and a written determination by
an independent medical reviewer has been issued with respect
to such review, or
``(ii) the qualified external review entity has determined
under section 503C(c)(3) that a referral to an independent
medical reviewer is not required.
``(B) Injunctive relief for irreparable harm.--A
participant or beneficiary may seek relief under subsection
(a)(1)(B) prior to the exhaustion of administrative remedies
under section 503B or 503C (as required under subparagraph
(A)) if it is demonstrated to the court, by a preponderance
of the evidence, that the exhaustion of such remedies would
cause irreparable harm to the health of the participant or
beneficiary. Any determinations that already have been made
under section 503A, 503B, or 503C in such case, or that are
made in such case while an action under this subparagraph is
pending, shall be given due consideration by the court in any
action under subsection (a)(1)(B) in such case.
Notwithstanding the awarding of such relief under subsection
(a)(1)(B) pursuant to this subparagraph, no relief shall be
available under paragraph (1), with respect to a participant
or beneficiary, unless the requirements of subparagraph (A)
are met.
``(C) Receipt of benefits during appeals process.--Receipt
by the participant or beneficiary of the benefits involved in
the claim for benefits during the pendency of any
administrative processes referred to in subparagraph (A) or
of any action commenced under this subsection--
``(i) shall not preclude continuation of all such
administrative processes to their conclusion if so moved by
any party, and
``(ii) shall not preclude any liability under subsection
(a)(1)(C) and this subsection in connection with such claim.
The court in any action commenced under this subsection shall
take into account any receipt of benefits during such
administrative processes or such action in determining the
amount of the damages awarded.
``(4) Limitations on recovery of damages.--
``(A) Maximum award of noneconomic damages.--The aggregate
amount of liability for noneconomic loss in an action under
paragraph (1) may not exceed $1,500,000.
``(B) Limitation on award of punitive damages.--In the case
of any action commenced pursuant to paragraph (1), the court
may not award any punitive, exemplary, or similar damages
against a defendant, except that the court may award
punitive, exemplary, or similar damages (in addition to
damages described in subparagraph (A)), in an aggregate
amount not to exceed $1,500,000, if--
``(i) the denial of a claim for benefits involved in the
case was reversed by a written determination by an
independent medical reviewer under section 503C(d)(3)(F); and
``(ii) there has been a failure to authorize coverage in
compliance with such written determination.
``(C) Permitting application of lower state damage
limits.--A State may limit damages for noneconomic loss or
punitive, exemplary, or similar damages in an action under
paragraph (1) to amounts less than the amounts permitted
under this paragraph.
``(5) Admissibility.--In an action described in subclause
(I) or (II) of paragraph (1)(A) relating to a denial of a
claim for benefits, any determination by an independent
medical reviewer under section 503C(d) or 503C(e)(4)(B)
relating to such denial is admissible.
``(6) Waiver of internal review.--In the case of any cause
of action under paragraph (1), the waiver or nonwaiver of
internal review under section 503B(a)(4) by the group health
plan, or health insurance issuer that offers health insurance
coverage in connection with a group health plan, shall not be
used in determining liability.
``(7) Limitations on actions.--Paragraph (1) shall not
apply in connection with any action that is commenced more
than 5 years after the date on which the failure described in
such paragraph occurred or, if earlier, not later than 2
years after the first date the participant or beneficiary
became aware of the personal injury or death referred to in
such paragraph.
``(8) Exclusion of directed recordkeepers.--
``(A) In general.--Paragraph (1) shall not apply with
respect to a directed record keeper in connection with a
group health plan.
``(B) Directed recordkeeper.--For purposes of this
paragraph, the term `directed record keeper' means, in
connection with a group health plan, a person engaged in
directed recordkeeping activities pursuant to the specific
instructions of the plan, the employer, or another plan
sponsor, including the distribution of enrollment information
and distribution of disclosure materials under this Act or
title I of the Bipartisan Patient Protection Act and whose
duties do not
[[Page H5264]]
include making determinations on claims for benefits.
``(C) Limitation.--Subparagraph (A) does not apply in
connection with any directed recordkeeper to the extent that
the directed recordkeeper fails to follow the specific
instruction of the plan or the employer or other plan
sponsor.
``(9) Protection of the regulation of quality of medical
care under state law.--Nothing in this subsection shall be
construed to preclude any action under State law against a
person or entity for liability or vicarious liability with
respect to the delivery of medical care. A cause of action
that is based on or otherwise relates to a group health
plan's determination on a claim for benefits shall not be
deemed to be the delivery of medical care under any State law
for purposes of this paragraph. Any such cause of action
shall be maintained exclusively under this section. Nothing
in this paragraph shall be construed to alter, amend, modify,
invalidate, impair, or supersede section 514.
``(10) Coordination with fiduciary requirements.--A
fiduciary shall not be treated as failing to meet any
requirement of part 4 solely by reason of any action taken by
a fiduciary which consists of full compliance with the
reversal under section 503C (relating to independent external
appeals procedures for group health plans) of a denial of
claim for benefits (within the meaning of section
503C(i)(2)).
``(11) Construction.--Nothing in this subsection shall be
construed as authorizing a cause of action under paragraph
(1) for the failure of a group health plan or health
insurance issuer to provide an item or service that is
specifically excluded under the plan or coverage.
``(12) Limitation on class action litigation.--A claim or
cause of action under this subsection may not be maintained
as a class action, as a derivative action, or as an action on
behalf of any group of 2 or more claimants.
``(13) Purchase of insurance to cover liability.--Nothing
in section 410 shall be construed to preclude the purchase by
a group health plan of insurance to cover any liability or
losses arising under a cause of action under subsection
(a)(1)(C) and this subsection.
``(14) Retrospective claims for benefits.--A cause of
action shall not arise under paragraph (1) where the claim
for benefits relates to an item or service that has already
been provided to the participant or beneficiary under the
plan or coverage and the claim relates solely to the
subsequent denial of payment for the provision of such item
or service.
``(15) Exemption from personal liability for individual
members of boards of directors, joint boards of trustees,
etc.--Any individual who is--
``(A) a member of a board of directors of an employer or
plan sponsor; or
``(B) a member of an association, committee, employee
organization, joint board of trustees, or other similar group
of representatives of the entities that are the plan sponsor
of plan maintained by two or more employers and one or more
employee organizations;
shall not be personally liable under this subsection for
conduct that is within the scope of employment or of plan-
related duties of the individuals unless the individual acts
in a fraudulent manner for personal enrichment.
``(16) Definitions and related rules.--For purposes of this
subsection:
``(A) Claim for benefits.--The term `claim for benefits'
shall have the meaning given such term in section 503A(e).
``(B) Group health plan.--The term `group health plan'
shall have the meaning given such term in section 733(a).
``(C) Health insurance coverage.--The term `health
insurance coverage' has the meaning given such term in
section 733(b)(1).
``(D) Health insurance issuer.--The term `health insurance
issuer' has the meaning given such term in section 733(b)(2).
``(E) Ordinary care.--The term `ordinary care' means, with
respect to a determination on a claim for benefits, that
degree of care, skill, and diligence that a reasonable and
prudent individual would exercise in making a fair
determination on a claim for benefits of like kind to the
claims involved.
``(F) Personal injury.--The term `personal injury' means a
physical injury and includes an injury arising out of the
treatment (or failure to treat) a mental illness or disease.
``(G) Treatment of excepted benefits.--The provisions of
this subsection (and subsection (a)(1)(C)) shall not apply to
excepted benefits (as defined in section 733(c)), other than
benefits described in section 733(c)(2)(A), in the same
manner as the provisions of part 7 do not apply to such
benefits under subsections (b) and (c) of section 732.
(2) Conforming amendment.--Section 502(a)(1) of such Act
(29 U.S.C. 1132(a)(1)) is amended--
(A) by striking ``or'' at the end of subparagraph (A);
(B) in subparagraph (B), by striking ``plan;'' and
inserting ``plan, or''; and
(C) by adding at the end the following new subparagraph:
``(C) for the relief provided for in subsection (n) of this
section.''.
(b) Availability of Actions in State Court.--
(1) Jurisdiction of state courts.--Section 502(e)(1) of
such Act (29 U.S.C. 1132(e)) is amended--
(A) in the first sentence, by striking ``subsection
(a)(1)(B)'' and inserting ``paragraphs (1)(B), (1)(C), and
(7) of subsection (a)'';
(B) in the second sentence, by striking ``paragraphs (1)(B)
and (7)'' and inserting ``paragraphs (1)(B), (1)(C), and
(7)''; and
(C) by adding at the end the following new sentence:
``State courts of competent jurisdiction in the State in
which the plaintiff resides and district courts of the United
States shall have concurrent jurisdiction over actions under
subsections (a)(1)(C) and (n).''.
(2) Limitation on removability of certain actions in state
court.--Section 1445 of title 28, United States Code, is
amended by adding at the end the following new subsection:
``(e)(1) A civil action brought in any State court under
subsections (a)(1)(C) and (n) of section 502 of the Employee
Retirement Income Security Act of 1974 against any party
(other than the employer, plan, plan sponsor, or other entity
treated under section 502(n) of such Act as such) arising
from a medically reviewable determination may not be removed
to any district court of the United States.
``(2) For purposes of paragraph (1), the term `medically
reviewable decision' means a denial of a claim for benefits
under the plan which is described in section 503C(d)(2) of
the Employee Retirement Income Security Act of 1974.''.
(c) Effective Date.--The amendments made by this section
shall apply to acts and omissions, from which a cause of
action arises, occurring on or after the applicable effective
date under section 601.
Amend section 403 to read as follows:
SEC. 403. LIMITATION ON CERTAIN CLASS ACTION LITIGATION.
(a) In General.--Section 502 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1132), as amended by
section 402, is further amended by adding at the end the
following:
``(o) Limitation on Class Action Litigation.--Any claim or
cause of action that is maintained under this section (other
than under subsection (n)) or under section 1962 or 1964(c)
of title 18, United States Code, in connection with a group
health plan, or health insurance coverage issued in
connection with a group health plan, as a class action,
derivative action, or as an action on behalf of any group of
2 or more claimants, may be maintained only if the class, the
derivative claimant, or the group of claimants is limited to
the participants or beneficiaries of a group health plan
established by only 1 plan sponsor. No action maintained by
such class, such derivative claimant, or such group of
claimants may be joined in the same proceeding with any
action maintained by another class, derivative claimant, or
group of claimants or consolidated for any purpose with any
other proceeding. In this paragraph, the terms `group health
plan' and `health insurance coverage' have the meanings given
such terms in section 733.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply with respect to actions commenced on or after
August 2, 2001. Notwithstanding the preceding sentence, with
respect to class actions, the amendment made by subsection
(a) shall apply with respect to civil actions which are
pending on such date in which a class action has not been
certified as of such date.
Amend section 603 to read as follows:
SEC. 603. SEVERABILITY.
(a) In General.--Except as provided in subsections (b) and
(c), if any provision of this Act, an amendment made by this
Act, or the application of such provision or amendment to any
person or circumstance is held to be unconstitutional, the
remainder of this Act, the amendments made by this Act, and
the application of the provisions of such to any person or
circumstance shall not be affected thereby.
(b) Dependence of Remedies on Appeals.--If any provision of
section 503A, 503B, or 503C of the Employee Retirement Income
Security Act of 1974 (as inserted by section 131) or the
application of either such section to any person or
circumstance is held to be unconstitutional, section 502(n)
of such Act (as inserted by section 402) shall be deemed to
be null and void and shall be given no force or effect.
(c) Remedies.--If any provision of section 502(n) of the
Employee Retirement Income Security Act of 1974 (as inserted
by section 402), or the application of such section to any
person or circumstance, is held to be unconstitutional, the
remainder of such section shall be deemed to be null and void
and shall be given no force or effect.
Page 16, line 10, strike ``on a timely basis'' and insert
``in accordance with the applicable deadlines established
under this section and section 503B''.
Page 29, line 14, strike ``or modify''.
Page 36, line 12, strike ``upheld, reversed, or modified''
and insert ``upheld or reversed''.
Page 39, line 23, strike ``uphold, reverse, or modify'' and
insert ``uphold or reverse''.
Page 40, line 8, and page 44, line 9, strike ``or modify''.
Page 23, line 18; page 41, line 19; page 43, line 2; , ,
strike ``reviewer (or reviewers)'' and insert ``a review
panel''.
Page 33, line 7, strike ``reviewer'' and insert ``review
panel''.
Page 34, line 25, strike ``reviewer'' and insert ``review
panel composed of 3 independent medical reviewers''.
Page 34, lines 8 and 13; page 36, line 8; page 37, line 3;
page 38, lines 6 and 20; page 39, line
[[Page H5265]]
4, 20, and 21; page 40, lines 1, 2 and 14; page 41, line 6;
page 43, lines 6, 17, and 20; page 44, lines 5, 9, and 14;
page 45, line 24; page 61, line 5; page 67, line 3; page 68,
line 25; , strike ``reviewer'' and insert ``review panel''.
Page 36, line 14; page 43, line 21; page 44, line 12; ,
strike ``reviewer's'' and insert ``review panel's''.
Page 41, line 4, strike ``reviewer (or reviewers)'' and
insert ``review panel''.
Page 47, line 15, strike ``independent external reviewer''
and insert ``independent medical review panel''.
Page 50, line 20, strike ``1 or more individuals'' and
insert ``an independent medical review panel''.
Page 51, amend lines 4 through 6 to read as follows:
``(B) with respect to each review, the review panel meets
the requirements of paragraph (4) and at least 1 reviewer on
the panel meets the requirements described in paragraph (5);
and
Page 51, line 8, strike ``the reviewer'' and insert ``each
reviewer''.
Page 53, line 21, strike ``a reviewer'' and insert ``each
reviewer''.
Page 54, line 6, strike ``a reviewer (or reviewers)'' and
insert ``the independent medical review panel''.
Page 61, line 5, insert ``or any independent medical review
panel'' after ``reviewer''.
Page 64, lines 1 and 5, strike ``reviewers'' and insert
``review panel''.
Page 64, line 14; page 69, lines 16 and 19, strike
``reviewers'' and insert ``review panels''.
Page 8, after line 17, insert the following (and place the
text from page 8, line 18, through page 16, line 20 in
quotation marks):
Part 5 of subtitle B of title I of the Employee Retirement
Income Security Act of 1974 is amended by inserting after
section 503 (29 U.S.C. 1133) the following:
``SEC. 503A. PROCEDURES FOR INITIAL CLAIMS FOR BENEFITS AND
PRIOR AUTHORIZATION DETERMINATIONS.
Page 16, after line 21, insert the following (and place the
text from page 16, line 22, through page 25, line 13 in
quotation marks):
Part 5 of subtitle B of title I of the Employee Retirement
Income Security Act of 1974 (as amended by section 102) is
amended further by inserting after section 503A (29 U.S.C.
1133) the following:
``SEC. 503B. INTERNAL APPEALS OF CLAIMS DENIALS.
Page 25, after line 15, insert the following (and place the
text from page 25, line 16, through page 69, line 22 in
quotation marks):
Part 5 of subtitle B of title I of the Employee Retirement
Income Security Act of 1974 (as amended by sections 102 and
103) is amended further by inserting after section 503B (29
U.S.C. 1133) the following:
``SEC. 503C. INDEPENDENT EXTERNAL APPEALS PROCEDURES.
Page 119, line 1, insert after ``treatment.'' the
following: ``The name of the designated decisionmaker (or
decisionmakers) appointed under paragraph (2) of section
502(n) of the Employee Retirement Income Security Act of 1974
for purposes of such section.''.
Page 138, line 21, insert after ``plan'' the following:
``and only with respect to patient protection requirements
under section 101 and subtitles B, C, and D and this
subtitle''.
Page 145, line 12, strike ``and the provisions of sections
502(a)(1)(C), 502(n), and 514(d) of the Employee Retirement
Income Security Act of 1974 (added by section 402)''.
Page 148, line 15, after ``Act'' insert the following:
``and sections 503A through 503C of the Employee Retirement
Income Security Act of 1974''.
Page 149, line 9, after ``Act'' insert the following: ``and
sections 503A through 503C of the Employee Retirement Income
Security Act of 1974 (with respect to enrollees under
individual health insurance coverage in the same manner as
they apply to participants and beneficiaries under group
health insurance coverage)''.
Page 152, line 16, insert ``section 101 and subtitles B, C,
D, and E of'' before ``title I''.
Page 155, strike lines 1 through 19 (and redesignate the
subsequent paragraphs accordingly).
Page 158, strike lines 19 through 25 and insert the
following:
``(b)(1)(A) Subject to subparagraphs (B) and (C), 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 sections 503A, 503B,
and 503C, and such requirements shall be deemed to be
incorporated into this subsection.
``(B) With respect to the internal appeals process required
to be established under section 503B, 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 process and system
(and is not liable for the issuer's failure to provide for
such process and system), if the issuer is obligated to
provide for (and provides for) such process and system.
``(C) Pursuant to rules of the Secretary, insofar as a
group health plan enters into a contract with a qualified
external review entity for the conduct of external appeal
activities in accordance with section 503C, 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.
``(2) In the case of a group health plan, compliance with
the requirements of sections 503A, 503B, and 503C, and
compliance with regulations promulgated by the Secretary, in
connection with a denial of a claim under a group health plan
shall be deemed compliance with subsection (a) with respect
to such claim denial.
``(3) Terms used in this subsection which are defined in
section 733 shall have the meanings provided such terms in
such section.''.
Page 210, line 19, after ``Act'' insert the following:
``and sections 503A through 503C of the Employee Retirement
Income Security Act of 1974''.
Make such additional technical and conforming changes to
the text of the bill as are necessary to do the following:
(1) Replace references to sections 102, 103, and 104 of the
bill with references to sections 503A, 503B, and 503C of the
Employee Retirement Income Security Act of 1974, as amended
by the bill.
(2) In sections 102, 103, and 104, strike any reference to
``enrollee'' or ``enrollees'' and insert ``in connection with
the group health plan'' after ``health insurance coverage'',
and make necessary conforming grammatical changes.
The CHAIRMAN. Pursuant to House Resolution 219, the gentleman from
Georgia (Mr. Norwood) and a Member opposed each will control 30
minutes.
Mr. ANDREWS. Mr. Chairman, I claim the time in opposition to the
amendment.
The CHAIRMAN. The gentleman from New Jersey will be recognized for 30
minutes.
The gentleman from Georgia (Mr. Norwood) is recognized on his
amendment.
Mr. NORWOOD. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I rise today to bring before the House an effort at
bridging the gap on this very difficult and contentious issue. I
realize that my decision to bring forth this amendment is a
controversial one, but I hope my colleagues will set aside for an hour
their bitterness and consider the substance of our proposal.
I have heard some of my colleagues come to the floor to say that my
amendment was written by the insurance industry. It is just silly, I
think, for people to say that. The insurance industry cannot stand me.
They have had me on dart boards for years, and everyone in the House
knows that. So let us set aside those insane accusations. Instead, Mr.
Chairman, let us talk about the substance of the amendment.
My amendment is consistent with the principles of the underlying
bill. My amendment creates a cause of action for a negligent denial of
a claim for benefits. This cause of action against insurers will be
heard in State court. So does the underlying bill.
The amendment protects employers by allowing them to have a
designated decisionmaker to be liable. So does the underlying bill.
{time} 1845
It requires all administrative remedies be exhausted before a case
can go to court. So the underlying bill, my amendment only allows
punitive damages in cases where the insurer refuses to follow the
determination of the external reviewer. So does the underlying bill.
There are, however, some significant differences. My amendment caps
liability at $1.5 million for noneconomic damages. Punitive damages are
capped at $1.5 million. I argued long and hard with almost every friend
I have against putting caps in a bill for 4 years because we had a
President who said he would veto a patient protections bill with caps.
Now we have a President who says he will veto a bill without caps.
This compromise is a simple recognition of political reality. I have
made a compromise to create a rebuttal presumption in favor of the
insurer when the external reviewers rule in favor of the plan.
I have listened to my colleagues complain long and loud about the
inequity of that, but I have one simple question in response: If the
external reviewer says the plan was right in turning down a treatment,
how could the plan have been negligent in turning down a treatment?
I know some of my colleagues feel I have made a significant change
moving away from the simple lifting of the ERISA preemption, but before
Members condemn differences because they are changes, think about what
has really changed. Under my amendment, a patient will have a cause of
action against an insurer in every State in America, in a State court
using State
[[Page H5266]]
rules and procedures. Is that significantly different from the
underlying bill?
I know some of my colleagues believe that the language of my
amendment preempts the direction of current case law. We worked deep
into the night last night on that language. I am not completely
satisfied with the provision in our bill that protects State law, and I
pledge to Members to work to further clarify the language in conference
because I know Members know my intent.
But before Members offhandedly reject the language, I think they
should explain to us how Americans will be left without a remedy under
this amendment.
Mr. Chairman, the key difference between the amendment I am bringing
before Members today and the underlying bill is that the President has
agreed to sign the bill with the amendment I am bringing today. With
all due respect to the gentleman from Kentucky, the amendment I bring
today is a significant departure from the Fletcher bill.
The President has moved our way. I know this is not the ideal way to
offer a potential hand of compromise. I really would not blame Members
if they voted against the amendment, our Democratic friends, solely
because of the process issue. But before slapping away the hand that is
being extended to us, Members, I hope, will consider the substance and
realize how close we truly are to a law, not a bill. We have done that,
folks. But a law.
Mr. Chairman, I reserve the balance of my time.
Mr. ANDREWS. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman
from Texas (Mr. Turner), a Member who understands the flaws of writing
a complicated bill overnight.
Mr. TURNER. Mr. Chairman, we have heard a lot today from the other
side about the need for balance between giving patients protections and
holding down the cost of health insurance premiums.
In Texas, we have had 4 years of experience under our patient
protection laws. Health insurance premiums in Texas have gone up at
less than half the national average, 1,400 patients have exercised
their right to appeal, and only 17 lawsuits have occurred.
The original Ganske-Dingell-Norwood bill is modeled after the Texas
law. I submit to Members, in Texas, it is working. The Norwood
amendment that is offered here today destroys that balance and tips the
scales of justice in favor of the insurance companies.
Let us look at what the Norwood amendment does to the Ganske-Dingell-
Norwood bill. First, it establishes procedural rules that favor the
insurance company. For example, if the external review panel makes a
ruling and you decide as a patient to appeal it, you go into court with
the legal presumption that the medical review panel is correct. And to
overcome that, patients have to do it by clear and convincing evidence,
not the usual preponderance of the evidence in most civil cases.
Secondly, the Norwood amendment imposes this cap on noneconomic
damages. The gentleman from Florida mentioned that the President would
not sign a bill without a noneconomic damages cap. That is unusual
because when the President pushed tort reform in Texas in 1995, there
was no cap on noneconomic damages. In Texas today, there are no caps on
noneconomic damages in lawsuits brought against HMOs.
Thirdly, the Norwood amendment grants the HMO industry special
protection from accountability that no other business or industry in
this Nation has to date.
Fourth, the Norwood amendment requires patients to prove that the
wrongful and negligent acts of the HMO are the proximate cause of their
injury rather than a proximate cause of the injury, as in the
underlying bill. Some Members might ask, What is the big deal, ``A'' or
``the''? Very simple.
In a case involving an automobile accident, somebody runs a red
light, causes an accident, it is pretty easy to say that the running of
the red light is the proximate cause of the injury. But in malpractice
cases, there is seldom a single cause of an injury.
Consider a woman with breast cancer. Her HMO denies her a mammogram
which would have detected the nodule, she gets cancer and dies. The
family brings a lawsuit against the HMO. The truth of the matter is, if
we go with the Norwood amendment requiring the proximate cause, she
would not recover. Her family would not recover because the proximate
cause of her death was the cancer. So ``a proximate cause'' is what the
law should say.
We need to make sure that the Norwood amendment is defeated.
Yet under the Norwood amendment, state laws like the Texas Patient
Protection Law are preempted and patients end up in federal court with
less protection.
It leaves the doctor at a disadvantage when the doctor is subject to
a malpractice lawsuit along with an HMO. The claim against the doctor
would be in state court under state law. The suit against the HMO would
be under federal law and in every event would be subject to more
favorable procedural protections. When HMOs make medical decisions they
should have no less accountability than doctors must face in this
country today.
The Norwood amendment is worse than current law in a lot of ways. It
rolls back the protections that have been given to patients and their
doctors in both statutory and common law. Why should we turn our backs
on the original Ganske-Dingell-Norwood-Berry bill that has already
passed in a bipartisan fashion in the Senate, a bill that passed this
House in October of 1999 by an overwhelming majority of the House.
Mr. NORWOOD. Mr. Chairman, I yield 30 seconds to the gentleman from
Arizona (Mr. Shadegg).
Mr. SHADEGG. Mr. Chairman, my colleague from the other side said this
was modeled, the Ganske-Dingell bill was modeled after the Texas law,
and it was a wonderful bill.
Mr. Chairman, I wonder if the gentleman has read page 167 of the bill
which provides to certain health care plans sponsored by very large
group providers absolute immunity for nonmedical injuries? The language
of the gentleman's bill says if there is a self-funded, self-insured
plan, it gets absolute immunity when someone is injured or killed by a
nonmedical determination.
So let us say they wrongfully decide coverage and a patient is
injured, there is absolute immunity, there is no recovery whatsoever.
Mr. NORWOOD. Mr. Chairman, I yield 3 minutes to the gentleman from
Minnesota (Mr. Peterson).
(Mr. PETERSON of Minnesota asked and was given permission to revise
and extend his remarks.)
Mr. PETERSON of Minnesota. Mr. Chairman, I rise today to support the
Norwood amendment. I first started working on a patient protections
bill back in September 1992 when I introduced what I think was the
first patient protection legislation in the House, H.R. 6027.
Among other things, it tried to make sense out of the way that ERISA
impacted health services in this country. I have been working on these
issues ever since.
It seems to me that we have finally reached the point where both
sides in this debate have moved enough towards the middle we might be
able to finally resolve these issues. The Fletcher-Peterson bill that I
have been involved in has helped move everyone toward the center.
When the Senate was doing their bill, the Senate passed amendments
that moved their bill toward the Fletcher-Peterson position. During the
last few days, the Ganske-Dingell bill has added language to cover some
of these same provisions, such as including the dedicated decision-
maker language, requiring the full exhaustion of internal and external
reviews before going to court, keeping contract disputes in Federal
courts and making adjustments to MSAs.
The patients' rights issue has come a long way since 1992 when we
first started on this. Last night we continued that progress with the
gentleman from Georgia (Mr. Norwood) helping to put together a
compromise that we could actually pass into law. Last night, to the
credit of the gentleman from Georgia (Mr. Norwood) and President Bush,
each gave a little to get a little, and the product of that compromise
is what we have before us today.
But are we grateful for this compromise? Are we praising everyone for
having reached an agreement that is essentially the majority of the
base bill itself? No. Instead, now, we have shifted the argument to
other issues, like preemption of State law.
As I understand it, the Ganske-Dingell bill develops a State cause of
action in that it modifies it with things
[[Page H5267]]
such as a dedicated decision-maker and other things which are a
preemption of State law, as far as I can see. That leaves us with the
question of whether or not, if we are doing that, it is constitutional.
Can we make Federal conditions on a State cause of action, and is
this not preemption of State law? The Norwood amendment has created a
Federal cause of action modified in the same ways. I think it is more
workable, and I think clearly it will withstand the test of
constitutionality.
With regard to the liability provisions, as a result of the
negotiation with the President, the Norwood amendment increased the
caps on damages to $1.5 million from the $500,000 that was advocated in
the Fletcher-Peterson bill.
The Norwood amendment will protect small businesses and mitigate
against possible increases of uninsured, as well as improving, health
care delivery. This amendment finally moves H.R. 2563 to a place of
agreement, a place where the Patients' Bill of Rights can pass the
House; and if the other body is willing to work with us in good faith,
we can ultimately get the President's signature and put this
legislation into law.
Mr. Chairman, I encourage each and every one of my colleagues to
support a real solution to the issue of patients' rights. Support the
Norwood amendment.
Mr. ANDREWS. Mr. Chairman, I yield 2 minutes to the gentleman from
California (Mr. Waxman), who is a champion of consumer groups across
the Nation that strongly oppose the Norwood amendment.
(Mr. WAXMAN asked and was given permission to revise and extend his
remarks.)
Mr. WAXMAN. Mr. Chairman, I am sorry to say it is hard to escape the
conclusion that last night President Bush finally put so much pressure
on the gentleman from Georgia (Mr. Norwood) that in the words of the
New York Times editorial today he, quote, ``apparently sold out his own
cause.'' That is sad for Americans who need and deserve a strong and
enforceable Patients' Bill of Rights.
Mr. Chairman, I just want to review what the American Medical
Association concluded about the deal agreed to by their former ally: It
overturns the good work done by States in protecting patients; it
reverses developing case laws that allow patients to hold plans
accountable when they play doctor. In other words, it makes things
worse instead of better for patients. It provides patient protections,
but does not allow enforcement of those rights.
If the White House operatives thought they could defend the so-called
``compromise'' President Bush talked the gentleman from Georgia (Mr.
Norwood) into, why did they insist that he make a commitment without
talking it over with his allies in and out of the government? Why did
they insist that drafting be rushed through in the wee hours of the
morning, and insist that they move forward before consumer and
physician groups and the American public could see and understand the
provisions?
Why do we find ourselves here on the House floor voting on an
amendment that either deliberately or accidentally preempts State laws,
disadvantages patients, and provides HMOs with a presumption that they
are right and the patient and physicians are wrong.
Mr. Chairman, I think the answer is obvious. They knew that if people
really got a chance to look at this, they would see it for the sham
that it is.
This is not the way to enact a Patients' Bill of Rights. This is the
way to ensure another stalemate. Reject this amendment.
{time} 1900
Mr. NORWOOD. Mr. Chairman, everybody knows that the New York Times is
not all of our Bible. They get it wrong frequently. They even reported
I lost 60 pounds; and you know darn well it was 40, so they do not get
it right.
Mr. Chairman, I yield 2 minutes to the gentleman from Texas (Mr.
Barton).
(Mr. BARTON of Texas asked and was given permission to revise and
extend his remarks.)
Mr. BARTON of Texas. Mr. Chairman, my father was a combat navigator
in World War II. He flew a B-24 liberator on 50 combat missions. He won
every combat award the Army Air Corps could award except the
Congressional Medal of Honor. I am glad he did not win that one or I
would not be here.
When I got elected to Congress I went to him and I asked him for some
advice.
I said: Dad, what should I do when I get up there?
He said: Son, always pick a good pilot.
I said: Pick a good pilot. What do you mean?
He said: There are going to be lots of rascals in Washington and
they're going to try to flimflam you; but if you've got a good pilot,
he'll set the right course and he'll always get you home.
Last week the gentleman from Georgia (Mr. Norwood) was the toast of
the town on the liberal side because he was holding out for the
Patients' Bill of Rights. He negotiated an agreement with the White
House and President Bush which I have looked at this afternoon, it
looks pretty good to me, and all of a sudden today he is accused of
selling out.
Mr. Chairman, the gentleman from Georgia is a good pilot. I would fly
with him anywhere. The day the gentleman from Georgia sells out is the
day ``In God We Trust'' that is on the facade behind us falls off that
facade.
I am with the gentleman from Georgia, I am going to vote for this
bill, and I say God bless the gentleman from Georgia, he is a good man.
Mr. ANDREWS. Mr. Chairman, I yield 1 minute to the gentleman from New
Jersey (Mr. Pallone), who represents a State that just enacted a very
strong patient protection law that will be repealed by this amendment.
Mr. PALLONE. Mr. Chairman, when you are sick and you have been denied
care and often do not have the energy to fight, the Norwood amendment
puts all sorts of roadblocks in the way of a real independent review.
The real Patients' Bill of Rights allows you to quickly and informally
go to an independent review board. They look at the patient, they look
at the medical record, look at whatever they want and decide what care
you need. Norwood turns this around and puts roadblocks in your way. It
makes it a judicial-type procedure stacked against you. The HMO picks
the information it sends to the board, the patient has no right to see
it and no right to ask witnesses any questions. You will need a lawyer
under Norwood in order to make your case. You have to prove that the
HMO's decision was wrong and should be either affirmed or overturned.
There is no flexibility with the board to craft a plan of care
somewhere in between.
Worse, if the board agrees with the HMO, a presumption in favor of
the HMO makes an appeal to the courts almost impossible.
Norwood stacks the deck against you. And it gives all the cards to
the HMO.
Mr. ANDREWS. Mr. Chairman, I yield 4 minutes to the gentleman from
Iowa (Mr. Ganske), one of the two principal authors of this bill.
Mr. GANSKE. Mr. Chairman, I thank the gentleman for yielding time.
Here we are. This is the nitty-gritty of the debate. We have sort of
been fooling around until we get to the Norwood amendment.
My colleague from Georgia is an acknowledged expert on this issue. I
wonder if my colleague would clarify some issues for me.
The gentleman from Georgia (Mr. Norwood) last night at the Committee
on Rules agreed that he had said that, quote, ``HMOs will be treated
better than others in the Norwood amendment.''
Is that because HMOs are being given affirmative defenses?
Mr. NORWOOD. Mr. Chairman, will the gentleman yield?
Mr. GANSKE. I yield to the gentleman from Georgia.
Mr. NORWOOD. Because there is no way that you can make it exactly the
same between the physician and the HMO, I do not believe. If the
gentleman is talking about the rebuttable presumption, and I presume he
is, what I would say to him there is that I did the best I could do in
negotiations to continue to allow the patient to have the recourse to
going into court.
Mr. GANSKE. But it is fair to say, then, that he stands by his
statement?
[[Page H5268]]
Mr. NORWOOD. I stand by the fact that if an insurance company does
exactly what they are told to do by a group of physicians in the
external review model, then we have to encourage them to offer the
treatment and not put them in a position so that they have always the
fear of being drug into court. But as the gentleman knows, I agree that
that patient should have the right to go into court.
Mr. GANSKE. So he stands by his statement that HMOs are treated
better in his amendment than others.
Now, is it the gentleman's understanding that his bill would abrogate
State laws on patients' rights?
Mr. NORWOOD. It is my understanding and the intent of this bill that,
first of all, we have a Federal cause of action for denial of care or
the delay of care in State court. We intend, and it is going to be this
way before we get it out of that conference if there is any question
about it, because the gentleman knows how it is with lawyers: ``is''
doesn't mean ``is.'' One lawyer says it means this; another lawyer says
it means that. But our intent is not to preempt any cause of action at
the State level.
Mr. GANSKE. Let me just read to the gentleman a statement by Ari
Fleischer today on this issue. The question to him was:
Republicans and Democrats believe that the deal struck between Mr.
Norwood and the President would abrogate State laws on patients' bill
of rights. Is that the White House understanding?
Here is what Mr. Fleischer said:
Yes. Yes. And I think you can get into a good discussion of that at
the background.
Question: So he doesn't believe that it would not abrogate State
laws?
Fleischer: There are a certain series of preemptions in there.
Does the gentleman agree with Mr. Fleischer's assessment there?
Mr. NORWOOD. In some States that presently have a managed care, an
HMO reform bill, we are going to have a preemption and a replacement in
that.
Mr. GANSKE. The gentleman from Georgia has respected the opinion of
Sara Rosenbaum, David Frankfurt and Rand Rosenblatt. He has sent out
Dear Colleagues on them. This is what they have to say about the
Norwood amendment:
``In preempting State law, the Norwood amendment goes beyond conduct
that involves negligent medical judgment to a particular patient's
case. The amendment made by virtue of the words ``based on'' stipulate
that State malpractice law does not apply to any treatment decision
made by the managed care organization, whether it be negligent,
reckless, willful or wanton. For example,'' Rosenbaum continues, ``no
State cause of action could be maintained against a designated
decisionmaker for its decision to discharge a patient early from a
hospital even if the likely result of that discharge would result in a
patient's death. In short, all forms of vicarious liability under State
law would be preempted.''
Is that an accurate representation?
Mr. NORWOOD. The key word here is ``may.'' We do not believe that it
does that. We do not intend for it to do that. And I do not intend for
it to do that when we have the opportunity to get into conference.
Mr. GANSKE. I thank the gentleman.
Mr. NORWOOD. Mr. Chairman, I yield 2 minutes to the gentleman from
Georgia (Mr. Isakson).
Mr. ISAKSON. Mr. Chairman, our State's motto is ``Wisdom, Justice and
Moderation.'' A favorite son of ours today, Dr. Charles Norwood,
exhibited those three qualities and those three characteristics
absolutely.
I do not think a thing in the world I am going to do is going to
change a mind in here, what I say; but I hope maybe we will get back
and change our hearts for just a second.
My granddaddy had a saying in south Georgia when he got into a
confusing controversy. He said, ``You know, if you want to get the mud
out of the water, you've got to get the hogs out of the spring.''
We are at a point in this debate where the focus on self-interest of
all the diverse interests on this bill is clouding the water. We have
made steps forward in patients' rights. We have made steps forward in
the amount that can be received in noneconomic and punitive damages. We
have made steps forward in protecting the fact that Americans are still
going to have insurance and joint and several liability will not sweep
through American business.
Some can poke fun at the gentleman from Georgia if they like, and you
can ask me hard questions I cannot answer; but successful legislation
in America on behalf of the people we are here to represent who are our
citizens, are going to be the patients, are better than the muddy water
interests of any lawyer, any business employer, any physician, any HMO
or any insurance company.
There comes a time and a place for a man to do what is right. Dr.
Charles Norwood has done what is right. You may disagree, but we are
light years ahead of where we have ever been; and we owe this debate
better than some of the things that have been said.
I urge your support for the Norwood amendment.
Mr. ANDREWS. Mr. Chairman, I yield 2 minutes to the gentleman from
Texas (Mr. Green) to comment on the bill that is before us rather than
the one he wishes was before us.
Mr. GREEN of Texas. Mr. Chairman, first I want to say that I respect
the gentleman from Georgia (Mr. Norwood) and the hard work that he has
done; but I also disagree with the language that was agreed to, and I
can stand here on this floor and still respect him but disagree with
him.
The President and the gentleman from Georgia stood last night on the
podium and proclaimed they reached a compromise. But it is really not a
compromise. It is not a compromise because not everybody was involved.
Only one Member was involved in it. The Norwood amendment holds HMOs to
different standards than doctors and hospitals. That was the base
reason for the bill. We are going to hear lots of Members come up
tonight and talk about how this is a great bill, but they were for the
Fletcher bill. They were not for a real patients' bill of rights,
anyway. So we are going to hear that tonight. Even though HMOs act like
doctors if they deny or delay care, they are not held accountable like
doctors under this amendment. They are the only health care providers
that are shielded. That is what is wrong.
What is more troubling about this proposal is that it destroys the
important patient protections that we have had in Texas for 4 years.
The gentleman from Arizona (Mr. Shadegg) may quote Texas law, but the
amendment that the gentleman from Georgia negotiated with the President
goes against Texas law. It does not have anything to do with holding an
employer who runs the business. That is Texas law. We wanted to correct
that in this bill. But it does change the liability. And it does change
the presumption.
There is nothing in Texas law that gives the HMO or the insurance
company the presumption that they are right. That is wrong. That is why
our appeals are so successful in Texas. That is why 52 percent of the
1,400 appeals were in favor of the patient. The HMOs that you are
defending were wrong more than half the time. That is what is wrong
with this law. That is why it is so bad. It is going to hurt what we
have successfully done in Texas where the insurance policies are under
State law. But we need to do a real patients' bill of rights for
everyone in the country. Sixty percent of my constituents do not come
under Texas law; they come under ERISA. That is why we need to make
sure we pass a strong patients' bill of rights, not a patients' bill of
wrongs, not an HMO bill of rights. That is what this is.
You heard the gentleman from Texas (Mr. Turner) talk about just the
changing of an ``a'' to a ``the'' will make sure our patients are
shafted by this bill.
Mr. ANDREWS. Mr. Chairman, I am pleased to yield 1\1/2\ minutes to
the gentlewoman from Texas (Ms. Jackson-Lee).
(Ms. JACKSON-LEE of Texas asked and was given permission to revise
and extend her remarks.)
Ms. JACKSON-LEE of Texas. Mr. Chairman, let me simply say I am
trained as a lawyer. But today I stand on this floor as someone who has
been, as many of us, a patient. I would like to cast my lot with the
physicians. And though I agree with the gentleman, I do not want a
bill; I would like to have a law. But I am prepared as a patient
[[Page H5269]]
to fight to the last breath so that patients around the country can
have the privilege of knowing that decisions between them and their
physician are not interfered with by HMOs.
I know the gentleman from Georgia means well and we do respect him.
But his amendment interferes and puts a wedge between the patient-
physician relationship. Our people understand what is right and what is
wrong. Under the presumption in his amendment, patients are wrong,
physicians are wrong and HMOs are right. Interestingly enough, the
George Washington University in a letter dated today said that this
amendment stipulates that State malpractice law does not apply to any
treatment decision made by a managed care organization whether it be
negligent, reckless, willful or wanton.
Picture yourself in a relationship with a doctor. They recommend a
diagnosis; they ask for a procedure. And there you are with an HMO that
denies it, recklessly, willfully and wantonly and God help that you
live and if you do not, look at your relatives going in to challenge
them, not because they want to be in court but because they want to
right the wrong and the HMO stands as the right and you stand as the
wrong.
I fight for the patients, and I fight for the physicians. I think
this amendment should go down.
{time} 1915
Mr. NORWOOD. Mr. Chairman, I yield 2 minutes to my lawyer, the
gentleman from Arizona (Mr. Shadegg).
Mr. SHADEGG. I thank the gentleman for yielding me time.
Mr. Chairman, let me begin by saying I respect greatly our colleague,
the gentleman from Iowa (Mr. Ganske), who has worked very hard on this
bill; but I think it is important to note he talked about the issue of
affirmative defenses. In the negotiations between the gentleman from
Georgia (Mr. Norwood) and the President, all of the affirmative
defenses were stricken from the bill because the gentleman from Georgia
(Mr. Norwood) wanted them stricken and they are gone.
Let us talk about this, the other issue of preemption. I need to talk
about preemption, because a great deal has been made here. Let us talk
about the issue of preemption, because that seems to be of great
concern here.
It needs to be understood that, number one, ERISA today preempts a
claim for benefits in all 50 States. If you try to bring a claim for
benefits and bring that as a cause of action in State court, you cannot
bring it in a single State, including Texas. Indeed, the corporate
healthcare case, Corporate HealthCare v. Texas right here, says
specifically that. If you seek to bring a claim for benefits case in
State court, it is preempted by Federal law.
There is a good reason for that. It is so that the management of
claims in all 50 States can be uniform, because this law, ERISA, was
intended to govern multi-State employers and multi-State unions.
Now, let us talk about a second issue, that is the Ganske bill. They
would have you believe that the Norwood amendment is the only thing
that preempts anything. That is ridiculous. The Ganske-Dingell bill
preempts issue after issue within the State cause of action. It says
you can bring a State cause of action, but then it preempts pieces of
that. It says you can only bring it against a designated decisionmaker,
it says you can only bring it after exhausting external review. The
preemption issue is in your bill as well as our bill, although it is 19
pages long in your bill.
Let us talk about its effort at preemption in this bill. In this
bill, we say what current law says, and that is if you are bringing a
claim for benefits, that belongs in Federal court. But, do you know
what? We give a remedy for damages.
But we also go beyond and codify existing State law on the issue of
the claims you can bring in States. If you bring a negligence claim
against a plan or its doctor, you can bring that for the services they
delivered, you can bring that under existing State law, and this bill
specifically says you can continue to bring it.
This is a red herring. I urge the adoption of the Norwood amendment.
Mr. ANDREWS. Mr. Chairman, I yield myself 15 seconds.
I believe the gentleman from Arizona said affirmative defenses are
not spelled out in the Federal cause of action. That is right. Of
course, that means it is up to the judiciary to invent them as we go
along. We do not know whether there will be affirmative defenses or
not, what they will mean, because it is not included in here. Because
when you draft a cause of action overnight, you cannot think of those
things.
Mr. Chairman, I yield 1 minute to the gentleman from Massachusetts
(Mr. Markey).
Mr. MARKEY. Mr. Chairman, I thank the gentleman for yielding me time.
Make no mistake, the Norwood amendment guts the patients' bill of
rights, and what is left behind? Nothing more than an ``HMO Bill of
Slights.''
The Norwood amendment slights patients with weakened accountability
provisions; it slights patients by preempting stronger State laws,
which would allow patients to sue HMOs for bad medical decisions; it
slights patients by prohibiting class action lawsuits against HMOs; and
it slights patients by allowing HMOs to delay a patient's day in court
by choosing Federal court over State court.
Mr. Chairman, justice delayed is justice denied. The American people
have waited too long for a real HMO bill of rights. Vote no on the
Norwood amendment, the ``HMO Bill of Slights.''
Mr. NORWOOD. Mr. Chairman, I am pleased to yield 1 minute to the
gentleman from Georgia (Mr. Deal), a good friend of mine.
Mr. DEAL of Georgia. Mr. Chairman, I thank the gentleman for yielding
me time.
As a trial attorney, I am both amused and somewhat dismayed by some
of the things that have been said here today. First of all, as a trial
attorney, it is amusing it see my good friend the plastic surgeon
cross-examining my other good friend, a dentist. But be that as it may,
there are a lot of things that have been said here.
First of all, on the issue of preemption, I think the gentleman from
Arizona (Mr. Shadegg) said it well. If States could do the things that
we are seeking to do in this legislation, then let States to it. It is
the very fact they cannot that is the necessity for the Federal
legislation that we are attempting to put in place here today.
On behalf of my friend the gentleman from Georgia (Mr. Norwood), let
me say this in conclusion. Many who would speak against his efforts
have been here for decades and saw no reason to go forward with the
effort of a patients' bill of rights, and to them I say, the gentleman
from Georgia (Mr. Norwood) should be your hero.
For those who would denigrate his methods or motives, I would simply
say to them, this issue would not be here today on the brink of
becoming law had it not been for his dedication.
For those of you who think the gentleman from Georgia (Mr. Norwood)
has sold out, it simply proves to me, you do not know the gentleman
from Georgia (Mr. Norwood).
Mr. ANDREWS. Mr. Chairman, I yield 1 minute to the gentlewoman from
California (Ms. Lofgren), one of our advocates for a strong and
forceful patients' bill of rights.
Ms. LOFGREN. Mr. Chairman, it has been quite a week here in the House
of Representatives. On Tuesday, we made it a felony for scientists to
cure disease with stem cells; Wednesday, we gave $36 billion in tax
goodies to big oil, gas and others, and allowed drilling in national
refuges; and today, we see the perversion of a good idea, a law that
would protect patients from insurance companies has been transformed
into a bill that protects insurance companies from patients.
The President's deal was obviously written by, or at least for,
special interests. It would repeal California's responsible law and
replace it with a new Federal preemption that would prevent wrongdoers
who are insurers, even intentional wrongdoers, from being held
responsible for their actions.
Now, why is it that doctors, lawyers, nurses can be held responsible
for their wrongdoing, but not insurance companies? It looks to me that
the bigger the campaign contributions to the Republicans, the bigger
the payoff with laws to benefit those same contributors.
This body has morphed from a place where legislation is deliberated
upon to the White House ATM machine. This
[[Page H5270]]
week, start by making scientists criminals; midweek, trash the
environment; today, destroy the patients' bill of rights.
It is a good thing Congress is about to recess. I do not know if the
country could stand another week like this one of Republican
``victories,'' where the special interests rule to the detriment of
ordinary Americans.
Mr. ANDREWS. Mr. Chairman, we hear often about the benefits of the
Texas patients' bill of rights, which will be repealed as a result of
this amendment.
Mr. Chairman, I yield 1 minute to the gentleman from Texas (Mr.
Bentsen).
Mr. BENTSEN. Mr. Chairman, I thank the gentleman for yielding me
time.
Mr. Chairman, let me start out by saying I have nothing but the
highest respect for the gentleman from Georgia (Mr. Norwood). The
problem is, the gentleman from Georgia (Mr. Norwood) went as far as
could go, and he ran into the White House. It is ironic, after being
here for 7 years, coming from a State where my former Governor used to
say, let Texans run Texas, and where my Texas colleagues up here on the
other side of the aisle said, let the States do it, because the States
can do it better, what always happens, whenever it gets in the way of
the powerful special interests, this idea of devolving power to the
States becomes wholly inconvenient.
The bill before us today would upend the law in Texas that passed
under George Bush's watch, the law he talked about during the campaign
that he was so proud about. But the fact is, that it upends the
interests of very powerful insurance companies who do not like the
Texas law, they do not like the California law, they do not like the
New Jersey law.
Now we are told we have to pass a bill in the House before conference
so we can get to conference, and then the gentleman from Georgia (Mr.
Norwood) has turned around and told us if there are problems with it,
we will work it out in conference.
It all seems rather inconsistent. Defeat the Norwood amendment, and
let us pass a real patients' bill of rights.
Mr. ANDREWS. Mr. Chairman, the American Medical Association, health
care providers across the country, want the Norwood amendment defeated.
Mr. Chairman, I yield 1 minute to the gentlewoman from California
(Ms. Capps), a representative of the nursing profession before she came
here.
Mrs. CAPPS. Mr. Chairman, I rise in opposition to the Norwood
amendment.
In the absence of action by the Federal Government, my State of
California recently acted to protect its citizens from overzealous
cost-cutters in the HMOs. One of the strengths of Ganske-Dingell is it
creates a Federal floor for patient protections, allowing States like
my own to have stronger protections.
But this amendment would override those State laws in order to
protect HMOs from accountability. As was confirmed in an exchange just
now between the gentleman from Iowa (Mr. Ganske) and the gentleman from
Georgia (Mr. Norwood), this amendment obliterates the cause of action
defined by the State of California, my State, and so many other States
as well.
If this amendment were to pass, patients in my home State would have
fewer protections than they do right now, and HMOs in California would
have more freedom to abuse them.
This amendment will do worse than take the teeth out of the Ganske-
Dingell bill; it will take the teeth out of state protections. So I
oppose the Norwood amendment, and I urge my colleagues to do the same.
Mr. NORWOOD. Mr. Chairman, it is my pleasure to yield 1 minute to my
friend, the gentleman from New York (Mr. Houghton).
Mr. HOUGHTON. Mr. Chairman, before I begin, I just want to thank a
couple of people who have spent an enormous amount of time on this,
Francesca Tedesco and also Kathy Rafferty. I want to thank the
gentleman from Georgia (Mr. Norwood).
What the gentleman from Georgia (Mr. Norwood) has done is very, very
significant. I say this because I come from the world of business. You
can have a patient, you can have a patient's rights, but if you do not
have the funding for that patient, it does not do any good.
What the gentleman from Georgia (Mr. Norwood) has done is bridge the
gap and made it possible for those people, not only in large and small
businesses, and small businesses, as you know, comprise 75 percent of
the employment in this country, it enables them now to buy into a
program which they feel they can afford, without having the sword of
liability, unending liability, hanging over their head.
I think a lot of people are going to be thanking the gentleman from
Georgia (Mr. Norwood) for bridging this gap, because it would not have
happened without him.
Mr. ANDREWS. Mr. Chairman, I am pleased to yield 1 minute to the
gentleman from Texas (Mr. Sandlin), another Texan who does not want his
State law repealed by the Norwood amendment.
Mr. SANDLIN. Mr. Chairman, I rise in strong opposition to this
outrageous amendment. For patients, this amendment is a lose-lose
situation. It is heads, the HMOs win, and tails, the patients lose.
Just a couple of points. This presumption, do you realize there is a
rebuttable presumption that creates a hurdle so high that patients will
never be able to recover? I have been in this situation before.
Do you know that courts will be giving written instructions to juries
to say the insurance company won before and the insurance company ought
to win again, and that is the burden you are putting on them.
You are also increasing the burden on punitives. You are making it
outrageous. You are increasing it to clear and convincing. That will
never happen.
The biggest fraudulent change of all was done in the dark of the
night where the standard was changed from a proximate cause to the
proximate cause. That was not done by accident, it was done to gut the
entire bill. If someone dies from a heart attack, for example, and was
denied treatment, the death will not be from the lack of treatment, it
will be from the heart attack, and they lose.
This entire bill has been gutted. We all know what happened. We
worked 5 years on this bill, and last night it was undone in a matter
of minutes, and we know what happened.
Mr. ANDREWS. Mr. Chairman, I am pleased to yield 1\1/2\ minutes to
the gentlewoman from Connecticut (Ms. DeLauro).
Ms. DeLAURO. Mr. Chairman, I rise in opposition to the Norwood
amendment. It overturns the painstaking work that has been done over
the past 5 years to craft a good piece of legislation that said that we
are going to protect patients in this country, that we are going to
protect their families.
It essentially establishes an HMO bill of rights. It affords
insurance companies and HMOs a special status. It literally gives them
the ability to act with impunity, that is, to make medical decisions
that overrule doctors and harm patients; and, my friends, they never
have to face the consequences of their actions.
It is the first time, and now legally the presumption is that the HMO
is right, and you have to prove them wrong. That is what happened at
the White House last night.
The Bush-Norwood amendment is just another example of President Bush
siding with the special interests over hardworking American families by
carving out special protections for the HMOs. This amendment rolls back
patient protection, it walks all over States' rights.
My God, the other party is always talking about States making their
decisions, individuals making the decisions, except when it conflicts
with the rewards for their special interest friends.
Vote against the Norwood amendment.
Mr. ANDREWS. Mr. Chairman, I am pleased to yield 1 minute to the
gentlewoman from Ohio (Mrs. Jones), a strong voice against special
interest legislation.
Mrs. JONES of Ohio. Mr. Chairman, I rise in opposition to the Norwood
amendment. It is very easy to speak in a vacuum about the impact that
legislation has on the Federal level in State courts.
{time} 1930
But the reality is, with the lack of time dedicated to this
particular legislation, we do not really know what in
[[Page H5271]]
heck it will have. In fact, we worry, and I am sure the gentleman from
Georgia (Mr. Norwood) worries as well, that people's ability to bring
claims in State courts have been, in fact, affected by this
legislation.
Many of my colleagues may have had the opportunity to think about
what happens in a courtroom, but I served in a courtroom for 10 years.
One of the dilemmas about having legislation that is passed and saying
in the State court, this is the impact we think it is going to have, is
that it will ultimately take someone's case to work its way through the
State court, through the appellate court, and then to the Supreme Court
to resolve it.
So why, when we are people of good sense, can we not resolve it right
here and understand and put in place legislation that will not have
that type of impact?
Mr. Chairman, I rise in opposition to this legislation.
Mr. NORWOOD. Mr. Chairman, it is a pleasure to yield 1\1/2\ minutes
to the gentleman from Tennessee (Mr. Hilleary).
(Mr. HILLEARY asked and was given permission to revise and extend his
remarks.)
Mr. HILLEARY. Mr. Chairman, I am a proud supporter of the Norwood
amendment and I commend the gentleman from Georgia and the President
last night for breaking the logjam on the Patients' Bill of Rights.
The Norwood amendment affects only liability. We are all in agreement
on the medical care side of this debate. The only debate is over where
the available money for health care will go, to the patients or the
cost of litigation.
The Norwood amendment calls for full compensation to the patient for
economic damages caused by an HMO. In other words, patients are
completely compensated and reimbursed for the money the HMO actually
caused them to lose. In addition, the Norwood amendment allows up to $3
million for pain and suffering and punitive damages. That is a lot of
money, but not so much money as to create massive numbers of new,
frivolous lawsuits.
The Ganske bill, on the other hand, allows for unlimited punitive and
economic damages. This will be a tremendous enticement for frivolous
lawsuits. Thus, way too much of the precious limited money available
for patient health care will be chewed up in the litigation of these
lawsuits, not for health care.
The bill of the gentleman from Iowa (Mr. Ganske) also makes an
effort, although an inadequate effort, to close off lawsuits against
businesses which had absolutely nothing to do with the HMO's unlawful
act. No business in its right mind will offer insurance or any kind of
health care benefits to its employees if they can be sued for something
they did not do.
If we want a legitimate Patients' Bill of Rights that actually wants
a chance to become law this year and help these people we keep talking
about, I strongly urge my colleagues to vote for the Norwood amendment.
Mr. NORWOOD. Mr. Chairman, it is a pleasure to yield to the gentleman
from Ohio (Mr. Boehner), the chairman of the Committee on Education and
the Workforce.
Mr. BOEHNER. Mr. Chairman, let me thank the gentleman for yielding me
time, and let me say that all of us, I think, owe the gentleman from
Georgia (Mr. Norwood) a great big thank-you. The gentleman has been at
this for 6\1/2\ years as a Member of Congress.
I know when I went to his district in 1994 and campaigned with him,
we went around his district, we spent 16 hours in a bus going to about
16 small towns in eastern Georgia. Those constituents in that district
wanted a Patients' Bill of Rights.
The gentleman came up here, and we all know, every Member of Congress
knows, there is nobody in this body who has worked harder, nobody who
has put more heart and soul into trying to find the right language that
will be signed into law than the gentleman from Georgia (Mr. Norwood),
and we owe him a great big thanks.
Everybody thinks there is some big fight here, that there is some
huge difference. Let us put it all back in perspective.
The bill we have here is an identical bill. We have one bill. The
only big argument is over how much more liability we are going to
impose on insurers and on employers.
The amendment offered by the gentleman from Georgia basically says
that we are going to expand remedies and we are going to expand
liability from where we are today, and we are going to give people
easier access to courts. Our friends on the other side have an even
greater expansion of liability in State and Federal courts, and what
their language will do is drive employers out of the system, will drive
up costs for employers and their employees. It will damage the
foundation of our health insurance system today, which is employer-
provided coverage.
What we are trying to do here is to find some common ground, and I
think the gentleman from Georgia (Mr. Norwood), working with the
President, has found common ground that will give patients in America
greater access to the courts, greater remedies, bringing greater
accountability. Not as much as we have on the other side, but our bill
will not drive employers out of the system; it will not drive up costs.
It is a reasonable compromise that the American people expect us to
deliver for them.
Mr. ANDREWS. Mr. Chairman, it is my privilege to yield 2 minutes to
the gentleman from Iowa (Mr. Ganske), the principal voice for patients
around America.
Mr. GANSKE. Mr. Chairman, I have here a ``Dear Colleague'' that was
sent out by the gentleman from Georgia on August 1. It says, ``An
explanation of how ERISA preemption works.'' It says, ``Under H.R.
2563,'' that is the base bill, the Ganske-Dingell bill, ``if an insurer
injures you by denying or delaying medically necessary care, you can go
to State court under common law to hold the insurer accountable.'' That
has been a fundamental part of the bill.
So it surprised me greatly when I read on page 20 of the Norwood
amendment these words: ``A civil action brought in any State court
under section'' such and such ``against any party other than the
employer plan, plan's sponsor or any other entity, i.e., dedicated
decision-maker, arising from a medically reviewable determination may
not be removed from any district court.''
What this basically means is that all of those groups can go into
Federal, and that gets to then this interesting part of the Norwood
bill. I mean, this could be interpreted as unconstitutional under
Pegram v. Hedrick.
But then, at the end, we have a nonseverability clause, so that the
entire enforcement section becomes inoperative if one section in the
Norwood amendment is unconstitutional.
Mr. Chairman, I am just amazed at this. I know the gentleman from
Georgia in the past has fought against putting nonseverability clauses
in.
Mr. DINGELL. Mr. Chairman, will the gentleman yield?
Mr. GANSKE. I yield to the gentleman from Michigan.
Mr. DINGELL. Mr. Chairman, all of that dies, but the preemption
clause remains, and, as a result of this, the subscriber to the health
care plan is left totally naked and devoid of any protection or any
rights to enforce his interests in his policy.
Mr. NORWOOD. Mr. Chairman, I am pleased to yield 2 minutes to the
gentleman from Ohio (Mr. Portman).
Mr. PORTMAN. Mr. Chairman, I thank the gentleman from Georgia.
I just want to make the point that we just heard from the other side
that somehow cases that are in State court would be removed to Federal
district court. That would not happen under the Norwood amendment. It
would be in State court with a Federal cause of action.
So I do not know what the point of that last statement was, but we
are in State court, and that is a change. That is a change that the
gentleman from Georgia (Mr. Norwood) brought to this debate.
I am a strong supporter of the Norwood amendment and I am also a
strong supporter of the underlying bill.
I want to back up for a second and talk about why we are here. Eight
years ago when I got elected to Congress, we were talking about the
Patients' Bill of Rights, and it was about access to emergency room
care, it was about access to OB-GYNs, it was about access to
specialists, it was about access to clinical trials. All of this is in
[[Page H5272]]
this underlying legislation. This is the Patients' Bill of Rights we
have been talking about for all of the 8 years I have been here.
But while this bill provides all of these patient rights, it also
provides the single most important protection of all, and that is
health care insurance coverage. It provides the right balance, yes,
making HMOs and other insurance companies accountable; yes, providing
access to the courts when one is aggrieved; but not raising the cost of
health care insurance to the point that we is risking health care
coverage for literally millions of Americans. That is the most
fundamental protection of all. It is the right balance.
It is easy around this place to criticize. It is easy to be partisan,
and we have heard some of that today on the floor. We have even heard
some allegations of bad motives. We have even heard some allegations of
corruption earlier on the floor. That is easy. What is harder is to get
something done for the American people.
The American patient has waited too long. I commend the gentleman
from Georgia (Mr. Norwood) for working hard on this issue not only for
all of the time he has been in Congress, but over the last month, for
working hard to find a bill that this President can sign and that
provides the fundamental patients' rights that we have talked about and
that provides the fundamental accountability for HMOs, and that
delivers for the American people.
That is what this place is all about. That is the heavy lifting. I
commend the gentleman from Georgia (Mr. Norwood).
Mr. ANDREWS. Mr. Chairman, I yield 2 minutes to the gentleman from
Arkansas (Mr. Berry), one of the leaders throughout this effort, a real
expert on this matter.
Mr. BERRY. Mr. Chairman, I thank the gentleman from New Jersey, and I
thank him for his leadership, along with many others that have worked
hard on this issue. The gentleman from Iowa (Mr. Ganske) has worked
tirelessly and continues to work tirelessly in the interests of
patients, particularly children.
It has been an interesting day. We have heard a lot of rhetoric on
this floor. I have been almost amused. I say ``almost.'' This would be
funny, it would be amusing if it was not such serious business. I have
heard my colleagues on this side of the aisle stand in the well and
talk about how our bill allows us to sue like they are proud of it. But
this bill over here is a terrible thing; it lets you sue also.
Like I say, if it was not for the serious nature of this, it would be
funny.
Meryl Haggart, a great country singer, has this song that he sings,
made probably back in the 1980s, called Rainbow Stew. It says, ``When a
President goes through the White House door and does what he says he
will do, we will all be drinking that free bubble-up and eating that
rainbow stew.''
This is the biggest batch of rainbow stew I have ever seen. That is
what it is, folks. It is rainbow stew. That is what your constituents
are going to get is rainbow stew.
I carry this buckeye in my pocket. It is a worthless little old
thing. Folklore in Arkansas says if you carry one, it will bring you
good luck and keep rheumatism away if you rub it just right. You have
got to know how to rub it. That is what this is going to be worth to
the American people.
Now, we have heard over and over that the real important thing about
this is, it will be signed into law. If this ever gets signed into law,
I will come to this floor, ask for unanimous consent, and stand on my
head and stack BBs. And I am not in too good a shape. I think it would
be very difficult.
I urge this body not to do something so foolish as to vote for this
amendment.
Mr. NORWOOD. Mr. Chairman, I yield 1 minute to the gentleman from
Texas (Mr. Culberson), a new Member of Congress who, I think, is a
great addition to this Chamber.
Mr. CULBERSON. Mr. Chairman, I rise in very strong support of the
Norwood amendment, because I am completely committed to protecting the
10th amendment right of the States to enact a Patients' Bill of Rights.
I came here on January 3 after serving 14 years in the Texas house. I
am a coauthor of the Texas patients' bill of rights. I served longer
under Governor Bush than any other governor. I helped carry all of his
tort reforms in 1995. I helped pass this patients' bill of rights in
Texas in 1997. So I know firsthand that this legislation the gentleman
has drafted does not preempt the Texas patients' bill of rights, as has
been stated. This bill protects the rights of States to regulate health
care and to pass medical malpractice laws.
Mr. Chairman, I know that George W. Bush is a man of honor,
integrity, and a man of his word; and he and the gentleman from Georgia
(Mr. Norwood) have both given us their word that if there is any doubt
that this bill would in any way preempt or restrict the rights of the
States to regulate health care or protect patients' rights, they will
fix it in conference. I believe the language they have now protects the
rights of States.
I strongly support the amendment, and I urge Members who believe in
the rights of States to protect the rights of patients at the State
level to support this legislation.
{time} 1945
Mr. ANDREWS. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman
from Michigan (Mr. Dingell), a giant in this institution, the dean of
the House of Representatives and our great friend.
(Mr. DINGELL asked and was given permission to revise and extend his
remarks.)
Mr. DINGELL. Mr. Chairman, I think it is time for us to look at this
as what it is. I am told by my good friend on the other side that the
problem here is lawsuits. I am sure they have trouble with that.
My problem is without some mechanism for the American citizen to
think his rights are being properly protected in the courts of law,
there is no sustainable right for that American citizen.
I had a good friend who called me up not long back. He is a doctor of
medicine, very much respected. He had been serving as an appeals
officer for an HMO since he retired. He said, Dingell, you do not know
it but they just fired me. I said, Doc, tell me why they did it. He
said, They said I was making medical decisions instead of insurance
decisions.
That is the issue here before us. We want to see to it that we still
have medical decisions being made in favor of, and on behalf of, the
patients. This is to see to it that the HMOs are treated the same as
anybody else, not given preferential and reverential treatment.
That is what the Norwood amendment does. It shelters them against
litigation. Worse than that it preempts State law; and in the process
it jiggers the rules of evidence, the weight of the proceedings, the
manner of proceedings, so that the hand of the Government is weighing
heavily on the scales of justice against the citizen who has lost a leg
or a wife or a husband or who has been injured by HMOs engaging in the
practice of medicine.
If an American citizen cannot go to court to get relief and help
under those situations, the value of his citizenship has been shrunk,
and it will be shrunk by the Norwood amendment if it is adopted. Just
remember what I stated about my friend who was fired for making medical
decisions instead of insurance decisions.
Now, it does preempt the laws of the States now in existence; and it
weighs the new proceedings against the person who wishes to complain to
his government about having been wronged by an HMO. I have here in my
hands a letter which I will insert in the Record at the appropriate
time from the insurance commissioner from the State of Michigan, a good
Republican official, who complains that the law of the State of
Michigan is being usurped by the amendment offered by my good friend
from Georgia. Protect my citizens, if you will not protect your own,
against that kind of outrage.
Office of Financial and
Insurance Services,
Lansing, MI, August 2, 2001.
Michigan Congressional Delegation,
House of Representatives, Washington, DC.
Dear Representatives: I am contacting you again with regard
to an amendment that is being proposed to the patients' bill
of rights legislation. It has come to our attention that the
Norwood amendment contains a provision that would preempt all
State internal and external review laws. States would not be
allowed to certify and retain these laws. The internal and
external review process would be federalized.
[[Page H5273]]
I oppose the portion of the Norwood amendment that would
preempt the Michigan Office of Financial and Insurance
Services' ability to implement, oversee and enforce
Michigan's statutory internal and external grievance
procedures. Michigan was one of the first states to implement
both an internal and external grievance procedure when it
enacted its patient's bill of rights in 1996. Then again in
2000, the Michigan Legislature, with Governor Engler's
support, enacted the Patient's Right to Independent Review
Act (PRIRA-2000 PA 251) that provided sweeping changes to the
external review procedure and shortened (considerably) the
time frames for the internal review procedures. PRIRA took
effect October 1, 2000.
I am asking for your help in resolving this preemption
issue as the process moves forward. The Senate bill allows
states to certify state laws and therefore retain their
internal/external reviews, so this issue will be a point of
negotiation in conference. It would be very helpful if enough
Members objected to this provision in the Norwood amendment
so that it is highlighted for those conference negotiations.
If States are not allowed to retain jurisdiction over the
internal and external review process then their ability to
oversee other protections will be severely limited.
Very truly yours,
Frank M. Fitzgerald,
Commissioner.
Mr. NORWOOD. Mr. Chairman, I yield myself such time as I may consume.
The CHAIRMAN. The gentleman from Georgia has 7 minutes.
Mr. NORWOOD. Mr. Chairman, this is not the ideal process I would have
designed for this debate today. I am disappointed that some of my
colleagues have allowed their passionate feelings about process to lead
them into making dubious statements about substance, because this
debate most assuredly should be about substance.
I would like to remind my colleagues of what my amendment provides
for injured patients. A patient who is injured when an insurer makes a
negligent denial of claim for benefits will have the opportunity to
hold that insurer accountable in State court. The patient will have
access to the State courts that we have together supported for years.
The patient will hold the insurer liable under the same State rules and
procedures that a doctor will be held accountable under. Is not this
what we have been fighting for all these years?
My amendment includes those protections to prevent frivolous lawsuits
that we have all fought to include in a bill. All of us. My amendment
protects employers by allowing them to choose a designated decision-
maker, so very important to all of us.
My amendment requires patients exhaust all administrative remedies.
My amendment also includes a rebuttable presumption in favor of the
plan if the reviewer rose in favor of the plan. While I know my friends
have raised concerns about this provision, I continue to raise just one
simple question: If an expert reviewer says an insurer was right in
denying care, how was the insurer negligent in denying care? Should not
they have some extra consideration?
My amendment includes limitations on damages. There is a $1.5 million
cap on noneconomic damages. There is a cap on punitive damages of $1.5
million. That is only available when an insurer ignores an external
reviewer. I believe personally in limitation of damages. Some of my
colleagues do not, obviously. This is a legitimate area for debate, is
it not?
Mr. Chairman, these issues I have raised are issues we should be
debating. I am sorry that the debate has deteriorated some. I am
disappointed that they feel that they have not been given adequate time
for a debate. I will understand if they feel they cannot support my
amendment solely because of process, because they have heard me
complain before of similar things.
But before Members cast this vote against this bill, I ask them to
consider what the amendment actually does; and more importantly, I want
Members to support who supports this bill.
The President has committed to signing our bill with this amendment.
I have been working for 5 years to get a bill signed into law, not just
pass another bill. Like it or not, we have to work with this President
who has to sign this bill.
I think my colleagues are deluding themselves, maybe, if they think
we can force a bill down this President's throat. It is simply not
going to happen with this honorable man from Texas. So I accept the
President's offer to bridge the gap.
I know this is not the final bill, and so do the Members. I know
there are words that need to be changed. I think my colleagues are
missing the boat by treating every interpretation of a problem in my
amendment, real or imagined, as a life-or-death decision.
Instead, we should be looking at the underlying offer and asking
ourselves, is this an offer that accomplishes what we set out to do in
creating a real remedy for patients?
Mr. Chairman, the answer to that question is yes. I encourage my
colleagues, all my colleagues, to join me in accepting the President's
offer of a compromise to go into conference. I would encourage my
colleagues who will vote no today to set aside their feelings and ask
themselves, what are they holding out for? What is it that they need to
say yes to, once and for all changing the law of this great Nation to
protect patients?
Mr. Chairman, I have found the answer, I believe. The working answer
is in this amendment and in a conference. I would encourage my
colleagues to join me in supporting this amendment. I am saddened
deeply that it will not be bipartisan; and I know it will not, because
I believe now and I have believed for years the true answer to this is
a bipartisan solution.
I want to take a minute of personal privilege to thank all the
Members. Many Members on both sides of the aisle have worked as hard as
I have. I know who they are. I have worked as hard against my friend,
the gentleman from Kentucky (Mr. Fletcher), as anybody I know; but by
golly, he has worked hard in his own way to protect patients, too.
Nobody I know has been around this issue consistently and constantly
and every time I turn around more than my friend, the gentleman from
Arizona (Mr. Shadegg). He has added tremendously to this debate in many
ways, which I do not have time to go over right now.
I want to say to all of my Democratic colleagues, I believe them very
much when they say they want a patient protections bill. I believe that
our Members do, too. I know how hard they have worked. I know who they
are, too. I have had a few hours with them to try to work this out.
I just have to point out to all the Members, I want Members to know
who Bridget Taylor is, a lady that I have the greatest respect and
admiration for who has worked her little heart out for the benefit of
patients of this Nation.
I want to say to my staff, I thank them. I know what I have done to
them. My friend, Rodney Whitlock, has been with me 7 years; and I do
not know many people who have taken a worse beating on my behalf than
Rodney Whitlock in the last 2 weeks. I thank him.
And to my friend, the gentleman from Michigan (Mr. Dingell), he knows
I love him and respect him, and I know where he wants to go. He knows
where I want to go. It has been a great honor working with the
gentleman from Michigan. I appreciate his efforts on behalf of
patients, too.
Lastly, I want to say to my friend, and I do mean that, to the
gentleman from Iowa (Mr. Ganske), I do not know anybody, including me,
that has worked as hard as the gentleman has. I admire the gentleman
so. I know he is trying to do the right things for his patients. God
knows, there is nobody more persistent and tough and stubborn and
willing to fight and stand up, and I have admired the gentleman so,
because he has taken some tough hits. I know the people of Iowa need to
be grateful to have you as their Representative in Congress.
Lastly, I want to say to all of the Members about the President of
the United States, I do not make any bones about it, I love this man. I
have gotten to know him. I have the greatest respect in the world for
him. Whatever Members may think of him, I promise them, the President
and his staff have worked me good for the last 2 weeks. What they have
been trying to do is to get a patients' protection bill out that they
can agree with.
I thank them for their efforts and thank all of the Members. I hope
that at some point tonight we will have a bipartisan vote.
Mr. ANDREWS. Mr. Chairman, I yield myself the balance of my time.
(Mr. ANDREWS asked and was given permission to revise and extend his
remarks.)
[[Page H5274]]
Mr. ANDREWS. Mr. Chairman, let me begin by expressing my appreciation
to my good friend, the gentleman from Michigan (Mr. Dingell), whom I
admire so much; to the gentleman from Iowa (Mr. Ganske); and to all
those involved.
The vote we are about to take is not about the good intentions of
good and decent people, because there are many in this debate. It is
about making a good choice for the people of our country, the people
who are sitting in a hospital waiting-room tonight with their stomachs
and their hearts in their throats, not just because they are worried
about whether their loved one is going to recover, but whether they are
going to have a hassle over who pays the bill. That is who we have to
think about here tonight.
I respect those who are here tonight to try to help the President. I
am here to try to help the patients of the United States of America
here tonight.
To understand why I oppose this flawed amendment, Members need to
understand the following situation. A person goes to her primary care
provider. The primary care provider says, You really ought to see a
specialist. She does not get the right to see the specialist because
the HMO says no.
Because of the time delay, she develops a malignant tumor. She is in
the hospital. She dies as a result of the malignant tumor. But before
she dies, the wrong medications are administered to her wrongly by an
employee of the hospital. Her estate sues the hospital and sues the
HMO, not because they want to recover a lot of money, but because they
have been wronged.
The way I read this bill, there is one word that denies that family's
claim. Because despite whatever good intentions there might be, the law
is about words, not good intentions. The words in this bill say that
the actions of the HMO have to be the proximate cause of the injury.
{time} 2000
And a good lawyer, and, boy, the HMOs have really good lawyers, is
going to figure out in a heartbeat how to beat that case. Because he or
she is going to say the death here was not ``the'' proximate cause by
the HMO, it was ``a'' proximate cause. So the claim gets tossed out.
This is not just about words, it is about values. If we want to hold
the HMOs of this country accountable, this is the vote. There will not
be another one. I do not think so. If my colleagues want to hold them
accountable, they should come to floor, take out their card, and vote
for the patients of this country. Vote ``no'' on the Norwood amendment.
Mr. WEXLER. Mr. Chairman, I would like to state for the record my
enthusiastic support for the Dingell-Ganske Bi-Partisan Patients' Bill
of Rights (H.R. 2563) and my opposition to the Norwood amendment. The
Dingell-Ganske is the only true patient protection bill in Congress.
H.R. 2563 allows patients to sue an HMO in state courts when they are
denied care. Further, the bill allows patients to sue in federal court
for breach of contract.
H.R. 2563 would return medical decision-making to patients and health
care professionals. Americans would have greater access to specialists,
including pediatric specialists for children and gynecologists for
women. Coverage for emergency room care would be available, as well as
the right to talk freely with doctors and nurses about every medical
option. The Patients' Bill of Rights would end financial incentives for
doctors and nurses to limit the care they provide. It would also
provide an appeals process and real legal accountability for the
decisions made by insurance companies.
Opponents of this bill claim that the Dingell-Ganske Patients' Bill
of Rights would unnecessarily expose employers to lawsuits. In fact,
the newly filed Dingell-Ganske bill includes amendments adopted in the
Senate which shield employers from liability if they are not directly
involved in the decisionmaking process.
In light of the passage of the McCain, Kennedy, Edwards Bipartisan
Patients' Bill of Rights in the Senate, the Republican leadership has
drafted a weak amendment that purports to protect patients' rights
while at the same time protecting the insurance industry. At the last
minute, the President, the Republican leadership and Congressman
Norwood crafted an amendment that basically negates the Dingell-Ganske
bill. While the Norwood Amendment claims to allow lawsuits to be filed
in state courts, such suits would be limited by federal law. Further,
the Norwood amendment allows employers to unilaterally remove an action
from state to federal courts. Federal courts are the wrong venue for
bringing medical suits. Federal courts are backlogged with cases that
would take priority over civil actions. Further, federal courts do not
have experience with medical suits because they are typically brought
before state courts.
Additionally, the Norwood amendment unreasonably caps non-economic
damages. Those without substantial income--the elderly, children and
homemakers would suffer the most under these limited damage provisions.
The Amendment also caps punitive damages and heightens the bar required
to obtain compensation by asking juries to meet the ``clear and
convincing'' standard prior to awarding damages. In short, the
Amendment creates legal hurdles that make it almost impossible for a
patient who is being denied care to get help from the courts.
All concerns over the Bipartisan Patient Protection bill have been
resolved in the Senate and have been adopted in the newly drafted
Dingell-Ganske. There is no reason to oppose this bill, unless you are
trying to appease the insurance companies.
Ms. MILLENDER-McDONALD. Mr. Chairman, I rise in support of the base
bill, Dingell-Norwood-Ganske-Berry. However, I am concerned about
provisions in the Norwood amendment, if adopted, that will have a
deleterious impact on women.
H.R. 2563, in its original form, provides protections for women and
mothers and provides them with direct access to a physician
specializing in obstetrics or gynecology, without them having to obtain
prior authorization or referral from their primary physicians. The base
bill requires that plans permit parents to designate a pediatrician as
their child's primary provider. My district constituents will derive
substantial benefits from this provision. Furthermore, the base bill
provides vital protection regarding medical and surgical benefits for
women afflicted with cancer, including coverage that a doctor deems
medically necessary.
Mr. Speaker, it is paramount for us to pass a bill that establishes
both internal and external appeals processes, and which allows women a
mechanism to appeal a denial of a benefit claim to services and/or
treatment that a doctor feels is necessary. Today I stand and champion
the needs of all Americans, but particularly for women. I applaud the
authors of the Dingell-Ganske-Berry bill. Their legislation is a beacon
of good policy and intentions. On the other hand, the negotiated
agreement, crafted under the cloak of secrecy and darkness, must not be
tolerated nor condoned. I implore my colleagues to support the base
bill, support women's needs contained within it, and support Americans
who want and need a true patients bill of rights.
Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Chairman, opponents of the
Bipartisan Patients' Bill of Rights contend that allowing the public to
sue their HMOs will lead to a litigation explosion, a rise in health
care costs, and insurance companies going bankrupt. Regardless of the
fact that none of these theories have been proven, and that the facts
actually show the opposite to be true, they are inundating the public
with this misleading rhetoric. Well, those who live in glass houses
should not throw stones. The managed care industry does not hesitate to
sue when it protects its bottom line, regardless of the effect it has
on patients.
Mr. Chairman, we must pass a Patients' Bill of Rights that no longer
allows HMOs to maintain their privileged immunity from being held
legally responsible to their patients. Though this is what we should
do, many of my colleagues are willing to keep medical decisions in the
hands of unqualified HMOs and support the Norwood amendment.
The amendment provides for a one-sided preemption of state damage
caps. For states with no damage caps, the damage caps in this amendment
would apply. States that currently do not cap damages would be forced
to accept the damage limitations provided in this bill. Mr. Chairman, a
$500,000 cap to cover damages for pain and suffering is not enough.
Placing a cap on punitive damages erodes the deterrent effect of
punitive awards.
Mr. Chairman, I would like to conclude with an example that may
provide my colleagues with a clearer picture of what the Norwood
amendment does to patients who depend on their insurance companies to
provide for them.
Consider the woman with breast cancer. Her HMO denies her a
mammogram, which could have detected it. The undetected cancer worsens.
When it is finally diagnosed, it is beyond treatment. The woman dies.
Her family brings a lawsuit against the HMO for failure to provide the
mammogram that could have identified her condition and led to life
saving treatment. Even if the jury finds fault with the HMO, $500,000
will not bring that woman back. $500,000 is not enough for pain and
suffering. $500,000 is a slap on the wrist for an HMO that prevented a
woman from receiving a mammogram that may have detected breast cancer,
and possibly saved her life.
Now, I ask my colleagues to imagine that this woman was their mother,
their wife, their
[[Page H5275]]
daughter. Would $500,000 be enough to raise your kids? Would $500,000
be enough to put your kids through college? Would $500,000 be enough to
explain where their mother is? How then would they feel about the
Norwood amendment--the amendment that stacks the deck against patients,
the amendment that could possibly stack the deck against one of their
loved ones?
Mr. OWENS. Mr. Chairman, I rise in opposition to the Norwood
amendment to H.R. 2563, the Bipartisan Patient Protection Act, aka, the
Patients' Bill of Rights.
The deception being debated here today is quite reminiscent of
Orwell's novel when each day citizens wake up to a new reality.
Yesterday, we left the Hill and Mr. Norwood was one of the leading
proponents of a significant and fair Patient's Bill of Rights that was
truly bipartisan. We arrived today and the Patients' Bill of Rights has
been transformed into a HMO Bill of Rights, stripping both patients and
states of the right to hold these ``sacred cows'' accountable. The
extent to which the American people are being counted upon to ignore
the details and simply ``don't worry, be happy'' that something was
done is shameful and frightening.
A system of checks and balances is only fair and just. Why should the
patient and their family members be left without recourse in the event
of a tragic error simply because they belong to an HMO. This is a
government of, by, and for the people, not HMO's. Our responsibility is
to ensure a patient's right to sue health plans for injuries sustained
as a result of a delay or denial of medical care. If anyone deserves a
privileged status when involved in or affected by medical decisions it
should be the potential victim.
A patient's right to recourse is an important check and balance in a
system that must balance profit margins with patient needs. To take
such an important protection away from American citizens is wrong. To
further limit a state's right to protect its citizens from self serving
decisions made by HMO's may be unconstitutional. To abandon our
commitment to a meaningful Patient's Bill of Rights for political
expedience is unconscionable. Mr. Norwood conceded too much. The
Ganske/Dingell Bill offers us a chance to pass a true bipartisan
Patient's Bill of Rights that is fair and just.
Mr. Chairman, to preserve states' rights and consumer rights; and to
block one more path toward the corporate takeover of America, I urge my
colleagues to defeat this poison amendment, and pass a fair Patient's
Bill of Rights.
Mrs. CHRISTENSEN. Mr. Chairman, I rise in opposition to the Bush/
Norwood amendment and I urge my colleagues to oppose its passage.
I agree with the American Medical Association, which oppose the
Norwood amendment for four very good reasons.
First, the Norwood amendment overturns the good work that states
like Texas and Georgia have done in protecting patients. It reverses
developing case law that allows patients to hold plans accountable when
they make decisions that harm them.
Second, the Norwood amendment takes away states power to set the
standards by which HMOs can be punished with punitive damages creating
a one-way preemption of states rights in favor HMOs.
Third, it gives HMOs an unfair advantage by raising the bar making it
harder for patients to make their case in court.
Finally, and most troubling, the Norwood amendment provides patients
protections on the one hand but does not allow them to enforce those
same protections in court.
Mr. Chairman, the Norwood amendment and all of the amendments offered
today, are nothing more than poison pills designed to kill the
meaningful Ganske/Dingell patient protection bill by forcing a
conference with the Senate.
I urge my colleagues to oppose the Norwood amendment, which is
nothing more than a gift to the HMO industry. The American people want
us to give them a real Patients' Bill of Rights with real enforcement
provisions and real protections.
Mr. McGOVERN. Mr. Chairman, I rise today to urge this House vote
against the Norwood-Bush amendment for Ganske-Dingell.
Norwood-Bush is not real reform. President Bush doesn't want to sign
any meaningful patient protection legislation. As Governor, he never
signed any Texas patient protection law, and now he is attempting to
use this Congress to kill real patient protections.
For five years, the Republicans ignored patients by forcing through
hollow patient protection bills that only benefit insurance companies.
Today we have an opportunity to finally put patients ahead of
bureaucrats and bean-counters.
President Bush wants the House to pass a bill just different enough
that the Senate cannot support it. The House Republican leadership can
then kill the bill in conference.
Patients, their families and their physicians deserve much better.
The Norwood-Bush proposal is about bad politics, not good policy.
Let's get past the politics. Let's do this right.
Pass the Ganske-Dingell bill.
The CHAIRMAN. The question is on the amendment offered by the
gentleman from Georgia (Mr. Norwood).
The question was taken; and the Chairman announced that the ayes
appeared to have it.
Recorded Vote
Mr. ANDREWS. Mr. Chairman, I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 218,
noes 213, not voting 3, as follows:
[Roll No. 329]
AYES--218
Aderholt
Akin
Armey
Bachus
Baker
Ballenger
Barr
Bartlett
Barton
Bass
Bereuter
Biggert
Bilirakis
Blunt
Boehlert
Boehner
Bonilla
Bono
Brady (TX)
Brown (SC)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Cannon
Cantor
Capito
Castle
Chabot
Chambliss
Coble
Collins
Combest
Cooksey
Cox
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis, Jo Ann
Davis, Tom
Deal
DeLay
DeMint
Diaz-Balart
Doolittle
Dreier
Duncan
Dunn
Ehlers
Ehrlich
Emerson
English
Everett
Ferguson
Flake
Fletcher
Foley
Forbes
Fossella
Frelinghuysen
Gallegly
Gekas
Gibbons
Gilchrest
Gillmor
Gilman
Goode
Goodlatte
Goss
Graham
Granger
Graves
Green (WI)
Greenwood
Grucci
Gutknecht
Hansen
Hart
Hastert
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hilleary
Hobson
Hoekstra
Horn
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Isakson
Issa
Istook
Jenkins
Johnson (CT)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
Kerns
King (NY)
Kingston
Kirk
Knollenberg
Kolbe
LaHood
Largent
Latham
LaTourette
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (KY)
Lucas (OK)
Manzullo
McCrery
McHugh
McInnis
McKeon
Mica
Miller (FL)
Miller, Gary
Moran (KS)
Myrick
Nethercutt
Ney
Northup
Norwood
Nussle
Osborne
Ose
Otter
Oxley
Pence
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Portman
Pryce (OH)
Putnam
Quinn
Radanovich
Ramstad
Regula
Rehberg
Reynolds
Riley
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Royce
Ryan (WI)
Ryun (KS)
Saxton
Scarborough
Schaffer
Schrock
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Skeen
Smith (MI)
Smith (TX)
Souder
Stearns
Stump
Sununu
Sweeney
Tancredo
Tauzin
Taylor (NC)
Terry
Thomas
Thornberry
Thune
Tiahrt
Tiberi
Toomey
Traficant
Upton
Vitter
Walden
Walsh
Wamp
Watkins (OK)
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson
Wolf
Young (AK)
Young (FL)
NOES--213
Abercrombie
Ackerman
Allen
Andrews
Baca
Baird
Baldacci
Baldwin
Barcia
Barrett
Becerra
Bentsen
Berkley
Berman
Berry
Bishop
Blagojevich
Blumenauer
Bonior
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brown (FL)
Brown (OH)
Capps
Capuano
Cardin
Carson (IN)
Carson (OK)
Clay
Clayton
Clement
Clyburn
Condit
Conyers
Costello
Coyne
Cramer
Crowley
Cummings
Davis (CA)
Davis (FL)
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Doggett
Dooley
Doyle
Edwards
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank
Frost
Ganske
Gephardt
Gonzalez
Gordon
Green (TX)
Gutierrez
Hall (OH)
Hall (TX)
Harman
Hastings (FL)
Hill
Hilliard
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Johnson (IL)
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick
Kind (WI)
Kleczka
Kucinich
LaFalce
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Leach
Lee
Levin
Lewis (GA)
Lofgren
Lowey
Luther
Maloney (CT)
Maloney (NY)
Markey
Mascara
Matheson
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McDermott
McGovern
McIntyre
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Millender-McDonald
Miller, George
[[Page H5276]]
Mink
Mollohan
Moore
Moran (VA)
Morella
Murtha
Nadler
Napolitano
Neal
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Phelps
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Rivers
Rodriguez
Roemer
Ross
Rothman
Roukema
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Schakowsky
Schiff
Scott
Serrano
Sherman
Shows
Skelton
Slaughter
Smith (NJ)
Smith (WA)
Snyder
Solis
Spratt
Stark
Stenholm
Strickland
Stupak
Tanner
Tauscher
Taylor (MS)
Thompson (CA)
Thompson (MS)
Thurman
Tierney
Towns
Turner
Udall (CO)
Udall (NM)
Velazquez
Visclosky
Waters
Watson (CA)
Watt (NC)
Waxman
Weiner
Wexler
Woolsey
Wu
Wynn
NOT VOTING--3
Lipinski
Paul
Spence
{time} 2023
Mr. ISTOOK changed his vote from ``no'' to ``aye.''
So the amendment was agreed to.
The result of the vote was announced as above recorded.
The CHAIRMAN. It is now in order to consider Amendment No. 3 printed
in House Report 107-184.
Amendment No. 3 Offered by Mr. Thomas
Mr. THOMAS. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 3 offered by Mr. Thomas:
Add at the end the following new title (and amend the table
of contents of the bill accordingly):
TITLE VIII--REFORMS RELATING TO HEALTH CARE LIABILITY CLAIMS
SEC. 801. TABLE OF CONTENTS OF TITLE.
The table of contents of this title is as follows:
Sec. 801. Table of contents of title.
Sec. 802. Application in States.
Sec. 803. Encouraging speedy resolution of claims.
Sec. 804. Compensating patient injury; fair share rule.
Sec. 805. Authorization of payment of future damages to
claimants in health care lawsuits.
Sec. 806. No punitive damages for health care products that
comply with FDA standards.
Sec. 807. Effect on other laws.
Sec. 808. Definitions.
Sec. 809. Effective date; general provisions.
SEC. 802. APPLICATION IN STATES.
The provisions of this title relating to any requirement or
rule shall not apply with respect to a health care lawsuit
brought under State law insofar as the applicable statutory
law of that State with respect to such lawsuit specifies
another policy with respect to such requirement or rule.
SEC. 803. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.
Health care lawsuits shall be commenced no later than 2
years after the claimant discovers, or through the use of
reasonable diligence should have discovered, the injury for
which the lawsuit was brought. In all cases, a health care
lawsuit shall be filed no later than 5 years after the date
of the injury. The time periods for filing health care
lawsuits established in this section shall not apply in cases
of malicious intent to injure. To the extent that chapter 171
of title 28, United States Code, relating to tort procedure,
and, subject to section 802, State law (with respect to both
procedural and substantive matters), establishes a longer
period during which a health care lawsuit may be initiated
than is authorized in this section, such chapter or law is
superceded or preempted.
SEC. 804. COMPENSATING PATIENT INJURY; FAIR SHARE RULE.
(a) Unlimited Amount of Damages for Actual Losses in Health
Care Lawsuits.--In any health care lawsuit, the full amount
of a claimant's economic loss may be fully recovered, subject
to section 809(d)(2), without limitation.
(b) Additional Non-Economic Damages.--Subject to section
809(d)(2), in any health care lawsuit, the amount of non-
economic damages may be as much as $250,000, regardless of
the number of parties against whom the action is brought or
the number of separate claims or actions brought with respect
to the same occurrence.
(c) No Discount of Award for Non-Economic Damages.--In any
health care lawsuit, an award for future non-economic damages
shall not be discounted to present value. The jury shall not
be informed of the maximum award for non-economic damages. An
award for non-economic damages in excess of the amount
specified in subsection (b) (or the amount provided under
section 809(d)(2), if applicable) shall be reduced either
before the entry of judgment, or by amendment of the judgment
after entry, and such reduction shall be made before
accounting for any other reduction in damages required by
law. If separate awards are rendered for past and future non-
economic damages and the combined awards exceed the amount so
specified, the future non-economic damages shall be reduced
first.
(d) Fair Share Rule.--In any health care lawsuit, each
party shall be liable for the party's several share of any
damages only and not for the share of any other person. Each
party shall be liable only for the amount of damages
allocated to such party in direct proportion to such party's
percentage of responsibility. A separate judgment shall be
rendered against each such party for the amount allocated to
such party. For purposes of this section, the trier of fact
shall determine the proportion of responsibility of each
party for the claimant's harm.
(e) Additional Health Benefits.--In any health care
lawsuit, any party may introduce evidence of collateral
source benefits. If any party elects to introduce such
evidence, the opposing party may introduce evidence of any
amount paid or contributed or reasonably likely to be paid or
contributed in the future by or on behalf of such opposing
party to secure the right to such collateral source benefits.
No provider of collateral source benefits shall recover any
amount against the claimant or receive any lien or credit
against the claimant's recovery or be equitably or legally
subrogated to the right of the claimant in a health care
lawsuit. This subsection shall apply to a health care lawsuit
that is settled as well as a health care lawsuit that is
resolved by a fact finder.
(f) Treatment of Punitive Damages.--
(1) General rule.--Punitive damages may, to the extent
permitted by applicable State law, be awarded in any health
care lawsuit in any Federal or State court against a
defendant if the claimant establishes by clear and convincing
evidence that the harm suffered was the result of conduct--
(A) specifically intended to cause harm; or
(B) conduct manifesting a conscious, flagrant indifference
to the rights or safety of others.
(2) Applicability.--This subsection shall apply to any such
health care lawsuit on any theory where punitive damages are
sought. This subsection does not create a cause of action for
punitive damages.
(3) Limitation on punitive damages.--The total amount of
punitive damages that may be awarded to a claimant for losses
resulting from the injury which is the subject of such a
health care lawsuit may not exceed the greater of--
(A) 2 times the amount of economic damages, or
(B) $250,000,
regardless of the number of parties against whom the action
is brought or the number of actions brought with respect to
the injury. Subject to section 802, this subsection does not
preempt or supersede any State or Federal law to the extent
that such law would further limit the award of punitive
damages.
(4) Bifurcation.--At the request of any party, the trier of
fact shall consider in a separate proceeding whether punitive
damages are to be awarded and the amount of such award. If a
separate proceeding is requested, evidence relevant only to
the claim of punitive damages, as determined by applicable
State law, shall be inadmissible in any proceeding to
determine whether actual damages are to be awarded.
(g) Limitations on Applicability of this Section.--This
section applies only to health care lawsuits. Furthermore
only to the extent that--
(1) chapter 171 of title 28, United States Code, relating
to tort procedure, permits the recovery of a greater amount
of damages than authorized by this section, such chapter
shall be superseded by this section; and
(2) only to the extent that either chapter 171 of title 28,
United States Code, relating to tort procedure, or, subject
to section 802, State law (with respect to procedural and
substantive matters), prohibits the introduction of evidence
regarding collateral source benefits or mandates or permits
subrogation or a lien on an award of damages for the cost of
providing collateral source benefits, such chapter or law is
superseded or preempted by this section.
SEC. 805. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO
CLAIMANTS IN HEALTH CARE LAWSUITS.
(a) In General.--In any health care lawsuit, if an award of
future damages, without reduction to present value, equaling
or exceeding $50,000 is made against a party with sufficient
insurance or other assets to fund a period payment of such a
judgment, the court shall, at the request of any party, enter
a judgment ordering that the future damages be paid by
periodic payments in accordance with the Uniform Periodic
Payment of Judgments Act promulgated by the National
Conference of Commissioners on Uniform State Laws in July
1990. This section applies to all actions which have not been
first set for trial or retrial prior to the effective date of
this title.
(b) Limitation on Applicability of This Section.--Only to
the extent that chapter 171 of title 28, United States Code,
relating to tort procedure, or, subject to section 802, State
law (with respect to both procedural and substantive
matters), reduces the applicability or scope of the
regulation of periodic payment of future damages as
authorized in this section, is such chapter or law preempted
or superseded.
[[Page H5277]]
SEC. 806. NO PUNITIVE DAMAGES FOR HEALTH CARE PRODUCTS THAT
COMPLY WITH FDA STANDARDS.
(a) General Rule.--In the case of any health care lawsuit,
no punitive or exemplary damages may be awarded against the
manufacturer of a medical product based on a claim that the
medical product caused the claimant's harm if the medical
product complies with FDA standards.
(b) Exception.--Subsection (a) shall not apply in any
health care lawsuit in which--
(1) before or after the grant of FDA permission to market a
medical product, a person knowingly misrepresents to or
withholds from the FDA required information that is material
and relevant to the performance of such medical product, if
such misrepresentation or withholding of information is
causally related to the harm which the claimant allegedly
suffered; or
(2) a person makes an illegal payment to an official of FDA
for the purpose of either securing or maintaining approval of
such medical product.
SEC. 807. EFFECT ON OTHER LAWS.
This title does not affect the application of title XXI of
the Public Health Service Act (relating to the national
vaccine program). To the extent that this title is judged to
be in conflict with such title XXI, then this title shall not
apply to an action brought under such title. If any aspect of
such a civil action is not governed by a Federal rule of law
under such title, then this title or otherwise applicable law
(as determined under this title) will apply to that aspect of
the action.
SEC. 808. DEFINITIONS.
As used in this title:
(1) Alternative dispute resolution.--The term ``alternative
dispute resolution'' means a system that provides for the
resolution of health care lawsuits in a manner other than
through a civil action brought in a State or Federal Court.
(2) Amount recovered by claimants.--The term ``amount
recovered by claimants'' means the total amount of damages
awarded to a party, after taking into account any reduction
in damages required by this title or applicable law, and
after deducting any disbursements or costs incurred in
connection with prosecution or settlement of a claim,
including all costs paid or advanced by any person. Costs of
health care incurred by the plaintiff and the attorneys'
office overhead costs or charges for legal services are not
deductible disbursements or costs for such purpose. Such term
does not include any punitive or exemplary damages.
(3) Claimant.--The term ``claimant'' means any person who
asserts a health care liability claim or brings a health care
lawsuit, including a person who asserts or claims a right to
legal or equitable contribution, indemnity, or subrogation,
arising out of a health care lawsuit, and any person on whose
behalf such a claim is asserted or such an action is brought,
whether deceased, incompetent, or a minor.
(4) Collateral source benefits.--The term ``collateral
source benefits'' means any amount paid or reasonably likely
to be paid in the future to or on behalf of the claimant, or
any service, product or other benefit provided or reasonably
likely to be provided in the future to or on behalf of the
claimant, as a result of injury or wrongful death, pursuant
to--
(A) any State or Federal health, sickness, income-
disability, accident or workers' compensation act;
(B) any health, sickness, income-disability, or accident
insurance that provides health benefits or income-disability
coverage;
(C) any contract or agreement of any group, organization,
partnership, or corporation to provide, pay for, or reimburse
the cost of medical, hospital, dental, or income disability
benefits; and
(D) any other publicly or privately funded program.
(5) Complies With FDA standards.--The term ``complies with
FDA standards'' means, in the case of any medical product,
that such product is either--
(A) subject to pre-market approval or review by the Food
and Drug Administration under section 505, 506, 510, 515 or
520 of the Federal Food, Drug, and Cosmetic Act (21 U.S. C.
355, 356, 360, 360e, 360j) or section 351 of the Public
Health Service Act (42 U.S. C. 262) and such approval or
review concerns the adequacy of the packaging or labeling of
such medical product or the safety of the formulation or
performance of any aspect of such medical product which a
health care lawsuit claims caused the claimant's harm, and
such medical product was marketed in conformity with the
regulations under such sections, or
(B) generally recognized as safe and effective pursuant to
conditions established by the FDA and applicable FDA
regulations, including those related to packaging and
labeling.
(6) Contingent fee.--The term ``contingent fee'' includes
all compensation to any person or persons which is payable
only if a recovery is effected on behalf of one or more
claimants.
(7) Economic loss.--The term ``economic loss'' means
reasonable amounts incurred for necessary health treatment
and medical expenses, lost wages, replacement service losses,
and other pecuniary expenditures due to personal injuries
suffered as a result of injury.
(8) FDA.--The term ``FDA'' means the Food and Drug
Administration.
(9) Health care goods or services.--The term ``health care
goods or services'' means any medical product, or any service
provided by a health care provider or by any individual
working under the supervision of a health care provider, that
relates to the diagnosis, prevention, or treatment of any
human disease or impairment, or the assessment of the health
of human beings.
(10) Health care lawsuit.--The term ``health care lawsuit''
means any health care liability claim concerning the
provision of health care goods or services, or any civil
action concerning the provision of health care goods or
services brought in a State or Federal Court or pursuant to
an alternative dispute resolution procedure, against a health
care provider or the manufacturer, distributor, supplier,
marketer, promoter or seller of a medical product, regardless
of the theory of liability on which the claim is based, or
the number of claimants, plaintiffs, defendants, or other
parties, or the number of claims or causes of action in which
the claimant alleges a health care liability claim.
(11) Health care liability claim.--The term ``health care
liability claim'' means a demand by any person (whether or
not pursuant to an alternative dispute resolution system, an
action in State court, or an action in Federal court)
concerning the provision of health care goods or services, if
made against a health care provider or the manufacturer,
distributor, supplier, marketer, promoter or seller of a
medical product, including third-party claims, cross-claims,
counter-claims, or contribution claims, which are based upon
the provision or use of (or the failure to provide or use)
health care services or medical products, regardless of the
theory of liability on which the claim is based, or the
number of claimants, plaintiffs, defendants, or other
parties, or the number of claims or causes of action.
(12) Health care provider.--The term ``health care
provider'' means any person or entity required by State or
Federal laws or regulations to be licensed, registered, or
certified to provide health care goods or services or whose
health care goods or services are required to be so licensed,
registered, or certified, or which are exempted from such
requirement by other statute or regulation.
(13) Injury.--The term ``injury'' means any illness,
disease, or other harm that is the subject of a health care
liability claim.
(14) Malicious intent to injure.--The term ``malicious
intent to injure'' means intentionally causing or attempting
to cause physical injury other than providing health care
goods or services.
(15) Medical product.--The term ``medical product'' means a
drug (as defined in section 201(g)(1) of the Federal Food,
Drug and Cosmetic Act (21 U.S.C. 321(g)(1)) or a medical
device as defined in section 201(h) of such Act (21 U.S.C.
321(h)), including anycomponent or raw material used therein,
but excluding health care services.
(16) Non-economic loss.--The term ``non-economic loss''
means physical impairment, emotional distress, mental
anguish, disfigurement, loss of enjoyment, loss of
companionship, loss of services, loss of consortium, and any
other non-pecuniary losses.
(17) Recovery.--The term ``recovery'' means the net sum
recovered after deducting any disbursements or costs incurred
in connection with prosecution or settlement of a claim,
including all costs paid or advanced by any person. Costs of
health care incurred by the plaintiff and the attorneys'
office overhead costs or charges for legal services are not
deductible disbursements or costs for such purpose.
(18) State.--The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, American Samoa, the Northern
Mariana Islands, the Trust Territory of the Pacific Islands,
and any other territory or possession of the United States,
or any political subdivision thereof.
(20) State law.--The term ``State law'' includes all
constitutional provisions, statutes, laws, judicial
decisions, rules, regulations, or other State action having
the effect of law in any State.
SEC. 809. EFFECTIVE DATE; GENERAL PROVISIONS.
(a) In General.--This title shall apply to any health care
lawsuit brought in a Federal or State court, and to any
health care liability claim subject to an alternative dispute
resolution system, that is initiated on or after the date of
enactment of this Act, except that any health care lawsuit
arising from an injury occurring before the date of enactment
of this Act shall be governed by the applicable statute of
limitations provisions in effect at the time the injury
occurred.
(b) Health Care Lawsuits.--The provisions governing health
care lawsuits set forth in this title supersede chapter 171
of title 28, United States Code, relating to tort claims
procedure and, subject to section 802, preempt State law to
the extent that State law differs from any provisions of law
established by or under this title.
(c) Protection of States' Rights.--Any issue that is not
governed by any provision of law established by or under this
title (including State standards of negligence) will be
governed by otherwise applicable State or Federal law.
Subject to subsection (d)(2) and section 802, this title does
not preempt or supersede any law that imposes greater
protections for health care providers, plans, and
organizations from liability, loss, or damages that those
provided by this title.
(d) Rule of Construction.--No provision of this title shall
be construed to preempt--
[[Page H5278]]
(1) the implementation of any State sponsored or private
alternative dispute resolution program;
(2) pursuant to section 802, any State statutory limit
(whether enacted before, on, or after the date of the
enactment of this Act) on the total amount of economic, non-
economic, or punitive damages that may be awarded in a health
care lawsuit, whether or not such State statutory limit
permits the recovery of a greater or lesser amount of such
damages than is provided for under section 804; or
(3) any defense available to a party in a health care
lawsuit under any other provision of Federal law.
The CHAIRMAN. Pursuant to House Resolution 219, the gentleman from
California (Mr. Thomas) and the gentleman from Michigan (Mr. Conyers)
each will control 20 minutes.
The Chair recognizes the gentleman from California (Mr. Thomas.)
Mr. THOMAS. Mr. Chairman, I yield myself 3 minutes. Subsequent to
that I yield the balance of my time to the gentleman from California
(Mr. Cox) and ask unanimous consent that he control the balance of the
time.
The CHAIRMAN. Without objection, the gentleman from California (Mr.
Cox) will control the balance of the time.
There was no objection.
(Mr. THOMAS asked and was given permission to revise and extend his
remarks.)
Mr. THOMAS. Mr. Chairman, the amendment that was just passed puts a
limit on the amount that can be received in terms of damages. One side
of the equation has been adjusted properly. Notwithstanding the fact
you can seek damages, there is a limit.
This amendment proposes to create balance, put a limit on the other
side of the equation. What you see here is a quote from a letter from
the American College of Surgeons to the President of the United States
on February 7. It says:
If the Congress seriously entertains caps on punitive and noneconomic
damages--we have just done that--we believe it would be difficult if
not impossible to explain why Federal policymakers did not at the same
time address the liability exposure faced by physicians, hospitals and
other health care practitioners.
It would be unfair, the College of Surgeons said, to enact a
patients' bill of rights that caps damages for suits against health
plans without capping damages for suits brought against physicians and
other health care providers. This is exactly what this amendment does.
It does not intrude on any State that has in place its own desired
medical malpractice structure, but where there is none, this amendment
will provide one unless and until the State passes its own and the
State's prerogative would then prevail. It is simply an opportunity to
provide a degree of uniformity where there is none today.
Mr. Chairman, it is my pleasure to include for the Record a letter, I
might say a long overdue letter, from the American Medical Association.
It says, and I quote, on behalf of the American Medical Association,
we would like to express our support for medical liability reform
consistent with the general tort reform provisions included in the
amendment to H.R. 2563 being offered by the gentleman from California
(Mr. Cox), myself, Chairman Tauzin, Chairman Boehner and Chairman
Sensenbrenner.
The American Medical Association has gone on record in support of
this medical malpractice amendment. Let us bring symmetry to this
package. Let us put limits on plans. Let us put limits on physicians.
Let us move forward in a way in which, as we go to conference, we will
know for sure that at long last there is balance in the way in which
assessment and the metering out is done where patients' health is
concerned.
American Medical Association,
Chicago, Illinois, August 2, 2001.
Hon. Chris Cox,
U.S. House of Representatives,
Washington, DC.
Dear Representative Cox: On behalf of the American Medical
Association (AMA) we would like to express our support for
medical liability reform consistent with the general tort
reform provisions included in the amendment to H.R. 2563
being offered by you and Representatives Bill Thomas, Billy
Tauzin, John Boehner, and Jim Sensenbrenner.
AMA policy has long supported medical liability reform and
we appreciate your efforts in this regard. As you know we
have expressed concerns in the past about coupling such
reforms with the Patients' Bill of Rights. As we enter
conference it continues to be our hope that controversy
surrounding this amendment will not interfere with the
ultimate passage of meaningful patients' rights legislation.
This issue remains a high priority for the AMA and we stand
ready to work with you on this or any other matter.
Respectfully,
Robert W. Gilmore, MD
Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
Ladies and gentlemen of the House, we are now reaching perhaps the
worst amendment on medical malpractice that has ever been brought
forward to the House of Representatives. I say that carefully because
the one that the Republicans brought forward in 1995 was a real doozy,
but this one goes further than that one. This caps doctors and
hospitals. What makes it worse than 1995 is that it extends medical
malpractice protection to insurance and HMO companies.
Secondly, it lowers punitive damage caps to only two times the
economic damages, or $250,000, where the 1995 bill in its generosity
limited it to three times economic damages, or $250,000.
Third, it has new limitations on accruing interest on noneconomic
damages.
Finally, it applies limitations to private settlements as well as
court cases.
So here in a system where each State has heretofore determined what
the economic damages would be, what the noneconomic damages would be,
what the punitive damages would be, here the majority party in this
body has now determined that we are not only going to protect HMOs, we
are going to cap suits against doctors and hospitals.
In a single stroke, the Thomas amendment, which is joined in by
several chairmen on the other side as well, would place an arbitrary
and capricious cap on the ability of the millions of persons harmed by
medical negligence to recover in their own State courts. This amendment
is even worse than the coverage in the Norwood amendment; and as I have
said, this is the most severe and limiting malpractice amendment ever
considered by the House.
If it were adopted, Congress would be saying to the American people,
We don't care if you lose your ability to bear children; we don't care
if you're forced to bear excruciating pain for the remainder of your
life; we don't care if you're permanently disfigured or crippled,
because under this amendment, a medical professional who fell asleep in
the operating room or operated on the wrong patient would be completely
insulated from punitive damages. The language goes so far as to cap the
liability of a doctor, heaven forbid, who even rapes his patient. Do
Members not know that punitive damages are the only way to deter such
outrageous conduct?
The new statute of limitations takes no account of the fact that many
injuries caused by malpractice or faulty drugs take years, sometimes
decades, to manifest themselves. Under this proposal, a patient who is
negligently inflicted with HIV-infected blood and develops AIDS 6 years
later would be forever barred from filing a liability claim.
The so-called periodic payment provisions are nothing less than a
Federal installment plan for HMOs. The bill allows insurance companies
teetering on the verge of bankruptcy to delay and then completely avoid
future financial obligations. Have you no shame? They would have no
obligation to pay interest on amounts they owe their victims.
And guess what else happens under this sweetheart deal of an
amendment? The drug companies, the producers of killer devices like the
Dalkon Shield, the Cooper-7 IUD, high absorbency tampons linked to
toxic shock syndrome and silicone gel implants, all would have
completely avoided billions of dollars in damages had this bill been
law.
Somewhere between 80 to 100,000 people die in this country each year
from medical malpractice. It is the third leading cause of preventable
deaths in America. If we pass this amendment, there is no question that
the pain and suffering and deaths will increase. And this Congress will
be to blame.
Therefore, I urge a ``no'' vote on the Thomas amendment.
Mr. Chairman, this ``poison pill'' amendment represents the most far
reaching and dangerous malpractice provision ever considered by the
Congress, and is even worse than previous malpractice limitations
passed during the
[[Page H5279]]
``Contract with America.'' Unlike previous malpractice amendments taken
up the Republican House, this would apply to limit HMO and insurance
company liability. It would also supersede state laws to severely limit
recoveries by harmed patients. The following is a more detailed
description.
Scope and Preemption (Secs. 802,809)--the amendment preempts state
law and the federal torts claims act with regard to any health care
actions, even privately negotiated claims and those submitted to
arbitration. This means the bill would limit the liability of
physicians, drug companies, and hospitals. In addition, it would limit
the liability of HMO's and insurance companies in a far more severe
fashion that the Norwood amendment or the Fletcher bill.
Statute of limitations/repose (Sec. 803)--provides for a statute of
limitations that prohibits victims from bringing any health care
lawsuit more than two years after an injury is discovered. It also
provides for a statute of repose that prohibits victims from bringing
any health care lawsuit more than five years after the negligent
conduct that caused the injury first occurred. The above time
limitations for initiating a health care lawsuit will not apply in
cases where there is a ``malicious'' intent to injure--an almost
impossible standard to meet. Thus under the proposal, a patient who is
negligently inflicted with HIV-inflected blood and develops AIDS 6
years later would be forever barred from filing a medical malpractice
or product liability claim.
Cap on Non-economic Damages (Sec. 804(b), (c))--caps the award of
non-economic damages in health care lawsuits at $250,000 regardless of
the number of defendants involved. These caps are far more restrictive
than the caps on non-economic damages proposed in the Norwood amendment
of $1.5 million. Although harder to scientifically measure, non-
economic damages compensate victims for real losses--such as loss of
sight, disfigurement, inability to bear children, incontinence,
inability to feed or bathe oneself, or loss of a limb--that are not
accounted for in lost wages. Caps on non-economic damages would
unfairly penalize those victims who suffer the most severe injury and
are most in need of financial security. Non-economic damage caps have
also been found to have a disproportionately negative impact on women,
minorities, the poor, the young, and the unemployed; since they
generally have lower wages, a greater proportion of their losses is
non-economic. The bill also provides that an award for future non-
economic damages will not be discounted to present value, which would
appear to mean that there will be no adjustment made for inflation when
non-economic damages are awarded. This restriction has never been
proposed in any previous malpractice amendment.
Joint and Several Liability (804)(d))--provides that in any health
care lawsuit concerning the provision of health care goods or services,
each party shall be liable only for the amount of damages allocated to
such party in direct proportion to such party's percentage of
responsibility. This provision eliminates the state doctrine of joint
and several liability for non-economic damages, and raises the concern
that instead of placing the burden of financial loss on
the identifiable defendant, victims who prevail on a liability claim
may not be able to recover all of their damages.
Collateral Source (804(e))--eliminates the collateral source rule by
allowing defendants in medical malpractice cases to unilaterally
introduce evidence of collateral source payments received or to be
received by the claimant, such as health or disability insurance. In
most states under the collateral source rule, a victim is able to
obtain compensation for the full amount of damages incurred, and his or
her health insurance provider is able to seek subrogation in respect of
its own payments to the victim. This ensures that the true cost of
damages lies with the wrongdoer while eliminating the possibility of
double recovery by the victim. The Thomas amendment would turn this
system on its head by allowing tortfeasors to introduce evidence of
potential collateral payments owing from the insurer to the victim.
This would have the effect of shifting costs from negligent health care
providers at the expense of injured victims.
Limits on Punitive Damages (804(f))--caps punitive damage awards at
the greater of $250,000 or two times economic damages and limits the
state law standard for the award of punitive damages to intentional or
``consciously indifferent'' conduct; and allows for a bifurcated
proceeding to determine issues relating to punitive damages. Again, the
cap on punitive damages in the Thomas amendment is far worse than even
the Norwood amendment which caps punitive damages at $1.5 million. It
is also more severe than previously considered malpractice amendments.
Punitive damages impose punishment for outrageous and deliberate
misconduct and they deter others from engaging in similar behavior.
Collectively, these restrictions on punitive damages are likely to
completely eliminate not only the incentive for seeking punitive
damages, but any realistic possibility of obtaining them. Permitting
defendants to bifurcate proceedings concerning the award of punitive
damages will lead to far more costly and time-consuming proceedings,
again working to the disadvantage of injured victims.
Periodic Payments (805)--grants wrongdoers the option of paying
damage awards in excess of $50,000 on an ``installment plan.'' This
provision would apply not only to future economic damages realized over
time, such as lost wages, but to non-economic losses, like the loss of
a limb, that are realized all at once. Also, in contrast to many state
law periodic payment provisions, the Thomas proposal does not seek to
protect the victim from the risk of nonpayment resulting from future
insolvency by the wrongdoer or to specify that future payments should
be increased to account for inflation or to reflect changed
circumstances.
Elimination of Punitive Damages for FDA approved health care
products--completely bans punitive damages in the case of drugs or
other devices that have been approved by the FDA or any other drug
``generally recognized as safe and effective'' pursuant to FDA-
established conditions. Injuries from medical devices have an estimated
cost of $26 billion annually. It is problematic to use compliance with
the FDA as a basis for immunity from punitive damages when those
regulations have proven inadequate to protect patients numerous times
in the past. Government safety standards, at their best, establish only
a minimum level of protection for the public. At their worst, they can
become outdated, under-protective or under-enforced. Providing immunity
from punitive damages to these manufacturers would eliminate the
possibility of recovering these costs and would shift the burden to the
injured patient. Banning punitive damages for FDA-approved products
will also have a disproportionate impact on women and seniors, since
they make up the largest class of victims of medical products.
The Thomas amendment also ignores a number of complex legal issues.
For example, in the state law context, various damage caps have been
held to violate state constitutional guarantees relating to equal
protection, due process, and rights of trial by jury and access to the
courts; and these very same concerns will surely be present at the
Federal level. And by layering a system of Federal rules on top of a
two-century old system of State common law, the Thomas amendment will
inevitably lead to confusing conflicts, not only within the Federal and
State courts, but between Federal and State courts.
Mr. Chairman, I reserve the balance of my time.
Mr. COX. Mr. Chairman, I yield such time as he may consume to the
gentleman from Florida (Mr. Shaw).
(Mr. SHAW asked and was given permission to revise and extend his
remarks.)
Mr. SHAW. Mr. Chairman, I rise in strong support of the Patients'
Bill of Rights and this amendment to reform malpractice.
Mr. Chairman, in the last Congress I cosponsored the Bipartisan
Consensus Managed Care Improvement Act, known as the Dingell-Norwood
bill, after much serious consideration. I decided to support this
reform legislation, in opposition to Republican leadership, in order to
send a strong message to patients and the managed care industry about
the importance of addressing managed care abuses. Notwithstanding my
support for the Dingell-Norwood bill in 1999, I remained concerned that
implementation of that bill could increase health insurance costs and
expand liability to employers and health plans, and therefore voted for
several less litigious substitutes last year. As a result, this year I
am cosponsor of H.R. 2315, Patients' Bill of Rights Act of 2001, which
was introduced by Representative Ernie Fletcher and endorsed by
President George W. Bush.
Because of my concern that the new Ganske-Dingell bill could result
in a tidal wave of medical malpractice lawsuits against health plans,
HMOs--and, make no mistake about it--doctors, hospitals and other
health care providers, I rise in strong support of the Thomas-Cox
Medical Malpractice Reform Amendment.
Currently, even before the drastic expansion of medical malpractice
lawsuits that would certainly result from passage of the new Ganske-
Dingell bill, it was estimated that the direct and indirect costs of
medical malpractice reform cost the Medicare program approximately $1.5
billion over a 10 year period. Why? Because the threat of lawsuits
results in physicians practicing defensive medicine--for example,
ordering extra tests or treatments that they might not otherwise do.
This adds indirectly to Medicare costs at a time when the Medicare
program, like the Social Security program, will be running a deficit in
the near future as millions of baby boomers become eligible for
Medicare.
[[Page H5280]]
Yet, we know from a 1996 study of Medicare heart attack victims that
the additional tests and treatments did not help or harm these Medicare
heart patients. Yet the defensive medicine test increased these heart
attack patient's hospital and doctor's bills from five to nine percent.
Medical malpractice premiums are also incorporated as direct Medicare
costs that determine how much a doctor or hospital is paid for each
Medicare patient they treat. Again, Medicare is currently paying every
day for direct and indirect medical malpractice costs that do not
improve the quality of health care that Medicare patients receive.
We have to remember that this is a patient's bill of rights, so why
would we want to drive up a patient's hospital and doctor bills if the
patient's recovery are not improved? Medicare savings that would result
from these medical malpractice reforms--which, as I mentioned earlier,
the CBO estimated to be $1.5 billion over 10 years--could be applied to
a new Medicare prescription drug benefit or to improving Medicare's
preventive health care benefits like breast, cervical or prostate
cancer screening. Likewise, patients who have private health insurance
would ultimately benefit from lower medical bills, which keep health
insurance premiums down, helping to ensure that health insurance
remains affordable for individuals and employers. In the absence of
this Thomas-Cox Medical Malpractice Reform Amendment, the health care
dollars that are diverted from providing patient care and into the
legal system will explode. Will redirecting health care dollars into
trial lawyers' pockets and the courts provide patients with any better
care--which should be the true measure of a patients bill of rights?
Research has shown that the threat of medical malpractice lawsuits will
not improve patient care.
What I have concluded, as a Member committed to ensuring that managed
care plans should be held liable for their decisions, is that Congress
needs to:
First enact a bill which ensures that patients have a indisputable
right to hold health plans and all health care providers legal
accountable for quality health care.
Second, that the new limited right to sue created by Congress be
balanced by pairing it with the medical malpractice reforms in the
Thomas-Cox Medical Malpractice Reform Amendment--reforms that are
similar to the reforms 20 states already have.
In closing, I support a strong Patients' Bill of Rights that is
balanced by holding health care providers legally accountable with the
reasonable limits on medical malpractice lawsuits contained in the
Thomas-Cox Medical Malpractice Reform Amendment.
Mr. COX. Mr. Chairman, I yield myself 30 seconds for the purpose of
correcting the record because the gentleman from Michigan has just
stated several things that are factually in error.
First, he said that this amendment would apply to health plans, that
it would provide relief from damages to health plans. It does not. It
has no application to health plans or insurers. If it did, the American
Medical Association would not endorse it.
Second, he said that it preempts State law. It preempts no State law.
None.
Third, he said that intentional conduct such as a rape would somehow
go scott free under this. That is flat wrong. Intentional conduct is
excepted.
Lastly, he said that if a professional fell asleep or were negligent
that he/she would not be responsible for punitive damages. That is
simply false.
Mr. Chairman, I reserve the balance of my time.
Mr. CONYERS. Mr. Chairman, I yield myself 1 minute. I just want to
ask the floor manager, the gentleman from California (Mr. Cox), if I
heard him correctly when he said that this measure before us preempts
no State law.
I yield to him for a yes or no response.
Mr. COX. Mr. Chairman, that is correct. Section 802 specifically
states that.
Mr. CONYERS. Mr. Chairman, I yield 2 minutes to the gentleman from
Virginia (Mr. Scott), a member of the Committee on the Judiciary.
Mr. SCOTT. Mr. Chairman, I thank the gentleman for yielding time. It
is ironic that when you have a bill entitled Patients' Bill of Rights,
we are spending all of our time stripping the patients of those rights.
There are many issues in this amendment, about 10 different issues,
we have got 20 minutes to explain them all which is about 2 minutes per
issue as we strip our patients of their fundamental rights and
traditional laws when they are victims of negligence.
Questions like the statute of limitations. When do you lose your
right to sue? What is a reasonable amount of time before you have to
file your suit or lose your rights? Two minutes is not enough time to
explain that.
A cap on noneconomic damages. When you lose your sight, lose a limb,
what is fair, particularly if you were nonworking, did not have any
economic losses? What is fair when you suffer a situation like that?
States have dealt with that. The amount in this bill is one of the
lowest found anywhere in the country.
The complicated issue of joint and several liability. If everybody
agrees that you have got a $100,000 case, how do you ever collect if
the HMO is partly at fault, the doctor is partly at fault, maybe the
nurse is, maybe the hospital, how do you ever get recovery,
particularly if one of them is about to go bankrupt?
{time} 2045
We cannot discuss that in 2 minutes.
The collateral source rule, where you have a person who has paid an
insurance premium and has a benefit, who ought to get the benefit of
that? Should it be the one that paid the premium, should it be Blue
Cross/Blue Shield getting their money back, or should it be the one
that created the damage altogether? This bill provides that out of the
three, the one that created the problem gets the benefit.
The calculation of the periodic payments, that is a calculated issue.
We know with lottery proceeds, you can get a lump sum or get your money
strung out. You know if you get the lump sum, you only get half the
money. How does this work out? Do they get to just pay half the money,
or do they get to spread it out? We do not have time to show that
calculation and how unfair this is.
This is not only bad policy, it is a bad process, and I would hope
that we would defeat this amendment.
Mr. COX. Mr. Chairman, I yield myself 30 seconds.
Mr. Chairman, in fact, the purpose of this legislation is to make
sure that we do not have runaway health care costs and that we have
more people insured. The legislation states, and it is worth pointing
out, because we have heard something slightly different here, that
there will be unlimited damages paid to compensate patients for their
medical injuries. Unlimited, without limit.
We are, however, putting some regulations on abuses by lawyers. For
example, we want to make sure that there is a fair share rule. If you
cause 95 percent of the problem, you pay 95 percent of the damage. That
is not the rule today.
Mr. CONYERS. Mr. Chairman, I yield 2 minutes to the gentlewoman from
California (Mrs. Davis).
Mrs. DAVIS of California. Mr. Chairman, I rise today in opposition to
the Thomas malpractice amendment. I want you to know that throughout my
tenure in the State legislature I supported malpractice reform. I agree
with the gentleman from California (Mr. Thomas) that we do need to
address this issue, and I am saddened that this amendment was developed
in the middle of the night.
Malpractice reform is too big and too important an issue to be
addressed in this hasty, unclear manner. If you want to ask any member
of the State legislature over the last few years how they feel about
that, I am sure they will reflect that opinion.
I am just not sure if you realize how enormous an issue it is. Do you
realize that this bill would put medical malpractice cases in Federal
courts for the first time? It is not a small, minor change. It is a
major policy decision that should be debated on its own, rather than as
a sideline discussion to another major bill.
I am pleased that the gentleman from California (Mr. Thomas) brought
up the letter from the AMA, because if he had only read the second
paragraph, I think you would have gotten a different feeling about this
letter. It goes on to say, in fact, the AMA policy has long supported
medical liability reform. They have in California, it is called MICRA.
They appreciate the efforts. But they also say that they have expressed
concerns in the past about coupling such reforms with the patients'
bill of rights. They are concerned that this amendment could interfere
with the ultimate passage of meaningful patients' rights legislation.
I spoke to a physician earlier today who said, yes, complicate it and
kill it.
[[Page H5281]]
I hope that is not what we are trying to do here.
I know in the State assembly I tried to bring together attorneys and
physicians around this matter to develop a compromise on malpractice
reform. There is just no way that this House can find the right answer
to this important issue without bringing all the parties involved to
the table.
If we want effective and responsible malpractice reform, I urge
Members to vote against the Thomas amendment.
Mr. COX. Mr. Chairman, I yield myself 10 seconds to point out that
the American Medical Association has strongly been in support of these
reforms every year I have been in Congress, for 15 years, and their
only concern, as the gentlewoman did not let on, is President Clinton,
representing the trial lawyers, threatened to veto the legislation if
they included the provision they wanted.
Mr. Chairman, I yield 5 minutes to the gentleman from Wisconsin (Mr.
Sensenbrenner), the chairman of the Committee on the Judiciary.
Mr. SENSENBRENNER. Mr. Chairman, the purpose of this amendment is to
make sure that health care coverage is more available and affordable to
all Americans.
These medical malpractice reform provisions will benefit the American
people by limiting costs to doctors, hospitals, and other health care
providers, which in turn will improve access to affordable health care
insurance for all. Unfortunately, the current medical malpractice
litigation is a wealth redistribution lottery that benefits trial
lawyers, instead of an efficient system designed to fairly compensate
those injured by the wrongful acts of others.
Medical malpractice lawyers often simply target the perceived deep
pockets of doctors, hospitals and insurance companies. In many cases,
defendants know a lawsuit would not succeed on its merits, but agree to
settle out of court just to avoid the endless and expensive legal
process. In the end, the lawyers often walk away with as much money as
the plaintiff. This injustice raises the price of health care, causes
unwarranted personal anguish and unfairly damages reputations.
Doctors and hospitals should be held responsible for truly negligent
behavior resulting in actual harm. But a system that perpetuates the
concept of joint and several liability has no effective mechanism, such
as the cap on noneconomic damages, to deter frivolous lawsuits is
simply not just.
America is the only country in the world that provides unlimited
compensation for noneconomic damages. Of course, noneconomic damages
are separate from and do not include payment for medical costs, lost
wages and other out-of-pocket expenses. Therefore, a cap on noneconomic
damages would not in any way limit the amount of money an injured
plaintiff could receive for their hospital costs, doctor bills, other
medical expenses, and lost wages.
Malpractice insurance is expensive because many of the claims brought
against doctors and other health care providers are lengthy and
frivolous. In the year 2000, the average medical malpractice claim took
more than 5 years to settle. Statistics also show that 80 percent of
all medical malpractice claims do not even involve a negligent adverse
event to the plaintiff. Furthermore, only one out of six plaintiffs who
receive compensation from these claims present any evidence of
negligent medical injury.
We also have the ever more prevalent problem of doctors practicing
defensive medicine. Many doctors are ordering unnecessary and costly
medical tests and procedures solely to insulate themselves from
potential lawsuit and not for the medical benefit of their patients.
For example, conservative estimates predict that with effective medical
malpractice tort reform, $600 million a year would be saved in Medicare
payments in just the area of treating cardiac disease.
Let me be perfectly clear about who benefits from our current health
care liability system: the trial lawyers in America, who continue to
line their pockets with each outrageous verdict or settlement.
Congress' concern should be helping improve America's health care
system, not helping the trial lawyers purchase fancier homes, cars,
boats, and country club membership.
This amendment is clearly needed if we are going to make a definitive
step today to improve the health care system. The AMA supporters of the
Ganske-Dingell patients' bill of rights approach recognized this fact,
as was stated by the chairman of the Committee on Ways and Means
earlier tonight.
My colleagues, the choice is simple: the more dollars which are spent
on medical malpractice lawsuits, insurance premiums and lawyers, the
fewer dollars there are for Americans to receive quality medical care.
Let us put patients' rights ahead of lawyers' avarice, and support this
much needed amendment.
Mr. CONYERS. Mr. Chairman, I yield myself 20 seconds merely to point
out to the distinguished floor manager, the gentleman from California
(Mr. Cox), that on page 10, section 809, lines 21 and 22, it says,
``This title shall apply to any health care lawsuit brought in a
Federal or State court.'' I presume the State court is operating under
State law.
Mr. Chairman, I yield 2 minutes to the distinguished gentleman from
New York (Mr. Nadler), a member of the Committee on the Judiciary.
Mr. NADLER. Mr. Chairman, a few minutes ago this House by a party-
line vote adopted the Norwood amendment which caps punitive damages at
$1.5 million and caps noneconomic damages at $1.5 million.
This amendment will take both noneconomic damages, pain and
suffering, loss of a limb, and say that a child who lost a limb should
be compensated at only $250,000, and punitive damages should be
compensated at only $250,000.
If this amendment passes, both amendments will be in place and the
bill will totally contradict itself, because in one place it will say
$1.5 million and in the other place, $250,000. The attempt by the
Republican majority is to kill this bill through poison pill
amendments. They have done two contradictory amendments.
Secondly, let me point out that by capping punitive damages at
$250,000, the purpose of punitive damages is to deter willful, grossly
negligent misconduct. We know of companies that have calculated that
they will let people die, they will put unsafe things in their cars or
other things, because it is cheaper to pay the damages than to change
what they are doing.
Punitive damages are designed to stop that. By limiting punitive
damages to $250,000, you will get HMOs that will calculate that it is
cheaper to deny medical care, cheaper to pay the economic damages,
cheaper to pay the $250,000 limited punitive damages, no matter how
willful, how grossly negligent, how deceitful, how willful they may be.
It is cheaper to kill people and save money, because we have removed
the one deterrent the law has.
This is an amendment that should never be passed. But, of course, it
does not really matter, since we already killed the bill, which will
never pass the Senate, by putting in the Norwood amendment. But we
should not set the precedent of saying to large corporations, calculate
the cost benefit. Do things that may kill or maim people if it is
cheaper for your bottom line.
Mr. COX. Mr. Chairman, I yield myself 20 seconds to correct the
gross, egregious and ought to be subject to punitive damages if we have
the kinds of standards we are talking about here in the Congress
misstatements of what this amendment is all about.
Punitive damages under this legislation are unlimited. They are not
limited to $250,000. The gentleman apparently did not read the
amendment. There is a base of $250,000, or twice economic damages, and
economic damages are unlimited under this legislation.
He said punitive damages also are limited for health insurance plans
or HMOs. This amendment has no application to HMOs or health insurance
plans. None.
Mr. CONYERS. Mr. Chairman, I am pleased to yield 2 minutes to the
gentlewoman from Texas (Ms. Jackson-Lee), a valued member of the
Committee on the Judiciary.
(Ms. JACKSON-LEE of Texas asked and was given permission to revise
and extend her remarks.)
Ms. JACKSON-LEE of Texas. Mr. Chairman, I am glad the distinguished
gentleman from California made the
[[Page H5282]]
point about this amendment. It has nothing to do with HMOs, so he
says, and the patients' bill of rights.
This is the very point that we are making about this amendment. It is
clearly a poison pill. It is the adding of a medical malpractice issue.
No matter how relevant it may be to the general discussion of medical
malpractice, both Federal and State law, it has no relevance in this
debate.
The real issue becomes that those who have been fighting for the
medical malpractice revisions have done so and have been refuted and
rejected for session after session, and they use the patients' bill of
rights when we are trying to reestablish the sanctity of the patient
and physician relationship to now do this.
The most egregious part of this particular amendment is the cap on
noneconomic damages, for what that says is that if you have a child age
5 with the potential of growth, education and opportunity, and through
some tragic accident at age 5 they lose their limbs, then you will
limit the ability of that child growing into adulthood to be able to be
cared for independently by capping the noneconomic damages.
{time} 2100
This is not a case of frivolousnes; this is not a case where we are
suggesting that there are frivolous lawsuits. This is mean-spirited.
Then, secondarily what this does is it gives the medical device
companies, the ones that have the MRI, the ones that have the needles,
a buyout. The buyout is, even if they are approved by the FDA, they get
a buyout. We know that government agencies are not perfect, so that
means if we got some blanket approval 25 years ago for a device, we
have no ability, if someone is injured, to recover.
This is heinous. This is, I would say, one of the worst amendments we
have, and the American Medical Association will have nothing to do with
it, and they should not be misused as they are being misused. Vote this
amendment down.
Mr. COX. Mr. Chairman, I yield 2 minutes to the gentleman from
Louisiana (Mr. Tauzin), the chairman of the Committee on Energy and
Commerce.
Mr. TAUZIN. Mr. Chairman, as a cosponsor of the amendment, let me
first make the point that no one argues, no one can argue, that
unnormally high, runaway malpractice jury awards harms our health care.
First of all, it raises costs, it absolutely raises the cost of medical
malpractice insurance of physicians and gets passed on to all of us.
Secondly, we all know what it does to physicians. It sends a chilling
effect to physicians around the country who end up practicing defensive
medicine; in fact, doing things not necessary, not required, just to
protect themselves from the lawyers who might end up suing them.
Today, we can do something about it. We can pass this amendment
modeled after the California law.
What is beautiful about this amendment is that not only does this
amendment place some caps on those runaway charges that juries
sometimes make that we all pay for, but it does so in a way that does
not preempt the State law. For example, if your State caps noneconomic
damages at $500,000, so be it. If your State has any cap on punitive
damages, then your State law in that area is preserved. If your State
wants to place a $500,000 cap on punitive damages 3 years from now, it
is permitted to do so under this amendment.
In short, our authors have put this amendment together in such a way
that it helps a number of States restrain runaway malpractice costs
and, at the same time, preserves your State's ability to do it
differently if you want to do it differently in your State.
Mr. Chairman, this is modest medical malpractice reform. We passed
some recently on medical devices that were going out of business, not
because they were losing lawsuits; simply because the cost of defending
the lawsuits was driving the companies out of the business of making
things, like shunts for kids with hydrocephalic cases or limbs for
children who have lost their limbs to cancer.
When we passed that medical malpractice reform a few years ago, those
manufacturers went back into business. Today, we have a chance to keep
our health care system in business. Pass this good amendment.
Mr. CONYERS. Mr. Chairman, I yield myself 1\1/2\ minutes to first,
hopefully correct the chairman of the Committee on the Judiciary, the
gentleman from Wisconsin (Mr. Sensenbrenner), who asserted that lawyers
were getting huge fees. All fees, most Members know, are controlled by
the court. Any exorbitant fees are not permitted. And from time
immemorial, lawyers get one-third of the recovery. If that is what we
are complaining about, we should make it clear that anything more
excessive is controlled by the court.
Then, the gentleman from California (Mr. Cox), the floor manager, has
asserted that the bill does not cap punitive damages. Now if,
unfortunately, a physician rapes a patient, many would say she has no
economic damages, she may have no lost wages and negligible medical
costs. So the Cox amendment would, in that case, cap her punitive
damages at $250,000.
Mr. COX. Mr. Chairman, that is false. That is false. The gentleman
must yield on that point.
Mr. CONYERS. Sir, control yourself.
So, I say to the gentleman from California (Mr. Cox), it is
incorrect, I repeat, incorrect to assert that this amendment does not
cap punitive damages. If the gentleman takes issue with that, he may
use his own time and explain to the membership what he disagrees about.
Mr. Chairman, I yield 1 minute to the gentleman from Iowa (Mr.
Ganske).
Mr. GANSKE. Mr. Chairman, I stood on this floor arguing for medical
malpractice reform, and I continued before that, but not on this bill.
Let me read to my colleagues from a letter from the AMA on this.
``AMA policy has long supported medical liability reform, and we
appreciate your efforts in this regard. As you know, we have expressed
concerns in the past about coupling such reforms with the Patients'
Bill of Rights. As we enter into the conference for the Patients' Bill
of Rights, it continues to be our hope that controversy surrounding
this amendment will not interfere with the ultimate passage of a
meaningful Patients' Bill of Rights.''
We have just passed an amendment that I think will make the
conference more difficult. I think if this amendment to this bill
passes, the conference will be really difficult. I continue to be a
supporter for medical malpractice reform. I would like to see it come
up another time.
I urge a no vote on this amendment.
Mr. COX. Mr. Chairman, I yield myself 45 seconds to correct the
record.
We have the right of free speech here on the floor of the House, but
it is very important that we stick to the facts. The bill says very
clearly that, first of all, punitive damages are not limited, but
rather, they are fixed in amount, in a variable amount that can rise to
infinity at twice economic damages.
Second, the gentleman from Michigan stated an outrageous example. He
says if a physician rapes someone, that they would somehow be shielded
from liability by this amendment or some other act of Congress. What
this amendment very clearly states is that anyone who specifically
intends to cause harm has no place in this provision. It does not
apply.
Mr. Chairman, I yield 1 minute to the gentleman from Kentucky (Mr.
Fletcher), the author of so much of the good work that the President
and the Congress are bringing to the floor today.
Mr. FLETCHER. Mr. Chairman, as a practicing physician, the
possibility of malpractice was always there in the back of your mind,
because you wanted to make sure you delivered the most quality care you
could to your patients.
I can think of generally, probably a day did not go by when there
were things that you felt like, well, I do not really think we need
this, but because of the way malpractice is, we are going to order a
specific test. A patient that comes in with a headache, you may not see
them again for a while, and you order an $800 or a $1,000 MRI just to
make sure that if something happens way in the future that you do not
incur some sort of frivolous lawsuit.
But let me talk about a couple of things. One, according to Daniel P.
Kessler, an associate professor at Stanford Business School, when he
looked
[[Page H5283]]
at direct costs, he said they may be relatively small, the direct costs
of liability. I think clearly we can say they are fairly significant.
But they are small relative to the indirect costs which he estimates
five times.
For that reason and for the quality of care, to make sure that we do
not promote defensive medicine, I urge my colleagues to support this,
as most of the physicians across the country would agree.
Mr. CONYERS. Mr. Chairman, I am pleased to yield 1 minute to the
gentlewoman from Ohio (Mrs. Jones), a lawyer, prosecutor, and former
judge.
Mrs. JONES of Ohio. Mr. Chairman, as we sit here debating a Patients'
Bill of Rights, we stopped talking about the patients' rights and
started reading letters from the AMA saying, well, I do not want the
doctors to be any more liable, the HMOs, so we are happy with the
legislation.
I would suggest to those of my colleagues on the floor of this House,
walk a mile in the shoes of someone who has been injured, walk a mile
in the shoes of a family member who has a child that has been maimed or
blinded, and you will not be talking about limits, you will be talking
about, let me get to court and establish my damages, and if I establish
them, pay me; and if they have been negligent or extremely negligent,
let me get punitive damages.
Let us get realistic, I say to my colleagues. We as significant
Members of Congress can pass legislation that will not be questionable,
that will not be left to a court to interpret. We can make it clear to
the people of these United States that we are going to stand up for
patients' rights, that we are going to stand up and allow them to
collect if they are damaged.
Mr. COX. Mr. Chairman, I yield 2 minutes to the gentleman from
Pennsylvania (Mr. Toomey).
Mr. TOOMEY. Mr. Chairman, I thank the gentleman from California for
yielding time.
I would like to commend the sponsors of this amendment. I introduced
bills both in the previous Congress and in this Congress that are
substantially the same as this amendment, so I am grateful that we are
going to have a chance to include this in legislation that is moving.
Why do we need medical malpractice reform? It is simple. Medical
malpractice awards are out of control. Medical malpractice awards are
draining millions of dollars from health care and putting it into
courtrooms and trial lawyers. They are contributing significantly to
the staggering increase in health care costs. They are forcing doctors
to practice defensive medicine to protect themselves against, very
often, meritless claims, and these awards are forcing some doctors to
leave their specialties altogether.
My State of Pennsylvania has been particularly hard hit by what is
now a legal system run amok. We rank second in the Nation in medical
malpractice judgments. We suffer through jury verdicts that are amongst
the highest, twice the level of California, which has this kind of
medical malpractice reform. As a result, doctors in my State often pay
premiums that are twice the level of California, often over $100,000 a
year just for insurance; good doctors who have never harmed a soul, who
have never been negligent.
Mr. Chairman, this is long overdue. This provision applies to all
health care providers; it provides reasonable parameters on awards. It
eliminates the insidious application of joint and several liability;
and that, in layman terms, simply means that defendants will be
required to pay judgments in proportion to their responsibility, not in
proportion to the thickness of their wallet.
Finally, Mr. Chairman, many of us are concerned that what we do here
in Washington respect the rights of the States. This amendment does
exactly that. This amendment says that if there is a State that has a
medical malpractice law on the books, then that State law will prevail.
If a State has no law whatsoever, then this amendment would prevail. If
a State has no law and subsequently chooses to pass a law, then this
would become irrelevant in that State; the State law would then once
again prevail. This respects States' rights. This is going to help
restore funding to health care instead of to trial lawyers.
I urge my colleagues to support this amendment.
Mr. CONYERS. Mr. Chairman, I reserve my time.
Mr. COX. Mr. Chairman, I yield 2 minutes to the distinguished
gentleman from Louisiana (Mr. McCrery), a member of the Committee on
Ways and Means.
Mr. McCRERY. Mr. Chairman, placing reasonable caps on medical
malpractice will help us, as the gentleman from Louisiana pointed out
(Mr. Tauzin), to fight health care inflation. In 1999, fully 13 percent
of our gross domestic product went to health care expenses. That number
will climb to almost 16 percent before this decade is over. At some
point, this trend becomes unsustainable and some sort of national
health care system in which politicians ration health care becomes
inevitable.
Our medical malpractice system is a drag on the health care system in
many ways. Dollars spent on lawyers, enormous jury awards and
settlements to avoid litigation are not being spent on patient care.
Data from the insurance analyst A.M. Best show that injured claimants
received less than one-third of total malpractice premiums in 1996,
while attorneys' fees, the cost of expert witnesses and other court
costs eat up more than half.
The fear of being sued encourages defensive medicine, extra tests and
procedures which may help insulate physicians from being sued, but do
nothing for patients, other than add to their bills. The amendment
before us strikes an appropriate balance. It permits States to enact
their own medical malpractice laws, if they wish, but it does set a
standard which will govern malpractice actions in States which have
failed to enact their own reforms.
Finally, it is critical to remember that nothing in this amendment
denies injured plaintiffs from obtaining adequate redress, including
compensation for 100 percent of their economic losses, their medical
costs, their lost wages, future lost wages. Instead, though, this
amendment places reasonable limits on noneconomic and punitive damages.
As the American Medical Association noted in testimony in 1996,
``While these can be emotionally charged issues, the fact remains that
the current tort system, driven as it is by the potential for unlimited
attorneys' fees and unlimited compensation for intangible losses, is
unable to resolve medical liability claims effectively and
efficiently.''
{time} 2115
``Moreover, even with the cap of a quarter of a million dollars, the
United States would be the most generous country in the world in
compensating for noneconomic losses.''
This is a balanced amendment. It will do great good for our health
care system in this country.
Mr. CONYERS. Mr. Chairman, I reserve my time.
Mr. COX. Mr. Chairman, I yield 1 minute to the gentleman from
Pennsylvania (Mr. Greenwood), a member of the Committee on Energy and
Commerce.
Mr. GREENWOOD. Mr. Chairman, I thank the gentleman for yielding me
time.
In my State of Pennsylvania, it was not very long ago that when I
looked at the medical community I saw a group of folks doing pretty
well. They seemed to have a nice income. They seemed to be enjoying
their profession. They seemed to be on top of the world.
In the last 15 years or so I have seen a dramatic change in my
doctors from the State of Pennsylvania. I have seen them hit with
medical malpractice rates that are phenomenal, a 45 percent increase in
the medical malpractice rates just in the last year in the State of
Pennsylvania.
I knew a physician. He was a good orthopedist, one of the best. All
he liked to do was get up in the morning and fix broken bones. His
medical malpractice rates got so high that his daughter secretly paid
his premiums for him just so he would not give up and quit. Finally,
when he found out how high those premiums were, he left the State of
Pennsylvania and we lost one of our finest physicians.
The doctors in my State of Pennsylvania have had it. We have got to
pass this medical malpractice tonight.
Mr. CONYERS. Mr. Chairman, I yield 1 minute to the gentleman from
Texas (Mr. Sandlin).
[[Page H5284]]
Mr. SANDLIN. Mr. Chairman, last night one could watch network TV or
C-SPAN and by switching back and forth one could watch two shows,
``Let's Make a Deal'' and ``The Price Is Right.'' If one listened very
closely in the middle of night, one could almost hear the White House
say, Come on down. You are our next contestant.
We still do not know what was behind doors 1, 2, or 3; and we are
wondering what the grand prize was. We know this amendment was filed
for political cover. Let us be straight about it. That being said, let
us get to the facts.
All of us are concerned about the high cost of medical care. However,
medical malpractice does not contribute to that. An October 1992 study
of the Congressional Budget Office concluded and said:
Malpractice insurance premiums account for less than one
penny of each dollar spent annually on the Nation's health
care.
A study funded by the Texas Medical Association, the Trial Lawyers'
Association, the Texas Hospital Association said:
Changing the medical professional liability system will
have minimal cost savings impact on their overall health care
delivery system in Texas.
Many factors contribute to increased medical costs. This is not one
of them. Vote no on Thomas-Cox. It is pure politics. We know it. It is
nothing more and the patients lose.
parliamentary inquiry
Mr. COX. Mr. Chairman, does the minority have the right to close?
The CHAIRMAN. The gentleman from California has the right to close.
Mr. COX. Mr. Chairman, I yield myself 5 seconds to observe that this
Chamber has on many occasions passed legislation of this type, and it
has been scored by the Congressional Budget Office as saving $1.5
billion.
Mr. Chairman, I reserve the balance of my time.
parliamentary inquiry
Mr. CONYERS. Parliamentary inquiry, Mr. Chairman.
The CHAIRMAN. The chair finds that the gentleman from Michigan is not
a ``manager'' of the pending measure within the meaning of clause 3(c)
of rule XVII. Consequently, the gentleman from California has the right
to close.
Mr. CONYERS. Mr. Chairman, I thank the Chair for answering my
anticipated question.
Mr. Chairman, I yield the balance of my time to the gentlewoman from
Colorado (Ms. DeGette).
The CHAIRMAN. The gentlewoman is recognized for 1\1/4\ minutes.
Ms. DeGETTE. Mr. Chairman, if this amendment passes, this bill will
have completed its transformation from the Patients' Bill of Rights, to
the providers' bill of rights. Make no mistake about it, under the
Norwood amendment which just passed, patients will never be able to
hold HMOs legally accountable because of an unreasonable burden of
proof.
If this amendment is passed, patients will now not be adequately
compensated for their damages that they incur as a result of
malpractice by doctors or any other providers.
My colleague, the gentleman from California (Mr. Cox), says
incorrectly that the bill provides unlimited economic damages. But he
knows as well as everybody else here that State statutes limit economic
damages to actual money paid out of pocket. So if there is someone who
has medical bills of $2,000 and they have noneconomic damages of $1
million, too bad. They are out of court. The only noneconomic damages
they can get would be $4,000 under this amendment.
Now where will this apply? In some of the most tragic situations,
loss of a limb or sight, the loss of mobility, the loss of fertility,
excruciating pain and permanent and severe disfigurement, also, the
loss of a child or a spouse. There are a number of other damages that
are limited. Do not take this out on the patients. Vote no on this
amendment.
Mr. COX. Mr. Chairman, I yield myself 15 seconds while they are
setting up the chart to correct the misunderstanding of the
gentlewoman.
She described a situation in which there were for some reason, under
State law, a limit on economic damages, there is no such limit in this
bill, and that the limit amounted to $2,000 in a case and that that
would mean twice the economic damages would be a $4,000 limit under
this bill. But she misunderstands it because the limit in that case
would be a quarter million dollars. That is the limit that would apply,
the greater, not the lesser, of twice the economic damages or a quarter
million dollars.
Mr. Chairman, I will inquire how much time remains.
The CHAIRMAN. The gentleman from California has 2 minutes remaining.
Mr. COX. Mr. Chairman, I yield myself my remaining time.
Mr. Chairman, I wish to address the Chamber from the floor because I
wanted to draw attention to this chart.
This describes the situation in America today in which insurance
premiums paid by all of us here in this Chamber are distributed
unequally to pay the costs of lawsuit abuse: 32.46 percent going to pay
injured claimants; and 52 percent to pay attorneys, witnesses, expert
witnesses, and other court expenses. That is wrong, and we are here to
fix it.
There is virtually a constitutional right in America to bring a bad
lawsuit, and we count on the courts to throw the bad ones out. But in
the Federal system today, because the courts are so busy, 93 percent of
cases never get a single day of trial.
That creates enormous opportunity for mischief, because then people
can extort settlements, since everyone knows how expensive it is to
wait it out and pay their lawyers while they finally might be one of
the 7 percent of cases that get their day in court.
We want to adopt a ``fair share'' rule. We want to say that if one
committed 5 percent of the problem, then pay 5 percent of the damages.
Let us say that a rapist drug dealer staggers into the emergency room
with a knife wound and demands, in his drug-induced haze, to be
operated on, and gives the emergency room fits.
The surgeon that works on him does the best he can, but it is not
perfect. The drug dealer and rapist sues. The jury finds he is 95
percent responsible for his own knife wounds, but 5 percent of the
problem lies with the hospital, because the physician was working too
long.
Today the hospital, us, the premium payer, can be made to pay 100
percent because the drug dealer is without means. We want a fair share
rule because if one pays premiums, one should not be denied health care
in that way.
Everyone knows this bill, which is very important, which we are going
to pass, which expands patient protections, is going to raise the cost
of insurance. We are trying to find ways to regulate it.
If Members believe that all doctors are bad and all lawyers are good,
this amendment is not for them. But if Members believe that some
lawyers need some regulation, as well as HMOs getting regulation
properly in this bill, vote aye for lower health care premiums and more
access to health care.
Mr. SHAYS. Mr. Chairman, I rise in support of the Thomas-Cox
amendment. As one who has long supported reforming our medical
malpractice laws, I am pleased to support this amendment.
This amendment is similar to legislation Mr. Greenwood and I
introduced, the Medical Malpractice Rx Act, which will help prevent
frivolous, excessive lawsuits that are driving up the cost of health
care, forcing doctors to practice defensive medicine, and making access
to affordable health insurance more difficult for the average American.
Only 40 cents of every dollar paid to litigate and settle malpractice
cases is ever paid to the actual victims. Lawsuits impose unnecessarily
high litigation costs on all parties and these costs are then passed
along to consumers. The rate of malpractice cases has doubled in the
past ten years and on average 120,000 lawsuits are filed against
America's 500,000 physicians at any one time. That's one lawsuit for
every four doctors.
It is imperative we adopt the Thomas-Cox amendment to discourage
abuse of our legal system and curb the unsustainable growth of medical
costs in our country. I urge my colleagues on both sides of the aisle
to vote in favor of this amendment.
The CHAIRMAN. The question is on the amendment offered by the
gentleman from California (Mr. Thomas).
The question was taken; and the Chairman announced that the ayes
appeared to have it.
Recorded Vote
Mr. CONYERS. Mr. Chairman, I demand a recorded vote.
A recorded vote was ordered.
[[Page H5285]]
The vote was taken by electronic device, and there were--ayes 207,
noes 221, not voting 5, as follows:
[Roll No. 330]
AYES--207
Aderholt
Akin
Armey
Bachus
Baker
Ballenger
Barr
Bartlett
Barton
Bass
Bereuter
Biggert
Bilirakis
Blunt
Boehlert
Boehner
Bonilla
Bono
Brady (TX)
Brown (SC)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Cannon
Cantor
Capito
Castle
Chabot
Coble
Collins
Combest
Cooksey
Cox
Cramer
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis, Jo Ann
Davis, Tom
Deal
DeLay
DeMint
Doolittle
Dreier
Dunn
Ehlers
English
Everett
Ferguson
Flake
Fletcher
Foley
Forbes
Fossella
Frelinghuysen
Gallegly
Gekas
Gibbons
Gilchrest
Gillmor
Goode
Goodlatte
Goss
Granger
Graves
Green (WI)
Greenwood
Gutknecht
Hansen
Hart
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hilleary
Hobson
Hoekstra
Horn
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Isakson
Issa
Johnson (CT)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
Kerns
Kingston
Kirk
Knollenberg
Kolbe
LaHood
Largent
Latham
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (KY)
Lucas (OK)
Manzullo
McCrery
McHugh
McInnis
McKeon
Mica
Miller (FL)
Miller, Gary
Moran (KS)
Myrick
Ney
Northup
Norwood
Nussle
Osborne
Ose
Otter
Oxley
Pence
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Portman
Pryce (OH)
Putnam
Quinn
Radanovich
Ramstad
Regula
Rehberg
Reynolds
Riley
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryan (WI)
Ryun (KS)
Saxton
Scarborough
Schaffer
Schrock
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Skeen
Smith (MI)
Smith (NJ)
Smith (TX)
Souder
Stearns
Stenholm
Stump
Sununu
Sweeney
Tancredo
Tauzin
Taylor (NC)
Thomas
Thornberry
Thune
Tiahrt
Tiberi
Toomey
Traficant
Upton
Vitter
Walden
Walsh
Wamp
Watkins (OK)
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wilson
Wolf
Young (AK)
Young (FL)
NOES--221
Abercrombie
Ackerman
Allen
Andrews
Baca
Baird
Baldacci
Baldwin
Barcia
Barrett
Becerra
Bentsen
Berkley
Berman
Berry
Bishop
Blagojevich
Blumenauer
Bonior
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brown (FL)
Brown (OH)
Capps
Capuano
Cardin
Carson (IN)
Carson (OK)
Chambliss
Clay
Clayton
Clement
Clyburn
Condit
Conyers
Costello
Coyne
Crowley
Cummings
Davis (CA)
Davis (FL)
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Diaz-Balart
Dicks
Dingell
Doggett
Dooley
Doyle
Duncan
Edwards
Ehrlich
Emerson
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank
Frost
Ganske
Gephardt
Gilman
Gonzalez
Gordon
Graham
Green (TX)
Grucci
Gutierrez
Hall (OH)
Hall (TX)
Harman
Hastings (FL)
Hill
Hilliard
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Istook
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Jenkins
John
Johnson (IL)
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick
Kind (WI)
King (NY)
Kleczka
Kucinich
LaFalce
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
LaTourette
Lee
Levin
Lewis (GA)
Lofgren
Lowey
Luther
Maloney (CT)
Maloney (NY)
Mascara
Matheson
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McDermott
McGovern
McIntyre
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Millender-McDonald
Miller, George
Mink
Mollohan
Moore
Moran (VA)
Morella
Murtha
Nadler
Napolitano
Neal
Nethercutt
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Phelps
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Rivers
Rodriguez
Roemer
Ross
Rothman
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Schakowsky
Schiff
Scott
Serrano
Sherman
Shows
Skelton
Slaughter
Smith (WA)
Snyder
Solis
Spratt
Stark
Strickland
Stupak
Tanner
Tauscher
Taylor (MS)
Terry
Thompson (MS)
Thurman
Tierney
Towns
Turner
Udall (CO)
Udall (NM)
Velazquez
Visclosky
Waters
Watson (CA)
Watt (NC)
Waxman
Weiner
Wexler
Wicker
Woolsey
Wu
Wynn
NOT VOTING--5
Lipinski
Markey
Paul
Spence
Thompson (CA)
{time} 2146
Mr. ENGLISH changed his vote from ``no'' to ``aye.''
So the amendment was rejected.
The result of the vote was announced as above recorded.
The CHAIRMAN. Under the rule, the Committee rises.
Accordingly, the Committee rose; and the Speaker pro tempore (Mr.
Bereuter) having assumed the chair, Mr. LaHood, Chairman of the
Committee of the Whole House on the State of the Union, reported that
that Committee, having had under consideration the bill (H.R. 2563) 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, pursuant to
House Resolution 219, he reported the bill back to the House with
sundry amendments adopted by the Committee of the Whole.
The SPEAKER pro tempore. Under the rule, the previous question is
ordered.
Is a separate vote demanded on any amendment? If not, the Chair will
put them en gros.
The amendments were agreed to.
The SPEAKER pro tempore. The question is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
Motion to Recommit Offered by Mr. Berry
Mr. BERRY. Mr. Speaker, I offer a motion to recommit.
The SPEAKER pro tempore. Is the gentleman opposed to the bill?
Mr. BERRY. Yes, Mr. Speaker, in its current form I am.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.
The Clerk read as follows:
Mr. Berry moves to recommit the bill H.R. 2563 to the
Committee on Ways and Means, the Committee on Energy and
Commerce, and the Committee on Education and the Workforce
with instructions that each report the same back to the House
forthwith with the following amendment:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Bipartisan
Patient Protection Act''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--IMPROVING MANAGED CARE
Subtitle A--Utilization Review; Claims; and Internal and External
Appeals
Sec. 101. Utilization review activities.
Sec. 102. Procedures for initial claims for benefits and prior
authorization determinations.
Sec. 103. Internal appeals of claims denials.
Sec. 104. Independent external appeals procedures.
Sec. 105. Health care consumer assistance fund.
Subtitle B--Access to Care
Sec. 111. Consumer choice option.
Sec. 112. Choice of health care professional.
Sec. 113. Access to emergency care.
Sec. 114. Timely access to specialists.
Sec. 115. Patient access to obstetrical and gynecological care.
Sec. 116. Access to pediatric care.
Sec. 117. Continuity of care.
Sec. 118. Access to needed prescription drugs.
Sec. 119. Coverage for individuals participating in approved clinical
trials.
Sec. 120. Required coverage for minimum hospital stay for mastectomies
and lymph node dissections for the treatment of breast
cancer and coverage for secondary consultations.
Subtitle C--Access to Information
Sec. 121. Patient access to information.
Subtitle D--Protecting the Doctor-Patient Relationship
Sec. 131. Prohibition of interference with certain medical
communications.
Sec. 132. Prohibition of discrimination against providers based on
licensure.
Sec. 133. Prohibition against improper incentive arrangements.
Sec. 134. Payment of claims.
Sec. 135. Protection for patient advocacy.
Subtitle E--Definitions
Sec. 151. Definitions.
Sec. 152. Preemption; State flexibility; construction.
[[Page H5286]]
Sec. 153. Exclusions.
Sec. 154. Treatment of excepted benefits.
Sec. 155. Regulations.
Sec. 156. Incorporation into plan or coverage documents.
Sec. 157. Preservation of protections.
TITLE II--APPLICATION OF QUALITY CARE STANDARDS TO GROUP HEALTH PLANS
AND HEALTH INSURANCE COVERAGE 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.
Sec. 203. Cooperation between Federal and State authorities.
TITLE III--APPLICATION OF PATIENT PROTECTION STANDARDS TO FEDERAL
HEALTH INSURANCE PROGRAMS
Sec. 301. Application of patient protection standards to Federal health
insurance programs.
TITLE IV--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974
Sec. 401. Application of patient protection standards to group health
plans and group health insurance coverage under the
Employee Retirement Income Security Act of 1974.
Sec. 402. Availability of civil remedies.
Sec. 403. Limitation on certain class action litigation.
Sec. 404. Limitations on actions.
Sec. 405. Cooperation between Federal and State authorities.
Sec. 406. Sense of the Senate concerning the importance of certain
unpaid services.
TITLE V--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986
Subtitle A--Application of Patient Protection Provisions
Sec. 501. Application of requirements to group health plans under the
Internal Revenue Code of 1986.
Sec. 502. Conforming enforcement for women's health and cancer rights.
Subtitle B--Health Care Coverage Access Tax Incentives
Sec. 511. Expanded availability of Archer MSAs.
Sec. 512. Deduction for 100 percent of health insurance costs of self-
employed individuals.
Sec. 513. Credit for health insurance expenses of small businesses.
Sec. 514. Certain grants by private foundations to qualified health
benefit purchasing coalitions.
Sec. 515. State grant program for market innovation.
TITLE VI--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION
Sec. 601. Effective dates.
Sec. 602. Coordination in implementation.
Sec. 603. Severability.
TITLE VII--MISCELLANEOUS PROVISIONS
Sec. 701. No impact on Social Security Trust Fund.
Sec. 702. Customs user fees.
Sec. 703. Fiscal year 2002 medicare payments.
Sec. 704. Sense of Senate with respect to participation in clinical
trials and access to specialty care.
Sec. 705. Sense of the Senate regarding fair review process.
Sec. 706. Annual review.
Sec. 707. Definition of born-alive infant.
TITLE VIII--REVENUE OFFSETS
Subtitle A--Extension of Custom User Fees
Sec. 801. Further extension of authority to levy customs user fees.
Subtitle B--Tax Shelter Provisions
Part I--Clarification of Economic Substance Doctrine
Sec. 811. Clarification of economic substance doctrine.
Part II--Penalties
Sec. 821. Increase in penalty on underpayments resulting from failure
to satisfy certain common law rules.
Sec. 822. Penalty on promoters of tax avoidance strategies which have
no economic substance, etc.
Sec. 823. Modifications of penalties for aiding and abetting
understatement of tax liability involving tax shelters.
Sec. 824. Failure to maintain lists.
Sec. 825. Penalty for failing to disclose reportable transaction.
Sec. 826. Registration of certain tax shelters without corporate
participants.
Sec. 827. Effective dates.
Part III--Limitations on Importation or Transfer of Built-in Losses
Sec. 831. Limitation on importation of built-in losses.
Sec. 832. Disallowance of partnership loss transfers.
TITLE I--IMPROVING MANAGED CARE
Subtitle A--Utilization Review; Claims; and Internal and External
Appeals
SEC. 101. UTILIZATION REVIEW ACTIVITIES.
(a) Compliance With Requirements.--
(1) In general.--A group health plan, and a health
insurance issuer that provides 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 and section 102.
(2) 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.
(3) Utilization review defined.--For purposes of this
section, the terms ``utilization review'' and ``utilization
review activities'' mean procedures used to monitor or
evaluate the use or coverage, 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.
(b) Written Policies and Criteria.--
(1) Written policies.--A utilization review program shall
be conducted consistent with written policies and procedures
that govern all aspects of the program.
(2) Use of written criteria.--
(A) In general.--Such a program shall utilize written
clinical review criteria developed with input from a range of
appropriate actively practicing health care professionals, as
determined by the plan, pursuant to the program. Such
criteria shall include written clinical review criteria that
are based on valid clinical evidence where available and 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.
(B) Continuing use of standards in retrospective review.--
If a health care service has been specifically pre-authorized
or approved for a participant, beneficiary, or enrollee 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 enrollee during the same course of treatment.
(C) Review of sample of claims denials.--Such a program
shall provide for a periodic evaluation of the clinical
appropriateness of at least a sample of denials of claims for
benefits.
(c) Conduct of Program Activities.--
(1) Administration by health care professionals.--A
utilization review program shall be administered by qualified
health care professionals who shall oversee review decisions.
(2) Use of qualified, independent personnel.--
(A) In general.--A utilization review program shall provide
for the conduct of utilization review activities only through
personnel who are qualified and have received appropriate
training in the conduct of such activities under the program.
(B) 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 encourages denials of claims for benefits.
(C) Prohibition of conflicts.--Such a program shall not
permit a health care professional who is providing health
care services to an individual to perform utilization review
activities in connection with the health care services being
provided to the individual.
(3) Accessibility of review.--Such a program shall provide
that appropriate personnel performing utilization review
activities under the program, including the utilization
review administrator, 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.
(4) 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 an individual
more frequently than is reasonably required to assess whether
the services under review are medically necessary and
appropriate.
SEC. 102. PROCEDURES FOR INITIAL CLAIMS FOR BENEFITS AND
PRIOR AUTHORIZATION DETERMINATIONS.
(a) Procedures of Initial Claims for Benefits.--
(1) In general.--A group health plan, and a health
insurance issuer offering health insurance coverage, shall--
(A) make a determination on an initial claim for benefits
by a participant, beneficiary, or enrollee (or authorized
representative) regarding payment or coverage for items or
services under the terms and conditions of the plan or
coverage involved, including any cost-sharing amount that the
participant, beneficiary, or enrollee is required to pay with
respect to such claim for benefits; and
(B) notify a participant, beneficiary, or enrollee (or
authorized representative) and the treating health care
professional involved regarding a determination on an initial
claim for benefits made under the terms and conditions of the
plan or coverage, including any cost-sharing amounts that the
participant, beneficiary, or enrollee may be required to
[[Page H5287]]
make with respect to such claim for benefits, and of the
right of the participant, beneficiary, or enrollee to an
internal appeal under section 103.
(2) Access to information.--
(A) Timely provision of necessary information.--With
respect to an initial claim for benefits, the participant,
beneficiary, or enrollee (or authorized representative) and
the treating health care professional (if any) shall provide
the plan or issuer with access to information requested by
the plan or issuer that is necessary to make a determination
relating to the claim. Such access shall be provided not
later than 5 days after the date on which the request for
information is received, or, in a case described in
subparagraph (B) or (C) of subsection (b)(1), by such earlier
time as may be necessary to comply with the applicable
timeline under such subparagraph.
(B) Limited effect of failure on plan or issuer's
obligations.--Failure of the participant, beneficiary, or
enrollee to comply with the requirements of subparagraph (A)
shall not remove the obligation of the plan or issuer to make
a decision in accordance with the medical exigencies of the
case and as soon as possible, based on the available
information, and failure to comply with the time limit
established by this paragraph shall not remove the obligation
of the plan or issuer to comply with the requirements of this
section.
(3) Oral requests.--In the case of a claim for benefits
involving an expedited or concurrent determination, a
participant, beneficiary, or enrollee (or authorized
representative) may make an initial claim for benefits
orally, but a group health plan, or health insurance issuer
offering health insurance coverage, may require that the
participant, beneficiary, or enrollee (or authorized
representative) provide written confirmation of such request
in a timely manner on a form provided by the plan or issuer.
In the case of such an oral request for benefits, the making
of the request (and the timing of such request) shall be
treated as the making at that time of a claim for such
benefits without regard to whether and when a written
confirmation of such request is made.
(b) Timeline for Making Determinations.--
(1) Prior authorization determination.--
(A) In general.--A group health plan, and a health
insurance issuer offering health insurance coverage, shall
make a prior authorization determination on a claim for
benefits (whether oral or written) in accordance with the
medical exigencies of the case and as soon as possible, but
in no case later than 14 days from the date on which the plan
or issuer receives information that is reasonably necessary
to enable the plan or issuer to make a determination on the
request for prior authorization and in no case later than 28
days after the date of the claim for benefits is received.
(B) Expedited determination.--Notwithstanding subparagraph
(A), a group health plan, and a health insurance issuer
offering health insurance coverage, shall expedite a prior
authorization determination on a claim for benefits described
in such subparagraph when a request for such an expedited
determination is made by a participant, beneficiary, or
enrollee (or authorized representative) at any time during
the process for making a determination and a health care
professional certifies, with the request, that a
determination under the procedures described in subparagraph
(A) would seriously jeopardize the life or health of the
participant, beneficiary, or enrollee or the ability of the
participant, beneficiary, or enrollee to maintain or regain
maximum function. Such determination shall be made in
accordance with the medical exigencies of the case and as
soon as possible, but in no case later than 72 hours after
the time the request is received by the plan or issuer under
this subparagraph.
(C) Ongoing care.--
(i) Concurrent review.--
(I) In general.--Subject to clause (ii), in the case of a
concurrent review of ongoing care (including
hospitalization), which results in a termination or reduction
of such care, the plan or issuer must provide by telephone
and in printed form notice of the concurrent review
determination to the individual or the individual's designee
and the individual's health care provider in accordance with
the medical exigencies of the case and as soon as possible,
with sufficient time prior to the termination or reduction to
allow for an appeal under section 103(b)(3) to be completed
before the termination or reduction takes effect.
(II) Contents of notice.--Such notice shall include, with
respect to ongoing health care items and services, the number
of ongoing services approved, the new total of approved
services, the date of onset of services, and the next review
date, if any, as well as a statement of the individual's
rights to further appeal.
(ii) Rule of construction.--Clause (i) shall not be
construed as requiring plans or issuers to provide coverage
of care that would exceed the coverage limitations for such
care.
(2) Retrospective determination.--A group health plan, and
a health insurance issuer offering health insurance coverage,
shall make a retrospective determination on a claim for
benefits in accordance with the medical exigencies of the
case and as soon as possible, but not later than 30 days
after the date on which the plan or issuer receives
information that is reasonably necessary to enable the plan
or issuer to make a determination on the claim, or, if
earlier, 60 days after the date of receipt of the claim for
benefits.
(c) Notice of a Denial of a Claim for Benefits.--Written
notice of a denial made under an initial claim for benefits
shall be issued to the participant, beneficiary, or enrollee
(or authorized representative) and the treating health care
professional in accordance with the medical exigencies of the
case and as soon as possible, but in no case later than 2
days after the date of the determination (or, in the case
described in subparagraph (B) or (C) of subsection (b)(1),
within the 72-hour or applicable period referred to in such
subparagraph).
(d) Requirements of Notice of Determinations.--The written
notice of a denial of a claim for benefits determination
under subsection (c) shall be provided in printed form and
written in a manner calculated to be understood by the
participant, beneficiary, or enrollee and shall include--
(1) the specific reasons for the determination (including a
summary of the clinical or scientific evidence used in making
the determination);
(2) the procedures for obtaining additional information
concerning the determination; and
(3) notification of the right to appeal the determination
and instructions on how to initiate an appeal in accordance
with section 103.
(e) Definitions.--For purposes of this part:
(1) Authorized representative.--The term ``authorized
representative'' means, with respect to an individual who is
a participant, beneficiary, or enrollee, any health care
professional or other person acting on behalf of the
individual with the individual's consent or without such
consent if the individual is medically unable to provide such
consent.
(2) Claim for benefits.--The term ``claim for benefits''
means any request for coverage (including authorization of
coverage), for eligibility, or for payment in whole or in
part, for an item or service under a group health plan or
health insurance coverage.
(3) Denial of claim for benefits.--The term ``denial''
means, with respect to a claim for benefits, a denial (in
whole or in part) of, or a failure to act on a timely basis
upon, the claim for benefits and includes a failure to
provide benefits (including items and services) required to
be provided under this title.
(4) Treating health care professional.--The term ``treating
health care professional'' means, with respect to services to
be provided to a participant, beneficiary, or enrollee, a
health care professional who is primarily responsible for
delivering those services to the participant, beneficiary, or
enrollee.
SEC. 103. INTERNAL APPEALS OF CLAIMS DENIALS.
(a) Right to Internal Appeal.--
(1) In general.--A participant, beneficiary, or enrollee
(or authorized representative) may appeal any denial of a
claim for benefits under section 102 under the procedures
described in this section.
(2) Time for appeal.--
(A) In general.--A group health plan, and a health
insurance issuer offering health insurance coverage, shall
ensure that a participant, beneficiary, or enrollee (or
authorized representative) has a period of not less than 180
days beginning on the date of a denial of a claim for
benefits under section 102 in which to appeal such denial
under this section.
(B) Date of denial.--For purposes of subparagraph (A), the
date of the denial shall be deemed to be the date as of which
the participant, beneficiary, or enrollee knew of the denial
of the claim for benefits.
(3) Failure to act.--The failure of a plan or issuer to
issue a determination on a claim for benefits under section
102 within the applicable timeline established for such a
determination under such section is a denial of a claim for
benefits for purposes this subtitle as of the date of the
applicable deadline.
(4) Plan waiver of internal review.--A group health plan,
or health insurance issuer offering health insurance
coverage, may waive the internal review process under this
section. In such case the plan or issuer shall provide notice
to the participant, beneficiary, or enrollee (or authorized
representative) involved, the participant, beneficiary, or
enrollee (or authorized representative) involved shall be
relieved of any obligation to complete the internal review
involved, and may, at the option of such participant,
beneficiary, enrollee, or representative proceed directly to
seek further appeal through external review under section 104
or otherwise.
(b) Timelines for Making Determinations.--
(1) Oral requests.--In the case of an appeal of a denial of
a claim for benefits under this section that involves an
expedited or concurrent determination, a participant,
beneficiary, or enrollee (or authorized representative) may
request such appeal orally. A group health plan, or health
insurance issuer offering health insurance coverage, may
require that the participant, beneficiary, or enrollee (or
authorized representative) provide written confirmation of
such request in a timely manner on a form provided by the
plan or issuer. In the case of such an oral request for an
appeal of a denial, the making of the request (and the timing
of such request) shall be treated as the
[[Page H5288]]
making at that time of a request for an appeal without regard
to whether and when a written confirmation of such request is
made.
(2) Access to information.--
(A) Timely provision of necessary information.--With
respect to an appeal of a denial of a claim for benefits, the
participant, beneficiary, or enrollee (or authorized
representative) and the treating health care professional (if
any) shall provide the plan or issuer with access to
information requested by the plan or issuer that is necessary
to make a determination relating to the appeal. Such access
shall be provided not later than 5 days after the date on
which the request for information is received, or, in a case
described in subparagraph (B) or (C) of paragraph (3), by
such earlier time as may be necessary to comply with the
applicable timeline under such subparagraph.
(B) Limited effect of failure on plan or issuer's
obligations.--Failure of the participant, beneficiary, or
enrollee to comply with the requirements of subparagraph (A)
shall not remove the obligation of the plan or issuer to make
a decision in accordance with the medical exigencies of the
case and as soon as possible, based on the available
information, and failure to comply with the time limit
established by this paragraph shall not remove the obligation
of the plan or issuer to comply with the requirements of this
section.
(3) Prior authorization determinations.--
(A) In general.--Except as provided in this paragraph or
paragraph (4), a group health plan, and a health insurance
issuer offering health insurance coverage, shall make a
determination on an appeal of a denial of a claim for
benefits under this subsection in accordance with the medical
exigencies of the case and as soon as possible, but in no
case later than 14 days from the date on which the plan or
issuer receives information that is reasonably necessary to
enable the plan or issuer to make a determination on the
appeal and in no case later than 28 days after the date the
request for the appeal is received.
(B) Expedited determination.--Notwithstanding subparagraph
(A), a group health plan, and a health insurance issuer
offering health insurance coverage, shall expedite a prior
authorization determination on an appeal of a denial of a
claim for benefits described in subparagraph (A), when a
request for such an expedited determination is made by a
participant, beneficiary, or enrollee (or authorized
representative) at any time during the process for making a
determination and a health care professional certifies, with
the request, that a determination under the procedures
described in subparagraph (A) would seriously jeopardize the
life or health of the participant, beneficiary, or enrollee
or the ability of the participant, beneficiary, or enrollee
to maintain or regain maximum function. Such determination
shall be made in accordance with the medical exigencies of
the case and as soon as possible, but in no case later than
72 hours after the time the request for such appeal is
received by the plan or issuer under this subparagraph.
(C) Ongoing care determinations.--
(i) In general.--Subject to clause (ii), in the case of a
concurrent review determination described in section
102(b)(1)(C)(i)(I), which results in a termination or
reduction of such care, the plan or issuer must provide
notice of the determination on the appeal under this section
by telephone and in printed form to the individual or the
individual's designee and the individual's health care
provider in accordance with the medical exigencies of the
case and as soon as possible, with sufficient time prior to
the termination or reduction to allow for an external appeal
under section 104 to be completed before the termination or
reduction takes effect.
(ii) Rule of construction.--Clause (i) shall not be
construed as requiring plans or issuers to provide coverage
of care that would exceed the coverage limitations for such
care.
(4) Retrospective determination.--A group health plan, and
a health insurance issuer offering health insurance coverage,
shall make a retrospective determination on an appeal of a
denial of a claim for benefits in no case later than 30 days
after the date on which the plan or issuer receives necessary
information that is reasonably necessary to enable the plan
or issuer to make a determination on the appeal and in no
case later than 60 days after the date the request for the
appeal is received.
(c) Conduct of Review.--
(1) In general.--A review of a denial of a claim for
benefits under this section shall be conducted by an
individual with appropriate expertise who was not involved in
the initial determination.
(2) Peer review of medical decisions by health care
professionals.--A review of an appeal of a denial of a claim
for benefits that is based on a lack of medical necessity and
appropriateness, or based on an experimental or
investigational treatment, or requires an evaluation of
medical facts--
(A) shall be made by a physician (allopathic or
osteopathic); or
(B) in a claim for benefits provided by a non-physician
health professional, shall be made by reviewer (or reviewers)
including at least one practicing non-physician health
professional of the same or similar specialty;
with appropriate expertise (including, in the case of a
child, appropriate pediatric expertise) and acting within the
appropriate scope of practice within the State in which the
service is provided or rendered, who was not involved in the
initial determination.
(d) Notice of Determination.--
(1) In general.--Written notice of a determination made
under an internal appeal of a denial of a claim for benefits
shall be issued to the participant, beneficiary, or enrollee
(or authorized representative) and the treating health care
professional in accordance with the medical exigencies of the
case and as soon as possible, but in no case later than 2
days after the date of completion of the review (or, in the
case described in subparagraph (B) or (C) of subsection
(b)(3), within the 72-hour or applicable period referred to
in such subparagraph).
(2) Final determination.--The decision by a plan or issuer
under this section shall be treated as the final
determination of the plan or issuer on a denial of a claim
for benefits. The failure of a plan or issuer to issue a
determination on an appeal of a denial of a claim for
benefits under this section within the applicable timeline
established for such a determination shall be treated as a
final determination on an appeal of a denial of a claim for
benefits for purposes of proceeding to external review under
section 104.
(3) Requirements of notice.--With respect to a
determination made under this section, the notice described
in paragraph (1) shall be provided in printed form and
written in a manner calculated to be understood by the
participant, beneficiary, or enrollee and shall include--
(A) the specific reasons for the determination (including a
summary of the clinical or scientific evidence used in making
the determination);
(B) the procedures for obtaining additional information
concerning the determination; and
(C) notification of the right to an independent external
review under section 104 and instructions on how to initiate
such a review.
SEC. 104. INDEPENDENT EXTERNAL APPEALS PROCEDURES.
(a) Right to External Appeal.--A group health plan, and a
health insurance issuer offering health insurance coverage,
shall provide in accordance with this section participants,
beneficiaries, and enrollees (or authorized representatives)
with access to an independent external review for any denial
of a claim for benefits.
(b) Initiation of the Independent External Review
Process.--
(1) Time to file.--A request for an independent external
review under this section shall be filed with the plan or
issuer not later than 180 days after the date on which the
participant, beneficiary, or enrollee receives notice of the
denial under section 103(d) or notice of waiver of internal
review under section 103(a)(4) or the date on which the plan
or issuer has failed to make a timely decision under section
103(d)(2) and notifies the participant or beneficiary that it
has failed to make a timely decision and that the beneficiary
must file an appeal with an external review entity within 180
days if the participant or beneficiary desires to file such
an appeal.
(2) Filing of request.--
(A) In general.--Subject to the succeeding provisions of
this subsection, a group health plan, or health insurance
issuer offering health insurance coverage, may--
(i) except as provided in subparagraph (B)(i), require that
a request for review be in writing;
(ii) limit the filing of such a request to the participant,
beneficiary, or enrollee involved (or an authorized
representative);
(iii) except if waived by the plan or issuer under section
103(a)(4), condition access to an independent external review
under this section upon a final determination of a denial of
a claim for benefits under the internal review procedure
under section 103;
(iv) except as provided in subparagraph (B)(ii), require
payment of a filing fee to the plan or issuer of a sum that
does not exceed $25; and
(v) require that a request for review include the consent
of the participant, beneficiary, or enrollee (or authorized
representative) for the release of necessary medical
information or records of the participant, beneficiary, or
enrollee to the qualified external review entity only for
purposes of conducting external review activities.
(B) Requirements and exception relating to general rule.--
(i) Oral requests permitted in expedited or concurrent
cases.--In the case of an expedited or concurrent external
review as provided for under subsection (e), the request for
such review may be made orally. A group health plan, or
health insurance issuer offering health insurance coverage,
may require that the participant, beneficiary, or enrollee
(or authorized representative) provide written confirmation
of such request in a timely manner on a form provided by the
plan or issuer. Such written confirmation shall be treated as
a consent for purposes of subparagraph (A)(v). In the case of
such an oral request for such a review, the making of the
request (and the timing of such request) shall be treated as
the making at that time of a request for such a review
without regard to whether and when a written confirmation of
such request is made.
(ii) Exception to filing fee requirement.--
(I) Indigency.--Payment of a filing fee shall not be
required under subparagraph (A)(iv) where there is a
certification (in a form and manner specified in guidelines
established by the appropriate Secretary) that
[[Page H5289]]
the participant, beneficiary, or enrollee is indigent (as
defined in such guidelines).
(II) Fee not required.--Payment of a filing fee shall not
be required under subparagraph (A)(iv) if the plan or issuer
waives the internal appeals process under section 103(a)(4).
(III) Refunding of fee.--The filing fee paid under
subparagraph (A)(iv) shall be refunded if the determination
under the independent external review is to reverse or modify
the denial which is the subject of the review.
(IV) Collection of filing fee.--The failure to pay such a
filing fee shall not prevent the consideration of a request
for review but, subject to the preceding provisions of this
clause, shall constitute a legal liability to pay.
(c) Referral to Qualified External Review Entity Upon
Request.--
(1) In general.--Upon the filing of a request for
independent external review with the group health plan, or
health insurance issuer offering health insurance coverage,
the plan or issuer shall immediately refer such request, and
forward the plan or issuer's initial decision (including the
information described in section 103(d)(3)(A)), to a
qualified external review entity selected in accordance with
this section.
(2) Access to plan or issuer and health professional
information.--With respect to an independent external review
conducted under this section, the participant, beneficiary,
or enrollee (or authorized representative), the plan or
issuer, and the treating health care professional (if any)
shall provide the external review entity with information
that is necessary to conduct a review under this section, as
determined and requested by the entity. Such information
shall be provided not later than 5 days after the date on
which the request for information is received, or, in a case
described in clause (ii) or (iii) of subsection (e)(1)(A), by
such earlier time as may be necessary to comply with the
applicable timeline under such clause.
(3) Screening of requests by qualified external review
entities.--
(A) In general.--With respect to a request referred to a
qualified external review entity under paragraph (1) relating
to a denial of a claim for benefits, the entity shall refer
such request for the conduct of an independent medical review
unless the entity determines that--
(i) any of the conditions described in clauses (ii) or
(iii) of subsection (b)(2)(A) have not been met;
(ii) the denial of the claim for benefits does not involve
a medically reviewable decision under subsection (d)(2);
(iii) the denial of the claim for benefits relates to a
decision regarding whether an individual is a participant,
beneficiary, or enrollee who is enrolled under the terms and
conditions of the plan or coverage (including the
applicability of any waiting period under the plan or
coverage); or
(iv) the denial of the claim for benefits is a decision as
to the application of cost-sharing requirements or the
application of a specific exclusion or express limitation on
the amount, duration, or scope of coverage of items or
services under the terms and conditions of the plan or
coverage unless the decision is a denial described in
subsection (d)(2).
Upon making a determination that any of clauses (i) through
(iv) applies with respect to the request, the entity shall
determine that the denial of a claim for benefits involved is
not eligible for independent medical review under subsection
(d), and shall provide notice in accordance with subparagraph
(C).
(B) Process for making determinations.--
(i) No deference to prior determinations.--In making
determinations under subparagraph (A), there shall be no
deference given to determinations made by the plan or issuer
or the recommendation of a treating health care professional
(if any).
(ii) Use of appropriate personnel.--A qualified external
review entity shall use appropriately qualified personnel to
make determinations under this section.
(C) Notices and general timelines for determination.--
(i) Notice in case of denial of referral.--If the entity
under this paragraph does not make a referral to an
independent medical reviewer, the entity shall provide notice
to the plan or issuer, the participant, beneficiary, or
enrollee (or authorized representative) filing the request,
and the treating health care professional (if any) that the
denial is not subject to independent medical review. Such
notice--
(I) shall be written (and, in addition, may be provided
orally) in a manner calculated to be understood by a
participant or enrollee;
(II) shall include the reasons for the determination;
(III) include any relevant terms and conditions of the plan
or coverage; and
(IV) include a description of any further recourse
available to the individual.
(ii) General timeline for determinations.--Upon receipt of
information under paragraph (2), the qualified external
review entity, and if required the independent medical
reviewer, shall make a determination within the overall
timeline that is applicable to the case under review as
described in subsection (e), except that if the entity
determines that a referral to an independent medical reviewer
is not required, the entity shall provide notice of such
determination to the participant, beneficiary, or enrollee
(or authorized representative) within such timeline and
within 2 days of the date of such determination.
(d) Independent Medical Review.--
(1) In general.--If a qualified external review entity
determines under subsection (c) that a denial of a claim for
benefits is eligible for independent medical review, the
entity shall refer the denial involved to an independent
medical reviewer for the conduct of an independent medical
review under this subsection.
(2) Medically reviewable decisions.--A denial of a claim
for benefits is eligible for independent medical review if
the benefit for the item or service for which the claim is
made would be a covered benefit under the terms and
conditions of the plan or coverage but for one (or more) of
the following determinations:
(A) Denials based on medical necessity and
appropriateness.--A determination that the item or service is
not covered because it is not medically necessary and
appropriate or based on the application of substantially
equivalent terms.
(B) Denials based on experimental or investigational
treatment.--A determination that the item or service is not
covered because it is experimental or investigational or
based on the application of substantially equivalent terms.
(C) Denials otherwise based on an evaluation of medical
facts.--A determination that the item or service or condition
is not covered based on grounds that require an evaluation of
the medical facts by a health care professional in the
specific case involved to determine the coverage and extent
of coverage of the item or service or condition.
(3) Independent medical review determination.--
(A) In general.--An independent medical reviewer under this
section shall make a new independent determination with
respect to whether or not the denial of a claim for a benefit
that is the subject of the review should be upheld, reversed,
or modified.
(B) Standard for determination.--The independent medical
reviewer's determination relating to the medical necessity
and appropriateness, or the experimental or investigational
nature, or the evaluation of the medical facts, of the item,
service, or condition involved shall be based on the medical
condition of the participant, beneficiary, or enrollee
(including the medical records of the participant,
beneficiary, or enrollee) and valid, relevant scientific
evidence and clinical evidence, including peer-reviewed
medical literature or findings and including expert opinion.
(C) No coverage for excluded benefits.--Nothing in this
subsection shall be construed to permit an independent
medical reviewer to require that a group health plan, or
health insurance issuer offering health insurance coverage,
provide coverage for items or services for which benefits are
specifically excluded or expressly limited under the plan or
coverage in the plain language of the plan document (and
which are disclosed under section 121(b)(1)(C)).
Notwithstanding any other provision of this Act, any
exclusion of an exact medical procedure, any exact time limit
on the duration or frequency of coverage, and any exact
dollar limit on the amount of coverage that is specifically
enumerated and defined (in the plain language of the plan or
coverage documents) under the plan or coverage offered by a
group health plan or health insurance issuer offering health
insurance coverage and that is disclosed under section
121(b)(1) shall be considered to govern the scope of the
benefits that may be required: Provided, That the terms and
conditions of the plan or coverage relating to such an
exclusion or limit are in compliance with the requirements of
law.
(D) Evidence and information to be used in medical
reviews.--In making a determination under this subsection,
the independent medical reviewer shall also consider
appropriate and available evidence and information, including
the following:
(i) The determination made by the plan or issuer with
respect to the claim upon internal review and the evidence,
guidelines, or rationale used by the plan or issuer in
reaching such determination.
(ii) The recommendation of the treating health care
professional and the evidence, guidelines, and rationale used
by the treating health care professional in reaching such
recommendation.
(iii) Additional relevant evidence or information obtained
by the reviewer or submitted by the plan, issuer,
participant, beneficiary, or enrollee (or an authorized
representative), or treating health care professional.
(iv) The plan or coverage document.
(E) Independent determination.--In making determinations
under this section, a qualified external review entity and an
independent medical reviewer shall--
(i) consider the claim under review without deference to
the determinations made by the plan or issuer or the
recommendation of the treating health care professional (if
any); and
(ii) consider, but not be bound by, the definition used by
the plan or issuer of ``medically necessary and
appropriate'', or ``experimental or investigational'', or
other substantially equivalent terms that are used by the
plan or issuer to describe medical necessity and
appropriateness or experimental or investigational nature of
the treatment.
[[Page H5290]]
(F) Determination of independent medical reviewer.--An
independent medical reviewer shall, in accordance with the
deadlines described in subsection (e), prepare a written
determination to uphold, reverse, or modify the denial under
review. Such written determination shall include--
(i) the determination of the reviewer;
(ii) the specific reasons of the reviewer for such
determination, including a summary of the clinical or
scientific evidence used in making the determination; and
(iii) with respect to a determination to reverse or modify
the denial under review, a timeframe within which the plan or
issuer must comply with such determination.
(G) Nonbinding nature of additional recommendations.--In
addition to the determination under subparagraph (F), the
reviewer may provide the plan or issuer and the treating
health care professional with additional recommendations in
connection with such a determination, but any such
recommendations shall not affect (or be treated as part of)
the determination and shall not be binding on the plan or
issuer.
(e) Timelines and Notifications.--
(1) Timelines for independent medical review.--
(A) Prior authorization determination.--
(i) In general.--The independent medical reviewer (or
reviewers) shall make a determination on a denial of a claim
for benefits that is referred to the reviewer under
subsection (c)(3) in accordance with the medical exigencies
of the case and as soon as possible, but in no case later
than 14 days after the date of receipt of information under
subsection (c)(2) if the review involves a prior
authorization of items or services and in no case later than
21 days after the date the request for external review is
received.
(ii) Expedited determination.--Notwithstanding clause (i)
and subject to clause (iii), the independent medical reviewer
(or reviewers) shall make an expedited determination on a
denial of a claim for benefits described in clause (i), when
a request for such an expedited determination is made by a
participant, beneficiary, or enrollee (or authorized
representative) at any time during the process for making a
determination, and a health care professional certifies, with
the request, that a determination under the timeline
described in clause (i) would seriously jeopardize the life
or health of the participant, beneficiary, or enrollee or the
ability of the participant, beneficiary, or enrollee to
maintain or regain maximum function. Such determination shall
be made in accordance with the medical exigencies of the case
and as soon as possible, but in no case later than 72 hours
after the time the request for external review is received by
the qualified external review entity.
(iii) Ongoing care determination.--Notwithstanding clause
(i), in the case of a review described in such clause that
involves a termination or reduction of care, the notice of
the determination shall be completed not later than 24 hours
after the time the request for external review is received by
the qualified external review entity and before the end of
the approved period of care.
(B) Retrospective determination.--The independent medical
reviewer (or reviewers) shall complete a review in the case
of a retrospective determination on an appeal of a denial of
a claim for benefits that is referred to the reviewer under
subsection (c)(3) in no case later than 30 days after the
date of receipt of information under subsection (c)(2) and in
no case later than 60 days after the date the request for
external review is received by the qualified external review
entity.
(2) Notification of determination.--The external review
entity shall ensure that the plan or issuer, the participant,
beneficiary, or enrollee (or authorized representative) and
the treating health care professional (if any) receives a
copy of the written determination of the independent medical
reviewer prepared under subsection (d)(3)(F). Nothing in this
paragraph shall be construed as preventing an entity or
reviewer from providing an initial oral notice of the
reviewer's determination.
(3) Form of notices.--Determinations and notices under this
subsection shall be written in a manner calculated to be
understood by a participant.
(f) Compliance.--
(1) Application of determinations.--
(A) External review determinations binding on plan.--The
determinations of an external review entity and an
independent medical reviewer under this section shall be
binding upon the plan or issuer involved.
(B) Compliance with determination.--If the determination of
an independent medical reviewer is to reverse or modify the
denial, the plan or issuer, upon the receipt of such
determination, shall authorize coverage to comply with the
medical reviewer's determination in accordance with the
timeframe established by the medical reviewer.
(2) Failure to comply.--
(A) In general.--If a plan or issuer fails to comply with
the timeframe established under paragraph (1)(B) with respect
to a participant, beneficiary, or enrollee, where such
failure to comply is caused by the plan or issuer, the
participant, beneficiary, or enrollee may obtain the items or
services involved (in a manner consistent with the
determination of the independent external reviewer) from any
provider regardless of whether such provider is a
participating provider under the plan or coverage.
(B) Reimbursement.--
(i) In general.--Where a participant, beneficiary, or
enrollee obtains items or services in accordance with
subparagraph (A), the plan or issuer involved shall provide
for reimbursement of the costs of such items or services.
Such reimbursement shall be made to the treating health care
professional or to the participant, beneficiary, or enrollee
(in the case of a participant, beneficiary, or enrollee who
pays for the costs of such items or services).
(ii) Amount.--The plan or issuer shall fully reimburse a
professional, participant, beneficiary, or enrollee under
clause (i) for the total costs of the items or services
provided (regardless of any plan limitations that may apply
to the coverage of such items or services) so long as the
items or services were provided in a manner consistent with
the determination of the independent medical reviewer.
(C) Failure to reimburse.--Where a plan or issuer fails to
provide reimbursement to a professional, participant,
beneficiary, or enrollee in accordance with this paragraph,
the professional, participant, beneficiary, or enrollee may
commence a civil action (or utilize other remedies available
under law) to recover only the amount of any such
reimbursement that is owed by the plan or issuer and any
necessary legal costs or expenses (including attorney's fees)
incurred in recovering such reimbursement.
(D) Available remedies.--The remedies provided under this
paragraph are in addition to any other available remedies.
(3) Penalties against authorized officials for refusing to
authorize the determination of an external review entity.--
(A) Monetary penalties.--
(i) In general.--In any case in which the determination of
an external review entity is not followed by a group health
plan, or by a health insurance issuer offering health
insurance coverage, any person who, acting in the capacity of
authorizing the benefit, causes such refusal may, in the
discretion of a court of competent jurisdiction, be liable to
an aggrieved participant, beneficiary, or enrollee for a
civil penalty in an amount of up to $1,000 a day from the
date on which the determination was transmitted to the plan
or issuer by the external review entity until the date the
refusal to provide the benefit is corrected.
(ii) Additional penalty for failing to follow timeline.--In
any case in which treatment was not commenced by the plan in
accordance with the determination of an independent external
reviewer, the Secretary shall assess a civil penalty of
$10,000 against the plan and the plan shall pay such penalty
to the participant, beneficiary, or enrollee involved.
(B) Cease and desist order and order of attorney's fees.--
In any action described in subparagraph (A) brought by a
participant, beneficiary, or enrollee with respect to a group
health plan, or a health insurance issuer offering health
insurance coverage, in which a plaintiff alleges that a
person referred to in such subparagraph has taken an action
resulting in a refusal of a benefit determined by an external
appeal entity to be covered, or has failed to take an action
for which such person is responsible under the terms and
conditions of the plan or coverage and which is necessary
under the plan or coverage for authorizing a benefit, the
court shall cause to be served on the defendant an order
requiring the defendant--
(i) to cease and desist from the alleged action or failure
to act; and
(ii) to pay to the plaintiff a reasonable attorney's fee
and other reasonable costs relating to the prosecution of the
action on the charges on which the plaintiff prevails.
(C) Additional civil penalties.--
(i) In general.--In addition to any penalty imposed under
subparagraph (A) or (B), the appropriate Secretary may assess
a civil penalty against a person acting in the capacity of
authorizing a benefit determined by an external review entity
for one or more group health plans, or health insurance
issuers offering health insurance coverage, for--
(I) any pattern or practice of repeated refusal to
authorize a benefit determined by an external appeal entity
to be covered; or
(II) any pattern or practice of repeated violations of the
requirements of this section with respect to such plan or
coverage.
(ii) Standard of proof and amount of penalty.--Such penalty
shall be payable only upon proof by clear and convincing
evidence of such pattern or practice and shall be in an
amount not to exceed the lesser of--
(I) 25 percent of the aggregate value of benefits shown by
the appropriate Secretary to have not been provided, or
unlawfully delayed, in violation of this section under such
pattern or practice; or
(II) $500,000.
(D) Removal and disqualification.--Any person acting in the
capacity of authorizing benefits who has engaged in any such
pattern or practice described in subparagraph (C)(i) with
respect to a plan or coverage, upon the petition of the
appropriate Secretary, may be removed by the court from such
position, and from any other involvement, with respect to
such a plan or coverage, and may be precluded from returning
to any such position or involvement for a period determined
by the court.
(4) Protection of legal rights.--Nothing in this subsection
or subtitle shall be construed as altering or eliminating any
cause of action or legal rights or remedies of participants,
beneficiaries, enrollees, and others under State or Federal
law (including sections 502 and 503 of the Employee
Retirement Income Security Act of 1974), including the
[[Page H5291]]
right to file judicial actions to enforce rights.
(g) Qualifications of Independent Medical Reviewers.--
(1) In general.--In referring a denial to 1 or more
individuals to conduct independent medical review under
subsection (c), the qualified external review entity shall
ensure that--
(A) each independent medical reviewer meets the
qualifications described in paragraphs (2) and (3);
(B) with respect to each review at least 1 such reviewer
meets the requirements described in paragraphs (4) and (5);
and
(C) compensation provided by the entity to the reviewer is
consistent with paragraph (6).
(2) Licensure and expertise.--Each independent medical
reviewer shall be a physician (allopathic or osteopathic) or
health care professional who--
(A) is appropriately credentialed or licensed in 1 or more
States to deliver health care services; and
(B) typically treats the condition, makes the diagnosis, or
provides the type of treatment under review.
(3) Independence.--
(A) In general.--Subject to subparagraph (B), each
independent medical reviewer in a case shall--
(i) not be a related party (as defined in paragraph (7));
(ii) not have a material familial, financial, or
professional relationship with such a party; and
(iii) not otherwise have a conflict of interest with such a
party (as determined under regulations).
(B) Exception.--Nothing in subparagraph (A) shall be
construed to--
(i) prohibit an individual, solely on the basis of
affiliation with the plan or issuer, from serving as an
independent medical reviewer if--
(I) a non-affiliated individual is not reasonably
available;
(II) the affiliated individual is not involved in the
provision of items or services in the case under review;
(III) the fact of such an affiliation is disclosed to the
plan or issuer and the participant, beneficiary, or enrollee
(or authorized representative) and neither party objects; and
(IV) the affiliated individual is not an employee of the
plan or issuer and does not provide services exclusively or
primarily to or on behalf of the plan or issuer;
(ii) prohibit an individual who has staff privileges at the
institution where the treatment involved takes place from
serving as an independent medical reviewer merely on the
basis of such affiliation if the affiliation is disclosed to
the plan or issuer and the participant, beneficiary, or
enrollee (or authorized representative), and neither party
objects; or
(iii) prohibit receipt of compensation by an independent
medical reviewer from an entity if the compensation is
provided consistent with paragraph (6).
(4) Practicing health care professional in same field.--
(A) In general.--In a case involving treatment, or the
provision of items or services--
(i) by a physician, a reviewer shall be a practicing
physician (allopathic or osteopathic) of the same or similar
specialty, as a physician who, acting within the appropriate
scope of practice within the State in which the service is
provided or rendered, typically treats the condition, makes
the diagnosis, or provides the type of treatment under
review; or
(ii) by a non-physician health care professional, a
reviewer (or reviewers) shall include at least one practicing
non-physician health care professional of the same or similar
specialty as the non-physician health care professional who,
acting within the appropriate scope of practice within the
State in which the service is provided or rendered, typically
treats the condition, makes the diagnosis, or provides the
type of treatment under review.
(B) Practicing defined.--For purposes of this paragraph,
the term ``practicing'' means, with respect to an individual
who is a physician or other health care professional that the
individual provides health care services to individual
patients on average at least 2 days per week.
(5) Pediatric expertise.--In the case of an external review
relating to a child, a reviewer shall have expertise under
paragraph (2) in pediatrics.
(6) Limitations on reviewer compensation.--Compensation
provided by a qualified external review entity to an
independent medical reviewer in connection with a review
under this section shall--
(A) not exceed a reasonable level; and
(B) not be contingent on the decision rendered by the
reviewer.
(7) Related party defined.--For purposes of this section,
the term ``related party'' means, with respect to a denial of
a claim under a plan or coverage relating to a participant,
beneficiary, or enrollee, any of the following:
(A) The plan, plan sponsor, or issuer involved, or any
fiduciary, officer, director, or employee of such plan, plan
sponsor, or issuer.
(B) The participant, beneficiary, or enrollee (or
authorized representative).
(C) The health care professional that provides the items or
services involved in the denial.
(D) The institution at which the items or services (or
treatment) involved in the denial are provided.
(E) The manufacturer of any drug or other item that is
included in the items or services involved in the denial.
(F) Any other party determined under any regulations to
have a substantial interest in the denial involved.
(h) Qualified External Review Entities.--
(1) Selection of qualified external review entities.--
(A) Limitation on plan or issuer selection.--The
appropriate Secretary shall implement procedures--
(i) to assure that the selection process among qualified
external review entities will not create any incentives for
external review entities to make a decision in a biased
manner; and
(ii) for auditing a sample of decisions by such entities to
assure that no such decisions are made in a biased manner.
No such selection process under the procedures implemented by
the appropriate Secretary may give either the patient or the
plan or issuer any ability to determine or influence the
selection of a qualified external review entity to review the
case of any participant, beneficiary, or enrollee.
(B) State authority with respect to qualified external
review entities for health insurance issuers.--With respect
to health insurance issuers offering health insurance
coverage in a State, the State may provide for external
review activities to be conducted by a qualified external
appeal entity that is designated by the State or that is
selected by the State in a manner determined by the State to
assure an unbiased determination.
(2) Contract with qualified external review entity.--Except
as provided in paragraph (1)(B), the external review process
of a plan or issuer under this section shall be conducted
under a contract between the plan or issuer and 1 or more
qualified external review entities (as defined in paragraph
(4)(A)).
(3) Terms and conditions of contract.--The terms and
conditions of a contract under paragraph (2) shall--
(A) be consistent with the standards the appropriate
Secretary shall establish to assure there is no real or
apparent conflict of interest in the conduct of external
review activities; and
(B) provide that the costs of the external review process
shall be borne by the plan or issuer.
Subparagraph (B) shall not be construed as applying to the
imposition of a filing fee under subsection (b)(2)(A)(iv) or
costs incurred by the participant, beneficiary, or enrollee
(or authorized representative) or treating health care
professional (if any) in support of the review, including the
provision of additional evidence or information.
(4) Qualifications.--
(A) In general.--In this section, the term ``qualified
external review entity'' means, in relation to a plan or
issuer, an entity that is initially certified (and
periodically recertified) under subparagraph (C) as meeting
the following requirements:
(i) The entity has (directly or through contracts or other
arrangements) sufficient medical, legal, and other expertise
and sufficient staffing to carry out duties of a qualified
external review entity under this section on a timely basis,
including making determinations under subsection (b)(2)(A)
and providing for independent medical reviews under
subsection (d).
(ii) The entity is not a plan or issuer or an affiliate or
a subsidiary of a plan or issuer, and is not an affiliate or
subsidiary of a professional or trade association of plans or
issuers or of health care providers.
(iii) The entity has provided assurances that it will
conduct external review activities consistent with the
applicable requirements of this section and standards
specified in subparagraph (C), including that it will not
conduct any external review activities in a case unless the
independence requirements of subparagraph (B) are met with
respect to the case.
(iv) The entity has provided assurances that it will
provide information in a timely manner under subparagraph
(D).
(v) The entity meets such other requirements as the
appropriate Secretary provides by regulation.
(B) Independence requirements.--
(i) In general.--Subject to clause (ii), an entity meets
the independence requirements of this subparagraph with
respect to any case if the entity--
(I) is not a related party (as defined in subsection
(g)(7));
(II) does not have a material familial, financial, or
professional relationship with such a party; and
(III) does not otherwise have a conflict of interest with
such a party (as determined under regulations).
(ii) Exception for reasonable compensation.--Nothing in
clause (i) shall be construed to prohibit receipt by a
qualified external review entity of compensation from a plan
or issuer for the conduct of external review activities under
this section if the compensation is provided consistent with
clause (iii).
(iii) Limitations on entity compensation.--Compensation
provided by a plan or issuer to a qualified external review
entity in connection with reviews under this section shall--
(I) not exceed a reasonable level; and
(II) not be contingent on any decision rendered by the
entity or by any independent medical reviewer.
[[Page H5292]]
(C) Certification and recertification process.--
(i) In general.--The initial certification and
recertification of a qualified external review entity shall
be made--
(I) under a process that is recognized or approved by the
appropriate Secretary; or
(II) by a qualified private standard-setting organization
that is approved by the appropriate Secretary under clause
(iii).
In taking action under subclause (I), the appropriate
Secretary shall give deference to entities that are under
contract with the Federal Government or with an applicable
State authority to perform functions of the type performed by
qualified external review entities.
(ii) Process.--The appropriate Secretary shall not
recognize or approve a process under clause (i)(I) unless the
process applies standards (as promulgated in regulations)
that ensure that a qualified external review entity--
(I) will carry out (and has carried out, in the case of
recertification) the responsibilities of such an entity in
accordance with this section, including meeting applicable
deadlines;
(II) will meet (and has met, in the case of
recertification) appropriate indicators of fiscal integrity;
(III) will maintain (and has maintained, in the case of
recertification) appropriate confidentiality with respect to
individually identifiable health information obtained in the
course of conducting external review activities; and
(IV) in the case of recertification, shall review the
matters described in clause (iv).
(iii) Approval of qualified private standard-setting
organizations.--For purposes of clause (i)(II), the
appropriate Secretary may approve a qualified private
standard-setting organization if such Secretary finds that
the organization only certifies (or recertifies) external
review entities that meet at least the standards required for
the certification (or recertification) of external review
entities under clause (ii).
(iv) Considerations in recertifications.--In conducting
recertifications of a qualified external review entity under
this paragraph, the appropriate Secretary or organization
conducting the recertification shall review compliance of the
entity with the requirements for conducting external review
activities under this section, including the following:
(I) Provision of information under subparagraph (D).
(II) Adherence to applicable deadlines (both by the entity
and by independent medical reviewers it refers cases to).
(III) Compliance with limitations on compensation (with
respect to both the entity and independent medical reviewers
it refers cases to).
(IV) Compliance with applicable independence requirements.
(V) Compliance with the requirement of subsection (d)(1)
that only medically reviewable decisions shall be the subject
of independent medical review and with the requirement of
subsection (d)(3) that independent medical reviewers may not
require coverage for specifically excluded benefits.
(v) Period of certification or recertification.--A
certification or recertification provided under this
paragraph shall extend for a period not to exceed 2 years.
(vi) Revocation.--A certification or recertification under
this paragraph may be revoked by the appropriate Secretary or
by the organization providing such certification upon a
showing of cause. The Secretary, or organization, shall
revoke a certification or deny a recertification with respect
to an entity if there is a showing that the entity has a
pattern or practice of ordering coverage for benefits that
are specifically excluded under the plan or coverage.
(vii) Petition for denial or withdrawal.--An individual may
petition the Secretary, or an organization providing the
certification involves, for a denial of recertification or a
withdrawal of a certification with respect to an entity under
this subparagraph if there is a pattern or practice of such
entity failing to meet a requirement of this section.
(viii) Sufficient number of entities.--The appropriate
Secretary shall certify and recertify a number of external
review entities which is sufficient to ensure the timely and
efficient provision of review services.
(D) Provision of information.--
(i) In general.--A qualified external review entity shall
provide to the appropriate Secretary, in such manner and at
such times as such Secretary may require, such information
(relating to the denials which have been referred to the
entity for the conduct of external review under this section)
as such Secretary determines appropriate to assure compliance
with the independence and other requirements of this section
to monitor and assess the quality of its external review
activities and lack of bias in making determinations. Such
information shall include information described in clause
(ii) but shall not include individually identifiable medical
information.
(ii) Information to be included.--The information described
in this subclause with respect to an entity is as follows:
(I) The number and types of denials for which a request for
review has been received by the entity.
(II) The disposition by the entity of such denials,
including the number referred to a independent medical
reviewer and the reasons for such dispositions (including the
application of exclusions), on a plan or issuer-specific
basis and on a health care specialty-specific basis.
(III) The length of time in making determinations with
respect to such denials.
(IV) Updated information on the information required to be
submitted as a condition of certification with respect to the
entity's performance of external review activities.
(iii) Information to be provided to certifying
organization.--
(I) In general.--In the case of a qualified external review
entity which is certified (or recertified) under this
subsection by a qualified private standard-setting
organization, at the request of the organization, the entity
shall provide the organization with the information provided
to the appropriate Secretary under clause (i).
(II) Additional information.--Nothing in this subparagraph
shall be construed as preventing such an organization from
requiring additional information as a condition of
certification or recertification of an entity.
(iv) Use of information.--Information provided under this
subparagraph may be used by the appropriate Secretary and
qualified private standard-setting organizations to conduct
oversight of qualified external review entities, including
recertification of such entities, and shall be made available
to the public in an appropriate manner.
(E) Limitation on liability.--No qualified external review
entity having a contract with a plan or issuer, and no person
who is employed by any such entity or who furnishes
professional services to such entity (including as an
independent medical reviewer), shall be held by reason of the
performance of any duty, function, or activity required or
authorized pursuant to this section, to be civilly liable
under any law of the United States or of any State (or
political subdivision thereof) if there was no actual malice
or gross misconduct in the performance of such duty,
function, or activity.
(5) Report.--Not later than 12 months after the general
effective date referred to in section 601, the General
Accounting Office shall prepare and submit to the appropriate
committees of Congress a report concerning--
(A) the information that is provided under paragraph
(3)(D);
(B) the number of denials that have been upheld by
independent medical reviewers and the number of denials that
have been reversed by such reviewers; and
(C) the extent to which independent medical reviewers are
requiring coverage for benefits that are specifically
excluded under the plan or coverage.
SEC. 105. HEALTH CARE CONSUMER ASSISTANCE FUND.
(a) Grants.--
(1) In general.--The Secretary of Health and Human Services
(referred to in this section as the ``Secretary'') shall
establish a fund, to be known as the ``Health Care Consumer
Assistance Fund'', to be used to award grants to eligible
States to carry out consumer assistance activities (including
programs established by States prior to the enactment of this
Act) designed to provide information, assistance, and
referrals to consumers of health insurance products.
(2) State eligibility.--To be eligible to receive a grant
under this subsection a State shall prepare and submit to the
Secretary an application at such time, in such manner, and
containing such information as the Secretary may require,
including a State plan that describes--
(A) the manner in which the State will ensure that the
health care consumer assistance office (established under
paragraph (4)) will educate and assist health care consumers
in accessing needed care;
(B) the manner in which the State will coordinate and
distinguish the services provided by the health care consumer
assistance office with the services provided by Federal,
State and local health-related ombudsman, information,
protection and advocacy, insurance, and fraud and abuse
programs;
(C) the manner in which the State will provide information,
outreach, and services to underserved, minority populations
with limited English proficiency and populations residing in
rural areas;
(D) the manner in which the State will oversee the health
care consumer assistance office, its activities, product
materials and evaluate program effectiveness;
(E) the manner in which the State will ensure that funds
made available under this section will be used to supplement,
and not supplant, any other Federal, State, or local funds
expended to provide services for programs described under
this section and those described in subparagraphs (C) and
(D);
(F) the manner in which the State will ensure that health
care consumer office personnel have the professional
background and training to carry out the activities of the
office; and
(G) the manner in which the State will ensure that
consumers have direct access to consumer assistance personnel
during regular business hours.
(3) Amount of grant.--
(A) In general.--From amounts appropriated under subsection
(b) for a fiscal year, the Secretary shall award a grant to a
State in an amount that bears the same ratio to such amounts
as the number of individuals within the State covered under a
group health plan or under health insurance coverage offered
by a health insurance issuer bears to the total number of
individuals so covered in all States (as determined by the
[[Page H5293]]
Secretary). Any amounts provided to a State under this
subsection that are not used by the State shall be remitted
to the Secretary and reallocated in accordance with this
subparagraph.
(B) Minimum amount.--In no case shall the amount provided
to a State under a grant under this subsection for a fiscal
year be less than an amount equal to 0.5 percent of the
amount appropriated for such fiscal year to carry out this
section.
(C) Non-federal contributions.--A State will provide for
the collection of non-Federal contributions for the operation
of the office in an amount that is not less than 25 percent
of the amount of Federal funds provided to the State under
this section.
(4) Provision of funds for establishment of office.--
(A) In general.--From amounts provided under a grant under
this subsection, a State shall, directly or through a
contract with an independent, nonprofit entity with
demonstrated experience in serving the needs of health care
consumers, provide for the establishment and operation of a
State health care consumer assistance office.
(B) Eligibility of entity.--To be eligible to enter into a
contract under subparagraph (A), an entity shall demonstrate
that it has the technical, organizational, and professional
capacity to deliver the services described in subsection (b)
to all public and private health insurance participants,
beneficiaries, enrollees, or prospective enrollees.
(C) Existing state entity.--Nothing in this section shall
prevent the funding of an existing health care consumer
assistance program that otherwise meets the requirements of
this section.
(b) Use of Funds.--
(1) By state.--A State shall use amounts provided under a
grant awarded under this section to carry out consumer
assistance activities directly or by contract with an
independent, non-profit organization. An eligible entity may
use some reasonable amount of such grant to ensure the
adequate training of personnel carrying out such activities.
To receive amounts under this subsection, an eligible entity
shall provide consumer assistance services, including--
(A) the operation of a toll-free telephone hotline to
respond to consumer requests;
(B) the dissemination of appropriate educational materials
on available health insurance products and on how best to
access health care and the rights and responsibilities of
health care consumers;
(C) the provision of education on effective methods to
promptly and efficiently resolve questions, problems, and
grievances;
(D) the coordination of educational and outreach efforts
with health plans, health care providers, payers, and
governmental agencies;
(E) referrals to appropriate private and public entities to
resolve questions, problems and grievances; and
(F) the provision of information and assistance, including
acting as an authorized representative, regarding internal,
external, or administrative grievances or appeals procedures
in nonlitigative settings to appeal the denial, termination,
or reduction of health care services, or the refusal to pay
for such services, under a group health plan or health
insurance coverage offered by a health insurance issuer.
(2) Confidentiality and access to information.--
(A) State entity.--With respect to a State that directly
establishes a health care consumer assistance office, such
office shall establish and implement procedures and protocols
in accordance with applicable Federal and State laws.
(B) Contract entity.--With respect to a State that, through
contract, establishes a health care consumer assistance
office, such office shall establish and implement procedures
and protocols, consistent with applicable Federal and State
laws, to ensure the confidentiality of all information shared
by a participant, beneficiary, enrollee, or their personal
representative and their health care providers, group health
plans, or health insurance insurers with the office and to
ensure that no such information is used by the office, or
released or disclosed to State agencies or outside persons or
entities without the prior written authorization (in
accordance with section 164.508 of title 45, Code of Federal
Regulations) of the individual or personal representative.
The office may, consistent with applicable Federal and State
confidentiality laws, collect, use or disclose aggregate
information that is not individually identifiable (as defined
in section 164.501 of title 45, Code of Federal Regulations).
The office shall provide a written description of the
policies and procedures of the office with respect to the
manner in which health information may be used or disclosed
to carry out consumer assistance activities. The office shall
provide health care providers, group health plans, or health
insurance issuers with a written authorization (in accordance
with section 164.508 of title 45, Code of Federal
Regulations) to allow the office to obtain medical
information relevant to the matter before the office.
(3) Availability of services.--The health care consumer
assistance office of a State shall not discriminate in the
provision of information, referrals, and services regardless
of the source of the individual's health insurance coverage
or prospective coverage, including individuals covered under
a group health plan or health insurance coverage offered by a
health insurance issuer, the medicare or medicaid programs
under title XVIII or XIX of the Social Security Act (42
U.S.C. 1395 and 1396 et seq.), or under any other Federal or
State health care program.
(4) Designation of responsibilities.--
(A) Within existing state entity.--If the health care
consumer assistance office of a State is located within an
existing State regulatory agency or office of an elected
State official, the State shall ensure that--
(i) there is a separate delineation of the funding,
activities, and responsibilities of the office as compared to
the other funding, activities, and responsibilities of the
agency; and
(ii) the office establishes and implements procedures and
protocols to ensure the confidentiality of all information
shared by a participant, beneficiary, or enrollee or their
personal representative and their health care providers,
group health plans, or health insurance issuers with the
office and to ensure that no information is disclosed to the
State agency or office without the written authorization of
the individual or their personal representative in accordance
with paragraph (2).
(B) Contract entity.--In the case of an entity that enters
into a contract with a State under subsection (a)(3), the
entity shall provide assurances that the entity has no
conflict of interest in carrying out the activities of the
office and that the entity is independent of group health
plans, health insurance issuers, providers, payers, and
regulators of health care.
(5) Subcontracts.--The health care consumer assistance
office of a State may carry out activities and provide
services through contracts entered into with 1 or more
nonprofit entities so long as the office can demonstrate that
all of the requirements of this section are complied with by
the office.
(6) Term.--A contract entered into under this subsection
shall be for a term of 3 years.
(c) Report.--Not later than 1 year after the Secretary
first awards grants under this section, and annually
thereafter, the Secretary shall prepare and submit to the
appropriate committees of Congress a report concerning the
activities funded under this section and the effectiveness of
such activities in resolving health care-related problems and
grievances.
(d) Authorization of Appropriations.--There are authorized
to be appropriated such sums as may be necessary to carry out
this section.
Subtitle B--Access to Care
SEC. 111. CONSUMER CHOICE OPTION.
(a) In General.--If--
(1) a health insurance issuer providing health insurance
coverage in connection with a group health plan offers to
enrollees health insurance coverage which provides for
coverage of services (including physician pathology services)
only if such services are furnished through health care
professionals and providers who are members of a network of
health care professionals and providers who have entered into
a contract with the issuer to provide such services, or
(2) a group health plan offers to participants or
beneficiaries health benefits which provide for coverage of
services only if such services are furnished through health
care professionals and providers who are members of a network
of health care professionals and providers who have entered
into a contract with the plan to provide such services,
then the issuer or plan shall also offer or arrange to be
offered to such enrollees, participants, or beneficiaries (at
the time of enrollment and during an annual open season as
provided under subsection (c)) the option of health insurance
coverage or health benefits which provide for coverage of
such services which are not furnished through health care
professionals and providers who are members of such a network
unless such enrollees, participants, or beneficiaries are
offered such non-network coverage through another group
health plan or through another health insurance issuer in the
group market.
(b) Additional Costs.--The amount of any additional premium
charged by the health insurance issuer or group health plan
for the additional cost of the creation and maintenance of
the option described in subsection (a) and the amount of any
additional cost sharing imposed under such option shall be
borne by the enrollee, participant, or beneficiary unless it
is paid by the health plan sponsor or group health plan
through agreement with the health insurance issuer.
(c) Open Season.--An enrollee, participant, or beneficiary,
may change to the offering provided under this section only
during a time period determined by the health insurance
issuer or group health plan. Such time period shall occur at
least annually.
SEC. 112. CHOICE OF HEALTH CARE PROFESSIONAL.
(a) Primary Care.--If a group health plan, or a health
insurance issuer that offers health insurance coverage,
requires or provides for designation by a participant,
beneficiary, or enrollee of a participating primary care
provider, then the plan or issuer shall permit each
participant, beneficiary, and enrollee to designate any
participating primary care provider who is available to
accept such individual.
(b) Specialists.--
(1) In general.--Subject to paragraph (2), 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 and
appropriate specialty care, pursuant to appropriate referral
procedures, from any
[[Page H5294]]
qualified participating health care professional who is
available to accept such individual for such care.
(2) Limitation.--Paragraph (1) shall not apply to specialty
care if the plan or issuer clearly informs participants,
beneficiaries, and enrollees of the limitations on choice of
participating health care professionals with respect to such
care.
(3) Construction.--Nothing in this subsection shall be
construed as affecting the application of section 114
(relating to access to specialty care).
SEC. 113. ACCESS TO EMERGENCY CARE.
(a) Coverage of Emergency Services.--
(1) In general.--If a group health plan, or health
insurance coverage offered by a health insurance issuer,
provides or covers any benefits with respect to services in
an emergency department of a hospital, the plan or issuer
shall cover emergency services (as defined in paragraph
(2)(B))--
(A) without the need for any prior authorization
determination;
(B) whether 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--
(i) by a nonparticipating health care provider with or
without prior authorization, or
(ii) by a participating health care provider without prior
authorization,
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 with prior authorization; and
(D) without regard to any other term or condition of such
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.--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, with respect to an emergency medical condition--
(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 such emergency medical
condition, 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.
(C) Stabilize.--The term ``to stabilize'', with respect to
an emergency medical condition (as defined in subparagraph
(A)), has the meaning given in section 1867(e)(3) of the
Social Security Act (42 U.S.C. 1395dd(e)(3)).
(b) Reimbursement for Maintenance Care and Post-
Stabilization Care.--A group health plan, and health
insurance coverage offered by a health insurance issuer, must
provide reimbursement for maintenance care and post-
stabilization care in accordance with the requirements of
section 1852(d)(2) of the Social Security Act (42 U.S.C.
1395w-22(d)(2)). Such reimbursement shall be provided in a
manner consistent with subsection (a)(1)(C).
(c) Coverage of Emergency Ambulance Services.--
(1) In general.--If a group health plan, or health
insurance coverage provided by a health insurance issuer,
provides any benefits with respect to ambulance services and
emergency services, the plan or issuer shall cover emergency
ambulance services (as defined in paragraph (2)) furnished
under the plan or coverage under the same terms and
conditions under subparagraphs (A) through (D) of subsection
(a)(1) under which coverage is provided for emergency
services.
(2) Emergency ambulance services.--For purposes of this
subsection, the term ``emergency ambulance services'' means
ambulance services (as defined for purposes of section
1861(s)(7) of the Social Security Act) furnished to transport
an individual who has an emergency medical condition (as
defined in subsection (a)(2)(A)) to a hospital for the
receipt of emergency services (as defined in subsection
(a)(2)(B)) in a case in which the emergency services are
covered under the plan or coverage pursuant to subsection
(a)(1) and a prudent layperson, with an average knowledge of
health and medicine, could reasonably expect that the absence
of such transport would result in placing the health of the
individual in serious jeopardy, serious impairment of bodily
function, or serious dysfunction of any bodily organ or part.
SEC. 114. TIMELY ACCESS TO SPECIALISTS.
(a) Timely Access.--
(1) In general.--A group health plan and a health insurance
issuer offering health insurance coverage shall ensure that
participants, beneficiaries, and enrollees receive timely
access to specialists who are appropriate to the condition
of, and accessible to, the participant, beneficiary, or
enrollee, when such specialty care is a covered benefit under
the plan or coverage.
(2) Rule of construction.--Nothing in paragraph (1) shall
be construed--
(A) to require the coverage under a group health plan or
health insurance coverage of benefits or services;
(B) to prohibit a plan or issuer from including providers
in the network only to the extent necessary to meet the needs
of the plan's or issuer's participants, beneficiaries, or
enrollees; or
(C) to override any State licensure or scope-of-practice
law.
(3) Access to certain providers.--
(A) In general.--With respect to specialty care under this
section, if a participating specialist is not available and
qualified to provide such care to the participant,
beneficiary, or enrollee, the plan or issuer shall provide
for coverage of such care by a nonparticipating specialist.
(B) Treatment of nonparticipating providers.--If a
participant, beneficiary, or enrollee receives care from a
nonparticipating specialist pursuant to subparagraph (A),
such specialty care shall be provided at no additional cost
to the participant, beneficiary, or enrollee beyond what the
participant, beneficiary, or enrollee would otherwise pay for
such specialty care if provided by a participating
specialist.
(b) Referrals.--
(1) Authorization.--Subject to subsection (a)(1), a group
health plan or health insurance issuer may require an
authorization in order to obtain coverage for specialty
services under this section. Any such authorization--
(A) shall be for an appropriate duration of time or number
of referrals, including an authorization for a standing
referral where appropriate; and
(B) may not be refused solely because the authorization
involves services of a nonparticipating specialist (described
in subsection (a)(3)).
(2) Referrals for ongoing special conditions.--
(A) In general.--Subject to subsection (a)(1), a group
health plan and a health insurance issuer shall permit a
participant, beneficiary, or enrollee who has an ongoing
special condition (as defined in subparagraph (B)) to receive
a referral to a specialist for the treatment of such
condition and such specialist may authorize such referrals,
procedures, tests, and other medical services with respect to
such condition, or coordinate the care for such condition,
subject to the terms of a treatment plan (if any) referred to
in subsection (c) with respect to the condition.
(B) Ongoing special condition defined.--In this subsection,
the term ``ongoing special condition'' means a condition or
disease that--
(i) is life-threatening, degenerative, potentially
disabling, or congenital; and
(ii) requires specialized medical care over a prolonged
period of time.
(c) Treatment Plans.--
(1) In general.--A group health plan or health insurance
issuer may require that the specialty care be provided--
(A) pursuant to a treatment plan, but only if the treatment
plan--
(i) is developed by the specialist, in consultation with
the case manager or primary care provider, and the
participant, beneficiary, or enrollee, and
(ii) is approved by the plan or issuer in a timely manner,
if the plan or issuer requires such approval; and
(B) in accordance with applicable quality assurance and
utilization review standards of the plan or issuer.
(2) Notification.--Nothing in paragraph (1) shall be
construed as prohibiting a plan or issuer from requiring the
specialist to provide the plan or issuer with regular updates
on the specialty care provided, as well as all other
reasonably necessary medical information.
(d) Specialist Defined.--For purposes of this section, the
term ``specialist'' means, with respect to the condition of
the participant, beneficiary, or enrollee, a health care
professional, facility, or center 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.
SEC. 115. PATIENT ACCESS TO OBSTETRICAL AND GYNECOLOGICAL
CARE.
(a) General Rights.--
(1) Direct access.--A group health plan, and a health
insurance issuer offering health insurance coverage,
described in subsection (b) may not require authorization or
referral by the plan, issuer, or any person (including a
primary care provider described in subsection (b)(2)) in the
case of a female participant, beneficiary, or enrollee who
seeks coverage for obstetrical or gynecological care provided
by a participating health care professional who specializes
in obstetrics or gynecology.
(2) Obstetrical and gynecological care.--A group health
plan and a health insurance issuer described in subsection
(b) shall treat the provision of obstetrical and
gynecological care, and the ordering of related obstetrical
and gynecological items and services, pursuant to the direct
access
[[Page H5295]]
described under paragraph (1), by a participating health care
professional who specializes in obstetrics or gynecology as
the authorization of the primary care provider.
(b) Application of Section.--A group health plan, or health
insurance issuer offering health insurance coverage,
described in this subsection is a group health plan or
coverage that--
(1) provides coverage for obstetric or gynecologic care;
and
(2) requires the designation by a participant, beneficiary,
or enrollee of a participating primary care provider.
(c) Construction.--Nothing in subsection (a) shall be
construed to--
(1) waive any exclusions of coverage under the terms and
conditions of the plan or health insurance coverage with
respect to coverage of obstetrical or gynecological care; or
(2) preclude the group health plan or health insurance
issuer involved from requiring that the obstetrical or
gynecological provider notify the primary care health care
professional or the plan or issuer of treatment decisions.
SEC. 116. ACCESS TO PEDIATRIC CARE.
(a) Pediatric Care.--In the case of a person who has a
child who is a participant, beneficiary, or enrollee under a
group health plan, or health insurance coverage offered by a
health insurance issuer, if the plan or issuer requires or
provides for the designation of a participating primary care
provider for the child, the plan or issuer shall permit such
person to designate a physician (allopathic or osteopathic)
who specializes in pediatrics as the child's primary care
provider if such provider participates in the network of the
plan or issuer.
(b) Construction.--Nothing in subsection (a) shall be
construed to waive any exclusions of coverage under the terms
and conditions of the plan or health insurance coverage with
respect to coverage of pediatric care.
SEC. 117. CONTINUITY OF CARE.
(a) Termination of Provider.--
(1) In general.--If--
(A) a contract between a group health plan, or a health
insurance issuer offering health insurance coverage, and a
treating health care provider is terminated (as defined in
paragraph (e)(4)), or
(B) benefits or coverage provided by a health care provider
are terminated because of a change in the terms of provider
participation in such plan or coverage,
the plan or issuer shall meet the requirements of paragraph
(3) with respect to each continuing care patient.
(2) 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 paragraph (1) (and the succeeding provisions of this
section) shall apply under the plan in the same manner as if
there had been a contract between the plan and the provider
that had been terminated, but only with respect to benefits
that are covered under the plan after the contract
termination.
(3) Requirements.--The requirements of this paragraph are
that the plan or issuer--
(A) notify the continuing care patient involved, or arrange
to have the patient notified pursuant to subsection (d)(2),
on a timely basis of the termination described in paragraph
(1) (or paragraph (2), if applicable) and the right to elect
continued transitional care from the provider under this
section;
(B) provide the patient with an opportunity to notify the
plan or issuer of the patient's need for transitional care;
and
(C) subject to subsection (c), permit the patient to elect
to continue to be covered with respect to the course of
treatment by such provider with the provider's consent during
a transitional period (as provided for under subsection (b)).
(4) Continuing care patient.--For purposes of this section,
the term ``continuing care patient'' means a participant,
beneficiary, or enrollee who--
(A) is undergoing a course of treatment for a serious and
complex condition from the provider at the time the plan or
issuer receives or provides notice of provider, benefit, or
coverage termination described in paragraph (1) (or paragraph
(2), if applicable);
(B) is undergoing a course of institutional or inpatient
care from the provider at the time of such notice;
(C) is scheduled to undergo non-elective surgery from the
provider at the time of such notice;
(D) is pregnant and undergoing a course of treatment for
the pregnancy from the provider at the time of such notice;
or
(E) is or was determined to be terminally ill (as
determined under section 1861(dd)(3)(A) of the Social
Security Act) at the time of such notice, but only with
respect to a provider that was treating the terminal illness
before the date of such notice.
(b) Transitional Periods.--
(1) Serious and complex conditions.--The transitional
period under this subsection with respect to a continuing
care patient described in subsection (a)(4)(A) shall extend
for up to 90 days (as determined by the treating health care
professional) from the date of the notice described in
subsection (a)(3)(A).
(2) Institutional or inpatient care.--The transitional
period under this subsection for a continuing care patient
described in subsection (a)(4)(B) shall extend until the
earlier of--
(A) the expiration of the 90-day period beginning on the
date on which the notice under subsection (a)(3)(A) is
provided; or
(B) the date of discharge of the patient from such care or
the termination of the period of institutionalization, or, if
later, the date of completion of reasonable follow-up care.
(3) Scheduled non-elective surgery.--The transitional
period under this subsection for a continuing care patient
described in subsection (a)(4)(C) shall extend until the
completion of the surgery involved and post-surgical follow-
up care relating to the surgery and occurring within 90 days
after the date of the surgery.
(4) Pregnancy.--The transitional period under this
subsection for a continuing care patient described in
subsection (a)(4)(D) shall extend through the provision of
post-partum care directly related to the delivery.
(5) Terminal illness.--The transitional period under this
subsection for a continuing care patient described in
subsection (a)(4)(E) shall extend for the remainder of the
patient's life for care that is directly related to the
treatment of the terminal illness or its medical
manifestations.
(c) Permissible Terms and Conditions.--A group health plan
or health insurance issuer may condition coverage of
continued treatment by a provider under this section upon the
provider agreeing to the following terms and conditions:
(1) The treating health care provider agrees to accept
reimbursement from the plan or issuer and continuing care
patient involved (with respect to cost-sharing) at the rates
applicable prior to the start of the transitional period as
payment in full (or, in the case described in subsection
(a)(2), at the rates applicable under the replacement plan or
coverage after the date of the termination of the contract
with the group health plan or health insurance issuer) and
not to impose cost-sharing with respect to the patient in an
amount that would exceed the cost-sharing that could have
been imposed if the contract referred to in subsection (a)(1)
had not been terminated.
(2) The treating health care provider agrees to adhere to
the quality assurance standards of the plan or issuer
responsible for payment under paragraph (1) and to provide to
such plan or issuer necessary medical information related to
the care provided.
(3) The treating health care provider agrees otherwise to
adhere to such plan's or issuer's policies and procedures,
including procedures regarding referrals and obtaining prior
authorization and providing services pursuant to a treatment
plan (if any) approved by the plan or issuer.
(d) Rules of Construction.--Nothing in this section shall
be construed--
(1) to require the coverage of benefits which would not
have been covered if the provider involved remained a
participating provider; or
(2) with respect to the termination of a contract under
subsection (a) to prevent a group health plan or health
insurance issuer from requiring that the health care
provider--
(A) notify participants, beneficiaries, or enrollees of
their rights under this section; or
(B) provide the plan or issuer with the name of each
participant, beneficiary, or enrollee who the provider
believes is a continuing care patient.
(e) Definitions.--In this section:
(1) Contract.--The term ``contract'' includes, with respect
to a plan or issuer and a treating health care provider, a
contract between such plan or issuer and an organized network
of providers that includes the treating health care provider,
and (in the case of such a contract) the contract between the
treating health care provider and the organized network.
(2) Health care provider.--The term ``health care
provider'' or ``provider'' means--
(A) any individual who is engaged in the delivery of health
care services in a State and who is required by State law or
regulation to be licensed or certified by the State to engage
in the delivery of such services in the State; and
(B) any entity that is engaged in the delivery of health
care services in a State and that, if it is required by State
law or regulation to be licensed or certified by the State to
engage in the delivery of such services in the State, is so
licensed.
(3) Serious and complex condition.--The term ``serious and
complex condition'' means, with respect to a participant,
beneficiary, or enrollee under the plan or coverage--
(A) in the case of an acute illness, a condition that is
serious enough to require specialized medical treatment to
avoid the reasonable possibility of death or permanent harm;
or
(B) in the case of a chronic illness or condition, is an
ongoing special condition (as defined in section
114(b)(2)(B)).
(4) Terminated.--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
for failure to meet applicable quality standards or for
fraud.
[[Page H5296]]
SEC. 118. ACCESS TO NEEDED PRESCRIPTION DRUGS.
(a) In General.--To the extent that a group health plan, or
health insurance coverage offered by a health insurance
issuer, provides coverage for benefits with respect to
prescription drugs, and limits such coverage to drugs
included in a formulary, the plan or issuer shall--
(1) ensure the participation of physicians and pharmacists
in developing and reviewing such formulary;
(2) provide for disclosure of the formulary to providers;
and
(3) in accordance with the applicable quality assurance and
utilization review standards of the plan or issuer, provide
for exceptions from the formulary limitation when a non-
formulary alternative is medically necessary and appropriate
and, in the case of such an exception, apply the same cost-
sharing requirements that would have applied in the case of a
drug covered under the formulary.
(b) Coverage of Approved Drugs and Medical Devices.--
(1) In general.--A group health plan (and health insurance
coverage offered in connection with such a plan) that
provides any coverage of prescription drugs or medical
devices shall not deny coverage of such a drug or device on
the basis that the use is investigational, if the use--
(A) in the case of a prescription drug--
(i) is included in the labeling authorized by the
application in effect for the drug pursuant to subsection (b)
or (j) of section 505 of the Federal Food, Drug, and Cosmetic
Act, without regard to any postmarketing requirements that
may apply under such Act; or
(ii) is included in the labeling authorized by the
application in effect for the drug under section 351 of the
Public Health Service Act, without regard to any
postmarketing requirements that may apply pursuant to such
section; or
(B) in the case of a medical device, is included in the
labeling authorized by a regulation under subsection (d) or
(3) of section 513 of the Federal Food, Drug, and Cosmetic
Act, an order under subsection (f) of such section, or an
application approved under section 515 of such Act, without
regard to any postmarketing requirements that may apply under
such Act.
(2) Construction.--Nothing in this subsection shall be
construed as requiring a group health plan (or health
insurance coverage offered in connection with such a plan) to
provide any coverage of prescription drugs or medical
devices.
SEC. 119. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED
CLINICAL TRIALS.
(a) Coverage.--
(1) 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
subsection (b)), the plan or issuer--
(A) may not deny the individual participation in the
clinical trial referred to in subsection (b)(2);
(B) subject to subsection (c), may not deny (or limit or
impose additional conditions on) the coverage of routine
patient costs for items and services furnished in connection
with participation in the trial; and
(C) may not discriminate against the individual on the
basis of the enrollee's participation in such trial.
(2) Exclusion of certain costs.--For purposes of paragraph
(1)(B), routine patient costs do not include the cost of the
tests or measurements conducted primarily for the purpose of
the clinical trial involved.
(3) Use of in-network providers.--If one or more
participating providers is participating in a clinical trial,
nothing in paragraph (1) 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.
(b) Qualified Individual Defined.--For purposes of
subsection (a), 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:
(1)(A) The individual has a life-threatening or serious
illness for which no standard treatment is effective.
(B) The individual is eligible to participate in an
approved clinical trial according to the trial protocol with
respect to treatment of such illness.
(C) The individual's participation in the trial offers
meaningful potential for significant clinical benefit for the
individual.
(2) Either--
(A) 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 paragraph
(1); or
(B) 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
paragraph (1).
(c) Payment.--
(1) In general.--Under this section a group health plan and
a health insurance issuer shall provide for payment for
routine patient costs described in subsection (a)(2) but is
not required to pay for costs of items and services that are
reasonably expected (as determined by the appropriate
Secretary) to be paid for by the sponsors of an approved
clinical trial.
(2) Payment rate.--In the case of covered items and
services provided by--
(A) a participating provider, the payment rate shall be at
the agreed upon rate; or
(B) a nonparticipating provider, the payment rate shall be
at the rate the plan or issuer would normally pay for
comparable services under subparagraph (A).
(d) Approved Clinical Trial Defined.--
(1) In general.--In this section, the term ``approved
clinical trial'' means a clinical research study or clinical
investigation--
(A) 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, including a qualified nongovernmental
research entity to which the National Cancer Institute has
awarded a center support grant;
(iii) either of the following if the conditions described
in paragraph (2) are met--
(I) the Department of Veterans Affairs;
(II) the Department of Defense; or
(B) approved by the Food and Drug Administration.
(2) Conditions for departments.--The conditions described
in this paragraph, 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 appropriate Secretary determines--
(A) to be comparable to the system of peer review of
studies and investigations used by the National Institutes of
Health; and
(B) assures unbiased review of the highest ethical
standards by qualified individuals who have no interest in
the outcome of the review.
(e) Construction.--Nothing in this section shall be
construed to limit a plan's or issuer's coverage with respect
to clinical trials.
SEC. 120. REQUIRED COVERAGE FOR MINIMUM HOSPITAL STAY FOR
MASTECTOMIES AND LYMPH NODE DISSECTIONS FOR THE
TREATMENT OF BREAST CANCER AND COVERAGE FOR
SECONDARY CONSULTATIONS.
(a) Inpatient Care.--
(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 treatment of breast
cancer is provided for a period of time as is determined by
the attending physician, in consultation with the patient, to
be medically necessary and appropriate following--
(A) a mastectomy;
(B) a lumpectomy; or
(C) a lymph node dissection for the treatment of breast
cancer.
(2) Exception.--Nothing in this section shall be construed
as requiring the provision of inpatient coverage if the
attending physician and patient determine that a shorter
period of hospital stay is medically appropriate.
(b) Prohibition on Certain Modifications.--In implementing
the requirements of this section, a group health plan, and a
health insurance issuer providing health insurance coverage,
may not modify the terms and conditions of coverage based on
the determination by a participant, beneficiary, or enrollee
to request less than the minimum coverage required under
subsection (a).
(c) Secondary Consultations.--
(1) In general.--A group health plan, and a health
insurance issuer providing health insurance coverage, that
provides coverage with respect to medical and surgical
services provided in relation to the diagnosis and treatment
of cancer shall ensure that full coverage is provided for
secondary consultations by specialists in the appropriate
medical fields (including pathology, radiology, and oncology)
to confirm or refute such diagnosis. Such plan or issuer
shall ensure that full coverage is provided for such
secondary consultation whether such consultation is based on
a positive or negative initial diagnosis. In any case in
which the attending physician certifies in writing that
services necessary for such a secondary consultation are not
sufficiently available from specialists operating under the
plan or coverage with respect to whose services coverage is
otherwise provided under such plan or by such issuer, such
plan or issuer shall ensure that coverage is provided with
respect to the services necessary for the secondary
consultation with any other specialist selected by the
attending physician for such purpose at no additional cost to
the individual beyond that which the individual would have
paid if the specialist was participating in the network of
the plan or issuer.
(2) Exception.--Nothing in paragraph (1) shall be construed
as requiring the provision of secondary consultations where
the patient determines not to seek such a consultation.
(d) Prohibition on Penalties or Incentives.--A group health
plan, and a health insurance issuer providing health
insurance coverage, may not--
(1) penalize or otherwise reduce or limit the reimbursement
of a provider or specialist because the provider or
specialist provided care to a participant, beneficiary, or
enrollee in accordance with this section;
[[Page H5297]]
(2) provide financial or other incentives to a physician or
specialist to induce the physician or specialist to keep the
length of inpatient stays of patients following a mastectomy,
lumpectomy, or a lymph node dissection for the treatment of
breast cancer below certain limits or to limit referrals for
secondary consultations; or
(3) provide financial or other incentives to a physician or
specialist to induce the physician or specialist to refrain
from referring a participant, beneficiary, or enrollee for a
secondary consultation that would otherwise be covered by the
plan or coverage involved under subsection (c).
Subtitle C--Access to Information
SEC. 121. PATIENT ACCESS TO INFORMATION.
(a) Requirement.--
(1) Disclosure.--
(A) In general.--A group health plan, and a health
insurance issuer that provides coverage in connection with
health insurance coverage, shall provide for the disclosure
to participants, beneficiaries, and enrollees--
(i) of the information described in subsection (b) at the
time of the initial enrollment of the participant,
beneficiary, or enrollee under the plan or coverage;
(ii) of such information on an annual basis--
(I) in conjunction with the election period of the plan or
coverage if the plan or coverage has such an election period;
or
(II) in the case of a plan or coverage that does not have
an election period, in conjunction with the beginning of the
plan or coverage year; and
(iii) of information relating to any material reduction to
the benefits or information described in such subsection or
subsection (c), in the form of a notice provided not later
than 30 days before the date on which the reduction takes
effect.
(B) Participants, beneficiaries, and enrollees.--The
disclosure required under subparagraph (A) shall be
provided--
(i) jointly to each participant, beneficiary, and enrollee
who reside at the same address; or
(ii) in the case of a beneficiary or enrollee who does not
reside at the same address as the participant or another
enrollee, separately to the participant or other enrollees
and such beneficiary or enrollee.
(2) Provision of information.--Information shall be
provided to participants, beneficiaries, and enrollees under
this section at the last known address maintained by the plan
or issuer with respect to such participants, beneficiaries,
or enrollees, to the extent that such information is provided
to participants, beneficiaries, or enrollees via the United
States Postal Service or other private delivery service.
(b) Required Information.--The informational materials to
be distributed under this section shall include for each
option available under the group health plan or health
insurance coverage the following:
(1) Benefits.--A description of the covered benefits,
including--
(A) any in- and out-of-network benefits;
(B) specific preventive services covered under the plan or
coverage if such services are covered;
(C) any specific exclusions or express limitations of
benefits described in section 104(d)(3)(C);
(D) any other benefit limitations, including any annual or
lifetime benefit limits and any monetary limits or limits on
the number of visits, days, or services, and any specific
coverage exclusions; and
(E) any definition of medical necessity used in making
coverage determinations by the plan, issuer, or claims
administrator.
(2) Cost sharing.--A description of any cost-sharing
requirements, including--
(A) any premiums, deductibles, coinsurance, copayment
amounts, and liability for balance billing, for which the
participant, beneficiary, or enrollee will be responsible
under each option available under the plan;
(B) any maximum out-of-pocket expense for which the
participant, beneficiary, or enrollee may be liable;
(C) any cost-sharing requirements for out-of-network
benefits or services received from nonparticipating
providers; and
(D) any additional cost-sharing or charges for benefits and
services that are furnished without meeting applicable plan
or coverage requirements, such as prior authorization or
precertification.
(3) Disenrollment.--Information relating to the
disenrollment of a participant, beneficiary, or enrollee.
(4) Service area.--A description of the plan or issuer's
service area, including the provision of any out-of-area
coverage.
(5) Participating providers.--A directory of participating
providers (to the extent a plan or issuer provides coverage
through a network of providers) that includes, at a minimum,
the name, address, and telephone number of each participating
provider, and information about how to inquire whether a
participating provider is currently accepting new patients.
(6) Choice of primary care provider.--A description of any
requirements and procedures to be used by participants,
beneficiaries, and enrollees in selecting, accessing, or
changing their primary care provider, including providers
both within and outside of the network (if the plan or issuer
permits out-of-network services), and the right to select a
pediatrician as a primary care provider under section 116 for
a participant, beneficiary, or enrollee who is a child if
such section applies.
(7) Preauthorization requirements.--A description of the
requirements and procedures to be used to obtain
preauthorization for health services, if such
preauthorization is required.
(8) Experimental and investigational treatments.--A
description of the process for determining whether a
particular item, service, or treatment is considered
experimental or investigational, and the circumstances under
which such treatments are covered by the plan or issuer.
(9) Specialty care.--A description of the requirements and
procedures to be used by participants, beneficiaries, and
enrollees in accessing specialty care and obtaining referrals
to participating and nonparticipating specialists, including
any limitations on choice of health care professionals
referred to in section 112(b)(2) and the right to timely
access to specialists care under section 114 if such section
applies.
(10) Clinical trials.--A description of the circumstances
and conditions under which participation in clinical trials
is covered under the terms and conditions of the plan or
coverage, and the right to obtain coverage for approved
clinical trials under section 119 if such section applies.
(11) Prescription drugs.--To the extent the plan or issuer
provides coverage for prescription drugs, a statement of
whether such coverage is limited to drugs included in a
formulary, a description of any provisions and cost-sharing
required for obtaining on- and off-formulary medications, and
a description of the rights of participants, beneficiaries,
and enrollees in obtaining access to access to prescription
drugs under section 118 if such section applies.
(12) Emergency services.--A summary of the rules and
procedures for accessing emergency services, including the
right of a participant, beneficiary, or enrollee to obtain
emergency services under the prudent layperson standard under
section 113, if such section applies, and any educational
information that the plan or issuer may provide regarding the
appropriate use of emergency services.
(13) Claims and appeals.--A description of the plan or
issuer's rules and procedures pertaining to claims and
appeals, a description of the rights (including deadlines for
exercising rights) of participants, beneficiaries, and
enrollees under subtitle A in obtaining covered benefits,
filing a claim for benefits, and appealing coverage decisions
internally and externally (including telephone numbers and
mailing addresses of the appropriate authority), and a
description of any additional legal rights and remedies
available under section 502 of the Employee Retirement Income
Security Act of 1974 and applicable State law.
(14) Advance directives and organ donation.--A description
of procedures for advance directives and organ donation
decisions if the plan or issuer maintains such procedures.
(15) Information on plans and issuers.--The name, mailing
address, and telephone number or numbers of the plan
administrator and the issuer to be used by participants,
beneficiaries, and enrollees seeking information about plan
or coverage benefits and services, payment of a claim, or
authorization for services and treatment. Notice of whether
the benefits under the plan or coverage are provided under a
contract or policy of insurance issued by an issuer, or
whether benefits are provided directly by the plan sponsor
who bears the insurance risk.
(16) Translation services.--A summary description of any
translation or interpretation services (including the
availability of printed information in languages other than
English, audio tapes, or information in Braille) that are
available for non-English speakers and participants,
beneficiaries, and enrollees with communication disabilities
and a description of how to access these items or services.
(17) Accreditation information.--Any information that is
made public by accrediting organizations in the process of
accreditation if the plan or issuer is accredited, or any
additional quality indicators (such as the results of
enrollee satisfaction surveys) that the plan or issuer makes
public or makes available to participants, beneficiaries, and
enrollees.
(18) Notice of requirements.--A description of any rights
of participants, beneficiaries, and enrollees that are
established by the Bipartisan Patient Protection Act
(excluding those described in paragraphs (1) through (17)) if
such sections apply. The description required under this
paragraph may be combined with the notices of the type
described in sections 711(d), 713(b), or 606(a)(1) of the
Employee Retirement Income Security Act of 1974 and with any
other notice provision that the appropriate Secretary
determines may be combined, so long as such combination does
not result in any reduction in the information that would
otherwise be provided to the recipient.
(19) Availability of additional information.--A statement
that the information described in subsection (c), and
instructions on obtaining such information (including
telephone numbers and, if available, Internet websites),
shall be made available upon request.
(20) Designated decisionmakers.--A description of the
participants and beneficiaries with respect to whom each
designated decisionmaker under the plan has assumed liability
under section 502(o) of the Employee Retirement Income
Security Act of 1974 and the name and address of each such
decisionmaker.
[[Page H5298]]
(c) Additional Information.--The informational materials to
be provided upon the request of a participant, beneficiary,
or enrollee shall include for each option available under a
group health plan or health insurance coverage the following:
(1) Status of providers.--The State licensure status of the
plan or issuer's participating health care professionals and
participating health care facilities, and, if available, the
education, training, specialty qualifications or
certifications of such professionals.
(2) Compensation methods.--A summary description by
category of the applicable methods (such as capitation, fee-
for-service, salary, bundled payments, per diem, or a
combination thereof) used for compensating prospective or
treating health care professionals (including primary care
providers and specialists) and facilities in connection with
the provision of health care under the plan or coverage.
(3) Prescription drugs.--Information about whether a
specific prescription medication is included in the formulary
of the plan or issuer, if the plan or issuer uses a defined
formulary.
(4) Utilization review activities.--A description of
procedures used and requirements (including circumstances,
timeframes, and appeals rights) under any utilization review
program under sections 101 and 102, including any drug
formulary program under section 118.
(5) External appeals information.--Aggregate information on
the number and outcomes of external medical reviews, relative
to the sample size (such as the number of covered lives)
under the plan or under the coverage of the issuer.
(d) Manner of Disclosure.--The information described in
this section shall be disclosed in an accessible medium and
format that is calculated to be understood by a participant
or enrollee.
(e) Rules of Construction.--Nothing in this section shall
be construed to prohibit a group health plan, or a health
insurance issuer in connection with health insurance
coverage, from--
(1) distributing any other additional information
determined by the plan or issuer to be important or necessary
in assisting participants, beneficiaries, and enrollees in
the selection of a health plan or health insurance coverage;
and
(2) complying with the provisions of this section by
providing information in brochures, through the Internet or
other electronic media, or through other similar means, so
long as--
(A) the disclosure of such information in such form is in
accordance with requirements as the appropriate Secretary may
impose, and
(B) in connection with any such disclosure of information
through the Internet or other electronic media--
(i) the recipient has affirmatively consented to the
disclosure of such information in such form,
(ii) the recipient is capable of accessing the information
so disclosed on the recipient's individual workstation or at
the recipient's home,
(iii) the recipient retains an ongoing right to receive
paper disclosure of such information and receives, in advance
of any attempt at disclosure of such information to him or
her through the Internet or other electronic media, notice in
printed form of such ongoing right and of the proper software
required to view information so disclosed, and
(iv) the plan administrator appropriately ensures that the
intended recipient is receiving the information so disclosed
and provides the information in printed form if the
information is not received.
Subtitle D--Protecting the Doctor-Patient Relationship
SEC. 131. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL
COMMUNICATIONS.
(a) General Rule.--The provisions of any contract or
agreement, or the operation of any contract or agreement,
between a group health plan or health insurance issuer in
relation to health insurance coverage (including any
partnership, association, or other organization that enters
into or administers such a contract or agreement) and a
health care provider (or group of health care providers)
shall not prohibit or otherwise restrict a health care
professional from advising such a participant, beneficiary,
or enrollee who is a patient of the professional about the
health status of the individual or medical care or treatment
for the individual's condition or disease, regardless of
whether benefits for such care or treatment are provided
under the plan or coverage, if the professional is acting
within the lawful scope of practice.
(b) Nullification.--Any contract provision or agreement
that restricts or prohibits medical communications in
violation of subsection (a) shall be null and void.
SEC. 132. PROHIBITION OF DISCRIMINATION AGAINST PROVIDERS
BASED ON LICENSURE.
(a) In General.--A group health plan, and a health
insurance issuer with respect to health insurance coverage,
shall not discriminate with respect to participation or
indemnification as to any provider who is acting within the
scope of the provider's license or certification under
applicable State law, solely on the basis of such license or
certification.
(b) Construction.--Subsection (a) shall not be construed--
(1) as requiring the coverage under a group health plan or
health insurance coverage of a particular benefit or service
or to prohibit a plan or issuer from including providers only
to the extent necessary to meet the needs of the plan's or
issuer's participants, beneficiaries, or enrollees or from
establishing any measure designed to maintain quality and
control costs consistent with the responsibilities of the
plan or issuer;
(2) to override any State licensure or scope-of-practice
law; or
(3) as requiring a plan or issuer that offers network
coverage to include for participation every willing provider
who meets the terms and conditions of the plan or issuer.
SEC. 133. PROHIBITION AGAINST IMPROPER INCENTIVE
ARRANGEMENTS.
(a) 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 1852(j)(4) of the Social Security Act) unless the
requirements described in clauses (i), (ii)(I), and (iii) of
subparagraph (A) of such section are met with respect to such
a plan.
(b) Application.--For purposes of carrying out paragraph
(1), any reference in section 1852(j)(4) of the Social
Security Act to the Secretary, a Medicare+Choice
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.
(c) Construction.--Nothing in this section shall be
construed as prohibiting all capitation and similar
arrangements or all provider discount arrangements.
SEC. 134. PAYMENT OF CLAIMS.
A group health plan, and a health insurance issuer offering
health insurance coverage, shall provide for prompt payment
of claims submitted for health care services or supplies
furnished to a participant, beneficiary, or enrollee with
respect to benefits covered by the plan or issuer, in a
manner that is no less protective than the provisions of
section 1842(c)(2) of the Social Security Act (42 U.S.C.
1395u(c)(2)).
SEC. 135. PROTECTION FOR PATIENT ADVOCACY.
(a) Protection for Use of Utilization Review and Grievance
Process.--A group health plan, and a health insurance issuer
with respect to the provision of health insurance coverage,
may not retaliate against a participant, beneficiary,
enrollee, or health care provider based on the participant's,
beneficiary's, enrollee's or provider's use of, or
participation in, a utilization review process or a grievance
process of the plan or issuer (including an internal or
external review or appeal process) under this title.
(b) Protection for Quality Advocacy by Health Care
Professionals.--
(1) In general.--A group health plan and a health insurance
issuer may not retaliate or discriminate against a protected
health care professional because the professional in good
faith--
(A) discloses information relating to the care, services,
or conditions affecting one or more participants,
beneficiaries, or enrollees of the plan or issuer to an
appropriate public regulatory agency, an appropriate private
accreditation body, or appropriate management personnel of
the plan or issuer; or
(B) initiates, cooperates, or otherwise participates in an
investigation or proceeding by such an agency with respect to
such care, services, or conditions.
If an institutional health care provider is a participating
provider with such a plan or issuer or otherwise receives
payments for benefits provided by such a plan or issuer, the
provisions of the previous sentence shall apply to the
provider in relation to care, services, or conditions
affecting one or more patients within an institutional health
care provider in the same manner as they apply to the plan or
issuer in relation to care, services, or conditions provided
to one or more participants, beneficiaries, or enrollees; and
for purposes of applying this sentence, any reference to a
plan or issuer is deemed a reference to the institutional
health care provider.
(2) Good faith action.--For purposes of paragraph (1), a
protected health care professional is considered to be acting
in good faith with respect to disclosure of information or
participation if, with respect to the information disclosed
as part of the action--
(A) the disclosure is made on the basis of personal
knowledge and is consistent with that degree of learning and
skill ordinarily possessed by health care professionals with
the same licensure or certification and the same experience;
(B) the professional reasonably believes the information to
be true;
(C) the information evidences either a violation of a law,
rule, or regulation, of an applicable accreditation standard,
or of a generally recognized professional or clinical
standard or that a patient is in imminent hazard of loss of
life or serious injury; and
(D) subject to subparagraphs (B) and (C) of paragraph (3),
the professional has followed reasonable internal procedures
of the plan, issuer, or institutional health care provider
established for the purpose of addressing quality concerns
before making the disclosure.
(3) Exception and special rule.--
[[Page H5299]]
(A) General exception.--Paragraph (1) does not protect
disclosures that would violate Federal or State law or
diminish or impair the rights of any person to the continued
protection of confidentiality of communications provided by
such law.
(B) Notice of internal procedures.--Subparagraph (D) of
paragraph (2) shall not apply unless the internal procedures
involved are reasonably expected to be known to the health
care professional involved. For purposes of this
subparagraph, a health care professional is reasonably
expected to know of internal procedures if those procedures
have been made available to the professional through
distribution or posting.
(C) Internal procedure exception.--Subparagraph (D) of
paragraph (2) also shall not apply if--
(i) the disclosure relates to an imminent hazard of loss of
life or serious injury to a patient;
(ii) the disclosure is made to an appropriate private
accreditation body pursuant to disclosure procedures
established by the body; or
(iii) the disclosure is in response to an inquiry made in
an investigation or proceeding of an appropriate public
regulatory agency and the information disclosed is limited to
the scope of the investigation or proceeding.
(4) Additional considerations.--It shall not be a violation
of paragraph (1) to take an adverse action against a
protected health care professional if the plan, issuer, or
provider taking the adverse action involved demonstrates that
it would have taken the same adverse action even in the
absence of the activities protected under such paragraph.
(5) Notice.--A group health plan, health insurance issuer,
and institutional health care provider shall post a notice,
to be provided or approved by the Secretary of Labor, setting
forth excerpts from, or summaries of, the pertinent
provisions of this subsection and information pertaining to
enforcement of such provisions.
(6) Constructions.--
(A) Determinations of coverage.--Nothing in this subsection
shall be construed to prohibit a plan or issuer from making a
determination not to pay for a particular medical treatment
or service or the services of a type of health care
professional.
(B) Enforcement of peer review protocols and internal
procedures.--Nothing in this subsection shall be construed to
prohibit a plan, issuer, or provider from establishing and
enforcing reasonable peer review or utilization review
protocols or determining whether a protected health care
professional has complied with those protocols or from
establishing and enforcing internal procedures for the
purpose of addressing quality concerns.
(C) Relation to other rights.--Nothing in this subsection
shall be construed to abridge rights of participants,
beneficiaries, enrollees, and protected health care
professionals under other applicable Federal or State laws.
(7) Protected health care professional defined.--For
purposes of this subsection, the term ``protected health care
professional'' means an individual who is a licensed or
certified health care professional and who--
(A) with respect to a group health plan or health insurance
issuer, is an employee of the plan or issuer or has a
contract with the plan or issuer for provision of services
for which benefits are available under the plan or issuer; or
(B) with respect to an institutional health care provider,
is an employee of the provider or has a contract or other
arrangement with the provider respecting the provision of
health care services.
Subtitle E--Definitions
SEC. 151. DEFINITIONS.
(a) Incorporation of General Definitions.--Except as
otherwise provided, the provisions of section 2791 of the
Public Health Service Act shall apply for purposes of this
title in the same manner as they apply for purposes of title
XXVII of such Act.
(b) Secretary.--Except as otherwise provided, the term
``Secretary'' means the Secretary of Health and Human
Services, in consultation with the Secretary of Labor and the
term ``appropriate Secretary'' means the Secretary of Health
and Human Services in relation to carrying out this title
under sections 2706 and 2751 of the Public Health Service Act
and the Secretary of Labor in relation to carrying out this
title under section 714 of the Employee Retirement Income
Security Act of 1974.
(c) Additional Definitions.--For purposes of this title:
(1) Applicable authority.--The term ``applicable
authority'' means--
(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 this title, 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 provision under section
2722(a)(2) or 2761(a)(2) of the Public Health Service Act.
(2) Enrollee.--The term ``enrollee'' means, with respect to
health insurance coverage offered by a health insurance
issuer, an individual enrolled with the issuer to receive
such coverage.
(3) Group health plan.--The term ``group health plan'' has
the meaning given such term in section 733(a) of the Employee
Retirement Income Security Act of 1974, except that such term
includes a employee welfare benefit plan treated as a group
health plan under section 732(d) of such Act or defined as
such a plan under section 607(1) of such Act.
(4) Health care professional.--The term ``health care
professional'' means an individual who is licensed,
accredited, or certified under State law to provide specified
health care services and who is operating within the scope of
such licensure, accreditation, or certification.
(5) Health care provider.--The term ``health care
provider'' includes a physician or other health care
professional, as well as an institutional or other facility
or agency that provides health care services and that is
licensed, accredited, or certified to provide health care
items and services under applicable State law.
(6) Network.--The term ``network'' means, with respect to a
group health plan or health insurance issuer offering health
insurance coverage, the participating health care
professionals and providers through whom the plan or issuer
provides health care items and services to participants,
beneficiaries, or enrollees.
(7) 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 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.
(8) Participating.--The term ``participating'' means, with
respect to a health care provider that provides health care
items and services to a participant, beneficiary, or enrollee
under 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.
(9) Prior authorization.--The term ``prior authorization''
means the process of obtaining prior approval from a health
insurance issuer or group health plan for the provision or
coverage of medical services.
(10) Terms and conditions.--The term ``terms and
conditions'' includes, with respect to a group health plan or
health insurance coverage, requirements imposed under this
title with respect to the plan or coverage.
SEC. 152. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.
(a) Continued Applicability of State Law With Respect to
Health Insurance Issuers.--
(1) In general.--Subject to paragraph (2), this title 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
or otherwise) except to the extent that such standard or
requirement prevents the application of a requirement of this
title.
(2) Continued preemption with respect to group health
plans.--Nothing in this title 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.--In applying this section, a State law
that provides for equal access to, and availability of, all
categories of licensed health care providers and services
shall not be treated as preventing the application of any
requirement of this title.
(b) Application of Substantially Compliant State Laws.--
(1) In general.--In the case of a State law that imposes,
with respect to health insurance coverage offered by a health
insurance issuer and with respect to a group health plan that
is a non-Federal governmental plan, a requirement that
substantially complies (within the meaning of subsection (c))
with a patient protection requirement (as defined in
paragraph (3)) and does not prevent the application of other
requirements under this Act (except in the case of other
substantially compliant requirements), in applying the
requirements of this title under section 2707 and 2753 (as
applicable) of the Public Health Service Act (as added by
title II), subject to subsection (a)(2)--
(A) the State law shall not be treated as being superseded
under subsection (a); and
(B) the State law shall apply instead of the patient
protection requirement otherwise applicable with respect to
health insurance coverage and non-Federal governmental plans.
(2) Limitation.--In the case of a group health plan covered
under title I of the Employee Retirement Income Security Act
of 1974, paragraph (1) shall be construed to apply only with
respect to the health insurance coverage (if any) offered in
connection with the plan.
(3) Definitions.--In this section:
(A) Patient protection requirement.--The term ``patient
protection requirement'' means a requirement under this
title, and includes (as a single requirement) a group or
related set of requirements under a section or similar unit
under this title.
(B) Substantially compliant.--The terms ``substantially
compliant'', substantially complies'', or ``substantial
compliance'' with respect to a State law, mean that the State
law has the same or similar features as the patient
protection requirements and has a similar effect.
[[Page H5300]]
(c) Determinations of Substantial Compliance.--
(1) Certification by states.--A State may submit to the
Secretary a certification that a State law provides for
patient protections that are at least substantially compliant
with one or more patient protection requirements. Such
certification shall be accompanied by such information as may
be required to permit the Secretary to make the determination
described in paragraph (2)(A).
(2) Review.--
(A) In general.--The Secretary shall promptly review a
certification submitted under paragraph (1) with respect to a
State law to determine if the State law substantially
complies with the patient protection requirement (or
requirements) to which the law relates.
(B) Approval deadlines.--
(i) Initial review.--Such a certification is considered
approved unless the Secretary notifies the State in writing,
within 90 days after the date of receipt of the
certification, that the certification is disapproved (and the
reasons for disapproval) or that specified additional
information is needed to make the determination described in
subparagraph (A).
(ii) Additional information.--With respect to a State that
has been notified by the Secretary under clause (i) that
specified additional information is needed to make the
determination described in subparagraph (A), the Secretary
shall make the determination within 60 days after the date on
which such specified additional information is received by
the Secretary.
(3) Approval.--
(A) In general.--The Secretary shall approve a
certification under paragraph (1) unless--
(i) the State fails to provide sufficient information to
enable the Secretary to make a determination under paragraph
(2)(A); or
(ii) the Secretary determines that the State law involved
does not provide for patient protections that substantially
comply with the patient protection requirement (or
requirements) to which the law relates.
(B) State challenge.--A State that has a certification
disapproved by the Secretary under subparagraph (A) may
challenge such disapproval in the appropriate United States
district court.
(C) Deference to states.--With respect to a certification
submitted under paragraph (1), the Secretary shall give
deference to the State's interpretation of the State law
involved with respect to the patient protection involved.
(D) Public notification.--The Secretary shall--
(i) provide a State with a notice of the determination to
approve or disapprove a certification under this paragraph;
(ii) promptly publish in the Federal Register a notice that
a State has submitted a certification under paragraph (1);
(iii) promptly publish in the Federal Register the notice
described in clause (i) with respect to the State; and
(iv) annually publish the status of all States with respect
to certifications.
(4) Construction.--Nothing in this subsection shall be
construed as preventing the certification (and approval of
certification) of a State law under this subsection solely
because it provides for greater protections for patients than
those protections otherwise required to establish substantial
compliance.
(5) Petitions.--
(A) Petition process.--Effective on the date on which the
provisions of this Act become effective, as provided for in
section 601, a group health plan, health insurance issuer,
participant, beneficiary, or enrollee may submit a petition
to the Secretary for an advisory opinion as to whether or not
a standard or requirement under a State law applicable to the
plan, issuer, participant, beneficiary, or enrollee that is
not the subject of a certification under this subsection, is
superseded under subsection (a)(1) because such standard or
requirement prevents the application of a requirement of this
title.
(B) Opinion.--The Secretary shall issue an advisory opinion
with respect to a petition submitted under subparagraph (A)
within the 60-day period beginning on the date on which such
petition is submitted.
(d) 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) State.--The term ``State'' includes a State, the
District of Columbia, Puerto Rico, the Virgin Islands, Guam,
American Samoa, the Northern Mariana Islands, any political
subdivisions of such, or any agency or instrumentality of
such.
SEC. 153. EXCLUSIONS.
(a) No Benefit Requirements.--Nothing in this title shall
be construed to require a group health plan or a health
insurance issuer offering health insurance coverage to
include specific items and services under the terms of such a
plan or coverage, other than those provided under the terms
and conditions of such plan or coverage.
(b) Exclusion From Access to Care Managed Care Provisions
for Fee-for-Service Coverage.--
(1) In general.--The provisions of sections 111 through 117
shall not apply to a group health plan or health insurance
coverage if the only coverage offered under the plan or
coverage is fee-for-service coverage (as defined in paragraph
(2)).
(2) Fee-for-service coverage defined.--For purposes of this
subsection, the term ``fee-for-service coverage'' means
coverage under a group health plan or health insurance
coverage that--
(A) reimburses hospitals, health professionals, and other
providers on a fee-for-service basis without placing the
provider at financial risk;
(B) does not vary reimbursement for such a provider based
on an agreement to contract terms and conditions or the
utilization of health care items or services relating to such
provider;
(C) allows access to any provider that is lawfully
authorized to provide the covered services and that agrees to
accept the terms and conditions of payment established under
the plan or by the issuer; and
(D) for which the plan or issuer does not require prior
authorization before providing for any health care services.
SEC. 154. TREATMENT OF EXCEPTED BENEFITS.
(a) In General.--The requirements of this title and the
provisions of sections 502(a)(1)(C), 502(n), and 514(d) of
the Employee Retirement Income Security Act of 1974 (added by
section 402) shall not apply to excepted benefits (as defined
in section 733(c) of such Act), other than benefits described
in section 733(c)(2)(A) of such Act, in the same manner as
the provisions of part 7 of subtitle B of title I of such Act
do not apply to such benefits under subsections (b) and (c)
of section 732 of such Act.
(b) Coverage of Certain Limited Scope Plans.--Only for
purposes of applying the requirements of this title under
sections 2707 and 2753 of the Public Health Service Act,
section 714 of the Employee Retirement Income Security Act of
1974, and section 9813 of the Internal Revenue Code of 1986,
the following sections shall be deemed not to apply:
(1) Section 2791(c)(2)(A) of the Public Health Service Act.
(2) Section 733(c)(2)(A) of the Employee Retirement Income
Security Act of 1974.
(3) Section 9832(c)(2)(A) of the Internal Revenue Code of
1986.
SEC. 155. 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 title. 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
title.
SEC. 156. INCORPORATION INTO PLAN OR COVERAGE DOCUMENTS.
The requirements of this title with respect to a group
health plan or health insurance coverage are, subject to
section 154, deemed to be incorporated into, and made a part
of, such plan or the policy, certificate, or contract
providing such coverage and are enforceable under law as if
directly included in the documentation of such plan or such
policy, certificate, or contract.
SEC. 157. PRESERVATION OF PROTECTIONS.
(a) In General.--The rights under this Act (including the
right to maintain a civil action and any other rights under
the amendments made by this Act) may not be waived, deferred,
or lost pursuant to any agreement not authorized under this
Act.
(b) Exception.--Subsection (a) shall not apply to an
agreement providing for arbitration or participation in any
other nonjudicial procedure to resolve a dispute if the
agreement is entered into knowingly and voluntarily by the
parties involved after the dispute has arisen or is pursuant
to the terms of a collective bargaining agreement. Nothing in
this subsection shall be construed to permit the waiver of
the requirements of sections 103 and 104 (relating to
internal and external review).
TITLE II--APPLICATION OF QUALITY CARE STANDARDS TO GROUP HEALTH PLANS
AND HEALTH INSURANCE COVERAGE UNDER THE 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. 2707. PATIENT PROTECTION STANDARDS.
``Each group health plan shall comply with patient
protection requirements under title I of the Bipartisan
Patient Protection Act, 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) 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 2707)'' after ``requirements of such
subparts''.
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 2752 the following new
section:
``SEC. 2753. PATIENT PROTECTION STANDARDS.
``Each health insurance issuer shall comply with patient
protection requirements under title I of the Bipartisan
Patient Protection Act with respect to individual health
[[Page H5301]]
insurance coverage it offers, and such requirements shall be
deemed to be incorporated into this subsection.''.
SEC. 203. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
Part C of title XXVII of the Public Health Service Act (42
U.S.C. 300gg-91 et seq.) is amended by adding at the end the
following:
``SEC. 2793. COOPERATION BETWEEN FEDERAL AND STATE
AUTHORITIES.
``(a) Agreement with States.--A State may enter into an
agreement with the Secretary for the delegation to the State
of some or all of the Secretary's authority under this title
to enforce the requirements applicable under title I of the
Bipartisan Patient Protection Act with respect to health
insurance coverage offered by a health insurance issuer and
with respect to a group health plan that is a non-Federal
governmental plan.
``(b) Delegations.--Any department, agency, or
instrumentality of a State to which authority is delegated
pursuant to an agreement entered into under this section may,
if authorized under State law and to the extent consistent
with such agreement, exercise the powers of the Secretary
under this title which relate to such authority.''.
TITLE III--APPLICATION OF PATIENT PROTECTION STANDARDS TO FEDERAL
HEALTH INSURANCE PROGRAMS
SEC. 301. APPLICATION OF PATIENT PROTECTION STANDARDS TO
FEDERAL HEALTH INSURANCE PROGRAMS.
(a) Sense of Congress.--It is the sense of Congress that
enrollees in Federal health insurance programs should have
the same rights and privileges as those afforded under title
I and under the amendments made by title IV to participants
and beneficiaries under group health plans.
(b) Conforming Federal Health Insurance Programs.--It is
the sense of Congress that the President should require, by
executive order, the Federal official with authority over
each Federal health insurance program, to the extent
feasible, to take such steps as are necessary to implement
the rights and privileges described in subsection (a) with
respect to such program.
(c) GAO Report on Additional Steps Required.--Not later
than 1 year after the date of the enactment of this Act, the
Comptroller General of the United States shall submit to
Congress a report on statutory changes that are required to
implement such rights and privileges in a manner that is
consistent with the missions of the Federal health insurance
programs and that avoids unnecessary duplication or
disruption of such programs.
(d) Federal Health Insurance Program.--In this section, the
term ``Federal health insurance program'' means a Federal
program that provides creditable coverage (as defined in
section 2701(c)(1) of the Public Health Service Act) and
includes a health program of the Department of Veterans
Affairs.
TITLE IV--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974
SEC. 401. APPLICATION OF PATIENT PROTECTION STANDARDS TO
GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE
COVERAGE UNDER THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974.
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. 714. 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
Bipartisan Patient Protection Act (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 Bipartisan Patient Protection Act 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 111 (relating to consumer choice option).
``(B) Section 112 (relating to choice of health care
professional).
``(C) Section 113 (relating to access to emergency care).
``(D) Section 114 (relating to timely access to
specialists).
``(E) Section 115 (relating to patient access to
obstetrical and gynecological care).
``(F) Section 116 (relating to access to pediatric care).
``(G) Section 117 (relating to continuity of care), but
only insofar as a replacement issuer assumes the obligation
for continuity of care.
``(H) Section 118 (relating to access to needed
prescription drugs).
``(I) Section 119 (relating to coverage for individuals
participating in approved clinical trials).
``(J) Section 120 (relating to required coverage for
minimum hospital stay for mastectomies and lymph node
dissections for the treatment of breast cancer and coverage
for secondary consultations).
``(K) Section 134 (relating to payment of claims).
``(2) Information.--With respect to information required to
be provided or made available under section 121 of the
Bipartisan Patient Protection 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 available (or provides and
makes available) such information.
``(3) Internal appeals.--With respect to the internal
appeals process required to be established under section 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 process and system (and is not liable for the
issuer's failure to provide for such process and system), if
the issuer is obligated to provide for (and provides for)
such process and system.
``(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 104 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 the Bipartisan Patient Protection Act, the group health
plan shall not be liable for such violation unless the plan
caused such violation:
``(A) Section 131 (relating to prohibition of interference
with certain medical communications).
``(B) Section 132 (relating to prohibition of
discrimination against providers based on licensure).
``(C) Section 133 (relating to prohibition against improper
incentive arrangements).
``(D) Section 135 (relating to protection for patient
advocacy).
``(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.
``(7) Treatment of substantially compliant state laws.--For
purposes of applying this subsection in connection with
health insurance coverage, any reference in this subsection
to a requirement in a section or other provision in the
Bipartisan Patient Protection Act with respect to a health
insurance issuer is deemed to include a reference to a
requirement under a State law that substantially complies (as
determined under section 152(c) of such Act) with the
requirement in such section or other provisions.
``(8) Application to certain prohibitions against
retaliation.--With respect to compliance with the
requirements of section 135(b)(1) of the Bipartisan Patient
Protection Act, for purposes of this subtitle the term `group
health plan' is deemed to include a reference to an
institutional health care provider.
``(c) Enforcement of Certain Requirements.--
``(1) Complaints.--Any protected health care professional
who believes that the professional has been retaliated or
discriminated against in violation of section 135(b)(1) of
the Bipartisan Patient Protection Act may file with the
Secretary a complaint within 180 days of the date of the
alleged retaliation or discrimination.
``(2) Investigation.--The Secretary shall investigate such
complaints and shall determine if a violation of such section
has occurred and, if so, shall issue an order to ensure that
the protected health care professional does not suffer any
loss of position, pay, or benefits in relation to the plan,
issuer, or provider involved, as a result of the violation
found by the Secretary.
``(d) Conforming Regulations.--The Secretary shall issue
regulations to coordinate the requirements on group health
plans and health insurance issuers under this section with
the requirements imposed under the other provisions of this
title. In order to reduce duplication and clarify the rights
of participants and beneficiaries with respect to information
that is required to be provided, such regulations shall
coordinate the information disclosure requirements under
section 121 of the Bipartisan Patient Protection Act with the
reporting and disclosure requirements imposed under part 1,
so long as such coordination does not result in any reduction
in the information that would otherwise be provided to
participants and beneficiaries.''.
(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:
[[Page H5302]]
``(b) In the case of a group health plan (as defined in
section 733), compliance with the requirements of subtitle A
of title I of the Bipartisan Patient Protection Act, and
compliance with regulations promulgated by the Secretary, 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 714''.
(2) The table of contents in section 1 of such Act is
amended by inserting after the item relating to section 713
the following new item:
``SEC. 714. 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 135(b))'' after
``part 7''.
SEC. 402. AVAILABILITY OF CIVIL REMEDIES.
(a) Availability of Federal Civil Remedies in Cases Not
Involving Medically Reviewable Decisions.--
(1) In general.--Section 502 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1132) is amended by
adding at the end the following new subsections:
``(n) Cause of Action Relating to Provision of Health
Benefits.--
``(1) In general.--In any case in which--
``(A) a person who is a fiduciary of a group health plan, a
health insurance issuer offering health insurance coverage in
connection with the plan, or an agent of the plan, issuer, or
plan sponsor, upon consideration of a claim for benefits of a
participant or beneficiary under section 102 of the
Bipartisan Patient Protection Act (relating to procedures for
initial claims for benefits and prior authorization
determinations) or upon review of a denial of such a claim
under section 103 of such Act (relating to internal appeal of
a denial of a claim for benefits), fails to exercise ordinary
care in making a decision--
``(i) regarding whether an item or service is covered under
the terms and conditions of the plan or coverage,
``(ii) regarding whether an individual is a participant or
beneficiary who is enrolled under the terms and conditions of
the plan or coverage (including the applicability of any
waiting period under the plan or coverage), or
``(iii) as to the application of cost-sharing requirements
or the application of a specific exclusion or express
limitation on the amount, duration, or scope of coverage of
items or services under the terms and conditions of the plan
or coverage, and
``(B) such failure is a proximate cause of personal injury
to, or the death of, the participant or beneficiary,
such plan, plan sponsor, or issuer shall be liable to the
participant or beneficiary (or the estate of such participant
or beneficiary) for economic and noneconomic damages (but not
exemplary or punitive damages) in connection with such
personal injury or death.
``(2) Cause of action must not involve medically reviewable
decision.--
``(A) In general.--A cause of action is established under
paragraph (1)(A) only if the decision referred to in
paragraph (1)(A) does not include a medically reviewable
decision.
``(B) Medically reviewable decision.--For purposes of this
subsection, the term `medically reviewable decision' means a
denial of a claim for benefits under the plan which is
described in section 104(d)(2) of the Bipartisan Patient
Protection Act (relating to medically reviewable decisions).
``(3) Limitation regarding certain types of actions saved
from preemption of state law.--A cause of action is not
established under paragraph (1)(A) in connection with a
failure described in paragraph (1)(A) to the extent that a
cause of action under State law (as defined in section
514(c)) for such failure would not be preempted under section
514.
``(4) Definitions and related rules.--For purposes of this
subsection.--
``(A) Ordinary care.--The term `ordinary care' means, with
respect to a determination on a claim for benefits, that
degree of care, skill, and diligence that a reasonable and
prudent individual would exercise in making a fair
determination on a claim for benefits of like kind to the
claims involved.
``(B) Personal injury.--The term `personal injury' means a
physical injury and includes an injury arising out of the
treatment (or failure to treat) a mental illness or disease.
``(C) Claim for benefits; denial.--The terms `claim for
benefits' and `denial of a claim for benefits' have the
meanings provided such terms in section 102(e) of the
Bipartisan Patient Protection Act.
``(D) Terms and conditions.--The term `terms and
conditions' includes, with respect to a group health plan or
health insurance coverage, requirements imposed under title I
of the Bipartisan Patient Protection Act.
``(E) Treatment of excepted benefits.--Under section 154(a)
of the Bipartisan Patient Protection Act, the provisions of
this subsection and subsection (a)(1)(C) do not apply to
certain excepted benefits.
``(5) Exclusion of employers and other plan sponsors.--
``(A) Causes of action against employers and plan sponsors
precluded.--Subject to subparagraph (B), paragraph (1)(A)
does not authorize a cause of action against an employer or
other plan sponsor maintaining the plan (or against an
employee of such an employer or sponsor acting within the
scope of employment).
``(B) Certain causes of action permitted.--Notwithstanding
subparagraph (A), a cause of action may arise against an
employer or other plan sponsor (or against an employee of
such an employer or sponsor acting within the scope of
employment) under paragraph (1)(A), to the extent there was
direct participation by the employer or other plan sponsor
(or employee) in the decision of the plan under section 102
of the Bipartisan Patient Protection Act upon consideration
of a claim for benefits or under section 103 of such Act upon
review of a denial of a claim for benefits.
``(C) Direct participation.--
``(i) In general.--For purposes of subparagraph (B), the
term `direct participation' means, in connection with a
decision described in paragraph (1)(A), the actual making of
such decision or the actual exercise of control in making
such decision.
``(ii) Rules of construction.--For purposes of clause (i),
the employer or plan sponsor (or employee) shall not be
construed to be engaged in direct participation because of
any form of decisionmaking or other conduct that is merely
collateral or precedent to the decision described in
paragraph (1)(A) on a particular claim for benefits of a
participant or beneficiary, including (but not limited to)--
``(I) any participation by the employer or other plan
sponsor (or employee) in the selection of the group health
plan or health insurance coverage involved or the third party
administrator or other agent;
``(II) any engagement by the employer or other plan sponsor
(or employee) in any cost-benefit analysis undertaken in
connection with the selection of, or continued maintenance
of, the plan or coverage involved;
``(III) any participation by the employer or other plan
sponsor (or employee) in the process of creating, continuing,
modifying, or terminating the plan or any benefit under the
plan, if such process was not substantially focused solely on
the particular situation of the participant or beneficiary
referred to in paragraph (1)(A); and
``(IV) any participation by the employer or other plan
sponsor (or employee) in the design of any benefit under the
plan, including the amount of copayment and limits connected
with such benefit.
``(iii) Irrelevance of certain collateral efforts made by
employer or plan sponsor.--For purposes of this subparagraph,
an employer or plan sponsor shall not be treated as engaged
in direct participation in a decision with respect to any
claim for benefits or denial thereof in the case of any
particular participant or beneficiary solely by reason of--
``(I) any efforts that may have been made by the employer
or plan sponsor to advocate for authorization of coverage for
that or any other participant or beneficiary (or any group of
participants or beneficiaries), or
``(II) any provision that may have been made by the
employer or plan sponsor for benefits which are not covered
under the terms and conditions of the plan for that or any
other participant or beneficiary (or any group of
participants or beneficiaries).
``(D) Application to certain plans.--
``(i) In general.--Notwithstanding any other provision of
this subsection, no group health plan described in clause
(ii) (or plan sponsor of such a plan) shall be liable under
paragraph (1) for the performance of, or the failure to
perform, any non-medically reviewable duty under the plan.
``(ii) Definition.--A group health plan described in this
clause is--
``(I) a group health plan that is self-insured and self
administered by an employer (including an employee of such an
employer acting within the scope of employment); or
``(II) a multiemployer plan as defined in section 3(37)(A)
(including an employee of a contributing employer or of the
plan, or a fiduciary of the plan, acting within the scope of
employment or fiduciary responsibility) that is self-insured
and self-administered.
``(6) Exclusion of physicians and other health care
professionals.--
``(A) In general.--No treating physician or other treating
health care professional of the participant or beneficiary,
and no person acting under the direction of such a physician
or health care professional, shall be liable under paragraph
(1) for the performance of, or the failure to perform, any
non-medically reviewable duty of the plan, the plan sponsor,
or any health insurance issuer offering health insurance
coverage in connection with the plan.
``(B) Definitions.--For purposes of subparagraph (A)--
``(i) Health care professional.--The term `health care
professional' means an individual who is licensed,
accredited, or certified under State law to provide specified
health care services and who is operating within the scope of
such licensure, accreditation, or certification.
``(ii) Non-medically reviewable duty.--The term `non-
medically reviewable duty' means a duty the discharge of
which does not include the making of a medically reviewable
decision.
``(7) Exclusion of hospitals.--No treating hospital of the
participant or beneficiary shall be liable under paragraph
(1) for the performance of, or the failure to perform, any
non-medically reviewable duty (as defined in paragraph
(6)(B)(ii)) of the plan, the plan sponsor, or any health
insurance issuer offering health insurance coverage in
connection with the plan.
``(8) Rule of construction relating to exclusion from
liability of physicians,
[[Page H5303]]
health care professionals, and hospitals.--Nothing in
paragraph (6) or (7) shall be construed to limit the
liability (whether direct or vicarious) of the plan, the plan
sponsor, or any health insurance issuer offering health
insurance coverage in connection with the plan.
``(9) Requirement of exhaustion.--
``(A) In general.--A cause of action may not be brought
under paragraph (1) in connection with any denial of a claim
for benefits of any individual until all administrative
processes under sections 102 and 103 of the Bipartisan
Patient Protection Act (if applicable) have been exhausted.
``(B) Exception for needed care.--A participant or
beneficiary may seek relief exclusively in Federal court
under subsection 502(a)(1)(B) prior to the exhaustion of
administrative remedies under sections 102, 103, or 104 of
the Bipartisan Patient Protection Act (as required under
subparagraph (A)) if it is demonstrated to the court that the
exhaustion of such remedies would cause irreparable harm to
the health of the participant or beneficiary. Notwithstanding
the awarding of relief under subsection 502(a)(1)(B) pursuant
to this subparagraph, no relief shall be available as a
result of, or arising under, paragraph (1)(A) or paragraph
(10)(B), with respect to a participant or beneficiary, unless
the requirements of subparagraph (A) are met.
``(C) Receipt of benefits during appeals process.--Receipt
by the participant or beneficiary of the benefits involved in
the claim for benefits during the pendency of any
administrative processes referred to in subparagraph (A) or
of any action commenced under this subsection--
``(i) shall not preclude continuation of all such
administrative processes to their conclusion if so moved by
any party, and
``(ii) shall not preclude any liability under subsection
(a)(1)(C) and this subsection in connection with such claim.
The court in any action commenced under this subsection shall
take into account any receipt of benefits during such
administrative processes or such action in determining the
amount of the damages awarded.
``(D) Admissible.--Any determination made by a reviewer in
an administrative proceeding under section 103 of the
Bipartisan Patient Protection Act shall be admissible in any
Federal court proceeding and shall be presented to the trier
of fact.
``(10) Statutory damages.--
``(A) In general.--The remedies set forth in this
subsection (n) shall be the exclusive remedies for causes of
action brought under this subsection.
``(B) Assessment of civil penalties.--In addition to the
remedies provided for in paragraph (1) (relating to the
failure to provide contract benefits in accordance with the
plan), a civil assessment, in an amount not to exceed
$5,000,000, payable to the claimant may be awarded in any
action under such paragraph if the claimant establishes by
clear and convincing evidence that the alleged conduct
carried out by the defendant demonstrated bad faith and
flagrant disregard for the rights of the participant or
beneficiary under the plan and was a proximate cause of the
personal injury or death that is the subject of the claim.
``(11) Limitation on attorneys' fees.--
``(A) In general.--Notwithstanding any other provision of
law, or any arrangement, agreement, or contract regarding an
attorney's fee, the amount of an attorney's contingency fee
allowable for a cause of action brought pursuant to this
subsection shall not exceed \1/3\ of the total amount of the
plaintiff's recovery (not including the reimbursement of
actual out-of-pocket expenses of the attorney).
``(B) Determination by district court.--The last Federal
district court in which the action was pending upon the final
disposition, including all appeals, of the action shall have
jurisdiction to review the attorney's fee to ensure that the
fee is a reasonable one.
``(12) Limitation of action.--Paragraph (1) shall not apply
in connection with any action commenced after 3 years after
the later of--
``(A) the date on which the plaintiff first knew, or
reasonably should have known, of the personal injury or death
resulting from the failure described in paragraph (1), or
``(B) the date as of which the requirements of paragraph
(9) are first met.
``(13) Tolling provision.--The statute of limitations for
any cause of action arising under State law relating to a
denial of a claim for benefits that is the subject of an
action brought in Federal court under this subsection shall
be tolled until such time as the Federal court makes a final
disposition, including all appeals, of whether such claim
should properly be within the jurisdiction of the Federal
court. The tolling period shall be determined by the
applicable Federal or State law, whichever period is greater.
``(14) Purchase of insurance to cover liability.--Nothing
in section 410 shall be construed to preclude the purchase by
a group health plan of insurance to cover any liability or
losses arising under a cause of action under subsection
(a)(1)(C) and this subsection.
``(15) Exclusion of directed recordkeepers.--
``(A) In general.--Subject to subparagraph (C), paragraph
(1) shall not apply with respect to a directed recordkeeper
in connection with a group health plan.
``(B) Directed recordkeeper.--For purposes of this
paragraph, the term `directed recordkeeper' means, in
connection with a group health plan, a person engaged in
directed recordkeeping activities pursuant to the specific
instructions of the plan or the employer or other plan
sponsor, including the distribution of enrollment information
and distribution of disclosure materials under this Act or
title I of the Bipartisan Patient Protection Act and whose
duties do not include making decisions on claims for
benefits.
``(C) Limitation.--Subparagraph (A) does not apply in
connection with any directed recordkeeper to the extent that
the directed recordkeeper fails to follow the specific
instruction of the plan or the employer or other plan
sponsor.
``(16) Exclusion of health insurance agents.--Paragraph (1)
does not apply with respect to a person whose sole
involvement with the group health plan is providing advice or
administrative services to the employer or other plan sponsor
relating to the selection of health insurance coverage
offered in connection with the plan.
``(17) No effect on state law.--No provision of State law
(as defined in section 514(c)(1)) shall be treated as
superseded or otherwise altered, amended, modified,
invalidated, or impaired by reason of the provisions of
subsection (a)(1)(C) and this subsection.
``(18) Relief from liability for employer or other plan
sponsor by means of designated decisionmaker.--
``(A) In general.--Notwithstanding the direct participation
(as defined in paragraph (5)(C)(i)) of an employer or plan
sponsor, in any case in which there is (or is deemed under
subparagraph (B) to be) a designated decisionmaker that meets
the requirements of subsection (o)(1) for an employer or
other plan sponsor--
``(i) all liability of such employer or plan sponsor
involved (and any employee of such employer or sponsor acting
within the scope of employment) under this subsection in
connection with any participant or beneficiary shall be
transferred to, and assumed by, the designated decisionmaker,
and
``(ii) with respect to such liability, the designated
decisionmaker shall be substituted for the employer or
sponsor (or employee) in the action and may not raise any
defense that the employer or sponsor (or employee) could not
raise if such a decisionmaker were not so deemed.
``(B) Automatic designation.--A health insurance issuer
shall be deemed to be a designated decisionmaker for purposes
of subparagraph (A) with respect to the participants and
beneficiaries of an employer or plan sponsor, whether or not
the employer or plan sponsor makes such a designation, and
shall be deemed to have assumed unconditionally all liability
of the employer or plan sponsor under such designation in
accordance with subsection (o), unless the employer or plan
sponsor affirmatively enters into a contract to prevent the
service of the designated decisionmaker.
``(C) Treatment of certain trust funds.--For purposes of
this paragraph, the terms `employer' and `plan sponsor', in
connection with the assumption by a designated decisionmaker
of the liability of employer or other plan sponsor pursuant
to this paragraph, shall be construed to include a trust fund
maintained pursuant to section 302 of the Labor Management
Relations Act, 1947 (29 U.S.C. 186) or the Railway Labor Act
(45 U.S.C. 151 et seq.).
``(19) Previously provided services.--
``(A) in general.--Except as provided in this paragraph, a
cause of action shall not arise under paragraph (1) where the
denial involved relates to an item or service that has
already been fully provided to the participant or beneficiary
under the plan or coverage and the claim relates solely to
the subsequent denial of payment for the provision of such
item or service.
``(B) Exception.--Nothing in subparagraph (A) shall be
construed to--
``(i) prohibit a cause of action under paragraph (1) where
the nonpayment involved results in the participant or
beneficiary being unable to receive further items or services
that are directly related to the item or service involved in
the denial referred to in subparagraph (A) or that are part
of a continuing treatment or series of procedures; or
``(ii) limit liability that otherwise would arise from the
provision of the item or services or the performance of a
medical procedure.
``(20) Exemption from personal liability for individual
members of boards of directors, joint boards of trustees,
etc.--Any individual who is--
``(A) a member of a board of directors of an employer or
plan sponsor; or
``(B) a member of an association, committee, employee
organization, joint board of trustees, or other similar group
of representatives of the entities that are the plan sponsor
of plan maintained by two or more employers and one or more
employee organizations;
shall not be personally liable under this subsection for
conduct that is within the scope of employment or of plan-
related duties of the individuals unless the individual acts
in a fraudulent manner for personal enrichment.
``(o) Requirements for Designated Decisionmakers of Group
Health Plans.--
[[Page H5304]]
``(1) In general.--For purposes of subsection (n)(18) and
section 514(d)(9), a designated decisionmaker meets the
requirements of this paragraph with respect to any
participant or beneficiary if--
``(A) such designation is in such form as may be prescribed
in regulations of the Secretary,
``(B) the designated decisionmaker--
``(i) meets the requirements of paragraph (2),
``(ii) assumes unconditionally all liability of the
employer or plan sponsor involved (and any employee of such
employer or sponsor acting within the scope of employment)
either arising under subsection (n) or arising in a cause of
action permitted under section 514(d) in connection with
actions (and failures to act) of the employer or plan sponsor
(or employee) occurring during the period in which the
designation under subsection (n)(18) or section 514(d)(9) is
in effect relating to such participant and beneficiary,
``(iii) agrees to be substituted for the employer or plan
sponsor (or employee) in the action and not to raise any
defense with respect to such liability that the employer or
plan sponsor (or employee) may not raise, and
``(iv) where paragraph (2)(B) applies, assumes
unconditionally the exclusive authority under the group
health plan to make medically reviewable decisions under the
plan with respect to such participant or beneficiary, and
``(C) the designated decisionmaker and the participants and
beneficiaries for whom the decisionmaker has assumed
liability are identified in the written instrument required
under section 402(a) and as required under section 121(b)(19)
of the Bipartisan Patient Protection Act.
Any liability assumed by a designated decisionmaker pursuant
to this subsection shall be in addition to any liability that
it may otherwise have under applicable law.
``(2) Qualifications for designated decisionmakers.--
``(A) In general.--Subject to subparagraph (B), an entity
is qualified under this paragraph to serve as a designated
decisionmaker with respect to a group health plan if the
entity has the ability to assume the liability described in
paragraph (1) with respect to participants and beneficiaries
under such plan, including requirements relating to the
financial obligation for timely satisfying the assumed
liability, and maintains with the plan sponsor and the
Secretary certification of such ability. Such certification
shall be provided to the plan sponsor or named fiduciary and
to the Secretary upon designation under subsection (n)(18)(B)
or section 517(d)(9)(B) and not less frequently than annually
thereafter, or if such designation constitutes a multiyear
arrangement, in conjunction with the renewal of the
arrangement.
``(B) Special qualification in the case of certain
reviewable decisions.--In the case of a group health plan
that provides benefits consisting of medical care to a
participant or beneficiary only through health insurance
coverage offered by a single health insurance issue, such
issuer is the only entity that may be qualified under this
paragraph to serve as a designated decisionmaker with respect
to such participant or beneficiary, and shall serve as the
designated decisionmaker unless the employer or other plan
sponsor acts affirmatively to prevent such service.
``(3) Requirements relating to financial obligations.--For
purposes of paragraph (2)(A), the requirements relating to
the financial obligation of an entity for liability shall
include--
``(A) coverage of such entity under an insurance policy or
other arrangement, secured and maintained by such entity, to
effectively insure such entity against losses arising from
professional liability claims, including those arising from
its service as a designated decisionmaker under this part; or
``(B) evidence of minimum capital and surplus levels that
are maintained by such entity to cover any losses as a result
of liability arising from its service as a designated
decisionmaker under this part.
The appropriate amounts of liability insurance and minimum
capital and surplus levels for purposes of subparagraphs (A)
and (B) shall be determined by an actuary using sound
actuarial principles and accounting practices pursuant to
established guidelines of the American Academy of Actuaries
and in accordance with such regulations as the Secretary may
prescribe and shall be maintained throughout the term for
which the designation is in effect. The provisions of this
paragraph shall not apply in the case of a designated
decisionmaker that is a group health plan, plan sponsor, or
health insurance issuer and that is regulated under Federal
law or a State financial solvency law.
``(4) Limitation on appointment of treating physicians.--A
treating physician who directly delivered the care,
treatment, or provided the patient service that is the
subject of a cause of action by a participant or beneficiary
under subsection (n) or section 514(d) may not be designated
as a designated decisionmaker under this subsection with
respect to such participant or beneficiary.''.
(2) Conforming amendment.--Section 502(a)(1) of such Act
(29 U.S.C. 1132(a)(1)) is amended--
(A) by striking ``or'' at the end of subparagraph (A);
(B) in subparagraph (B), by striking ``plan;'' and
inserting ``plan, or''; and
(C) by adding at the end the following new subparagraph:
``(C) for the relief provided for in subsection (n) of this
section.''.
(b) Rules Relating to ERISA Preemption.--Section 514 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1144) is amended--
(1) by redesignating subsection (d) as subsection (f); and
(2) by inserting after subsection (c) the following new
subsections:
``(d) Preemption Not To Apply to Causes of Action under
State Law Involving Medically Reviewable Decision.--
``(1) Non-preemption of certain causes of action.--
``(A) In general.--Except as provided in this subsection,
nothing in this title (including section 502) shall be
construed to supersede or otherwise alter, amend, modify,
invalidate, or impair any cause of action under State law of
a participant or beneficiary under a group health plan (or
the estate of such a participant or beneficiary) against the
plan, the plan sponsor, any health insurance issuer offering
health insurance coverage in connection with the plan, or any
managed care entity in connection with the plan to recover
damages resulting from personal injury or for wrongful death
if such cause of action arises by reason of a medically
reviewable decision.
``(B) Medically reviewable decision.--For purposes of
subparagraph (A), the term `medically reviewable decision'
means a denial of a claim for benefits under the plan which
is described in section 104(d)(2) of the Bipartisan Patient
Protection Act (relating to medically reviewable decisions).
``(C) Limitation on punitive damages.--
``(i) In general.--Except as provided in clauses (ii) and
(iii), with respect to a cause of action described in
subparagraph (A) brought with respect to a participant or
beneficiary, State law is superseded insofar as it provides
any punitive, exemplary, or similar damages if, as of the
time of the personal injury or death, all the requirements of
the following sections of the Bipartisan Patient Protection
Act were satisfied with respect to the participant or
beneficiary:
``(I) Section 102 (relating to procedures for initial
claims for benefits and prior authorization determinations).
``(II) Section 103 of such Act (relating to internal
appeals of claims denials).
``(III) Section 104 of such Act (relating to independent
external appeals procedures).
``(ii) Exception for certain actions for wrongful death.--
Clause (i) shall not apply with respect to an action for
wrongful death if the applicable State law provides (or has
been construed to provide) for damages in such an action
which are only punitive or exemplary in nature.
``(iii) Exception for willful or wanton disregard for the
rights or safety of others.--Clause (i) shall not apply with
respect to any cause of action described in subparagraph (A)
if, in such action, the plaintiff establishes by clear and
convincing evidence that conduct carried out by the defendant
with willful or wanton disregard for the rights or safety of
others was a proximate cause of the personal injury or
wrongful death that is the subject of the action.
``(2) Definitions and related rules.--For purposes of this
subsection and subsection (e)--
``(A) Treatment of excepted benefits.--Under section 154(a)
of the Bipartisan Patient Protection Act, the provisions of
this subsection do not apply to certain excepted benefits.
``(B) Personal injury.--The term `personal injury' means a
physical injury and includes an injury arising out of the
treatment (or failure to treat) a mental illness or disease.
``(C) Claim for benefit; denial.--The terms `claim for
benefits' and `denial of a claim for benefits' shall have the
meaning provided such terms under section 102(e) of the
Bipartisan Patient Protection Act.
``(D) Managed care entity.--
``(i) In general.--The term `managed care entity' means, in
connection with a group health plan and subject to clause
(ii), any entity that is involved in determining the manner
in which or the extent to which items or services (or
reimbursement therefor) are to be provided as benefits under
the plan.
``(ii) Treatment of treating physicians, other treating
health care professionals, and treating hospitals.--Such term
does not include a treating physician or other treating
health care professional (as defined in section
502(n)(6)(B)(i)) of the participant or beneficiary and also
does not include a treating hospital insofar as it is acting
solely in the capacity of providing treatment or care to the
participant or beneficiary. Nothing in the preceding sentence
shall be construed to preempt vicarious liability of any
plan, plan sponsor, health insurance issuer, or managed care
entity.
``(3) Exclusion of employers and other plan sponsors.--
``(A) Causes of action against employers and plan sponsors
precluded.--Subject to subparagraph (B), paragraph (1) does
not apply with respect to--
``(i) any cause of action against an employer or other plan
sponsor maintaining the plan (or against an employee of such
an employer or sponsor acting within the scope of
employment), or
``(ii) a right of recovery, indemnity, or contribution by a
person against an employer or other plan sponsor (or such an
employee) for
[[Page H5305]]
damages assessed against the person pursuant to a cause of
action to which paragraph (1) applies.
``(B) Certain causes of action permitted.--Notwithstanding
subparagraph (A), paragraph (1) applies with respect to any
cause of action that is brought by a participant or
beneficiary under a group health plan (or the estate of such
a participant or beneficiary) to recover damages resulting
from personal injury or for wrongful death against any
employer or other plan sponsor maintaining the plan (or
against an employee of such an employer or sponsor acting
within the scope of employment) if such cause of action
arises by reason of a medically reviewable decision, to the
extent that there was direct participation by the employer or
other plan sponsor (or employee) in the decision.
``(C) Direct participation.--
``(i) Direct participation in decisions.--For purposes of
subparagraph (B), the term `direct participation' means, in
connection with a decision described in subparagraph (B), the
actual making of such decision or the actual exercise of
control in making such decision or in the conduct
constituting the failure.
``(ii) Rules of construction.--For purposes of clause (i),
the employer or plan sponsor (or employee) shall not be
construed to be engaged in direct participation because of
any form of decisionmaking or other conduct that is merely
collateral or precedent to the decision described in
subparagraph (B) on a particular claim for benefits of a
particular participant or beneficiary, including (but not
limited to)--
``(I) any participation by the employer or other plan
sponsor (or employee) in the selection of the group health
plan or health insurance coverage involved or the third party
administrator or other agent;
``(II) any engagement by the employer or other plan sponsor
(or employee) in any cost-benefit analysis undertaken in
connection with the selection of, or continued maintenance
of, the plan or coverage involved;
``(III) any participation by the employer or other plan
sponsor (or employee) in the process of creating, continuing,
modifying, or terminating the plan or any benefit under the
plan, if such process was not substantially focused solely on
the particular situation of the participant or beneficiary
referred to in paragraph (1)(A); and
``(IV) any participation by the employer or other plan
sponsor (or employee) in the design of any benefit under the
plan, including the amount of copayment and limits connected
with such benefit.
``(iv) Irrelevance of certain collateral efforts made by
employer or plan sponsor.--For purposes of this subparagraph,
an employer or plan sponsor shall not be treated as engaged
in direct participation in a decision with respect to any
claim for benefits or denial thereof in the case of any
particular participant or beneficiary solely by reason of--
``(I) any efforts that may have been made by the employer
or plan sponsor to advocate for authorization of coverage for
that or any other participant or beneficiary (or any group of
participants or beneficiaries), or
``(II) any provision that may have been made by the
employer or plan sponsor for benefits which are not covered
under the terms and conditions of the plan for that or any
other participant or beneficiary (or any group of
participants or beneficiaries).
``(4) Requirement of exhaustion.--
``(A) In general.--Except as provided in subparagraph (D),
a cause of action may not be brought under paragraph (1) in
connection with any denial of a claim for benefits of any
individual until all administrative processes under sections
102, 103, and 104 of the Bipartisan Patient Protection Act
(if applicable) have been exhausted.
``(B) Late manifestation of injury.--
``(i) In general.--A participant or beneficiary shall not
be precluded from pursuing a review under section 104 of the
Bipartisan Patient Protection Act regarding an injury that
such participant or beneficiary has experienced if the
external review entity first determines that the injury of
such participant or beneficiary is a late manifestation of an
earlier injury.
``(ii) Definition.--In this subparagraph, the term `late
manifestation of an earlier injury' means an injury sustained
by the participant or beneficiary which was not known, and
should not have been known, by such participant or
beneficiary by the latest date that the requirements of
subparagraph (A) should have been met regarding the claim for
benefits which was denied.
``(C) Exception for needed care.--A participant or
beneficiary may seek relief exclusively in Federal court
under subsection 502(a)(1)(B) prior to the exhaustion of
administrative remedies under sections 102, 103, or 104 of
the Bipartisan Patient Protection Act (as required under
subparagraph (A)) if it is demonstrated to the court that the
exhaustion of such remedies would cause irreparable harm to
the health of the participant or beneficiary. Notwithstanding
the awarding of relief under subsection 502(a)(1)(B) pursuant
to this subparagraph, no relief shall be available as a
result of, or arising under, paragraph (1)(A) unless the
requirements of subparagraph (A) are met.
``(D) Failure to review.--
``(i) In general.--If the external review entity fails to
make a determination within the time required under section
104(e)(1)(A)(i), a participant or beneficiary may bring an
action under section 514(d) after 10 additional days after
the date on which such time period has expired and the filing
of such action shall not affect the duty of the independent
medical reviewer (or reviewers) to make a determination
pursuant to section 104(e)(1)(A)(i).
``(ii) Expedited determination.--If the external review
entity fails to make a determination within the time required
under section 104(e)(1)(A)(ii), a participant or beneficiary
may bring an action under this subsection and the filing of
such an action shall not affect the duty of the independent
medical reviewer (or reviewers) to make a determination
pursuant to section 104(e)(1)(A)(ii).
``(E) Receipt of benefits during appeals process.--Receipt
by the participant or beneficiary of the benefits involved in
the claim for benefits during the pendency of any
administrative processes referred to in subparagraph (A) or
of any action commenced under this subsection--
``(i) shall not preclude continuation of all such
administrative processes to their conclusion if so moved by
any party, and
``(ii) shall not preclude any liability under subsection
(a)(1)(C) and this subsection in connection with such claim.
``(F) Admissible.--Any determination made by a reviewer in
an administrative proceeding under section 104 of the
Bipartisan Patient Protection Act shall be admissible in any
Federal or State court proceeding and shall be presented to
the trier of fact.
``(5) Tolling provision.--The statute of limitations for
any cause of action arising under section 502(n) relating to
a denial of a claim for benefits that is the subject of an
action brought in State court shall be tolled until such time
as the State court makes a final disposition, including all
appeals, of whether such claim should properly be within the
jurisdiction of the State court. The tolling period shall be
determined by the applicable Federal or State law, whichever
period is greater.
``(6) Exclusion of directed recordkeepers.--
``(A) In general.--Subject to subparagraph (C), paragraph
(1) shall not apply with respect to a directed recordkeeper
in connection with a group health plan.
``(B) Directed recordkeeper.--For purposes of this
paragraph, the term `directed recordkeeper' means, in
connection with a group health plan, a person engaged in
directed recordkeeping activities pursuant to the specific
instructions of the plan or the employer or other plan
sponsor, including the distribution of enrollment information
and distribution of disclosure materials under this Act or
title I of the Bipartisan Patient Protection Act and whose
duties do not include making decisions on claims for
benefits.
``(C) Limitation.--Subparagraph (A) does not apply in
connection with any directed recordkeeper to the extent that
the directed recordkeeper fails to follow the specific
instruction of the plan or the employer or other plan
sponsor.
``(7) Construction.--Nothing in this subsection shall be
construed as--
``(A) saving from preemption a cause of action under State
law for the failure to provide a benefit for an item or
service which is specifically excluded under the group health
plan involved, except to the extent that--
``(i) the application or interpretation of the exclusion
involves a determination described in section 104(d)(2) of
the Bipartisan Patient Protection Act, or
``(ii) the provision of the benefit for the item or service
is required under Federal law or under applicable State law
consistent with subsection (b)(2)(B);
``(B) preempting a State law which requires an affidavit or
certificate of merit in a civil action;
``(C) affecting a cause of action or remedy under State law
in connection with the provision or arrangement of excepted
benefits (as defined in section 733(c)), other than those
described in section 733(c)(2)(A); or
``(D) affecting a cause of action under State law other
than a cause of action described in paragraph (1)(A).
``(8) Purchase of insurance to cover liability.--Nothing in
section 410 shall be construed to preclude the purchase by a
group health plan of insurance to cover any liability or
losses arising under a cause of action described in paragraph
(1)(A).
``(9) Relief from liability for employer or other plan
sponsor by means of designated decisionmaker.--
``(A) In general.--Paragraph (1) shall not apply with
respect to any cause of action described in paragraph (1)(A)
under State law insofar as such cause of action provides for
liability with respect to a participant or beneficiary of an
employer or plan sponsor (or an employee of such employer or
sponsor acting within the scope of employment), if with
respect to the employer or plan sponsor there is (or is
deemed under subparagraph (B) to be) a designated
decisionmaker that meets the requirements of section
502(o)(1) with respect to such participant or beneficiary.
Such paragraph (1) shall apply with respect to any cause of
action described in paragraph (1)(A) under State law against
the designated decisionmaker of such employer or other plan
sponsor with respect to the participant or beneficiary.
``(B) Automatic designation.--A health insurance issuer
shall be deemed to be a designated decisionmaker for purposes
of subparagraph (A) with respect to the participants and
beneficiaries of an employer or plan sponsor, whether or not
the employer or plan sponsor makes such a designation, and
[[Page H5306]]
shall be deemed to have assumed unconditionally all liability
of the employer or plan sponsor under such designation in
accordance with subsection (o), unless the employer or plan
sponsor affirmatively enters into a contract to prevent the
service of the designated decisionmaker.
``(C) Treatment of certain trust funds.--For purposes of
this paragraph, the terms `employer' and `plan sponsor', in
connection with the assumption by a designated decisionmaker
of the liability of employer or other plan sponsor pursuant
to this paragraph, shall be construed to include a trust fund
maintained pursuant to section 302 of the Labor Management
Relations Act, 1947 (29 U.S.C. 186) or the Railway Labor Act
(45 U.S.C. 151 et seq.).
``(10) Previously provided services.--
``(A) In general.--Except as provided in this paragraph, a
cause of action shall not arise under paragraph (1) where the
denial involved relates to an item or service that has
already been fully provided to the participant or beneficiary
under the plan or coverage and the claim relates solely to
the subsequent denial of payment for the provision of such
item or service.
``(B) Exception.--Nothing in subparagraph (A) shall be
construed to--
``(i) prohibit a cause of action under paragraph (1) where
the nonpayment involved results in the participant or
beneficiary being unable to receive further items or services
that are directly related to the item or service involved in
the denial referred to in subparagraph (A) or that are part
of a continuing treatment or series of procedures;
``(ii) prohibit a cause of action under paragraph (1)
relating to quality of care; or
``(iii) limit liability that otherwise would arise from the
provision of the item or services or the performance of a
medical procedure.
``(11) Exemption from personal liability for individual
members of boards of directors, joint boards of trustees,
etc.--Any individual who is--
``(A) a member of a board of directors of an employer or
plan sponsor; or
``(B) a member of an association, committee, employee
organization, joint board of trustees, or other similar group
of representatives of the entities that are the plan sponsor
of plan maintained by two or more employers and one or more
employee organizations;
shall not be personally liable under this subsection for
conduct that is within the scope of employment or of plan-
related duties of the individuals unless the individual acts
in a fraudulent manner for personal enrichment.
``(12) Choice of law.--A cause of action brought under
paragraph (1) shall be governed by the law (including choice
of law rules) of the State in which the plaintiff resides.
``(13) Limitation on attorneys' fees.--
``(A) In general.--Notwithstanding any other provision of
law, or any arrangement, agreement, or contract regarding an
attorney's fee, the amount of an attorney's contingency fee
allowable for a cause of action brought under paragraph (1)
shall not exceed \1/3\ of the total amount of the plaintiff's
recovery (not including the reimbursement of actual out-of-
pocket expenses of the attorney).
``(B) Determination by court.--The last court in which the
action was pending upon the final disposition, including all
appeals, of the action may review the attorney's fee to
ensure that the fee is a reasonable one.
``(C) No preemption of state law.--Subparagraph (A) shall
not apply with respect to a cause of action under paragraph
(1) that is brought in a State that has a law or framework of
laws with respect to the amount of an attorney's contingency
fee that may be incurred for the representation of a
participant or beneficiary (or the estate of such participant
or beneficiary) who brings such a cause of action.
``(e) Rules of Construction Relating to Health Care.--
Nothing in this title shall be construed as--
``(1) affecting any State law relating to the practice of
medicine or the provision of, or the failure to provide,
medical care, or affecting any action (whether the liability
is direct or vicarious) based upon such a State law,
``(2) superseding any State law permitted under section
152(b)(1)(A) of the Bipartisan Patient Protection Act, or
``(3) affecting any applicable State law with respect to
limitations on monetary damages.
``(f) No Right of Action for Recovery, Indemnity, or
Contribution by Issuers Against Treating Health Care
Professionals and Treating Hospitals.--In the case of any
care provided, or any treatment decision made, by the
treating health care professional or the treating hospital of
a participant or beneficiary under a group health plan which
consists of medical care provided under such plan, any cause
of action under State law against the treating health care
professional or the treating hospital by the plan or a health
insurance issuer providing health insurance coverage in
connection with the plan for recovery, indemnity, or
contribution in connection with such care (or any medically
reviewable decision made in connection with such care) or
such treatment decision is superseded.''.
(c) Effective Date.--The amendments made by this section
shall apply to acts and omissions (from which a cause of
action arises) occurring on or after the applicable effective
under section 601.
SEC. 403. LIMITATION ON CERTAIN CLASS ACTION LITIGATION.
Section 502 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1132), as amended by section 402, is
further amended by adding at the end the following:
``(p) Limitation on Class Action Litigation.--
``(1) In general.--Any claim or cause of action that is
maintained under this section in connection with a group
health plan, or health insurance coverage issued in
connection with a group health plan, as a class action,
derivative action, or as an action on behalf of any group of
2 or more claimants, may be maintained only if the class, the
derivative claimant, or the group of claimants is limited to
the participants or beneficiaries of a group health plan
established by only 1 plan sponsor. No action maintained by
such class, such derivative claimant, or such group of
claimants may be joined in the same proceeding with any
action maintained by another class, derivative claimant, or
group of claimants or consolidated for any purpose with any
other proceeding. In this paragraph, the terms `group health
plan' and `health insurance coverage' have the meanings given
such terms in section 733.
``(2) Effective date.--This subsection shall apply to all
civil actions that are filed on or after January 1, 2002.''.
SEC. 404. LIMITATIONS ON ACTIONS.
Section 502 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1132) (as amended by section 402(a)) is
amended further by adding at the end the following new
subsection:
``(q) Limitations on Actions Relating to Group Health
Plans.--
``(1) In general.--Except as provided in paragraph (2), no
action may be brought under subsection (a)(1)(B), (a)(2), or
(a)(3) by a participant or beneficiary seeking relief based
on the application of any provision in section 101, subtitle
B, or subtitle D of title I of the Bipartisan Patient
Protection Act (as incorporated under section 714).
``(2) Certain actions allowable.--An action may be brought
under subsection (a)(1)(B), (a)(2), or (a)(3) by a
participant or beneficiary seeking relief based on the
application of section 101, 113, 114, 115, 116, 117,
118(a)(3), 119, or 120 of the Bipartisan Patient Protection
Act (as incorporated under section 714) to the individual
circumstances of that participant or beneficiary, except
that--
``(A) such an action may not be brought or maintained as a
class action; and
``(B) in such an action, relief may only provide for the
provision of (or payment of) benefits, items, or services
denied to the individual participant or beneficiary involved
(and for attorney's fees and the costs of the action, at the
discretion of the court) and shall not provide for any other
relief to the participant or beneficiary or for any relief to
any other person.
``(3) Other provisions unaffected.--Nothing in this
subsection shall be construed as affecting subsections
(a)(1)(C) and (n) or section 514(d).
``(4) Enforcement by secretary unaffected.--Nothing in this
subsection shall be construed as affecting any action brought
by the Secretary.''.
SEC. 405. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
Subpart C of part 7 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1191 et seq.) is amended by adding at the end the following
new section:
``SEC. 735. COOPERATION BETWEEN FEDERAL AND STATE
AUTHORITIES.
``(a) Agreement with States.--A State may enter into an
agreement with the Secretary for the delegation to the State
of some or all of the Secretary's authority under this title
to enforce the requirements applicable under title I of the
Bipartisan Patient Protection Act with respect to health
insurance coverage offered by a health insurance issuer and
with respect to a group health plan that is a non-Federal
governmental plan.
``(b) Delegations.--Any department, agency, or
instrumentality of a State to which authority is delegated
pursuant to an agreement entered into under this section may,
if authorized under State law and to the extent consistent
with such agreement, exercise the powers of the Secretary
under this title which relate to such authority.''.
SEC. 406. SENSE OF THE SENATE CONCERNING THE IMPORTANCE OF
CERTAIN UNPAID SERVICES.
It is the sense of the Senate that the court should
consider the loss of a nonwage earning spouse or parent as an
economic loss for the purposes of this section. Furthermore,
the court should define the compensation for the loss not as
minimum services, but, rather, in terms that fully compensate
for the true and whole replacement cost to the family.
TITLE V--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986
Subtitle A--Application of Patient Protection Provisions
SEC. 501. APPLICATION TO GROUP HEALTH PLANS UNDER THE
INTERNAL REVENUE CODE OF 1986.
Subchapter B of chapter 100 of the Internal Revenue Code of
1986 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 patients' bill of rights.'';
[[Page H5307]]
and
(2) by inserting after section 9812 the following:
``SEC. 9813. STANDARD RELATING TO PATIENTS' BILL OF RIGHTS.
``A group health plan shall comply with the requirements of
title I of the Bipartisan Patient Protection Act (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.''.
SEC. 502. CONFORMING ENFORCEMENT FOR WOMEN'S HEALTH AND
CANCER RIGHTS.
Subchapter B of chapter 100 of the Internal Revenue Code of
1986, as amended by section 501, is further amended--
(1) in the table of sections, by inserting after the item
relating to section 9813 the following new item:
``Sec. 9814. Standard relating to women's health and cancer rights.'';
and
(2) by inserting after section 9813 the following:
``SEC. 9814. STANDARD RELATING TO WOMEN'S HEALTH AND CANCER
RIGHTS.
``The provisions of section 713 of the Employee Retirement
Income Security Act of 1974 (as in effect as of the date of
the enactment of this section) shall apply to group health
plans as if included in this subchapter.''.
Subtitle B--Health Care Coverage Access Tax Incentives
SEC. 511. EXPANDED AVAILABILITY OF ARCHER MSAS.
(a) Extension of Program.--Paragraphs (2) and (3)(B) of
section 220(i) of the Internal Revenue Code of 1986 (defining
cut-off year) are each amended by striking ``2002'' each
place it appears and inserting ``2004''.
(b) Increase In Number of Permitted Account Participants.--
(1) In general.--Subsection (j) of section 220 of such Code
is amended by redesignating paragraphs (3), (4), and (5) as
paragraphs (4), (5), and (6) and by inserting after paragraph
(2) the following new paragraph:
``(3) Determination of whether limit exceeded for years
after 2001.--
``(A) In general.--The numerical limitation for any year
after 2001 is exceeded if the sum of--
``(i) the number of Archer MSA returns filed on or before
April 15 of such calendar year for taxable years ending with
or within the preceding calendar year, plus
``(ii) the Secretary's estimate (determined on the basis of
the returns described in clause (i)) of the number of Archer
MSA returns for such taxable years which will be filed after
such date, exceeds 1,000,000. For purposes of the preceding
sentence, the term `Archer MSA return' means any return on
which any exclusion is claimed under section 106(b) or any
deduction is claimed under this section.
``(B) Alternative computation of limitation.--The numerical
limitation for any year after 2001 is also exceeded if the
sum of--
``(i) 90 percent of the sum determined under subparagraph
(A) for such calendar year, plus
``(ii) the product of 2.5 and the number of medical savings
accounts established during the portion of such year
preceding July 1 (based on the reports required under
paragraph (5)) for taxable years beginning in such year,
exceeds 1,000,000''.
(2) Conforming amendments.--
(A) Clause (ii) of section 220(j)(2)(B) of such Code is
amended by striking ``paragraph (4)'' and inserting
``paragraph (5)''.
(B) Subparagraph (A) of section 220(j)(4) of such Code is
amended by striking ``and 2001'' and inserting ``2001, 2002,
and 2003''.
(c) Increase in Size of Eligible Employers.--Subparagraph
(A) of section 220(c)(4) of such Code is amended by striking
``50 or fewer employees'' and inserting ``100 or fewer
employees''.
(d) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
(e) GAO Study.--Not later than 1 year after the date of the
enactment of this Act, the Comptroller General of the United
States shall prepare and submit a report to the Committee on
Ways and Means of the House of Representatives and the
Committee on Finance of the Senate on the impact of Archer
MSAs on the cost of conventional insurance (especially in
those areas where there are higher numbers of such accounts)
and on adverse selection and health care costs.
SEC. 512. DEDUCTION FOR 100 PERCENT OF HEALTH INSURANCE COSTS
OF SELF-EMPLOYED INDIVIDUALS.
(a) In General.--Paragraph (1) of section 162(l) of the
Internal Revenue Code of 1986 is amended to read as follows:
``(1) Allowance of deduction.--In the case of an individual
who is an employee within the meaning of section 401(c)(1),
there shall be allowed as a deduction under this section an
amount equal to 100 percent of the amount paid during the
taxable year for insurance which constitutes medical care for
the taxpayer and the taxpayer's spouse and dependents.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2001.
SEC. 513. CREDIT FOR HEALTH INSURANCE EXPENSES OF SMALL
BUSINESSES.
(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. 45G. SMALL BUSINESS HEALTH INSURANCE EXPENSES.
``(a) General Rule.--For purposes of section 38, in the
case of a small employer, the health insurance credit
determined under this section for the taxable year is an
amount equal to the applicable percentage of the expenses
paid by the taxpayer during the taxable year for health
insurance coverage for such year provided under a new health
plan for employees of such employer.
``(b) Applicable Percentage.--For purposes of subsection
(a), the applicable percentage is--
``(1) in the case of insurance purchased as a member of a
qualified health benefit purchasing coalition (as defined in
section 9841), 30 percent, and
``(2) in the case of insurance not described in paragraph
(1), 20 percent.
``(c) Limitations.--
``(1) Per employee dollar limitation.--The amount of
expenses taken into account under subsection (a) with respect
to any employee for any taxable year shall not exceed--
``(A) $2,000 in the case of self-only coverage, and
``(B) $5,000 in the case of family coverage.
In the case of an employee who is covered by a new health
plan of the employer for only a portion of such taxable year,
the limitation under the preceding sentence shall be an
amount which bears the same ratio to such limitation
(determined without regard to this sentence) as such portion
bears to the entire taxable year.
``(2) Period of coverage.--Expenses may be taken into
account under subsection (a) only with respect to coverage
for the 4-year period beginning on the date the employer
establishes a new health plan.
``(d) Definitions.--For purposes of this section--
``(1) Health insurance coverage.--The term `health
insurance coverage' has the meaning given such term by
section 9832(b)(1).
``(2) New health plan.--
``(A) In general.--The term `new health plan' means any
arrangement of the employer which provides health insurance
coverage to employees if--
``(i) such employer (and any predecessor employer) did not
establish or maintain such arrangement (or any similar
arrangement) at any time during the 2 taxable years ending
prior to the taxable year in which the credit under this
section is first allowed, and
``(ii) such arrangement provides health insurance coverage
to at least 70 percent of the qualified employees of such
employer.
``(B) Qualified employee.--
``(i) In general.--The term `qualified employee' means any
employee of an employer if the annual rate of such employee's
compensation (as defined in section 414(s)) exceeds $10,000.
``(ii) Treatment of certain employees.--The term `employee'
shall include a leased employee within the meaning of section
414(n).
``(3) Small employer.--The term `small employer' has the
meaning given to such term by section 4980D(d)(2); except
that only qualified employees shall be taken into account.
``(e) Special Rules.--
``(1) Certain rules made applicable.--For purposes of this
section, rules similar to the rules of section 52 shall
apply.
``(2) Amounts paid under salary reduction arrangements.--No
amount paid or incurred pursuant to a salary reduction
arrangement shall be taken into account under subsection (a).
``(f) Termination.--This section shall not apply to
expenses paid or incurred by an employer with respect to any
arrangement established on or after January 1, 2010.''.
(b) Credit To Be Part of General Business Credit.--Section
38(b) of such Code (relating to current year business credit)
is amended by striking ``plus'' at the end of paragraph (14),
by striking the period at the end of paragraph (15) and
inserting ``, plus'', and by adding at the end the following:
``(16) in the case of a small employer (as defined in
section 45G(d)(3)), the health insurance credit determined
under section 45G(a).''.
(c) No Carrybacks.--Subsection (d) of section 39 of such
Code (relating to carryback and carryforward of unused
credits) is amended by adding at the end the following:
``(11) No carryback of section 45g credit before effective
date.--No portion of the unused business credit for any
taxable year which is attributable to the employee health
insurance expenses credit determined under section 45G may be
carried back to a taxable year ending before the date of the
enactment of section 45G.''.
(d) Denial of Double Benefit.--Section 280C of such Code is
amended by adding at the end the following new subsection:
``(d) Credit for Small Business Health Insurance
Expenses.--
``(1) In general.--No deduction shall be allowed for that
portion of the expenses (otherwise allowable as a deduction)
taken into account in determining the credit under section
45G for the taxable year which is equal to the amount of the
credit determined for such taxable year under section 45G(a).
``(2) Controlled groups.--Persons treated as a single
employer under subsection (a) or (b) of section 52 shall be
treated as 1 person for purposes of this section.''.
(e) Clerical Amendment.--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:
[[Page H5308]]
``Sec. 45G. Small business health insurance expenses.''.
(f) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred in taxable years
beginning after December 31, 2001, for arrangements
established after the date of the enactment of this Act.
SEC. 514. CERTAIN GRANTS BY PRIVATE FOUNDATIONS TO QUALIFIED
HEALTH BENEFIT PURCHASING COALITIONS.
(a) In General.--Section 4942 of the Internal Revenue Code
of 1986 (relating to taxes on failure to distribute income)
is amended by adding at the end the following:
``(k) Certain Qualified Health Benefit Purchasing Coalition
Distributions.--
``(1) In general.--For purposes of subsection (g), sections
170, 501, 507, 509, and 2522, and this chapter, a qualified
health benefit purchasing coalition distribution by a private
foundation shall be considered to be a distribution for a
charitable purpose.
``(2) Qualified health benefit purchasing coalition
distribution.--For purposes of paragraph (1)--
``(A) In general.--The term `qualified health benefit
purchasing coalition distribution' means any amount paid or
incurred by a private foundation to or on behalf of a
qualified health benefit purchasing coalition (as defined in
section 9841) for purposes of payment or reimbursement of
amounts paid or incurred in connection with the establishment
and maintenance of such coalition.
``(B) Exclusions.--Such term shall not include any amount
used by a qualified health benefit purchasing coalition (as
so defined)--
``(i) for the purchase of real property,
``(ii) as payment to, or for the benefit of, members (or
employees or affiliates of such members) of such coalition,
or
``(iii) for any expense paid or incurred more than 48
months after the date of establishment of such coalition.
``(3) Termination.--This subsection shall not apply--
``(A) to qualified health benefit purchasing coalition
distributions paid or incurred after December 31, 2009, and
``(B) with respect to start-up costs of a coalition which
are paid or incurred after December 31, 2010.''.
(b) Qualified Health Benefit Purchasing Coalition.--
(1) In general.--Chapter 100 of such Code (relating to
group health plan requirements) is amended by adding at the
end the following new subchapter:
``Subchapter D--Qualified Health Benefit Purchasing Coalition
``Sec. 9841. Qualified health benefit purchasing coalition.
``SEC. 9841. QUALIFIED HEALTH BENEFIT PURCHASING COALITION.
``(a) In General.--A qualified health benefit purchasing
coalition is a private not-for-profit corporation which--
``(1) sells health insurance through State licensed health
insurance issuers in the State in which the employers to
which such coalition is providing insurance are located, and
``(2) establishes to the Secretary, under State
certification procedures or other procedures as the Secretary
may provide by regulation, that such coalition meets the
requirements of this section.
``(b) Board of Directors.--
``(1) In general.--Each purchasing coalition under this
section shall be governed by a Board of Directors.
``(2) Election.--The Secretary shall establish procedures
governing election of such Board.
``(3) Membership.--The Board of Directors shall--
``(A) be composed of representatives of the members of the
coalition, in equal number, including small employers and
employee representatives of such employers, but
``(B) not include other interested parties, such as service
providers, health insurers, or insurance agents or brokers
which may have a conflict of interest with the purposes of
the coalition.
``(c) Membership of Coalition.--
``(1) In general.--A purchasing coalition shall accept all
small employers residing within the area served by the
coalition as members if such employers request such
membership.
``(2) Other members.--The coalition, at the discretion of
its Board of Directors, may be open to individuals and large
employers.
``(3) Voting.--Members of a purchasing coalition shall have
voting rights consistent with the rules established by the
State.
``(d) Duties of Purchasing Coalitions.--Each purchasing
coalition shall--
``(1) enter into agreements with small employers (and, at
the discretion of its Board, with individuals and other
employers) to provide health insurance benefits to employees
and retirees of such employers,
``(2) where feasible, enter into agreements with 3 or more
unaffiliated, qualified licensed health plans, to offer
benefits to members,
``(3) offer to members at least 1 open enrollment period of
at least 30 days per calendar year,
``(4) serve a significant geographical area and market to
all eligible members in that area, and
``(5) carry out other functions provided for under this
section.
``(e) Limitation on Activities.--A purchasing coalition
shall not--
``(1) perform any activity (including certification or
enforcement) relating to compliance or licensing of health
plans,
``(2) assume insurance or financial risk in relation to any
health plan, or
``(3) perform other activities identified by the State as
being inconsistent with the performance of its duties under
this section.
``(f) Additional Requirements for Purchasing Coalitions.--
As provided by the Secretary in regulations, a purchasing
coalition shall be subject to requirements similar to the
requirements of a group health plan under this chapter.
``(g) Relation to Other Laws.--
``(1) Preemption of state fictitious group laws.--
Requirements (commonly referred to as fictitious group laws)
relating to grouping and similar requirements for health
insurance coverage are preempted to the extent such
requirements impede the establishment and operation of
qualified health benefit purchasing coalitions.
``(2) Allowing savings to be passed through.--Any State law
that prohibits health insurance issuers from reducing
premiums on health insurance coverage sold through a
qualified health benefit purchasing coalition to reflect
administrative savings is preempted. This paragraph shall not
be construed to preempt State laws that impose restrictions
on premiums based on health status, claims history, industry,
age, gender, or other underwriting factors.
``(3) No waiver of hipaa requirements.--Nothing in this
section shall be construed to change the obligation of health
insurance issuers to comply with the requirements of title
XXVII of the Public Health Service Act with respect to health
insurance coverage offered to small employers in the small
group market through a qualified health benefit purchasing
coalition.
``(h) Definition of Small Employer.--For purposes of this
section--
``(1) In general.--The term `small employer' means, with
respect to any calendar year, any employer if such employer
employed an average of at least 2 and not more than 50
qualified employees on business days during either of the 2
preceding calendar years. For purposes of the preceding
sentence, a preceding calendar year may be taken into account
only if the employer was in existence throughout such year.
``(2) Employers not in existence in preceding year.--In the
case of an employer which was not in existence throughout the
1st preceding calendar year, the determination under
paragraph (1) shall be based on the average number of
qualified employees that it is reasonably expected such
employer will employ on business days in the current calendar
year.''.
(2) Conforming amendment.--The table of subchapters for
chapter 100 of such Code is amended by adding at the end the
following item:
``Subchapter D. Qualified health benefit purchasing coalition.''.
(c) Effective Date.--The amendment made by subsection (a)
shall apply to taxable years beginning after December 31,
2001.
SEC. 515. STATE GRANT PROGRAM FOR MARKET INNOVATION.
(a) In General.--The Secretary of Health and Human Services
(in this section referred to as the ``Secretary'') shall
establish a program (in this section referred to as the
``program'') to award demonstration grants under this section
to States to allow States to demonstrate the effectiveness of
innovative ways to increase access to health insurance
through market reforms and other innovative means. Such
innovative means may include (and are not limited to) any of
the following:
(1) Alternative group purchasing or pooling arrangements,
such as purchasing cooperatives for small businesses,
reinsurance pools, or high risk pools.
(2) Individual or small group market reforms.
(3) Consumer education and outreach.
(4) Subsidies to individuals, employers, or both, in
obtaining health insurance.
(b) Scope; Duration.--The program shall be limited to not
more than 10 States and to a total period of 5 years,
beginning on the date the first demonstration grant is made.
(c) Conditions for Demonstration Grants.--
(1) In general.--The Secretary may not provide for a
demonstration grant to a State under the program unless the
Secretary finds that under the proposed demonstration grant--
(A) the State will provide for demonstrated increase of
access for some portion of the existing uninsured population
through a market innovation (other than merely through a
financial expansion of a program initiated before the date of
the enactment of this Act);
(B) the State will comply with applicable Federal laws;
(C) the State will not discriminate among participants on
the basis of any health status-related factor (as defined in
section 2791(d)(9) of the Public Health Service Act), except
to the extent a State wishes to focus on populations that
otherwise would not obtain health insurance because of such
factors; and
(D) the State will provide for such evaluation, in
coordination with the evaluation required under subsection
(d), as the Secretary may specify.
(2) Application.--The Secretary shall not provide a
demonstration grant under the program to a State unless--
(A) the State submits to the Secretary such an application,
in such a form and manner, as the Secretary specifies;
[[Page H5309]]
(B) the application includes information regarding how the
demonstration grant will address issues such as governance,
targeted population, expected cost, and the continuation
after the completion of the demonstration grant period; and
(C) the Secretary determines that the demonstration grant
will be used consistent with this section.
(3) Focus.--A demonstration grant proposal under section
need not cover all uninsured individuals in a State or all
health care benefits with respect to such individuals.
(d) Evaluation.--The Secretary shall enter into a contract
with an appropriate entity outside the Department of Health
and Human Services to conduct an overall evaluation of the
program at the end of the program period. Such evaluation
shall include an analysis of improvements in access, costs,
quality of care, or choice of coverage, under different
demonstration grants.
(e) Option To Provide for Initial Planning Grants.--
Notwithstanding the previous provisions of this section,
under the program the Secretary may provide for a portion of
the amounts appropriated under subsection (f) (not to exceed
$5,000,000) to be made available to any State for initial
planning grants to permit States to develop demonstration
grant proposals under the previous provisions of this
section.
(f) Authorization of Appropriations.--There are authorized
to be appropriated $100,000,000 for each fiscal year to carry
out this section. Amounts appropriated under this subsection
shall remain available until expended.
(g) State Defined.--For purposes of this section, the term
``State'' has the meaning given such term for purposes of
title XIX of the Social Security Act.
TITLE VI--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION
SEC. 601. EFFECTIVE DATES.
(a) Group Health Coverage.--
(1) In general.--Subject to paragraph (2) and subsection
(d), the amendments made by sections 201(a), 401, 403, 501,
and 502 (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 October 1, 2002
(in this section referred to as the ``general effective
date'').
(2) Treatment of collective bargaining agreements.--In the
case of a group health plan maintained pursuant to one or
more collective bargaining agreements between employee
representatives and one or more employers ratified before the
date of the enactment of this Act, the amendments made by
sections 201(a), 401, 403, 501, and 502 (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
agreements relating to the plan terminates (excluding any
extension thereof agreed to after the date of the enactment
of this Act); or
(B) the general effective date;
but shall apply not later than 1 year after 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.--Subject to
subsection (d), 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.
(c) 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, 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 regarding 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 required data, 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.
(d) Transition for Notice Requirement.--The disclosure of
information required under section 121 of this Act shall
first be provided pursuant to--
(1) subsection (a) with respect to a group health plan that
is maintained as of the general effective date, not later
than 30 days before the beginning of the first plan year to
which title I applies in connection with the plan under such
subsection; or
(2) subsection (b) with respect to a individual health
insurance coverage that is in effect as of the general
effective date, not later than 30 days before the first date
as of which title I applies to the coverage under such
subsection.
SEC. 602. COORDINATION IN IMPLEMENTATION.
The Secretary of Labor and the Secretary of Health and
Human Services shall ensure, through the execution of an
interagency memorandum of understanding among such
Secretaries, that--
(1) regulations, rulings, and interpretations issued by
such Secretaries relating to the same matter over which such
Secretaries have responsibility under the provisions of this
Act (and the amendments made thereby) are administered so as
to have the same effect at all times; and
(2) coordination of policies relating to enforcing the same
requirements through such Secretaries in order to have a
coordinated enforcement strategy that avoids duplication of
enforcement efforts and assigns priorities in enforcement.
SEC. 603. SEVERABILITY.
If any provision of this Act, an amendment made by this
Act, or the application of such provision or amendment to any
person or circumstance is held to be unconstitutional, the
remainder of this Act, the amendments made by this Act, and
the application of the provisions of such to any person or
circumstance shall not be affected thereby.
TITLE VII--MISCELLANEOUS PROVISIONS
SEC. 701. NO IMPACT ON SOCIAL SECURITY TRUST FUND.
(a) In General.--Nothing in this Act (or an amendment made
by this Act) shall be construed to alter or amend the Social
Security Act (or any regulation promulgated under that Act).
(b) Transfers.--
(1) Estimate of secretary.--The Secretary of the Treasury
shall annually estimate the impact that the enactment of this
Act has on the income and balances of the trust funds
established under section 201 of the Social Security Act (42
U.S.C. 401).
(2) Transfer of funds.--If, under paragraph (1), the
Secretary of the Treasury estimates that the enactment of
this Act has a negative impact on the income and balances of
the trust funds established under section 201 of the Social
Security Act (42 U.S.C. 401), the Secretary shall transfer,
not less frequently than quarterly, from the general revenues
of the Federal Government an amount sufficient so as to
ensure that the income and balances of such trust funds are
not reduced as a result of the enactment of such Act.
SEC. 702. CUSTOMS USER FEES.
Section 13031(j)(3) of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) is amended
by striking ``2003'' and inserting ``2011, except that fees
may not be charged under paragraphs (9) and (10) of such
subsection after March 31, 2006''.
SEC. 703. FISCAL YEAR 2002 MEDICARE PAYMENTS.
Notwithstanding any other provision of law, any letter of
credit under part B of title XVIII of the Social Security Act
(42 U.S.C. 1395j et seq.) that would otherwise be sent to the
Treasury or the Federal Reserve Board on September 30, 2002,
by a carrier with a contract under section 1842 of that Act
(42 U.S.C. 1395u) shall be sent on October 1, 2002.
SEC. 704. SENSE OF SENATE WITH RESPECT TO PARTICIPATION IN
CLINICAL TRIALS AND ACCESS TO SPECIALTY CARE.
(a) Findings.--The Senate finds the following:
(1) Breast cancer is the most common form of cancer among
women, excluding skin cancers.
(2) During 2001, 182,800 new cases of female invasive
breast cancer will be diagnosed, and 40,800 women will die
from the disease.
(3) In addition, 1,400 male breast cancer cases are
projected to be diagnosed, and 400 men will die from the
disease.
(4) Breast cancer is the second leading cause of cancer
death among all women and the leading cause of cancer death
among women between ages 40 and 55.
(5) This year 8,600 children are expected to be diagnosed
with cancer.
(6) 1,500 children are expected to die from cancer this
year.
(7) There are approximately 333,000 people diagnosed with
multiple sclerosis in the United States and 200 more cases
are diagnosed each week.
(8) Parkinson's disease is a progressive disorder of the
central nervous system affecting 1,000,000 in the United
States.
(9) An estimated 198,100 men will be diagnosed with
prostate cancer this year.
(10) 31,500 men will die from prostate cancer this year. It
is the second leading cause of cancer in men.
(11) While information obtained from clinical trials is
essential to finding cures for diseases, it is still research
which carries the risk of fatal results. Future efforts
should be taken to protect the health and safety of adults
and children who enroll in clinical trials.
[[Page H5310]]
(12) While employers and health plans should be responsible
for covering the routine costs associated with federally
approved or funded clinical trials, such employers and health
plans should not be held legally responsible for the design,
implementation, or outcome of such clinical trials,
consistent with any applicable State or Federal liability
statutes.
(b) Sense of the Senate.--It is the sense of the Senate
that--
(1) men and women battling life-threatening, deadly
diseases, including advanced breast or ovarian cancer, should
have the opportunity to participate in a federally approved
or funded clinical trial recommended by their physician;
(2) an individual should have the opportunity to
participate in a federally approved or funded clinical trial
recommended by their physician if--
(A) that individual--
(i) has a life-threatening or serious illness for which no
standard treatment is effective;
(ii) is eligible to participate in a federally approved or
funded clinical trial according to the trial protocol with
respect to treatment of the illness;
(B) that individual's participation in the trial offers
meaningful potential for significant clinical benefit for the
individual; and
(C) either--
(i) the referring physician is a participating health care
professional and has concluded that the individual's
participation in the 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 the trial would be appropriate,
based upon the individual meeting the conditions described in
subparagraph (A);
(3) a child with a life-threatening illness, including
cancer, should be allowed to participate in a federally
approved or funded clinical trial if that participation meets
the requirements of paragraph (2);
(4) a child with a rare cancer should be allowed to go to a
cancer center capable of providing high quality care for that
disease; and
(5) a health maintenance organization's decision that an
in-network physician without the necessary expertise can
provide care for a seriously ill patient, including a woman
battling cancer, should be appealable to an independent,
impartial body, and that this same right should be available
to all Americans in need of access to high quality specialty
care.
SEC. 705. SENSE OF THE SENATE REGARDING FAIR REVIEW PROCESS.
(a) Findings.--The Senate finds the following:
(1) A fair, timely, impartial independent external appeals
process is essential to any meaningful program of patient
protection.
(2) The independence and objectivity of the review
organization and review process must be ensured.
(3) It is incompatible with a fair and independent appeals
process to allow a health maintenance organization to select
the review organization that is entrusted with providing a
neutral and unbiased medical review.
(4) The American Arbitration Association and arbitration
standards adopted under chapter 44 of title 28, United States
Code (28 U.S.C. 651 et seq.) both prohibit, as inherently
unfair, the right of one party to a dispute to choose the
judge in that dispute.
(b) Sense of the Senate.--It is the sense of the Senate
that--
(1) every patient who is denied care by a health
maintenance organization or other health insurance company
should be entitled to a fair, speedy, impartial appeal to a
review organization that has not been selected by the health
plan;
(2) the States should be empowered to maintain and develop
the appropriate process for selection of the independent
external review entity;
(3) a child battling a rare cancer whose health maintenance
organization has denied a covered treatment recommended by
its physician should be entitled to a fair and impartial
external appeal to a review organization that has not been
chosen by the organization or plan that has denied the care;
and
(4) patient protection legislation should not pre-empt
existing State laws in States where there already are strong
laws in place regarding the selection of independent review
organizations.
SEC. 706. ANNUAL REVIEW.
(a) In General.--Not later than 24 months after the general
effective date referred to in section 601(a)(1), and annually
thereafter for each of the succeeding 4 calendar years (or
until a repeal is effective under subsection (b)), the
Secretary of Health and Human Services shall request that the
Institute of Medicine of the National Academy of Sciences
prepare and submit to the appropriate committees of Congress
a report concerning the impact of this Act, and the
amendments made by this Act, on the number of individuals in
the United States with health insurance coverage.
(b) Limitation With Respect to Certain Plans.--If the
Secretary, in any report submitted under subsection (a),
determines that more than 1,000,000 individuals in the United
States have lost their health insurance coverage as a result
of the enactment of this Act, as compared to the number of
individuals with health insurance coverage in the 12-month
period preceding the date of enactment of this Act, section
402 of this Act shall be repealed effective on the date that
is 12 month after the date on which the report is submitted,
and the submission of any further reports under subsection
(a) shall not be required.
(c) Funding.--From funds appropriated to the Department of
Health and Human Services for fiscal years 2003 and 2004, the
Secretary of Health and Human Services shall provide for such
funding as the Secretary determines necessary for the conduct
of the study of the National Academy of Sciences under this
section.
SEC. 707. DEFINITION OF BORN-ALIVE INFANT.
(a) In General.--Chapter 1 of title 1, United States Code,
is amended by adding at the end the following:
``Sec. 8. `Person', `human being', `child', and `individual'
as including born-alive infant
``(a) In determining the meaning of any Act of Congress, or
of any ruling, regulation, or interpretation of the various
administrative bureaus and agencies of the United States, the
words `person', `human being', `child', and `individual',
shall include every infant member of the species homo sapiens
who is born alive at any stage of development.
``(b) As used in this section, the term `born alive', with
respect to a member of the species homo sapiens, means the
complete expulsion or extraction from his or her mother of
that member, at any stage of development, who after such
expulsion or extraction breathes or has a beating heart,
pulsation of the umbilical cord, or definite movement of
voluntary muscles, regardless of whether the umbilical cord
has been cut, and regardless of whether the expulsion or
extraction occurs as a result of natural or induced labor,
caesarean section, or induced abortion.
``(c) Nothing in this section shall be construed to affirm,
deny, expand, or contract any legal status or legal right
applicable to any member of the species homo sapiens at any
point prior to being born alive as defined in this
section.''.
(b) Clerical Amendment.--The table of sections at the
beginning of chapter 1 of title 1, United States Code, is
amended by adding at the end the following new item:
``8. `Person', `human being', `child', and `individual' as including
born-alive infant.''.
TITLE VIII--REVENUE OFFSETS
Subtitle A--Extension of Custom User Fees
SEC. 801. FURTHER EXTENSION OF AUTHORITY TO LEVY CUSTOMS USER
FEES.
Section 13031(j)(3) of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)), as amended
by section 702, is amended by striking ``, except that fees
may not be charged under paragraphs (9) and (10) of such
subsection after March 31, 2006''.
Subtitle B--Tax Shelter Provisions
PART I--CLARIFICATION OF ECONOMIC SUBSTANCE DOCTRINE
SEC. 811. CLARIFICATION OF ECONOMIC SUBSTANCE DOCTRINE.
(a) In General.--Section 7701 of the Internal Revenue Code
of 1986 is amended by redesignating subsection (m) as
subsection (n) and by inserting after subsection (l) the
following new subsection:
``(m) Clarification of Economic Substance Doctrine; Etc.--
``(1) General rules.--
``(A) In general.--In applying the economic substance
doctrine, the determination of whether a transaction has
economic substance shall be made as provided in this
paragraph.
``(B) Definition of economic substance.--For purposes of
subparagraph (A)--
``(i) In general.--A transaction has economic substance
only if--
``(I) the transaction changes in a meaningful way (apart
from Federal income tax effects) the taxpayer's economic
position, and
``(II) the taxpayer has a substantial nontax purpose for
entering into such transaction and the transaction is a
reasonable means of accomplishing such purpose.
``(ii) Special rule where taxpayer relies on profit
potential.--A transaction shall not be treated as having
economic substance by reason of having a potential for profit
unless--
``(I) the present value of the reasonably expected pre-tax
profit from the transaction is substantial in relation to the
present value of the expected net tax benefits that would be
allowed if the transaction were respected, and
``(II) the reasonably expected pre-tax profit from the
transaction exceeds a risk-free rate of return.
``(C) Treatment of fees and foreign taxes.--Fees and other
transaction expenses and foreign taxes shall be taken into
account as expenses in determining pre-tax profit under
subparagraph (B)(ii).
``(2) Special rules for transactions with tax-indifferent
parties.--
``(A) Special rules for financing transactions.--The form
of a transaction which is in substance the borrowing of money
or the acquisition of financial capital directly or
indirectly from a tax-indifferent party shall not be
respected if the present value of the deductions to be
claimed with respect to the transaction are substantially in
excess of the present value of the anticipated economic
returns of the person lending the money or providing the
financial capital. A public offering shall be treated as a
borrowing, or an acquisition of financial capital, from a
tax-indifferent party if it is reasonably expected that at
least 50 percent of the offering will be placed with tax-
indifferent parties.
[[Page H5311]]
``(B) Artificial income shifting and basis adjustments.--
The form of a transaction with a tax-indifferent party shall
not be respected if--
``(i) it results in an allocation of income or gain to the
tax-indifferent party in excess of such party's economic
income or gain, or
``(ii) it results in a basis adjustment or shifting of
basis on account of overstating the income or gain of the
tax-indifferent party.
``(3) Definitions and special rules.--For purposes of this
subsection--
``(A) Economic substance doctrine.--The term `economic
substance doctrine' means the common law doctrine under which
tax benefits under subtitle A with respect to a transaction
are not allowable if the transaction does not have economic
substance or lacks a business purpose.
``(B) Tax-indifferent party.--The term `tax-indifferent
party' means any person or entity not subject to tax imposed
by subtitle A. A person shall be treated as a tax-indifferent
party with respect to a transaction if the items taken into
account with respect to the transaction have no substantial
impact on such person's liability under subtitle A.
``(C) Exception for personal transactions of individuals.--
In the case of an individual, this subsection shall apply
only to transactions entered into in connection with a trade
or business or an activity engaged in for the production of
income.
``(D) Treatment of lessors.--In applying subclause (I) of
paragraph (1)(B)(ii) to the lessor of tangible property
subject to a lease, the expected net tax benefits shall not
include the benefits of depreciation, or any tax credit, with
respect to the leased property and subclause (II) of
paragraph (1)(B)(ii) shall be disregarded in determining
whether any of such benefits are allowable.
``(4) Other common law doctrines not affected.--Except as
specifically provided in this subsection, the provisions of
this subsection shall not be construed as altering or
supplanting any other rule of law referred to in section
6662(i)(2), and the requirements of this subsection shall be
construed as being in addition to any such other rule of
law.''
(b) Effective Date.--The amendments made by this section
shall apply to transactions after the date of the enactment
of this Act.
PART II--PENALTIES
SEC. 821. INCREASE IN PENALTY ON UNDERPAYMENTS RESULTING FROM
FAILURE TO SATISFY CERTAIN COMMON LAW RULES.
(a) In General.--Section 6662 of the Internal Revenue Code
of 1986 (relating to imposition of accuracy-related penalty)
is amended by adding at the end the following new subsection:
``(i) Increase in Penalty in Case of Failure To Satisfy
Certain Common Law Rules.--
``(1) In general.--To the extent that an underpayment is
attributable to a disallowance described in paragraph (2)--
``(A) subsection (a) shall be applied with respect to such
portion by substituting `40 percent' for `20 percent', and
``(B) subsection (d)(2)(B) and section 6664(c) shall not
apply.
``(2) Disallowances described.--A disallowance is described
in this subsection if such disallowance is on account of--
``(A) a lack of economic substance (within the meaning of
section 7701(m)(1)) for the transaction giving rise to the
claimed benefit or the transaction was not respected under
section 7701(m)(2),
``(B) a lack of business purpose for such transaction or
because the form of the transaction does not reflect its
substance, or
``(C) a failure to meet the requirements of any other
similar rule of law.
``(3) Increase in penalty not to apply if compliance with
disclosure requirements.--Paragraph (1)(A) shall not apply if
the taxpayer discloses to the Secretary (as such time and in
such manner as the Secretary shall prescribe) such
information as the Secretary shall prescribe with respect to
such transaction.''.
(b) Modifications to Penalty on Substantial Understatement
of Income Tax.--
(1) Modification of threshold.--Subparagraph (A) of section
6662(d)(1) of such Code is amended to read as follows:
``(A) In general.--For purposes of this section, there is a
substantial understatement of income tax for any taxable year
if the amount of the understatement for the taxable year
exceeds the lesser of--
``(i) $500,000, or
``(ii) the greater of 10 percent of the tax required to be
shown on the return for the taxable year or $5,000.''
(2) Modification of penalty on tax shelters, etc.--Clauses
(i) and (ii) of section 6662(d)(2)(C) of such Code are
amended to read as follows:
``(i) In general.--Subparagraph (B) shall not apply to any
item attributable to a tax shelter.''
``(ii) Determination of understatements with respect to tax
shelters, etc.--In any case in which there are one or more
items attributable to a tax shelter, the amount of the
understatement under subparagraph (A) shall in no event be
less than the amount of understatement which would be
determined for the taxable year if all items shown on the
return which are not attributable to any tax shelter were
treated as being correct. A similar rule shall apply in cases
to which subsection (i) applies, whether or not the items are
attributable to a tax shelter.''
(c) Treatment of Amended Returns.--Subsection (a) of
section 6664 of such Code is amended by adding at the end the
following new sentence: ``For purposes of this subsection, an
amended return shall be disregarded if such return is filed
on or after the date the taxpayer is first contacted by the
Secretary regarding the examination of the return.''
SEC. 822. PENALTY ON PROMOTERS OF TAX AVOIDANCE STRATEGIES
WHICH HAVE NO ECONOMIC SUBSTANCE, ETC.
(a) Penalty.--
(1) In general.--Section 6700 of the Internal Revenue Code
of 1986 (relating to promoting abusive tax shelters, etc.) is
amended by redesignating subsection (c) as subsection (d) and
by inserting after subsection (b) the following new
subsection:
``(c) Penalty on Substantial Promoters for Promoting Tax
Avoidance Strategies Which Have No Economic Substance, Etc.--
``(1) Imposition of penalty.--Any substantial promoter of a
tax avoidance strategy shall pay a penalty in the amount
determined under paragraph (2) with respect to such strategy
if such strategy (or any similar strategy promoted by such
promoter) fails to meet the requirements of any rule of law
referred to in section 6662(i)(2).
``(2) Amount of penalty.--The penalty under paragraph (1)
with respect to a promoter of a tax avoidance strategy is an
amount equal to 100 percent of the gross income derived (or
to be derived) by such promoter from such strategy.
``(3) Tax avoidance strategy.--For purposes of this
subsection, the term `tax avoidance strategy' means any
entity, plan, arrangement, or transaction a significant
purpose of the structure of which is the avoidance or evasion
of Federal income tax.
``(4) Substantial promoter.--For purposes of this
subsection--
``(A) In general.--The term `substantial promoter' means,
with respect to any tax avoidance strategy, any promoter if--
``(i) such promoter offers such strategy to more than 1
potential participant, and
``(ii) such promoter may receive fees in excess of $500,000
in the aggregate with respect to such strategy.
``(B) Aggregation rules.--For purposes of this paragraph--
``(i) Related persons.--A promoter and all persons related
to such promoter shall be treated as 1 person who is a
promoter.
``(ii) Similar strategies.--All similar tax avoidance
strategies of a promoter shall be treated as 1 tax avoidance
strategy.
``(C) Promoter.--The term `promoter' means any person who
participates in the promotion, offering, or sale of the tax
avoidance strategy.
``(D) Related person.--Persons are related if they bear a
relationship to each other which is described in section
267(b) or 707(b).
``(4) Coordination with subsection (a).--No penalty shall
be imposed by this subsection on any promoter with respect to
a tax avoidance strategy if a penalty is imposed under
subsection (a) on such promoter with respect to such
strategy.''
(2) Conforming amendment.--Subsection (d) of section 6700
of such Code is amended--
(A) by striking ``Penalty'' and inserting ``Penalties'',
and
(B) by striking ``penalty'' the first place it appears in
the text and inserting ``penalties''.
(b) Increase in Penalty on Promoting Abusive Tax
Shelters.--The first sentence of section 6700(a) of such Code
is amended by striking ``a penalty equal to'' and all that
follows and inserting ``a penalty equal to the greater of
$1,000 or 100 percent of the gross income derived (or to be
derived) by such person from such activity.''
SEC. 823. MODIFICATIONS OF PENALTIES FOR AIDING AND ABETTING
UNDERSTATEMENT OF TAX LIABILITY INVOLVING TAX
SHELTERS.
(a) Imposition of Penalty.--Section 6701(a) of the Internal
Revenue Code of 1986 (relating to imposition of penalty) is
amended to read as follows:
``(a) Imposition of Penalties.--
``(1) In general.--Any person--
``(A) who aids or assists in, procures, or advises with
respect to, the preparation or presentation of any portion of
a return, affidavit, claim, or other document,
``(B) who knows (or has reason to believe) that such
portion will be used in connection with any material matter
arising under the internal revenue laws, and
``(C) who knows that such portion (if so used) would result
in an understatement of the liability for tax of another
person,
shall pay a penalty with respect to each such document in the
amount determined under subsection (b).
``(2) Certain tax shelters.--If--
``(A) any person--
``(i) aids or assists in, procures, or advises with respect
to the creation, organization, sale, implementation,
management, or reporting of a tax shelter (as defined in
section 6662(d)(2)(C)(iii)) or of any entity, plan,
arrangement, or transaction that fails to meet the
requirements of any rule of law referred to in section
6662(i)(2), and
``(ii) opines, advises, represents, or otherwise indicates
(directly or indirectly) that the taxpayer's tax treatment of
items attributable to such tax shelter or such entity, plan,
arrangement, or transaction and giving rise to an
understatement of tax liability would more likely than not
prevail or not give rise to a penalty, and
``(B) such opinion, advice, representation, or indication
is unreasonable,
[[Page H5312]]
then such person shall pay a penalty in the amount determined
under subsection (b). If a standard higher than the more
likely than not standard was used in any such opinion,
advice, representation, or indication, then subparagraph
(A)(ii) shall be applied as if such standard were substituted
for the more likely than not standard.''
(b) Amount of Penalty.--Section 6701(b) of such Code
(relating to amount of penalty) is amended--
(1) by inserting ``or (3)'' after ``paragraph (2)'' in
paragraph (1),
(2) by striking ``subsection (a)'' each place it appears
and inserting ``subsection (a)(1)'', and
(3) by redesignating paragraph (3) as paragraph (4) and by
adding after paragraph (2) the following:
``(3) Tax shelters.--In the case of--
``(A) a penalty imposed by subsection (a)(1) which involves
a return, affidavit, claim, or other document relating to a
tax shelter or an entity, plan, arrangement, or transaction
that fails to meet the requirements of any rule of law
referred to in section 6662(i)(2), and
``(B) any penalty imposed by subsection (a)(2),
the amount of the penalty shall be equal to 100 percent of
the gross proceeds derived (or to be derived) by the person
in connection with the tax shelter or entity, plan,
arrangement, or transaction.''
(c) Referral and Publication.--If a penalty is imposed
under section 6701(a)(2) of such Code (as added by subsection
(a)) on any person, the Secretary of the Treasury shall--
(1) notify the Director of Practice of the Internal Revenue
Service and any appropriate State licensing authority of the
penalty and the circumstances under which it was imposed, and
(2) publish the identity of the person and the fact the
penalty was imposed on the person.
(d) Conforming Amendments.--
(1) Section 6701(d) of such Code is amended by striking
``Subsection (a)'' and inserting ``Subsection (a)(1)''.
(2) Section 6701(e) of such Code is amended by striking
``subsection (a)(1)'' and inserting ``subsection (a)(1)(A)''.
(3) Section 6701(f) of such Code is amended by inserting
``, tax shelter, or entity, plan, arrangement, or
transaction'' after ``document'' each place it appears.
SEC. 824. FAILURE TO MAINTAIN LISTS.
Section 6708(a) of the Internal Revenue Code of 1986
(relating to failure to maintain lists of investors in
potentially abusive tax shelters) is amended by adding at the
end the following: ``In the case of a tax shelter (as defined
in section 6662(d)(2)(C)(iii)) or entity, plan, arrangement,
or transaction that fails to meet the requirements of any
rule of law referred to in section 6662(i)(2), the penalty
shall be equal to 50 percent of the gross proceeds derived
(or to be derived) from each person with respect to which
there was a failure and the limitation of the preceding
sentence shall not apply.''
SEC. 825. PENALTY FOR FAILING TO DISCLOSE REPORTABLE
TRANSACTION.
(a) In General.--Part I of subchapter B of chapter 68 of
the Internal Revenue Code of 1986 (relating to assessable
penalties) is amended by inserting after section 6707 the
following new section:
``SEC. 6707A. PENALTY FOR FAILURE TO INCLUDE TAX SHELTER
INFORMATION WITH RETURN.
``(a) Imposition of Penalty.--Any person who fails to
include with its return of Federal income tax any information
required to be included under section 6011 with respect to a
reportable transaction shall pay a penalty in the amount
determined under subsection (b). No penalty shall be imposed
on any such failure if it is shown that such failure is due
to reasonable cause.
``(b) Amount of Penalty.--
``(1) In general.--The amount of the penalty under
subsection (a) shall be equal to the greater of--
``(A) 5 percent of any increase in Federal tax which
results from a difference between the taxpayer's treatment
(as shown on its return) of items attributable to the
reportable transaction to which the failure relates and the
proper tax treatment of such items, or
``(B) $100,000.
For purposes of subparagraph (A), the last sentence of
section 6664(a) shall apply.
``(2) Listed transaction.--If the failure under subsection
(a) relates to a reportable transaction which is the same as,
or substantially similar to, a transaction specifically
identified by the Secretary as a tax avoidance transaction
for purposes of section 6011, paragraph (1)(A) shall be
applied by substituting `10 percent' for `5 percent'.
``(c) Reportable Transaction.--For purposes of this
section, the term `reportable transaction' means any
transaction with respect to which information is required
under section 6011 to be included with a taxpayer's return of
tax because, as determined under regulations prescribed under
section 6011, such transaction has characteristics which may
be indicative of a tax avoidance transaction.
``(d) Coordination With Other Penalties.--The penalty
imposed by this section is in addition to any penalty imposed
under section 6662.''
(b) Conforming Amendment.--The table of sections for part I
of subchapter B of chapter 68 of such Code is amended by
inserting after the item relating to section 6707 the
following:
``Sec. 6707A. Penalty for failure to include tax shelter information on
return.''
SEC. 826. REGISTRATION OF CERTAIN TAX SHELTERS WITHOUT
CORPORATE PARTICIPANTS.
Section 6111(d)(1)(A) of the Internal Revenue Code of 1986
(relating to certain confidential arrangements treated as tax
shelters) is amended by striking ``for a direct or indirect
participant which is a corporation''.
SEC. 827. EFFECTIVE DATES.
(a) In General.--Except as provided in subsections (b),
(c), and (d), the amendments made by this subtitle shall
apply to transactions after the date of the enactment of this
Act.
(b) Section 821.--The amendments made by subsections (b)
and (c) of section 821 shall apply to taxable years ending
after the date of the enactment of this Act.
(c) Section 822.--The amendments made by subsection (a) of
section 822 shall apply to any tax avoidance strategy (as
defined in section 6700(c) of the Internal Revenue Code of
1986, as amended by this title) interests in which are
offered to potential participants after the date of the
enactment of this Act.
(d) Section 826.--The amendment made by section 826 shall
apply to any tax shelter interest which is offered to
potential participants after the date of the enactment of
this Act.
PART III--LIMITATIONS ON IMPORTATION OR TRANSFER OF BUILT-IN LOSSES
SEC. 831. LIMITATION ON IMPORTATION OF BUILT-IN LOSSES.
(a) In General.--Section 362 of the Internal Revenue Code
of 1986 (relating to basis to corporations) is amended by
adding at the end the following new subsection:
``(e) Limitation on Importation of Built-in Losses.--
``(1) In general.--If in any transaction described in
subsection (a) or (b) there would (but for this subsection)
be an importation of a net built-in loss, the basis of each
property described in paragraph (2) which is acquired in such
transaction shall (notwithstanding subsections (a) and (b))
be its fair market value immediately after such transaction.
``(2) Property described.--For purposes of paragraph (1),
property is described in this paragraph if--
``(A) gain or loss with respect to such property is not
subject to tax under this subtitle in the hands of the
transferor immediately before the transfer, and
``(B) gain or loss with respect to such property is subject
to such tax in the hands of the transferee immediately after
such transfer.
In any case in which the transferor is a partnership, the
preceding sentence shall be applied by treating each partner
in such partnership as holding such partner's proportionate
share of the property of such partnership.
``(3) Importation of net built-in loss.--For purposes of
paragraph (1), there is an importation of a net built-in loss
in a transaction if the transferee's aggregate adjusted bases
of property described in paragraph (2) which is transferred
in such transaction would (but for this subsection) exceed
the fair market value of such property immediately after such
transaction.''
(b) Comparable Treatment Where Liquidation.--Paragraph (1)
of section 334(b) of such Code (relating to liquidation of
subsidiary) is amended to read as follows:
``(1) In general.--If property is received by a corporate
distributee in a distribution in a complete liquidation to
which section 332 applies (or in a transfer described in
section 337(b)(1)), the basis of such property in the hands
of such distributee shall be the same as it would be in the
hands of the transferor; except that the basis of such
property in the hands of such distributee shall be the fair
market value of the property at the time of the
distribution--
``(A) in any case in which gain or loss is recognized by
the liquidating corporation with respect to such property, or
``(B) in any case in which the liquidating corporation is a
foreign corporation, the corporate distributee is a domestic
corporation, and the corporate distributee's aggregate
adjusted bases of property described in section 362(e)(2)
which is distributed in such liquidation would (but for this
subparagraph) exceed the fair market value of such property
immediately after such liquidation.''
(c) Effective Date.--The amendments made by this section
shall apply to transactions after the date of the enactment
of this Act.
SEC. 832. DISALLOWANCE OF PARTNERSHIP LOSS TRANSFERS.
(a) Treatment of Contributed Property With Built-in Loss.--
Paragraph (1) of section 704(c) of the Internal Revenue Code
of 1986 is amended by striking ``and'' at the end of
subparagraph (A), by striking the period at the end of
subparagraph (B) and inserting ``, and'', and by adding at
the end the following:
``(C) if any property so contributed has a built-in loss--
``(i) such built-in loss shall be taken into account only
in determining the amount of items allocated to the
contributing partner, and
``(ii) except as provided in regulations, in determining
the amount of items allocated to other partners, the basis of
the contributed property in the hands of the partnership
shall be treated as being equal to its fair market value
immediately after the contribution.
[[Page H5313]]
For purposes of subparagraph (C), the term `built-in loss'
means the excess of the adjusted basis of the property over
its fair market value immediately after the contribution.''
(b) Adjustment to Basis of Partnership Property on Transfer
of Partnership Interest If There Is Substantial Built-in
Loss.--
(1) Adjustment required.--Subsection (a) of section 743 of
such Code (relating to optional adjustment to basis of
partnership property) is amended by inserting before the
period ``or unless the partnership has a substantial built-in
loss immediately after such transfer''.
(2) Adjustment.--Subsection (b) of section 743 of such Code
is amended by inserting ``or with respect to which there is a
substantial built-in loss immediately after such transfer''
after ``section 754 is in effect''.
(3) Substantial built-in loss.--Section 743 of such Code is
amended by adding at the end the following new subsection:
``(d) Substantial Built-In Loss.--For purposes of this
section, a partnership has a substantial built-in loss with
respect to a transfer of an interest in a partnership if the
transferee partner's proportionate share of the adjusted
basis of the partnership property exceeds 110 percent of the
basis of such partner's interest in the partnership.''
(4) Clerical amendments.--
(A) The section heading for section 743 of such Code is
amended to read as follows:
``SEC. 743. ADJUSTMENT TO BASIS OF PARTNERSHIP PROPERTY WHERE
SECTION 754 ELECTION OR SUBSTANTIAL BUILT-IN
LOSS.''
(B) The table of sections for subpart C of part II of
subchapter K of chapter 1 of such Code is amended by striking
the item relating to section 743 and inserting the following
new item:
``Sec. 743. Adjustment to basis of partnership property where section
754 election or substantial built-in loss.''
(c) Adjustment to Basis of Undistributed Partnership
Property If There Is Substantial Basis Reduction.--
(1) Adjustment required.--Subsection (a) of section 734 of
such Code (relating to optional adjustment to basis of
undistributed partnership property) is amended by inserting
before the period ``or unless there is a substantial basis
reduction''.
(2) Adjustment.--Subsection (b) of section 734 of such Code
is amended by inserting ``or unless there is a substantial
basis reduction'' after ``section 754 is in effect''.
(3) Substantial basis reduction.--Section 734 of such Code
is amended by adding at the end the following new subsection:
``(d) Substantial Basis Reduction.--For purposes of this
section, there is a substantial basis reduction with respect
to a distribution if the sum of the amounts described in
subparagraphs (A) and (B) of subsection (b)(2) exceeds 10
percent of the aggregate adjusted basis of partnership
property immediately after the distribution.''
(4) Clerical amendments.--
(A) The section heading for section 734 of such Code is
amended to read as follows:
``SEC. 734. ADJUSTMENT TO BASIS OF UNDISTRIBUTED PARTNERSHIP
PROPERTY WHERE SECTION 754 ELECTION OR
SUBSTANTIAL BASIS REDUCTION.''
(B) The table of sections for subpart B of part II of
subchapter K of chapter 1 of such Code is amended by striking
the item relating to section 734 and inserting the following
new item:
``Sec. 734. Adjustment to basis of undistributed partnership property
where section 754 election or substantial basis
reduction.''
(d) Effective Dates.--
(1) Subsection (a).--The amendment made by subsection (a)
shall apply to contributions made after the date of the
enactment of this Act.
(2) Subsection (b).--The amendments made by subsection (a)
shall apply to transfers after the date of the enactment of
this Act.
(3) Subsection (c).--The amendments made by subsection (a)
shall apply to distributions after the date of the enactment
of this Act.
Mr. BERRY (during the reading). Mr. Speaker, I ask unanimous consent
that the motion to recommit be considered as read and printed in the
RECORD.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Arkansas?
There was no objection.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Arkansas (Mr. Berry) is recognized for 5 minutes in support of his
motion to recommit.
Mr. BERRY. Mr. Speaker, this motion to recommit is very simple. It is
the underlying bill that we are considering today, H.R. 2563, the true
Bipartisan Patient Protection Act, but with one important difference:
The costs of the bill are entirely paid for in the motion to recommit.
The sponsors of the Bipartisan Patient Protection Act had committed
ourselves to paying for the cost of the bill, and we added these pay-
fors when we presented a substitute to the Committee on Rules. However,
the Committee on Rules would not even let us offer this substitute.
The underlying bill, the Bipartisan Patient Protection Act, is nearly
the same as the Senate-passed bill. It was a bill that was debated for
2 weeks by the Senate, not 2 hours. It was ultimately passed by the
Senate in a true bipartisan majority of 59, just like a true bipartisan
majority passed a similar bill here in the last Congress.
However, this motion to recommit is even better than either of those
bills because it keeps our promise that nearly every Member of this
House, nearly every Member that sits this evening here on this floor
has promised to pay for our bills and not to raid the Medicare and
Social Security trust fund.
Mr. Speaker, this is a commitment we have made to the American
people, and it should be honored. The provisions to pay for the bill
are good government provisions. They continue the existing customs
fees, as did the Senate, and they crack down on sham business
enterprises designed solely to generate tax benefits. Nothing in the
recently passed bill is changed.
I want to remind my colleagues that because the Committee on Rules
did not make these provisions in order, this motion to recommit is
Members' only opportunity to vote for an amendment to pay for this
bill. It is Members' only chance not to rob the Medicare and Social
Security trust funds.
I urge a ``yes'' vote.
Mr. Speaker, I yield the balance of my time to the gentleman from
South Carolina (Mr. Spratt), the ranking member of the Committee on the
Budget.
Mr. SPRATT. Mr. Speaker, day by day, bill by bill, the surplus is
washing away. The House is driving this budget straight into the
Medicare trust fund.
Yesterday, it was the energy bill, with an impact on the budget,
according to the Congressional Budget Office, of $33 billion over 10
years. Today it is the Patients' Bill of Rights whose impact is $15
billion to $25 billion brought to the floor without being scored.
In each case, Democrats have offered offsets to protest the trust
funds and the surplus, and in each case, Republicans spurned the offer
of offsets.
Mr. Speaker, in 2 days, this House will have whacked $40 to $50
billion out of the surplus. It is a good thing we are going home.
Mr. Speaker, let me warn Members, mid-August when we are at home, the
Congressional Budget Office will complete its midyear update of the
budget, and when we come back, there will be no question, the House
will be in the Medicare trust fund. That is where the budget activity
today will have taken us, by passing bills like this and paying no heed
whatsoever to the budget. Bring it up, ignore the offset.
I direct Members' attention to this chart. This shows what thin ice
the budget is now sitting on. After the energy bill last night and the
defense bill we reported yesterday, there is a $12 billion bottom line
remainder in fiscal year 2002. That is black.
But if we come down here to where we have estimated the August update
by the Congressional Budget Office, and we have only estimated that
they will take the economy down by one-half of one percentage point in
the next year, Members will see that black 12 turns to a red 16. We go
from a surplus of $12 to $16 billion in deficit, meaning we are $16
billion into the Medicare trust fund. So much for the lockbox. That is
not just 1 year, it is every year from now until 2011; so much so, we
consume the entire Medicare surplus over this period of time.
Mr. Speaker, the only honest vote is for the motion to recommit,
which will pay for this bill.
Mr. TAUZIN. Mr. Speaker, I rise in opposition to the motion to
recommit.
Mr. Speaker, I would say to the gentleman if we would be so foolish
as to adopt this motion to recommit and pass tonight a $7.5 billion tax
increase, Americans might not want us to come home.
This motion to recommit not only would put forward this $7.5 billion
tax increase, but as Members know, it would undo the good work of this
House in endorsing the great work the gentleman from Georgia (Mr.
Norwood) has done in reaching agreement on the contentious issue of
liability.
Mr. Speaker, I yield 1 minute to the gentleman from Ohio (Mr.
Boehner), the chairman of the Committee on Education and the Workforce.
Mr. BOEHNER. Mr. Speaker, the gentleman from Louisiana (Mr. Tauzin)
[[Page H5314]]
mentioned that we would go back to the original liability that would
drive employers out of the system, drive up costs for employers and
their employees. We do not want to do that.
It would also eliminate the association health plans that we have
worked so hard on over the last 10 years to try to help small employers
provide health insurance for their employees.
But of all things, after 40 years of one party controlling this House
and balancing the budget one time in 40 years, to stand in the well of
the House and say that this bill will bust the budget, please, give me
a break.
Mr. TAUZIN. Mr. Speaker, I yield the balance of my time to the
gentleman from California (Mr. Thomas).
Mr. THOMAS. Mr. Speaker, the gentleman said that this is the same
bill. I know he does not want to revisit the passage of the Norwood
amendment. It passed. And what is not in the bill now with the Norwood
amendment is what is in this underlying bill.
I invite Members to turn to page 121 where it says on line 15, ``no
preemption of State law.'' And then down on line 4 it says, ``no right
of action for recovery, indemnity or contribution by issuers against
treating health care professionals and treating hospitals.'' They gave
it on line 14, and took it away on line 34. Thank goodness that is no
longer in the bill.
Let us visit the tax portion. What the Congressional Budget Office
said was that if this became law, their bill, the one we changed, it
would increase premiums 5 percent.
{time} 2200
It does not sound like a lot, but guess what employers do? They will
then, because their health costs are higher in terms of the insurance,
lower the wages. The Congressional Budget Office says they do. You have
to make up that because there is lower revenue. The Congressional
Budget Office says that your legislation reduces income and the HI
payroll tax, that is the Medicare Trust Fund, by $13 billion over 10
years. That is true; but remember, he proudly said, there was a tax
increase in here. The tax increase that is in here increases the
general fund because it is revenue. Now, that is good because they take
general fund revenue and put it over in Social Security to make up the
lost money because, remember, that payroll reduction also affects the
Social Security payroll tax fund.
So what they have done is taken general fund money and put it in the
Social Security fund, but the corporate tax increase only goes into the
general fund. You heard the gentleman on the floor. Guess who invades
the HI trust fund? According to the Congressional Budget Office, their
underlying bill, the one we are going to vote down in just a minute,
decreases income and HI payroll taxes by $13.4 billion. The corporate
tax provision in their bill can only go into general revenue. It cannot
cover HI.
They reduce the HI trust fund. Ironically, my friends, if you want to
protect the HI trust fund, vote ``no'' on the motion to recommit.
The SPEAKER pro tempore (Mr. Bereuter). Without objection, the
previous question is ordered on the motion to recommit.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Recorded Vote
Mr. BERRY. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 208,
noes 220, not voting 6, as follows:
[Roll No. 331]
AYES--208
Abercrombie
Ackerman
Allen
Andrews
Baca
Baird
Baldacci
Baldwin
Barcia
Barrett
Becerra
Bentsen
Berkley
Berman
Berry
Bishop
Blagojevich
Blumenauer
Bonior
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brown (FL)
Brown (OH)
Capps
Capuano
Cardin
Carson (IN)
Carson (OK)
Clay
Clayton
Clement
Clyburn
Condit
Conyers
Costello
Coyne
Cramer
Crowley
Cummings
Davis (CA)
Davis (FL)
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Doggett
Dooley
Doyle
Edwards
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank
Frost
Ganske
Gephardt
Gonzalez
Gordon
Green (TX)
Gutierrez
Hall (OH)
Hall (TX)
Harman
Hastings (FL)
Hill
Hilliard
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick
Kind (WI)
Kleczka
Kucinich
LaFalce
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Leach
Lee
Levin
Lewis (GA)
Lofgren
Lowey
Luther
Maloney (CT)
Maloney (NY)
Markey
Mascara
Matheson
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McDermott
McGovern
McIntyre
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Millender-McDonald
Miller, George
Mink
Mollohan
Moore
Moran (VA)
Morella
Murtha
Nadler
Napolitano
Neal
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Phelps
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Rivers
Rodriguez
Roemer
Ross
Rothman
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Schakowsky
Schiff
Scott
Serrano
Sherman
Shows
Skelton
Slaughter
Smith (WA)
Snyder
Solis
Spratt
Stark
Stenholm
Strickland
Tanner
Tauscher
Taylor (MS)
Thompson (MS)
Thurman
Tierney
Towns
Turner
Udall (CO)
Udall (NM)
Velazquez
Visclosky
Waters
Watson (CA)
Watt (NC)
Waxman
Weiner
Wexler
Woolsey
Wu
Wynn
NOES--220
Aderholt
Akin
Armey
Bachus
Baker
Ballenger
Barr
Bartlett
Barton
Bass
Bereuter
Biggert
Bilirakis
Blunt
Boehlert
Boehner
Bonilla
Bono
Brady (TX)
Brown (SC)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Cannon
Cantor
Capito
Castle
Chabot
Chambliss
Coble
Collins
Combest
Cooksey
Cox
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis, Jo Ann
Davis, Tom
Deal
DeLay
DeMint
Diaz-Balart
Doolittle
Dreier
Duncan
Dunn
Ehlers
Ehrlich
Emerson
English
Everett
Ferguson
Flake
Fletcher
Foley
Forbes
Fossella
Frelinghuysen
Gallegly
Gekas
Gibbons
Gilchrest
Gillmor
Gilman
Goode
Goodlatte
Goss
Graham
Granger
Graves
Green (WI)
Greenwood
Grucci
Gutknecht
Hansen
Hart
Hastert
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hilleary
Hobson
Hoekstra
Horn
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Isakson
Issa
Istook
Jenkins
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
Kerns
King (NY)
Kingston
Kirk
Knollenberg
Kolbe
LaHood
Largent
Latham
LaTourette
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (KY)
Lucas (OK)
Manzullo
McCrery
McHugh
McInnis
McKeon
Mica
Miller (FL)
Miller, Gary
Moran (KS)
Myrick
Nethercutt
Ney
Northup
Norwood
Nussle
Osborne
Ose
Otter
Oxley
Pence
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Portman
Pryce (OH)
Putnam
Quinn
Radanovich
Ramstad
Regula
Rehberg
Reynolds
Riley
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryan (WI)
Ryun (KS)
Saxton
Scarborough
Schaffer
Schrock
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Skeen
Smith (MI)
Smith (NJ)
Smith (TX)
Souder
Stearns
Stump
Sununu
Sweeney
Tancredo
Tauzin
Taylor (NC)
Terry
Thomas
Thornberry
Thune
Tiahrt
Tiberi
Toomey
Traficant
Upton
Vitter
Walden
Walsh
Wamp
Watkins (OK)
Watts (OK)
Weldon (FL)
Weller
Whitfield
Wicker
Wilson
Wolf
Young (AK)
Young (FL)
NOT VOTING--6
Lipinski
Paul
Spence
Stupak
Thompson (CA)
Weldon (PA)
{time} 2218
So the motion to recommit was rejected.
The result of the vote was announced as above recorded.
Stated for:
Mr. STUPAK. Mr. Speaker, on rollcall vote number 331, I was
unavoidably detained and missed that vote. Had I been here, I would
have voted ``aye.''
(Mr. SNYDER asked and was given permission to speak out of order for
1 minute.)
[[Page H5315]]
Congratulations and Farewell to Our Colleague, the Honorable Asa
Hutchinson
Mr. SNYDER. Mr. Speaker, the hour is late, but it is never too late
to say good-bye and hello to a friend; good-bye to Asa Hutchinson,
Congressman, and hello to the new head of the DEA, Asa Hutchinson.
Asa, we will miss you.
Mr. Speaker, I yield to the gentleman from Missouri (Mr. Hulshof).
Mr. HULSHOF. Mr. Speaker, I, too, want to add my accolades to the
departing Member, a classmate of mine, who came in in the 105th
Congress.
The gentleman from Arkansas has served with distinction the Third
Congressional District of Arkansas since his election. As Asa tells it,
the folks back home in Arkansas were not too impressed about this DEA
nomination, until they found out that he would be the head of 9,000
employees and have offices in over 50 countries, at which point they
then thought it was kind of a big deal.
Asa, of course, served with distinction on the Committee on the
Judiciary, and, as some of you who worked with him knew, he was thrust
into an interesting role with the impeachment matter. But he has also
been a leader on other issues regarding the Federal Judiciary, whether
it is regarding our forfeiture laws, whether it is racial profiling, or
campaign finance.
I think all of those issues, and the open mindedness that Asa brought
to those issues, is one reason there was such a tremendous show of
support, when every one of his colleagues on the Democratic side of the
aisle on the Committee on the Judiciary signed a letter of support to
the Senate Committee on the Judiciary, urging Asa's confirmation. I
think that was a tremendous show of bipartisan support.
Finally, Mr. Speaker, Asa, we simply say to you that as you continue
your service to this great Nation, that we wish you and Susan and your
family Godspeed. We all in this Chamber have been enriched by having
known you, and we are luckier all the more for the fact that we have
had a chance to work with you.
We wish you well.
The SPEAKER pro tempore (Mr. Bereuter). The question is on the
passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. McDERMOTT. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The vote was taken by electronic device, and there were--yeas 226,
nays 203, not voting 5, as follows:
[Roll No. 332]
YEAS--226
Aderholt
Akin
Armey
Bachus
Baker
Ballenger
Barr
Bartlett
Barton
Bass
Bereuter
Biggert
Bilirakis
Blunt
Boehlert
Boehner
Bonilla
Bono
Brady (TX)
Brown (SC)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Cannon
Cantor
Capito
Castle
Chabot
Chambliss
Coble
Collins
Combest
Cooksey
Cox
Cramer
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis, Jo Ann
Davis, Tom
Deal
DeLay
DeMint
Diaz-Balart
Doolittle
Dreier
Duncan
Dunn
Ehlers
Ehrlich
Emerson
English
Everett
Ferguson
Flake
Fletcher
Foley
Forbes
Fossella
Frelinghuysen
Gallegly
Ganske
Gekas
Gibbons
Gilchrest
Gillmor
Gilman
Goode
Goodlatte
Goss
Graham
Granger
Graves
Green (WI)
Greenwood
Grucci
Gutknecht
Hansen
Hart
Hastert
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hilleary
Hobson
Hoekstra
Horn
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Isakson
Issa
Istook
Jenkins
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
Kerns
King (NY)
Kingston
Kirk
Knollenberg
Kolbe
LaHood
Largent
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (KY)
Lucas (OK)
Manzullo
McCrery
McHugh
McInnis
McKeon
Mica
Miller (FL)
Miller, Gary
Moran (KS)
Morella
Myrick
Nethercutt
Ney
Northup
Norwood
Nussle
Osborne
Ose
Otter
Oxley
Pence
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Portman
Pryce (OH)
Putnam
Quinn
Radanovich
Ramstad
Regula
Rehberg
Reynolds
Riley
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryan (WI)
Ryun (KS)
Saxton
Scarborough
Schaffer
Schrock
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Skeen
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Souder
Stearns
Stump
Sununu
Sweeney
Tancredo
Tauzin
Taylor (NC)
Terry
Thomas
Thornberry
Thune
Tiahrt
Tiberi
Toomey
Traficant
Upton
Vitter
Walden
Walsh
Wamp
Watkins (OK)
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson
Wolf
Young (AK)
Young (FL)
NAYS--203
Abercrombie
Ackerman
Allen
Andrews
Baca
Baird
Baldacci
Baldwin
Barcia
Barrett
Becerra
Bentsen
Berkley
Berman
Berry
Bishop
Blagojevich
Blumenauer
Bonior
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brown (FL)
Brown (OH)
Capps
Capuano
Cardin
Carson (IN)
Carson (OK)
Clay
Clayton
Clement
Clyburn
Condit
Conyers
Costello
Coyne
Crowley
Cummings
Davis (CA)
Davis (FL)
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Doggett
Dooley
Doyle
Edwards
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank
Frost
Gephardt
Gonzalez
Gordon
Green (TX)
Gutierrez
Hall (OH)
Hall (TX)
Harman
Hastings (FL)
Hill
Hilliard
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick
Kind (WI)
Kleczka
Kucinich
LaFalce
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
Lofgren
Lowey
Luther
Maloney (CT)
Maloney (NY)
Markey
Mascara
Matheson
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McDermott
McGovern
McIntyre
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Millender-McDonald
Miller, George
Mink
Mollohan
Moore
Moran (VA)
Murtha
Nadler
Napolitano
Neal
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Phelps
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Rivers
Rodriguez
Roemer
Ross
Rothman
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Schakowsky
Schiff
Scott
Serrano
Sherman
Shows
Skelton
Slaughter
Snyder
Spratt
Stark
Stenholm
Strickland
Stupak
Tanner
Tauscher
Taylor (MS)
Thompson (MS)
Thurman
Tierney
Towns
Turner
Udall (CO)
Udall (NM)
Velazquez
Visclosky
Waters
Watson (CA)
Watt (NC)
Waxman
Weiner
Wexler
Woolsey
Wu
Wynn
NOT VOTING--5
Lipinski
Paul
Solis
Spence
Thompson (CA)
{time} 2342
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to recommit was laid on the table.
____________________