[Congressional Record (Bound Edition), Volume 145 (1999), Part 17]
[House]
[Pages 24318-24435]
[From the U.S. Government Publishing Office, www.gpo.gov]



       BIPARTISAN CONSENSUS MANAGED CARE IMPROVEMENT ACT OF 1999

  The SPEAKER pro tempore (Mrs. Biggert). Pursuant to House Resolution 
323 and rule XXVIII, the Chair declares the House in the Committee of 
the Whole House on the State of the Union for the further consideration 
of the bill, H.R. 2723.

                              {time}  1107


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the further consideration of 
the bill (H.R. 2723) to amend Title I of the Employee Retirement Income 
Security Act of 1974, title XXVII of the Public Health Service Act, and 
the Internal Revenue Code of 1986 to protect consumers in managed care 
plans and other health coverage, with Mr. Hastings of Washington in the 
chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. When the Committee of the Whole rose on Wednesday, 
October 6, 1999, all time for general debate had expired.
  Pursuant to the rule, the amendments printed in part A of House 
Report 106-366 are adopted and the bill, as amended, is considered read 
for amendment under the 5-minute rule.
  The text of H.R. 2723, as amended, is as follows:

                               H.R. 2723

       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 
     Consensus Managed Care Improvement Act of 1999''.
       (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--Grievances and Appeals

Sec. 101. Utilization review activities.
Sec. 102. Internal appeals procedures.
Sec. 103. External appeals procedures.
Sec. 104. Establishment of a grievance process.

                       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. Access to specialty care.
Sec. 115. 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.

                   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. Coverage of limited scope plans.
Sec. 155. Regulations.

 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.

TITLE III--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                                  1974

Sec. 301. Application of patient protection standards to group health 
              plans and group health insurance coverage under the 
              Employee Retirement Income Security Act of 1974.
Sec. 302. ERISA preemption not to apply to certain actions involving 
              health insurance policyholders.

TITLE IV--APPLICATION TO GROUP HEALTH PLANS UNDER THE INTERNAL REVENUE 
                              CODE OF 1986

Sec. 401. Amendments to the Internal Revenue Code of 1986.

        TITLE V--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

Sec. 501. Effective dates.
Sec. 502. Coordination in implementation.

             TITLE VI--HEALTH CARE PAPERWORK SIMPLIFICATION

Sec. 601. Health care paperwork simplification.

                    TITLE I--IMPROVING MANAGED CARE

                   Subtitle A--Grievance and 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.
       (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.

[[Page 24319]]

       (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 an 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 an 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 or 
     appropriate.
       (d) Deadline for Determinations.--
       (1) Prior authorization services.--
       (A) In general.--Except as provided in paragraph (2), in 
     the case of a utilization review activity involving the prior 
     authorization of health care items and services for an 
     individual, the utilization review program shall make a 
     determination concerning such authorization, and provide 
     notice of the determination to the individual or the 
     individual's designee and the individual's health care 
     provider by telephone and in printed form, as soon as 
     possible in accordance with the medical exigencies of the 
     case, and in no event later than the deadline specified in 
     subparagraph (B).
       (B) Deadline.--
       (i) In general.--Subject to clauses (ii) and (iii), the 
     deadline specified in this subparagraph is 14 days after the 
     date of receipt of the request for prior authorization.
       (ii) Extension permitted where notice of additional 
     information required.--If a utilization review program--

       (I) receives a request for a prior authorization,
       (II) determines that additional information is necessary to 
     complete the review and make the determination on the 
     request, and
       (III) notifies the requester, not later than five business 
     days after the date of receiving the request, of the need for 
     such specified additional information,

     the deadline specified in this subparagraph is 14 days after 
     the date the program receives the specified additional 
     information, but in no case later than 28 days after the date 
     of receipt of the request for the prior authorization. This 
     clause shall not apply if the deadline is specified in clause 
     (iii).
       (iii) Expedited cases.--In the case of a situation 
     described in section 102(c)(1)(A), the deadline specified in 
     this subparagraph is 72 hours after the time of the request 
     for prior authorization.
       (2) Ongoing care.--
       (A) Concurrent review.--
       (i) In general.--Subject to subparagraph (B), in the case 
     of a concurrent review of ongoing care (including 
     hospitalization), which results in a termination or reduction 
     of such care, the plan 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 as soon as possible in 
     accordance with the medical exigencies of the case, with 
     sufficient time prior to the termination or reduction to 
     allow for an appeal under section 102(c)(1)(A) 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.
       (B) Exception.--Subparagraph (A) shall not be interpreted 
     as requiring plans or issuers to provide coverage of care 
     that would exceed the coverage limitations for such care.
       (3) Previously provided services.--In the case of a 
     utilization review activity involving retrospective review of 
     health care services previously provided for an individual, 
     the utilization review program shall make a determination 
     concerning such services, and provide notice of the 
     determination to the individual or the individual's designee 
     and the individual's health care provider by telephone and in 
     printed form, within 30 days of the date of receipt of 
     information that is reasonably necessary to make such 
     determination, but in no case later than 60 days after the 
     date of receipt of the claim for benefits.
       (4) Failure to meet deadline.--In a case in which a group 
     health plan or health insurance issuer fails to make a 
     determination on a claim for benefit under paragraph (1), 
     (2)(A), or (3) by the applicable deadline established under 
     the respective paragraph, the failure shall be treated under 
     this subtitle as a denial of the claim as of the date of the 
     deadline.
       (5) Reference to special rules for emergency services, 
     maintenance care, and post-stabilization care.--For waiver of 
     prior authorization requirements in certain cases involving 
     emergency services and maintenance care and post-
     stabilization care, see subsections (a)(1) and (b) of section 
     113, respectively.
       (e) Notice of Denials of Claims for Benefits.--
       (1) In general.--Notice of a denial of claims for benefits 
     under a utilization review program 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 reasons for the denial (including the clinical 
     rationale);
       (B) instructions on how to initiate an appeal under section 
     102; and
       (C) notice of the availability, upon request of the 
     individual (or the individual's designee) of the clinical 
     review criteria relied upon to make such denial.
       (2) Specification of any additional information.--Such a 
     notice shall also specify what (if any) additional necessary 
     information must be provided to, or obtained by, the person 
     making the denial in order to make a decision on such an 
     appeal.
       (f) Claim for Benefits and Denial of Claim for Benefits 
     Defined.--For purposes of this subtitle:
       (1) 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.
       (2) Denial of claim for benefits.--The term ``denial'' 
     means, with respect to a claim for benefits, means a denial, 
     or a failure to act on a timely basis upon, in whole or in 
     part, the claim for benefits and includes a failure to 
     provide benefits (including items and services) required to 
     be provided under this title.

     SEC. 102. INTERNAL APPEALS PROCEDURES.

       (a) Right of Review.--
       (1) In general.--Each group health plan, and each health 
     insurance issuer offering health insurance coverage--
       (A) shall provide adequate notice in writing to any 
     participant or beneficiary under such plan, or enrollee under 
     such coverage, whose claim for benefits under the plan or 
     coverage has been denied (within the meaning of section 
     101(f)(2)), setting forth the specific reasons for such 
     denial of claim for benefits and rights to any further review 
     or appeal, written in a manner calculated to be understood by 
     the participant, beneficiary, or enrollee; and
       (B) shall afford such a participant, beneficiary, or 
     enrollee (and any provider or other person acting on behalf 
     of such an individual with the individual's consent or 
     without such consent if the individual is medically unable to 
     provide such consent) who is dissatisfied with such a denial 
     of claim for benefits a reasonable opportunity (of not less 
     than 180 days) to request and obtain a full and fair review 
     by a named fiduciary (with

[[Page 24320]]

     respect to such plan) or named appropriate individual (with 
     respect to such coverage) of the decision denying the claim.
       (2) Treatment of oral requests.--The request for review 
     under paragraph (1)(B) may be made orally, but, in the case 
     of an oral request, shall be followed by a request in 
     writing.
       (b) Internal Review Process.--
       (1) Conduct of review.--
       (A) In general.--A review of a denial of claim under this 
     section shall be made by an individual who--
       (i) in a case involving medical judgment, shall be a 
     physician or, in the case of limited scope coverage (as 
     defined in subparagraph (B), shall be an appropriate 
     specialist;
       (ii) has been selected by the plan or issuer; and
       (iii) did not make the initial denial in the internally 
     appealable decision.
       (B) Limited scope coverage defined.--For purposes of 
     subparagraph (A), the term ``limited scope coverage'' means a 
     group health plan or health insurance coverage the only 
     benefits under which are for benefits described in section 
     2791(c)(2)(A) of the Public Health Service Act (42 U.S.C. 
     300gg-91(c)(2)).
       (2) Time limits for internal reviews.--
       (A) In general.--Having received such a request for review 
     of a denial of claim, the plan or issuer shall, in accordance 
     with the medical exigencies of the case but not later than 
     the deadline specified in subparagraph (B), complete the 
     review on the denial and transmit to the participant, 
     beneficiary, enrollee, or other person involved a decision 
     that affirms, reverses, or modifies the denial. If the 
     decision does not reverse the denial, the plan or issuer 
     shall transmit, in printed form, a notice that sets forth the 
     grounds for such decision and that includes a description of 
     rights to any further appeal. Such decision shall be treated 
     as the final decision of the plan. Failure to issue such a 
     decision by such deadline shall be treated as a final 
     decision affirming the denial of claim.
       (B) Deadline.--
       (i) In general.--Subject to clauses (ii) and (iii), the 
     deadline specified in this subparagraph is 14 days after the 
     date of receipt of the request for internal review.
       (ii) Extension permitted where notice of additional 
     information required.--If a group health plan or health 
     insurance issuer--

       (I) receives a request for internal review,
       (II) determines that additional information is necessary to 
     complete the review and make the determination on the 
     request, and
       (III) notifies the requester, not later than five business 
     days after the date of receiving the request, of the need for 
     such specified additional information,

     the deadline specified in this subparagraph is 14 days after 
     the date the plan or issuer receives the specified additional 
     information, but in no case later than 28 days after the date 
     of receipt of the request for the internal review. This 
     clause shall not apply if the deadline is specified in clause 
     (iii).
       (iii) Expedited cases.--In the case of a situation 
     described in subsection (c)(1)(A), the deadline specified in 
     this subparagraph is 72 hours after the time of the request 
     for review.
       (c) Expedited Review Process.--
       (1) In general.--A group health plan, and a health 
     insurance issuer, shall establish procedures in writing for 
     the expedited consideration of requests for review under 
     subsection (b) in situations--
       (A) in which the application of the normal timeframe for 
     making a determination could seriously jeopardize the life or 
     health of the participant, beneficiary, or enrollee or such 
     an individual's ability to regain maximum function; or
       (B) described in section 101(d)(2) (relating to requests 
     for continuation of ongoing care which would otherwise be 
     reduced or terminated).
       (2) Process.--Under such procedures--
       (A) the request for expedited review may be submitted 
     orally or in writing by an individual or provider who is 
     otherwise entitled to request the review;
       (B) all necessary information, including the plan's or 
     issuer's decision, shall be transmitted between the plan or 
     issuer and the requester by telephone, facsimile, or other 
     similarly expeditious available method; and
       (C) the plan or issuer shall expedite the review in the 
     case of any of the situations described in subparagraph (A) 
     or (B) of paragraph (1).
       (3) Deadline for decision.--The decision on the expedited 
     review must be made and communicated to the parties as soon 
     as possible in accordance with the medical exigencies of the 
     case, and in no event later than 72 hours after the time of 
     receipt of the request for expedited review, except that in a 
     case described in paragraph (1)(B), the decision must be made 
     before the end of the approved period of care.
       (d) Waiver of Process.--A plan or issuer may waive its 
     rights for an internal review under subsection (b). In such 
     case the participant, beneficiary, or enrollee involved (and 
     any designee or provider involved) shall be relieved of any 
     obligation to complete the review involved and may, at the 
     option of such participant, beneficiary, enrollee, designee, 
     or provider, proceed directly to seek further appeal through 
     any applicable external appeals process.

     SEC. 103. EXTERNAL APPEALS PROCEDURES.

       (a) Right to External Appeal.--
       (1) In general.--A group health plan, and a health 
     insurance issuer offering health insurance coverage, shall 
     provide for an external appeals process that meets the 
     requirements of this section in the case of an externally 
     appealable decision described in paragraph (2), for which a 
     timely appeal is made either by the plan or issuer or by the 
     participant, beneficiary, or enrollee (and any provider or 
     other person acting on behalf of such an individual with the 
     individual's consent or without such consent if such an 
     individual is medically unable to provide such consent). The 
     appropriate Secretary shall establish standards to carry out 
     such requirements.
       (2) Externally appealable decision defined.--
       (A) In general.--For purposes of this section, the term 
     ``externally appealable decision'' means a denial of claim 
     for benefits (as defined in section 101(f)(2))--
       (i) that is based in whole or in part on a decision that 
     the item or service is not medically necessary or appropriate 
     or is investigational or experimental; or
       (ii) in which the decision as to whether a benefit is 
     covered involves a medical judgment.
       (B) Inclusion.--Such term also includes a failure to meet 
     an applicable deadline for internal review under section 102.
       (C) Exclusions.--Such term does not include--
       (i) specific exclusions or express limitations on the 
     amount, duration, or scope of coverage that do not involve 
     medical judgment; or
       (ii) a decision regarding whether an individual is a 
     participant, beneficiary, or enrollee under the plan or 
     coverage.
       (3) Exhaustion of internal review process.--Except as 
     provided under section 102(d), a plan or issuer may condition 
     the use of an external appeal process in the case of an 
     externally appealable decision upon a final decision in an 
     internal review under section 102, but only if the decision 
     is made in a timely basis consistent with the deadlines 
     provided under this subtitle.
       (4) Filing fee requirement.--
       (A) In general.--Subject to subparagraph (B), a plan or 
     issuer may condition the use of an external appeal process 
     upon payment to the plan or issuer of a filing fee that does 
     not exceed $25.
       (B) Exception for indigency.--The plan or issuer may not 
     require payment of the filing fee in the case of an 
     individual participant, beneficiary, or enrollee who 
     certifies (in a form and manner specified in guidelines 
     established by the Secretary of Health and Human Services) 
     that the individual is indigent (as defined in such 
     guidelines).
       (C) Refunding fee in case of successful appeals.--The plan 
     or issuer shall refund payment of the filing fee under this 
     paragraph if the recommendation of the external appeal entity 
     is to reverse or modify the denial of a claim for benefits 
     which is the subject of the appeal.
       (b) General Elements of External Appeals Process.--
       (1) Contract with qualified external appeal entity.--
       (A) Contract requirement.--Except as provided in 
     subparagraph (D), the external appeal process under this 
     section of a plan or issuer shall be conducted under a 
     contract between the plan or issuer and one or more qualified 
     external appeal entities (as defined in subsection (c)).
       (B) Limitation on plan or issuer selection.--The applicable 
     authority shall implement procedures--
       (i) to assure that the selection process among qualified 
     external appeal entities will not create any incentives for 
     external appeal 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.
       (C) Other terms and conditions.--The terms and conditions 
     of a contract under this paragraph shall be consistent with 
     the standards the appropriate Secretary shall establish to 
     assure there is no real or apparent conflict of interest in 
     the conduct of external appeal activities. Such contract 
     shall provide that all costs of the process (except those 
     incurred by the participant, beneficiary, enrollee, or 
     treating professional in support of the appeal) shall be paid 
     by the plan or issuer, and not by the participant, 
     beneficiary, or enrollee. The previous sentence shall not be 
     construed as applying to the imposition of a filing fee under 
     subsection (a)(4).
       (D) State authority with respect qualified external appeal 
     entity 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) Elements of process.--An external appeal process shall 
     be conducted consistent

[[Page 24321]]

     with standards established by the appropriate Secretary that 
     include at least the following:
       (A) Fair and de novo determination.--The process shall 
     provide for a fair, de novo determination. However, nothing 
     in this paragraph shall be construed as providing for 
     coverage of items and services for which benefits are 
     specifically excluded under the plan or coverage.
       (B) Standard of review.--An external appeal entity shall 
     determine whether the plan's or issuer's decision is in 
     accordance with the medical needs of the patient involved (as 
     determined by the entity) taking into account, as of the time 
     of the entity's determination, the patient's medical 
     condition and any relevant and reliable evidence the entity 
     obtains under subparagraph (D). If the entity determines the 
     decision is in accordance with such needs, the entity shall 
     affirm the decision and to the extent that the entity 
     determines the decision is not in accordance with such needs, 
     the entity shall reverse or modify the decision.
       (C) Consideration of plan or coverage definitions.--In 
     making such determination, the external appeal entity shall 
     consider (but not be bound by) any language in the plan or 
     coverage document relating to the definitions of the terms 
     medical necessity, medically necessary or appropriate, or 
     experimental, investigational, or related terms.
       (D) Evidence.--
       (i) In general.--An external appeal entity shall include, 
     among the evidence taken into consideration--

       (I) the decision made by the plan or issuer upon internal 
     review under section 102 and any guidelines or standards used 
     by the plan or issuer in reaching such decision;
       (II) any personal health and medical information supplied 
     with respect to the individual whose denial of claim for 
     benefits has been appealed; and
       (III) the opinion of the individual's treating physician or 
     health care professional.

       (ii) Additional evidence.--Such entity may also take into 
     consideration but not be limited to the following evidence 
     (to the extent available):

       (I) The results of studies that meet professionally 
     recognized standards of validity and replicability or that 
     have been published in peer-reviewed journals.
       (II) The results of professional consensus conferences 
     conducted or financed in whole or in part by one or more 
     Government agencies.
       (III) Practice and treatment guidelines prepared or 
     financed in whole or in part by Government agencies.
       (IV) Government-issued coverage and treatment policies.
       (V) Community standard of care and generally accepted 
     principles of professional medical practice.
       (VI) To the extent that the entity determines it to be free 
     of any conflict of interest, the opinions of individuals who 
     are qualified as experts in one or more fields of health care 
     which are directly related to the matters under appeal.
       (VII) To the extent that the entity determines it to be 
     free of any conflict of interest, the results of peer reviews 
     conducted by the plan or issuer involved.

       (E) Determination concerning externally appealable 
     decisions.--A qualified external appeal entity shall 
     determine--
       (i) whether a denial of claim for benefits is an externally 
     appealable decision (within the meaning of subsection 
     (a)(2));
       (ii) whether an externally appealable decision involves an 
     expedited appeal; and
       (iii) for purposes of initiating an external review, 
     whether the internal review process has been completed.
       (F) Opportunity to submit evidence.--Each party to an 
     externally appealable decision may submit evidence related to 
     the issues in dispute.
       (G) Provision of information.--The plan or issuer involved 
     shall provide timely access to the external appeal entity to 
     information and to provisions of the plan or health insurance 
     coverage relating to the matter of the externally appealable 
     decision, as determined by the entity.
       (H) Timely decisions.--A determination by the external 
     appeal entity on the decision shall--
       (i) be made orally or in writing and, if it is made orally, 
     shall be supplied to the parties in writing as soon as 
     possible;
       (ii) be made in accordance with the medical exigencies of 
     the case involved, but in no event later than 21 days after 
     the date (or, in the case of an expedited appeal, 72 hours 
     after the time) of requesting an external appeal of the 
     decision;
       (iii) state, in layperson's language, the basis for the 
     determination, including, if relevant, any basis in the terms 
     or conditions of the plan or coverage; and
       (iv) inform the participant, beneficiary, or enrollee of 
     the individual's rights (including any limitation on such 
     rights) to seek further review by the courts (or other 
     process) of the external appeal determination.
       (I) Compliance with determination.--If the external appeal 
     entity reverses or modifies the denial of a claim for 
     benefits, the plan or issuer shall--
       (i) upon the receipt of the determination, authorize 
     benefits in accordance with such determination;
       (ii) take such actions as may be necessary to provide 
     benefits (including items or services) in a timely manner 
     consistent with such determination; and
       (iii) submit information to the entity documenting 
     compliance with the entity's determination and this 
     subparagraph.
       (c) Qualifications of External Appeal Entities.--
       (1) In general.--For purposes of this section, the term 
     ``qualified external appeal entity'' means, in relation to a 
     plan or issuer, an entity that is certified under paragraph 
     (2) as meeting the following requirements:
       (A) The entity meets the independence requirements of 
     paragraph (3).
       (B) The entity conducts external appeal activities through 
     a panel of not fewer than three clinical peers.
       (C) The entity has sufficient medical, legal, and other 
     expertise and sufficient staffing to conduct external appeal 
     activities for the plan or issuer on a timely basis 
     consistent with subsection (b)(2)(G).
       (D) The entity meets such other requirements as the 
     appropriate Secretary may impose.
       (2) Initial certification of external appeal entities.--
       (A) In general.--In order to be treated as a qualified 
     external appeal entity with respect to--
       (i) a group health plan, the entity must be certified (and, 
     in accordance with subparagraph (B), periodically 
     recertified) as meeting the requirements of paragraph (1)--

       (I) by the Secretary of Labor;
       (II) under a process recognized or approved by the 
     Secretary of Labor; or
       (III) to the extent provided in subparagraph (C)(i), by a 
     qualified private standard-setting organization (certified 
     under such subparagraph); or

       (ii) a health insurance issuer operating in a State, the 
     entity must be certified (and, in accordance with 
     subparagraph (B), periodically recertified) as meeting such 
     requirements--

       (I) by the applicable State authority (or under a process 
     recognized or approved by such authority); or
       (II) if the State has not established a certification and 
     recertification process for such entities, by the Secretary 
     of Health and Human Services, under a process recognized or 
     approved by such Secretary, or to the extent provided in 
     subparagraph (C)(ii), by a qualified private standard-setting 
     organization (certified under such subparagraph).

       (B) Recertification process.--The appropriate Secretary 
     shall develop standards for the recertification of external 
     appeal entities. Such standards shall include a review of--
       (i) the number of cases reviewed;
       (ii) a summary of the disposition of those cases;
       (iii) the length of time in making determinations on those 
     cases;
       (iv) updated information of what was required to be 
     submitted as a condition of certification for the entity's 
     performance of external appeal activities; and
       (v) such information as may be necessary to assure the 
     independence of the entity from the plans or issuers for 
     which external appeal activities are being conducted.
       (C) Certification of qualified private standard-setting 
     organizations.--
       (i) For external reviews under group health plans.--For 
     purposes of subparagraph (A)(i)(III), the Secretary of Labor 
     may provide for a process for certification (and periodic 
     recertification) of qualified private standard-setting 
     organizations which provide for certification of external 
     review entities. Such an organization shall only be certified 
     if the organization does not certify an external review 
     entity unless it meets standards required for certification 
     of such an entity by such Secretary under subparagraph 
     (A)(i)(I).
       (ii) For external reviews of health insurance issuers.--For 
     purposes of subparagraph (A)(ii)(II), the Secretary of Health 
     and Human Services may provide for a process for 
     certification (and periodic recertification) of qualified 
     private standard-setting organizations which provide for 
     certification of external review entities. Such an 
     organization shall only be certified if the organization does 
     not certify an external review entity unless it meets 
     standards required for certification of such an entity by 
     such Secretary under subparagraph (A)(ii)(II).
       (3) Independence requirements.--
       (A) In general.--A clinical peer or other entity meets the 
     independence requirements of this paragraph if--
       (i) the peer or entity does not have a familial, financial, 
     or professional relationship with any related party;
       (ii) any compensation received by such peer or entity in 
     connection with the external review is reasonable and not 
     contingent on any decision rendered by the peer or entity;
       (iii) except as provided in paragraph (4), the plan and the 
     issuer have no recourse against the peer or entity in 
     connection with the external review; and
       (iv) the peer or entity does not otherwise have a conflict 
     of interest with a related party as determined under any 
     regulations which the Secretary may prescribe.
       (B) Related party.--For purposes of this paragraph, the 
     term ``related party'' means--

[[Page 24322]]

       (i) with respect to--

       (I) a group health plan or health insurance coverage 
     offered in connection with such a plan, the plan or the 
     health insurance issuer offering such coverage, or
       (II) individual health insurance coverage, the health 
     insurance issuer offering such coverage,

     or any plan sponsor, fiduciary, officer, director, or 
     management employee of such plan or issuer;
       (ii) the health care professional that provided the health 
     care involved in the coverage decision;
       (iii) the institution at which the health care involved in 
     the coverage decision is provided;
       (iv) the manufacturer of any drug or other item that was 
     included in the health care involved in the coverage 
     decision; or
       (v) any other party determined under any regulations which 
     the Secretary may prescribe to have a substantial interest in 
     the coverage decision.
       (4) Limitation on liability of reviewers.--No qualified 
     external appeal entity having a contract with a plan or 
     issuer under this part and no person who is employed by any 
     such entity or who furnishes professional services to such 
     entity, shall be held by reason of the performance of any 
     duty, function, or activity required or authorized pursuant 
     to this section, to have violated any criminal law, or to be 
     civilly liable under any law of the United States or of any 
     State (or political subdivision thereof) if due care was 
     exercised in the performance of such duty, function, or 
     activity and there was no actual malice or gross misconduct 
     in the performance of such duty, function, or activity.
       (d) External Appeal Determination Binding on Plan.--The 
     determination by an external appeal entity under this section 
     is binding on the plan and issuer involved in the 
     determination.
       (e) Penalties Against Authorized Officials for Refusing to 
     Authorize the Determination of an External Review Entity.--
       (1) Monetary penalties.--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 in 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.
       (2) Cease and desist order and order of attorney's fees.--
     In any action described in paragraph (1) 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 paragraph has taken an action 
     resulting in a refusal of a benefit determined by an external 
     appeal entity in violation of such terms of the plan, 
     coverage, or this subtitle, or has failed to take an action 
     for which such person is responsible under the plan, 
     coverage, or this title 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--
       (A) to cease and desist from the alleged action or failure 
     to act; and
       (B) 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.
       (3) Additional civil penalties.--
       (A) In general.--In addition to any penalty imposed under 
     paragraph (1) or (2), 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 
     in violation of the terms of such a plan, coverage, or this 
     title; or
       (ii) any pattern or practice of repeated violations of the 
     requirements of this section with respect to such plan or 
     plans or coverage.
       (B) 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.
       (4) Removal and disqualification.--Any person acting in the 
     capacity of authorizing benefits who has engaged in any such 
     pattern or practice described in paragraph (3)(A) 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.
       (f) Protection of Legal Rights.--Nothing in this 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.

     SEC. 104. ESTABLISHMENT OF A GRIEVANCE PROCESS.

       (a) Establishment of Grievance System.--
       (1) In general.--A group health plan, and a health 
     insurance issuer in connection with the provision of health 
     insurance coverage, shall establish and maintain a system to 
     provide for the presentation and resolution of oral and 
     written grievances brought by individuals who are 
     participants, beneficiaries, or enrollees, or health care 
     providers or other individuals acting on behalf of an 
     individual and with the individual's consent or without such 
     consent if the individual is medically unable to provide such 
     consent, regarding any aspect of the plan's or issuer's 
     services.
       (2) Grievance defined.--In this section, the term 
     ``grievance'' means any question, complaint, or concern 
     brought by a participant, beneficiary or enrollee that is not 
     a claim for benefits (as defined in section 101(f)(1)).
       (b) Grievance System.--Such system shall include the 
     following components with respect to individuals who are 
     participants, beneficiaries, or enrollees:
       (1) Written notification to all such individuals and 
     providers of the telephone numbers and business addresses of 
     the plan or issuer personnel responsible for resolution of 
     grievances and appeals.
       (2) A system to record and document, over a period of at 
     least three previous years, all grievances and appeals made 
     and their status.
       (3) A process providing for timely processing and 
     resolution of grievances.
       (4) Procedures for follow-up action, including the methods 
     to inform the person making the grievance of the resolution 
     of the grievance.

     Grievances are not subject to appeal under the previous 
     provisions of this subtitle.

                       Subtitle B--Access to Care

     SEC. 111. CONSUMER CHOICE OPTION.

       (a) In General.--If a health insurance issuer offers to 
     enrollees health insurance coverage in connection with a 
     group health plan which provides 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 issuer to provide such services, the 
     issuer shall also offer or arrange to be offered to such 
     enrollees (at the time of enrollment and during an annual 
     open season as provided under subsection (c)) the option of 
     health insurance coverage which provides for coverage of such 
     services which are not furnished through health care 
     professionals and providers who are members of such a network 
     unless enrollees 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 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 unless it is paid by the health plan sponsor through 
     agreement with the health insurance issuer.
       (c) Open Season.--An enrollee may change to the offering 
     provided under this section only during a time period 
     determined by the health insurance issuer. 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 or 
     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

[[Page 24323]]

     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 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 or not the health care provider furnishing such 
     services is a participating provider with respect to such 
     services;
       (C) in a manner so that, if such services are provided to a 
     participant, beneficiary, or enrollee--
       (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 based on prudent layperson 
     standard.--The term ``emergency medical condition'' means a 
     medical condition manifesting itself by acute symptoms of 
     sufficient severity (including severe pain) such that a 
     prudent layperson, who possesses an average knowledge of 
     health and medicine, could reasonably expect the absence of 
     immediate medical attention to result in a condition 
     described in clause (i), (ii), or (iii) of section 
     1867(e)(1)(A) of the Social Security Act.
       (B) Emergency services.--The term ``emergency services'' 
     means--
       (i) a medical screening examination (as required under 
     section 1867 of the Social Security Act) that is within the 
     capability of the emergency department of a hospital, 
     including ancillary services routinely available to the 
     emergency department to evaluate an emergency medical 
     condition (as defined in subparagraph (A)), and
       (ii) within the capabilities of the staff and facilities 
     available at the hospital, such further medical examination 
     and treatment as are required under section 1867 of such Act 
     to stabilize the patient.
       (C) Stabilize.--The term ``to stabilize'' means, with 
     respect to an emergency medical condition, to provide such 
     medical treatment of the condition as may be necessary to 
     assure, within reasonable medical probability, that no 
     material deterioration of the condition is likely to result 
     from or occur during the transfer of the individual from a 
     facility.
       (b) Reimbursement for Maintenance Care and Post-
     Stabilization Care.--In the case of services (other than 
     emergency services) for which benefits are available under a 
     group health plan, or under health insurance coverage offered 
     by a health insurance issuer, the plan or issuer shall 
     provide for reimbursement with respect to such services 
     provided to a participant, beneficiary, or enrollee other 
     than through a participating health care provider in a manner 
     consistent with subsection (a)(1)(C) (and shall otherwise 
     comply with the guidelines established under section 
     1852(d)(2) of the Social Security Act), if the services are 
     maintenance care or post-stabilization care covered under 
     such guidelines.

     SEC. 114. ACCESS TO SPECIALTY CARE.

       (a) Specialty Care for Covered Services.--
       (1) In general.--If--
       (A) an individual is a participant or beneficiary under a 
     group health plan or an enrollee who is covered under health 
     insurance coverage offered by a health insurance issuer,
       (B) the individual has a condition or disease of sufficient 
     seriousness and complexity to require treatment by a 
     specialist, and
       (C) benefits for such treatment are provided under the plan 
     or coverage,
     the plan or issuer shall make or provide for a referral to a 
     specialist who is available and accessible to provide the 
     treatment for such condition or disease.
       (2) Specialist defined.--For purposes of this subsection, 
     the term ``specialist'' means, with respect to a condition, a 
     health care practitioner, 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.
       (3) Care under referral.--A group health plan or health 
     insurance issuer may require that the care provided to an 
     individual pursuant to such referral under paragraph (1) be--
       (A) pursuant to a treatment plan, only if the treatment 
     plan is developed by the specialist and approved by the plan 
     or issuer, in consultation with the designated primary care 
     provider or specialist and the individual (or the 
     individual's designee), and
       (B) in accordance with applicable quality assurance and 
     utilization review standards of the plan or issuer.

     Nothing in this subsection shall be construed as preventing 
     such a treatment plan for an individual from requiring a 
     specialist to provide the primary care provider with regular 
     updates on the specialty care provided, as well as all 
     necessary medical information.
       (4) Referrals to participating providers.--A group health 
     plan or health insurance issuer is not required under 
     paragraph (1) to provide for a referral to a specialist that 
     is not a participating provider, unless the plan or issuer 
     does not have an appropriate specialist that is available and 
     accessible to treat the individual's condition and that is a 
     participating provider with respect to such treatment.
       (5) Treatment of nonparticipating providers.--If a plan or 
     issuer refers an individual to a nonparticipating specialist 
     pursuant to paragraph (1), services provided pursuant to the 
     approved treatment plan (if any) shall be provided at no 
     additional cost to the individual beyond what the individual 
     would otherwise pay for services received by such a 
     specialist that is a participating provider.
       (b) Specialists as Gatekeeper for Treatment of Ongoing 
     Special Conditions.--
       (1) In general.--A group health plan, or a health insurance 
     issuer, in connection with the provision of health insurance 
     coverage, shall have a procedure by which an individual who 
     is a participant, beneficiary, or enrollee and who has an 
     ongoing special condition (as defined in paragraph (3)) may 
     request and receive a referral to a specialist for such 
     condition who shall be responsible for and capable of 
     providing and coordinating the individual's care with respect 
     to the condition. Under such procedures if such an 
     individual's care would most appropriately be coordinated by 
     such a specialist, such plan or issuer shall refer the 
     individual to such specialist.
       (2) Treatment for related referrals.--Such specialists 
     shall be permitted to treat the individual without a referral 
     from the individual's primary care provider and may authorize 
     such referrals, procedures, tests, and other medical services 
     as the individual's primary care provider would otherwise be 
     permitted to provide or authorize, subject to the terms of 
     the treatment (referred to in subsection (a)(3)(A)) with 
     respect to the ongoing special condition.
       (3) Ongoing special condition defined.--In this subsection, 
     the term ``ongoing special condition'' means a condition or 
     disease that--
       (A) is life-threatening, degenerative, or disabling, and
       (B) requires specialized medical care over a prolonged 
     period of time.
       (4) Terms of referral.--The provisions of paragraphs (3) 
     through (5) of subsection (a) apply with respect to referrals 
     under paragraph (1) of this subsection in the same manner as 
     they apply to referrals under subsection (a)(1).
       (c) Standing Referrals.--
       (1) In general.--A group health plan, and a health 
     insurance issuer in connection with the provision of health 
     insurance coverage, shall have a procedure by which an 
     individual who is a participant, beneficiary, or enrollee and 
     who has a condition that requires ongoing care from a 
     specialist may receive a standing referral to such specialist 
     for treatment of such condition. If the plan or issuer, or if 
     the primary care provider in consultation with the medical 
     director of the plan or issuer and the specialist (if any), 
     determines that such a standing referral is appropriate, the 
     plan or issuer shall make such a referral to such a 
     specialist if the individual so desires.
       (2) Terms of referral.--The provisions of paragraphs (3) 
     through (5) of subsection (a) apply with respect to referrals 
     under paragraph (1) of this subsection in the same manner as 
     they apply to referrals under subsection (a)(1).

     SEC. 115. ACCESS TO OBSTETRICAL AND GYNECOLOGICAL CARE.

       (a) In General.--If a group health plan, or a health 
     insurance issuer in connection with the provision of health 
     insurance coverage, requires or provides for a participant, 
     beneficiary, or enrollee to designate a participating primary 
     care health care professional, the plan or issuer--
       (1) may not require authorization or a referral by the 
     individual's primary care health care professional or 
     otherwise for coverage of gynecological care (including 
     preventive women's health examinations) and pregnancy-related 
     services provided by a participating health care 
     professional, including a physician, who specializes in 
     obstetrics and gynecology to the extent such care is 
     otherwise covered, and
       (2) shall treat the ordering of other obstetrical or 
     gynecological care by such a participating professional as 
     the authorization of the primary care health care 
     professional with respect to such care under the plan or 
     coverage.
       (b) Construction.--Nothing in subsection (a) shall be 
     construed to--
       (1) waive any exclusions of coverage under the terms of the 
     plan or health insurance

[[Page 24324]]

     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.--If a group health plan, or a health 
     insurance issuer in connection with the provision of health 
     insurance coverage, requires or provides for an enrollee to 
     designate a participating primary care provider for a child 
     of such enrollee, the plan or issuer shall permit the 
     enrollee to designate a physician who specializes in 
     pediatrics as the child's primary care provider.
       (b) Construction.--Nothing in subsection (a) shall be 
     construed to waive any exclusions of coverage under the terms 
     of the plan or health insurance coverage with respect to 
     coverage of pediatric care.

     SEC. 117. CONTINUITY OF CARE.

       (a) In General.--
       (1) Termination of provider.--If a contract between a group 
     health plan, or a health insurance issuer in connection with 
     the provision of health insurance coverage, and a health care 
     provider is terminated (as defined in paragraph (3)(B)), or 
     benefits or coverage provided by a health care provider are 
     terminated because of a change in the terms of provider 
     participation in a group health plan, and an individual who 
     is a participant, beneficiary, or enrollee in the plan or 
     coverage is undergoing treatment from the provider for an 
     ongoing special condition (as defined in paragraph (3)(A)) at 
     the time of such termination, the plan or issuer shall--
       (A) notify the individual on a timely basis of such 
     termination and of the right to elect continuation of 
     coverage of treatment by the provider under this section; and
       (B) subject to subsection (c), permit the individual to 
     elect to continue to be covered with respect to treatment by 
     the provider of such condition during a transitional period 
     (provided under subsection (b)).
       (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) Definitions.--For purposes of this section:
       (A) Ongoing special condition.--The term ``ongoing special 
     condition'' has the meaning given such term in section 
     114(b)(3), and also includes pregnancy.
       (B) Termination.--The term ``terminated'' includes, with 
     respect to a contract, the expiration or nonrenewal of the 
     contract, but does not include a termination of the contract 
     by the plan or issuer for failure to meet applicable quality 
     standards or for fraud.
       (b) Transitional Period.--
       (1) In general.--Except as provided in paragraphs (2) 
     through (4), the transitional period under this subsection 
     shall extend up to 90 days (as determined by the treating 
     health care professional) after the date of the notice 
     described in subsection (a)(1)(A) of the provider's 
     termination.
       (2) Scheduled surgery and organ transplantation.--If 
     surgery or organ transplantation was scheduled for an 
     individual before the date of the announcement of the 
     termination of the provider status under subsection (a)(1)(A) 
     or if the individual on such date was on an established 
     waiting list or otherwise scheduled to have such surgery or 
     transplantation, the transitional period under this 
     subsection with respect to the surgery or transplantation 
     shall extend beyond the period under paragraph (1) and until 
     the date of discharge of the individual after completion of 
     the surgery or transplantation.
       (3) Pregnancy.--If--
       (A) a participant, beneficiary, or enrollee was determined 
     to be pregnant at the time of a provider's termination of 
     participation, and
       (B) the provider was treating the pregnancy before date of 
     the termination,
     the transitional period under this subsection with respect to 
     provider's treatment of the pregnancy shall extend through 
     the provision of post-partum care directly related to the 
     delivery.
       (4) Terminal illness.--If--
       (A) a participant, beneficiary, or enrollee was determined 
     to be terminally ill (as determined under section 
     1861(dd)(3)(A) of the Social Security Act) at the time of a 
     provider's termination of participation, and
       (B) the provider was treating the terminal illness before 
     the date of termination,
     the transitional period under this subsection shall extend 
     for the remainder of the individual's life for care directly 
     related to the treatment of the terminal illness 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 subsection (a)(1)(B) 
     upon the individual notifying the plan of the election of 
     continued coverage and upon the provider agreeing to the 
     following terms and conditions:
       (1) The provider agrees to accept reimbursement from the 
     plan or issuer and individual involved (with respect to cost-
     sharing) at the rates applicable prior to the start of the 
     transitional period as payment in full (or, in the case 
     described in subsection (a)(2), at the rates applicable under 
     the replacement plan or issuer after the date of the 
     termination of the contract with the health insurance issuer) 
     and not to impose cost-sharing with respect to the individual 
     in an amount that would exceed the cost-sharing that could 
     have been imposed if the contract referred to in subsection 
     (a)(1) had not been terminated.
       (2) The 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 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) Construction.--Nothing in this section shall be 
     construed to require the coverage of benefits which would not 
     have been covered if the provider involved remained a 
     participating provider.

     SEC. 118. ACCESS TO NEEDED PRESCRIPTION DRUGS.

       If a group health plan, or health insurance issuer that 
     offers health insurance coverage, provides benefits with 
     respect to prescription drugs but the coverage limits such 
     benefits to drugs included in a formulary, the plan or issuer 
     shall--
       (1) ensure participation of participating physicians and 
     pharmacists in the development of the formulary;
       (2) disclose to providers and, disclose upon request under 
     section 121(c)(5) to participants, beneficiaries, and 
     enrollees, the nature of the formulary restrictions; and
       (3) consistent with the standards for a utilization review 
     program under section 101, provide for exceptions from the 
     formulary limitation when a non-formulary alternative is 
     medically indicated.

     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 or 
     health insurance issuer shall provide for payment for routine 
     patient costs

[[Page 24325]]

     described in subsection (a)(2) but is not required to pay for 
     costs of items and services that are reasonably expected (as 
     determined by the Secretary) to be paid for by the sponsors 
     of an approved clinical trial.
       (2) Payment rate.--In the case of covered items and 
     services provided by--
       (A) a participating provider, the payment rate shall be at 
     the agreed upon rate, or
       (B) a nonparticipating provider, the payment rate shall be 
     at the rate the plan or issuer would normally pay for 
     comparable services under subparagraph (A).
       (d) Approved Clinical Trial Defined.--
       (1) In general.--In this section, the term ``approved 
     clinical trial'' means a clinical research study or clinical 
     investigation approved and funded (which may include funding 
     through in-kind contributions) by one or more of the 
     following:
       (A) The National Institutes of Health.
       (B) A cooperative group or center of the National 
     Institutes of Health.
       (C) Either of the following if the conditions described in 
     paragraph (2) are met:
       (i) The Department of Veterans Affairs.
       (ii) The Department of Defense.
       (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 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 scientific 
     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.

                   Subtitle C--Access to Information

     SEC. 121. PATIENT ACCESS TO INFORMATION.

       (a) Disclosure Requirement.--
       (1) Group health plans.--A group health plan shall--
       (A) provide to participants and beneficiaries at the time 
     of initial coverage under the plan (or the effective date of 
     this section, in the case of individuals who are participants 
     or beneficiaries as of such date), and at least annually 
     thereafter, the information described in subsection (b) in 
     printed form;
       (B) provide to participants and beneficiaries, within a 
     reasonable period (as specified by the appropriate Secretary) 
     before or after the date of significant changes in the 
     information described in subsection (b), information in 
     printed form on such significant changes; and
       (C) upon request, make available to participants and 
     beneficiaries, the applicable authority, and prospective 
     participants and beneficiaries, the information described in 
     subsection (b) or (c) in printed form.
       (2) Health insurance issuers.--A health insurance issuer in 
     connection with the provision of health insurance coverage 
     shall--
       (A) provide to individuals enrolled under such coverage at 
     the time of enrollment, and at least annually thereafter, the 
     information described in subsection (b) in printed form;
       (B) provide to enrollees, within a reasonable period (as 
     specified by the appropriate Secretary) before or after the 
     date of significant changes in the information described in 
     subsection (b), information in printed form on such 
     significant changes; and
       (C) upon request, make available to the applicable 
     authority, to individuals who are prospective enrollees, and 
     to the public the information described in subsection (b) or 
     (c) in printed form.
       (b) Information Provided.--The information described in 
     this subsection with respect to a group health plan or health 
     insurance coverage offered by a health insurance issuer 
     includes the following:
       (1) Service area.--The service area of the plan or issuer.
       (2) Benefits.--Benefits offered under the plan or coverage, 
     including--
       (A) covered benefits, including benefit limits and coverage 
     exclusions;
       (B) cost sharing, such as deductibles, coinsurance, and 
     copayment amounts, including any liability for balance 
     billing, any maximum limitations on out of pocket expenses, 
     and the maximum out of pocket costs for services that are 
     provided by nonparticipating providers or that are furnished 
     without meeting the applicable utilization review 
     requirements;
       (C) the extent to which benefits may be obtained from 
     nonparticipating providers;
       (D) the extent to which a participant, beneficiary, or 
     enrollee may select from among participating providers and 
     the types of providers participating in the plan or issuer 
     network;
       (E) process for determining experimental coverage; and
       (F) use of a prescription drug formulary.
       (3) Access.--A description of the following:
       (A) The number, mix, and distribution of providers under 
     the plan or coverage.
       (B) Out-of-network coverage (if any) provided by the plan 
     or coverage.
       (C) Any point-of-service option (including any supplemental 
     premium or cost-sharing for such option).
       (D) The procedures for participants, beneficiaries, and 
     enrollees to select, access, and change participating primary 
     and specialty providers.
       (E) The rights and procedures for obtaining referrals 
     (including standing referrals) to participating and 
     nonparticipating providers.
       (F) The name, address, and telephone number of 
     participating health care providers and an indication of 
     whether each such provider is available to accept new 
     patients.
       (G) Any limitations imposed on the selection of qualifying 
     participating health care providers, including any 
     limitations imposed under section 112(b)(2).
       (H) How the plan or issuer addresses the needs of 
     participants, beneficiaries, and enrollees and others who do 
     not speak English or who have other special communications 
     needs in accessing providers under the plan or coverage, 
     including the provision of information described in this 
     subsection and subsection (c) to such individuals.
       (4) Out-of-area coverage.--Out-of-area coverage provided by 
     the plan or issuer.
       (5) Emergency coverage.--Coverage of emergency services, 
     including--
       (A) the appropriate use of emergency services, including 
     use of the 911 telephone system or its local equivalent in 
     emergency situations and an explanation of what constitutes 
     an emergency situation;
       (B) the process and procedures of the plan or issuer for 
     obtaining emergency services; and
       (C) the locations of (i) emergency departments, and (ii) 
     other settings, in which plan physicians and hospitals 
     provide emergency services and post-stabilization care.
       (6) Percentage of premiums used for benefits (loss-
     ratios).--In the case of health insurance coverage only (and 
     not with respect to group health plans that do not provide 
     coverage through health insurance coverage), a description of 
     the overall loss-ratio for the coverage (as defined in 
     accordance with rules established or recognized by the 
     Secretary of Health and Human Services).
       (7) Prior authorization rules.--Rules regarding prior 
     authorization or other review requirements that could result 
     in noncoverage or nonpayment.
       (8) Grievance and appeals procedures.--All appeal or 
     grievance rights and procedures under the plan or coverage, 
     including the method for filing grievances and the time 
     frames and circumstances for acting on grievances and 
     appeals, who is the applicable authority with respect to the 
     plan or issuer.
       (9) Quality assurance.--Any information made public by an 
     accrediting organization in the process of accreditation of 
     the plan or issuer or any additional quality indicators the 
     plan or issuer makes available.
       (10) Information on issuer.--Notice of appropriate mailing 
     addresses and telephone numbers to be used by participants, 
     beneficiaries, and enrollees in seeking information or 
     authorization for treatment.
       (11) Notice of requirements.--Notice of the requirements of 
     this title.
       (12) Availability of information on request.--Notice that 
     the information described in subsection (c) is available upon 
     request.
       (c) Information Made Available Upon Request.--The 
     information described in this subsection is the following:
       (1) Utilization review activities.--A description of 
     procedures used and requirements (including circumstances, 
     time frames, and appeal rights) under any utilization review 
     program under section 101, including under any drug formulary 
     program under section 118.
       (2) Grievance and appeals information.--Information on the 
     number of grievances and appeals and on the disposition in 
     the aggregate of such matters.
       (3) Method of physician compensation.--A general 
     description by category (including salary, fee-for-service, 
     capitation, and such other categories as may be specified in 
     regulations of the Secretary) of the applicable method by 
     which a specified prospective or treating health care 
     professional is (or would be) compensated in connection with 
     the provision of health care under the plan or coverage.
       (4) Specific information on credentials of participating 
     providers.--In the case of each participating provider, a 
     description of the credentials of the provider.
       (5) Formulary restrictions.--A description of the nature of 
     any drug formula restrictions.
       (6) Participating provider list.--A list of current 
     participating health care providers.
       (d) Construction.--Nothing in this section shall be 
     construed as requiring public disclosure of individual 
     contracts or financial arrangements between a group health 
     plan or health insurance issuer and any provider.

         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

[[Page 24326]]

     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 offering 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 particular benefits or services 
     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 1876(i)(8) 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 1876(i)(8) of the Social 
     Security Act to the Secretary, an eligible organization, or 
     an individual enrolled with the organization shall be treated 
     as a reference to the applicable authority, a group health 
     plan or health insurance issuer, respectively, and a 
     participant, beneficiary, or enrollee with the plan or 
     organization, respectively.
       (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 
     group 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 consistent with the provisions of sections 1816(c)(2) 
     and 1842(c)(2) of the Social Security Act (42 U.S.C. 
     1395h(c)(2) and 42 U.S.C. 1395u(c)(2)), except that for 
     purposes of this section, subparagraph (C) of section 
     1816(c)(2) of the Social Security Act shall be treated as 
     applying to claims received from a participant, beneficiary, 
     or enrollee as well as claims referred to in such 
     subparagraph.

     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 or 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.

[[Page 24327]]



                        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 713 of the Employee Retirement Income 
     Security Act of 1974.
       (c) Additional Definitions.--For purposes of this title:
       (1) Actively practicing.--The term ``actively practicing'' 
     means, with respect to a physician or other health care 
     professional, such a physician or professional who provides 
     professional services to individual patients on average at 
     least two full days per week.
       (2) 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.
       (3) Clinical peer.--The term ``clinical peer'' means, with 
     respect to a review or appeal, an actively practicing 
     physician (allopathic or osteopathic) or other actively 
     practicing health care professional who holds a nonrestricted 
     license, and who is appropriately credentialed in the same or 
     similar specialty or subspecialty (as appropriate) as 
     typically handles the medical condition, procedure, or 
     treatment under review or appeal and includes a pediatric 
     specialist where appropriate; except that only a physician 
     (allopathic or osteopathic) may be a clinical peer with 
     respect to the review or appeal of treatment recommended or 
     rendered by a physician.
       (4) 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.
       (5) 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 and in section 
     2791(a)(1) of the Public Health Service Act.
       (6) 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.
       (7) 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.
       (8) 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.
       (9) 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.
       (10) 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.
       (11) 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.

     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.
       (b) 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 
     provide items and services (including abortions) that are 
     specifically excluded under the 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 the basis of a rate determined by the plan or 
     issuer 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) does not restrict the selection of providers among 
     those who are lawfully authorized to provide the covered 
     services and agree 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 coverage for any services.

     SEC. 154. COVERAGE OF LIMITED SCOPE PLANS.

       Only for purposes of applying the requirements of this 
     title under sections 2707 and 2753 of the Public Health 
     Service Act and section 714 of the Employee Retirement Income 
     Security Act of 1974, section 2791(c)(2)(A), and section 
     733(c)(2)(A) of the Employee Retirement Income Security Act 
     of 1974 shall be deemed not to apply.

     SEC. 155. REGULATIONS.

       The Secretaries of Health and Human Services and Labor 
     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.

 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.

       ``(a) In General.--Each group health plan shall comply with 
     patient protection requirements under title I of the 
     Bipartisan Consensus Managed Care Improvement Act of 1999, 
     and each health insurance issuer shall comply with patient 
     protection requirements under such title with respect to 
     group health insurance coverage it offers, and such 
     requirements shall be deemed to be incorporated into this 
     subsection.
       ``(b) Notice.--A group health plan shall comply with the 
     notice requirement under section 711(d) of the Employee 
     Retirement Income Security Act of 1974 with respect to the 
     requirements referred to in subsection (a) and a health 
     insurance issuer shall comply with such notice requirement as 
     if such section applied to such issuer and such issuer were a 
     group health plan.''.
       (b) Conforming Amendment.--Section 2721(b)(2)(A) of such 
     Act (42 U.S.C. 300gg-21(b)(2)(A)) is amended by inserting 
     ``(other than section 2707)'' after ``requirements of such 
     subparts''.

[[Page 24328]]



     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.

       ``(a) In General.--Each health insurance issuer shall 
     comply with patient protection requirements under title I of 
     the Bipartisan Consensus Managed Care Improvement Act of 1999 
     with respect to individual health insurance coverage it 
     offers, and such requirements shall be deemed to be 
     incorporated into this subsection.
       ``(b) Notice.--A health insurance issuer under this part 
     shall comply with the notice requirement under section 711(d) 
     of the Employee Retirement Income Security Act of 1974 with 
     respect to the requirements of such title as if such section 
     applied to such issuer and such issuer were a group health 
     plan.''.

TITLE III--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                                  1974

     SEC. 301. APPLICATION OF PATIENT PROTECTION STANDARDS TO 
                   GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE 
                   COVERAGE UNDER THE EMPLOYEE RETIREMENT INCOME 
                   SECURITY ACT OF 1974.

       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 Consensus Managed Care Improvement Act of 1999 (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 Consensus Managed Care 
     Improvement Act of 1999 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 112 (relating to choice of providers).
       ``(B) Section 113 (relating to access to emergency care).
       ``(C) Section 114 (relating to access to specialty care).
       ``(D) Section 115 (relating to access to obstetrical and 
     gynecological care).
       ``(E) Section 116 (relating to access to pediatric care).
       ``(F) Section 117(a)(1) (relating to continuity in case of 
     termination of provider contract) and section 117(a)(2) 
     (relating to continuity in case of termination of issuer 
     contract), but only insofar as a replacement issuer assumes 
     the obligation for continuity of care.
       ``(G) Section 118 (relating to access to needed 
     prescription drugs).
       ``(H) Section 119 (relating to coverage for individuals 
     participating in approved clinical trials.)
       ``(I) Section 134 (relating to payment of claims).
       ``(2) Information.--With respect to information required to 
     be provided or made available under section 121, 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) Grievance and internal appeals.--With respect to the 
     internal appeals process and the grievance system required to 
     be established under sections 102 and 104, 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 103, 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, 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) Application to certain prohibitions against 
     retaliation.--With respect to compliance with the 
     requirements of section 135(b)(1) of the Bipartisan Consensus 
     Managed Care Improvement Act of 1999, 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 Consensus Managed Care Improvement Act of 1999 
     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 may issue 
     regulations to coordinate the requirements on group health 
     plans under this section with the requirements imposed under 
     the other provisions of this title.''.
       (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 Consensus Managed Care 
     Improvement Act of 1999 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. 302. ERISA PREEMPTION NOT TO APPLY TO CERTAIN ACTIONS 
                   INVOLVING HEALTH INSURANCE POLICYHOLDERS.

       (a) In General.--Section 514 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1144) is amended by 
     adding at the end the following subsections:
       ``(e) Preemption Not To Apply to Certain Actions Arising 
     Out of Provision of Health Benefits.--
       ``(1) Non-preemption of certain causes of action.--
       ``(A) In general.--Except as provided in this subsection, 
     nothing in this title shall be construed to invalidate, 
     impair, or supersede any cause of action by a participant or 
     beneficiary (or the estate of a participant or beneficiary) 
     under State law to recover damages resulting from personal 
     injury or for wrongful death against any person--
       ``(i) in connection with the provision of insurance, 
     administrative services, or medical services by such person 
     to or for a group health plan as defined in section 733), or
       ``(ii) that arises out of the arrangement by such person 
     for the provision of such insurance, administrative services, 
     or medical services by other persons.
       ``(B) Limitation on punitive damages.--
       ``(i) In general.--No person shall be liable for any 
     punitive, exemplary, or similar damages in the case of a 
     cause of action brought under subparagraph (A) if--

       ``(I) it relates to an externally appealable decision (as 
     defined in subsection (a)(2) of section 103 of the Bipartisan 
     Consensus Managed Care Improvement Act of 1999);
       ``(II) an external appeal with respect to such decision was 
     completed under such section 103;
       ``(III) in the case such external appeal was initiated by 
     the plan or issuer filing the request for the external 
     appeal, the request was filed on a timely basis before the 
     date the action was brought or, if later, within 30 days 
     after the date the externally appealable decision was made; 
     and
       ``(IV) the plan or issuer complied with the determination 
     of the external appeal entity

[[Page 24329]]

     upon receipt of the determination of the external appeal 
     entity.

     The provisions of this clause supersede any State law or 
     common law to the contrary.
       ``(ii) Exception.--Clause (i) shall not apply with respect 
     to damages in the case of a cause of action for wrongful 
     death if the applicable State law provides (or has been 
     construed to provide) for damages in such a cause of action 
     which are only punitive or exemplary in nature.
       ``(C) Personal injury defined.--For purposes of this 
     subsection, 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.
       ``(2) Exception for group health plans, employers, and 
     other plan sponsors.--
       ``(A) In general.--Subject to subparagraph (B), paragraph 
     (1) does not authorize--
       ``(i) any cause of action against a group health plan or an 
     employer or other plan sponsor maintaining the plan (or 
     against an employee of such a plan, employer, or sponsor 
     acting within the scope of employment), or
       ``(ii) a right of recovery, indemnity, or contribution by a 
     person against a group health plan or an employer or other 
     plan sponsor (or such an employee) for damages assessed 
     against the person pursuant to a cause of action under 
     paragraph (1).
       ``(B) Special rule.--Subparagraph (A) shall not preclude 
     any cause of action described in paragraph (1) against group 
     health plan or an employer or other plan sponsor (or against 
     an employee of such a plan, employer, or sponsor acting 
     within the scope of employment) if--
       ``(i) such action is based on the exercise by the plan, 
     employer, or sponsor (or employee) of discretionary authority 
     to make a decision on a claim for benefits covered under the 
     plan or health insurance coverage in the case at issue; and
       ``(ii) the exercise by the plan, employer, or sponsor (or 
     employee) of such authority resulted in personal injury or 
     wrongful death.
       ``(C) Exception.--The exercise of discretionary authority 
     described in subparagraph (B)(i) shall not be construed to 
     include--
       ``(i) the decision to include or exclude from the plan any 
     specific benefit;
       ``(ii) any decision to provide extra-contractual benefits; 
     or
       ``(iii) any decision not to consider the provision of a 
     benefit while internal or external review is being conducted.
       ``(3) Futility of exhaustion.--An individual bringing an 
     action under this subsection is required to exhaust 
     administrative processes under sections 102 and 103 of the 
     Bipartisan Consensus Managed Care Improvement Act of 1999, 
     unless the injury to or death of such individual has occurred 
     before the completion of such processes.
       ``(4) Construction.--Nothing in this subsection shall be 
     construed as--
       ``(A) permitting a cause of action under State law for the 
     failure to provide an item or service which is specifically 
     excluded under the group health plan involved;
       ``(B) as preempting a State law which requires an affidavit 
     or certificate of merit in a civil action; or
       ``(C) permitting 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).
       ``(f) Rules of Construction Relating to Health Care.--
     Nothing in this title shall be construed as--
       ``(1) permitting the application of State laws that are 
     otherwise superseded by this title and that mandate the 
     provision of specific benefits by a group health plan (as 
     defined in section 733(a)) or a multiple employer welfare 
     arrangement (as defined in section 3(40)), or
       ``(2) affecting any State law which regulates the practice 
     of medicine or provision of medical care, or affecting any 
     action based upon such a State law.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to acts and omissions occurring on or after the 
     date of the enactment of this Act from which a cause of 
     action arises.

     SEC. 303. LIMITATIONS ON ACTIONS.

       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 subsection:
       ``(n)(1) Except as provided in this subsection, 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 Consensus Managed 
     Care Improvement Act of 1999 (as incorporated under section 
     714).
       ``(2) 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, 119, or 118(3) of the Bipartisan Consensus 
     Managed Care Improvement Act of 1999 (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) Nothing in this subsection shall be construed as 
     affecting any action brought by the Secretary.''.

TITLE IV--APPLICATION TO GROUP HEALTH PLANS UNDER THE INTERNAL REVENUE 
                              CODE OF 1986

     SEC. 401. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

       Subchapter B of chapter 100 of the Internal Revenue Code of 
     1986 is amended--
       (1) in the table of sections, by inserting after the item 
     relating to section 9812 the following new item:

``Sec. 9813. Standard relating to patient freedom of choice.'';

     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 Consensus Managed Care Improvement 
     Act of 1999 (as in effect as of the date of the enactment of 
     such Act), and such requirements shall be deemed to be 
     incorporated into this section.''.

        TITLE V--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

     SEC. 501. EFFECTIVE DATES.

       (a) Group Health Coverage.--
       (1) In general.--Subject to paragraph (2), the amendments 
     made by sections 201(a), 301, 303, and 401 (and title I 
     insofar as it relates to such sections) shall apply with 
     respect to group health plans, and health insurance coverage 
     offered in connection with group health plans, for plan years 
     beginning on or after January 1, 2001 (in this section 
     referred to as the ``general effective date'') and also shall 
     apply to portions of plan years occurring on and after such 
     date.
       (2) Treatment of collective bargaining agreements.--In the 
     case of a group health plan maintained pursuant to 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), 301, 303, and 401 (and title I insofar as it 
     relates to such sections) shall not apply to plan years 
     beginning before the later of--
       (A) the date on which the last collective bargaining 
     agreements relating to the plan terminates (determined 
     without regard to any extension thereof agreed to after the 
     date of the enactment of this Act), or
       (B) the general effective date.

     For purposes of subparagraph (A), any plan amendment made 
     pursuant to a collective bargaining agreement relating to the 
     plan which amends the plan solely to conform to any 
     requirement added by this Act shall not be treated as a 
     termination of such collective bargaining agreement.
       (b) Individual Health Insurance Coverage.--The amendments 
     made by section 202 shall apply with respect to individual 
     health insurance coverage offered, sold, issued, renewed, in 
     effect, or operated in the individual market on or after the 
     general effective date.

     SEC. 502. COORDINATION IN IMPLEMENTATION.

       The Secretary of Labor, the Secretary of Health and Human 
     Services, and the Secretary of the Treasury 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.

             TITLE VI--HEALTH CARE PAPERWORK SIMPLIFICATION

     SEC. 601. HEALTH CARE PAPERWORK SIMPLIFICATION.

       (a) Establishment of Panel.--
       (1) Establishment.--There is established a panel to be 
     known as the Health Care Panel to Devise a Uniform 
     Explanation of Benefits (in this section referred to as the 
     ``Panel'').
       (2) Duties of panel.--
       (A) In general.--The Panel shall devise a single form for 
     use by third-party health care payers for the remittance of 
     claims to providers.
       (B) Definition.--For purposes of this section, the term 
     ``third-party health care payer'' means any entity that 
     contractually pays health care bills for an individual.
       (3) Membership.--
       (A) Size and composition.--The Secretary of Health and 
     Human Services shall determine the number of members and the 
     composition of the Panel. Such Panel shall include equal 
     numbers of representatives of

[[Page 24330]]

     private insurance organizations, consumer groups, State 
     insurance commissioners, State medical societies, State 
     hospital associations, and State medical specialty societies.
       (B) Terms of appointment.--The members of the Panel shall 
     serve for the life of the Panel.
       (C) Vacancies.--A vacancy in the Panel shall not affect the 
     power of the remaining members to execute the duties of the 
     Panel, but any such vacancy shall be filled in the same 
     manner in which the original appointment was made.
       (4) Procedures.--
       (A) Meetings.--The Panel shall meet at the call of a 
     majority of its members.
       (B) First meeting.--The Panel shall convene not later than 
     60 days after the date of the enactment of the Bipartisan 
     Consensus Managed Care Improvement Act of 1999.
       (C) Quorum.--A quorum shall consist of a majority of the 
     members of the Panel.
       (D) Hearings.--For the purpose of carrying out its duties, 
     the Panel may hold such hearings and undertake such other 
     activities as the Panel determines to be necessary to carry 
     out its duties.
       (5) Administration.--
       (A) Compensation.--Except as provided in subparagraph (B), 
     members of the Panel shall receive no additional pay, 
     allowances, or benefits by reason of their service on the 
     Panel.
       (B) Travel expenses and per diem.--Each member of the Panel 
     who is not an officer or employee of the Federal Government 
     shall receive travel expenses and per diem in lieu of 
     subsistence in accordance with sections 5702 and 5703 of 
     title 5, United States Code.
       (C) Contract authority.--The Panel may contract with and 
     compensate Government and private agencies or persons for 
     items and services, without regard to section 3709 of the 
     Revised Statutes (41 U.S.C. 5).
       (D) Use of mails.--The Panel may use the United States 
     mails in the same manner and under the same conditions as 
     Federal agencies and shall, for purposes of the frank, be 
     considered a commission of Congress as described in section 
     3215 of title 39, United States Code.
       (E) Administrative support services.--Upon the request of 
     the Panel, the Secretary of Health and Human Services shall 
     provide to the Panel on a reimbursable basis such 
     administrative support services as the Panel may request.
       (6) Submission of form.--Not later than 2 years after the 
     first meeting, the Panel shall submit a form to the Secretary 
     of Health and Human Services for use by third-party health 
     care payers.
       (7) Termination.--The Panel shall terminate on the day 
     after submitting the form under paragraph (6).
       (b) Requirement for Use of Form by Third-Party Care 
     Payers.--A third-party health care payer shall be required to 
     use the form devised under subsection (a) for plan years 
     beginning on or after 5 years following the date of the 
     enactment of this Act.

  The CHAIRMAN. No further amendment is in order except those printed 
in part B of the report. 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, and shall not be subject to amendment.
  The Chairman of the Committee of the Whole may postpone a request for 
a recorded vote on any amendment and may reduce to a minimum of 5 
minutes the time for voting on any postponed question that immediately 
follows another vote, provided that the time for voting on the first 
question shall be a minimum of 15 minutes.
  It is now in order to consider amendment No. 1 printed in part B of 
House Report 106-366.


  Amendment No. 1 in the Nature of a Substitute Offered by Mr. Boehner

  Mr. BOEHNER. Mr. Chairman, I offer an amendment in the nature of a 
substitute.
  The CHAIRMAN. The Clerk will designate the amendment in the nature of 
a substitute.
  The text of the amendment in the nature of a substitute is as 
follows:

       Amendment No. 1 in the nature of a substitute offered by 
     Mr. Boehner:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the 
     ``Comprehensive Access and Responsibility in Health Care Act 
     of 1999''.
       (b) Table of Contents.--The table of contents is as 
     follows:


Sec. 1. Short title and table of contents.

 TITLE I--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                                  1974

                    Subtitle A--Patient Protections

Sec. 101. Patient access to unrestricted medical advice, emergency 
              medical care, obstetric and gynecological care, pediatric 
              care, and continuity of care.
Sec. 102. Required disclosure to network providers.
Sec. 103. Effective date and related rules.

               Subtitle B--Patient Access to Information

Sec. 111. Patient access to information regarding plan coverage, 
              managed care procedures, health care providers, and 
              quality of medical care.-
Sec. 112. Effective date and related rules.

             Subtitle C--Group Health Plan Review Standards

Sec. 121. Special rules for group health plans.
Sec. 122. Special rule for access to specialty care.
Sec. 123. Protection for certain information developed to reduce 
              mortality or morbidity or for improving patient care and 
              safety.
Sec. 124. Effective date.

 Subtitle E--Health Care Access, Affordability, and Quality Commission

Sec. 131. Establishment of commission.
Sec. 132. Effective date.

         TITLE II--AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT

Sec. 201. Patient access to unrestricted medical advice, emergency 
              medical care, obstetric and gynecological care, pediatric 
              care, and continuity of care.
Sec. 202. Requiring health maintenance organizations to offer option of 
              point-of-service coverage.
Sec. 203. Effective date and related rules.

               Subtitle B--Patient Access to Information

Sec. 211. Patient access to information regarding plan coverage, 
              managed care procedures, health care providers, and 
              quality of medical care.
Sec. 212. Effective date and related rules.

       TITLE III--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

Sec. 301. Patient access to unrestricted medical advice, emergency 
              medical care, obstetric and gynecological care, pediatric 
              care, and continuity of care.

                  TITLE IV--HEALTH CARE LAWSUIT REFORM

                     Subtitle A--General Provisions

Sec. 401. Federal reform of health care liability actions.
Sec. 402. Definitions.
Sec. 403. Effective date.

    Subtitle B--Uniform Standards for Health Care Liability Actions

Sec. 411. Statute of limitations.
Sec. 412. Calculation and payment of damages.
Sec. 413. Alternative dispute resolution.
Sec. 414. Reporting on fraud and abuse enforcement activities.

 TITLE I--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                                  1974

                    Subtitle A--Patient Protections

     SEC. 101. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE, 
                   EMERGENCY MEDICAL CARE, OBSTETRIC AND 
                   GYNECOLOGICAL CARE, PEDIATRIC CARE, AND 
                   CONTINUITY OF CARE.

       (a) In General.--Subpart B of part 7 of subtitle B of title 
     I of the Employee Retirement Income Security Act of 1974 is 
     amended by adding at the end the following new section:

     ``SEC. 714. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE, 
                   EMERGENCY MEDICAL CARE, OBSTETRIC AND 
                   GYNECOLOGICAL CARE, PEDIATRIC CARE, AND 
                   CONTINUITY OF CARE.

       ``(a) Patient Access to Unrestricted Medical Advice.--
       ``(1) In general.--In the case of any health care 
     professional acting within the lawful scope of practice in 
     the course of carrying out a contractual employment 
     arrangement or other direct contractual arrangement between 
     such professional and a group health plan or a health 
     insurance issuer offering health insurance coverage in 
     connection with a group health plan, the plan or issuer with 
     which such contractual employment arrangement or other direct 
     contractual arrangement is maintained by the professional may 
     not impose on such professional under such arrangement any 
     prohibition or restriction with respect to advice, provided 
     to a participant or beneficiary under the plan who is a 
     patient, about the health status of the participant or 
     beneficiary or the medical care or treatment for the 
     condition or disease of the participant or beneficiary, 
     regardless of whether benefits for such care or treatment are 
     provided under the plan or health insurance coverage offered 
     in connection with the plan.
       ``(2) Health care professional defined.--For purposes of 
     this paragraph, the term `health care professional' means a 
     physician (as defined in section 1861(r) of the Social 
     Security Act) or other health care professional if coverage 
     for the professional's services is provided under the group 
     health plan for the

[[Page 24331]]

     services of the professional. Such term includes a 
     podiatrist, optometrist, chiropractor, psychologist, dentist, 
     physician assistant, physical or occupational therapist and 
     therapy assistant, speech-language pathologist, audiologist, 
     registered or licensed practical nurse (including nurse 
     practitioner, clinical nurse specialist, certified registered 
     nurse anesthetist, and certified nurse-midwife), licensed 
     certified social worker, registered respiratory therapist, 
     and certified respiratory therapy technician.
       ``(3) Rule of construction.--Nothing in this subsection 
     shall be construed to require the sponsor of a group health 
     plan or a health insurance issuer offering health insurance 
     coverage in connection with the group health plan to engage 
     in any practice that would violate its religious beliefs or 
     moral convictions.
       ``(b) Patient Access to Emergency Medical Care.--
       ``(1) Coverage of emergency services.--
       ``(A) In general.--If a group health plan, or health 
     insurance coverage offered by a health insurance issuer, 
     provides any benefits with respect to emergency services (as 
     defined in subparagraph (B)(ii)), or ambulance services, the 
     plan or issuer shall cover emergency services (including 
     emergency ambulance services as defined in subparagraph 
     (B)(iii)) furnished under the plan or coverage--
       ``(i) without the need for any prior authorization 
     determination;
       ``(ii) whether or not the health care provider furnishing 
     such services is a participating provider with respect to 
     such services;
       ``(iii) in a manner so that, if such services are provided 
     to a participant or beneficiary by a nonparticipating health 
     care provider, the participant or beneficiary is not liable 
     for amounts that exceed the amounts of liability that would 
     be incurred if the services were provided by a participating 
     provider; and
       ``(iv) without regard to any other term or condition of 
     such plan or coverage (other than exclusion or coordination 
     of benefits, or an affiliation or waiting period, permitted 
     under section 701 and other than applicable cost sharing).
       ``(B) Definitions.--In this subsection:
       ``(i) Emergency medical condition.--The term `emergency 
     medical condition' means--

       ``(I) 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 (42 U.S.C. 
     1395dd(e)(1)(A)); and
       ``(II) a medical condition manifesting itself in a neonate 
     by acute symptoms of sufficient severity (including severe 
     pain) such that a prudent health care professional 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.

       ``(ii) Emergency services.--The term `emergency services' 
     means--

       ``(I) with respect to an emergency medical condition 
     described in clause (i)(I), a medical screening examination 
     (as required under section 1867 of the Social Security Act, 
     42 U.S.C. 1395dd)) that is within the capability of the 
     emergency department of a hospital, including ancillary 
     services routinely available to the emergency department to 
     evaluate an emergency medical condition (as defined in clause 
     (i)) and also, within the capabilities of the staff and 
     facilities at the hospital, such further medical examination 
     and treatment as are required under section 1867 of such Act 
     to stabilize the patient; or
       ``(II) with respect to an emergency medical condition 
     described in clause (i)(II), medical treatment for such 
     condition rendered by a health care provider in a hospital to 
     a neonate, including available hospital ancillary services in 
     response to an urgent request of a health care professional 
     and to the extent necessary to stabilize the neonate.

       ``(iii) Emergency ambulance services.--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 clause (i)) to a hospital 
     for the receipt of emergency services (as defined in clause 
     (ii)) in a case in which appropriate emergency medical 
     screening examinations are covered under the plan or coverage 
     pursuant to paragraph (1)(A) 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.
       ``(iv) Stabilize.--The term `to stabilize' means, with 
     respect to an emergency medical condition, to provide such 
     medical treatment of the condition as may be necessary to 
     assure, within reasonable medical probability, that no 
     material deterioration of the condition is likely to result 
     from or occur during the transfer of the individual from a 
     facility.
       ``(v) Nonparticipating.--The term `nonparticipating' means, 
     with respect to a health care provider that provides health 
     care items and services to a participant or beneficiary under 
     group health plan or under group health insurance coverage, a 
     health care provider that is not a participating health care 
     provider with respect to such items and services.
       ``(vi) Participating.--The term `participating' means, with 
     respect to a health care provider that provides health care 
     items and services to a participant or beneficiary under 
     group health plan or health insurance coverage offered by a 
     health insurance issuer in connection with such a plan, a 
     health care provider that furnishes such items and services 
     under a contract or other arrangement with the plan or 
     issuer.
       ``(c) Patient Right to Obstetric and Gynecological Care.--
       ``(1) In general.--In any case in which a group health plan 
     (or a health insurance issuer offering health insurance 
     coverage in connection with the plan)--
       ``(A) provides benefits under the terms of the plan 
     consisting of--
       ``(i) gynecological care (such as preventive women's health 
     examinations); or
       ``(ii) obstetric care (such as pregnancy-related services),

     provided by a participating health care professional who 
     specializes in such care (or provides benefits consisting of 
     payment for such care); and
       ``(B) requires or provides for designation by a participant 
     or beneficiary of a participating primary care provider,

     if the primary care provider designated by such a participant 
     or beneficiary is not such a health care professional, then 
     the plan (or issuer) shall meet the requirements of paragraph 
     (2).
       ``(2) Requirements.--A group health plan (or a health 
     insurance issuer offering health insurance coverage in 
     connection with the plan) meets the requirements of this 
     paragraph, in connection with benefits described in paragraph 
     (1) consisting of care described in clause (i) or (ii) of 
     paragraph (1)(A) (or consisting of payment therefor), if the 
     plan (or issuer)--
       ``(A) does not require authorization or a referral by the 
     primary care provider in order to obtain such benefits; and
       ``(B) treats the ordering of other care of the same type, 
     by the participating health care professional providing the 
     care described in clause (i) or (ii) of paragraph (1)(A), as 
     the authorization of the primary care provider with respect 
     to such care.
       ``(3) Health care professional defined.--For purposes of 
     this subsection, the term `health care professional' means an 
     individual (including, but not limited to, a nurse midwife or 
     nurse practitioner) who is licensed, accredited, or certified 
     under State law to provide obstetric and gynecological health 
     care services and who is operating within the scope of such 
     licensure, accreditation, or certification.
       ``(4) Construction.--Nothing in paragraph (1) shall be 
     construed as preventing a plan from offering (but not 
     requiring a participant or beneficiary to accept) a health 
     care professional trained, credentialed, and operating within 
     the scope of their licensure to perform obstetric and 
     gynecological health care services. Nothing in paragraph 
     (2)(B) shall waive any requirements of coverage relating to 
     medical necessity or appropriateness with respect to coverage 
     of gynecological or obstetric care so ordered.
       ``(5) Treatment of multiple coverage options.--In the case 
     of a plan providing benefits under two or more coverage 
     options, the requirements of this subsection shall apply 
     separately with respect to each coverage option.
       ``(d) Patient Right to Pediatric Care.--
       ``(1) In general.--In any case in which a group health plan 
     (or a health insurance issuer offering health insurance 
     coverage in connection with the plan) provides benefits 
     consisting of routine pediatric care provided by a 
     participating health care professional who specializes in 
     pediatrics (or consisting of payment for such care) and the 
     plan requires or provides for designation by a participant or 
     beneficiary of a participating primary care provider, the 
     plan (or issuer) shall provide that such a participating 
     health care professional may be designated, if available, by 
     a parent or guardian of any beneficiary under the plan is who 
     under 18 years of age, as the primary care provider with 
     respect to any such benefits.
       ``(2) Health care professional defined.--For purposes of 
     this subsection, the term `health care professional' means an 
     individual (including, but not limited to, a nurse 
     practitioner) who is licensed, accredited, or certified under 
     State law to provide pediatric health care services and who 
     is operating within the scope of such licensure, 
     accreditation, or certification.
       ``(3) Construction.--Nothing in paragraph (1) shall be 
     construed as preventing a plan from offering (but not 
     requiring a participant or beneficiary to accept) a health 
     care professional trained, credentialed, and operating within 
     the scope of their licensure to

[[Page 24332]]

     perform pediatric health care services. Nothing in paragraph 
     (1) shall waive any requirements of coverage relating to 
     medical necessity or appropriateness with respect to coverage 
     of pediatric care so ordered.
       ``(4) Treatment of multiple coverage options.--In the case 
     of a plan providing benefits under two or more coverage 
     options, the requirements of this subsection shall apply 
     separately with respect to each coverage option.
       ``(e) Continuity of Care.--
       ``(1) In general.--
       ``(A) Termination of provider.--If a contract between a 
     group health plan, or a health insurance issuer offering 
     health insurance coverage in connection with a group health 
     plan, and a health care provider is terminated (as defined in 
     subparagraph (D)(ii)), or benefits or coverage provided by a 
     health care provider are terminated because of a change in 
     the terms of provider participation in a group health plan, 
     and an individual who, at the time of such termination, is a 
     participant or beneficiary in the plan and is scheduled to 
     undergo surgery (including an organ transplantation), is 
     undergoing treatment for pregnancy, or is determined to be 
     terminally ill (as defined in section 1861(dd)(3)(A) of the 
     Social Security Act) and is undergoing treatment for the 
     terminal illness, the plan or issuer shall--
       ``(i) notify the individual on a timely basis of such 
     termination and of the right to elect continuation of 
     coverage of treatment by the provider under this subsection; 
     and
       ``(ii) subject to paragraph (3), permit the individual to 
     elect to continue to be covered with respect to treatment by 
     the provider for such surgery, pregnancy, or illness during a 
     transitional period (provided under paragraph (2)).
       ``(B) Treatment of termination of contract with health 
     insurance issuer.--If a contract for the provision of health 
     insurance coverage between a group health plan and a health 
     insurance issuer is terminated and, as a result of such 
     termination, coverage of services of a health care provider 
     is terminated with respect to an individual, the provisions 
     of subparagraph (A) (and the succeeding provisions of this 
     subsection) 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.
       ``(C) Termination defined.--For purposes of this 
     subsection, the term `terminated' includes, with respect to a 
     contract, the expiration or nonrenewal of the contract, but 
     does not include a termination of the contract by the plan or 
     issuer for failure to meet applicable quality standards or 
     for fraud.
       ``(2) Transitional period.--
       ``(A) In general.--Except as provided in subparagraphs (B) 
     through (D), the transitional period under this paragraph 
     shall extend up to 90 days (as determined by the treating 
     health care professional) after the date of the notice 
     described in paragraph (1)(A)(i) of the provider's 
     termination.
       ``(B) Scheduled surgery.--If surgery was scheduled for an 
     individual before the date of the announcement of the 
     termination of the provider status under paragraph (1)(A)(i), 
     the transitional period under this paragraph with respect to 
     the surgery shall extend beyond the period under subparagraph 
     (A) and until the date of discharge of the individual after 
     completion of the surgery.
       ``(C) Pregnancy.--If--
       ``(i) a participant or beneficiary was determined to be 
     pregnant at the time of a provider's termination of 
     participation, and
       ``(ii) the provider was treating the pregnancy before date 
     of the termination,

     the transitional period under this paragraph with respect to 
     provider's treatment of the pregnancy shall extend through 
     the provision of post-partum care directly related to the 
     delivery.
       ``(D) Terminal illness.--If--
       ``(i) a participant or beneficiary was determined to be 
     terminally ill (as determined under section 1861(dd)(3)(A) of 
     the Social Security Act) at the time of a provider's 
     termination of participation, and
       ``(ii) the provider was treating the terminal illness 
     before the date of termination,
     the transitional period under this paragraph shall extend for 
     the remainder of the individual's life for care directly 
     related to the treatment of the terminal illness or its 
     medical manifestations.
       ``(3) Permissible terms and conditions.--A group health 
     plan or health insurance issuer may condition coverage of 
     continued treatment by a provider under paragraph (1)(A)(i) 
     upon the individual notifying the plan of the election of 
     continued coverage and upon the provider agreeing to the 
     following terms and conditions:
       ``(A) The provider agrees to accept reimbursement from the 
     plan or issuer and individual involved (with respect to cost-
     sharing) at the rates applicable prior to the start of the 
     transitional period as payment in full (or, in the case 
     described in paragraph (1)(B), at the rates applicable under 
     the replacement plan or issuer after the date of the 
     termination of the contract with the health insurance issuer) 
     and not to impose cost-sharing with respect to the individual 
     in an amount that would exceed the cost-sharing that could 
     have been imposed if the contract referred to in paragraph 
     (1)(A) had not been terminated.
       ``(B) The provider agrees to adhere to the quality 
     assurance standards of the plan or issuer responsible for 
     payment under subparagraph (A) and to provide to such plan or 
     issuer necessary medical information related to the care 
     provided.
       ``(C) The provider agrees otherwise to adhere to such 
     plan's or issuer's policies and procedures, including 
     procedures regarding referrals and obtaining prior 
     authorization and providing services pursuant to a treatment 
     plan (if any) approved by the plan or issuer.
       ``(D) The provider agrees to provide transitional care to 
     all participants and beneficiaries who are eligible for and 
     elect to have coverage of such care from such provider.
       ``(E) If the provider initiates the termination, the 
     provider has notified the plan within 30 days prior to the 
     effective date of the termination of--
       ``(i) whether the provider agrees to permissible terms and 
     conditions (as set forth in this paragraph) required by the 
     plan, and
       ``(ii) if the provider agrees to the terms and conditions, 
     the specific plan beneficiaries and participants undergoing a 
     course of treatment from the provider who the provider 
     believes, at the time of the notification, would be eligible 
     for transitional care under this subsection.
       ``(4) Construction.--Nothing in this subsection shall be 
     construed to--
       ``(A) require the coverage of benefits which would not have 
     been covered if the provider involved remained a 
     participating provider, or
       ``(B) prohibit a group health plan from conditioning a 
     provider's participation on the provider's agreement to 
     provide transitional care to all participants and 
     beneficiaries eligible to obtain coverage of such care 
     furnished by the provider as set forth under this subsection.
       ``(f) Coverage for Individuals Participating in Approved 
     Cancer Clinical Trials.--
       ``(1) Coverage.--
       ``(A) In general.--If a group health plan (or a health 
     insurance issuer offering health insurance coverage in 
     connection with the plan) provides coverage to a qualified 
     individual (as defined in paragraph (2)), the plan or 
     issuer--
       ``(i) may not deny the individual participation in the 
     clinical trial referred to in paragraph (2)(B);
       ``(ii) subject to paragraphs (2), (3), and (4), may not 
     deny (or limit or impose additional conditions on) the 
     coverage of routine patient costs for items and services 
     furnished in connection with participation in the trial; and
       ``(iii) may not discriminate against the individual on the 
     basis of the participation of the participant or beneficiary 
     in such trial.
       ``(B) Exclusion of certain costs.--For purposes of 
     subparagraph (A)(ii), routine patient costs do not include 
     the cost of the tests or measurements conducted primarily for 
     the purpose of the clinical trial involved.
       ``(C) Use of in-network providers.--If one or more 
     participating providers is participating in a clinical trial, 
     nothing in subparagraph (A) shall be construed as preventing 
     a plan from requiring that a qualified individual participate 
     in the trial through such a participating provider if the 
     provider will accept the individual as a participant in the 
     trial.
       ``(2) Qualified individual defined.--For purposes of 
     paragraph (1), the term `qualified individual' means an 
     individual who is a participant or beneficiary in a group 
     health plan and who meets the following conditions:
       ``(A)(i) The individual has been diagnosed with cancer.
       ``(ii) The individual is eligible to participate in an 
     approved clinical trial according to the trial protocol with 
     respect to treatment of cancer.
       ``(iii) The individual's participation in the trial offers 
     meaningful potential for significant clinical benefit for the 
     individual.
       ``(B) Either--
       ``(i) the referring physician is a participating health 
     care professional and has concluded that the individual's 
     participation in such trial would be appropriate based upon 
     satisfaction by the individual of the conditions described in 
     subparagraph (A); or
       ``(ii) the individual provides medical and scientific 
     information establishing that the individual's participation 
     in such trial would be appropriate based upon the 
     satisfaction by the individual of the conditions described in 
     subparagraph (A).
       ``(3) Payment.--
       ``(A) In general.--A group health plan (or a health 
     insurance issuer offering health insurance coverage in 
     connection with the plan) shall provide for payment for 
     routine patient costs described in paragraph (1)(B) but is 
     not required to pay for costs of items and services that are 
     reasonably expected to be paid for by the sponsors of an 
     approved clinical trial.
       ``(B) Routine patient care costs.--
       ``(i) In general.--For purposes of this paragraph, the term 
     `routine patient care costs' shall include the costs 
     associated with the provision of items and services that--

[[Page 24333]]

       ``(I) would otherwise be covered under the group health 
     plan if such items and services were not provided in 
     connection with an approved clinical trial program; and
       ``(II) are furnished according to the protocol of an 
     approved clinical trial program.

       ``(ii) Exclusion.--For purposes of this paragraph, `routine 
     patient care costs' shall not include the costs associated 
     with the provision of--

       (I) an investigational drug or device, unless the Secretary 
     has authorized the manufacturer of such drug or device to 
     charge for such drug or device; or
       (II) any item or service supplied without charge by the 
     sponsor of the approved clinical trial program.

       ``(C) Payment rate.--For purposes of this subsection--
       ``(i) Participating providers.--In the case of covered 
     items and services provided by a participating provider, the 
     payment rate shall be at the agreed upon rate.
       ``(ii) Nonparticipating providers.--In the case of covered 
     items and services provided by a nonparticipating provider, 
     the payment rate shall be at the rate the plan would normally 
     pay for comparable items or services under clause (i).
       ``(4) Approved clinical trial defined.--
       ``(A) In general.--For purposes of this subsection, the 
     term `approved clinical trial' means a cancer clinical 
     research study or cancer clinical investigation approved by 
     an Institutional Review Board.
       ``(B) 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 Secretary determines--
       ``(i) to be comparable to the system of peer review of 
     studies and investigations used by the National Institutes of 
     Health, and
       ``(ii) assures unbiased review of the highest scientific 
     standards by qualified individuals who have no interest in 
     the outcome of the review.
       ``(5) Construction.--Nothing in this subsection shall be 
     construed to limit a plan's coverage with respect to clinical 
     trials.
       ``(6) Plan satisfaction of certain requirements; 
     responsibilities of fiduciaries.--
       ``(A) In general.--For purposes of this subsection, 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 requirements of this 
     subsection 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.
       ``(B) 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.
       ``(7) Study and report.--
       ``(A) Study.--The Secretary shall analyze cancer clinical 
     research and its cost implications for managed care, 
     including differentiation in--
       ``(i) the cost of patient care in trials versus standard 
     care;
       ``(ii) the cost effectiveness achieved in different sites 
     of service;
       ``(iii) research outcomes;
       ``(iv) volume of research subjects available in different 
     sites of service;
       ``(v) access to research sites and clinical trials by 
     cancer patients;
       ``(vi) patient cost sharing or copayment costs realized in 
     different sites of service;
       ``(vii) health outcomes experienced in different sites of 
     service;
       ``(viii) long term health care services and costs 
     experienced in different sites of service;
       ``(ix) morbidity and mortality experienced in different 
     sites of service; and
       ``(x) patient satisfaction and preference of sites of 
     service.
       ``(B) Report to congress.--Not later than January 1, 2005, 
     the Secretary shall submit a report to Congress that 
     contains--
       ``(i) an assessment of any incremental cost to group health 
     plans resulting from the provisions of this section;
       ``(ii) a projection of expenditures to such plans resulting 
     from this section;
       ``(iii) an assessment of any impact on premiums resulting 
     from this section; and
       ``(iv) recommendations regarding action on other 
     diseases.''.
       (b) Conforming Amendment.--The table of contents in section 
     1 of such Act is amended by adding at the end of the items 
     relating to subpart B of part 7 of subtitle B of title I of 
     such Act the following new item:

``Sec. 714. Patient access to unrestricted medical advice, emergency 
              medical care, obstetric and gynecological care, pediatric 
              care, and continuity of care.''.

     SEC. 102. REQUIRED DISCLOSURE TO NETWORK PROVIDERS.

       (a) In General.--Subpart B of part 7 of subtitle B of title 
     I of the Employee Retirement Income Security Act of 1974 (as 
     amended by section 101) is amended further by adding at the 
     end the following new section:

     ``SEC. 715. REQUIRED DISCLOSURE TO NETWORK PROVIDERS.

       ``(a) In General.--If a group health plan reimburses, 
     through a contract or other arrangement, a health care 
     provider at a discounted payment rate because the provider 
     participates in a provider network, the plan shall disclose 
     to the provider the following information before the provider 
     furnishes covered items or services under the plan:
       ``(1) The identity of the plan sponsor or other entity that 
     is to utilize the discounted payment rates in reimbursing 
     network providers in that network.
       ``(2) The existence of any substantial benefit 
     differentials established for the purpose of actively 
     encouraging participants or beneficiaries under the plan to 
     utilize the providers in that network.
       ``(3) The methods and materials by which providers in the 
     network are identified to such participants or beneficiaries 
     as part of the network.
       ``(b) Permitted Means of Disclosure.--Disclosure required 
     under subsection (a) by a plan may be made--
       ``(1) by another entity under a contract or other 
     arrangement between the plan and the entity; and
       ``(2) by making such information available in written 
     format, in an electronic format, on the Internet, or on a 
     proprietary computer network which is readily accessible to 
     the network providers.
       ``(c) Construction.--Nothing in this section shall be 
     construed to require, directly or indirectly, disclosure of 
     specific fee arrangements or other reimbursement 
     arrangements--
       ``(1) between (i) group health plans or provider networks 
     and (ii) health care providers, or
       ``(2) among health care providers.
       ``(d) Definitions.--For purposes of this subsection:
       ``(1) Benefit differential.--The term `benefit 
     differential' means, with respect to a group health plan, 
     differences in the case of any participant or beneficiary, in 
     the financial responsibility for payment of coinsurance, 
     copayments, deductibles, balance billing requirements, or any 
     other charge, based upon whether a health care provider from 
     whom covered items or services are obtained is a network 
     provider.
       ``(2) Discounted payment rate.--The term `discounted 
     payment rate' means, with respect to a provider, a payment 
     rate that is below the charge imposed by the provider.
       ``(3) Network provider.--The term `network provider' means, 
     with respect to a group health plan, a health care provider 
     that furnishes health care items and services to participants 
     or beneficiaries under the plan pursuant to a contract or 
     other arrangement with a provider network in which the 
     provider is participating.
       ``(4) Provider network.--The term `provider network' means, 
     with respect to a group health plan offering health insurance 
     coverage, an association of network providers through whom 
     the plan provides, through contract or other arrangement, 
     health care items and services to participants and 
     beneficiaries.''.
       (b) Conforming Amendment.--The table of contents in section 
     1 of such Act is amended by adding at the end of the items 
     relating to subpart B of part 7 of subtitle B of title I of 
     such Act the following new item:

``Sec. 715. Required disclosure to network providers.''.

     SEC. 103. EFFECTIVE DATE AND RELATED RULES.

       (a) In General.--The amendments made by this subtitle shall 
     apply with respect to plan years beginning on or after 
     January 1 of the second calendar year following the date of 
     the enactment of this Act, except that the Secretary of Labor 
     may issue regulations before such date under such amendments. 
     The Secretary shall first issue regulations necessary to 
     carry out the amendments made by this subtitle before the 
     effective date thereof.
       (b) Limitation on Enforcement Actions.--No enforcement 
     action shall be taken, pursuant to the amendments made by 
     this subtitle, against a group health plan or health 
     insurance issuer with respect to a violation of a requirement 
     imposed by such amendments before the date of issuance of 
     regulations issued in connection with such requirement, if 
     the plan or issuer has sought to comply in good faith with 
     such requirement.
       (c) Special Rule for 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 
     this subtitle shall not apply with respect to plan years 
     beginning before the later of--
       (1) the date on which the last of the collective bargaining 
     agreements relating to the plan terminates (determined 
     without regard to any extension thereof agreed to after the 
     date of the enactment of this Act); or
       (2) January 1, 2002.

     For purposes of this subsection, 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 subtitle shall not be treated as a 
     termination of such collective bargaining agreement.

[[Page 24334]]



               Subtitle B--Patient Access to Information

     SEC. 111. PATIENT ACCESS TO INFORMATION REGARDING PLAN 
                   COVERAGE, MANAGED CARE PROCEDURES, HEALTH CARE 
                   PROVIDERS, AND QUALITY OF MEDICAL CARE.

       (a) In General.--Part 1 of subtitle B of title I of the 
     Employee Retirement Income Security Act of 1974 is amended--
       (1) by redesignating section 111 as section 112; and
       (2) by inserting after section 110 the following new 
     section:


                   ``disclosure by group health plans

       ``Sec. 111. (a) Disclosure Requirement.--The administrator 
     of each group health plan shall take such actions as are 
     necessary to ensure that the summary plan description of the 
     plan required under section 102 (or each summary plan 
     description in any case in which different summary plan 
     descriptions are appropriate under part 1 for different 
     options of coverage) contains, among any information 
     otherwise required under this part, the information required 
     under subsections (b), (c), (d), and (e)(2)(A).
       ``(b) Plan Benefits.--The information required under 
     subsection (a) includes the following:
       ``(1) Covered items and services.--
       ``(A) Categorization of included benefits.--A description 
     of covered benefits, categorized by--
       ``(i) types of items and services (including any special 
     disease management program); and
       ``(ii) types of health care professionals providing such 
     items and services.
       ``(B) Emergency medical care.--A description of the extent 
     to which the plan covers emergency medical care (including 
     the extent to which the plan provides for access to urgent 
     care centers), and any definitions provided under the plan 
     for the relevant plan terminology referring to such care.
       ``(C) Preventative services.--A description of the extent 
     to which the plan provides benefits for preventative 
     services.
       ``(D) Drug formularies.--A description of the extent to 
     which covered benefits are determined by the use or 
     application of a drug formulary and a summary of the process 
     for determining what is included in such formulary.
       ``(E) COBRA continuation coverage.--A description of the 
     benefits available under the plan pursuant to part 6.
       ``(2) Limitations, exclusions, and restrictions on covered 
     benefits.--
       ``(A) Categorization of excluded benefits.--A description 
     of benefits specifically excluded from coverage, categorized 
     by types of items and services.
       ``(B) Utilization review and preauthorization 
     requirements.--Whether coverage for medical care is limited 
     or excluded on the basis of utilization review or 
     preauthorization requirements.
       ``(C) Lifetime, annual, or other period limitations.--A 
     description of the circumstances under which, and the extent 
     to which, coverage is subject to lifetime, annual, or other 
     period limitations, categorized by types of benefits.
       ``(D) Custodial care.--A description of the circumstances 
     under which, and the extent to which, the coverage of 
     benefits for custodial care is limited or excluded, and a 
     statement of the definition used by the plan for custodial 
     care.
       ``(E) Experimental treatments.--Whether coverage for any 
     medical care is limited or excluded because it constitutes an 
     investigational item or experimental treatment or technology, 
     and any definitions provided under the plan for the relevant 
     plan terminology referring to such limited or excluded care.
       ``(F) Medical appropriateness or necessity.--Whether 
     coverage for medical care may be limited or excluded by 
     reason of a failure to meet the plan's requirements for 
     medical appropriateness or necessity, and any definitions 
     provided under the plan for the relevant plan terminology 
     referring to such limited or excluded care.
       ``(G) Second or subsequent opinions.--A description of the 
     circumstances under which, and the extent to which, coverage 
     for second or subsequent opinions is limited or excluded.
       ``(H) Specialty care.--A description of the circumstances 
     under which, and the extent to which, coverage of benefits 
     for specialty care is conditioned on referral from a primary 
     care provider.
       ``(I) Continuity of care.--A description of the 
     circumstances under which, and the extent to which, coverage 
     of items and services provided by any health care 
     professional is limited or excluded by reason of the 
     departure by the professional from any defined set of 
     providers.
       ``(J) Restrictions on coverage of emergency services.--A 
     description of the circumstances under which, and the extent 
     to which, the plan, in covering emergency medical care 
     furnished to a participant or beneficiary of the plan imposes 
     any financial responsibility described in subsection (c) on 
     participants or beneficiaries or limits or conditions 
     benefits for such care subject to any other term or condition 
     of such plan.
       ``(3) Network characteristics.--If the plan (or health 
     insurance issuer offering health insurance coverage in 
     connection with the plan) utilizes a defined set of providers 
     under contract with the plan (or issuer), a detailed list of 
     the names of such providers and their geographic location, 
     set forth separately with respect to primary care providers 
     and with respect to specialists.
       ``(c) Participant's Financial Responsibilities.--The 
     information required under subsection (a) includes an 
     explanation of--
       ``(1) a participant's financial responsibility for payment 
     of premiums, coinsurance, copayments, deductibles, and any 
     other charges; and
       ``(2) the circumstances under which, and the extent to 
     which, the participant's financial responsibility described 
     in paragraph (1) may vary, including any distinctions based 
     on whether a health care provider from whom covered benefits 
     are obtained is included in a defined set of providers.
       ``(d) Dispute Resolution Procedures.--The information 
     required under subsection (a) includes a description of the 
     processes adopted by the plan pursuant to section 503, 
     including--
       ``(1) descriptions thereof relating specifically to--
       ``(A) coverage decisions;
       ``(B) internal review of coverage decisions; and
       ``(C) any external review of coverage decisions; and
       ``(2) the procedures and time frames applicable to each 
     step of the processes referred to in subparagraphs (A), (B), 
     and (C) of paragraph (1).
       ``(e) Information on Plan Performance.--Any information 
     required under subsection (a) shall include information 
     concerning the number of external reviews under section 503 
     that have been completed during the prior plan year and the 
     number of such reviews in which a recommendation is made for 
     modification or reversal of an internal review decision under 
     the plan.
       ``(f) Information Included with Adverse Coverage 
     Decisions.--A group health plan shall provide to each 
     participant and beneficiary, together with any notification 
     of the participant or beneficiary of an adverse coverage 
     decision, the following information:
       ``(1) Preauthorization and utilization review procedures.--
     A description of the basis on which any preauthorization 
     requirement or any utilization review requirement has 
     resulted in the adverse coverage decision.
       ``(2) Procedures for determining exclusions based on 
     medical necessity or on investigational items or experimental 
     treatments.--If the adverse coverage decision is based on a 
     determination relating to medical necessity or to an 
     investigational item or an experimental treatment or 
     technology, a description of the procedures and medically-
     based criteria used in such decision.
       ``(g) Information Available on Request.--
       ``(1) Access to plan benefit information in electronic 
     form.--
       ``(A) In general.--In addition to the information required 
     to be provided under section 104(b)(4), a group health plan 
     may, upon written request (made not more frequently than 
     annually), make available to participants and beneficiaries, 
     in a generally recognized electronic format--
       ``(i) the latest summary plan description, including the 
     latest summary of material modifications, and
       ``(ii) the actual plan provisions setting forth the 
     benefits available under the plan,
     to the extent such information relates to the coverage 
     options under the plan available to the participant or 
     beneficiary. A reasonable charge may be made to cover the 
     cost of providing such information in such generally 
     recognized electronic format. The Secretary may by regulation 
     prescribe a maximum amount which will constitute a reasonable 
     charge under the preceding sentence.
       ``(B) Alternative access.--The requirements of this 
     paragraph may be met by making such information generally 
     available (rather than upon request) on the Internet or on a 
     proprietary computer network in a format which is readily 
     accessible to participants and beneficiaries.
       ``(2) Additional information to be provided on request.--
       ``(A) Inclusion in summary plan description of summary of 
     additional information.--The information required under 
     subsection (a) includes a summary description of the types of 
     information required by this subsection to be made available 
     to participants and beneficiaries on request.
       ``(B) Information required from plans and issuers on 
     request.--In addition to information required to be included 
     in summary plan descriptions under this subsection, a group 
     health plan shall provide the following information to a 
     participant or beneficiary on request:
       ``(i) Care management information.--A description of the 
     circumstances under which, and the extent to which, the plan 
     has special disease management programs or programs for 
     persons with disabilities, indicating whether these programs 
     are voluntary or mandatory and whether a significant benefit 
     differential results from participation in such programs.
       ``(ii) Inclusion of drugs and biologicals in formularies.--
     A statement of whether a

[[Page 24335]]

     specific drug or biological is included in a formulary used 
     to determine benefits under the plan and a description of the 
     procedures for considering requests for any patient-specific 
     waivers.
       ``(iii) Accreditation status of health insurance issuers 
     and service providers.--A description of the accreditation 
     and licensing status (if any) of each health insurance issuer 
     offering health insurance coverage in connection with the 
     plan and of any utilization review organization utilized by 
     the issuer or the plan, together with the name and address of 
     the accrediting or licensing authority.
       ``(iv) Quality performance measures.--The latest 
     information (if any) maintained by the plan relating to 
     quality of performance of the delivery of medical care with 
     respect to coverage options offered under the plan and of 
     health care professionals and facilities providing medical 
     care under the plan.
       ``(C) Information required from health care 
     professionals.--
       ``(i) Qualifications, privileges, and method of 
     compensation.--Any health care professional treating a 
     participant or beneficiary under a group health plan shall 
     provide to the participant or beneficiary, on request, a 
     description of his or her professional qualifications 
     (including board certification status, licensing status, and 
     accreditation status, if any), privileges, and experience and 
     a general description by category (including salary, fee-for-
     service, capitation, and such other categories as may be 
     specified in regulations of the Secretary) of the applicable 
     method by which such professional is compensated in 
     connection with the provision of such medical care.
       ``(ii) Cost of procedures.--Any health care professional 
     who recommends an elective procedure or treatment while 
     treating a participant or beneficiary under a group health 
     plan that requires a participant or beneficiary to share in 
     the cost of treatment shall inform such participant or 
     beneficiary of each cost associated with the procedure or 
     treatment and an estimate of the magnitude of such costs.
       ``(D) Information required from health care facilities on 
     request.--Any health care facility from which a participant 
     or beneficiary has sought treatment under a group health plan 
     shall provide to the participant or beneficiary, on request, 
     a description of the facility's corporate form or other 
     organizational form and all forms of licensing and 
     accreditation status (if any) assigned to the facility by 
     standard-setting organizations.
       ``(h) Access to Information Relevant to the Coverage 
     Options under which the Participant or Beneficiary is 
     Eligible to Enroll.--In addition to information otherwise 
     required to be made available under this section, a group 
     health plan shall, upon written request (made not more 
     frequently than annually), make available to a participant 
     (and an employee who, under the terms of the plan, is 
     eligible for coverage but not enrolled) in connection with a 
     period of enrollment the summary plan description for any 
     coverage option under the plan under which the participant is 
     eligible to enroll and any information described in clauses 
     (i), (ii), (iii), (vi), (vii), and (viii) of subsection 
     (e)(2)(B).
       ``(i) Advance Notice of Changes in Drug Formularies.--Not 
     later than 30 days before the effective of date of any 
     exclusion of a specific drug or biological from any drug 
     formulary under the plan that is used in the treatment of a 
     chronic illness or disease, the plan shall take such actions 
     as are necessary to reasonably ensure that plan participants 
     are informed of such exclusion. The requirements of this 
     subsection may be satisfied--
       ``(1) by inclusion of information in publications broadly 
     distributed by plan sponsors, employers, or employee 
     organizations;
       ``(2) by electronic means of communication (including the 
     Internet or proprietary computer networks in a format which 
     is readily accessible to participants);
       ``(3) by timely informing participants who, under an 
     ongoing program maintained under the plan, have submitted 
     their names for such notification; or
       ``(4) by any other reasonable means of timely informing 
     plan participants.
       ``(j) Definitions and Related Rules.--
       ``(1) In general.--For purposes of this section--
       ``(A) Group health plan.--The term `group health plan' has 
     the meaning provided such term under section 733(a)(1).
       ``(B) Medical care.--The term `medical care' has the 
     meaning provided such term under section 733(a)(2).
       ``(C) Health insurance coverage.--The term `health 
     insurance coverage' has the meaning provided such term under 
     section 733(b)(1).
       ``(D) Health insurance issuer.--The term `health insurance 
     issuer' has the meaning provided such term under section 
     733(b)(2).
       ``(2) Applicability only in connection with included group 
     health plan benefits.--
       ``(A) In general.--The requirements of this section shall 
     apply only in connection with included group health plan 
     benefits.
       ``(B) Included group health plan benefit.--For purposes of 
     subparagraph (A), the term `included group health plan 
     benefit' means a benefit which is not an excepted benefit (as 
     defined in section 733(c)).''.
       (b) Conforming Amendments.--
       (1) Section 102(b) of such Act (29 U.S.C. 1022(b)) is 
     amended by inserting before the period at the end the 
     following: ``; and, in the case of a group health plan (as 
     defined in section 112(j)(1)(A)) providing included group 
     health plan benefits (as defined in section 111(j)(2)(B)), 
     the information required to be included under section 
     111(a)''.
       (2) The table of contents in section 1 of such Act is 
     amended by striking the item relating to section 111 and 
     inserting the following new items:

``Sec. 111. Disclosure by group health plans.
``Sec. 112. Repeal and effective date.''.

     SEC. 112. EFFECTIVE DATE AND RELATED RULES.

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

             Subtitle C--Group Health Plan Review Standards

     SEC. 121. SPECIAL RULES FOR GROUP HEALTH PLANS.

       (a) In General.--Section 503 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1133) is amended--
       (1) by inserting ``(a) In General.--'' after ``Sec. 503.'';
       (2) by inserting (after and below paragraph (2)) the 
     following new flush-left sentence:
     ``This subsection does not apply in the case of included 
     group health plan benefits (as defined in subsection 
     (b)(10)(S)).''; and
       (3) by adding at the end the following new subsection:
       ``(b) Special Rules for Group Health Plans.--
       ``(1) Coverage determinations.--Every group health plan 
     shall, in the case of included group health plan benefits--
       ``(A) provide adequate notice in writing in accordance with 
     this subsection to any participant or beneficiary of any 
     adverse coverage decision with respect to such benefits of 
     such participant or beneficiary under the plan, setting forth 
     the specific reasons for such coverage decision and any 
     rights of review provided under the plan, written in a manner 
     calculated to be understood by the average participant;
       ``(B) provide such notice in writing also to any treating 
     medical care provider of such participant or beneficiary, if 
     such provider has claimed reimbursement for any item or 
     service involved in such coverage decision, or if a claim 
     submitted by the provider initiated the proceedings leading 
     to such decision;
       ``(C) afford a reasonable opportunity to any participant or 
     beneficiary who is in receipt of the notice of such adverse 
     coverage decision, and who files a written request for review 
     of the initial coverage decision within 90 days after receipt 
     of the notice of the initial decision, for a full and fair 
     review of the decision by an appropriate named fiduciary who 
     did not make the initial decision; and
       ``(D) meet the additional requirements of this subsection, 
     which shall apply solely with respect to such benefits.
       ``(2) Time limits for making initial coverage decisions for 
     benefits and completing internal appeals.--
       ``(A) Time limits for deciding requests for benefit 
     payments, requests for advance determination of coverage, and 
     requests for required determination of medical necessity.--
     Except as provided in subparagraph (B)--
       ``(i) Initial decisions.--If a request for benefit 
     payments, a request for advance determination of coverage, or 
     a request for required determination of medical necessity is 
     submitted to a group health plan in such reasonable form as 
     may be required under the plan, the plan shall issue in 
     writing an initial coverage decision on the request before 
     the end of the initial decision period under paragraph 
     (10)(I) following the filing completion date. Failure to 
     issue a coverage decision on such a request before the end of 
     the period required under this clause shall be treated as an 
     adverse coverage decision for purposes of internal review 
     under clause (ii).
       ``(ii) Internal reviews of initial denials.--Upon the 
     written request of a participant or beneficiary for review of 
     an initial adverse coverage decision under clause (i), a 
     review by an appropriate named fiduciary (subject to 
     paragraph (3)) of the initial coverage decision shall be 
     completed, including issuance by the plan of a written 
     decision affirming, reversing, or modifying the initial

[[Page 24336]]

     coverage decision, setting forth the grounds for such 
     decision, before the end of the internal review period 
     following the review filing date. Such decision shall be 
     treated as the final decision of the plan, subject to any 
     applicable reconsideration under paragraph (4). Failure to 
     issue before the end of such period such a written decision 
     requested under this clause shall be treated as a final 
     decision affirming the initial coverage decision.
       ``(B) Time limits for making coverage decisions relating to 
     accelerated need medical care and for completing internal 
     appeals.--
       ``(i) Initial decisions.--A group health plan shall issue 
     in writing an initial coverage decision on any request for 
     expedited advance determination of coverage or for expedited 
     required determination of medical necessity submitted, in 
     such reasonable form as may be required under the plan before 
     the end of the accelerated need decision period under 
     paragraph (10)(K), in cases involving accelerated need 
     medical care, following the filing completion date. Failure 
     to approve or deny such a request before the end of the 
     applicable decision period shall be treated as a denial of 
     the request for purposes of internal review under clause 
     (ii).
       ``(ii) Internal reviews of initial denials.--Upon the 
     written request of a participant or beneficiary for review of 
     an initial adverse coverage decision under clause (i), a 
     review by an appropriate named fiduciary (subject to 
     paragraph (3)) of the initial coverage decision shall be 
     completed, including issuance by the plan of a written 
     decision affirming, reversing, or modifying the initial 
     converge decision, setting forth the grounds for the decision 
     before the end of the accelerated need decision period under 
     paragraph (10)(K) following the review filing date. Such 
     decision shall be treated as the final decision of the plan, 
     subject to any applicable reconsideration under paragraph 
     (4). Failure to issue before the end of the applicable 
     decision period such a written decision requested under this 
     clause shall be treated as a final decision affirming the 
     initial coverage decision.
       ``(3) Physicians must review initial coverage decisions 
     involving medical appropriateness or necessity or 
     investigational items or experimental treatment.--If an 
     initial coverage decision under paragraph (2)(A)(i) or 
     (2)(B)(i) is based on a determination that provision of a 
     particular item or service is excluded from coverage under 
     the terms of the plan because the provision of such item or 
     service does not meet the requirements for medical 
     appropriateness or necessity or would constitute provision of 
     investigational items or experimental treatment or 
     technology, the review under paragraph (2)(A)(ii) or 
     (2)(B)(ii), to the extent that it relates to medical 
     appropriateness or necessity or to investigational items or 
     experimental treatment or technology, shall be conducted by a 
     physician who is selected by the plan and who did not make 
     the initial denial.
       ``(4) Elective external review by independent medical 
     expert and reconsideration of initial review decision.--
       ``(A) In general.--In any case in which a participant or 
     beneficiary, who has received an adverse coverage decision 
     which is not reversed upon review conducted pursuant to 
     paragraph (1)(C) (including review under paragraph (2)(A)(ii) 
     or (2)(B)(ii)) and who has not commenced review of the 
     coverage decision under section 502, makes a request in 
     writing, within 30 days after the date of such review 
     decision, for reconsideration of such review decision, the 
     requirements of subparagraphs (B), (C), (D) and (E) shall 
     apply in the case of such adverse coverage decision, if the 
     requirements of clause (i) or (ii) are met, subject to clause 
     (iii).
       ``(i) Medical appropriateness or investigational item or 
     experimental treatment or technology.--The requirements of 
     this clause are met if such coverage decision is based on a 
     determination that provision of a particular item or service 
     that would otherwise be covered is excluded from coverage 
     because the provision of such item or service--

       ``(I) is not medically appropriate or necessary; or
       ``(II) would constitute provision of an investigational 
     item or experimental treatment or technology.

       ``(ii) Exclusion of item or service requiring evaluation of 
     medical facts or evidence.--The requirements of this clause 
     are met if--

       ``(I) such coverage decision is based on a determination 
     that a particular item or service is not covered under the 
     terms of the plan because provision of such item or service 
     is specifically or categorically excluded from coverage under 
     the terms of the plan, and
       ``(II) an independent contract expert finds under 
     subparagraph (C), in advance of any review of the decision 
     under subparagraph (D), that such determination primarily 
     requires the evaluation of medical facts or medical evidence 
     by a health professional.

       ``(iii) Matters specifically not subject to review.--The 
     requirements of subparagraphs (B), (C), (D), and (E) shall 
     not apply in the case of any adverse coverage decision if 
     such decision is based on--

       ``(I) a determination of eligibility for benefits,
       ``(II) the application of explicit plan limits on the 
     number, cost, or duration of any benefit, or
       ``(III) a limitation on the amount of any benefit payment 
     or a requirement to make copayments under the terms of the 
     plan.

     Review under this paragraph shall not be available for any 
     coverage decision that has previously undergone review under 
     this paragraph.
       ``(B) Limits on allowable advance payments.--The review 
     under this paragraph in connection with an adverse coverage 
     decision shall be available subject to any requirement of the 
     plan (unless waived by the plan for financial or other 
     reasons) for payment in advance to the plan by the 
     participant or beneficiary seeking review of an amount not to 
     exceed the greater of--
       ``(i) the lesser of $100 or 10 percent of the cost of the 
     medical care involved in the decision, or
       ``(ii) $25,

     with such dollar amount subject to compounded annual 
     adjustments in the same manner and to the same extent as 
     apply under section 215(i) of the Social Security Act, except 
     that, for any calendar year, such amount as so adjusted shall 
     be deemed, solely for such calendar year, to be equal to such 
     amount rounded to the nearest $10. No such payment may be 
     required in the case of any participant or beneficiary whose 
     enrollment under the plan is paid for, in whole or in part, 
     under a State plan under title XIX or XXI of the Social 
     Security Act. Any such advance payment shall be subject to 
     reimbursement if the recommendation of the independent 
     medical expert (or panel of such experts) under subparagraph 
     (D)(ii)(IV) is to reverse or modify the coverage decision.
       ``(C) Request to independent contract expert for 
     determination of whether coverage decision required 
     evaluation of medical facts or evidence.--
       ``(i) In general.--In the case of a request for review made 
     by a participant or beneficiary as described in subparagraph 
     (A), if the requirements of subparagraph (A)(ii) are met (and 
     review is not otherwise precluded under subparagraph 
     (A)(iii)), the terms of the plan shall provide for a 
     procedure for initial review by an independent contract 
     expert selected in accordance with subparagraph (H) under 
     which the expert will determine whether the coverage decision 
     requires the evaluation of medical facts or evidence by a 
     health professional. If the expert determines that the 
     coverage decision requires such evaluation, reconsideration 
     of such adverse decision shall proceed under this paragraph. 
     If the expert determines that the coverage decision does not 
     require such evaluation, the adverse decision shall remain 
     the final decision of the plan.
       ``(ii) Independent contract experts.--For purposes of this 
     subparagraph, the term `independent contract expert' means a 
     professional--

       ``(I) who has appropriate credentials and has attained 
     recognized expertise in the applicable area of contract 
     interpretation;
       ``(II) who was not involved in the initial decision or any 
     earlier review thereof; and
       ``(III) who is selected in accordance with subparagraph 
     (H)(i) and meets the requirements of subparagraph (H)(iii).

       ``(D) Reconsideration of initial review decision.--
       ``(i) In general.--In the case of a request for review made 
     by a participant or beneficiary as described in subparagraph 
     (A), if the requirements of subparagraph (A)(i) are met or 
     reconsideration proceeds under this paragraph pursuant to 
     subparagraph (C), the terms of the plan shall provide for a 
     procedure for such reconsideration in accordance with clause 
     (ii).
       ``(ii) Procedure for reconsideration.--The procedure 
     required under clause (i) shall include the following--

       ``(I) An independent medical expert (or a panel of such 
     experts, as determined necessary) will be selected in 
     accordance with subparagraph (H) to reconsider any coverage 
     decision described in subparagraph (A) to determine whether 
     such decision was in accordance with the terms of the plan 
     and this title.
       ``(II) The record for review (including a specification of 
     the terms of the plan and other criteria serving as the basis 
     for the initial review decision) will be presented to such 
     expert (or panel) and maintained in a manner which will 
     ensure confidentiality of such record.
       ``(III) Such expert (or panel) will reconsider the initial 
     review decision to determine whether such decision was in 
     accordance with the terms of the plan and this title. The 
     expert (or panel) in its reconsideration will take into 
     account the medical condition of the patient, the 
     recommendation of the treating physician, the initial 
     coverage decision (including the reasons for such decision) 
     and the decision upon review conducted pursuant to paragraph 
     (1)(C) (including review under paragraph (2)(A)(ii) or 
     (2)(B)(ii)) , any guidelines adopted by the plan through a 
     process involving medical practitioners and peer-reviewed 
     medical literature identified as such under criteria 
     established by the Food and Drug Administration, and any 
     other valid, relevant, scientific or clinical evidence the 
     expert (or panel) determines appropriate for its review. The 
     expert (or

[[Page 24337]]

     panel) may consult the participant or beneficiary, the 
     treating physician, the medical director of the plan, or any 
     other party who, in the opinion of the expert (or panel), may 
     have relevant information for consideration.

       ``(E) Issuance of binding final decision.--Upon completion 
     of the procedure for review under subparagraph (D), the 
     independent medical expert (or panel of such experts) shall 
     issue a written decision affirming, modifying, or reversing 
     the initial review decision, setting forth the grounds for 
     the decision. Such decision shall be the final decision of 
     the plan and shall be binding on the plan. Such decision 
     shall set forth specifically the determination of the expert 
     (or panel) of the appropriate period for timely compliance by 
     the plan with the decision. Such decision shall be issued 
     concurrently to the participant or beneficiary, to the 
     treating physician, and to the plan, shall constitute 
     conclusive, written authorization for the provision of 
     benefits under the plan in accordance with the decision, and 
     shall be treated as terms of the plan for purposes of any 
     action by the participant or beneficiary under section 502.
       ``(F) Time limits for reconsideration.--Any review under 
     this paragraph (including any review under subparagraph (C)) 
     shall be completed before the end of the reconsideration 
     period (as defined in paragraph (10)(L)) following the review 
     filing date in connection with such review. Failure to issue 
     a written decision before the end of the reconsideration 
     period in any reconsideration requested under this paragraph 
     shall be treated as a final decision affirming the initial 
     review decision of the plan.
       ``(G) Independent medical experts.--
       ``(i) In general.--For purposes of this paragraph, the term 
     `independent medical expert' means, in connection with any 
     coverage decision by a group health plan, a professional--

       ``(I) who is a physician or, if appropriate, another 
     medical professional,
       ``(II) who has appropriate credentials and has attained 
     recognized expertise in the applicable medical field,
       ``(III) who was not involved in the initial decision or any 
     earlier review thereof,
       ``(IV) who has no history of disciplinary action or 
     sanctions (including, but not limited to, loss of staff 
     privileges or participation restriction) taken or pending by 
     any hospital, health carrier, government, or regulatory body, 
     and
       ``(V) who is selected in accordance with subparagraph 
     (H)(i) and meets the requirements of subparagraph (H)(iii).

       ``(H) Selection of experts.--
       ``(i) In general.--An independent contract expert or 
     independent medical expert (or each member of any panel of 
     independent medical experts selected under subparagraph 
     (D)(ii)) is selected in accordance with this clause if--

       ``(I) the expert is selected by an intermediary which 
     itself meets the requirements of clauses (ii) and (iii), by 
     means of a method which ensures that the identity of the 
     expert is not disclosed to the plan, any health insurance 
     issuer offering health insurance coverage to the aggrieved 
     participant or beneficiary in connection with the plan, and 
     the aggrieved participant or beneficiary under the plan, and 
     the identities of the plan, the issuer, and the aggrieved 
     participant or beneficiary are not disclosed to the expert;
       ``(II) the expert is selected by an appropriately 
     credentialed panel of physicians meeting the requirements of 
     clauses (ii) and (iii) established by a fully accredited 
     teaching hospital meeting such requirements;
       ``(III) the expert is selected by an organization described 
     in section 1152(1)(A) of the Social Security Act which meets 
     the requirements of clauses (ii) and (iii);
       ``(IV) the expert is selected by an external review 
     organization which meets the requirements of clauses (ii) and 
     (iii) and is accredited by a private standard-setting 
     organization meeting such requirements;
       ``(V) the expert is selected by a State agency which is 
     established for the purpose of conducting independent 
     external reviews and which meets the requirements of clauses 
     (ii) and (iii); or
       ``(VI) the expert is selected, by an intermediary or 
     otherwise, in a manner that is, under regulations issued 
     pursuant to negotiated rulemaking, sufficient to ensure the 
     expert's independence, and the method of selection is devised 
     to reasonably ensure that the expert selected meets the 
     requirements of clauses (ii) and (iii).

       ``(ii) Standards of performance for intermediaries.--The 
     Secretary shall prescribe by regulation standards (in 
     addition to the requirements of clause (iii)) which entities 
     making selections under subclause (I), (II), (III), (IV), 
     (V), or (VI) of clause (ii) must meet in order to be eligible 
     for making such selections. Such standards shall include (but 
     are not limited to)--

       ``(I) assurance that the entity will carry out specified 
     duties in the course of exercising the entity's 
     responsibilities under clause (i)(I),
       ``(II) assurance that applicable deadlines will be met in 
     the exercise of such responsibilities, and
       ``(III) assurance that the entity meets appropriate 
     indicators of solvency and fiscal integrity.

     Each such entity shall provide to the Secretary, in such 
     manner and at such times as the Secretary may prescribe, 
     information relating the volume of claims with respect to 
     which the entity has served under this subparagraph, the 
     types of such claims, and such other information regarding 
     such claims as the Secretary may determine appropriate.
       ``(iii) Independence requirements.--An independent contract 
     expert or independent medical expert or another entity 
     described in clause (i) meets the independence requirements 
     of this clause if--

       ``(I) the expert or entity is not affiliated with any 
     related party;
       ``(II) any compensation received by such expert or entity 
     in connection with the external review is reasonable and not 
     contingent on any decision rendered by the expert or entity;
       ``(III) under the terms of the plan and any health 
     insurance coverage offered in connection with the plan, the 
     plan and the issuer (if any) have no recourse against the 
     expert or entity in connection with the external review; and
       ``(IV) the expert or entity does not otherwise have a 
     conflict of interest with a related party as determined under 
     any regulations which the Secretary may prescribe.

       ``(iv) Related party.--For purposes of clause (i)(I), the 
     term `related party' means--

       ``(I) the plan or any health insurance issuer offering 
     health insurance coverage in connection with the plan (or any 
     officer, director, or management employee of such plan or 
     issuer);
       ``(II) the physician or other medical care provider that 
     provided the medical care involved in the coverage decision;
       ``(III) the institution at which the medical care involved 
     in the coverage decision is provided;
       ``(IV) the manufacturer of any drug or other item that was 
     included in the medical care involved in the coverage 
     decision; or
       ``(V) any other party determined under any regulations 
     which the Secretary may prescribe to have a substantial 
     interest in the coverage decision.

       ``(v) Affiliated.--For purposes of clause (ii)(I), the term 
     `affiliated' means, in connection with any entity, having a 
     familial, financial, or professional relationship with, or 
     interest in, such entity.
       ``(I) Misbehavior by experts.--Any action by the expert or 
     experts in applying for their selection under this paragraph 
     or in the course of carrying out their duties under this 
     paragraph which constitutes--
       ``(i) fraud or intentional misrepresentation by such expert 
     or experts, or
       ``(ii) demonstrates failure to adhere to the standards for 
     selection set forth in subparagraph (H)(iii),

     shall be treated as a failure to meet the requirements of 
     this paragraph and therefore as a cause of action which may 
     be brought by a fiduciary under section 502(a)(3).
       ``(J) Benefit exclusions maintained.--Nothing in this 
     paragraph shall be construed as providing for or requiring 
     the coverage of items or services for which benefits are 
     specifically excluded under the group health plan or any 
     health insurance coverage offered in connection with the 
     plan.
       ``(5) Permitted alternatives to required forms of review.--
       ``(A) In general.--In accordance with such regulations (if 
     any) as may be prescribed by the Secretary for purposes of 
     this paragraph, in the case of any initial coverage decision 
     or any decision upon review thereof under paragraph 
     (2)(A)(ii) or (2)(B)(ii), a group health plan may provide an 
     alternative dispute resolution procedure meeting the 
     requirements of subparagraph (B) for use in lieu of the 
     procedures set forth under the preceding provisions of this 
     subsection relating review of such decision. Such procedure 
     may be provided in one form for all participants and 
     beneficiaries or in a different form for each group of 
     similarly situated participants and beneficiaries. Upon 
     voluntary election of such procedure by the plan and by the 
     aggrieved participant or beneficiary in connection with the 
     decision, the plan may provide under such procedure (in a 
     manner consistent with such regulations as the Secretary may 
     prescribe to ensure equitable procedures) for waiver of the 
     review of the decision under paragraph (3) or waiver of 
     further review of the decision under paragraph (4) or section 
     502 or for election by such parties of an alternative means 
     of external review (other than review under paragraph (4)).
       ``(B) Requirements.--An alternative dispute resolution 
     procedure meets the requirements of this subparagraph, in 
     connection with any decision, if--
       ``(i) such procedure is utilized solely--

       ``(I) in accordance with the applicable terms of a bona 
     fide collective bargaining agreement pursuant to which the 
     plan (or the applicable portion thereof governed by the 
     agreement) is established or maintained, or
       ``(II) upon election by both the aggrieved participant or 
     beneficiary and the plan,

       ``(ii) the procedure incorporates any otherwise applicable 
     requirement for review by a physician under paragraph (3), 
     unless waived by the participant or beneficiary (in a manner 
     consistent with such regulations as the

[[Page 24338]]

     Secretary may prescribe to ensure equitable procedures); and
       ``(iii) the means of resolution of dispute allow for 
     adequate presentation by each party of scientific and medical 
     evidence supporting the position of such party.
       ``(6) Review requirements.--In any review of a decision 
     issued under this subsection--
       ``(A) the record shall be maintained for purposes of any 
     further review in accordance with standards which shall be 
     prescribed in regulations of the Secretary designed to 
     facilitate such further review, and
       ``(B) any decision upon review which modifies or reverses a 
     decision below shall specifically set forth a determination 
     that the record upon review is sufficient to rebut a 
     presumption in favor of the decision below.
       ``(7) Compliance with fiduciary standards.--The issuance of 
     a decision under a plan upon review in good faith compliance 
     with the requirements of this subsection shall not be treated 
     as a violation of part 4 of subtitle B of title I of the 
     Employee Retirement Income Security Act of 1974.
       ``(8) Limitation on applicability of special rules.--The 
     provisions of this subsection shall not apply with respect to 
     employee benefit plans that are not group health plans or 
     with respect to benefits that are not included group health 
     plan benefits (as defined in paragraph (10)(S)).
       ``(9) Group health plan defined.--For purposes of this 
     section--
       ``(A) In general.--The term `group health plan' shall have 
     the meaning provided in section 733(a).
       ``(B) Treatment of partnerships.--The provisions of 
     paragraphs (1), (2), and (3) of section 732(d) shall apply.
       ``(10) Other definitions.--For purposes of this 
     subsection--
       ``(A) Request for benefit payments.--The term `request for 
     benefit payments' means a request, for payment of benefits by 
     a group health plan for medical care, which is made by, or 
     (if expressly authorized) on behalf of, a participant or 
     beneficiary after such medical care has been provided.
       ``(B) Required determination of medical necessity.--The 
     term `required determination of medical necessity' means a 
     determination required under a group health plan solely that 
     proposed medical care meets, under the facts and 
     circumstances at the time of the determination, the 
     requirements for medical appropriateness or necessity (which 
     may be subject to exceptions under the plan for fraud or 
     misrepresentation), irrespective of whether the proposed 
     medical care otherwise meets other terms and conditions of 
     coverage, but only if such determination does not constitute 
     an advance determination of coverage (as defined in 
     subparagraph (C)).
       ``(C) Advance determination of coverage.--The term `advance 
     determination of coverage' means a determination under a 
     group health plan that proposed medical care meets, under the 
     facts and circumstances at the time of the determination, the 
     plan's terms and conditions of coverage (which may be subject 
     to exceptions under the plan for fraud or misrepresentation).
       ``(D) Request for advance determination of coverage.--The 
     term `request for advance determination of coverage' means a 
     request for an advance determination of coverage of medical 
     care which is made by, or (if expressly authorized) on behalf 
     of, a participant or beneficiary before such medical care is 
     provided.
       ``(E) Request for expedited advance determination of 
     coverage.--The term `request for expedited advance 
     determination of coverage' means a request for advance 
     determination of coverage, in any case in which the proposed 
     medical care constitutes accelerated need medical care.
       ``(F) Request for required determination of medical 
     necessity.--The term `request for required determination of 
     medical necessity' means a request for a required 
     determination of medical necessity for medical care which is 
     made by or on behalf of a participant or beneficiary before 
     the medical care is provided.
       ``(G) Request for expedited required determination of 
     medical necessity.--The term `request for expedited required 
     determination of medical necessity' means a request for 
     required determination of medical necessity in any case in 
     which the proposed medical care constitutes accelerated need 
     medical care.
       ``(H) Accelerated need medical care.--The term `accelerated 
     need medical care' means medical care in any case in which an 
     appropriate physician has certified in writing (or as 
     otherwise provided in regulations of the Secretary) that the 
     participant or beneficiary is stabilized and--
       ``(i) that failure to immediately provide the care to the 
     participant or beneficiary could reasonably be expected to 
     result in--

       ``(I) placing the health of such participant or beneficiary 
     (or, with respect to such a participant or beneficiary who is 
     a pregnant woman, the health of the woman or her unborn 
     child) in serious jeopardy;
       ``(II) serious impairment to bodily functions; or
       ``(III) serious dysfunction of any bodily organ or part; or

       ``(ii) that immediate provision of the care is necessary 
     because the participant or beneficiary has made or is at 
     serious risk of making an attempt to harm himself or herself 
     or another individual.
       ``(I) Initial decision period.--The term `initial decision 
     period' means a period of 30 days, or such period as may be 
     prescribed in regulations of the Secretary.
       ``(J) Internal review period.--The term `internal review 
     period' means a period of 30 days, or such period as may be 
     prescribed in regulations of the Secretary.
       ``(K) Accelerated need decision period.--The term 
     `accelerated need decision period' means a period of 3 days, 
     or such period as may be prescribed in regulations of the 
     Secretary.
       ``(L) Reconsideration period.--The term `reconsideration 
     period' means a period of 25 days, or such period as may be 
     prescribed in regulations of the Secretary, except that, in 
     the case of a decision involving accelerated need medical 
     care, such term means the accelerated need decision period.
       ``(M) Filing completion date.--The term `filing completion 
     date' means, in connection with a group health plan, the date 
     as of which the plan is in receipt of all information 
     reasonably required (in writing or in such other reasonable 
     form as may be specified by the plan) to make an initial 
     coverage decision.
       ``(N) Review filing date.--The term `review filing date' 
     means, in connection with a group health plan, the date as of 
     which the appropriate named fiduciary (or the independent 
     medical expert or panel of such experts in the case of a 
     review under paragraph (4)) is in receipt of all information 
     reasonably required (in writing or in such other reasonable 
     form as may be specified by the plan) to make a decision to 
     affirm, modify, or reverse a coverage decision.
       ``(O) Medical care.--The term `medical care' has the 
     meaning provided such term by section 733(a)(2).
       ``(P) Health insurance coverage.--The term `health 
     insurance coverage' has the meaning provided such term by 
     section 733(b)(1).
       ``(Q) Health insurance issuer.--The term `health insurance 
     issuer' has the meaning provided such term by section 
     733(b)(2).
       ``(R) Written or in writing.--
       ``(i) In general.--A request or decision shall be deemed to 
     be `written' or `in writing' if such request or decision is 
     presented in a generally recognized printable or electronic 
     format. The Secretary may by regulation provide for 
     presentation of information otherwise required to be in 
     written form in such other forms as may be appropriate under 
     the circumstances.
       ``(ii) Medical appropriateness or investigational items or 
     experimental treatment determinations.--For purposes of this 
     subparagraph, in the case of a request for advance 
     determination of coverage, a request for expedited advance 
     determination of coverage, a request for required 
     determination of medical necessity, or a request for 
     expedited required determination of medical necessity, if the 
     decision on such request is conveyed to the provider of 
     medical care or to the participant or beneficiary by means of 
     telephonic or other electronic communications, such decision 
     shall be treated as a written decision.
       ``(S) Included group health plan benefit.--The term 
     `included group health plan benefit'' means a benefit under a 
     group health plan which is not an excepted benefit (as 
     defined in section 733(c)).''.
       (b) Civil Penalties.--
       (1) In general.--Section 502(c) of such Act (29 U.S.C. 
     1132(c)) is amended by redesignating paragraphs (6) and (7) 
     as paragraphs (7) and (8), respectively, and by inserting 
     after paragraph (5) the following new paragraph:
       ``(6)(A)(i) In the case of any failure to timely provide an 
     included group health plan benefit (as defined in section 
     503(b)(10)(S)) to a participant or beneficiary, which occurs 
     after the issuance of, and in violation of, a final decision 
     rendered upon completion of external review (under section 
     503(b)(4)) of an adverse coverage decision by the plan 
     relating to such benefit, any person acting in the capacity 
     of a fiduciary of the plan so as to cause such failure may, 
     in the court's discretion, be liable to the aggrieved 
     participant or beneficiary for a civil penalty.
       ``(ii) Except as provided in clause (iii), such civil 
     penalty shall be in an amount of up to $1,000 a day from the 
     date that occurs on or after the date of the issuance of the 
     decision under section 503(b)(4) and upon which the plan 
     otherwise could have been reasonably expected to commence 
     compliance with the decision until the date the failure to 
     provide the benefit is corrected.
       ``(iii) In any case in which it is proven by clear and 
     convincing evidence that the person referred to in clause (i) 
     acted willfully and in bad faith, the daily penalty under 
     clause (ii) shall be increased to an amount of up to $5,000 a 
     day.
       ``(iv) In any case in which it is further proven by clear 
     and convincing evidence that--
       ``(I) the plan is not in full compliance with the decision 
     of the independent medical expert (or panel of such experts) 
     under section 503(b)(4)(E)) within the appropriate period 
     specified in such decision, and

[[Page 24339]]

       ``(II) the failure to be in full compliance was caused by 
     the plan or by a health insurance issuer offering health 
     insurance coverage in connection with the plan,

     the plan shall pay the cost of all medical care which was not 
     provided by reason of such failure to fully comply and which 
     is otherwise obtained by the participant or beneficiary from 
     any provider.
       ``(B) For purposes of subparagraph (A), the plan, and any 
     health insurance issuer offering health insurance coverage in 
     connection with the plan, shall be deemed to be in compliance 
     with any decision of an independent medical expert (or panel 
     of such experts) under section 503(b)(4) with respect to any 
     participant or beneficiary upon transmission to such entity 
     (or panel) and to such participant or beneficiary by the plan 
     or issuer of timely notice of an authorization of coverage by 
     the plan or issuer which is consistent with such decision.
       ``(C) In any action commenced under subsection (a) by a 
     participant or beneficiary with respect to an included group 
     health plan benefit in which the plaintiff alleges that a 
     person, in the capacity of a fiduciary and in violation of 
     the terms of the plan or this title, has taken an action 
     resulting in an adverse coverage decision in violation of the 
     terms of the plan, or has failed to take an action for which 
     such person is responsible under the plan and which is 
     necessary under the plan for a favorable coverage decision, 
     upon finding in favor of the plaintiff, if such action was 
     commenced after a final decision of the plan upon review 
     which included a review under section 503(b)(4) or such 
     action was commenced under subsection (b)(4) of this section, 
     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.

     The remedies provided under this subparagraph shall be in 
     addition to remedies otherwise provided under this section.
       ``(D)(i) The Secretary may assess a civil penalty against a 
     person acting in the capacity of a fiduciary of one or more 
     group health plans (as defined in section 503(b)(9)) for--
       ``(I) any pattern or practice of repeated adverse coverage 
     decisions in connection with included group health plan 
     benefits in violation of the terms of the plan or plans or 
     this title; or
       ``(II) any pattern or practice of repeated violations of 
     the requirements of section 503 in connection with such 
     benefits.

     Such penalty shall be payable only upon proof by clear and 
     convincing evidence of such pattern or practice.
       ``(ii) Such penalty shall be in an amount not to exceed the 
     lesser of--
       ``(I) 5 percent of the aggregate value of benefits shown by 
     the Secretary to have not been provided, or unlawfully 
     delayed in violation of section 503, under such pattern or 
     practice; or
       ``(II) $100,000.
       ``(iii) Any person acting in the capacity of a fiduciary of 
     a group health plan or plans who has engaged in any such 
     pattern or practice in connection with included group health 
     plan benefits, upon the petition of the Secretary, may be 
     removed by the court from that position, and from any other 
     involvement, with respect to such plan or plans, and may be 
     precluded from returning to any such position or involvement 
     for a period determined by the court.
       ``(E) For purposes of this paragraph, the term `included 
     group health plan benefit' has the meaning provided in 
     section 503(b)(10)(S).
       ``(F) The preceding provisions of this paragraph shall not 
     apply with respect to employee benefit plans that are not 
     group health plans or with respect to benefits that are not 
     included group health plan benefits (as defined in paragraph 
     (10)(S)).''.
       (2) Conforming amendment.--Section 502(a)(6) of such Act 
     (29 U.S.C. 1132(a)(6)) is amended by striking ``, or (6)'' 
     and inserting ``, (6), or (7)''.
       (c) Expedited Court Review.--Section 502 of such Act (29 
     U.S.C. 1132) is amended--
       (1) in subsection (a)(8), by striking ``or'' at the end;
       (2) in subsection (a)(9), by striking the period and 
     inserting ``; or'';
       (3) by adding at the end of subsection (a) the following 
     new paragraph:
       ``(10) by a participant or beneficiary for appropriate 
     relief under subsection (b)(4).''.
       (4) by adding at the end of subsection (b) the following 
     new paragraph:
       ``(4) In the case of a group health plan, if exhaustion of 
     administrative remedies in accordance with paragraph 
     (2)(A)(ii) or (2)(B)(ii) of section 503(b) otherwise 
     necessary for an action for relief under paragraph (1)(B) or 
     (3) of subsection (a) has not been obtained and it is 
     demonstrated to the court by means of certification by an 
     appropriate physician that such exhaustion is not reasonably 
     attainable under the facts and circumstances without undue 
     risk of irreparable harm to the health of the participant or 
     beneficiary, a civil action may be brought by the participant 
     or beneficiary to obtain appropriate equitable relief. Any 
     determinations made under paragraph (2)(A)(ii) or (2)(B)(ii) 
     of section 503(b) made while an action under this paragraph 
     is pending shall be given due consideration by the court in 
     any such action. This paragraph shall not apply with respect 
     to benefits that are not included group health plan benefits 
     (as defined in section 503(b)(10)(S)).''.
       (d) Attorney's Fees.--Section 502(g) of such Act (29 U.S.C. 
     1132(g)) is amended--
       (1) in paragraph (1), by striking ``paragraph (2)'' and 
     inserting ``paragraph (2) or (3))''; and
       (2) by adding at the end the following new paragraph:
       ``(3) In any action under this title by a participant or 
     beneficiary in connection with an included group health plan 
     benefit (as defined in section 503(b)(10)(S)) in which 
     judgment in favor of the participant or beneficiary is 
     awarded, the court shall allow a reasonable attorney's fee 
     and costs of action to the participant or beneficiary.''.
       (e) Standard of Review Unaffected.--The standard of review 
     under section 502 of the Employee Retirement Income Security 
     Act of 1974 (as amended by this section) shall continue on 
     and after the date of the enactment of this Act to be the 
     standard of review which was applicable under such section as 
     of immediately before such date.
       (f) Concurrent Jurisdiction.--Section 502(e)(1) of such Act 
     (29 U.S.C. 1132(e)(1)) is amended--
       (1) in the first sentence, by striking ``under subsection 
     (a)(1)(B) of this section'' and inserting ``under subsection 
     (a)(1)(A) for relief under subsection (c)(6), under 
     subsection (a)(1)(B), and under subsection (b)(4)''; and
       (2) in the last sentence, by striking ``of actions under 
     paragraphs (1)(B) and (7) of subsection (a) of this section'' 
     and inserting ``of actions under paragraph (1)(A) of 
     subsection (a) for relief under subsection (c)(6) and of 
     actions under paragraphs (1)(B) and (7) of subsection (a) and 
     paragraph (4) of subsection (b)''.

     SEC. 122. SPECIAL RULE FOR ACCESS TO SPECIALTY CARE.

       Section 503(b) of such Act (as added by the preceding 
     provisions of this subtitle) is amended by adding at the end 
     the following new paragraph:
       ``(11) Special rule for access to specialty care.--
       ``(A) In general.--In the case of a request for advance 
     determination of coverage consisting of a request by a 
     physician for a determination of coverage of the services of 
     a specialist with respect to any condition, if coverage of 
     the services of such specialist for such condition is 
     otherwise provided under the plan, the initial coverage 
     decision referred to in subparagraph (A)(i) or (B)(i) of 
     paragraph (2) shall be issued within the accelerated need 
     decision period.
       ``(B) Specialist.--For purposes of this paragraph, the term 
     `specialist' means, with respect to a condition, a physician 
     who has a high level of expertise through appropriate 
     training and experience (including, in the case of a patient 
     who is a child, appropriate pediatric expertise) to treat the 
     condition.''.

     SEC. 123. PROTECTION FOR CERTAIN INFORMATION DEVELOPED TO 
                   REDUCE MORTALITY OR MORBIDITY OR FOR IMPROVING 
                   PATIENT CARE AND SAFETY.

       (a) Protection of Certain Information.--Notwithstanding any 
     other provision of Federal or State law, health care response 
     information shall be exempt from any disclosure requirement 
     (regardless of whether the requirement relates to subpoenas, 
     discovery, introduction of evidence, testimony, or any other 
     form of disclosure), in connection with a civil or 
     administrative proceeding under Federal or State law, to the 
     same extent as information developed by a health care 
     provider with respect to any of the following:
       (1) Peer review.
       (2) Utilization review.
       (3) Quality management or improvement.
       (4) Quality control.
       (5) Risk management.
       (6) Internal review for purposes of reducing mortality, 
     morbidity, or for improving patient care or safety.
       (b) No Waiver of Protection Through Interaction with 
     Accrediting Body.--Notwithstanding any other provision of 
     Federal or State law, the protection of health care response 
     information from disclosure provided under subsection (a) 
     shall not be deemed to be modified or in any way waived by--
       (1) the development of such information in connection with 
     a request or requirement of an accrediting body; or
       (2) the transfer of such information to an accrediting 
     body.
       (c) Definitions.--For purposes of this section:
       (1) The term ``accrediting body'' means a national, not-
     for-profit organization that--
       (A) accredits health care providers; and
       (B) is recognized as an accrediting body by statute or by a 
     Federal or State agency that regulates health care providers.
       (2) The term ``health care provider'' has the meaning given 
     such term in section 1188 of the Social Security Act (as 
     added by section 5001 of this Act).
       (3) The term ``health care response information'' means 
     information (including any data, report, record, memorandum, 
     analysis,

[[Page 24340]]

     statement, or other communication) developed by, or on behalf 
     of, a health care provider in response to a serious, adverse, 
     patient-related event--
       (A) during the course of analyzing or studying the event 
     and its causes; and
       (B) for purposes of--
       (i) reducing mortality or morbidity; or
       (ii) improving patient care or safety (including the 
     provider's notification to an accrediting body and the 
     provider's plans of action in response to such event).
       (5) The term ``State'' includes the District of Columbia, 
     Puerto Rico, the Virgin Islands, Guam, American Samoa, and 
     the Northern Mariana Islands.

     SEC. 124. EFFECTIVE DATE.

       (a) In General.--The amendments made by sections 801 and 
     802 shall apply with respect to grievances arising in plan 
     years beginning on or after January 1 of the second calendar 
     year following 12 months after the date the Secretary of 
     Labor issues all regulations necessary to carry out 
     amendments made by this title. The amendments made by section 
     803 shall take effect on such January 1.
       (b) Limitation on Enforcement Actions.--No enforcement 
     action shall be taken, pursuant to the amendments made by 
     this title, against a group health plan or health insurance 
     issuer with respect to a violation of a requirement imposed 
     by such amendments before the date of issuance of final 
     regulations issued in connection with such requirement, if 
     the plan or issuer has sought to comply in good faith with 
     such requirement.
       (c) Collective Bargaining Agreements.--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 title shall not be treated as a 
     termination of such collective bargaining agreement.

 Subtitle D--Health Care Access, Affordability, and Quality Commission

     SEC. 131. ESTABLISHMENT OF COMMISSION.

       Part 5 of the Employee Retirement Income Security Act of 
     1974 is amended by adding at the end the following new 
     section:


                 ``SEC. 518. HEALTH POLICY COMMISSION.

       ``(a) Establishment.--There is hereby established a 
     commission to be known as the Health Care Access, 
     Affordability, and Quality Commission (hereinafter in this 
     Act referred to as the ``Commission'').
       ``(b) Duties of Commission.--The duties of the Commission 
     shall be as follows:
       ``(1) Studies of critical areas.--Based on information 
     gathered by appropriate Federal agencies, advisory groups, 
     and other appropriate sources for health care information, 
     studies, and data, the Commission shall study and report on 
     in each of the following areas:
       ``(A) Independent expert external review programs.
       ``(B) Consumer friendly information programs.
       ``(C) The extent to which the following affect patient 
     quality and satisfaction:
       ``(i) health plan enrollees' attitudes based on surveys;
       ``(ii) outcomes measurements; and
       ``(iii) accreditation by private organizations.
       ``(D) Available systems to ensure the timely processing of 
     claims.
       ``(2) Establishment of form for remittance of claims to 
     providers.--Not later than 2 years after the date of the 
     first meeting of the Commission, the Commission shall develop 
     and transmit to the Secretary a proposed form for use by 
     health insurance issuers (as defined in section 733(b)(2)) 
     for the remittance of claims to health care providers. 
     Effective for plan years beginning after 5 years after the 
     date of the Comprehensive Access and Responsibility in Health 
     Care Act of 1999, a health insurance issuer offering health 
     insurance coverage in connection with a group health plan 
     shall use such form for the remittance of all claims to 
     providers.
       ``(3) Evaluation of health benefits mandates.--At the 
     request of the chairmen or ranking minority members of the 
     appropriate committees of Congress, the Commission shall 
     evaluate, taking into consideration the overall cost effect, 
     availability of treatment, and the effect on the health of 
     the general population, existing and proposed benefit 
     requirements for group health plans.
       ``(4) Comments on certain secretarial reports.--If the 
     Secretary submits to Congress (or a committee of Congress) a 
     report that is required by law and that relates to policies 
     under this section, the Secretary shall transmit a copy of 
     the report to the Commission. The Commission shall review the 
     report and, not later than 6 months after the date of 
     submittal of the Secretary's report to Congress, shall submit 
     to the appropriate committees of Congress written comments on 
     such report. Such comments may include such recommendations 
     as the Commission deems appropriate.
       ``(5) Agenda and additional review.--The Commission shall 
     consult periodically with the chairmen and ranking minority 
     members of the appropriate committees of Congress regarding 
     the Commission's agenda and progress toward achieving the 
     agenda. The Commission may conduct additional reviews, and 
     submit additional reports to the appropriate committees of 
     Congress, from time to time on such topics as may be 
     requested by such chairmen and members and as the Commission 
     deems appropriate.
       ``(6) Availability of reports.--The Commission shall 
     transmit to the Secretary a copy of each report submitted 
     under this subsection and shall make such reports available 
     to the public.
       ``(c) Membership.--
       ``(1) Number and appointment.--The Commission shall be 
     composed of 11 members appointed by the Comptroller General.
       ``(2) Qualifications.--
       ``(A) In general.--The membership of the Commission shall 
     include--
       ``(i) physicians and other health professionals;
       ``(ii) representatives of employers, including 
     multiemployer plans;
       ``(ii) representatives of insured employees;
       ``(iv) third-party payers; and
       ``(v) health services and health economics researchers with 
     expertise in outcomes and effectiveness research and 
     technology assessment.
       ``(B) Ethical disclosure.--The Comptroller General shall 
     establish a system for public disclosure by members of the 
     Commission of financial and other potential conflicts of 
     interest relating to such members.
       ``(3) Terms.--
       ``(A) In general.--Each member shall be appointed for a 
     term of 3 years, except that the Comptroller shall designate 
     staggered terms for the members first appointed.
       ``(B) Vacancies.--Any member appointed to fill a vacancy 
     occurring before the expiration of the term for which the 
     member's predecessor was appointed shall be appointed only 
     for the remainder of that term. A member may serve after the 
     expiration of that member's term until a successor has taken 
     office. A vacancy in the Commission shall be filled in the 
     manner in which the original appointment was made.
       ``(4) Basic pay.--
       ``(A) Rates of pay.--Except as provided in subparagraph 
     (B), members shall each be paid at a rate equal to the rate 
     of basic pay payable for level IV of the Executive Schedule 
     for each day (including travel time) during which they are 
     engaged in the actual performance of duties vested in the 
     Commission.
       ``(B) Prohibition of compensation of federal employees.--
     Members of the Commission who are full-time officers or 
     employees of the United States (or Members of Congress) may 
     not receive additional pay, allowances, or benefits by reason 
     of their service on the Commission.
       ``(5) Travel expenses.--Each member shall receive travel 
     expenses, including per diem in lieu of subsistence, in 
     accordance with sections 5702 and 5703 of title 5, United 
     States Code.
       ``(6) Chairperson.--The Chairperson of the Commission shall 
     be designated by the Comptroller at the time of the 
     appointment. The term of office of the Chairperson shall be 3 
     years.
       ``(7) Meetings.--The Commission shall meet 4 times each 
     year.
       ``(d) Director and Staff of Commission.--
       ``(1) Director.--The Commission shall have a Director who 
     shall be appointed by the Chairperson. The Director shall be 
     paid at a rate not to exceed the maximum rate of basic pay 
     payable for GS-13 of the General Schedule.
       ``(2) Staff.--The Director may appoint 2 additional staff 
     members.
       ``(3) Applicability of certain civil service laws.--The 
     Director and staff of the Commission shall be appointed 
     subject to the provisions of title 5, United States Code, 
     governing appointments in the competitive service, and shall 
     be paid in accordance with the provisions of chapter 51 and 
     subchapter III of chapter 53 of that title relating to 
     classification and General Schedule pay rates.
       ``(e) Powers of Commission.--
       ``(1) Hearings and sessions.--The Commission may, for the 
     purpose of carrying out this Act, hold hearings, sit and act 
     at times and places, take testimony, and receive evidence as 
     the Commission considers appropriate. The Commission may 
     administer oaths or affirmations to witnesses appearing 
     before it.
       ``(2) Powers of members and agents.--Any member or agent of 
     the Commission may, if authorized by the Commission, take any 
     action which the Commission is authorized to take by this 
     section.
       ``(3) Obtaining official data.--The Commission may secure 
     directly from any department or agency of the United States 
     information necessary to enable it to carry out this Act. 
     Upon request of the Chairperson of the Commission, the head 
     of that department or agency shall furnish that information 
     to the Commission.
       ``(4) Mails.--The Commission may use the United States 
     mails in the same manner and under the same conditions as 
     other departments and agencies of the United States.
       ``(5) Administrative support services.--Upon the request of 
     the Commission, the Administrator of General Services shall 
     provide to the Commission, on a reimbursable basis, the 
     administrative support services necessary for the Commission 
     to carry out its responsibilities under this Act.

[[Page 24341]]

       ``(6) Contract authority.--The Commission may contract with 
     and compensate government and private agencies or persons for 
     services, without regard to section 3709 of the Revised 
     Statutes (41 U.S.C. 5).
       ``(f) Reports.--Beginning December 31, 2000, and each year 
     thereafter, the Commission shall submit to the Congress an 
     annual report detailing the following information:
       ``(1) Access to care, affordability to employers and 
     employees, and quality of care under employer-sponsored 
     health plans and recommendations for improving such access, 
     affordability, and quality.
       ``(2) Any issues the Commission deems appropriate or any 
     issues (such as the appropriateness and availability of 
     particular medical treatment) that the chairmen or ranking 
     members of the appropriate committees of Congress requested 
     the Commission to evaluate.
       ``(g) Definition of Appropriate Committees of Congress.--
     For purposes of this section the term `appropriate committees 
     of Congress' means any committee in the Senate or House of 
     Representatives having jurisdiction over the Employee 
     Retirement Income Security Act of 1974.
       ``(h) Termination.--Section 14(a)(2)(B) of the Federal 
     Advisory Committee Act (5 U.S.C. App.; relating to the 
     termination of advisory committees) shall not apply to the 
     Commission.
       ``(i) Authorization of Appropriations.--There is authorized 
     to be appropriated for fiscal years 2000 through 2004 such 
     sums as may be necessary to carry out this section.''.

     SEC. 132. EFFECTIVE DATE.

       This subtitle shall be effective 6 months after the date of 
     the enactment of this Act.

         TITLE II--AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT

     Subtitle A--Patient Protections and Point of Service Coverage 
                              Requirements

     SEC. 201. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE, 
                   EMERGENCY MEDICAL CARE, OBSTETRIC AND 
                   GYNECOLOGICAL CARE, PEDIATRIC CARE, AND 
                   CONTINUITY OF CARE.

       (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 ACCESS TO UNRESTRICTED MEDICAL ADVICE, 
                   EMERGENCY MEDICAL CARE, OBSTETRIC AND 
                   GYNECOLOGICAL CARE, PEDIATRIC CARE, AND 
                   CONTINUITY OF CARE.

       ``(a) Patient Access to Unrestricted Medical Advice.--
       ``(1) In general.--In the case of any health care 
     professional acting within the lawful scope of practice in 
     the course of carrying out a contractual employment 
     arrangement or other direct contractual arrangement between 
     such professional and a group health plan or a health 
     insurance issuer offering health insurance coverage in 
     connection with a group health plan, the plan or issuer with 
     which such contractual employment arrangement or other direct 
     contractual arrangement is maintained by the professional may 
     not impose on such professional under such arrangement any 
     prohibition or restriction with respect to advice, provided 
     to a participant or beneficiary under the plan who is a 
     patient, about the health status of the participant or 
     beneficiary or the medical care or treatment for the 
     condition or disease of the participant or beneficiary, 
     regardless of whether benefits for such care or treatment are 
     provided under the plan or health insurance coverage offered 
     in connection with the plan.
       ``(2) Health care professional defined.--For purposes of 
     this paragraph, the term `health care professional' means a 
     physician (as defined in section 1861(r) of the Social 
     Security Act) or other health care professional if coverage 
     for the professional's services is provided under the group 
     health plan for the services of the professional. Such term 
     includes a podiatrist, optometrist, chiropractor, 
     psychologist, dentist, physician assistant, physical or 
     occupational therapist and therapy assistant, speech-language 
     pathologist, audiologist, registered or licensed practical 
     nurse (including nurse practitioner, clinical nurse 
     specialist, certified registered nurse anesthetist, and 
     certified nurse-midwife), licensed certified social worker, 
     registered respiratory therapist, and certified respiratory 
     therapy technician.
       ``(3) Rule of construction.--Nothing in this subsection 
     shall be construed to require the sponsor of a group health 
     plan or a health insurance issuer offering health insurance 
     coverage in connection with the group health plan to engage 
     in any practice that would violate its religious beliefs or 
     moral convictions.
       ``(b) Patient Access to Emergency Medical Care.--
       ``(1) Coverage of emergency services.--
       ``(A) In general.--If a group health plan, or health 
     insurance coverage offered by a health insurance issuer, 
     provides any benefits with respect to emergency services (as 
     defined in subparagraph (B)(ii)), or ambulance services, the 
     plan or issuer shall cover emergency services (including 
     emergency ambulance services as defined in subparagraph 
     (B)(iii)) furnished under the plan or coverage--
       ``(i) without the need for any prior authorization 
     determination;
       ``(ii) whether or not the health care provider furnishing 
     such services is a participating provider with respect to 
     such services;
       ``(iii) in a manner so that, if such services are provided 
     to a participant, beneficiary, or enrollee by a 
     nonparticipating health care provider, 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 provider; and
       ``(iv) without regard to any other term or condition of 
     such plan or coverage (other than exclusion or coordination 
     of benefits, or an affiliation or waiting period, permitted 
     under section 2701 and other than applicable cost sharing).
       ``(B) Definitions.--In this subsection:
       ``(i) Emergency medical condition.--The term `emergency 
     medical condition' means--

       ``(I) 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 (42 U.S.C. 
     1395dd(e)(1)(A)); and
       ``(II) a medical condition manifesting itself in a neonate 
     by acute symptoms of sufficient severity (including severe 
     pain) such that a prudent health care professional 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.

       ``(ii) Emergency services.--The term `emergency services' 
     means--

       ``(I) with respect to an emergency medical condition 
     described in clause (i)(I), a medical screening examination 
     (as required under section 1867 of the Social Security Act, 
     42 U.S.C. 1395dd)) that is within the capability of the 
     emergency department of a hospital, including ancillary 
     services routinely available to the emergency department to 
     evaluate an emergency medical condition (as defined in clause 
     (i)) and also, within the capabilities of the staff and 
     facilities at the hospital, such further medical examination 
     and treatment as are required under section 1867 of such Act 
     to stabilize the patient; or
       ``(II) with respect to an emergency medical condition 
     described in clause (i)(II), medical treatment for such 
     condition rendered by a health care provider in a hospital to 
     a neonate, including available hospital ancillary services in 
     response to an urgent request of a health care professional 
     and to the extent necessary to stabilize the neonate.

       ``(iii) Emergency ambulance services.--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 clause (i)) to a hospital 
     for the receipt of emergency services (as defined in clause 
     (ii)) in a case in which appropriate emergency medical 
     screening examinations are covered under the plan or coverage 
     pursuant to paragraph (1)(A) 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.
       ``(iv) Stabilize.--The term `to stabilize' means, with 
     respect to an emergency medical condition, to provide such 
     medical treatment of the condition as may be necessary to 
     assure, within reasonable medical probability, that no 
     material deterioration of the condition is likely to result 
     from or occur during the transfer of the individual from a 
     facility.
       ``(v) Nonparticipating.--The term `nonparticipating' means, 
     with respect to a health care provider that provides health 
     care items and services to a participant or beneficiary under 
     group health plan or under group health insurance coverage, a 
     health care provider that is not a participating health care 
     provider with respect to such items and services.
       ``(vi) Participating.--The term `participating' means, with 
     respect to a health care provider that provides health care 
     items and services to a participant or beneficiary under 
     group health plan or health insurance coverage offered by a 
     health insurance issuer in connection with such a plan, a 
     health care provider that furnishes such items and services 
     under a contract or other arrangement with the plan or 
     issuer.
       ``(c) Patient Right to Obstetric and Gynecological Care.--
       ``(1) In general.--In any case in which a group health plan 
     (or a health insurance issuer offering health insurance 
     coverage in connection with the plan)--
       ``(A) provides benefits under the terms of the plan 
     consisting of--
       ``(i) gynecological care (such as preventive women's health 
     examinations); or
       ``(ii) obstetric care (such as pregnancy-related services),

     provided by a participating health care professional who 
     specializes in such care (or provides benefits consisting of 
     payment for such care); and

[[Page 24342]]

       ``(B) requires or provides for designation by a participant 
     or beneficiary of a participating primary care provider,

     if the primary care provider designated by such a participant 
     or beneficiary is not such a health care professional, then 
     the plan (or issuer) shall meet the requirements of paragraph 
     (2).
       ``(1) Requirements.--A group health plan (or a health 
     insurance issuer offering health insurance coverage in 
     connection with the plan) meets the requirements of this 
     paragraph, in connection with benefits described in paragraph 
     (1) consisting of care described in clause (i) or (ii) of 
     paragraph (1)(A) (or consisting of payment therefor), if the 
     plan (or issuer)--
       ``(A) does not require authorization or a referral by the 
     primary care provider in order to obtain such benefits; and
       ``(B) treats the ordering of other care of the same type, 
     by the participating health care professional providing the 
     care described in clause (i) or (ii) of paragraph (1)(A), as 
     the authorization of the primary care provider with respect 
     to such care.
       ``(3) Health care professional defined.--For purposes of 
     this subsection, the term `health care professional' means an 
     individual (including, but not limited to, a nurse midwife or 
     nurse practitioner) who is licensed, accredited, or certified 
     under State law to provide obstetric and gynecological health 
     care services and who is operating within the scope of such 
     licensure, accreditation, or certification.
       ``(4) Construction.--Nothing in paragraph (1) shall be 
     construed as preventing a plan from offering (but not 
     requiring a participant or beneficiary to accept) a health 
     care professional trained, credentialed, and operating within 
     the scope of their licensure to perform obstetric and 
     gynecological health care services. Nothing in paragraph 
     (2)(B) shall waive any requirements of coverage relating to 
     medical necessity or appropriateness with respect to coverage 
     of gynecological or obstetric care so ordered.
       ``(5) Treatment of multiple coverage options.--In the case 
     of a plan providing benefits under two or more coverage 
     options, the requirements of this subsection shall apply 
     separately with respect to each coverage option.
       ``(d) Patient Right to Pediatric Care.--
       ``(1) In general.--In any case in which a group health plan 
     (or a health insurance issuer offering health insurance 
     coverage in connection with the plan) provides benefits 
     consisting of routine pediatric care provided by a 
     participating health care professional who specializes in 
     pediatrics (or consisting of payment for such care) and the 
     plan requires or provides for designation by a participant or 
     beneficiary of a participating primary care provider, the 
     plan (or issuer) shall provide that such a participating 
     health care professional may be designated, if available, by 
     a parent or guardian of any beneficiary under the plan is who 
     under 18 years of age, as the primary care provider with 
     respect to any such benefits.
       ``(2) Health care professional defined.--For purposes of 
     this subsection, the term `health care professional' means an 
     individual (including, but not limited to, a nurse 
     practitioner) who is licensed, accredited, or certified under 
     State law to provide pediatric health care services and who 
     is operating within the scope of such licensure, 
     accreditation, or certification.
       ``(3) Construction.--Nothing in paragraph (1) shall be 
     construed as preventing a plan from offering (but not 
     requiring a participant or beneficiary to accept) a health 
     care professional trained, credentialed, and operating within 
     the scope of their licensure to perform pediatric health care 
     services. Nothing in paragraph (1) shall waive any 
     requirements of coverage relating to medical necessity or 
     appropriateness with respect to coverage of pediatric care so 
     ordered.
       ``(4) Treatment of multiple coverage options.--In the case 
     of a plan providing benefits under two or more coverage 
     options, the requirements of this subsection shall apply 
     separately with respect to each coverage option.
       ``(e) Continuity of Care.--
       ``(1) In general.--
       ``(A) Termination of provider.--If a contract between a 
     group health plan, or a health insurance issuer offering 
     health insurance coverage in connection with a group health 
     plan, and a health care provider is terminated (as defined in 
     subparagraph (D)(ii)), or benefits or coverage provided by a 
     health care provider are terminated because of a change in 
     the terms of provider participation in a group health plan, 
     and an individual who, at the time of such termination, is a 
     participant or beneficiary in the plan and is scheduled to 
     undergo surgery (including an organ transplantation), is 
     undergoing treatment for pregnancy, or is determined to be 
     terminally ill (as defined in section 1861(dd)(3)(A) of the 
     Social Security Act) and is undergoing treatment for the 
     terminal illness, the plan or issuer shall--
       ``(i) notify the individual on a timely basis of such 
     termination and of the right to elect continuation of 
     coverage of treatment by the provider under this subsection; 
     and
       ``(ii) subject to paragraph (3), permit the individual to 
     elect to continue to be covered with respect to treatment by 
     the provider for such surgery, pregnancy, or illness during a 
     transitional period (provided under paragraph (2)).
       ``(B) Treatment of termination of contract with health 
     insurance issuer.--If a contract for the provision of health 
     insurance coverage between a group health plan and a health 
     insurance issuer is terminated and, as a result of such 
     termination, coverage of services of a health care provider 
     is terminated with respect to an individual, the provisions 
     of subparagraph (A) (and the succeeding provisions of this 
     subsection) 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.
       ``(C) Termination defined.--For purposes of this 
     subsection, the term `terminated' includes, with respect to a 
     contract, the expiration or nonrenewal of the contract, but 
     does not include a termination of the contract by the plan or 
     issuer for failure to meet applicable quality standards or 
     for fraud.
       ``(2) Transitional period.--
       ``(A) In general.--Except as provided in subparagraphs (B) 
     through (D), the transitional period under this paragraph 
     shall extend up to 90 days (as determined by the treating 
     health care professional) after the date of the notice 
     described in paragraph (1)(A)(i) of the provider's 
     termination.
       ``(B) Scheduled surgery.--If surgery was scheduled for an 
     individual before the date of the announcement of the 
     termination of the provider status under paragraph (1)(A)(i), 
     the transitional period under this paragraph with respect to 
     the surgery shall extend beyond the period under subparagraph 
     (A) and until the date of discharge of the individual after 
     completion of the surgery.
       ``(C) Pregnancy.--If--
       ``(i) a participant or beneficiary was determined to be 
     pregnant at the time of a provider's termination of 
     participation, and
       ``(ii) the provider was treating the pregnancy before date 
     of the termination,

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

     the transitional period under this paragraph shall extend for 
     the remainder of the individual's life for care directly 
     related to the treatment of the terminal illness or its 
     medical manifestations.
       ``(3) Permissible terms and conditions.--A group health 
     plan or health insurance issuer may condition coverage of 
     continued treatment by a provider under paragraph (1)(A)(i) 
     upon the individual notifying the plan of the election of 
     continued coverage and upon the provider agreeing to the 
     following terms and conditions:
       ``(A) The provider agrees to accept reimbursement from the 
     plan or issuer and individual involved (with respect to cost-
     sharing) at the rates applicable prior to the start of the 
     transitional period as payment in full (or, in the case 
     described in paragraph (1)(B), at the rates applicable under 
     the replacement plan or issuer after the date of the 
     termination of the contract with the health insurance issuer) 
     and not to impose cost-sharing with respect to the individual 
     in an amount that would exceed the cost-sharing that could 
     have been imposed if the contract referred to in paragraph 
     (1)(A) had not been terminated.
       ``(B) The provider agrees to adhere to the quality 
     assurance standards of the plan or issuer responsible for 
     payment under subparagraph (A) and to provide to such plan or 
     issuer necessary medical information related to the care 
     provided.
       ``(C) The provider agrees otherwise to adhere to such 
     plan's or issuer's policies and procedures, including 
     procedures regarding referrals and obtaining prior 
     authorization and providing services pursuant to a treatment 
     plan (if any) approved by the plan or issuer.
       ``(D) The provider agrees to provide transitional care to 
     all participants and beneficiaries who are eligible for and 
     elect to have coverage of such care from such provider.
       ``(E) If the provider initiates the termination, the 
     provider has notified the plan within 30 days prior to the 
     effective date of the termination of--
       ``(i) whether the provider agrees to permissible terms and 
     conditions (as set forth in this paragraph) required by the 
     plan, and
       ``(ii) if the provider agrees to the terms and conditions, 
     the specific plan beneficiaries and participants undergoing a 
     course of treatment from the provider who the provider 
     believes, at the time of the notification, would be eligible 
     for transitional care under this subsection.
       ``(4) Construction.--Nothing in this subsection shall be 
     construed to--
       ``(A) require the coverage of benefits which would not have 
     been covered if the provider

[[Page 24343]]

     involved remained a participating provider, or
       ``(B) prohibit a group health plan from conditioning a 
     provider's participation on the provider's agreement to 
     provide transitional care to all participants and 
     beneficiaries eligible to obtain coverage of such care 
     furnished by the provider as set forth under this subsection.
       ``(f) Coverage for Individuals Participating in Approved 
     Cancer Clinical Trials.--
       ``(1) Coverage.--
       ``(A) In general.--If a group health plan (or a health 
     insurance issuer offering health insurance coverage) provides 
     coverage to a qualified individual (as defined in paragraph 
     (2)), the plan or issuer--
       ``(i) may not deny the individual participation in the 
     clinical trial referred to in paragraph (2)(B);
       ``(ii) subject to paragraphs (2), (3), and (4), may not 
     deny (or limit or impose additional conditions on) the 
     coverage of routine patient costs for items and services 
     furnished in connection with participation in the trial; and
       ``(iii) may not discriminate against the individual on the 
     basis of the participation of the participant or beneficiary 
     in such trial.
       ``(B) Exclusion of certain costs.--For purposes of 
     subparagraph (A)(ii), routine patient costs do not include 
     the cost of the tests or measurements conducted primarily for 
     the purpose of the clinical trial involved.
       ``(C) Use of in-network providers.--If one or more 
     participating providers is participating in a clinical trial, 
     nothing in subparagraph (A) shall be construed as preventing 
     a plan from requiring that a qualified individual participate 
     in the trial through such a participating provider if the 
     provider will accept the individual as a participant in the 
     trial.
       ``(2) Qualified individual defined.--For purposes of 
     paragraph (1), the term `qualified individual' means an 
     individual who is a participant or beneficiary in a group 
     health plan and who meets the following conditions:
       ``(A)(i) The individual has been diagnosed with cancer.
       ``(ii) The individual is eligible to participate in an 
     approved clinical trial according to the trial protocol with 
     respect to treatment of cancer.
       ``(iii) The individual's participation in the trial offers 
     meaningful potential for significant clinical benefit for the 
     individual.
       ``(B) Either--
       ``(i) the referring physician is a participating health 
     care professional and has concluded that the individual's 
     participation in such trial would be appropriate based upon 
     satisfaction by the individual of the conditions described in 
     subparagraph (A); or
       ``(ii) the individual provides medical and scientific 
     information establishing that the individual's participation 
     in such trial would be appropriate based upon the 
     satisfaction by the individual of the conditions described in 
     subparagraph (A).
       ``(3) Payment.--
       ``(A) In general.--A group health plan (or a health 
     insurance issuer offering health insurance coverage) shall 
     provide for payment for routine patient costs described in 
     paragraph (1)(B) but is not required to pay for costs of 
     items and services that are reasonably expected to be paid 
     for by the sponsors of an approved clinical trial.
       ``(B) Routine patient care costs.--
       ``(i) In general.--For purposes of this paragraph, the term 
     `routine patient care costs' shall include the costs 
     associated with the provision of items and services that--

       ``(I) would otherwise be covered under the group health 
     plan if such items and services were not provided in 
     connection with an approved clinical trial program; and
       ``(II) are furnished according to the protocol of an 
     approved clinical trial program.

       ``(ii) Exclusion.--For purposes of this paragraph, `routine 
     patient care costs' shall not include the costs associated 
     with the provision of--

       ``(I) an investigational drug or device, unless the 
     Secretary has authorized the manufacturer of such drug or 
     device to charge for such drug or device; or
       ``(II) any item or service supplied without charge by the 
     sponsor of the approved clinical trial program.

       ``(C) Payment rate.--For purposes of this subsection--
       ``(i) Participating providers.--In the case of covered 
     items and services provided by a participating provider, the 
     payment rate shall be at the agreed upon rate.
       ``(ii) Nonparticipating providers.--In the case of covered 
     items and services provided by a nonparticipating provider, 
     the payment rate shall be at the rate the plan would normally 
     pay for comparable items or services under clause (i).
       ``(4) Approved clinical trial defined.--
       ``(A) In general.--For purposes of this subsection, the 
     term `approved clinical trial' means a cancer clinical 
     research study or cancer clinical investigation approved by 
     an Institutional Review Board.
       ``(B) 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 Secretary determines--
       ``(i) to be comparable to the system of peer review of 
     studies and investigations used by the National Institutes of 
     Health, and
       ``(ii) assures unbiased review of the highest scientific 
     standards by qualified individuals who have no interest in 
     the outcome of the review.
       ``(5) Construction.--Nothing in this subsection shall be 
     construed to limit a plan's coverage with respect to clinical 
     trials.
       ``(6) Plan satisfaction of certain requirements; 
     responsibilities of fiduciaries.--
       ``(A) In general.--For purposes of this subsection, 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 requirements of this 
     subsection 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.
       ``(B) 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 
     of title I of the Employee Retirement Income Security Act of 
     1974.
       ``(7) Study and report.--
       ``(A) Study.--The Secretary shall analyze cancer clinical 
     research and its cost implications for managed care, 
     including differentiation in--
       ``(i) the cost of patient care in trials versus standard 
     care;
       ``(ii) the cost effectiveness achieved in different sites 
     of service;
       ``(iii) research outcomes;
       ``(iv) volume of research subjects available in different 
     sites of service;
       ``(v) access to research sites and clinical trials by 
     cancer patients;
       ``(vi) patient cost sharing or copayment costs realized in 
     different sites of service;
       ``(vii) health outcomes experienced in different sites of 
     service;
       ``(viii) long term health care services and costs 
     experienced in different sites of service;
       ``(ix) morbidity and mortality experienced in different 
     sites of service; and
       ``(x) patient satisfaction and preference of sites of 
     service.
       ``(B) Report to congress.--Not later than January 1, 2005, 
     the Secretary shall submit a report to Congress that 
     contains--
       ``(i) an assessment of any incremental cost to group health 
     plans resulting from the provisions of this section;
       ``(ii) a projection of expenditures to such plans resulting 
     from this section;
       ``(iii) an assessment of any impact on premiums resulting 
     from this section; and
       ``(iv) recommendations regarding action on other 
     diseases.''.

     SEC. 202. REQUIRING HEALTH MAINTENANCE ORGANIZATIONS TO OFFER 
                   OPTION OF POINT-OF-SERVICE COVERAGE.

       Title XXVII of the Public Health Service Act is amended by 
     inserting after section 2713 the following new section:

     ``SEC. 2714. REQUIRING OFFERING OF OPTION OF POINT-OF-SERVICE 
                   COVERAGE.

       ``(a) Requirement to Offer Coverage Option to Certain 
     Employers.--Except as provided in subsection (c), any health 
     insurance issuer which--
       ``(1) is a health maintenance organization (as defined in 
     section 2791(b)(3)); and
       ``(2) which provides for coverage of services of one or 
     more classes of health care professionals under health 
     insurance coverage offered in connection with a group health 
     plan only if such services are furnished exclusively through 
     health care professionals within such class or classes who 
     are members of a closed panel of health care professionals,

     the issuer shall make available to the plan sponsor in 
     connection with such a plan a coverage option which provides 
     for coverage of such services which are furnished through 
     such class (or classes) of health care professionals 
     regardless of whether or not the professionals are members of 
     such panel.
       ``(b) Requirement to Offer Supplemental Coverage to 
     Participants in Certain Cases.--Except as provided in 
     subsection (c), if a health insurance issuer makes available 
     a coverage option under and described in subsection (a) to a 
     plan sponsor of a group health plan and the sponsor declines 
     to contract for such coverage option, then the issuer shall 
     make available in the individual insurance market to each 
     participant in the group health plan optional separate 
     supplemental health insurance coverage in the individual 
     health insurance market which consists of services identical 
     to those provided under such coverage provided through the 
     closed panel under the group health plan but are furnished 
     exclusively by health care professionals who are not members 
     of such a closed panel.
       ``(c) Exceptions.--
       ``(1) Offering of non-panel option.--Subsections (a) and 
     (b) shall not apply with respect to a group health plan if 
     the plan offers a coverage option that provides coverage for 
     services that may be furnished by a class or classes of 
     health care professionals who are not in a closed panel. This 
     paragraph shall be applied separately to distinguishable 
     groups of employees under the plan.

[[Page 24344]]

       ``(2) Availability of coverage through healthmart.--
     Subsections (a) and (b) shall not apply to a group health 
     plan if the health insurance coverage under the plan is made 
     available through a HealthMart (as defined in section 2801) 
     and if any health insurance coverage made available through 
     the HealthMart provides for coverage of the services of any 
     class of health care professionals other than through a 
     closed panel of professionals.
       ``(3) Relicensure exemption.--Subsections (a) and (b) shall 
     not apply to a health maintenance organization in a State in 
     any case in which--
       ``(A) the organization demonstrates to the applicable 
     authority that the organization has made a good faith effort 
     to obtain (but has failed to obtain) a contract between the 
     organization and any other health insurance issuer providing 
     for the coverage option or supplemental coverage described in 
     subsection (a) or (b), as the case may be, within the 
     applicable service area of the organization; and
       ``(B) the State requires the organization to receive or 
     qualify for a separate license, as an indemnity insurer or 
     otherwise, in order to offer such coverage option or 
     supplemental coverage, respectively.

     The applicable authority may require that the organization 
     demonstrate that it meets the requirements of the previous 
     sentence no more frequently that once every 2 years.
       ``(4) Collective bargaining agreements.--Subsections (a) 
     and (b) shall not apply in connection with a group health 
     plan if the plan is established or maintained pursuant to one 
     or more collective bargaining agreements.
       ``(5) Small issuers.--Subsections (a) and (b) shall not 
     apply in the case of a health insurance issuer with 25,000 or 
     fewer covered lives.
       ``(d) Applicability.--The requirements of this section 
     shall apply only in connection with included group health 
     plan benefits.
       ``(e) Definitions.--For purposes of this section:
       ``(1) Coverage through closed panel.--Health insurance 
     coverage for a class of health care professionals shall be 
     treated as provided through a closed panel of such 
     professionals only if such coverage consists of coverage of 
     items or services consisting of professionals services which 
     are reimbursed for or provided only within a limited network 
     of such professionals.
       ``(2) Health care professional.--The term `health care 
     professional' has the meaning given such term in section 
     2707(a)(2).
       ``(3) Included group health plan benefit.--The term 
     `included group health plan benefit' means a benefit which is 
     not an excepted benefit (as defined in section 2791(c)).''.

     SEC. 203. EFFECTIVE DATE AND RELATED RULES.

       (a) In General.--The amendments made by this title shall 
     apply with respect to plan years beginning on or after 
     January 1 of the second calendar year following the date of 
     the enactment of this Act, except that the Secretary of 
     Health and Human Services may issue regulations before such 
     date under such amendments. The Secretary shall first issue 
     regulations necessary to carry out the amendments made by 
     this title before the effective date thereof.
       (b) Limitation on Enforcement Actions.--No enforcement 
     action shall be taken, pursuant to the amendments made by 
     this title, against a group health plan or health insurance 
     issuer with respect to a violation of a requirement imposed 
     by such amendments before the date of issuance of regulations 
     issued in connection with such requirement, if the plan or 
     issuer has sought to comply in good faith with such 
     requirement.
       (c) Special Rule for 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 
     this title shall not apply with respect to plan years 
     beginning before the later of--
       (1) the date on which the last of the collective bargaining 
     agreements relating to the plan terminates (determined 
     without regard to any extension thereof agreed to after the 
     date of the enactment of this Act); or
       (2) January 1, 2002.

     For purposes of this subsection, 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 title shall not be treated as a 
     termination of such collective bargaining agreement.

               Subtitle B--Patient Access to Information

     SEC. 111. PATIENT ACCESS TO INFORMATION REGARDING PLAN 
                   COVERAGE, MANAGED CARE PROCEDURES, HEALTH CARE 
                   PROVIDERS, AND QUALITY OF MEDICAL CARE.

       (a) In General.--Subpart 2 of part A of title XXVII of the 
     Public Health Service Act (as amended by subtitle A) is 
     amended further by adding at the end the following new 
     section:

     ``SEC. 2708. DISCLOSURE BY GROUP HEALTH PLANS.

       ``(a) Disclosure Requirement.--Each health insurance issuer 
     offering health insurance coverage in connection with a group 
     health plan shall provide the plan administrator on a timely 
     basis with the information necessary to enable the 
     administrator to provide participants and beneficiaries with 
     information in a manner and to an extent consistent with the 
     requirements of section 111 of the Employee Retirement Income 
     Security Act of 1974. To the extent that any such issuer 
     provides such information on a timely basis to plan 
     participants and beneficiaries, the requirements of this 
     subsection shall be deemed satisfied in the case of such plan 
     with respect to such information.
       ``(b) Plan Benefits.--The information required under 
     subsection (a) includes the following:
       ``(1) Covered items and services.--
       ``(A) Categorization of included benefits.--A description 
     of covered benefits, categorized by--
       ``(i) types of items and services (including any special 
     disease management program); and
       ``(ii) types of health care professionals providing such 
     items and services.
       ``(B) Emergency medical care.--A description of the extent 
     to which the plan covers emergency medical care (including 
     the extent to which the plan provides for access to urgent 
     care centers), and any definitions provided under the plan 
     for the relevant plan terminology referring to such care.
       ``(C) Preventative services.--A description of the extent 
     to which the plan provides benefits for preventative 
     services.
       ``(D) Drug formularies.--A description of the extent to 
     which covered benefits are determined by the use or 
     application of a drug formulary and a summary of the process 
     for determining what is included in such formulary.
       ``(E) COBRA continuation coverage.--A description of the 
     benefits available under the plan pursuant to part 6.
       ``(2) Limitations, exclusions, and restrictions on covered 
     benefits.--
       ``(A) Categorization of excluded benefits.--A description 
     of benefits specifically excluded from coverage, categorized 
     by types of items and services.
       ``(B) Utilization review and preauthorization 
     requirements.--Whether coverage for medical care is limited 
     or excluded on the basis of utilization review or 
     preauthorization requirements.
       ``(C) Lifetime, annual, or other period limitations.--A 
     description of the circumstances under which, and the extent 
     to which, coverage is subject to lifetime, annual, or other 
     period limitations, categorized by types of benefits.
       ``(D) Custodial care.--A description of the circumstances 
     under which, and the extent to which, the coverage of 
     benefits for custodial care is limited or excluded, and a 
     statement of the definition used by the plan for custodial 
     care.
       ``(E) Experimental treatments.--Whether coverage for any 
     medical care is limited or excluded because it constitutes an 
     investigational item or experimental treatment or technology, 
     and any definitions provided under the plan for the relevant 
     plan terminology referring to such limited or excluded care.
       ``(F) Medical appropriateness or necessity.--Whether 
     coverage for medical care may be limited or excluded by 
     reason of a failure to meet the plan's requirements for 
     medical appropriateness or necessity, and any definitions 
     provided under the plan for the relevant plan terminology 
     referring to such limited or excluded care.
       ``(G) Second or subsequent opinions.--A description of the 
     circumstances under which, and the extent to which, coverage 
     for second or subsequent opinions is limited or excluded.
       ``(H) Specialty care.--A description of the circumstances 
     under which, and the extent to which, coverage of benefits 
     for specialty care is conditioned on referral from a primary 
     care provider.
       ``(I) Continuity of care.--A description of the 
     circumstances under which, and the extent to which, coverage 
     of items and services provided by any health care 
     professional is limited or excluded by reason of the 
     departure by the professional from any defined set of 
     providers.
       ``(J) Restrictions on coverage of emergency services.--A 
     description of the circumstances under which, and the extent 
     to which, the plan, in covering emergency medical care 
     furnished to a participant or beneficiary of the plan imposes 
     any financial responsibility described in subsection (c) on 
     participants or beneficiaries or limits or conditions 
     benefits for such care subject to any other term or condition 
     of such plan.
       ``(3) Network characteristics.--If the plan (or issuer) 
     utilizes a defined set of providers under contract with the 
     plan (or issuer), a detailed list of the names of such 
     providers and their geographic location, set forth separately 
     with respect to primary care providers and with respect to 
     specialists.
       ``(c) Participant's Financial Responsibilities.--The 
     information required under subsection (a) includes an 
     explanation of--
       ``(1) a participant's financial responsibility for payment 
     of premiums, coinsurance, copayments, deductibles, and any 
     other charges; and

[[Page 24345]]

       ``(2) the circumstances under which, and the extent to 
     which, the participant's financial responsibility described 
     in paragraph (1) may vary, including any distinctions based 
     on whether a health care provider from whom covered benefits 
     are obtained is included in a defined set of providers.
       ``(d) Dispute Resolution Procedures.--The information 
     required under subsection (a) includes a description of the 
     processes adopted by the plan of the type described in 
     section 503 of the Employee Retirement Income Security Act of 
     1974, including--
       ``(1) descriptions thereof relating specifically to--
       ``(A) coverage decisions;
       ``(B) internal review of coverage decisions; and
       ``(C) any external review of coverage decisions; and
       ``(2) the procedures and time frames applicable to each 
     step of the processes referred to in subparagraphs (A), (B), 
     and (C) of paragraph (1).
       ``(e) Information on Plan Performance.--Any information 
     required under subsection (a) shall include information 
     concerning the number of external reviews of the type 
     described in section 503 of the Employee Retirement Income 
     Security Act of 1974 that have been completed during the 
     prior plan year and the number of such reviews in which a 
     recommendation is made for modification or reversal of an 
     internal review decision under the plan.
       ``(f) Information Included with Adverse Coverage 
     Decisions.--A health insurance issuer offering health 
     insurance coverage in connection with a group health plan 
     shall provide to each participant and beneficiary, together 
     with any notification of the participant or beneficiary of an 
     adverse coverage decision, the following information:
       ``(1) Preauthorization and utilization review procedures.--
     A description of the basis on which any preauthorization 
     requirement or any utilization review requirement has 
     resulted in the adverse coverage decision.
       ``(2) Procedures for determining exclusions based on 
     medical necessity or on investigational items or experimental 
     treatments.--If the adverse coverage decision is based on a 
     determination relating to medical necessity or to an 
     investigational item or an experimental treatment or 
     technology, a description of the procedures and medically-
     based criteria used in such decision.
       ``(g) Information Available on Request.--
       ``(1) Access to plan benefit information in electronic 
     form.--
       ``(A) In general.--A health insurance issuer offering 
     health insurance coverage in connection with a group health 
     plan may, upon written request (made not more frequently than 
     annually), make available to participants and beneficiaries, 
     in a generally recognized electronic format--
       ``(i) the latest summary plan description, including the 
     latest summary of material modifications, and
       ``(ii) the actual plan provisions setting forth the 
     benefits available under the plan,
     to the extent such information relates to the coverage 
     options under the plan available to the participant or 
     beneficiary. A reasonable charge may be made to cover the 
     cost of providing such information in such generally 
     recognized electronic format. The Secretary may by regulation 
     prescribe a maximum amount which will constitute a reasonable 
     charge under the preceding sentence.
       ``(B) Alternative access.--The requirements of this 
     paragraph may be met by making such information generally 
     available (rather than upon request) on the Internet or on a 
     proprietary computer network in a format which is readily 
     accessible to participants and beneficiaries.
       ``(2) Additional information to be provided on request.--
       ``(A) Inclusion in summary plan description of summary of 
     additional information.--The information required under 
     subsection (a) includes a summary description of the types of 
     information required by this subsection to be made available 
     to participants and beneficiaries on request.
       ``(B) Information required from plans and issuers on 
     request.--In addition to information otherwise required to be 
     provided under this subsection, a health insurance issuer 
     offering health insurance coverage in connection with a group 
     health plan shall provide the following information to a 
     participant or beneficiary on request:
       ``(i) Care management information.--A description of the 
     circumstances under which, and the extent to which, the plan 
     has special disease management programs or programs for 
     persons with disabilities, indicating whether these programs 
     are voluntary or mandatory and whether a significant benefit 
     differential results from participation in such programs.
       ``(ii) Inclusion of drugs and biologicals in formularies.--
     A statement of whether a specific drug or biological is 
     included in a formulary used to determine benefits under the 
     plan and a description of the procedures for considering 
     requests for any patient-specific waivers.
       ``(iii) Accreditation status of health insurance issuers 
     and service providers.--A description of the accreditation 
     and licensing status (if any) of each health insurance issuer 
     offering health insurance coverage in connection with the 
     plan and of any utilization review organization utilized by 
     the issuer or the plan, together with the name and address of 
     the accrediting or licensing authority.
       ``(iv) Quality performance measures.--The latest 
     information (if any) maintained by the health insurance 
     issuer relating to quality of performance of the delivery of 
     medical care with respect to coverage options offered under 
     the plan and of health care professionals and facilities 
     providing medical care under the plan.
       ``(C) Information required from health care 
     professionals.--
       ``(i) Qualifications, privileges, and method of 
     compensation.--Any health care professional treating a 
     participant or beneficiary under a group health plan shall 
     provide to the participant or beneficiary, on request, a 
     description of his or her professional qualifications 
     (including board certification status, licensing status, and 
     accreditation status, if any), privileges, and experience and 
     a general description by category (including salary, fee-for-
     service, capitation, and such other categories as may be 
     specified in regulations of the Secretary) of the applicable 
     method by which such professional is compensated in 
     connection with the provision of such medical care.
       ``(ii) Cost of procedures.--Any health care professional 
     who recommends an elective procedure or treatment while 
     treating a participant or beneficiary under a group health 
     plan that requires a participant or beneficiary to share in 
     the cost of treatment shall inform such participant or 
     beneficiary of each cost associated with the procedure or 
     treatment and an estimate of the magnitude of such costs.
       ``(D) Information required from health care facilities on 
     request.--Any health care facility from which a participant 
     or beneficiary has sought treatment under a group health plan 
     shall provide to the participant or beneficiary, on request, 
     a description of the facility's corporate form or other 
     organizational form and all forms of licensing and 
     accreditation status (if any) assigned to the facility by 
     standard-setting organizations.
       ``(h) Access to Information Relevant to the Coverage 
     Options under which the Participant or Beneficiary is 
     Eligible to Enroll.--In addition to information otherwise 
     required to be made available under this section, a health 
     insurance issuer offering health insurance coverage in 
     connection with a group health plan shall, upon written 
     request (made not more frequently than annually), make 
     available to a participant (and an employee who, under the 
     terms of the plan, is eligible for coverage but not enrolled) 
     in connection with a period of enrollment the summary plan 
     description for any coverage option under the plan under 
     which the participant is eligible to enroll and any 
     information described in clauses (i), (ii), (iii), (vi), 
     (vii), and (viii) of subsection (e)(2)(B).
       ``(i) Advance Notice of Changes in Drug Formularies.--Not 
     later than 30 days before the effective of date of any 
     exclusion of a specific drug or biological from any drug 
     formulary under health insurance coverage offered by a health 
     insurance issuer in connection with a group health plan that 
     is used in the treatment of a chronic illness or disease, the 
     issuer shall take such actions as are necessary to reasonably 
     ensure that plan participants are informed of such exclusion. 
     The requirements of this subsection may be satisfied--
       ``(1) by inclusion of information in publications broadly 
     distributed by plan sponsors, employers, or employee 
     organizations;
       ``(2) by electronic means of communication (including the 
     Internet or proprietary computer networks in a format which 
     is readily accessible to participants);
       ``(3) by timely informing participants who, under an 
     ongoing program maintained under the plan, have submitted 
     their names for such notification; or
       ``(4) by any other reasonable means of timely informing 
     plan participants.
       ``(j) Definitions and Related Rules.--
       ``(1) In general.--For purposes of this section--
       ``(A) Group health plan.--The term `group health plan' has 
     the meaning provided such term under section 733(a)(1).
       ``(B) Medical care.--The term `medical care' has the 
     meaning provided such term under section 733(a)(2).
       ``(C) Health insurance coverage.--The term `health 
     insurance coverage' has the meaning provided such term under 
     section 733(b)(1).
       ``(D) Health insurance issuer.--The term `health insurance 
     issuer' has the meaning provided such term under section 
     733(b)(2).
       ``(2) Applicability only in connection with included group 
     health plan benefits.--
       ``(A) In general.--The requirements of this section shall 
     apply only in connection with included group health plan 
     benefits.
       ``(B) Included group health plan benefit.--For purposes of 
     subparagraph (A), the term `included group health plan 
     benefit' means a benefit which is not an excepted benefit (as 
     defined in section 2791(c)).''.

     SEC. 212. EFFECTIVE DATE AND RELATED RULES.

       (a) In General.--The amendments made by section 211 shall 
     apply with respect to plan

[[Page 24346]]

     years beginning on or after January 1 of the second calendar 
     year following 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 title 
     before such date.
       (b) Limitation on Enforcement Actions.--No enforcement 
     action shall be taken, pursuant to the amendments made by 
     this title, against a health insurance issuer with respect to 
     a violation of a requirement imposed by such amendments 
     before the date of issuance of final regulations issued in 
     connection with such requirement, if the issuer has sought to 
     comply in good faith with such requirement.

       TITLE III--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

     SEC. 301. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE, 
                   EMERGENCY MEDICAL CARE, OBSTETRIC AND 
                   GYNECOLOGICAL CARE, PEDIATRIC CARE, AND 
                   CONTINUITY OF CARE.

       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. Patient access to unrestricted medical advice, emergency 
              medical care, obstetric and gynecological care, pediatric 
              care, and continuity of care.''; and

       (2) by inserting after section 9812 the following:

     ``SEC. 9813. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE, 
                   EMERGENCY MEDICAL CARE, OBSTETRIC AND 
                   GYNECOLOGICAL CARE, PEDIATRIC CARE, AND 
                   CONTINUITY OF CARE.

       ``(a) Patient Access to Unrestricted Medical Advice.--
       ``(1) In general.--In the case of any health care 
     professional acting within the lawful scope of practice in 
     the course of carrying out a contractual employment 
     arrangement or other direct contractual arrangement between 
     such professional and a group health plan, the plan with 
     which such contractual employment arrangement or other direct 
     contractual arrangement is maintained by the professional may 
     not impose on such professional under such arrangement any 
     prohibition or restriction with respect to advice, provided 
     to a participant or beneficiary under the plan who is a 
     patient, about the health status of the participant or 
     beneficiary or the medical care or treatment for the 
     condition or disease of the participant or beneficiary, 
     regardless of whether benefits for such care or treatment are 
     provided under the plan.
       ``(2) Health care professional defined.--For purposes of 
     this paragraph, the term `health care professional' means a 
     physician (as defined in section 1861(r) of the Social 
     Security Act) or other health care professional if coverage 
     for the professional's services is provided under the group 
     health plan for the services of the professional. Such term 
     includes a podiatrist, optometrist, chiropractor, 
     psychologist, dentist, physician assistant, physical or 
     occupational therapist and therapy assistant, speech-language 
     pathologist, audiologist, registered or licensed practical 
     nurse (including nurse practitioner, clinical nurse 
     specialist, certified registered nurse anesthetist, and 
     certified nurse-midwife), licensed certified social worker, 
     registered respiratory therapist, and certified respiratory 
     therapy technician.
       ``(3) Rule of construction.--Nothing in this subsection 
     shall be construed to require the sponsor of a group health 
     plan to engage in any practice that would violate its 
     religious beliefs or moral convictions.
       ``(b) Patient Access to Emergency Medical Care.--
       ``(1) Coverage of emergency services.--
       ``(A) In general.--If a group health plan provides any 
     benefits with respect to emergency services (as defined in 
     subparagraph (B)(ii)), or ambulance services, the plan shall 
     cover emergency services (including emergency ambulance 
     services as defined in subparagraph (B)(iii)) furnished under 
     the plan--
       ``(i) without the need for any prior authorization 
     determination;
       ``(ii) whether or not the health care provider furnishing 
     such services is a participating provider with respect to 
     such services;
       ``(iii) in a manner so that, if such services are provided 
     to a participant or beneficiary by a nonparticipating health 
     care provider, the participant or beneficiary is not liable 
     for amounts that exceed the amounts of liability that would 
     be incurred if the services were provided by a participating 
     provider; and
       ``(iv) without regard to any other term or condition of 
     such plan (other than exclusion or coordination of benefits, 
     or an affiliation or waiting period, permitted under section 
     701 and other than applicable cost sharing).
       ``(B) Definitions.--In this subsection:
       ``(i) Emergency medical condition.--The term `emergency 
     medical condition' means--

       ``(I) 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 (42 U.S.C. 
     1395dd(e)(1)(A)); and
       ``(II) a medical condition manifesting itself in a neonate 
     by acute symptoms of sufficient severity (including severe 
     pain) such that a prudent health care professional 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.

       ``(ii) Emergency services.--The term `emergency services' 
     means--

       ``(I) with respect to an emergency medical condition 
     described in clause (i)(I), a medical screening examination 
     (as required under section 1867 of the Social Security Act, 
     42 U.S.C. 1395dd)) that is within the capability of the 
     emergency department of a hospital, including ancillary 
     services routinely available to the emergency department to 
     evaluate an emergency medical condition (as defined in clause 
     (i)) and also, within the capabilities of the staff and 
     facilities at the hospital, such further medical examination 
     and treatment as are required under section 1867 of such Act 
     to stabilize the patient; or
       ``(II) with respect to an emergency medical condition 
     described in clause (i)(II), medical treatment for such 
     condition rendered by a health care provider in a hospital to 
     a neonate, including available hospital ancillary services in 
     response to an urgent request of a health care professional 
     and to the extent necessary to stabilize the neonate.

       ``(iii) Emergency ambulance services.--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 clause (i)) to a hospital 
     for the receipt of emergency services (as defined in clause 
     (ii)) in a case in which appropriate emergency medical 
     screening examinations are covered under the plan pursuant to 
     paragraph (1)(A) 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.
       ``(iv) Stabilize.--The term `to stabilize' means, with 
     respect to an emergency medical condition, to provide such 
     medical treatment of the condition as may be necessary to 
     assure, within reasonable medical probability, that no 
     material deterioration of the condition is likely to result 
     from or occur during the transfer of the individual from a 
     facility.
       ``(v) Nonparticipating.--The term `nonparticipating' means, 
     with respect to a health care provider that provides health 
     care items and services to a participant or beneficiary under 
     group health plan, a health care provider that is not a 
     participating health care provider with respect to such items 
     and services.
       ``(vi) Participating.--The term `participating' means, with 
     respect to a health care provider that provides health care 
     items and services to a participant or beneficiary under 
     group health plan, a health care provider that furnishes such 
     items and services under a contract or other arrangement with 
     the plan.
       ``(c) Patient Right to Obstetric and Gynecological Care.--
       ``(1) In general.--In any case in which a group health 
     plan--
       ``(A) provides benefits under the terms of the plan 
     consisting of--
       ``(i) gynecological care (such as preventive women's health 
     examinations); or
       ``(ii) obstetric care (such as pregnancy-related services),

     provided by a participating health care professional who 
     specializes in such care (or provides benefits consisting of 
     payment for such care); and
       ``(B) requires or provides for designation by a participant 
     or beneficiary of a participating primary care provider,
     if the primary care provider designated by such a participant 
     or beneficiary is not such a health care professional, then 
     the plan shall meet the requirements of paragraph (2).
       ``(2) Requirements.--A group health plan meets the 
     requirements of this paragraph, in connection with benefits 
     described in paragraph (1) consisting of care described in 
     clause (i) or (ii) of paragraph (1)(A) (or consisting of 
     payment therefor), if the plan--
       ``(A) does not require authorization or a referral by the 
     primary care provider in order to obtain such benefits; and
       ``(B) treats the ordering of other care of the same type, 
     by the participating health care professional providing the 
     care described in clause (i) or (ii) of paragraph (1)(A), as 
     the authorization of the primary care provider with respect 
     to such care.
       ``(3) Health care professional defined.--For purposes of 
     this subsection, the term `health care professional' means an 
     individual (including, but not limited to, a nurse midwife or 
     nurse practitioner) who is licensed, accredited, or certified 
     under State law to provide obstetric and gynecological health 
     care services and who is operating within the scope of such 
     licensure, accreditation, or certification.

[[Page 24347]]

       ``(4) Construction.--Nothing in paragraph (1) shall be 
     construed as preventing a plan from offering (but not 
     requiring a participant or beneficiary to accept) a health 
     care professional trained, credentialed, and operating within 
     the scope of their licensure to perform obstetric and 
     gynecological health care services. Nothing in paragraph 
     (2)(B) shall waive any requirements of coverage relating to 
     medical necessity or appropriateness with respect to coverage 
     of gynecological or obstetric care so ordered.
       ``(5) Treatment of multiple coverage options.--In the case 
     of a plan providing benefits under two or more coverage 
     options, the requirements of this subsection shall apply 
     separately with respect to each coverage option.
       ``(d) Patient Right to Pediatric Care.--
       ``(1) In general.--In any case in which a group health plan 
     provides benefits consisting of routine pediatric care 
     provided by a participating health care professional who 
     specializes in pediatrics (or consisting of payment for such 
     care) and the plan requires or provides for designation by a 
     participant or beneficiary of a participating primary care 
     provider, the plan shall provide that such a participating 
     health care professional may be designated, if available, by 
     a parent or guardian of any beneficiary under the plan is who 
     under 18 years of age, as the primary care provider with 
     respect to any such benefits.
       ``(2) Health care professional defined.--For purposes of 
     this subsection, the term `health care professional' means an 
     individual (including, but not limited to, a nurse 
     practitioner) who is licensed, accredited, or certified under 
     State law to provide pediatric health care services and who 
     is operating within the scope of such licensure, 
     accreditation, or certification.
       ``(3) Construction.--Nothing in paragraph (1) shall be 
     construed as preventing a plan from offering (but not 
     requiring a participant or beneficiary to accept) a health 
     care professional trained, credentialed, and operating within 
     the scope of their licensure to perform pediatric health care 
     services. Nothing in paragraph (1) shall waive any 
     requirements of coverage relating to medical necessity or 
     appropriateness with respect to coverage of pediatric care so 
     ordered.
       ``(4) Treatment of multiple coverage options.--In the case 
     of a plan providing benefits under two or more coverage 
     options, the requirements of this subsection shall apply 
     separately with respect to each coverage option.
       ``(e) Continuity of Care.--
       ``(1) In general.--
       ``(A) Termination of provider.--If a contract between a 
     group health plan and a health care provider is terminated 
     (as defined in subparagraph (D)(ii)), or benefits provided by 
     a health care provider are terminated because of a change in 
     the terms of provider participation in a group health plan, 
     and an individual who, at the time of such termination, is a 
     participant or beneficiary in the plan and is scheduled to 
     undergo surgery (including an organ transplantation), is 
     undergoing treatment for pregnancy, or is determined to be 
     terminally ill (as defined in section 1861(dd)(3)(A) of the 
     Social Security Act) and is undergoing treatment for the 
     terminal illness, the plan shall--
       ``(i) notify the individual on a timely basis of such 
     termination and of the right to elect continuation of 
     coverage of treatment by the provider under this subsection; 
     and
       ``(ii) subject to paragraph (3), permit the individual to 
     elect to continue to be covered with respect to treatment by 
     the provider for such surgery, pregnancy, or illness during a 
     transitional period (provided under paragraph (2)).
       ``(B) Treatment of termination of contract with health 
     insurance issuer.--If a contract for the provision of health 
     insurance coverage between a group health plan and a health 
     insurance issuer is terminated and, as a result of such 
     termination, coverage of services of a health care provider 
     is terminated with respect to an individual, the provisions 
     of subparagraph (A) (and the succeeding provisions of this 
     subsection) 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.
       ``(C) Termination defined.--For purposes of this 
     subsection, the term `terminated' includes, with respect to a 
     contract, the expiration or nonrenewal of the contract, but 
     does not include a termination of the contract by the plan 
     for failure to meet applicable quality standards or for 
     fraud.
       ``(2) Transitional period.--
       ``(A) In general.--Except as provided in subparagraphs (B) 
     through (D), the transitional period under this paragraph 
     shall extend up to 90 days (as determined by the treating 
     health care professional) after the date of the notice 
     described in paragraph (1)(A)(i) of the provider's 
     termination.
       ``(B) Scheduled surgery.--If surgery was scheduled for an 
     individual before the date of the announcement of the 
     termination of the provider status under paragraph (1)(A)(i), 
     the transitional period under this paragraph with respect to 
     the surgery or transplantation.
       ``(C) Pregnancy.--If--
       ``(i) a participant or beneficiary was determined to be 
     pregnant at the time of a provider's termination of 
     participation, and
       ``(ii) the provider was treating the pregnancy before date 
     of the termination,
     the transitional period under this paragraph with respect to 
     provider's treatment of the pregnancy shall extend through 
     the provision of post-partum care directly related to the 
     delivery.
       ``(D) Terminal illness.--If--
       ``(i) a participant or beneficiary was determined to be 
     terminally ill (as determined under section 1861(dd)(3)(A) of 
     the Social Security Act) at the time of a provider's 
     termination of participation, and
       ``(ii) the provider was treating the terminal illness 
     before the date of termination,

     the transitional period under this paragraph shall extend for 
     the remainder of the individual's life for care directly 
     related to the treatment of the terminal illness or its 
     medical manifestations.
       ``(3) Permissible terms and conditions.--A group health 
     plan may condition coverage of continued treatment by a 
     provider under paragraph (1)(A)(i) upon the individual 
     notifying the plan of the election of continued coverage and 
     upon the provider agreeing to the following terms and 
     conditions:
       ``(A) The provider agrees to accept reimbursement from the 
     plan and individual involved (with respect to cost-sharing) 
     at the rates applicable prior to the start of the 
     transitional period as payment in full (or, in the case 
     described in paragraph (1)(B), at the rates applicable under 
     the replacement plan after the date of the termination of the 
     contract with the health insurance issuer) and not to impose 
     cost-sharing with respect to the individual in an amount that 
     would exceed the cost-sharing that could have been imposed if 
     the contract referred to in paragraph (1)(A) had not been 
     terminated.
       ``(B) The provider agrees to adhere to the quality 
     assurance standards of the plan responsible for payment under 
     subparagraph (A) and to provide to such plan necessary 
     medical information related to the care provided.
       ``(C) The provider agrees otherwise to adhere to such 
     plan's policies and procedures, including procedures 
     regarding referrals and obtaining prior authorization and 
     providing services pursuant to a treatment plan (if any) 
     approved by the plan.
       ``(D) The provider agrees to provide transitional care to 
     all participants and beneficiaries who are eligible for and 
     elect to have coverage of such care from such provider.
       ``(E) If the provider initiates the termination, the 
     provider has notified the plan within 30 days prior to the 
     effective date of the termination of--
       ``(i) whether the provider agrees to permissible terms and 
     conditions (as set forth in this paragraph) required by the 
     plan, and
       ``(ii) if the provider agrees to the terms and conditions, 
     the specific plan beneficiaries and participants undergoing a 
     course of treatment from the provider who the provider 
     believes, at the time of the notification, would be eligible 
     for transitional care under this subsection.
       ``(4) Construction.--Nothing in this subsection shall be 
     construed to--
       ``(A) require the coverage of benefits which would not have 
     been covered if the provider involved remained a 
     participating provider, or
       ``(B) prohibit a group health plan from conditioning a 
     provider's participation on the provider's agreement to 
     provide transitional care to all participants and 
     beneficiaries eligible to obtain coverage of such care 
     furnished by the provider as set forth under this subsection.
       ``(f) Coverage for Individuals Participating in Approved 
     Cancer Clinical Trials.--
       ``(1) Coverage.--
       ``(A) In general.--If a group health plan provides coverage 
     to a qualified individual (as defined in paragraph (2)), the 
     plan--
       ``(i) may not deny the individual participation in the 
     clinical trial referred to in paragraph (2)(B);
       ``(ii) subject to paragraphs (2), (3), and (4), may not 
     deny (or limit or impose additional conditions on) the 
     coverage of routine patient costs for items and services 
     furnished in connection with participation in the trial; and
       ``(iii) may not discriminate against the individual on the 
     basis of the participation of the participant or beneficiary 
     in such trial.
       ``(B) Exclusion of certain costs.--For purposes of 
     subparagraph (A)(ii), routine patient costs do not include 
     the cost of the tests or measurements conducted primarily for 
     the purpose of the clinical trial involved.
       ``(C) Use of in-network providers.--If one or more 
     participating providers is participating in a clinical trial, 
     nothing in subparagraph (A) shall be construed as preventing 
     a plan from requiring that a qualified individual participate 
     in the trial through such a participating provider if the 
     provider will accept the individual as a participant in the 
     trial.
       ``(2) Qualified individual defined.--For purposes of 
     paragraph (1), the term `qualified individual' means an 
     individual who is a participant or beneficiary in a group 
     health plan and who meets the following conditions:

[[Page 24348]]

       ``(A)(i) The individual has been diagnosed with cancer.
       ``(ii) The individual is eligible to participate in an 
     approved clinical trial according to the trial protocol with 
     respect to treatment of cancer.
       ``(iii) The individual's participation in the trial offers 
     meaningful potential for significant clinical benefit for the 
     individual.
       ``(B) Either--
       ``(i) the referring physician is a participating health 
     care professional and has concluded that the individual's 
     participation in such trial would be appropriate based upon 
     satisfaction by the individual of the conditions described in 
     subparagraph (A); or
       ``(ii) the individual provides medical and scientific 
     information establishing that the individual's participation 
     in such trial would be appropriate based upon the 
     satisfaction by the individual of the conditions described in 
     subparagraph (A).
       ``(3) Payment.--
       ``(A) In general.--A group health plan shall provide for 
     payment for routine patient costs described in paragraph 
     (1)(B) but is not required to pay for costs of items and 
     services that are reasonably expected to be paid for by the 
     sponsors of an approved clinical trial.
       ``(B) Routine patient care costs.--
       ``(i) In general.--For purposes of this paragraph, the term 
     `routine patient care costs' shall include the costs 
     associated with the provision of items and services that--

       ``(I) would otherwise be covered under the group health 
     plan if such items and services were not provided in 
     connection with an approved clinical trial program; and
       ``(II) are furnished according to the protocol of an 
     approved clinical trial program.

       ``(ii) Exclusion.--For purposes of this paragraph, `routine 
     patient care costs' shall not include the costs associated 
     with the provision of--

       (I) an investigational drug or device, unless the Secretary 
     has authorized the manufacturer of such drug or device to 
     charge for such drug or device; or
       (II) any item or service supplied without charge by the 
     sponsor of the approved clinical trial program.

       ``(C) Payment rate.--For purposes of this subsection--
       ``(i) Participating providers.--In the case of covered 
     items and services provided by a participating provider, the 
     payment rate shall be at the agreed upon rate.
       ``(ii) Nonparticipating providers.--In the case of covered 
     items and servicesprovided by a nonparticipating provider, 
     the payment rate shall be at the rate the plan would normally 
     pay for comparable items or services under clause (i).
       ``(4) Approved clinical trial defined.--
       ``(A) In general.--For purposes of this subsection, the 
     term `approved clinical trial' means a cancer clinical 
     research study or cancer clinical investigation approved by 
     an Institutional Review Board.
       ``(B) 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 Secretary determines--
       ``(i) to be comparable to the system of peer review of 
     studies and investigations used by the National Institutes of 
     Health, and
       ``(ii) assures unbiased review of the highest scientific 
     standards by qualified individuals who have no interest in 
     the outcome of the review.
       ``(5) Construction.--Nothing in this subsection shall be 
     construed to limit a plan's coverage with respect to clinical 
     trials.
       ``(6) Plan satisfaction of certain requirements; 
     responsibilities of fiduciaries.--
       ``(A) In general.--For purposes of this subsection, 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 requirements of this 
     subsection 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.
       ``(B) 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 
     of title I of the Employee Retirement Income Security Act of 
     1974.
       ``(7) Study and report.--
       ``(A) Study.--The Secretary shall analyze cancer clinical 
     research and its cost implications for managed care, 
     including differentiation in--
       ``(i) the cost of patient care in trials versus standard 
     care;
       ``(ii) the cost effectiveness achieved in different sites 
     of service;
       ``(iii) research outcomes;
       ``(iv) volume of research subjects available in different 
     sites of service;
       ``(v) access to research sites and clinical trials by 
     cancer patients;
       ``(vi) patient cost sharing or copyament costs realized in 
     different sites of service;
       ``(vii) health outcomes experienced in different sites of 
     service;
       ``(viii) long term health care services and costs 
     experienced in different sites of service;
       ``(ix) morbidity and mortality experienced in different 
     sites of service; and
       ``(x) patient satisfaction and preference of sites of 
     service.
       ``(B) Report to congress.--Not later than January 1, 2005, 
     the Secretary shall submit a report to Congress that 
     contains--
       ``(i) an assessment of any incremental cost to group health 
     plans resulting from the provisions of this section;
       ``(ii) a projection of expenditures to such plans resulting 
     from this section;
       ``(iii) an assessment of any impact on premiums resulting 
     from this section; and
       ``(iv) recommendations regarding action on other 
     diseases.''.

     SEC. 302. EFFECTIVE DATE AND RELATED RULES.

       (a) In General.--The amendments made by this title shall 
     apply with respect to plan years beginning on or after 
     January 1 of the second calendar year following the date of 
     the enactment of this Act, except that the Secretary of the 
     Treasury may issue regulations before such date under such 
     amendments. The Secretary shall first issue regulations 
     necessary to carry out the amendments made by this title 
     before the effective date thereof.
       (b) Limitation on Enforcement Actions.--No enforcement 
     action shall be taken, pursuant to the amendments made by 
     this title, against a group health plan with respect to a 
     violation of a requirement imposed by such amendments before 
     the date of issuance of regulations issued in connection with 
     such requirement, if the plan has sought to comply in good 
     faith with such requirement.
       (c) Special Rule for 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 
     this title shall not apply with respect to plan years 
     beginning before the later of--
       (1) the date on which the last of the collective bargaining 
     agreements relating to the plan terminates (determined 
     without regard to any extension thereof agreed to after the 
     date of the enactment of this Act); or
       (2) January 1, 2002.

     For purposes of this subsection, 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 title shall not be treated as a 
     termination of such collective bargaining agreement.

                  TITLE IV--HEALTH CARE LAWSUIT REFORM

                     Subtitle A--General Provisions

     SEC. 401. FEDERAL REFORM OF HEALTH CARE LIABILITY ACTIONS.

       (a) Applicability.--This title shall apply with respect to 
     any health care liability action brought in any State or 
     Federal court, except that this title shall not apply to--
       (1) an action for damages arising from a vaccine-related 
     injury or death to the extent that title XXI of the Public 
     Health Service Act applies to the action;
       (2) an action under the Employee Retirement Income Security 
     Act of 1974 (29 U.S.C. 1001 et seq.); or
       (3) an action in connection with benefits which are not 
     included group health plan benefits (as defined in section 
     402(14)).
       (b) Preemption.--This title shall preempt any State law to 
     the extent such law is inconsistent with the limitations 
     contained in this title. This title shall not preempt any 
     State law that provides for defenses or places limitations on 
     a person's liability in addition to those contained in this 
     title or otherwise imposes greater restrictions than those 
     provided in this title.
       (c) Effect on Sovereign Immunity and Choice of Law or 
     Venue.--Nothing in subsection (b) shall be construed to--
       (1) waive or affect any defense of sovereign immunity 
     asserted by any State under any provision of law;
       (2) waive or affect any defense of sovereign immunity 
     asserted by the United States;
       (3) affect the applicability of any provision of the 
     Foreign Sovereign Immunities Act of 1976;
       (4) preempt State choice-of-law rules with respect to 
     claims brought by a foreign nation or a citizen of a foreign 
     nation; or
       (5) affect the right of any court to transfer venue or to 
     apply the law of a foreign nation or to dismiss a claim of a 
     foreign nation or of a citizen of a foreign nation on the 
     ground of inconvenient forum.
       (d) Amount in Controversy.--In an action to which this 
     title applies and which is brought under section 1332 of 
     title 28, United States Code, the amount of non-economic 
     damages or punitive damages, and attorneys' fees or costs, 
     shall not be included in determining whether the matter in 
     controversy exceeds the sum or value of $50,000.
       (e) Federal Court Jurisdiction Not Established on Federal 
     Question Grounds.--Nothing in this title shall be construed 
     to establish any jurisdiction in the district courts of the 
     United States over health care liability actions on the basis 
     of section 1331 or 1337 of title 28, United States Code.

[[Page 24349]]



     SEC. 402. DEFINITIONS.

       As used in this title:
       (1) Actual damages.--The term ``actual damages'' means 
     damages awarded to pay for economic loss.
       (2) Alternative dispute resolution system; adr.--The term 
     ``alternative dispute resolution system'' or ``ADR'' means a 
     system established under Federal or State law that provides 
     for the resolution of health care liability claims in a 
     manner other than through health care liability actions.
       (3) Claimant.--The term ``claimant'' means any person who 
     brings a health care liability action and any person on whose 
     behalf such an action is brought. If such action is brought 
     through or on behalf of an estate, the term includes the 
     claimant's decedent. If such action is brought through or on 
     behalf of a minor or incompetent, the term includes the 
     claimant's legal guardian.
       (4) Clear and convincing evidence.--The term ``clear and 
     convincing evidence'' is that measure or degree of proof that 
     will produce in the mind of the trier of fact a firm belief 
     or conviction as to the truth of the allegations sought to be 
     established. Such measure or degree of proof is more than 
     that required under preponderance of the evidence but less 
     than that required for proof beyond a reasonable doubt.
       (5) Collateral source payments.--The term ``collateral 
     source payments'' means any amount paid or reasonably likely 
     to be paid in the future to or on behalf of a claimant, or 
     any service, product, or other benefit provided or reasonably 
     likely to be provided in the future to or on behalf of a 
     claimant, as a result of an 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.
       (6) Drug.--The term ``drug'' has the meaning given such 
     term in section 201(g)(1) of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 321(g)(1)).
       (7) Economic loss.--The term ``economic loss'' means any 
     pecuniary loss resulting from injury (including the loss of 
     earnings or other benefits related to employment, medical 
     expense loss, replacement services loss, loss due to death, 
     burial costs, and loss of business or employment 
     opportunities), to the extent recovery for such loss is 
     allowed under applicable State law.
       (8) Harm.--The term ``harm'' means any legally cognizable 
     wrong or injury for which punitive damages may be imposed.
       (9) Health benefit plan.--The term ``health benefit plan'' 
     means--
       (A) a hospital or medical expense incurred policy or 
     certificate;
       (B) a hospital or medical service plan contract;
       (C) a health maintenance subscriber contract; or
       (D) a Medicare+Choice plan (offered under part C of title 
     XVIII of the Social Security Act),
     that provides benefits with respect to health care services.
       (10) Health care liability action.--The term ``health care 
     liability action'' means a civil action brought in a State or 
     Federal court against--
       (A) a health care provider;
       (B) an entity which is obligated to provide or pay for 
     health benefits under any health benefit plan (including any 
     person or entity acting under a contract or arrangement to 
     provide or administer any health benefit); or
       (C) the manufacturer, distributor, supplier, marketer, 
     promoter, or seller of a medical product,

     in which the claimant alleges a claim (including third party 
     claims, cross claims, counter claims, or contribution claims) 
     based upon the provision of (or the failure to provide or pay 
     for) health care services or the use of a medical product, 
     regardless of the theory of liability on which the claim is 
     based or the number of plaintiffs, defendants, or causes of 
     action.
       (11) Health care liability claim.--The term ``health care 
     liability claim'' means a claim in which the claimant alleges 
     that injury was caused by the provision of (or the failure to 
     provide) health care services.
       (12) Health care provider.--The term ``health care 
     provider'' means any person that is engaged in the delivery 
     of health care services in a State and that is required by 
     the laws or regulations of the State to be licensed or 
     certified by the State to engage in the delivery of such 
     services in the State.
       (13) Health care service.--The term ``health care service'' 
     means any service eligible for payment under a health benefit 
     plan, including services related to the delivery or 
     administration of such service.
       (14) Included group health plan benefit.--The term 
     `included group health plan benefit' means a benefit under a 
     group health plan which is not an excepted benefit (as 
     defined in section 733(c) of the Employee Retirement Income 
     Security Act of 1974).
       (15) Medical device.--The term ``medical device'' has the 
     meaning given such term in section 201(h) of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 321(h)).
       (16) Non-economic damages.--The term ``non-economic 
     damages'' means damages paid to an individual for pain and 
     suffering, inconvenience, emotional distress, mental anguish, 
     loss of consortium, injury to reputation, humiliation, and 
     other nonpecuniary losses.
       (17) Person.--The term ``person'' means any individual, 
     corporation, company, association, firm, partnership, 
     society, joint stock company, or any other entity, including 
     any governmental entity.
       (18) Product seller.--
       (A) In general.--Subject to subparagraph (B), the term 
     ``product seller'' means a person who, in the course of a 
     business conducted for that purpose--
       (i) sells, distributes, rents, leases, prepares, blends, 
     packages, labels, or is otherwise involved in placing, a 
     product in the stream of commerce; or
       (ii) installs, repairs, or maintains the harm-causing 
     aspect of a product.
       (B) Exclusion.--Such term does not include--
       (i) a seller or lessor of real property;
       (ii) a provider of professional services in any case in 
     which the sale or use of a product is incidental to the 
     transaction and the essence of the transaction is the 
     furnishing of judgment, skill, or services; or
       (iii) any person who--

       (I) acts in only a financial capacity with respect to the 
     sale of a product; or
       (II) leases a product under a lease arrangement in which 
     the selection, possession, maintenance, and operation of the 
     product are controlled by a person other than the lessor.

       (19) Punitive damages.--The term ``punitive damages'' means 
     damages awarded against any person not to compensate for 
     actual injury suffered, but to punish or deter such person or 
     others from engaging in similar behavior in the future.
       (20) State.--The term ``State'' means each of the several 
     States, the District of Columbia, Puerto Rico, the Virgin 
     Islands, Guam, American Samoa, the Northern Mariana Islands, 
     and any other territory or possession of the United States.

     SEC. 403. EFFECTIVE DATE.

       This title will apply to--
       (1) any health care liability action brought in a Federal 
     or State court; and
       (2) any health care liability claim subject to an 
     alternative dispute resolution system,

     that is initiated on or after the date of enactment of this 
     title, except that any health care liability claim or action 
     arising from an injury occurring before the date of enactment 
     of this title shall be governed by the applicable statute of 
     limitations provisions in effect at the time the injury 
     occurred.

    Subtitle B--Uniform Standards for Health Care Liability Actions

     SEC. 411. STATUTE OF LIMITATIONS.

       A health care liability action may not be brought after the 
     expiration of the 2-year period that begins on the date on 
     which the alleged injury that is the subject of the action 
     was discovered or should reasonably have been discovered, but 
     in no case after the expiration of the 5-year period that 
     begins on the date the alleged injury occurred.

     SEC. 412. CALCULATION AND PAYMENT OF DAMAGES.

       (a) Treatment of Non-Economic Damages.--
       (1) Limitation on non-economic damages.--The total amount 
     of non-economic damages that may be awarded to a claimant for 
     losses resulting from the injury which is the subject of a 
     health care liability action may not exceed $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. The limitation under this paragraph shall not 
     apply to an action for damages based solely on intentional 
     denial of medical treatment necessary to preserve a patient's 
     life that the patient is otherwise qualified to receive, 
     against the wishes of a patient, or if the patient is 
     incompetent, against the wishes of the patient's guardian, on 
     the basis of the patient's present or predicated age, 
     disability, degree of medical dependency, or quality of life.
       (2) Limit.--If, after the date of the enactment of this 
     Act, a State enacts a law which prescribes the amount of non-
     economic damages which may be awarded in a health care 
     liability action which is different from the amount 
     prescribed by section 412(a)(1), the State amount shall apply 
     in lieu of the amount prescribed by such section. If, after 
     the date of the enactment of this Act, a State enacts a law 
     which limits the amount of recovery in a health care 
     liability action without delineating between economic and 
     non-economic damages, the State amount shall apply in lieu of 
     the amount prescribed by such section.
       (3) Joint and several liability.--In any health care 
     liability action brought in State or Federal court, a 
     defendant shall be liable only for the amount of non-economic 
     damages attributable to such defendant in direct proportion 
     to such defendant's share of fault or responsibility for the 
     claimant's actual

[[Page 24350]]

     damages, as determined by the trier of fact. In all such 
     cases, the liability of a defendant for non-economic damages 
     shall be several and not joint and a separate judgment shall 
     be rendered against each defendant for the amount allocated 
     to such defendant.
       (b) Treatment of Punitive Damages.--
       (1) General rule.--Punitive damages may, to the extent 
     permitted by applicable State law, be awarded in any health 
     care liability action for harm 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 
     health care liability action brought in any Federal or State 
     court 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 a health 
     care liability action 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. 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.
       (4) Drugs and devices.--
       (A) In general.--
       (i) Punitive damages.--Punitive damages shall not be 
     awarded against a manufacturer or product seller of a drug or 
     medical device which caused the claimant's harm where--

       (I) such drug or device was subject to premarket approval 
     by the Food and Drug Administration with respect to the 
     safety of the formulation or performance of the aspect of 
     such drug or device which caused the claimant's harm, or the 
     adequacy of the packaging or labeling of such drug or device 
     which caused the harm, and such drug, device, packaging, or 
     labeling was approved by the Food and Drug Administration; or
       (II) the drug is generally recognized as safe and effective 
     pursuant to conditions established by the Food and Drug 
     Administration and applicable regulations, including 
     packaging and labeling regulations.

       (ii) Application.--Clause (i) shall not apply in any case 
     in which the defendant, before or after premarket approval of 
     a drug or device--

       (I) intentionally and wrongfully withheld from or 
     misrepresented to the Food and Drug Administration 
     information concerning such drug or device required to be 
     submitted under the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 301 et seq.) or section 351 of the Public Health 
     Service Act (42 U.S.C. 262) that is material and relevant to 
     the harm suffered by the claimant; or
       (II) made an illegal payment to an official or employee of 
     the Food and Drug Administration for the purpose of securing 
     or maintaining approval of such drug or device.

       (B) Packaging.--In a health care liability action for harm 
     which is alleged to relate to the adequacy of the packaging 
     or labeling of a drug which is required to have tamper-
     resistant packaging under regulations of the Secretary of 
     Health and Human Services (including labeling regulations 
     related to such packaging), the manufacturer or product 
     seller of the drug shall not be held liable for punitive 
     damages unless such packaging or labeling is found by the 
     court by clear and convincing evidence to be substantially 
     out of compliance with such regulations.
       (c) Periodic Payments for Future Losses.--
       (1) General rule.--In any health care liability action in 
     which the damages awarded for future economic and non-
     economic loss exceeds $50,000, a person shall not be required 
     to pay such damages in a single, lump-sum payment, but shall 
     be permitted to make such payments periodically based on when 
     the damages are likely to occur, as such payments are 
     determined by the court.
       (2) Finality of judgment.--The judgment of the court 
     awarding periodic payments under this subsection may not, in 
     the absence of fraud, be reopened at any time to contest, 
     amend, or modify the schedule or amount of the payments.
       (3) Lump-sum settlements.--This subsection shall not be 
     construed to preclude a settlement providing for a single, 
     lump-sum payment.
       (d) Treatment of Collateral Source Payments.--
       (1) Introduction into evidence.--In any health care 
     liability action, any defendant may introduce evidence of 
     collateral source payments. If any defendant elects to 
     introduce such evidence, the claimant 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 the 
     claimant to secure the right to such collateral source 
     payments.
       (2) No subrogation.--No provider of collateral source 
     payments 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 liability action.
       (3) Application to settlements.--This subsection shall 
     apply to an action that is settled as well as an action that 
     is resolved by a fact finder.

     SEC. 413. ALTERNATIVE DISPUTE RESOLUTION.

       Any ADR used to resolve a health care liability action or 
     claim shall contain provisions relating to statute of 
     limitations, non-economic damages, joint and several 
     liability, punitive damages, collateral source rule, and 
     periodic payments which are consistent with the provisions 
     relating to such matters in this title.

     SEC. 414. REPORTING ON FRAUD AND ABUSE ENFORCEMENT 
                   ACTIVITIES.

       The General Accounting Office shall--
       (1) monitor--
       (A) the compliance of the Department of Justice and all 
     United States Attorneys-with the guideline entitled 
     ``Guidance on the Use of the False Claims Act in Civil Health 
     Care Matters'' issued by the Department on June 3, 1998, 
     including any revisions to that guideline; and
       (B) the compliance of the Office of the Inspector General 
     of the Department of Health and Human Services with the 
     protocols and guidelines entitled ``National Project 
     Protocols--Best Practice Guidelines'' issued by the Inspector 
     General on June 3, 1998, including any revisions to such 
     protocols and guidelines; and
       (2) submit a report on such compliance to the Committee on 
     Commerce, the Committee on the Judiciary, and the Committee 
     on Ways and Means of the House of Representatives and the 
     Committee on the Judiciary and the Committee on Finance of 
     the Senate not later than February 1, 2000, and every year 
     thereafter for a period of 4 years ending February 1, 2003.

  The CHAIRMAN. Pursuant to House Resolution 323, the gentleman from 
Ohio (Mr. Boehner) and the gentleman from Michigan (Mr. Dingell) will 
each control 30 minutes.
  The Chair recognizes the gentleman from Ohio (Mr. Boehner).
  Mr. BOEHNER. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, let us stop and ask ourselves a basic question: Just 
what is health care reform all about? Is it forcing HMOs to be more 
accountable? Is it expanding access for the 44 million who do not have 
health coverage? Is it limiting costs and making coverage more 
affordable?
  The answer to all of these questions is yes. Health care reform is 
about all of these things, access, accountability, and affordability, 
and we cannot address one without affecting the others; and if we truly 
want to help patients, we certainly cannot address one at the expense 
of the other two.
  Mr. Chairman, I have the utmost respect for my colleague the 
gentleman from Michigan (Mr. Dingell) and my colleague the gentleman 
from Georgia (Mr. Norwood), and I know they believe they found the 
prescription for what is ailing our health system. But, in truth, I 
believe their bill is poison for our health care system today.
  In an effort to make managed care more accountable, the Dingell-
Norwood proposal would authorize lawsuits against health plans. The 
trouble is most health plans in America are employer-based. More than 
124 million Americans get their health coverage through the workplace, 
a benefit employers can provide voluntarily, thanks to a law known as 
ERISA, which shields employers from unnecessary litigation. The system, 
for all its complexity, has saved countless American lives.
  Under the Dingell-Norwood proposal though, that would change. 
Expanding lawsuits against employer-based health plans means expanding 
lawsuits against employers. If employers are exposed to lawsuits, they 
are going to stop providing coverage to their employees.
  It means millions of American workers are going to lose their health 
insurance at the very time Congress should be working on expanding 
access to coverage.
  The Dingell-Norwood bill has other flaws. The authors claim their 
bill is

[[Page 24351]]

about giving control to doctors and patients, but it is also about 
giving control to the Federal Government.
  Under their proposal, the Department of Labor, the Department of 
Health and Human Services, the IRS, and likely the States, would all 
have a hand in regulating Americans' health benefits. Granting the 
bureaucracy these new powers is another quiet step toward the 
government-run health care system Americans overwhelmingly rejected in 
1993 and 1994. They were right to reject it then, and they would be 
right in rejecting it now.
  Their proposal has a third gaping flaw, and it concerns something 
that is not even in the bill at all, and that is medical malpractice 
reform. Our opponents often cite the experience in Texas and what they 
have done with their HMO liability reform bill, and in fact there have 
not been a flood of frivolous lawsuits and exploding costs. But what 
our colleagues never mention is that Texas passed a sweeping medical 
malpractice and tort reform law 2 years before they passed their HMO 
liability. Why should this Congress not do the same?

                              {time}  1115

  Mr. Chairman, Americans want health care reform. But legislation that 
exposes employers to lawsuits jeopardizes the benefits to 124 million 
American lives who get their coverage from their workplace. It expands 
the reach of big government and slams the door of medical tort reform, 
and I am not sure that that is what Americans really want when they 
think about health care reform today.
  Fortunately, there is an alternative. My substitute, the CARE Act, 
would punish bad HMOs without punishing the uninsured. We named it the 
CARE Act because patients want access to care, not access to court. But 
that does not mean that managed care companies get a free ride. Instead 
of lawsuits, the CARE Act would guarantee patients the protection of a 
strong, enforceable and legally binding appeals process.
  If you or your family is denied care, you can automatically appeal to 
independent physicians who are familiar with your case and conditions 
and are completely independent from the HMO. Assuming the physicians 
rule in your favor, you get the care; there is no delay, period. You 
have the right to that care and can get it immediately. And if your 
plan refuses to do what the doctors order, the plan is subject up to 
$5,000 per day until you get the care, with no caps.
  Now, Mr. Chairman, if we really want to get tough on HMOs that 
wrongly deny care, I do not think it gets much tougher than that. But 
here is the best part. Under our CARE Act, HMOs are punished for the 
wrongful denials before a patient is harmed, instead of after the fact 
when it is too late. Instead of waiting until a tragic mistake is made, 
it ensures that patients get the care they need when they need it, and 
is that not really what managed care reform is all about?
  External review gives patients a better option. It also gives us as 
Members of Congress the chance to be consistent. How can 286 Members of 
Congress vote to cap Y2K liability for high-tech companies, and then 
change course and vote for expanded lawsuits in health care? How can 
three-fourths of the House vote to override the President's veto of 
securities litigation reform and then turn around and vote to support 
new lawsuits against employers? How can Members vote for medical 
malpractice reform six times in the last 5 years in this House that 
shields providers from lawsuits and then reverse themselves and support 
expanded liability in health care?
  The CARE Act is not just an alternative to lawsuits, Mr. Chairman, it 
is a better idea altogether.
  So I ask my colleagues, for the sake of the 124 million Americans in 
employer-based health care, give this plan a chance. And for the sake 
of the 44 million Americans who have no health insurance, give this 
option a chance. For the sake of our kids and our grandkids whose 
quality of life will depend on the health care system of the 21st 
century, give this option a chance.
  I urge my colleagues to join me in voting to give patients care, not 
court. Let us not jeopardize the health insurance benefits our 
constituents enjoy today from their employers.
  Mr. Chairman, I reserve the balance of my time.
  Mr. DINGELL. Mr. Chairman, I yield myself 2 minutes.
  Mr. Chairman, this is a wonderful amendment, but unfortunately, it is 
a sham and an optical illusion, and very frankly, a fraud. The benefits 
look good, but there is no way that one can obtain them. Every other 
alternative to the Norwood-Dingell-Ganske bill that we will consider at 
least pretends to give you the ability to hold the health insurance 
companies accountable when they make a medical decision that hurts you. 
This one does not even keep up the pretense.
  The bill is not a serious effort. If you buy insurance, the bill does 
not help you; and if you have a chronic or serious medical condition 
requiring regular treatment by a specialist, the bill does not help 
you. If you believe you should get care when it is medically necessary, 
this bill does not help you.
  For the rhetoric that we are about to hear about lawyers taking over 
health care and the health care profession, this bill would hand the 
lawyer, and not the doctor, the power to decide when one needs medical 
evaluation.
  These are just a few of the flaws contained in the Boehner 
substitute. I urge my colleagues to reject it. I say that with all 
respect for my good friend, the author of this unfortunate proposal.
  Mr. Chairman, I reserve the balance of my time.
  Mr. BOEHNER. Mr. Chairman, I yield 3 minutes to the gentleman from 
Virginia (Mr. Bliley), the chairman of the Committee on Commerce.
  Mr. BLILEY. Mr. Chairman, I thank the gentleman for yielding me this 
time.
  Mr. Chairman, we need care, not courts. The Boehner bill does that. 
It allows for binding external review; and if the plan does not accept 
that, if the external review rules in favor of the patient and the 
care, then the fine of $1,000 a day takes place until they do comply, 
and there is no cap. It also enables the patient to go to any health 
care provider that they see fit at that time and be treated. Is that 
not far better than waiting and going to court and maybe 3 years down 
the road you get a verdict in your favor. In the meantime, what are you 
doing about the care that you need in order maybe to live? It is good 
for your heirs, but it is not very good for you.
  If people say, well, there will not be many lawsuits, read last 
week's Wall Street Journal. The same plaintiff lawyers who took on the 
tobacco companies and are taking on the gun manufacturers are lining up 
for the biggest pot since tobacco, the HMOs. And when they sue, they 
will not just sue the HMO, they will sue everybody in sight, including 
the employer. And employers, many of them, are not going to put up with 
that. What they will do will be to put the money in the worker's 
envelope and say, you are on your own. Unfortunately, many of them, you 
know how young people are, they think they are eternal, they will not 
buy insurance. They would rather have an automobile or something else, 
or take a trip, and that $44 million uninsured number will go up 
dramatically.
  We increased our uninsured last year by 1 million at a time when we 
have virtual full employment. So, we need to pass the Boehner bill to 
make sure that patients get care and not courts.
  Mr. Chairman, I rise today in strong support of the Boehner 
substitute to H.R. 2723.
  Managed care is an essential component of our health care delivery 
system today. The notion of managing care grew out of a concern over a 
decade ago that health care costs were escalating, and something needed 
to be done to get control over these skyrocketing annual cost 
increases. In response to these concerns, insurers began to contract 
with health care providers to arrange to have a broad network of health 
professionals available to provide benefits. Health professionals 
accept reduced fees in exchange for access to a high volume of 
patients; and plan enrollees pay lower premiums in exchange for seeing 
one of the health professionals in the network. In addition, plans have 
quality assurance and utilization review programs to ensure that 
patients

[[Page 24352]]

continue to receive cost-efficient quality health care.
  This private sector response to the increase in health care spending 
in the 1980's succeeded in reigning in health care spending, while 
maintaining and yes, even improving the quality of care for millions of 
Americans. Many health care professionals believe that the techniques 
used by managed care companies, such as promoting wellness, the strong 
emphasis on preventive care, and the ability to ``manage one's care,'' 
have been valuable contributions to improving the health of America.
  The pendulum which started on the side of high health costs, with no 
control on utilization, has swung towards lower costs and increased 
scrutiny of the types of services health professionals are performing. 
We are here today, to decide how far that pendulum has swung. I agree 
that many of the provisions in all of the bills we are discussing today 
are reasonable--ensuring that doctors are not limited in the treatment 
options they can share with their patients; guaranteeing women direct 
access to their OB/GYN provider, and ensuring that children can have 
their pediatrician serve as their primary care provider, are just some 
of the common sense protections that I think we all support.
  I also support providing as much information as possible that the 
patient would find useful in evaluating their health care options. That 
is why I submitted an amendment which would have required physicians to 
disclose malpractice judgments or criminal convictions issued against 
them. If this amendment were law today, a consumer would be able to use 
the Internet to thoroughly research the background of any physician 
licensed to practice medicine in the United States. I was disappointed 
when this amendment was not made in order.
  There are two provisions in the Boehner substitute that I would like 
to bring to everyone's attention, because I feel they are positive 
steps towards ensuring quality without compromising on accountability. 
The first is the responsible and common sense way in which a plan is 
held accountable once an independent medical expert has determined what 
the course of treatment for a patient should be. If the plan does not 
arrange to provide the care in accordance with what an independent 
medical expert has determined to be appropriate care, the plan will be 
fined $1,000 per day until the plan complies with the independent 
expert's opinion. More importantly for the patient, he or she can see 
any provider at any facility he or she chooses, and the plan has to pay 
for it. This is a commonsense approach towards ensuring the patient 
gets the care he or she has paid for, and holds the plan accountable 
for providing that care in a timely manner. Care, not courts--that is 
what patients want when they seek medical attention.
  The second provision I would like to mention, which prior to this 
year had been strongly supported by the AMA, is medical malpractice 
reform. The Boehner substitute would reform the guidelines governing 
health care lawsuits by, among other things, limiting ``non-economic 
damages to $250,000, but deferring to states if they feel a higher or 
lower amount is appropriate. Health care expenditures should be 
directed towards improving the health of America's patients; not 
towards lining the pockets of trial lawyers--too often the case today. 
These reforms would keep more dollars going to patient care and less to 
the trial lawyers.
  I am extremely concerned about the terms of the debate we are having 
today. One million Americans lost their health insurance coverage in 
just this past year alone. That is the crisis in health care in America 
today. If we legislators want to alter the way in which health care is 
delivered through private markets in this country, we owe it to the 
American people, to those who sent us here to do the people's work, to 
at a minimum, abide by the Hippocratic oath that health professionals 
are obligated to follow every day, which states ``First, Do No Harm.''
  I am disappointed that the debate has focused more on trial lawyers, 
than on how we can create incentives for the private insurance market 
to offer more affordable health insurance for all Americans.
  Those favoring increasing the role of trial lawyers in our health 
care delivery system point to Texas as an example of what happens when 
a state allowed state court action against a health plan, and yet only 
a handful of suits have been filed. This does not tell the whole 
picture. Just this week in an article printed in the New York Times by 
Dave Morehead, a doctor with the Scott and White Health Plan in Texas, 
Dr. Morehead states, ``Lawsuits cost companies money, but so does the 
mere threat of a lawsuits.'' He points out that as a result of the 
recent legislation passed in Texas, the physicians participating in the 
Scott and White Health Plan have changed the way they practice 
medicine. Pre-authorization requirements which are utilized as a means 
to ensure that patients receive a course of treatment that is safe and 
effective, thus reducing the risk of complications which often result 
from some procedures, have been discontinued for fear of litigation 
resulting from any delay in treatment. He adds that 25 to 35 percent of 
tests and treatments do not contribute to better health. Dr. Morehead 
sums up his experience in Texas by concluding `Our experience shows 
that the right to sue doesn't help patients get better care. It just 
drives costs up, for us and for them.''
  How many times do we have to come to the well this session on a 
highly politicized issue and find the trial lawyers actively 
campaigning for more litigation. First it was tobacco, then guns, now 
health care. If lawyers are going to start getting in the business of 
practicing medicine, perhaps we should require them to go to medical 
school. I am sure the physician community would welcome them, as 
ironically they too are advocating for more lawyer involvement in the 
delivery of health care in this country today. On the other hand, this 
might give the public more comfort. Since lawyers and judges will be 
making clinical decisions as a result of some of these bills, perhaps 
we should require them to at least have some medical training.
  America has the greatest health care in the world. The fact that 16.3 
percent of our fellow citizens cannot afford it is deeply troubling. 
That the plight of these 44.3 million Americans has been lost on 
helping the trial attorneys is tragic. I hope members will think of the 
44.3 million of Americans who do not have any health insurance as they 
consider what legislation to vote for today. Do patients deserve care 
or courts? I vote for care and that is why I am supporting the Boehner 
substitute, and encourage my colleagues to do the same.
  Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the distinguished 
gentleman from Iowa (Mr. Ganske).
  Mr. GANSKE. Mr. Chairman, a fundamental flaw, a fundamental flaw in 
the bill that passed the Senate and in the Boehner bill is that it does 
not address the issue of medical necessity. The problem in the ERISA 
plan, and that is under ERISA law, a health plan can define medical 
necessity in any way they want to. The gentleman's bill does nothing to 
change that, he would agree with me on that.
  Let me cite an example of why that could be a problem. Let us say 
that a health plan sets up its definition for getting psychiatric care, 
saying that somebody has to try to commit suicide three times before 
one can qualify. That may sound absurd, but let us just say that the 
plan does that.
  A little boy goes out, a teenager, tries to commit suicide once, 
tries to commit suicide twice, and finally on the third time, commits 
suicide. Now, under the Boehner bill, that plan followed its own 
criteria. Guess what? Under the Boehner bill and under the bill that 
passed the Senate, there is no recourse, because ERISA says that the 
health plan can define medical necessity in any way they want to, no 
matter how unreasonable the criteria are or seem to be by an 
independent panel, review panel. They still, under ERISA law, cannot 
change the fact that a health plan could define medical necessity as 
the cheapest, least expensive care.
  We could take a little boy with a cleft palate, a health plan could 
say all we are going to provide treatment for that is a plastic 
obturator, a piece of plastic stuck up into that hole. If that is the 
way the plan's employer has defined medical necessity, there is no 
recourse, even if it does not fit any prescribed standards of care.
  That is such a fundamental problem that is not addressed in the 
Boehner bill and that was not addressed in the Senate bill, and on that 
alone we should vote no on the Boehner bill.
  Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the distinguished 
gentleman from New Jersey (Mr. Andrews).
  Mr. ANDREWS. Mr. Chairman, I rise in opposition to the Boehner 
substitute.
  The key questions here are who decides who gets care and on what 
basis. The Boehner substitute says the managed care plan decides who 
gets care on any basis they find economically viable.

[[Page 24353]]

  When a Member of our family, when someone we love has to see an 
oncologist or a cardiologist or a speech therapist, the reason we are 
here today is that too many people have been told no, that that is not 
something that is appropriate under their plan. The underlying Norwood-
Dingell bill says that decisions about who will get that care will be 
made by qualified, independent medical professionals. The Boehner bill 
says the plan will decide, and when the plan decides on the basis of 
its own economic motivation, its own definition of what is best for the 
plan, no one is held accountable.
  The Boehner substitute fails the two most critical tests that are 
before us today in protecting the rights of patients. When it comes to 
the issue of whether decision-makers are held accountable, the Boehner 
substitute says, they are not held accountable in the same way that 
delicatessens and fast food restaurants and homebuilders and everyone 
else in America is held accountable.
  When it comes to the issue of the standard on that decision, the 
Boehner bill says the plan sets the standard. We say the medical 
professionals acting in consultation with the families should set that 
standard.
  Reject the Boehner substitute; stand for the Norwood-Dingell bill.
  Mr. BOEHNER. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman 
from Missouri (Mr. Talent), the chairman of the Committee on Small 
Business.
  Mr. TALENT. Mr. Chairman, we have a problem in America with health 
care today. We addressed one of the problems yesterday, trying to help 
the uninsured.
  The other problem is people who have insurance and cannot be certain 
that they will get the coverage they have been promised when they get 
sick. So their insurance is fine, and then when they get sick, they are 
concerned that their HMO may turn them down for coverage, and they have 
a right to be concerned, and we need to address that, and the Boehner 
bill does that.
  The idea is to provide people with the care that they need when their 
physician prescribes it before they become seriously ill or die. The 
key to that is the external review process that is in this bill, and 
what it says, quite simply, is this: your physician, let us say, 
prescribes for you a cardiac cath. The plan turns it down and says no, 
you only need beta blockers. You can appeal immediately to an 
independent panel of specialists, cardiologists in that field who are 
fully vested with the authority to reverse the HMO's decision. They 
have to take into account all of the evidence that is given, including 
the protocols that the plan wants to follow, but they are vested under 
this bill with the authority to reverse the decision of the HMO. I read 
that language this morning.
  It is frustrating how we all seem to agree we want the same thing 
here, and then we are arguing about what the bills actually say. The 
bill vests the authority in the independent reviewers to reverse 
decisions of the plan with regard to medical necessity.
  Now, why is that better than open-ended liability against employers 
and plans as is provided in Norwood-Dingell? Because that will take 
billions and billions of dollars out of treatment rooms and put it into 
courtrooms. That will take billions and billions of dollars out of care 
and put it into legal fees and defensive medicine and everything that 
we have been struggling with for years and years and years with regard 
to providers and physicians.

                              {time}  1130

  Mr. Chairman, it does not have to be all or nothing at all. It does 
not have to be the world we have now where the plans are unrestricted, 
where you cannot control what they do, or where we open this thing up 
to lawsuits against every employer in the country who has a group 
health plan and all the plans in unrestricted fashions. We can have a 
good, measured response that makes sure people get the care they need 
when their physician prescribes it without big government, without 
thousands and thousands of lawsuits that will draw money out of 
treatment rooms and put it in the courtrooms. I think the gentleman has 
a good idea. I am going to support his bill.
  Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the distinguished 
gentlewoman from Colorado (Ms. DeGette).
  Ms. DeGETTE. Mr. Chairman, children are not just little adults. They 
have different health and developmental needs than adults, and they 
often require age-appropriate pediatric expertise to understand, 
diagnose, and treat their health problems. They deserve health care 
providers that have training and expertise in their conditions. H.R. 
2723, the Dingell-Norwood bill, contains provisions that allow children 
to have access to pediatricians, access to pediatric specialty care, 
access to emergency care, continuity of care, appeals to pediatric 
experts, and pediatric quality assurance provisions.
  The Boehner substitute, however, as we can see from this chart, fails 
to measure up in every single comparison. Children are far too often 
put at risk by being inappropriately referred to certain adult 
specialists who are not trained in children's health needs. Who is 
affected? Children like Kaitlynn Bogan of West Alexandria, Ohio, whose 
health plan would not refer her to a pediatric gastrologist and who 
continued to react with blood curdling screams until the Bogan family 
mortgaged their home and went outside the plan to a pediatric 
specialist who corrected her problem.
  Carley Christie of Palo Alto, California, who was inappropriately 
referred to an adult specialist for a Wilms' tumor who performed a 
needle biopsy which punctured the tumor and essentially tripled the 
duration of Christie's chemotherapy. The family, finally on their own 
and at their own expense, again elected to have the surgery performed 
by a qualified pediatric specialist.
  Mr. Chairman, the American public strongly supports allowing families 
like these to get access to the critical pediatric care they need. In 
fact, 86 percent of Americans have expressed their support for the 
Dingell-Norwood plan that would ensure children get access to pediatric 
specialists like pediatric heart specialists and surgeons and to 
hospitals that specialize in treating children. As adults, we have a 
responsibility to our kids. I urge my colleagues to reject this 
amendment and to support the Dingell-Norwood plan.
  Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the gentleman from 
Utah (Mr. Cook).
  Mr. COOK. Mr. Chairman, I rise in support of the bipartisan patient 
protection plan offered by the gentleman from Georgia (Mr. Norwood) and 
the gentleman from Michigan (Mr. Dingell). I want to commend the 
leadership of the House for allowing what I think has been a very fair 
and an open debate. Quality health care is one of the most important 
issues facing our constituents.
  Now, each of these proposals, all of the bills that are being debated 
today, have some very good ideas in them. However, I have concluded 
that the Norwood-Dingell approach is the best. If Americans have the 
right to sue for a damaged fence or an unsafe toy, they should have the 
right to sue if their health or life has been endangered or lost. This 
is a constitutional right.
  Doctors already face liability. But too often their decisions are 
forced upon them by an insurance plan. It is only fair, it is only 
American that the insurance plans be held to the same accountability. 
The State is the appropriate venue for these cases. States already 
license the doctors. They license the health plans. And we all know 
that the Federal courts are already overwhelmed with criminal cases.
  I cannot understand why those of us that believe in the importance of 
States rights are so eager to try to throw some of these cases into the 
Federal system. The doctor-patient relationship has been damaged in 
this country, and I believe that the Norwood-Dingell bill is going to 
help restore that relationship and hopefully will put doctors and 
patients back in control of what I think ought to be a private health 
care system.
  Mr. BOEHNER. Mr. Chairman, I am happy to yield 2\1/2\ minutes to the 
gentleman from North Carolina (Mr.

[[Page 24354]]

Ballenger), chairman of the Subcommittee on Workforce Protections of 
the Committee on Education and the Workforce.
  Mr. BALLENGER. Mr. Chairman, first of all I thank the gentleman for 
yielding me this time. I think it is important to realize what small 
businesses will do when they are faced with health care liability 
provided by the Norwood-Dingell bill.
  Let me show Members what increased liability will do to my own small 
company in North Carolina. We have 200 employees. We self-insure. Our 
health insurance expenses last year were a total of $700,000. Of this 
cost, the company voluntarily paid $550,000, or $2,750 per employee. 
For additional coverage, the employees collectively paid $150,000, or 
$750 per employee. Now, the $2,750 per employee expense covered by my 
company is a voluntary fringe benefit.
  Why would any company voluntarily give a fringe benefit that would 
expose them to the possibility of being sued? We can say that 
litigation is not likely but small business owners cannot afford to 
take that chance. With the specter of liability looming, it would make 
good business sense to give the employee a pay increase of $1.375 per 
hour, that is $2,750 spread over a year, give them $1.375 and advise 
each of them to get their own health insurance. This would leave my 
company free of liability. I guarantee that it would cost each employee 
substantially more to purchase insurance individually, and many 
employees would not use their wage increases for health insurance.
  As Members can see, the liability provisions of Norwood-Dingell will 
lead to a greater number of uninsured nationwide. Unlike the liability-
ridden Norwood-Dingell bill, the Boehner substitute will ensure 
patients' rights without exposing employers to lawsuits for voluntarily 
providing health care to their employees. A strong, binding, 
independent external review process for health plans, with a fine of 
$5,000 a day for plans who refuse to adhere to the decision of the 
panel of doctors, will provide accountability to the millions of 
Americans in employer-based care.
  Do not jeopardize the employer-based health care system. Let the 
small businesses and employers continue to provide health care benefits 
to the American workforce. I urge my colleagues to vote for the Boehner 
substitute and the 150 million people who have insurance coverage right 
now.
  Mr. DINGELL. Mr. Chairman, I yield 1 minute to the distinguished 
gentlewoman from Michigan (Ms. Stabenow).
  Ms. STABENOW. Mr. Chairman, I am very pleased to be a cosponsor of 
the Norwood-Dingell-Ganske legislation. I want to particularly thank 
the gentleman from Michigan (Mr. Dingell) for his leadership in this 
area.
  I rise to strongly oppose the Boehner substitute. I want to take just 
a moment to share the story of Jessica Luker. Jessica died 3 weeks ago. 
She had an emergency operation on May 11. Her family found out on May 
12 that they had suddenly become part of an HMO as of May 1. The HMO 
would not cover the emergency surgery. They would not allow her to 
continue with her doctor of 14 years, her neurologist who had been 
caring for her and her disability. Jessica died while her family was 
fighting the HMO that would not allow her to get the kind of care that 
she needed.
  It is not right in this country when a family that is struggling to 
care for their dying daughter also has to fight their insurance 
carrier. The Boehner substitute would do nothing to help Jessica's 
family or her situation. I urge a ``no'' vote on the Boehner substitute 
and a ``yes'' vote on a real patients' bill of rights.
  Mr. DINGELL. Mr. Chairman, I yield 1 minute to the distinguished 
gentleman from New York (Mr. Forbes).
  Mr. FORBES. I thank the gentleman for yielding me the time.
  Mr. Chairman, I rise today and ask that we pass a comprehensive 
patients' bill of rights and reject the Boehner and other substitutes 
that would only delay what this Nation needs. It needs accountability 
with our HMOs; we need consumer protections; and we need to put the 
doctors and health care professionals back in charge.
  I am reminded of a family up in the north fork of Long Island, New 
York. Mae woke up in the middle of the night. Her husband was gagging 
and choking in blood. He was lying in a pool of blood. She did not call 
911. Why? Because when she called it a month earlier, 911 arrived and 
when she got home from the hospital with her husband, the bills came in 
and they were not paid because a clerk said at the HMO that it was not 
deemed an emergency.
  So this time she calls the 24-hour hotline for the HMO. They have the 
privately contracted ambulance come from somewhere up the island half 
an hour after her husband stopped breathing. The privately contracted 
ambulance arrives and, of course, unfortunately her husband was dead. 
These kinds of incidents require that we move as a Congress to get a 
comprehensive patients' bill of rights. I urge passage of Dingell-
Norwood and rejection of all the substitutes.
  Mr. BOEHNER. Mr. Chairman, I yield myself 15 seconds. The last 2 
examples that were presented on the floor by the other side would be 
protected under the Boehner substitute today. The accountability 
procedures in our bill guarantee access to care. The only real 
difference between these two bills is that we do not allow lawsuits 
filed to drive employers into bankruptcy.
  Mr. Chairman, I yield 2 minutes to the gentleman from Michigan (Mr. 
Knollenberg).
  Mr. KNOLLENBERG. Mr. Chairman, I thank the gentleman for yielding me 
this time. I rise in strong support of the substitute offered by the 
gentleman from Ohio.
  Mr. Chairman, I urge my colleagues to remember the important 
principle behind the creation of the Employee Retirement Income 
Security Act of 1974, better known as ERISA. In response to a number of 
flagrant abuses to benefit plans, it was decided that protecting the 
interests of employers as well as the beneficiaries was of the utmost 
importance. Because of this sentiment, ERISA abides by the predominant 
view that employees should be afforded the opportunity to quality care.
  These provisions apply to nearly 150 million employees, 80 percent of 
our Nation's workers, who otherwise may not have obtained the necessary 
access to the vital coverage that they require. Because plans would be 
subject to the same benefit laws across the States, costs are kept down 
because government regulations which traditionally drive costs up are 
eliminated.
  Look at the numbers. We have heard them before. Some 44 million 
Americans do not have health insurance. That means one out of six do 
not have health coverage. The other proposals that we are considering 
today, that we have been listening to, would significantly raise 
premiums, some by over 4 percent. The nonpartisan CBO, Congressional 
Budget Office, concludes every percentage point in premiums that are 
increased translates into 400,000 people losing their coverage.
  Common sense tells us that what we should be doing is to consider 
ways to provide coverage for all Americans, not forcing people out of 
their health coverage. Make no mistake about it, the chief 
beneficiaries of preempting ERISA would be the trial attorneys. 
Consumers and employers would be left to pick up the bill for increased 
and often frivolous litigation.
  This Congress must ensure the patient's right to care, not the 
lawyer's right to bill. The alternatives offered today do nothing to 
help sick people get better. That is what this debate should be about. 
That is why I support the Boehner substitute, and I believe all Members 
should.
  Mr. BROWN of Ohio. Mr. Chairman, I ask unanimous consent to claim the 
time of the gentleman from Michigan (Mr. Dingell).
  The CHAIRMAN. Without objection, the gentleman from Ohio will control 
the time in opposition.
  There was no objection.
  Mr. BROWN of Ohio. Mr. Chairman, I yield 2 minutes to the gentleman 
from Georgia (Mr. Norwood), the sponsor of the underlying Norwood-
Dingell bill.

[[Page 24355]]


  Mr. NORWOOD. Mr. Chairman, I think it would be sort of nice and fun 
if I took a minute and responded to my good friend the gentleman from 
North Carolina (Mr. Ballenger). He said that he is a business owner, a 
small business owner, and he does not want his business sued, he does 
not want to be sued. I could not agree with that more. Of course we do 
not want to do that. That is why we really do not do that. The 
gentleman from North Carolina has discretionary authority over his 
small company. He is the CEO, he is the owner, he is the President.

                              {time}  1145

  But he is also the congressman. He is in Washington. He is not making 
medical necessity decisions for his employees at all. It is that third-
party administrator that he hired to decide whether those patients get 
to be hospitalized or whether they get that surgery or whether they get 
that operation. That is who we are talking about. That is who we are 
putting under the gun, that third-party administrator.
  Our bill says over and over again, it protects the gentleman from 
North Carolina, but it does go after that third-party administrator in 
a very tailored way. All it says, one thing, if one denies a benefit 
that is a benefit in the plan, that was a benefit the gentleman from 
North Carolina thought his people ought to have, and one denies it 
arbitrarily, and one kills somebody, one has to be responsible for 
those decisions.
  What are they going to do? They are going to carry malpractice 
insurance like the rest of the world has to. What is that going to 
cost? Fifteen to 20 cents a month per patient. But it gives those 
people that are patients, that work for the gentleman from North 
Carolina the feeling, the encouragement they actually will have 
decisions made by their doctors, not by that clerk that may be living 
in Missouri. That is what it is all about.
  I have told the gentleman from North Carolina over and over again, we 
are not going to sue him. We do not want to sue him. We do not want to 
sue small businesses. That is why we wrote the bill. Page 99, look at 
it. We protect the gentleman from North Carolina. But his third-party 
administrator must be careful.
  Mr. BOEHNER. Mr. Chairman, I yield myself 1 minute.
  Now, the gentleman from Georgia (Mr. Norwood), my dear friend who 
believes passionately on this issue, and I congratulate him for the 5 
years he spent moving this issue along, but we have a very serious 
disagreement here, because not only are my colleagues exposing health 
plans and employers to liability, they are jeopardizing the health 
coverage for millions of Americans because, in the end, it is the 
health plan and the employer that is going to pay the bill.
  Now, under our system today, the employers provide coverage for 125 
million people. If my colleagues raise the cost to them and expose them 
to liability, guess who is in danger? Their employees are. That is not 
what we want to do.
  Now, the gentleman says, well, employers are shielded. The fact is, 
under ERISA, employers have to provide a fiduciary responsibility. They 
have to use discretion on behalf and for the benefit of every employee 
in the plan. We cannot create a wall that says we are going to punish 
health plans without hurting employers and their employees.
  Mr. Chairman, I am happy to yield 2 minutes to the gentleman from 
Wisconsin (Mr. Ryan).
  Mr. RYAN of Wisconsin. Mr. Chairman, I wish to speak in favor of the 
Boehner amendment today. I believe that this amendment achieves the 
necessary balance between protection of individuals enrolled in managed 
care plans and keeping their care affordable and accessible for 
employers and their employees.
  The last thing we want to do is drive up the number of uninsured 
Americans today. Too many costly mandates and too many costly lawsuits 
will result in just that.
  I firmly believe that real patient protections are ensuring greater 
access to care, more affordable care, and the highest quality care. 
According to the Census Bureau, we have 44 million Americans who are 
uninsured today. The last thing we want to do is drive that number up. 
We want to get that number down, not up.
  We must approach managed care legislation in the same way we approach 
other mandates we have voted on. We need to consider its effect on the 
individuals in this country and on their ability to access quality 
health care.
  I have heard from hundreds of employers and their representatives 
from my district, the First District of Wisconsin, who are extremely 
nervous about this action that we are taking here today. They are 
nervous, not because they may be required to provide more benefits, 
that is a fine thing, but they are nervous because they may be facing a 
whole new array of lawsuits simply because they choose to offer health 
care for their employees.
  I urge Congress to consider those businesses and the people they 
employ in this debate today. Anything we do to drive up their costs to 
expose them to a whole new feeding frenzy of lawsuits will drive up the 
number of uninsured.
  We must strive to protect the rights of individuals in managed care, 
make sure that they are not wrongfully denied care, but make sure that 
health care remains affordable and accessible.
  The Boehner amendment strikes that balance. It contains strong 
measures to review health care decisions. It requires an internal 
review, external review that has teeth and enforcement measures. More 
importantly, we need to make sure that the relationship in health care 
is between patients and their doctors, not patients and the HMOs and 
patients and their trial lawyers.
  Mr. BROWN of Ohio. Mr. Chairman, I yield 1 minute to the gentleman 
from Wisconsin (Mr. Kind).
  Mr. KIND. Mr. Chairman, I thank the gentleman from Ohio for yielding 
me this time.
  Mr. Chairman, I rise today as a supporter of Norwood-Dingell and in 
strong opposition to the Boehner substitute.
  This debate is really a very simple debate. Do my colleagues think 
that medically necessary, important health care decisions should be 
placed in the hands of doctors in consultation with their patients or 
should health plan administrators sitting in their offices hundreds of 
miles away be making these life-and-death decisions. And there are life 
and death decisions being made.
  For me, the debate is about a young family in western Wisconsin who, 
2 years ago, were informed that their 10-year-old little girl had an 
inoperable brain tumor, and they wanted this particular form of 
treatment that the doctor was recommending.
  The health plan administrator says, ``We will cover that as long as 
it is an AMA-approved treatment.'' The problem, when they talked to the 
AMA, is that there was no such thing as an ``AMA-approved'' treatment. 
So they denied coverage.
  As a father of 2 young boys myself, I can think of no greater fear 
than a parent facing the prospect of losing a child.
  They then did what any parents would do under the circumstances. They 
went into debt. They borrowed. They took a second mortgage out in order 
to finance the treatment. They ended up with over $100,000 of debt. 
That young girl eventually died last year. It should not be this way.
  Under the Norwood-Dingell bill, administration of a health plan will 
no longer be able to hide behind the shield of ERISA protection but 
instead will be subject to an internal and external review process and 
held responsible for negligent medical decisions.
  No longer should parents be faced with the draconian decision of 
having to mortgage their families' life away or face the prospect of 
losing a child. Let's put medical decisions back in the hands of 
doctors and their patients, not insurance companies.
  I urge my colleagues to support the Norwood-Dingell bill and oppose 
the Boehner and other substitutes.
  Mr. BROWN of Ohio. Mr. Chairman, I yield 1 minute to the gentleman 
from Rhode Island (Mr. Kennedy).
  Mr. KENNEDY of Rhode Island. Mr. Chairman, do my colleagues realize

[[Page 24356]]

that the only people in our society that are exempted from our laws and 
exempted from being sued are foreign diplomats and HMO bureaucrats? 
They are the only ones in our society that are held above the law.
  My colleagues read about where that foreign diplomat ran over that 
young girl in Washington, D.C., never had to be held liable until the 
Georgian government said that he had to be held liable. Guess what? The 
same blanket immunity that those foreign diplomats have these HMO 
bureaucrats have.
  Now, the thing that is going on here is these HMO bureaucrats forget 
medical malpractice. That is when a doctor makes a bad decision. We are 
having people who have no medical education whatsoever, never went to 
medical school, they are the ones making medical decisions. That is 
criminal.
  If my colleagues think medical malpractice is criminal, try having 
someone who has no medical experience whatsoever making a medical 
decision. That is criminal. Those two instances, this Boehner bill will 
not cover; and that is why we ought to reject the Boehner substitute.
  Mr. BROWN of Ohio. Mr. Chairman, I yield 1 minute to the gentleman 
from Louisiana (Mr. Jefferson).
  Mr. JEFFERSON. Mr. Chairman, I thank the gentleman for yielding me 
this time.
  Mr. Chairman, who would have ever thought just a few short years ago 
that we would earnestly debate here in this Congress whether a child 
needing medical attention could see a pediatrician or whether a woman 
could engage an OB/GYN for her primary care or whether a cancer patient 
could follow the advice of a family physician and see a cancer 
specialist?
  It seems obvious that people should be able to make these choices for 
themselves and for their families. What is more odd is that the choices 
and the access, which we seek today through the passage of the Dingell-
Norwood Patients' Bills of Rights, are choices that our people used to 
have.
  In this sense, Dingell-Norwood is not declarative of new rights for 
patients, but is restorative of old ones.
  But the trouble with restoring old choices, the other side says, is 
the new costs involved that make health care choices unaffordable.
  But are we to assume that every level of every profit center in every 
HMO plan is reasonable, that every expense incurred by every HMO plan 
is warranted, or that greater patient choice will not usher in greater 
competition among HMO plans that will work to drive plan costs down? I 
think not. Besides, this has not been the experience of States which 
have undertaken HMO reform.
  The three amendments offered by my Republican colleagues make these 
vital decisions for consumers. I urge Members to reject the tempered 
approach of the Boehner-Coburn amendments and embrace the bold approach 
of Dingell-Norwood.
  Mr. BROWN of Ohio. Mr. Chairman, I yield 1 minute to the gentleman 
from Pennsylvania (Mr. Hoeffel).
  Mr. HOEFFEL. Mr. Chairman, I thank the gentleman for yielding me this 
time.
  Mr. Chairman, I rise in opposition to the Boehner amendment and in 
strong support of the Norwood-Dingell underlying legislation. The 
gentleman from Iowa (Mr. Ganske) got it entirely correct when he 
identified, as others have, that the key here is the question of 
medical necessity.
  The Boehner substitute would continue to allow insurance company 
bureaucrats to determine what is medically necessary. That has got to 
stop. We must allow medical doctors once again to make the decisions 
that affect the quality of their patients' care. We must allow them to 
determine medical necessity, not the insurance bureaucrats.
  Like our doctors who have complained to me in huge numbers, the 
Montgomery County, Pennsylvania Medical Society to a person tells me 
that they spend far too much time fighting with insurance companies, 
and that is time taken away from patient care.
  Let us oppose the Boehner substitute and pass Norwood-Dingell.
  Mr. Chairman, I rise in opposition to the Boehner substitute and in 
support of the base bill, the Bipartisan Consensus Managed Care 
Improvement Act.
  I am a cosponsor of H.R. 2723 because it would allow Americans to be 
treated as patients, not as numbers that affect the bottom line.
  HMO encroachments on the quality of health care are real.
  One of my constituents, Dr. Peter Lantos of Erdenheim, PA, described 
to me that when he needed prostate surgery, his HMO was unwilling to 
provide a list of specialists, making it difficult to make an 
intelligent choice. He was told to go to a specific hospital, not the 
one he preferred.
  After fighting many layers of bureaucracy, Dr. Lantos prevailed. 
However, he lost what could have been critical time, although as a 
doctor he knew how to fight the system. What about the average person 
who does not? They would have lost even more valuable time.
  H.R. 2723 would: strengthen doctor and patient control over medical 
decisions by allowing doctors, rather than accountants, to define 
``medical necessity''; protect patients by guaranteeing access to 
specialists, out-of-network doctors, out-of-network emergency rooms, 
and non-formulary drugs. It also increases choice by guaranteeing 
patients a point-of service plan option; prohibit gag rules on doctors, 
so they may discuss all treatment options with their patients; and hold 
HMO's accountable by establishing an external review process and 
allowing liability suits in state courts.
  The Boehner substitute does not correct medical necessity, does not 
hold health plans liable, and waters down patient protections. It is 
not serious reform.
  We spend millions of dollars training our doctors, and billions 
developing drugs, treatments and equipment to treat America's patients. 
Then we turn all of that knowledge and innovation and investment over 
to a bean counter from a business school. Something is wrong.
  The most important part of a good bedside manner used to be the 
infusion of hope that everything would be done to fix what ails the 
patient. That has been replaced by a glance at the HMO manual and a 
shrug of the shoulder.
  Doctors now take time they could spend with patients to argue with 
insurance companies.
  America's patients deserve medical care that will make them well 
quicker and keep them well longer. They need more than a placebo, but 
sadly, that is all this bill is.
  I urge my colleagues not to be fooled by this or the other two poison 
pill substitutes. Let's have a clean vote on Dingell-Norwood, clean up 
the Senate bill in conference, and send managed care reform to the 
American people before the holidays.
  Mr. BOEHNER. Mr. Chairman, I yield myself 15 seconds.
  Mr. Chairman, under our proposal, an internal review is required, as 
we have under existing law. Only a doctor can deny care at the internal 
review level. Then if it is denied, a patient has the ability to go to 
an external review where an independent medical doctor will determine 
whether, in fact, that care can be given.
  Mr. Chairman, I am happy to yield 3 minutes to the gentlewoman from 
Kentucky (Mrs. Northup).
  Mrs. NORTHUP. Mr. Chairman, as we debate this substitute, I am 
reminded of what Kentucky did in the General Assembly in 1994. They 
passed a bill much like the gentleman from Iowa (Mr. Ganske) and the 
gentleman from Georgia (Mr. Norwood) have proposed in this session and 
the last session of Congress, one that is highly regulatory, one that 
they convinced the public will give them more medicine at a lower cost. 
Of course none of this happened.
  In fact, the highly regulatory procedures that were enacted by the 
Kentucky General Assembly is pointed to by every other one of the other 
49 States as the disaster that anybody with any understanding of 
insurance and the cost of medicine would have understood.
  The fact is 45 insurance companies out of 47 have left Kentucky. 
There are only two that are selling insurance in Kentucky today. The 
fact is the prices have skyrocketed. Just this year, businesses are 
telling me again of their increases at 38 percent and 50 percent.
  We have an increasing number of workers today that are choosing not 
to take their company's health insurance because even their share of 
the premium at 10 or 25 percent is more than they want to pay.

[[Page 24357]]

  Who is deciding not to take insurance? It is the healthy young 
workers, the workers we need in the health insurance system. Because 
insurance in all cases is one of those products where all of the people 
pay in, the healthy pay in, so that the people that get sick, that the 
costs are taken care of. When we begin to have the healthy young 
workers not buy insurance, what it does is create this spiral that 
continues. Health insurance goes up and up, outpricing most people that 
want health insurance.
  It is terribly counterproductive for us to siphon off medical money, 
medical money that comes to the medical community from insurance and 
use it for legal services. We need to create a system where every 
dollar of medical money, money gotten through medical insurance, is 
spent on medical services and medical miracles.
  We can do that if we ensure that insurance companies live up to their 
responsibility through an appeals process, appeals process within the 
plan, an appeals process outside of the plan, and not through siphoning 
off huge numbers of dollars and go back to the system of excessive 
medical tests that drove the costs so high originally by allowing 
lawsuits, more lawsuits than what we have now.
  So I support the substitute of the gentleman from Ohio (Mr. Boehner), 
and I ask the rest of the Members to consider supporting it, too.

                              {time}  1200

  Mr. BROWN of Ohio. Mr. Chairman, I yield 1 minute to the gentlewoman 
from California (Mrs. Capps), a member of the Subcommittee on Health 
and Environment.
  Mrs. CAPPS. Mr. Chairman, I rise in strong opposition to the Boehner 
amendment. This substitute will not protect patients. This bill does 
not provide for independent and timely appeals when patients are harmed 
by HMO decisions. This amendment leaves in place what is wrong with the 
current system. HMO bureaucrats, not doctors, will determine what 
treatment is medically necessary. In comparison, the bipartisan 
Norwood-Dingell bill provides a core set of meaningful protections for 
patients. Finally, the Boehner amendment will not allow patients to sue 
their HMOs for negligent care.
  The consensus bill includes a strong independent review panel 
procedure. And as a last resort, patients must have the ability to sue 
HMOs for harmful medical decisions. No other industry has such special 
legal protections. The HMO industry should not have them either.
  I urge my colleagues to oppose the Boehner amendment.
  Mr. BROWN of Ohio. Mr. Chairman, I yield 1 minute to the gentleman 
from Ohio (Mr. Strickland), also a member of the Subcommittee on Health 
and Environment.
  Mr. STRICKLAND. Mr. Chairman, I am angry today. I am angry because 
the constituents that I represent from southern Ohio are being denied 
their rightful medical care under today's system. I am angry because 
the health care insurance lobbyists are lining our walkways as we walk 
to this chamber. I am angry because hundreds of thousands of dollars 
have been poured into influencing the decisions of Members in this 
chamber in the last few days and weeks. I am angry because I believe 
Americans, moms and dads and children, are being injured and are losing 
their lives today because we have not had the courage to stand up and 
do the right thing for the American people.
  I hope the American people are watching us today. I hope they take 
note of our votes today, because we have a forced choice. We can either 
support patients or we can support insurance companies. It is as simple 
as that. This substitute is a nonhelpful bill. We need to support the 
Norwood-Dingell bill and give the American citizens true protections in 
their health care coverage.
  Mr. BROWN of Ohio. Mr. Chairman, I yield such time as she may consume 
to the gentlewoman from the Virgin Islands (Mrs. Christensen).
  Mrs. CHRISTENSEN. Mr. Chairman, I rise in opposition to this 
amendment.
  Mr. Chairman, I rise in opposition to the Boehner amendment, and ask 
my colleagues to vote against it. This is a poison pill amendment which 
would gut many of the provisions that are needed to implement true 
managed care reform.
  The American people have told us time and time again, and in many 
ways, that they want the way that managed care delivers health care 
changed. They don't want it changed just for some, but for all. To half 
step change, as this amendment would do, would be more of a disservice 
than a service.
  For example, Mr. Chairman, the Boehner substitute would half step the 
accountability provisions in the Dingell-Norwood bill by providing for 
an external appeal provision. The problem with this proposal and why it 
fall far short, is because the external reviewers in the Boehner 
substitute will use the HMO's plan definition of medical necessity and 
not the insured's physician.
  If such a set-up could work there would be no need for the Norwood-
Dingell.
  It is precisely to get away from having the plan's definition of 
medical necessity be the determining factor and not the patient and his 
doctor's definition why we need the Norwood-Dingell bill.
  Vote against the Boehner substitute and vote for a clean Norwood-
Dingell bill.
  Mr. BROWN of Ohio. Mr. Chairman, I yield 3 minutes to the gentleman 
from Michigan (Mr. Bonior), the Democratic whip.
  Mr. BONIOR. Mr. Chairman, I thank the gentleman for yielding me this 
time.
  I recently met a woman from Marysville, Michigan. Her young daughter 
had only one kidney left and was in a fight for her life against 
diabetes. She desperately needed to see a specialist, but her HMO was 
worried about the cost, not getting this little girl the treatment that 
she needed. They were worried about how much it might affect their 
bottom line.
  So what happened? They sent her to a general practitioner. That 
doctor could not help her. Her mother begged for a specialist. The HMO 
said, again, no, you have to go see somebody on the staff. So they sent 
her to another staff doctor. No answers. They still would not yield, 
the HMOs. This went on week after week after week. This girl got sicker 
and sicker and sicker, and ultimately the HMO refused to see her 10 
different times before they sent her to a specialist. Ten times before 
a specialist.
  She survived, but there are others who have not survived. This is 
what happens when insurance companies make medical decisions instead of 
doctors and patients. And that is why we are trying to come up with a 
bill today that will address this problem. Over 300 health 
organizations, the AMA, the cardiologists, Families USA, consumer and 
health groups have endorsed the Dingell-Norwood bill and are opposed to 
the Boehner substitute, which we are on now, the Shadegg-Coburn 
substitute, and the others that we will face.
  They know that the insurance companies are out of control, these 
groups. Just look at the numbers. Eighty-three percent of the doctors 
surveyed say managed care has cut time that they spent with their 
patients. Eighty-six percent of the doctors say that managed care has 
reduced their access to specialists, in the example I gave previously. 
Almost 90 percent of the docs report that HMOs actually reject medical 
recommendations they make for their patients. And it goes on and on and 
on.
  There is no accountability in the substitute that we are addressing 
here today. No recourse if an individual is turned down; nothing to 
give an individual the right to fight and to petition in a way that is 
going to hold the HMOs and the insurance companies accountable.
  Vote against the substitute, vote against Coburn-Shadegg, vote 
against the substitute that follows that changes the course of 
direction in our courts, and vote for the bill that the American people 
are yearning for, waiting for, the bill authored by the gentleman from 
Georgia (Mr. Norwood) and the gentleman from Michigan (Mr. Dingell), as 
well as the gentleman from Iowa (Mr. Ganske). It is the bill that will 
set us on the course to correct all of these abuses, all of these 
horror stories.
  It is the doctors and the patients versus the insurance companies in 
this country. It could not be more clear.

[[Page 24358]]


  Mr. BOEHNER. Mr. Chairman, I yield 1 minute to the gentleman from 
South Carolina (Mr. DeMint).
  Mr. DeMINT. Mr. Chairman, I rise in strong support of the Boehner 
substitute.
  As an employer myself for 15 years, I am angry too that folks would 
stand up today and punish small employers as well as any size employers 
who try to provide health insurance for their employees.
  I am angry at this idea that we can take health insurance out of the 
hands of employers and put it in the hands of the trial lawyers and 
expect to get better health care.
  I am angry that yesterday I was in this room and this same group who 
is arguing for more liability today would try to keep individuals from 
owning their own health insurance so they could protect themselves by 
making their own health care decisions.
  And I am angry today that now they are back making it harder for 
employers to buy that health insurance for individuals who cannot buy 
it for themselves.
  I am angry because there is no one here suggesting where they are 
going to go when they cannot buy it for themselves, yet we do not want 
employers to buy it any more. Because the question is not whether 
people will have good health care, it is whether the health care system 
will be run by attorneys or will be run by physicians.
  Mr. BROWN of Ohio. Mr. Chairman, I yield 1 minute to the gentleman 
from Tennessee (Mr. Tanner).
  Mr. TANNER. Mr. Chairman, I thank the gentleman for yielding me this 
time, and I would like to engage in a colloquy with the gentleman from 
Michigan (Mr. Dingell) and the gentleman from Georgia (Mr. Norwood) 
about the underlying intent of the bill.
  Is it the intent of the sponsors to permit claims to be brought 
against independent insurance agents who work with employers in helping 
to select a plan?
  Mr. DINGELL. Mr. Chairman, will the gentleman yield?
  Mr. TANNER. I yield to the gentleman from Michigan.
  Mr. DINGELL. The answer to the gentleman's question is no. If an 
independent insurance agent assists with the selection of or purchase 
of a plan, but is not involved in the medical care decisions, it is not 
our intent to permit a claim to be brought against the insurance agent, 
and under our proposal it cannot.
  Mr. TANNER. Reclaiming my time, Mr. Chairman, I thank the gentleman.
  It is an important clarifying position, and I wanted to make sure 
that the omission of specific legislative language in section 302 could 
not be interpreted to permit a claim against an independent insurance 
agent if that agent is not involved in the making of any actual medical 
care decisions.
  Mr. NORWOOD. Mr. Chairman, will the gentleman yield?
  Mr. TANNER. I yield to the gentleman from Georgia.
  Mr. NORWOOD. I would say to the gentleman, Mr. Chairman, that I hope 
my son is watching this colloquy. He is an insurance agent.
  But the gentleman is absolutely correct in his assumption.
  Mr. DINGELL. Mr. Chairman, if an independent insurance agent assists 
with the selection or purchase of a plan but is not involved in the 
medical care decisions, it is not our intent to permit a claim to be 
brought against that insurance agent.
  Independent insurance agents do not make medical decisions and 
therefore should not be liable for harm caused by a decision made by a 
group health plan. However, Section 302 dictates that claims may be 
brought against an employer or its employees, if the employer or 
employee participates in any way in the making of decisions on health 
care claims.
  The omission of specific legislative language could not be 
interpreted to permit a claim against an independent insurance agent if 
the independent insurance agent is not involved in the making of any 
actual medical care decisions.
  If this bill proceeds to conference, we would seek clarification that 
independent insurance agents are not to be held liable for medical and 
care decisions made by others. It is the intent of the legislation to 
limit liability only to those who make medical care decisions.
  It is not our intent that independent insurance agents could be held 
liable.
  Independent insurance agents who work with or on behalf of an 
employer in helping the employer to select a plan should be subject to 
the same liability parameters as the employer.
  Mr. BROWN of Ohio. Mr. Chairman, I yield 2 minutes to the gentlewoman 
from North Carolina (Mrs. Clayton).
  Mrs. CLAYTON. Mr. Chairman, I thank the gentleman for yielding me 
this time.
  Mr. Chairman, some would have us believe that this debate is about 
courts and lawyers. This is not about courts; it is about care. It is 
not about lawyers but about doctors having the right to provide that 
care.
  I am against the Boehner substitute because it omits the needed 
enforcement of protection for patients and their doctors in providing 
that care. Similarly, I am against any substitution that caps damages, 
like the Coburn substitute. Likewise, I am against the Houghton-Graham 
substitute because it also strikes out the enforcement and compliance 
provided by the Norwood-Dingell bill on H.R. 2723.
  When a person goes to the doctor, they are not interested in who they 
can sue. They are interested in who can cure them. But more 
importantly, Mr. Chairman, this debate is about care for all, rather 
than care for some. Some would have us believe that the tax package 
will result in all America's being covered and healthy. But such an 
approach to managed care reform will not result in greater coverage; it 
will only result in benefiting the wealthy, the healthy, or those who 
are financially well off.
  This is a misguided concern, Mr. Chairman, because in North Carolina 
28.6 percent of children under the age of 19, who are at or below 200 
percent of the poverty level, are without health insurance. Rural 
communities are disproportionately without care. Some 44.3 million 
people are uninsured in 1998, despite a good economy. Last year 1.7 
million more people were uninsured than the previous year in households 
making below $50,000.
  Mr. Chairman, we should support the Norwood-Dingell bill. It is about 
care, it is about opportunity, it is about accountability.
  Mr. BOEHNER. Mr. Chairman, I yield 1 minute to the gentlewoman from 
Ohio (Ms. Pryce), an esteemed member of the Republican leadership in 
the House.
  Ms. PRYCE of Ohio. Mr. Chairman, I thank my good friend from Ohio for 
yielding me this time, and I rise in support of the Boehner substitute.
  Mr. Chairman, since his markup, the gentleman from Ohio has continued 
to work to improve upon his proposals. Specifically, he deserves credit 
as the first one to add strong cancer clinical trials language to his 
proposal. This language gives cancer patients access to all trials 
approved by the FDA or sponsored by federally approved entities, as 
well as those sanctioned by the Department of Defense, NIH, and 
Veterans Affairs.
  We simply must increase participation in clinical trials if our 
researchers are going to make strides in their search for new 
treatments and a cure for this horrid disease. This language has the 
support of some 40 cancer organizations, and it is not in the Dingell-
Norwood bill.
  In addition to cancer patients, the Boehner substitute offers all 
patients basic protections. The amendment bans gag rules, ensures 
emergency room coverage, provides direct access to OB-GYNs and 
pediatricians, and offers continuity of care. These are the common 
sense reforms that we all agree on.
  I encourage all of my colleagues to support the Boehner amendment.
  Mr. BROWN of Ohio. Mr. Chairman, I yield 1 minute to the gentleman 
from Wisconsin (Mr. Barrett), a member of the Subcommittee on Health 
and Environment.
  Mr. BARRETT of Wisconsin. Mr. Chairman, we have heard a lot this 
morning about lawsuits, and I want to talk a little bit about the 
lawsuits in Texas, because Texas has a law similar to the law that we 
are trying to pass. There have been less than a handful, less than 
five. Three of them involved persons who were denied access to a cancer 
specialist; and, as a result, their

[[Page 24359]]

health deteriorated dramatically over that time period.
  The fourth one, the one that struck me the most, was an individual 
who was in the hospital and his physician said that this patient should 
not be sent home because of his severe depression. The HMO bureaucrat 
demanded that the patient be sent home. The patient went home, 
swallowed a bottle of antifreeze and killed himself because of the 
decision of the bureaucrat.
  Mr. Chairman, this piece of legislation, or this amendment, would 
deny access to the courts for that individual. I think that that would 
be wrong. I think that that is a situation where, clearly, the medical 
decision was not made by the physician. The decision was made by the 
HMO. And in order for us to move that decision-making process back to 
the physician, we have to have access to the courts.
  Mr. Chairman, this is not going to create a wave of lawsuits, but it 
is going to protect those individuals who are denied medical care.
  Mr. BOEHNER. Mr. Chairman, I yield myself such time as I may consume 
to say that the example just given would never happen under the Boehner 
proposal, nor would it happen under the Dingell-Norwood proposal, and 
the gentleman well knows that.
  Mr. Chairman, I yield 2 minutes to the gentleman from Texas (Mr. 
Armey), the majority leader.
  Mr. ARMEY. Mr. Chairman, I thank the gentleman for yielding me this 
time.
  Let me begin my remarks, Mr. Chairman, by pointing out that this is a 
serious business we are about today, and I am proud it is being taken 
as seriously as it is by this body.
  I would also like to thank those Members of this body who yesterday 
cast a vote that provided some equity and opportunity not only to the 
44 million Americans that are today doing without insurance, but to the 
millions of additional Americans who buy their own insurance.

                              {time}  1215

  It is about time that we remove barriers to insurability from these 
people and treated them fairly under the law. I am proud that we passed 
those provisions last night.
  But with respect to the offers we see contested here, I want to tell 
my colleagues I am speaking on behalf of the Boehner bill precisely 
because the gentleman from Ohio (Mr. Boehner) in crafting this bill 
kept his eye on the ball. He asked himself the question, who is this 
about? And the answer was, wholly and without compromise, the well-
being of the patient and the patient's family.
  Mr. Chairman, we have all been there ourselves and we have certainly 
seen our constituents there. They have someone they love, maybe it is 
mom or dad, maybe it is their child, maybe it is their spouse, someone 
they love, relying on their insurance coverage and a sense of security 
they have drawn from that, at a moment of medical stress; and they are 
scared. They are terrified, Mr. Chairman, that dad is not getting the 
right care, that their baby is not getting the right procedures. They 
have doubts. They have concerns. They have worries. And they are 
frantic with fear.
  Mr. Chairman, not only does the patient but the patient's family 
deserves to have an answer now from medical professionals. Now I must 
know. If dad is not getting the right treatment, what can we do to 
change it?
  The gentleman from Ohio (Mr. Boehner) responds to that. He says the 
patient's well-being and that peace of mind of the family comes before 
the doctors, comes before the trial lawyers, comes before the health 
care provider, comes before everything. And that is what he provides, 
an immediate, comprehensive, compelling review by medical professionals 
that says, we give the right necessary treatment and we give it now.
  How could anybody turn away from that and say instead to that 
distressed mother or father or husband or daughter, no, we would rather 
give you our promise that 6 months from now or maybe a year we will get 
you on the docket and we will let the lawyers and the judges decide 
what should have been the care that that precious baby got 6 months or 
a year ago?
  No, that is not good enough, Mr. Chairman. That is not a good enough 
answer for my children. It is not a good enough answer for the parents. 
We must do what the Boehner bill says we should do, give that family 
that answer now and get the care to the parents now. It is about health 
care. It is about danger. It is about a chance to get a good recovery 
with the right care and get it now.
  Let the trial lawyers and, for that matter, let the doctors take 
their turn. But today let us all vote for Boehner and let us put 
patients and the patients' families ahead of everybody else as this 
bill does.
  The CHAIRMAN. The Chair would remind the Members that the gentleman 
from Ohio (Mr. Boehner) on the majority side has 3\3/4\ minutes 
remaining, and the gentleman from Ohio (Mr. Brown) on the minority side 
has 3\3/4\ minutes remaining and the right to close.
  Mr. BROWN of Ohio. Mr. Chairman, I yield 1\1/2\ minutes to my friend 
the gentlewoman from Connecticut (Ms. DeLauro).
  Ms. DeLAURO. Mr. Chairman, let me read a letter from my constituents 
Gary and Marlene Rappaport from Orange, Connecticut.

       As parents whose 25-year-old daughter Rebecca died after 
     delay in receiving a bone marrow transplant because of 
     repeated denials from her insurance provider, we are writing 
     in strong support of the Norwood-Dingell bill. As Rebecca 
     wrote in her journal dated March 28, 1997, ``I would like my 
     family to continue my pursuit of litigation, suing for gross 
     negligence resulting in severe physical damage, physical pain 
     and inestimable emotional suffering. My medical record, 
     history, and physicians support my case. Should an award be 
     given in my absence, I would like a significant portion 
     donated to cancer research.''

  Rebecca had a full life ahead of her. She did not get that chance. 
Her parents are left with an unimaginable heartache, the loss of a 
beloved daughter, and nowhere to turn to address wrongful denial.
  Vote against the Boehner substitute. It fails to cover all privately 
insured Americans, does not provide for independent or timely appeals 
of decisions. It does not provide for access to specialty care. And 
most of all, it does not allow patients to hold their health plans 
accountable.
  The only bill that does that today is Dingell-Norwood. Do it. Pass 
Dingell-Norwood. Do it for the Rappaports and do it for families like 
them who are in pain and who are begging for our help here on the floor 
of this House today.
  Mr. BROWN of Ohio. Mr. Chairman, I yield 1 minute to the gentlewoman 
from the Virgin Islands (Mrs. Christensen).
  Mrs. CHRISTENSEN. Mr. Chairman, I thank the gentleman for yielding me 
the time.
  Mr. Chairman, I am here once again to ask my colleagues to reject all 
of the substitute amendments that are now being considered and vote for 
a clean Norwood-Dingell-Ganske bill.
  I realize that I have not been here very long. But in the almost 3 
years that I have been in Congress, this bill, H.R. 2723, represents 
the best example of bipartisan cooperation that I have ever seen.
  What makes this compromise so special is that it was done in direct 
response to the concerns that have been brought to us by the people we 
serve, not out of our political interests but in the interests of all 
Americans.
  The Goss-Coburn-Shadegg substitute puts an unnecessary albatross on 
the back of our attempts to have real managed care reform. Its purpose 
could not be anything other than to fatally poison a good bill, making 
it eligible for a sure veto, thus killing any chance for the American 
people to get the relief they so desperately seek.
  I ask my colleagues to stand with the American people and against the 
HMO industry. Vote ``no'' on the Goss-Coburn-Shadegg amendment.
  Mr. BOEHNER. Mr. Chairman, I yield myself the balance of my time.
  Mr. Chairman, what this debate really comes down to, I think, is 
whether we are going to have accountability through litigation and 
lawyers or are we going to have accountability through doctors.

[[Page 24360]]

  To ensure accountability in health care decisions, I think my 
proposal vests its power in independent doctors to make the right 
medical decisions.
  I think the Dingell-Norwood proposal believes lawyers are the best 
authority when it comes to medical treatment. They believe that 
employers who voluntarily provide health care insurance to their 
employees ought to be subject to open-ended liability if someone 
believes they have been treated unfairly.
  This reminds me of the incredible logic of trial attorneys suing 
doctors for malpractice when they attempted to render medical care to 
injured or ill individuals on an emergency basis. What happened? 
Doctors and other health care professionals began to stand by and did 
not apply their knowledge and skills to help fellow human beings for 
fear of being sued by some enterprising trial lawyer.
  Across this country, States and local governments had to pass good 
samaritan laws in order to protect doctors and nurses from doing the 
right thing in the first place.
  Well, let me assure my colleagues, if we move forward on court 
liability for employers, today's employers are going to become the 
doctors and nurses of the 1970s. They will stand by and no longer offer 
health insurance to their employees. Instead of having 44 million 
Americans with no health care coverage, we will have tens of millions 
added to that list.
  Now, let us put in place a binding external appeal that will ensure 
that patients get their care when they need it. As the Washington Post 
stated earlier this week: ``Our first instinct would be to try the 
appeals system first and broaden access to the courts only if the 
appeals process turned out after a number of years to not work.''
  My colleagues, we have an opportunity today to do something that is 
responsible, responsible for our health care system by bringing more 
accountability to managed care without driving up costs and without 
creating more uninsured. It is a delicate balance that we walk between 
bringing more accountability without driving up the cost and driving 
down access to our system. We have a great system in America where 
employers are provided health care for 125 million American lives in a 
shared arrangement in most cases.
  Unfortunately, the Norwood-Dingell bill today, in my view, will 
jeopardize the health insurance benefits that millions of Americans 
get. Do we really want to take that big step off of this cliff without 
a parachute? Do we really want to take the chance that millions of 
Americans are going to lose their insurance because we want to open 
this up to litigation and entreat the trial bar to another new field 
that they can go out and operate in?
  I do not think that is what the American people want us to do. They 
want us to take a responsible approach. They want us to take an 
approach that will ensure they get the care without driving up cost and 
without jeopardizing the number one benefit that they appreciate from 
their employers.
  Vote for the Boehner proposal.
  Mr. BROWN of Ohio. Mr. Chairman, I yield myself the balance of my 
time.
  Mr. Chairman, this substitute undoes the good bipartisan work that 
the gentleman from Michigan (Mr. Dingell), the gentleman from Georgia 
(Mr. Norwood), and the gentleman from Iowa (Mr. Ganske) did to craft 
this very positive strong legislation.
  Similar legislation is working in Texas where insurance companies are 
held accountable when they make medical decisions.
  The Boehner substitute, however, is not a serious legislative effort. 
It does not hold insurance companies accountable when they make medical 
decisions that harm people. For all the discussion and all the talk, 
Mr. Chairman, about lawyers taking over the health care profession, the 
Boehner substitute would hand the lawyer, not the doctor, the power to 
decide whether a case needs a medical evaluation.
  Mr. Chairman, the majority of Members support the Norwood-Dingell-
Ganske bill. Vote ``no'' on the Boehner substitute.
  Mr. CLAY. Mr. Chairman, the Boehner substitute fails to provide 
enrollees with what they want most from their health plan--
accountability. Under the Boehner substitute, all court actions would 
be subject to caps on noneconomic and punitive damages of $250,000. The 
Boehner substitute does not ensure that employees are adequately 
redressed when they have been injured. Therefore, health plans still 
retain an incentive to deny claims in order to cut costs. Every other 
business is subject to liability when they make negligent decisions, 
why should health plans be any different?
  The Boehner substitute creates a health care access affordability, 
and quality commission. This proposed commission would establish model 
guidelines, evaluate the cost impact of proposed mandates, comment on 
secretarial reports, and conduct additional reviews requested by 
Members of Congress. However, what this proposed commission really does 
is create a new Federal bureaucracy that duplicates many functions that 
are ongoing, both within the Department of Labor and other parts of the 
Federal Government.
  The Boehner substitute also contains a ``conscience clause'' that 
significantly weakens the anti-gag protection. This clause allows plans 
to limit or deny any coverage that is inconsistent with its moral or 
religious convictions. This provision essentially allows plans to gag 
their providers from discussing any issues to which the plan is morally 
opposed. Plans would be able to devise new strategies to deny care, 
under the guise of moral opposition. This is why I support the 
Bipartisan Managed Care Improvement Act, H.R. 2723. It represents a 
reasonable, bipartisan compromise that protects patients. This is not 
the case with the substitute before us. I urge my colleagues to vote 
``no'' on the Boehner substitute.
  The CHAIRMAN. The question is on the amendment in the nature of a 
substitute offered by the gentleman from Ohio (Mr. Boehner).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.


                             Recorded Vote

  Mr. BOEHNER. Mr. Chairman, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 145, 
noes 284, not voting 5, as follows:

                             [Roll No. 487]

                               AYES--145

     Aderholt
     Archer
     Armey
     Baker
     Ballenger
     Barrett (NE)
     Bartlett
     Barton
     Bereuter
     Biggert
     Bilirakis
     Bliley
     Blunt
     Boehner
     Bonilla
     Brady (TX)
     Bryant
     Burr
     Callahan
     Calvert
     Camp
     Cannon
     Chabot
     Chambliss
     Coble
     Collins
     Cox
     Crane
     Cubin
     Cunningham
     Deal
     DeLay
     DeMint
     Dickey
     Doolittle
     Dreier
     Dunn
     Ehlers
     Ehrlich
     Everett
     Ewing
     Fletcher
     Fossella
     Fowler
     Gekas
     Gibbons
     Gillmor
     Goode
     Goodlatte
     Goodling
     Goss
     Granger
     Green (WI)
     Gutknecht
     Hansen
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (MT)
     Hilleary
     Hobson
     Hoekstra
     Hostettler
     Houghton
     Hulshof
     Hyde
     Jenkins
     Johnson, Sam
     Jones (NC)
     Kasich
     Kingston
     Knollenberg
     Kolbe
     LaHood
     Latham
     Lewis (KY)
     Linder
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCrery
     McInnis
     McIntosh
     McKeon
     Mica
     Miller (FL)
     Miller, Gary
     Myrick
     Nethercutt
     Ney
     Northup
     Nussle
     Ose
     Oxley
     Packard
     Paul
     Pease
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Pombo
     Portman
     Pryce (OH)
     Radanovich
     Ramstad
     Regula
     Riley
     Rogers
     Rohrabacher
     Royce
     Ryan (WI)
     Ryun (KS)
     Salmon
     Sensenbrenner
     Sherwood
     Shimkus
     Shuster
     Simpson
     Smith (MI)
     Smith (TX)
     Stump
     Sununu
     Talent
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thune
     Tiahrt
     Toomey
     Upton
     Walden
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Young (AK)

                               NOES--284

     Abercrombie
     Ackerman
     Allen
     Andrews
     Bachus
     Baird
     Baldacci
     Baldwin
     Barcia
     Barr
     Barrett (WI)
     Bass
     Bateman
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bilbray
     Bishop
     Blagojevich
     Blumenauer
     Boehlert
     Bonior
     Bono
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Burton
     Buyer
     Campbell
     Canady
     Capps
     Capuano
     Cardin
     Carson
     Castle
     Chenoweth-Hage
     Clay
     Clayton
     Clement
     Clyburn
     Coburn
     Combest
     Condit
     Conyers
     Cook
     Cooksey
     Costello
     Coyne
     Cramer
     Crowley
     Cummings

[[Page 24361]]


     Danner
     Davis (FL)
     Davis (IL)
     Davis (VA)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Diaz-Balart
     Dicks
     Dingell
     Dixon
     Doggett
     Dooley
     Doyle
     Duncan
     Edwards
     Emerson
     Engel
     English
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Foley
     Forbes
     Ford
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Frost
     Gallegly
     Ganske
     Gejdenson
     Gephardt
     Gilchrest
     Gilman
     Gonzalez
     Gordon
     Graham
     Green (TX)
     Greenwood
     Gutierrez
     Hall (OH)
     Hall (TX)
     Hastings (FL)
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Hooley
     Horn
     Hoyer
     Hunter
     Hutchinson
     Inslee
     Isakson
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kelly
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kleczka
     Klink
     Kucinich
     Kuykendall
     LaFalce
     Lampson
     Lantos
     Largent
     LaTourette
     Lazio
     Leach
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     Lipinski
     LoBiondo
     Lofgren
     Lowey
     Luther
     Maloney (CT)
     Maloney (NY)
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McHugh
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Minge
     Mink
     Moakley
     Mollohan
     Moore
     Moran (KS)
     Moran (VA)
     Morella
     Murtha
     Nadler
     Napolitano
     Neal
     Norwood
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Phelps
     Pickett
     Pomeroy
     Porter
     Price (NC)
     Quinn
     Rahall
     Rangel
     Reyes
     Reynolds
     Rivers
     Rodriguez
     Roemer
     Rogan
     Ros-Lehtinen
     Rothman
     Roukema
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sanford
     Sawyer
     Saxton
     Schaffer
     Schakowsky
     Scott
     Serrano
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Shows
     Sisisky
     Skeen
     Skelton
     Slaughter
     Smith (NJ)
     Smith (WA)
     Snyder
     Souder
     Spence
     Spratt
     Stabenow
     Stark
     Stearns
     Stenholm
     Strickland
     Stupak
     Sweeney
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Thurman
     Tierney
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Vento
     Visclosky
     Vitter
     Walsh
     Wamp
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Weygand
     Wilson
     Wise
     Wolf
     Woolsey
     Wu
     Wynn
     Young (FL)

                             NOT VOTING--5

     Johnson (CT)
     Kaptur
     Larson
     Metcalf
     Scarborough

                              {time}  1246

  Ms. RIVERS and Mr. KUYKENDALL changed their vote from ``aye'' to 
``no.''
  Mr. BARRETT of Nebraska changed his vote from ``no'' to ``aye.''
  So the amendment in the nature of a substitute was rejected.
  The result of the vote was announced as above recorded.
  Stated against:
  Mr. LARSON. Mr. Chairman, on rollcall No. 487, I was inadvertently 
detained. Had I been present, I would have voted ``no.''
  The CHAIRMAN. It is now in order to consider amendment No. 2 printed 
in part B of House Report 106-366.


   Amendment No. 2 in the Nature of a Substitute Offered by Mr. Goss

  Mr. GOSS. Mr. Chairman, I offer an amendment in the nature of a 
substitute.
  The CHAIRMAN. The Clerk will designate the amendment in the nature of 
a substitute.
  The text of the amendment in the nature of a substitute is as 
follows:

       Amendment No. 2 in the nature of a substitute offered by 
     Mr. Goss:
       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 ``Health 
     Care Quality and Choice Act of 1999''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

         TITLE I-- AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT

Sec. 101. Application to group health plans and group health insurance 
              coverage.
Sec. 102. Application to individual health insurance coverage.
Sec. 103. Improving managed care.

                 ``TITLE XXVIII--IMPROVING MANAGED CARE

                  ``Subtitle A--Grievance and Appeals

``Sec. 2801. Utilization review activities.
``Sec. 2802. Internal appeals procedures.
``Sec. 2803. External appeals procedures.
``Sec. 2804. Establishment of a grievance process.

                      ``Subtitle B--Access to Care

``Sec. 2811. Consumer choice option.
``Sec. 2812. Choice of health care professional.
``Sec. 2813. Access to emergency care.
``Sec. 2814. Access to specialty care.
``Sec. 2815. Access to obstetrical and gynecological care.
``Sec. 2816. Access to pediatric care.
``Sec. 2817. Continuity of care.
``Sec. 2818. Network adequacy.
``Sec. 2819. Access to experimental or investigational prescription 
              drugs.
``Sec. 2820. Coverage for individuals participating in approved cancer 
              clinical trials.

                  ``Subtitle C--Access to Information

``Sec. 2821. Patient access to information.

        ``Subtitle D--Protecting the Doctor-Patient Relationship

``Sec. 2831. Prohibition of interference with certain medical 
              communications.
``Sec. 2832. Prohibition of discrimination against providers based on 
              licensure.
``Sec. 2833. Prohibition against improper incentive arrangements.
``Sec. 2834. Payment of clean claims.

                       ``Subtitle E--Definitions

``Sec. 2841. Definitions.
``Sec. 2842. Rule of construction.
``Sec. 2843. Exclusions.
``Sec. 2844. Coverage of limited scope plans.
``Sec. 2845. Regulations.
``Sec. 2846. Limitation on application of provisions relating to group 
              health plans..

TITLE II--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                                  1974

Sec. 201. Application of patient protection standards to group health 
              plans and group health insurance coverage under the 
              Employee Retirement Income Security Act of 1974.
Sec. 202. Improving managed care.

                    ``Part 8--Improving Managed Care

                   ``Subpart A--Grievance and Appeals

``Sec. 801. Utilization review activities.
``Sec. 802. Internal appeals procedures.
``Sec. 803. External appeals procedures.
``Sec. 804. Establishment of a grievance process.

                      ``Subpart B--Access to Care

``Sec. 812. Choice of health care professional.
``Sec. 813. Access to emergency care.
``Sec. 814. Access to specialty care.
``Sec. 815. Access to obstetrical and gynecological care.
``Sec. 816. Access to pediatric care.
``Sec. 817. Continuity of care.
``Sec. 818. Network adequacy.
``Sec. 819. Access to experimental or investigational prescription 
              drugs.
``Sec. 820. Coverage for individuals participating in approved cancer 
              clinical trials.

                   ``Subpart C--Access to Information

``Sec. 821. Patient access to information.

        ``Subpart D--Protecting the Doctor-Patient Relationship

``Sec. 831. Prohibition of interference with certain medical 
              communications.
``Sec. 832. Prohibition of discrimination against providers based on 
              licensure.
``Sec. 833. Prohibition against improper incentive arrangements.
``Sec. 834. Payment of clean claims.

                        ``Subpart E--Definitions

``Sec. 841. Definitions.
``Sec. 842. Rule of construction.
``Sec. 843. Exclusions.
``Sec. 844. Coverage of limited scope plans.
``Sec. 845. Regulations.
Sec. 203. Availability of court remedies.
Sec. 204. Availability of binding arbitration.

      TITLE III-- AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

Sec. 301. Application to group health plans under the Internal Revenue 
              Code of 1986.
Sec. 302. Improving managed care.

                 ``Chapter 101--Improving Managed Care


                 ``SUBCHAPTER A--GRIEVANCE AND APPEALS.

``Sec. 9901. Utilization review activities.
``Sec. 9902. Internal appeals procedures.
``Sec. 9903. External appeals procedures.
``Sec. 9904. Establishment of a grievance process.


                     ``SUBCHAPTER B--ACCESS TO CARE

``Sec. 9912. Choice of health care professional.
``Sec. 9913. Access to emergency care.
``Sec. 9914. Access to specialty care.
``Sec. 9915. Access to obstetrical and gynecological care.

[[Page 24362]]

``Sec. 9916. Access to pediatric care.
``Sec. 9917. Continuity of care.
``Sec. 9918. Network adequacy.
``Sec. 9919. Access to experimental or investigational prescription 
              drugs.
``Sec. 9920. Coverage for individuals participating in approved cancer 
              clinical trials.


                 ``SUBCHAPTER C--ACCESS TO INFORMATION

``Sec. 9921. Patient access to information.


       ``SUBCHAPTER D--PROTECTING THE DOCTOR-PATIENT RELATIONSHIP

``Sec. 9931. Prohibition of interference with certain medical 
              communications.
``Sec. 9932. Prohibition of discrimination against providers based on 
              licensure.
``Sec. 9933. Prohibition against improper incentive arrangements.
``Sec. 9934. Payment of clean claims.


                      ``SUBCHAPTER E--DEFINITIONS

``Sec. 9941. Definitions.
``Sec. 9942. Exclusions.
``Sec. 9943. Coverage of limited scope plans.
``Sec. 9944. Regulations.

       TITLE IV--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

Sec. 401. Effective dates.
Sec. 402. Coordination in implementation.

                       TITLE V--OTHER PROVISIONS

                 Subtitle A--Protection of Information

Sec. 501. Protection for certain information.

                       Subtitle B--Other Matters

Sec. 511. Health care paperwork simplification.

         TITLE I-- AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT

     SEC. 101. 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.

       ``(a) In General.--Each group health plan shall comply with 
     patient protection requirements under title XXVIII, and each 
     health insurance issuer shall comply with patient protection 
     requirements under such title with respect to group health 
     insurance coverage it offers, and such requirements shall be 
     deemed to be incorporated into this subsection.
       ``(b) Notice.--A group health plan shall comply with the 
     notice requirement under section 711(d) of the Employee 
     Retirement Income Security Act of 1974 (as in effect on the 
     date of the enactment of the Health Care Quality and Choice 
     Act of 1999) with respect to the requirements referred to in 
     subsection (a) and a health insurance issuer shall comply 
     with such notice requirement as if such section applied to 
     such issuer and such issuer were a group health plan.''.
       (b) Conforming Amendment.--Section 2721(b)(2)(A) of such 
     Act (42 U.S.C. 300gg-21(b)(2)(A)) is amended by inserting 
     ``(other than section 2707)'' after ``requirements of such 
     subparts''.

     SEC. 102. 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.

       ``(a) In General.--Each health insurance issuer shall 
     comply with patient protection requirements under title 
     XXVIII with respect to individual health insurance coverage 
     it offers, and such requirements shall be deemed to be 
     incorporated into this subsection.
       ``(b) Notice.--A health insurance issuer under this part 
     shall comply with the notice requirement under section 711(d) 
     of the Employee Retirement Income Security Act of 1974 with 
     respect to the requirements of such title as if such section 
     applied to such issuer and such issuer were a group health 
     plan.''.

     SEC. 103. IMPROVING MANAGED CARE.

       The Public Health Service Act is amended by adding at the 
     end the following new title:

                 ``TITLE XXVIII--IMPROVING MANAGED CARE

                  ``Subtitle A--Grievance and Appeals

     ``SEC. 2801. 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.
       ``(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 practicing physicians, 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 an 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 periodic evaluation at reasonable intervals 
     of the clinical appropriateness of 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 
     appropriate physician specialists who shall be selected by 
     the plan or issuer and 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. 
     This subparagraph shall not preclude any capitation 
     arrangements between plans and providers.
       ``(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 or appropriate.
       ``(d) Deadline for Determinations.--
       ``(1) Prior authorization services.--
       ``(A) In general.--Except as provided in paragraph (2), in 
     the case of a utilization review activity involving the prior 
     authorization of health care items and services for an 
     individual, the utilization review program shall make a 
     determination concerning such authorization, and provide 
     notice of the determination to the individual or the 
     individual's designee and the individual's health care 
     provider by telephone and in printed or electronic form, no 
     later than the deadline specified in subparagraph (B). The 
     provider involved shall provide timely access to information 
     relevant to the matter of the review decision.
       ``(B) Deadline.--
       ``(i) In general.--Subject to clauses (ii) and (iii), the 
     deadline specified in this subparagraph is 14 days after the 
     earliest date as of which the request for prior authorization 
     has been received and all necessary information has been 
     provided.
       ``(ii) Extension permitted where notice of additional 
     information required.--If a utilization review program--

       ``(I) receives a request for a prior authorization,
       ``(II) determines that additional information is necessary 
     to complete the review and make the determination on the 
     request,
       ``(III) notifies the requester, not later than 5 business 
     days after the date of receiving the request, of the need for 
     such specified additional information, and

[[Page 24363]]

       ``(IV) requires the requester to submit specified 
     information not later than 2 business days after 
     notification,

     the deadline specified in this subparagraph is 14 days after 
     the date the program receives the specified additional 
     information, but in no case later than 28 days after the date 
     of receipt of the request for the prior authorization. This 
     clause shall not apply if the deadline is specified in clause 
     (iii).
       ``(iii) Expedited cases.--In the case of a situation 
     described in section 102(c)(1)(A), the deadline specified in 
     this subparagraph is 48 hours after the time of the request 
     for prior authorization.
       ``(2) Ongoing care.--
       ``(A) Concurrent review.--
       ``(i) In general.--Subject to subparagraph (B), in the case 
     of a concurrent review of ongoing care (including 
     hospitalization), which results in a termination or reduction 
     of such care, the plan must provide by telephone and in 
     printed or electronic form notice of the concurrent review 
     determination to the individual or the individual's designee 
     and the individual's health care provider as soon as possible 
     in accordance with the medical exigencies of the case, with 
     sufficient time prior to the termination or reduction to 
     allow for an appeal under section 102(c)(1)(A) 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.
       ``(B) Exception.--Subparagraph (A) shall not be interpreted 
     as requiring plans or issuers to provide coverage of care 
     that would exceed the coverage limitations for such care.
       ``(3) Previously provided services.--In the case of a 
     utilization review activity involving retrospective review of 
     health care services previously provided for an individual, 
     the utilization review program shall make a determination 
     concerning such services, and provide notice of the 
     determination to the individual or the individual's designee 
     and the individual's health care provider by telephone and in 
     printed or electronic form, within 30 days of the date of 
     receipt of information that is reasonably necessary to make 
     such determination, but in no case later than 60 days after 
     the date of receipt of the claim for benefits.
       ``(4) Failure to meet deadline.--In a case in which a group 
     health plan or health insurance issuer fails to make a 
     determination on a claim for benefit under paragraph (1), 
     (2)(A), or (3) by the applicable deadline established under 
     the respective paragraph, the failure shall be treated under 
     this subtitle as a denial of the claim as of the date of the 
     deadline.
       ``(5) Reference to special rules for emergency services, 
     maintenance care, post-stabilization care, and emergency 
     ambulance services.--For waiver of prior authorization 
     requirements in certain cases involving emergency services, 
     maintenance care and post-stabilization care, and emergency 
     ambulance services, see subsections (a)(1), (b), and (c)(1) 
     of section 113, respectively.
       ``(e) Notice of Denials of Claims for Benefits.--
       ``(1) In general.--Notice of a denial of claims for 
     benefits under a utilization review program shall be provided 
     in printed or electronic form and written in a manner 
     calculated to be understood by the participant, beneficiary, 
     or enrollee and shall include--
       ``(A) the reasons for the denial (including the clinical 
     rationale);
       ``(B) instructions on how to initiate an appeal under 
     section 102; and
       ``(C) notice of the availability, upon request of the 
     individual (or the individual's designee) of the clinical 
     review criteria relied upon to make such denial.
       ``(2) Specification of any additional information.--Such a 
     notice shall also specify what (if any) additional necessary 
     information must be provided to, or obtained by, the person 
     making the denial in order to make a decision on such an 
     appeal.
       ``(f) Claim for Benefits and Denial of Claim for Benefits 
     Defined.--For purposes of this subtitle:
       ``(1) Claim for benefits.--The term `claim for benefits' 
     means any request for coverage (including authorization of 
     coverage), or for payment in whole or in part, for an item or 
     service under a group health plan or health insurance 
     coverage.
       ``(2) Denial of claim for benefits.--The term `denial' 
     means, with respect to a claim for benefits, a denial, or a 
     failure to act on a timely basis upon, in whole or in part, 
     the claim for benefits and includes a failure to provide or 
     pay for benefits (including items and services) required to 
     be provided or paid for under this title.

     ``SEC. 2802. INTERNAL APPEALS PROCEDURES.

       ``(a) Right of Review.--
       ``(1) In general.--Each group health plan, and each health 
     insurance issuer offering health insurance coverage--
       ``(A) shall provide adequate notice in written or 
     electronic form to any participant or beneficiary under such 
     plan, or enrollee under such coverage, whose claim for 
     benefits under the plan or coverage has been denied ``(within 
     the meaning of section 2801(f)(2)), setting forth the 
     specific reasons for such denial of claim for benefits and 
     rights to any further review or appeal, written in layman's 
     terms to be understood by the participant, beneficiary, or 
     enrollee; and
       ``(B) shall afford such a participant, beneficiary, or 
     enrollee (and any provider or other person acting on behalf 
     of such an individual with the individual's consent or 
     without such consent if the individual is medically unable to 
     provide such consent) who is dissatisfied with such a denial 
     of claim for benefits a reasonable opportunity of not less 
     than 180 days to request and obtain a full and fair review by 
     a named fiduciary (with respect to such plan) or named 
     appropriate individual (with respect to such coverage) of the 
     decision denying the claim.
       ``(2) Treatment of oral requests.--The request for review 
     under paragraph (1)(B) may be made orally, but, in the case 
     of an oral request, shall be followed by a request in written 
     or electronic form.
       ``(b) Internal Review Process.--
       ``(1) Conduct of review.--
       ``(A) In general.--A review of a denial of claim under this 
     section shall be made by an individual (who shall be a 
     physician in a case involving medical judgment) who has been 
     selected by the plan or issuer and who did not make the 
     initial denial in the internally appealable decision, except 
     that in the case of limited scope coverage (as defined in 
     subparagraph (B)) an appropriate specialist shall review the 
     decision.
       ``(B) Limited scope coverage defined.--For purposes of 
     subparagraph (A), the term `limited scope coverage' means a 
     group health plan or health insurance coverage the only 
     benefits under which are for benefits described in section 
     2791(c)(2)(A) of the Public Health Service Act (42 U.S.C. 
     300gg-91(c)(2)).
       ``(2) Time limits for internal reviews.--
       ``(A) In general.--Having received such a request for 
     review of a denial of claim, the plan or issuer shall, in 
     accordance with the medical exigencies of the case but not 
     later than the deadline specified in subparagraph (B), 
     complete the review on the denial and transmit to the 
     participant, beneficiary, enrollee, or other person involved 
     a decision that affirms, reverses, or modifies the denial. If 
     the decision does not reverse the denial, the plan or issuer 
     shall transmit, in printed or electronic form, a notice that 
     sets forth the grounds for such decision and that includes a 
     description of rights to any further appeal. Such decision 
     shall be treated as the final decision of the plan. Failure 
     to issue such a decision by such deadline shall be treated as 
     a final decision affirming the denial of claim.
       ``(B) Deadline.--
       ``(i) In general.--Subject to clauses (ii) and (iii), the 
     deadline specified in this subparagraph is 14 days after the 
     earliest date as of which the request for prior authorization 
     has been received and all necessary information has been 
     provided. The provider involved shall provide timely access 
     to information relevant to the matter of the review decision.
       ``(ii) Extension permitted where notice of additional 
     information required.--If a group health plan or health 
     insurance issuer--

       ``(I) receives a request for internal review,
       ``(II) determines that additional information is necessary 
     to complete the review and make the determination on the 
     request,
       ``(III) notifies the requester, not later than 5 business 
     days after the date of receiving the request, of the need for 
     such specified additional information, and
       ``(IV) requires the requester to submit specified 
     information not later than 48 hours after notification,

     the deadline specified in this subparagraph is 14 days after 
     the date the plan or issuer receives the specified additional 
     information, but in no case later than 28 days after the date 
     of receipt of the request for the internal review. This 
     clause shall not apply if the deadline is specified in clause 
     (iii).
       ``(iii) Expedited cases.--In the case of a situation 
     described in subsection (c)(1)(A), the deadline specified in 
     this subparagraph is 48 hours after the time of request for 
     review
       ``(c) Expedited Review Process.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer, shall establish procedures in writing for 
     the expedited consideration of requests for review under 
     subsection (b) in situations--
       ``(A) in which, as determined by the plan or issuer or as 
     certified in writing by a treating physician, the application 
     of the normal timeframe for making the determination could 
     seriously jeopardize the life or health of the participant, 
     beneficiary, or enrollee or such individual's ability to 
     regain maximum function; or
       ``(B) described in section 2801(d)(2) (relating to requests 
     for continuation of ongoing care which would otherwise be 
     reduced or terminated).
       ``(2) Process.--Under such procedures--
       ``(A) the request for expedited review may be submitted 
     orally or in writing by an individual or provider who is 
     otherwise entitled to request the review;

[[Page 24364]]

       ``(B) all necessary information, including the plan's or 
     issuer's decision, shall be transmitted between the plan or 
     issuer and the requester by telephone, facsimile, or other 
     similarly expeditious available method; and
       ``(C) the plan or issuer shall expedite the review in the 
     case of any of the situations described in subparagraph (A) 
     or (B) of paragraph (1).
       ``(3) Deadline for decision.--The decision on the expedited 
     review must be made and communicated to the parties as soon 
     as possible in accordance with the medical exigencies of the 
     case, and in no event later than 48 hours after the time of 
     receipt of the request for expedited review, except that in a 
     case described in paragraph (1)(B), the decision must be made 
     before the end of the approved period of care.
       ``(d) Waiver of Process.--A plan or issuer may waive its 
     rights for an internal review under subsection (b). In such 
     case the participant, beneficiary, or enrollee involved (and 
     any designee or provider involved) shall be relieved of any 
     obligation to complete the review involved and may, at the 
     option of such participant, beneficiary, enrollee, designee, 
     or provider, proceed directly to seek further appeal through 
     any applicable external appeals process.

     ``SEC. 2803. EXTERNAL APPEALS PROCEDURES.

       ``(a) Right to External Appeal.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer offering health insurance coverage, shall 
     provide for an external appeals process that meets the 
     requirements of this section in the case of an externally 
     appealable decision described in paragraph (2), for which a 
     timely appeal is made (within a reasonable period not to 
     exceed 365 days) either by the plan or issuer or by the 
     participant, beneficiary, or enrollee (and any provider or 
     other person acting on behalf of such an individual with the 
     individual's consent or without such consent if such an 
     individual is medically unable to provide such consent).
       ``(2) Externally appealable decision defined.--
       ``(A) In general.--For purposes of this section, the term 
     `externally appealable decision' means a denial of claim for 
     benefits (as defined in section 2801(f)(2)), if--
       ``(i) the item or service involved is covered under the 
     plan or coverage,
       ``(ii) the amount involved exceeds $100, increased or 
     decreased, for each calendar year that ends after December 
     31, 2001, by the same percentage as the percentage by which 
     the medical care expenditure category of the Consumer Price 
     Index for All Urban Consumers (United States city average), 
     published by the Bureau of Labor Statistics, for September of 
     the preceding calendar year has increased or decreased from 
     such index for September 2000, and
       ``(iii) the requirements of subparagraph (B) are met with 
     respect to such denial.

     Such term also includes a failure to meet an applicable 
     deadline for internal review under section 2802 or such 
     standards as are established pursuant to section 2818.
       ``(B) Requirements.--For purposes of subparagraph (A)(iii), 
     the requirements of this subparagraph are met with respect to 
     a denial of a claim for benefits if--
       ``(i) the denial is based in whole or in part on a decision 
     that the item or service is not medically necessary or 
     appropriate or is investigational or experimental, or
       ``(ii) in such denial, the decision as to whether an item 
     or service is covered involves a medical judgment.
       ``(C) Exclusions.--The term `externally appealable 
     decision' does not include--
       ``(i) specific exclusions or express limitations on the 
     amount, duration, or scope of coverage; or
       ``(ii) a decision regarding eligibility for any benefits.
       ``(3) Exhaustion of internal review process.--Except as 
     provided under section 2802(d), a plan or issuer may 
     condition the use of an external appeal process in the case 
     of an externally appealable decision upon a final decision in 
     an internal review under section 2802, but only if the 
     decision is made in a timely basis consistent with the 
     deadlines provided under this subtitle.
       ``(4) Filing fee requirement.--
       ``(A) In general.--A plan or issuer may condition the use 
     of an external appeal process upon payment in advance to the 
     plan or issuer of a $25 filing fee.
       ``(B) Refunding fee in case of successful appeals.--The 
     plan or issuer shall refund payment of the filing fee under 
     this paragraph if the recommendation of the external appeal 
     entity is to reverse the denial of a claim for benefits which 
     is the subject of the appeal.
       ``(b) General Elements of External Appeals Process.--
       ``(1) Use of qualified external appeal entity.--
       ``(A) In general.--The external appeal process under this 
     section of a plan or issuer shall be conducted between the 
     plan or issuer and one or more qualified external appeal 
     entities (as defined in subsection (c)). Nothing in this 
     subsection shall be construed as requiring that such 
     procedures provide for the selection for any plan of more 
     than one such entity.
       ``(B) Limitation on plan or issuer selection.--The 
     Secretary shall implement procedures to assure that the 
     selection process among qualified external appeal entities 
     will not create any incentives for external appeal entities 
     to make a decision in a biased manner.
       ``(C) Other terms and conditions.--The terms and conditions 
     of this paragraph shall be consistent with the standards the 
     Secretary shall establish to assure there is no real or 
     apparent conflict of interest in the conduct of external 
     appeal activities. All costs of the process (except those 
     incurred by the participant, beneficiary, enrollee, or 
     treating professional in support of the appeal) shall be paid 
     by the plan or issuer, and not by the participant, 
     beneficiary, or enrollee. The previous sentence shall not be 
     construed as applying to the imposition of a filing fee under 
     subsection (a)(4).
       ``(2) Elements of process.--An external appeal process 
     shall be conducted consistent with standards established by 
     the Secretary that include at least the following:
       ``(A) Fair and de novo determination.--The process shall 
     provide for a fair, de novo determination described in 
     subparagraph (B) based on evidence described in subparagraphs 
     (C) and (D).
       ``(B) Standard of review.--An external appeal entity shall 
     determine whether the plan's or issuer's decision is 
     appropriate for the medical condition of the patient involved 
     (as determined by the entity) taking into account as of the 
     time of the entity's determination the patient's medical 
     condition and any relevant and reliable evidence the entity 
     obtains under subparagraphs (C) and (D). If the entity 
     determines the decision is appropriate for such condition, 
     the entity shall affirm the decision and to the extent that 
     the entity determines the decision is not appropriate for 
     such condition, the entity shall reverse the decision. 
     Nothing in this subparagraph shall be construed as providing 
     for coverage of items or services not provided or covered by 
     the plan or issuer.
       ``(C) Required consideration of certain matters.--In making 
     such determination, the external appeal entity shall 
     consider, but not be bound by--
       ``(i) any language in the plan or coverage document 
     relating to the definitions of the terms medical necessity, 
     medically necessary or appropriate, or experimental, 
     investigational, or related terms;
       ``(ii) the decision made by the plan or issuer upon 
     internal review under section 2802 and any guidelines or 
     standards used by the plan or issuer in reaching such 
     decision; and
       ``(iii) the opinion of the individual's treating physician 
     or health care professional.

     The entity also shall consider any personal health and 
     medical information supplied with respect to the individual 
     whose denial of claim for benefits has been appealed. The 
     entity also shall consider the results of studies that meet 
     professionally recognized standards of validity and 
     replicability or that have been published in peer-reviewed 
     journals.
       ``(D) Additional evidence.--Such entity may also take into 
     consideration but not be limited to the following evidence 
     (to the extent available):
       ``(i) The results of professional consensus conferences.
       ``(ii) Practice and treatment policies.
       ``(iii) Community standard of care.
       ``(iv) Generally accepted principles of professional 
     medical practice consistent with the best practice of 
     medicine.
       ``(v) To the extent that the entity determines it to be 
     free of any conflict of interest, the opinions of individuals 
     who are qualified as experts in one or more fields of health 
     care which are directly related to the matters under appeal.
       ``(vi) To the extent that the entity determines it to be 
     free of any conflict of interest, the results of peer reviews 
     conducted by the plan or issuer involved.
       ``(E) Determination concerning externally appealable 
     decisions.--
       ``(i) In general.--A qualified external appeal entity shall 
     determine--

       ``(I) whether a denial of claim for benefits is an 
     externally appealable decision (within the meaning of 
     subsection (a)(2));
       ``(II) whether an externally appealable decision involves 
     an expedited appeal;
       ``(III) for purposes of initiating an external review, 
     whether the internal review process has been completed; and
       ``(IV) whether the item or services is covered under the 
     plan or coverage.

       ``(ii) Construction.--Nothing in a determination by a 
     qualified external appeal entity under this section shall be 
     construed as authorizing, or providing for, coverage of items 
     and services for which benefits are not provided under the 
     plan or coverage.
       ``(F) Opportunity to submit evidence.--Each party to an 
     externally appealable decision may submit evidence related to 
     the issues in dispute.
       ``(G) Provision of information.--The plan or issuer 
     involved shall provide to the external appeal entity timely 
     access to information and to provisions of the plan or health 
     insurance coverage relating to the matter of the externally 
     appealable decision, as determined by the entity. The 
     provider involved shall provide to the external appeal entity 
     timely access to information relevant to the

[[Page 24365]]

     matter of the externally appealable decision, as determined 
     by the entity.
       ``(H) Timely decisions.--A determination by the external 
     appeal entity on the decision shall--
       ``(i) be made orally or in written or electronic form and, 
     if it is made orally, shall be supplied to the parties in 
     written or electronic form as soon as possible;
       ``(ii) be made in accordance with the medical exigencies of 
     the case involved, but in no event later than 21 days after 
     the date (or, in the case of an expedited appeal, 48 hours 
     after the time) of requesting an external appeal of the 
     decision;
       ``(iii) state, in layperson's language, the scientific 
     rationale for such determination as well as the basis for 
     such determination, including, if relevant, any basis in the 
     terms or conditions of the plan or coverage; and
       ``(iv) inform the participant, beneficiary, or enrollee of 
     the individual's rights (including any limitation on such 
     rights) to seek binding arbitration or further review by the 
     courts (or other process) of the external appeal 
     determination.
       ``(I) Compliance with determination.--If the external 
     appeal entity determines that a denial of a claim for 
     benefits was not reasonable and reverses the denial, the plan 
     or issuer--
       ``(i) shall (upon the receipt of the determination) 
     authorize the provision or payment for benefits in accordance 
     with such determination;
       ``(ii) shall take such actions as may be necessary to 
     provide or pay for benefits (including items or services) in 
     a timely manner consistent with such determination; and
       ``(iii) shall submit information to the entity documenting 
     compliance with the entity's determination and this 
     subparagraph.
       ``(J) Construction.--Nothing in this paragraph shall be 
     construed as providing for coverage of items and services for 
     which benefits are not provided under the plan or coverage.
       ``(c) Qualifications of External Appeal Entities.--
       ``(1) In general.--For purposes of this section, the term 
     `qualified external appeal entity' means, in relation to a 
     plan or issuer, an entity that is certified under paragraph 
     (2) as meeting the following requirements:
       ``(A) The entity meets the independence requirements of 
     paragraph (3).
       ``(B) The entity conducts external appeal activities 
     through at least three clinical peers who are practicing 
     physicians.
       ``(C) The entity has sufficient medical, legal, and other 
     expertise and sufficient staffing to conduct external appeal 
     activities for the plan or issuer on a timely basis 
     consistent with subsection (b)(2)(G).
       ``(2) Initial certification of external appeal entities.--
       ``(A) In general.--In order to be treated as a qualified 
     external appeal entity with respect to a group health plan or 
     health insurance issuer operating in a State, the entity must 
     be certified (and, in accordance with subparagraph (B), 
     periodically recertified) as meeting such requirements--
       ``(i) by the applicable State authority (or under a process 
     recognized or approved by such authority); or
       ``(ii) if the State has not established a certification and 
     recertification process for such entities, by the Secretary, 
     under a process recognized or approved by the Secretary, or 
     to the extent provided in subparagraph (C)(ii), by a 
     qualified private standard-setting organization (certified 
     under such subparagraph), if elected by the entity.
       ``(B) Recertification process.--The Secretary shall develop 
     standards for the recertification of external appeal 
     entities. Such standards shall include a review of--
       ``(i) the number of cases reviewed;
       ``(ii) a summary of the disposition of those cases;
       ``(iii) the length of time in making determinations on 
     those cases;
       ``(iv) updated information of what was required to be 
     submitted as a condition of certification for the entity's 
     performance of external appeal activities; and
       ``(v) information necessary to assure that the entity meets 
     the independence requirements (described in paragraph (3)) 
     with respect to plans and issuers for which it conducts 
     external review activities.
       ``(C) Certification of qualified private standard-setting 
     organizations.--For purposes of subparagraph (A)(ii), the 
     Secretary may provide for a process for certification (and 
     periodic recertification) of qualified private standard-
     setting organizations which provide for certification of 
     external appeal entities. Such an organization shall only be 
     certified if the organization does not certify an external 
     appeal entity unless it meets standards as least as stringent 
     as the standards required for certification of such an entity 
     by the Secretary under subparagraph (A)(ii).
       ``(3) Independence requirements.--
       ``(A) In general.--A clinical peer or other entity meets 
     the independence requirements of this paragraph if--
       ``(i) the peer or entity is not affiliated with any related 
     party;
       ``(ii) any compensation received by such peer or entity in 
     connection with the external review is reasonable and not 
     contingent on any decision rendered by the peer or entity;
       ``(iii) the plan and the issuer (if any) have no recourse 
     against the peer or entity in connection with the external 
     review; and
       ``(iv) the peer or entity does not otherwise have a 
     conflict of interest with a related party.
       ``(B) Related party.--For purposes of this paragraph, the 
     term `related party' means--
       ``(i) with respect to--

       ``(I) a group health plan or health insurance coverage 
     offered in connection with such a plan, the plan or the 
     health insurance issuer offering such coverage, or
       ``(II) individual health insurance coverage, the health 
     insurance issuer offering such coverage,

     or any plan sponsor, fiduciary, officer, director, or 
     management employee of such plan or issuer;
       ``(ii) the health care professional that provided the 
     health care involved in the coverage decision;
       ``(iii) the institution at which the health care involved 
     in the coverage decision is provided; or
       ``(iv) the manufacturer of any drug or other item that was 
     included in the health care involved in the coverage 
     decision.
       ``(C) Affiliated.--For purposes of this paragraph, the term 
     `affiliated' means, in connection with any peer or entity, 
     having a familial, financial, or fiduciary relationship with 
     such peer or entity.
       ``(4) Limitation on liability of reviewers.--No qualified 
     external appeal entity having a contract with a plan or 
     issuer under this part and no person who is employed by any 
     such entity or who furnishes professional services to such 
     entity, shall be held by reason of the performance of any 
     duty, function, or activity required or authorized pursuant 
     to this section, to have violated any criminal law, or to be 
     civilly liable under any law of the United States or of any 
     State (or political subdivision thereof) if due care was 
     exercised in the performance of such duty, function, or 
     activity and there was no actual malice or gross misconduct 
     in the performance of such duty, function, or activity.
       ``(d) External Appeal Determination Binding on Plan.--
       ``(1) In general.--The determination by an external appeal 
     entity shall be binding on the plan (and issuer, if any) 
     involved in the determination.
       ``(2) Protection of legal rights.--Nothing in this subtitle 
     shall be construed as removing any legal rights of 
     participants, beneficiaries, enrollees, and others under 
     State or Federal law, including the right to file judicial 
     actions to enforce rights.
       ``(e) Penalties Against Authorized Officials for Refusing 
     to Authorize the Determination of an External Appeal 
     Entity.--
       ``(1) Monetary penalties.--In any case in which the 
     determination of an external appeal entity is not followed in 
     a timely fashion by a group health plan, or by a health 
     insurance issuer offering health insurance coverage, any 
     named fiduciary who, acting in the capacity of authorizing 
     the benefit, causes such refusal may, in the discretion in 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 appeal entity until the date the refusal to provide 
     the benefit is corrected.
       ``(2) Cease and desist order and order of attorney's 
     fees.--In any action described in paragraph (1) 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 paragraph has taken an action 
     resulting in a refusal of a benefit determined by an external 
     appeal entity in violation of such terms of the plan, 
     coverage, or this subtitle, or has failed to take an action 
     for which such person is responsible under the plan, 
     coverage, or this title 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--
       ``(A) to cease and desist from the alleged action or 
     failure to act; and
       ``(B) 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.
       ``(f) Protection of Legal Rights.--Nothing in this subtitle 
     shall be construed as removing or limiting any legal rights 
     of participants, beneficiaries, enrollees, and others under 
     State or Federal law (including section 502 of the Employee 
     Retirement Income Security Act of 1974), including the right 
     to file judicial actions to enforce rights.

     ``SEC. 2804. ESTABLISHMENT OF A GRIEVANCE PROCESS.

       ``(a) Establishment of Grievance System.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer in connection with the provision of health 
     insurance coverage, shall establish and maintain a system to 
     provide for the presentation and resolution of oral and 
     written grievances brought by individuals who are 
     participants, beneficiaries,

[[Page 24366]]

     or enrollees, or health care providers or other individuals 
     acting on behalf of an individual and with the individual's 
     consent or without such consent if the individual is 
     medically unable to provide such consent, regarding any 
     aspect of the plan's or issuer's services.
       ``(2) Grievance defined.--In this section, the term 
     `grievance' means any question, complaint, or concern brought 
     by a participant, beneficiary, or enrollee that is not a 
     claim for benefits.
       ``(b) Grievance System.--Such system shall include the 
     following components with respect to individuals who are 
     participants, beneficiaries, or enrollees:
       ``(1) Written notification to all such individuals and 
     providers of the telephone numbers and business addresses of 
     the plan or issuer personnel responsible for resolution of 
     grievances and appeals.
       ``(2) A system to record and document, over a period of at 
     least 3 previous years beginning two months after the date of 
     the enactment of this Act, all grievances and appeals made 
     and their status.
       ``(3) A process providing processing and resolution of 
     grievances within 60 days.
       ``(4) Procedures for follow-up action, including the 
     methods to inform the person making the grievance of the 
     resolution of the grievance.
     Grievances are not subject to appeal under the previous 
     provisions of this subtitle.

                      ``Subtitle B--Access to Care

     ``SEC. 2811. CONSUMER CHOICE OPTION.

       ``(a) In General.--If a health insurance issuer offers to 
     enrollees health insurance coverage in connection with a 
     group health plan which provides 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 issuer to provide such services, the 
     issuer shall also offer to such enrollees (at the time of 
     enrollment and during an annual open season as provided under 
     subsection (c)) the option of health insurance coverage which 
     provides for coverage of such services which are not 
     furnished through health care professionals and providers who 
     are members of such a network unless enrollees are offered 
     such non-network coverage through another health insurance 
     issuer.
       ``(b) Additional Costs.--The amount of any additional 
     premium charged by the health insurance issuer 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 unless it is paid by the health plan sponsor through 
     agreement with the health insurance issuer.
       ``(c) Open Season.--An enrollee may change to the offering 
     provided under this section only during a time period 
     determined by the health insurance issuer. Such time period 
     shall occur at least annually.

     ``SEC. 2812. 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.--A group health plan and a health 
     insurance issuer that offers health insurance coverage shall 
     permit each participant, beneficiary, or enrollee to receive 
     medically necessary or appropriate specialty care, pursuant 
     to appropriate referral procedures, from any qualified 
     participating health care professional who is available to 
     accept such individual for such care.

     ``SEC. 2813. 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--
       ``(i) 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; and
       ``(ii) a medical condition manifesting itself in a neonate 
     by acute symptoms of sufficient severity (including severe 
     pain) such that a prudent health care professional could 
     reasonably expect the absence of immediate medical attention 
     to result in a condition described in clause (i), (ii), or 
     (iii) of section 1867(e)(1)(A) of the Social Security Act.
       ``(B) Emergency services.--The term `emergency services' 
     means--
       ``(i) with respect to an emergency medical condition 
     described in subparagraph (A)(i)--

       ``(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; or

       ``(ii) with respect to an emergency medical condition 
     described in subparagraph (A)(ii), medical treatment for such 
     condition rendered by a health care provider in a hospital to 
     a neonate, including available hospital ancillary services in 
     response to an urgent request of a health care professional 
     and to the extent necessary to stabilize the neonate.
       ``(C) Stabilize.--The term `to stabilize' means, with 
     respect to an emergency medical condition, to provide such 
     medical treatment of the condition as may be necessary to 
     assure, within reasonable medical probability, that no 
     material deterioration of the condition is likely to result 
     from or occur during the transfer of the individual from a 
     facility.
       ``(b) Reimbursement for Maintenance Care and Post-
     Stabilization Care.--If benefits are available under a group 
     health plan, or under health insurance coverage offered by a 
     health insurance issuer, with respect to maintenance care or 
     post-stabilization care covered under the guidelines 
     established under section 1852(d)(2) of the Social Security 
     Act, the plan or issuer shall provide for reimbursement with 
     respect to such services provided to a participant, 
     beneficiary, or enrollee other than through a participating 
     health care provider in a manner consistent with subsection 
     (a)(1)(C) (and shall otherwise comply with such guidelines).
       ``(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. 2814. ACCESS TO SPECIALTY CARE.

       ``(a) Specialty Care for Covered Services.--
       ``(1) In general.--If--
       ``(A) an individual is a participant or beneficiary under a 
     group health plan or an enrollee who is covered under health 
     insurance coverage offered by a health insurance issuer,
       ``(B) the individual has a condition or disease of 
     sufficient seriousness and complexity to require treatment by 
     a specialist or the individual requires physician pathology 
     services, and
       ``(C) benefits for such treatment or services are provided 
     under the plan or coverage,

     the plan or issuer shall make or provide for a referral to a 
     specialist who is available and accessible (consistent with 
     standards developed under section 2818) to provide the 
     treatment for such condition or disease or to provide such 
     services.
       ``(2) Specialist defined.--For purposes of this subsection, 
     the term `specialist' means,

[[Page 24367]]

     with respect to a condition or services, a health care 
     practitioner, facility, or center or physician pathologist 
     that has adequate expertise through appropriate training and 
     experience (including, in the case of a child, appropriate 
     pediatric expertise and in the case of a pregnant woman, 
     appropriate obstetrical expertise) to provide high quality 
     care in treating the condition or to provide physician 
     pathology services.
       ``(3) Care under referral.--A group health plan or health 
     insurance issuer may require that the care provided to an 
     individual pursuant to such referral under paragraph (1) with 
     respect to treatment be--
       ``(A) pursuant to a treatment plan, only if the treatment 
     plan is developed by the specialist and approved by the plan 
     or issuer, in consultation with the designated primary care 
     provider or specialist and the individual (or the 
     individual's designee), and
       ``(B) in accordance with applicable quality assurance and 
     utilization review standards of the plan or issuer.

     Nothing in this subsection shall be construed as preventing 
     such a treatment plan for an individual from requiring a 
     specialist to provide the primary care provider with regular 
     updates on the specialty care provided, as well as all 
     necessary medical information.
       ``(4) Referrals to participating providers.--A group health 
     plan or health insurance issuer is not required under 
     paragraph (1) to provide for a referral to a specialist that 
     is not a participating provider, unless the plan or issuer 
     does not have a specialist that is available and accessible 
     to treat the individual's condition or provide physician 
     pathology services and that is a participating provider with 
     respect to such treatment or services.
       ``(5) Referrals to nonparticipating providers.--In a case 
     in which a referral of an individual to a nonparticipating 
     specialist is required under paragraph (1), the group health 
     plan or health insurance issuer shall provide the individual 
     the option of at least three nonparticipating specialists.
       ``(6) Treatment of nonparticipating providers.--If a plan 
     or issuer refers an individual to a nonparticipating 
     specialist pursuant to paragraph (1), services provided 
     pursuant to the approved treatment plan (if any) shall be 
     provided at no additional cost to the individual beyond what 
     the individual would otherwise pay for services received by 
     such a specialist that is a participating provider.
       ``(b) Specialists as Gatekeeper for Treatment of Ongoing 
     Special Conditions.--
       ``(1) In general.--A group health plan, or a health 
     insurance issuer, in connection with the provision of health 
     insurance coverage, shall have a procedure by which an 
     individual who is a participant, beneficiary, or enrollee and 
     who has an ongoing special condition (as defined in paragraph 
     (3)) may request and receive a referral to a specialist for 
     such condition who shall be responsible for and capable of 
     providing and coordinating the individual's care with respect 
     to the condition. Under such procedures if such an 
     individual's care would most appropriately be coordinated by 
     such a specialist, such plan or issuer shall refer the 
     individual to such specialist.
       ``(2) Treatment for related referrals.--Such specialists 
     shall be permitted to treat the individual without a referral 
     from the individual's primary care provider and may authorize 
     such referrals, procedures, tests, and other medical services 
     as the individual's primary care provider would otherwise be 
     permitted to provide or authorize, subject to the terms of 
     the treatment (referred to in subsection (a)(3)(A)) with 
     respect to the ongoing special condition.
       ``(3) Ongoing special condition defined.--In this 
     subsection, the term `ongoing special condition' means a 
     condition or disease that--
       ``(A) is life-threatening, degenerative, or disabling, and
       ``(B) requires specialized medical care over a prolonged 
     period of time.
       ``(4) Terms of referral.--The provisions of paragraphs (3) 
     through (5) of subsection (a) apply with respect to referrals 
     under paragraph (1) of this subsection in the same manner as 
     they apply to referrals under subsection (a)(1).
       ``(5) Construction.--Nothing in this subsection shall be 
     construed as preventing an individual who is a participant, 
     beneficiary, or enrollee and who has an ongoing special 
     condition from having the individual's primary care physician 
     assume the responsibilities for providing and coordinating 
     care described in paragraph (1).
       ``(c) Standing Referrals.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer in connection with the provision of health 
     insurance coverage, shall have a procedure by which an 
     individual who is a participant, beneficiary, or enrollee and 
     who has a condition that requires ongoing care from a 
     specialist may receive a standing referral to such specialist 
     for treatment of such condition. If the plan or issuer, or if 
     the primary care provider in consultation with the medical 
     director of the plan or issuer and the specialist (if any), 
     determines that such a standing referral is appropriate, the 
     plan or issuer shall make such a referral to such a 
     specialist if the individual so desires.
       ``(2) Terms of referral.--The provisions of paragraphs (3) 
     through (5) of subsection (a) apply with respect to referrals 
     under paragraph (1) of this subsection in the same manner as 
     they apply to referrals under subsection (a)(1).

     ``SEC. 2815. ACCESS TO OBSTETRICAL AND GYNECOLOGICAL CARE.

       ``(a) In General.--If a group health plan, or a health 
     insurance issuer in connection with the provision of health 
     insurance coverage, requires or provides for a participant, 
     beneficiary, or enrollee to designate a participating primary 
     care health care professional, the plan or issuer--
       ``(1) may not require authorization or a referral by the 
     individual's primary care health care professional or 
     otherwise for covered gynecological care (including 
     preventive women's health examinations) or for covered 
     pregnancy-related services provided by a participating 
     physician (including a family practice physician) who 
     specializes or is trained and experienced in gynecology or 
     obstetrics, respectively, to the extent such care is 
     otherwise covered; and
       ``(2) shall treat the ordering of other gynecological or 
     obstetrical care by such a participating physician as the 
     authorization of the primary care health care professional 
     with respect to such care under the plan or coverage.
       ``(b) Construction.--Nothing in subsection (a) shall be 
     construed to--
       ``(1) waive any exclusions of coverage under the terms of 
     the plan with respect to coverage of gynecological or 
     obstetrical care;
       ``(2) preclude the group health plan or health insurance 
     issuer involved from requiring that the gynecologist or 
     obstetrician notify the primary care health care professional 
     or the plan of treatment decisions; or
       ``(3) prevent a plan or issuer from offering, in addition 
     to physicians described in subsection (a)(1), non-physician 
     health care professionals who are trained and experienced in 
     gynecology or obstetrics.

     ``SEC. 2816. ACCESS TO PEDIATRIC CARE.

       ``(a) Pediatric Care.--If a group health plan, or a health 
     insurance issuer in connection with the provision of health 
     insurance coverage, requires or provides for an enrollee to 
     designate a participating primary care provider for a child 
     of such enrollee, the plan or issuer shall permit the 
     enrollee to designate a physician (including a family 
     practice physician) who specializes or is trained and 
     experienced in pediatrics as the child's primary care 
     provider.
       ``(b) Construction.--Nothing in subsection (a) shall be 
     construed to waive any exclusions of coverage under the terms 
     of the plan with respect to coverage of pediatric care.

     ``SEC. 2817. CONTINUITY OF CARE.

       ``(a) In General.--
       ``(1) Termination of provider.--If a contract between a 
     group health plan, or a health insurance issuer in connection 
     with the provision of health insurance coverage, and a health 
     care provider is terminated (as defined in paragraph (3)(B)), 
     or benefits or coverage provided by a health care provider 
     are terminated because of a change in the terms of provider 
     participation in a group health plan, and an individual who 
     is a participant, beneficiary, or enrollee in the plan or 
     coverage is undergoing treatment from the provider for an 
     ongoing special condition (as defined in paragraph (3)(A)) at 
     the time of such termination, the plan or issuer shall--
       ``(A) notify the individual on a timely basis of such 
     termination and of the right to elect continuation of 
     coverage of treatment by the provider under this section; and
       ``(B) subject to subsection (c), permit the individual to 
     elect to continue to be covered with respect to treatment by 
     the provider of such condition during a transitional period 
     (provided under subsection (b)).
       ``(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) Definitions.--For purposes of this section:
       ``(A) Ongoing special condition.--The term `ongoing special 
     condition' has the meaning given such term in section 
     2814(b)(3), and also includes pregnancy.
       ``(B) Termination.--The term `terminated' includes, with 
     respect to a contract, the expiration or nonrenewal of the 
     contract, but does not include a termination of the contract 
     by the plan or issuer for failure to meet applicable quality 
     standards or for fraud.
       ``(b) Transitional Period.--
       ``(1) In general.--Except as provided in paragraphs (2) 
     through (4), the transitional period under this subsection 
     shall extend up to 90 days (as determined by the treating 
     health care professional) after the date of the notice 
     described in subsection (a)(1)(A) of the provider's 
     termination.

[[Page 24368]]

       ``(2) Scheduled surgery and organ transplantation.--If 
     surgery or organ transplantation was scheduled for an 
     individual before the date of the announcement of the 
     termination of the provider status under subsection (a)(1)(A) 
     or if the individual on such date was on an established 
     waiting list or otherwise scheduled to have such surgery or 
     transplantation, the transitional period under this 
     subsection with respect to the surgery or transplantation 
     shall extend beyond the period under paragraph (1) and until 
     the date of discharge of the individual after completion of 
     the surgery or transplantation.
       ``(3) Pregnancy.--If--
       ``(A) a participant, beneficiary, or enrollee was 
     determined to be pregnant at the time of a provider's 
     termination of participation, and
       ``(B) the provider was treating the pregnancy before date 
     of the termination,
     the transitional period under this subsection with respect to 
     provider's treatment of the pregnancy shall extend through 
     the provision of post-partum care directly related to the 
     delivery.
       ``(4) Terminal illness.--If--
       ``(A) a participant, beneficiary, or enrollee was 
     determined to be terminally ill (as determined under section 
     1861(dd)(3)(A) of the Social Security Act) at the time of a 
     provider's termination of participation, and
       ``(B) the provider was treating the terminal illness before 
     the date of termination,
     the transitional period under this subsection shall extend 
     for the remainder of the individual's life for care directly 
     related to the treatment of the terminal illness 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 subsection (a)(1)(B) 
     upon the individual notifying the plan of the election of 
     continued coverage and upon the provider agreeing to the 
     following terms and conditions:
       ``(1) The provider agrees to accept reimbursement from the 
     plan or issuer and individual involved (with respect to cost-
     sharing) at the rates applicable prior to the start of the 
     transitional period as payment in full (or, in the case 
     described in subsection (a)(2), at the rates applicable under 
     the replacement plan or issuer after the date of the 
     termination of the contract with the health insurance issuer) 
     and not to impose cost-sharing with respect to the individual 
     in an amount that would exceed the cost-sharing that could 
     have been imposed if the contract referred to in subsection 
     (a)(1) had not been terminated.
       ``(2) The 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 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) Construction.--Nothing in this section shall be 
     construed to require the coverage of benefits which would not 
     have been covered if the provider involved remained a 
     participating provider.

     ``SEC. 2818. NETWORK ADEQUACY.

       ``(a) Requirement.--A group health plan, and a health 
     insurance issuer providing health insurance coverage, shall 
     meet such standards for network adequacy as are established 
     by law pursuant to this section.
       ``(b) Development of Standards.--
       ``(1) Establishment of panel.--There is established a panel 
     to be known as the Health Care Panel to Establish Network 
     Adequacy Standards (in this section referred to as the 
     `Panel').
       ``(2) Duties of panel.--The Panel shall devise standards 
     for group health plans and health insurance issuers that 
     offer health insurance coverage to ensure that--
       ``(A) participants, beneficiaries, and enrollees have 
     access to a sufficient number, mix, and distribution of 
     health care professionals and providers; and
       ``(B) covered items and services are available and 
     accessible to each participant, beneficiary, and enrollee--
       ``(i) in the service area of the plan or issuer;
       ``(ii) at a variety of sites of service;
       ``(iii) with reasonable promptness (including reasonable 
     hours of operation and after hours services);
       ``(iv) with reasonable proximity to the residences or 
     workplaces of enrollees; and
       ``(v) in a manner that takes into account the diverse needs 
     of enrollees and reasonably assures continuity of care.
       ``(c) Membership.--
       ``(1) Size and composition.--The Panel shall be composed of 
     15 members. The Secretary of Health and Human Services, the 
     Majority Leader of the Senate, and the Speaker of House of 
     Representatives shall each appoint 1 member from 
     representatives of private insurance organizations, consumer 
     groups, State insurance commissioners, State medical 
     societies, and State medical specialty societies.
       ``(2) Terms of appointment.--The members of the Panel shall 
     serve for the life of the Panel.
       ``(3) Vacancies.--A vacancy in the Panel shall not affect 
     the power of the remaining members to execute the duties of 
     the Panel, but any such vacancy shall be filled in the same 
     manner in which the original appointment was made.
       ``(d) Procedures.--
       ``(1) Meetings.--The Panel shall meet at the call of a 
     majority of its members.
       ``(2) First meeting.--The Panel shall convene not later 
     than 60 days after the date of the enactment of the Health 
     Care Quality and Choice Act of 1999.
       ``(3) Quorum.--A quorum shall consist of a majority of the 
     members of the Panel.
       ``(4) Hearings.--For the purpose of carrying out its 
     duties, the Panel may hold such hearings and undertake such 
     other activities as the Panel determines to be necessary to 
     carry out its duties.
       ``(e) Administration.--
       ``(1) Compensation.--Except as provided in paragraph (1), 
     members of the Panel shall receive no additional pay, 
     allowances, or benefits by reason of their service on the 
     Panel.
       ``(2) Travel expenses and per diem.--Each member of the 
     Panel who is not an officer or employee of the Federal 
     Government shall receive travel expenses and per diem in lieu 
     of subsistence in accordance with sections 5702 and 5703 of 
     title 5, United States Code.
       ``(3) Contract authority.--The Panel may contract with and 
     compensate government and private agencies or persons for 
     items and services, without regard to section 3709 of the 
     Revised Statutes (41 U.S.C. 5).
       ``(4) Use of mails.--The Panel may use the United States 
     mails in the same manner and under the same conditions as 
     Federal agencies and shall, for purposes of the frank, be 
     considered a commission of Congress as described in section 
     3215 of title 39, United States Code.
       ``(5) Administrative support services.--Upon the request of 
     the Panel, the Secretary of Health and Human Services shall 
     provide to the Panel on a reimbursable basis such 
     administrative support services as the Panel may request.
       ``(f) Report and Establishment of Standards.--Not later 
     than 2 years after the first meeting, the Panel shall submit 
     a report to Congress and the Secretary of Health and Human 
     Services detailing the standards devised under subsection (b) 
     and recommendations regarding the implementation of such 
     standards. Such standards shall take effect to the extent 
     provided by Federal law enacted after the date of the 
     submission of such report.
       ``(g) Termination.--The Panel shall terminate on the day 
     after submitting its report to the Secretary of Health and 
     Human Services under subsection (f).

     ``SEC. 2819. ACCESS TO EXPERIMENTAL OR INVESTIGATIONAL 
                   PRESCRIPTION DRUGS.

       ``No use of a prescription drug or medical device shall be 
     considered experimental or investigational under a group 
     health plan or under health insurance coverage provided by a 
     health insurance issuer if such use is included in the 
     labeling authorized by the U.S. Food and Drug Administration 
     under section 505, 513 or 515 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 355) or under section 351 of the 
     Public Health Service Act (42 U.S.C. 262), unless such use is 
     demonstrated to be unsafe or ineffective.

     ``SEC. 2820. COVERAGE FOR INDIVIDUALS PARTICIPATING IN 
                   APPROVED CANCER CLINICAL TRIALS.

       ``(a) Coverage.--
       ``(1) In general.--If a group health plan (or a health 
     insurance issuer offering 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 subsections (b), (c), and (d), 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 individual'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 an enrollee in health insurance coverage and 
     who meets the following conditions:
       ``(1)(A) The individual has been diagnosed with cancer.
       ``(B) The individual is eligible to participate in an 
     approved clinical trial according

[[Page 24369]]

     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 individual 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 
     (or health insurance issuer offering health insurance) 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 to be paid 
     for by the sponsors of an approved clinical trial.
       ``(2) Routine patient care costs.--For purposes of this 
     section--
       ``(A) In general.--The term `routine patient care costs' 
     includes the costs associated with the provision of items and 
     services that--
       ``(i) would otherwise be covered under the group health 
     plan or health insurance coverage if such items and services 
     were not provided in connection with an approved clinical 
     trial program; and
       ``(ii) are furnished according to the protocol of an 
     approved clinical trial program.
       ``(B) Exclusion.--Such term does include the costs 
     associated with the provision of--
       ``(i) an investigational drug or device, unless the 
     Secretary has authorized the manufacturer of such drug or 
     device to charge for such drug or device; or
       ``(ii) any item or service supplied without charge by the 
     sponsor of the approved clinical trial program.
       ``(3) 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 items or services under subparagraph (A).
       ``(d) Approved Clinical Trial Defined.--In this section, 
     the term `approved clinical trial' means a cancer clinical 
     research study or cancer clinical investigation approved by 
     an Institutional Review Board.
       ``(e) Construction.--Nothing in this section shall be 
     construed to limit a plan's or issuer's coverage with respect 
     to clinical trials.
       ``(f) Plan Satisfaction of Certain Requirements; 
     Responsibilities of Fiduciaries.--
       ``(1) In general.--For purposes of this section, 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 requirements of this 
     section 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.
       ``(2) Construction.--Nothing in this section shall be 
     construed to affect or modify the responsibilities of the 
     fiduciaries of a group health plan under part 4 of subtitle B 
     of the Employee Retirement Income Security Act of 1974.
       ``(g) Study and Report.--
       ``(1) Study.--The Secretary of Health and Human Services, 
     in consultation with the Secretary and the Secretary of the 
     Treasury, shall analyze cancer clinical research and its cost 
     implications for managed care, including differentiation in--
       ``(A) the cost of patient care in trials versus standard 
     care;
       ``(B) the cost effectiveness achieved in different sites of 
     service;
       ``(C) research outcomes;
       ``(D) volume of research subjects available in different 
     sites of service;
       ``(E) access to research sites and clinical trials by 
     cancer patients;
       ``(F) patient cost sharing or copayment costs realized in 
     different sites of service;
       ``(G) health outcomes experienced in different sites of 
     service;
       ``(H) long term health care services and costs experienced 
     in different sites of service;
       ``(I) morbidity and mortality experienced in different 
     sites of service; and
       ``(J) patient satisfaction and preference of sites of 
     service.
       ``(2) Report to congress.--Not later than January 1, 2005, 
     the Secretary of Health and Human Services shall submit a 
     report to Congress that contains--
       ``(A) an assessment of any incremental cost to group health 
     plans and health insurance issuers resulting from the 
     provisions of this section;
       ``(B) a projection of expenditures to such plans and 
     issuers resulting from this section;
       ``(C) an assessment of any impact on premiums resulting 
     from this section; and
       ``(D) recommendations regarding action on other diseases.

                  ``Subtitle C--Access to Information

     ``SEC. 2821. PATIENT ACCESS TO INFORMATION.

       ``(a) Disclosure Requirement.--
       ``(1) Group health plans.--A group health plan shall--
       ``(A) provide to participants and beneficiaries at the time 
     of initial coverage under the plan (or the effective date of 
     this section, in the case of individuals who are participants 
     or beneficiaries as of such date), and at least annually 
     thereafter, the information described in subsection (b);
       ``(B) provide to participants and beneficiaries, within a 
     reasonable period (as specified by the Secretary) before or 
     after the date of significant changes in the information 
     described in subsection (b), information on such significant 
     changes; and
       ``(C) upon request, make available to participants and 
     beneficiaries, the Secretary, and prospective participants 
     and beneficiaries, the information described in subsection 
     (b) or (c).

     The plan may charge a reasonable fee for provision in printed 
     form of any of the information described in subsection (b) or 
     (c) more than once during any plan year.
       ``(2) Health insurance issuers.--A health insurance issuer 
     in connection with the provision of health insurance coverage 
     shall--
       ``(A) provide to individuals enrolled under such coverage 
     at the time of enrollment, and at least annually thereafter, 
     the information described in subsection (b);
       ``(B) provide to enrollees, within a reasonable period (as 
     specified by the Secretary) before or after the date of 
     significant changes in the information described in 
     subsection (b), information in printed form on such 
     significant changes; and
       ``(C) upon request, make available to the Secretary, to 
     individuals who are prospective enrollees, and to the public 
     the information described in subsection (b) or (c).
       ``(b) Information Provided.--The information described in 
     this subsection with respect to a group health plan or health 
     insurance coverage offered by a health insurance issuer shall 
     be provided to a participant, beneficiary, or enrollee free 
     of charge at least once a year and includes the following:
       ``(1) Service area.--The service area of the plan or 
     issuer.
       ``(2) Benefits.--Benefits offered under the plan or 
     coverage, including--
       ``(A) those that are covered benefits ``(all of which shall 
     be referred to by such relevant CPT and DRG codes as are 
     available), limits and conditions on such benefits, and those 
     benefits that are explicitly excluded from coverage (all of 
     which shall be referred to by such relevant CPT and DRG codes 
     as are available);
       ``(B) cost sharing, such as deductibles, coinsurance, and 
     copayment amounts, including any liability for balance 
     billing, any maximum limitations on out of pocket expenses, 
     and the maximum out of pocket costs for services that are 
     provided by nonparticipating providers or that are furnished 
     without meeting the applicable utilization review 
     requirements;
       ``(C) the extent to which benefits may be obtained from 
     nonparticipating providers;
       ``(D) the extent to which a participant, beneficiary, or 
     enrollee may select from among participating providers and 
     the types of providers participating in the plan or issuer 
     network;
       ``(E) process for determining experimental coverage; and
       ``(F) use of a prescription drug formulary.
       ``(3) Access.--A description of the following:
       ``(A) The number, mix, and distribution of providers under 
     the plan or coverage.
       ``(B) Out-of-network coverage (if any) provided by the plan 
     or coverage.
       ``(C) Any point-of-service option (including any 
     supplemental premium or cost-sharing for such option).
       ``(D) The procedures for participants, beneficiaries, and 
     enrollees to select, access, and change participating primary 
     and specialty providers.
       ``(E) The rights and procedures for obtaining referrals 
     (including standing referrals) to participating and 
     nonparticipating providers.
       ``(F) The name, address, and telephone number of 
     participating health care providers and an indication of 
     whether each such provider is available to accept new 
     patients.
       ``(G) Any limitations imposed on the selection of 
     qualifying participating health care providers, including any 
     limitations imposed under section 2812(b)(2).
       ``(4) Out-of-area coverage.--Out-of-area coverage provided 
     by the plan or issuer.
       ``(5) Emergency coverage.--Coverage of emergency services, 
     including--
       ``(A) the appropriate use of emergency services, including 
     use of the 911 telephone system or its local equivalent in 
     emergency situations and an explanation of what constitutes 
     an emergency situation;
       ``(B) the process and procedures of the plan or issuer for 
     obtaining emergency services; and
       ``(C) the locations of (i) emergency departments, and (ii) 
     other settings, in which plan physicians and hospitals 
     provide emergency services and post-stabilization care.

[[Page 24370]]

       ``(6) Prior authorization rules.--Rules regarding prior 
     authorization or other review requirements that could result 
     in noncoverage or nonpayment.
       ``(7) Grievance and appeals procedures.--All appeal or 
     grievance rights and procedures under the plan or coverage, 
     including the method for filing grievances and the time 
     frames and circumstances for acting on grievances and 
     appeals, who is the applicable authority with respect to the 
     plan or issuer.
       ``(8) Accountability.--A description of the legal recourse 
     options available for participants and beneficiaries under 
     the plan including--
       ``(A) the preemption that applies under section 514 of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1144) to certain actions arising out of the provision of 
     health benefits; and
       ``(B) the extent to which coverage decisions made by the 
     plan are subject to internal review or any external review 
     and the proper time frames under
       ``(9) Quality assurance.--Any information made public by an 
     accrediting organization in the process of accreditation of 
     the plan or issuer or any additional quality indicators the 
     plan or issuer makes available.
       ``(10) Information on issuer.--Notice of appropriate 
     mailing addresses and telephone numbers to be used by 
     participants, beneficiaries, and enrollees in seeking 
     information or authorization for treatment.
       ``(11) Availability of information on request.--Notice that 
     the information described in subsection (c) is available upon 
     request.
       ``(c) Information Made Available Upon Request.--The 
     information described in this subsection is the following:
       ``(1) Utilization review activities.--A description of 
     procedures used and requirements (including circumstances, 
     time frames, and appeal rights) under any utilization review 
     program under section 2801.
       ``(2) Grievance and appeals information.--Information on 
     the number of grievances and appeals and on the disposition 
     in the aggregate of such matters.
       ``(3) Formulary restrictions.--A description of the nature 
     of any drug formula restrictions.
       ``(4) Participating provider list.--A list of current 
     participating health care providers.
       ``(d) Construction.--Nothing in this section shall be 
     construed as requiring public disclosure of individual 
     contracts or financial arrangements between a group health 
     plan or health insurance issuer and any provider.

        ``Subtitle D--Protecting the Doctor-Patient Relationship

     ``SEC. 2831. 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. 2832. PROHIBITION OF DISCRIMINATION AGAINST PROVIDERS 
                   BASED ON LICENSURE.

       ``(a) In General.--A group health plan and a health 
     insurance issuer offering 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 particular benefits or 
     services 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;
       ``(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; or
       ``(4) as prohibiting a family practice physician with 
     appropriate expertise from providing pediatric or obstetrical 
     or gynecological care.

     ``SEC. 2833. 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 1876(i)(8) 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 1876(i)(8) of the Social 
     Security Act to the Secretary, an eligible organization, or 
     an individual enrolled with the organization shall be treated 
     as a reference to the applicable authority, a group health 
     plan or health insurance issuer, respectively, and a 
     participant, beneficiary, or enrollee with the plan or 
     organization, respectively.
       ``(c) Construction.--Nothing in this section shall be 
     construed as prohibiting all capitation and similar 
     arrangements or all provider discount arrangements.

     ``SEC. 2834. PAYMENT OF CLEAN CLAIMS.

       ``A group health plan, and a health insurance issuer 
     offering group 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 consistent with the provisions of sections 
     1816(c)(2) and 1842(c)(2) of the Social Security Act (42 
     U.S.C. 1395h(c)(2) and 42 U.S.C. 1395u(c)(2)), except that 
     for purposes of this section, subparagraph (C) of section 
     1816(c)(2) of the Social Security Act shall be treated as 
     applying to claims received from a participant, beneficiary, 
     or enrollee as well as claims referred to in such 
     subparagraph.

                       ``Subtitle E--Definitions

     ``SEC. 2841. DEFINITIONS.

       ``(a) Incorporation of General Definitions.--Except as 
     otherwise provided, the provisions of section 2791 shall 
     apply for purposes of this title in the same manner as they 
     apply for purposes of title XXVII.
       ``(b) 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
       ``(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) Clinical peer.--The term `clinical peer' means, with 
     respect to a review or appeal, a practicing physician or 
     other health care professional who holds a nonrestricted 
     license and who is--
       ``(A) appropriately certified by a nationally recognized, 
     peer reviewed accrediting body in the same or similar 
     specialty as typically manages the medical condition, 
     procedure, or treatment under review or appeal, or
       ``(B) is trained and experienced in managing such 
     condition, procedure, or treatment,

     and includes a pediatric specialist where appropriate; except 
     that only a physician may be a clinical peer with respect to 
     the review or appeal of treatment recommended or rendered by 
     a physician.
       ``(3) 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.
       ``(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

[[Page 24371]]

     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) Physician.--The term `physician' means an allopathic 
     or osteopathic physician.
       ``(10) Practicing physician.--The term `practicing 
     physician' means a physician who is licensed in the State in 
     which the physician furnishes professional services and who 
     provides professional services to individual patients on 
     average at least two full days per week.
       ``(11) 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.

     ``SEC. 2842. RULE OF 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 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.
       ``(b) 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, the Northern Mariana Islands, any 
     political subdivisions of a State or such Islands, or any 
     agency or instrumentality of either.

     ``SEC. 2843. 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 
     provide specific benefits under the terms of such plan or 
     coverage, other than those provided under the terms of such 
     plan or coverage.
       ``(b) Exclusion for Fee-for-Service Coverage.--
       ``(1) In general.--
       ``(A) Group health plans.--The provisions of sections 2811 
     through 2821 shall not apply to a group health plan if the 
     only coverage offered under the plan is fee-for-service 
     coverage (as defined in paragraph (2)).
       ``(B) Health insurance coverage.--The provisions of 
     sections 2801 through 2821 shall not apply to health 
     insurance coverage if the only coverage offered under the 
     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 agree 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. 2844. COVERAGE OF LIMITED SCOPE PLANS.

       ``Only for purposes of applying the requirements of this 
     title under sections 2707 and 2753, section 2791(c)(2)(A) 
     shall be deemed not to apply.

     ``SEC. 2845. REGULATIONS.

       ``The Secretary of Health and Human Services shall issue 
     such regulations as may be necessary or appropriate to carry 
     out this title under sections 2707 and 2753. The Secretary 
     may promulgate such regulations in the form of interim final 
     rules as may be necessary to carry out this title in a timely 
     manner.

     ``SEC. 2846. LIMITATION ON APPLICATION OF PROVISIONS RELATING 
                   TO GROUP HEALTH PLANS.

       ``The requirements of this title shall apply with respect 
     to group health plans only--
       ``(1) in the case of a plan that is a non-Federal 
     governmental plan (as defined in section 2791(d)(8)(C)), and
       ``(2) with respect to health insurance coverage offered in 
     connection with a group health plan (including such a plan 
     that is a church plan or a governmental plan), except that 
     subtitle A shall apply with respect to such coverage only to 
     the extent it is offered in connection with a non-Federal 
     governmental plan or a church plan.''.

TITLE II--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                                  1974

     SEC. 201. APPLICATION OF PATIENT PROTECTION STANDARDS TO 
                   GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE 
                   COVERAGE UNDER THE EMPLOYEE RETIREMENT INCOME 
                   SECURITY ACT OF 1974.

       (a) In General.--Subpart B of part 7 of subtitle B of title 
     I of the Employee Retirement Income Security Act of 1974 is 
     amended by adding at the end the following new section:

     ``SEC. 714. PATIENT PROTECTION STANDARDS.

       ``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 part 8 and 
     such requirements shall be deemed to be incorporated into 
     this section.''.
       (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 subpart A of 
     part 8 in the case of a claims denial shall be deemed 
     compliance with subsection (a) with respect to such claims 
     denial. For purposes of applying the previous sentence, the 
     exceptions provided under section 732 shall be deemed to 
     apply.''.
       (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.''.

     SEC. 202. IMPROVING MANAGED CARE.

       (a) In General.--Subtitle B of title I of the Employee 
     Retirement Income Security Act of 1974 is amended by adding 
     at the end the following new part:

                    ``Part 8--Improving Managed Care

                   ``Subpart A--Grievance and Appeals

     ``SEC. 801. UTILIZATION REVIEW ACTIVITIES.

       ``(a) Compliance With Requirements.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer that provides health insurance coverage in 
     connection with such a plan, 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.
       ``(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 practicing physicians, 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 or beneficiary under 
     such a program, the program shall not, pursuant to 
     retrospective review, revise or modify the specific 
     standards, criteria, or procedures used for the utilization 
     review for procedures, treatment, and services delivered to 
     the individual during the same course of treatment.
       ``(C) Review of sample of claims denials.--Such a program 
     shall provide for periodic evaluation at reasonable intervals 
     of the clinical appropriateness of 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 
     appropriate physician specialists who shall be selected by 
     the plan or issuer and who shall oversee review decisions.

[[Page 24372]]

       ``(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. 
     This subparagraph shall not preclude any capitation 
     arrangements between plans and providers.
       ``(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 or appropriate.
       ``(d) Deadline for Determinations.--
       ``(1) Prior authorization services.--
       ``(A) In general.--Except as provided in paragraph (2), in 
     the case of a utilization review activity involving the prior 
     authorization of health care items and services for an 
     individual, the utilization review program shall make a 
     determination concerning such authorization, and provide 
     notice of the determination to the individual or the 
     individual's designee and the individual's health care 
     provider by telephone and in printed or electronic form, no 
     later than the deadline specified in subparagraph (B). The 
     provider involved shall provide timely access to information 
     relevant to the matter of the review decision.
       ``(B) Deadline.--
       ``(i) In general.--Subject to clauses (ii) and (iii), the 
     deadline specified in this subparagraph is 14 days after the 
     earliest date as of which the request for prior authorization 
     has been received and all necessary information has been 
     provided.
       ``(ii) Extension permitted where notice of additional 
     information required.--If a utilization review program--

       ``(I) receives a request for a prior authorization,
       ``(II) determines that additional information is necessary 
     to complete the review and make the determination on the 
     request,
       ``(III) notifies the requester, not later than 5 business 
     days after the date of receiving the request, of the need for 
     such specified additional information, and
       ``(IV) requires the requester to submit specified 
     information not later than 2 business days after 
     notification,

     the deadline specified in this subparagraph is 14 days after 
     the date the program receives the specified additional 
     information, but in no case later than 28 days after the date 
     of receipt of the request for the prior authorization. This 
     clause shall not apply if the deadline is specified in clause 
     (iii).
       ``(iii) Expedited cases.--In the case of a situation 
     described in section 802(c)(1)(A), the deadline specified in 
     this subparagraph is 48 hours after the time of the request 
     for prior authorization.
       ``(2) Ongoing care.--
       ``(A) Concurrent review.--
       ``(i) In general.--Subject to subparagraph (B), in the case 
     of a concurrent review of ongoing care (including 
     hospitalization), which results in a termination or reduction 
     of such care, the plan must provide by telephone and in 
     printed or electronic form notice of the concurrent review 
     determination to the individual or the individual's designee 
     and the individual's health care provider as soon as possible 
     in accordance with the medical exigencies of the case, with 
     sufficient time prior to the termination or reduction to 
     allow for an appeal under section 802(c)(1)(A) 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.
       ``(B) Exception.--Subparagraph (A) shall not be interpreted 
     as requiring plans or issuers to provide coverage of care 
     that would exceed the coverage limitations for such care.
       ``(3) Previously provided services.--In the case of a 
     utilization review activity involving retrospective review of 
     health care services previously provided for an individual, 
     the utilization review program shall make a determination 
     concerning such services, and provide notice of the 
     determination to the individual or the individual's designee 
     and the individual's health care provider by telephone and in 
     printed or electronic form, within 30 days of the date of 
     receipt of information that is reasonably necessary to make 
     such determination, but in no case later than 60 days after 
     the date of receipt of the claim for benefits.
       ``(4) Failure to meet deadline.--In a case in which a group 
     health plan or health insurance issuer fails to make a 
     determination on a claim for benefit under paragraph (1), 
     (2)(A), or (3) by the applicable deadline established under 
     the respective paragraph, the failure shall be treated under 
     this subpart as a denial of the claim as of the date of the 
     deadline.
       ``(5) Reference to special rules for emergency services, 
     maintenance care, post-stabilization care, and emergency 
     ambulance services.--For waiver of prior authorization 
     requirements in certain cases involving emergency services, 
     maintenance care and post-stabilization care, and emergency 
     ambulance services, see subsections (a)(1), (b), and (c)(1) 
     of section 813, respectively.
       ``(e) Notice of Denials of Claims for Benefits.--
       ``(1) In general.--Notice of a denial of claims for 
     benefits under a utilization review program shall be provided 
     in printed or electronic form and written in a manner 
     calculated to be understood by the participant or beneficiary 
     and shall include--
       ``(A) the reasons for the denial (including the clinical 
     rationale);
       ``(B) instructions on how to initiate an appeal under 
     section 802; and
       ``(C) notice of the availability, upon request of the 
     individual (or the individual's designee) of the clinical 
     review criteria relied upon to make such denial.
       ``(2) Specification of any additional information.--Such a 
     notice shall also specify what (if any) additional necessary 
     information must be provided to, or obtained by, the person 
     making the denial in order to make a decision on such an 
     appeal.
       ``(f) Claim for Benefits and Denial of Claim for Benefits 
     Defined.--For purposes of this subpart:
       ``(1) Claim for benefits.--The term `claim for benefits' 
     means any request for coverage (including authorization of 
     coverage), or for payment in whole or in part, for an item or 
     service under a group health plan or health insurance 
     coverage offered in connection with such a plan.
       ``(2) Denial of claim for benefits.--The term `denial' 
     means, with respect to a claim for benefits, a denial, or a 
     failure to act on a timely basis upon, in whole or in part, 
     the claim for benefits and includes a failure to provide or 
     pay for benefits (including items and services) required to 
     be provided or paid for under this part.

     ``SEC. 802. INTERNAL APPEALS PROCEDURES.

       ``(a) Right of Review.--
       ``(1) In general.--Each group health plan, and each health 
     insurance issuer offering health insurance coverage in 
     connection with such a plan--
       ``(A) shall provide adequate notice in written or 
     electronic form to any participant or beneficiary under such 
     plan whose claim for benefits under the plan or coverage has 
     been denied (within the meaning of section 801(f)(2)), 
     setting forth the specific reasons for such denial of claim 
     for benefits and rights to any further review or appeal, 
     written in layman's terms to be understood by the participant 
     or beneficiary; and
       ``(B) shall afford such a participant or beneficiary (and 
     any provider or other person acting on behalf of such an 
     individual with the individual's consent or without such 
     consent if the individual is medically unable to provide such 
     consent) who is dissatisfied with such a denial of claim for 
     benefits a reasonable opportunity of not less than 180 days 
     to request and obtain a full and fair review by a named 
     fiduciary (with respect to such plan) or named appropriate 
     individual (with respect to such coverage) of the decision 
     denying the claim.
       ``(2) Treatment of oral requests.--The request for review 
     under paragraph (1)(B) may be made orally, but, in the case 
     of an oral request, shall be followed by a request in written 
     or electronic form.
       ``(b) Internal Review Process.--
       ``(1) Conduct of review.--
       ``(A) In general.--A review of a denial of claim under this 
     section shall be made by an individual (who shall be a 
     physician in a case involving medical judgment) who has been 
     selected by the plan or issuer and who did not make the 
     initial denial in the internally appealable decision, except 
     that in the case of limited scope coverage (as defined in 
     subparagraph (B)) an appropriate specialist shall review the 
     decision.
       ``(B) Limited scope coverage defined.--For purposes of 
     subparagraph (A), the term `limited scope coverage' means a 
     group health plan or health insurance coverage the only 
     benefits under which are for benefits described in section 
     2791(c)(2)(A) of the Public Health Service Act (42 U.S.C. 
     300gg-91(c)(2)).
       ``(2) Time limits for internal reviews.--

[[Page 24373]]

       ``(A) In general.--Having received such a request for 
     review of a denial of claim, the plan or issuer shall, in 
     accordance with the medical exigencies of the case but not 
     later than the deadline specified in subparagraph (B), 
     complete the review on the denial and transmit to the 
     participant, beneficiary, or other person involved a decision 
     that affirms, reverses, or modifies the denial. If the 
     decision does not reverse the denial, the plan or issuer 
     shall transmit, in printed or electronic form, a notice that 
     sets forth the grounds for such decision and that includes a 
     description of rights to any further appeal. Such decision 
     shall be treated as the final decision of the plan. Failure 
     to issue such a decision by such deadline shall be treated as 
     a final decision affirming the denial of claim.
       ``(B) Deadline.--
       ``(i) In general.--Subject to clauses (ii) and (iii), the 
     deadline specified in this subparagraph is 14 days after the 
     earliest date as of which the request for prior authorization 
     has been received and all necessary information has been 
     provided. The provider involved shall provide timely access 
     to information relevant to the matter of the review decision.
       ``(ii) Extension permitted where notice of additional 
     information required.--If a group health plan or health 
     insurance issuer--

       ``(I) receives a request for internal review,
       ``(II) determines that additional information is necessary 
     to complete the review and make the determination on the 
     request,
       ``(III) notifies the requester, not later than 5 business 
     days after the date of receiving the request, of the need for 
     such specified additional information, and
       ``(IV) requires the requester to submit specified 
     information not later than 48 hours after notification,

     the deadline specified in this subparagraph is 14 days after 
     the date the plan or issuer receives the specified additional 
     information, but in no case later than 28 days after the date 
     of receipt of the request for the internal review. This 
     clause shall not apply if the deadline is specified in clause 
     (iii).
       ``(iii) Expedited cases.--In the case of a situation 
     described in subsection (c)(1)(A), the deadline specified in 
     this subparagraph is 48 hours after the time of request for 
     review.
       ``(c) Expedited Review Process.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer, shall establish procedures in writing for 
     the expedited consideration of requests for review under 
     subsection (b) in situations--
       ``(A) in which, as determined by the plan or issuer or as 
     certified in writing by a treating physician, the application 
     of the normal timeframe for making the determination could 
     seriously jeopardize the life or health of the participant or 
     beneficiary or such individual's ability to regain maximum 
     function; or
       ``(B) described in section 801(d)(2) (relating to requests 
     for continuation of ongoing care which would otherwise be 
     reduced or terminated).
       ``(2) Process.--Under such procedures--
       ``(A) the request for expedited review may be submitted 
     orally or in writing by an individual or provider who is 
     otherwise entitled to request the review;
       ``(B) all necessary information, including the plan's or 
     issuer's decision, shall be transmitted between the plan or 
     issuer and the requester by telephone, facsimile, or other 
     similarly expeditious available method; and
       ``(C) the plan or issuer shall expedite the review in the 
     case of any of the situations described in subparagraph (A) 
     or (B) of paragraph (1).
       ``(3) Deadline for decision.--The decision on the expedited 
     review must be made and communicated to the parties as soon 
     as possible in accordance with the medical exigencies of the 
     case, and in no event later than 48 hours after the time of 
     receipt of the request for expedited review, except that in a 
     case described in paragraph (1)(B), the decision must be made 
     before the end of the approved period of care.
       ``(d) Waiver of Process.--A plan or issuer may waive its 
     rights for an internal review under subsection (b). In such 
     case the participant or beneficiary involved (and any 
     designee or provider involved) shall be relieved of any 
     obligation to complete the review involved and may, at the 
     option of such participant, beneficiary, designee, or 
     provider, proceed directly to seek further appeal through any 
     applicable external appeals process.

     ``SEC. 803. EXTERNAL APPEALS PROCEDURES.

       ``(a) Right to External Appeal.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer offering health insurance coverage in 
     connection with such a plan, shall provide for an external 
     appeals process that meets the requirements of this section 
     in the case of an externally appealable decision described in 
     paragraph (2), for which a timely appeal is made (within a 
     reasonable period not to exceed 365 days) either by the plan 
     or issuer or by the participant or beneficiary (and any 
     provider or other person acting on behalf of such an 
     individual with the individual's consent or without such 
     consent if such an individual is medically unable to provide 
     such consent).
       ``(2) Externally appealable decision defined.--
       ``(A) In general.--For purposes of this section, the term 
     `externally appealable decision' means a denial of claim for 
     benefits (as defined in section 801(f)(2)), if--
       ``(i) the item or service involved is covered under the 
     plan or coverage,
       ``(ii) the amount involved exceeds $100, increased or 
     decreased, for each calendar year that ends after December 
     31, 2001, by the same percentage as the percentage by which 
     the medical care expenditure category of the Consumer Price 
     Index for All Urban Consumers (United States city average), 
     published by the Bureau of Labor Statistics, for September of 
     the preceding calendar year has increased or decreased from 
     such index for September 2000, and
       ``(iii) the requirements of subparagraph (B) are met with 
     respect to such denial.

     Such term also includes a failure to meet an applicable 
     deadline for internal review under section 802 or such 
     standards as are established pursuant to section 818.
       ``(B) Requirements.--For purposes of subparagraph (A)(iii), 
     the requirements of this subparagraph are met with respect to 
     a denial of a claim for benefits if--
       ``(i) the denial is based in whole or in part on a decision 
     that the item or service is not medically necessary or 
     appropriate or is investigational or experimental, or
       ``(ii) in such denial, the decision as to whether an item 
     or service is covered involves a medical judgment.
       ``(C) Exclusions.--The term `externally appealable 
     decision' does not include--
       ``(i) specific exclusions or express limitations on the 
     amount, duration, or scope of coverage; or
       ``(ii) a decision regarding eligibility for any benefits.
       ``(3) Exhaustion of internal review process.--Except as 
     provided under section 802(d), a plan or issuer may condition 
     the use of an external appeal process in the case of an 
     externally appealable decision upon a final decision in an 
     internal review under section 802, but only if the decision 
     is made in a timely basis consistent with the deadlines 
     provided under this subpart.
       ``(4) Filing fee requirement.--
       ``(A) In general.--A plan or issuer may condition the use 
     of an external appeal process upon payment in advance to the 
     plan or issuer of a $25 filing fee.
       ``(B) Refunding fee in case of successful appeals.--The 
     plan or issuer shall refund payment of the filing fee under 
     this paragraph if the recommendation of the external appeal 
     entity is to reverse the denial of a claim for benefits which 
     is the subject of the appeal.
       ``(b) General Elements of External Appeals Process.--
       ``(1) Use of qualified external appeal entity.--
       ``(A) In general.--The external appeal process under this 
     section of a plan or issuer shall be conducted between the 
     plan or issuer and one or more qualified external appeal 
     entities (as defined in subsection (c)). Nothing in this 
     subsection shall be construed as requiring that such 
     procedures provide for the selection for any plan of more 
     than one such entity.
       ``(B) Limitation on plan or issuer selection.--The 
     Secretary shall implement procedures to assure that the 
     selection process among qualified external appeal entities 
     will not create any incentives for external appeal entities 
     to make a decision in a biased manner.
       ``(C) Other terms and conditions.--The terms and conditions 
     of this paragraph shall be consistent with the standards the 
     Secretary shall establish to assure there is no real or 
     apparent conflict of interest in the conduct of external 
     appeal activities. All costs of the process (except those 
     incurred by the participant, beneficiary, or treating 
     professional in support of the appeal) shall be paid by the 
     plan or issuer, and not by the participant or beneficiary. 
     The previous sentence shall not be construed as applying to 
     the imposition of a filing fee under subsection (a)(4).
       ``(2) Elements of process.--An external appeal process 
     shall be conducted consistent with standards established by 
     the Secretary that include at least the following:
       ``(A) Fair and de novo determination.--The process shall 
     provide for a fair, de novo determination described in 
     subparagraph (B) based on evidence described in subparagraphs 
     (C) and (D).
       ``(B) Standard of review.--An external appeal entity shall 
     determine whether the plan's or issuer's decision is 
     appropriate for the medical condition of the patient involved 
     (as determined by the entity) taking into account as of the 
     time of the entity's determination the patient's medical 
     condition and any relevant and reliable evidence the entity 
     obtains under subparagraphs (C) and (D). If the entity 
     determines the decision is appropriate for such condition, 
     the entity shall affirm the decision and to the extent that 
     the entity determines the decision is not appropriate for 
     such condition, the entity shall reverse the decision. 
     Nothing in this subparagraph shall be construed as providing 
     for coverage of items or services not provided or covered by 
     the plan or issuer.
       ``(C) Required consideration of certain matters.--In making 
     such determination, the external appeal entity shall 
     consider, but not be bound by--

[[Page 24374]]

       ``(i) any language in the plan or coverage document 
     relating to the definitions of the terms medical necessity, 
     medically necessary or appropriate, or experimental, 
     investigational, or related terms;
       ``(ii) the decision made by the plan or issuer upon 
     internal review under section 802 and any guidelines or 
     standards used by the plan or issuer in reaching such 
     decision; and
       ``(iii) the opinion of the individual's treating physician 
     or health care professional.

     The entity also shall consider any personal health and 
     medical information supplied with respect to the individual 
     whose denial of claim for benefits has been appealed. The 
     entity also shall consider the results of studies that meet 
     professionally recognized standards of validity and 
     replicability or that have been published in peer-reviewed 
     journals.
       ``(D) Additional evidence.--Such entity may also take into 
     consideration but not be limited to the following evidence 
     (to the extent available):
       ``(i) The results of professional consensus conferences.
       ``(ii) Practice and treatment policies.
       ``(iii) Community standard of care.
       ``(iv) Generally accepted principles of professional 
     medical practice consistent with the best practice of 
     medicine.
       ``(v) To the extent that the entity determines it to be 
     free of any conflict of interest, the opinions of individuals 
     who are qualified as experts in one or more fields of health 
     care which are directly related to the matters under appeal.
       ``(vi) To the extent that the entity determines it to be 
     free of any conflict of interest, the results of peer reviews 
     conducted by the plan or issuer involved.
       ``(E) Determination concerning externally appealable 
     decisions.--
       ``(i) In general.--A qualified external appeal entity shall 
     determine--

       ``(I) whether a denial of claim for benefits is an 
     externally appealable decision (within the meaning of 
     subsection (a)(2));
       ``(II) whether an externally appealable decision involves 
     an expedited appeal;
       ``(III) for purposes of initiating an external review, 
     whether the internal review process has been completed; and
       ``(IV) whether the item or services is covered under the 
     plan or coverage.

       ``(ii) Construction.--Nothing in a determination by a 
     qualified external appeal entity under this section shall be 
     construed as authorizing, or providing for, coverage of items 
     and services for which benefits are not provided under the 
     plan or coverage.
       ``(F) Opportunity to submit evidence.--Each party to an 
     externally appealable decision may submit evidence related to 
     the issues in dispute.
       ``(G) Provision of information.--The plan or issuer 
     involved shall provide to the external appeal entity timely 
     access to information and to provisions of the plan or health 
     insurance coverage relating to the matter of the externally 
     appealable decision, as determined by the entity. The 
     provider involved shall provide to the external appeal entity 
     timely access to information relevant to the matter of the 
     externally appealable decision, as determined by the entity.
       ``(H) Timely decisions.--A determination by the external 
     appeal entity on the decision shall--
       ``(i) be made orally or in written or electronic form and, 
     if it is made orally, shall be supplied to the parties in 
     written or electronic form as soon as possible;
       ``(ii) be made in accordance with the medical exigencies of 
     the case involved, but in no event later than 21 days after 
     the date (or, in the case of an expedited appeal, 48 hours 
     after the time) of requesting an external appeal of the 
     decision;
       ``(iii) state, in layperson's language, the scientific 
     rationale for such determination as well as the basis for 
     such determination, including, if relevant, any basis in the 
     terms or conditions of the plan or coverage; and
       ``(iv) inform the participant or beneficiary of the 
     individual's rights (including any limitation on such rights) 
     to seek binding arbitration or further review by the courts 
     (or other process) of the external appeal determination.
       ``(I) Compliance with determination.--If the external 
     appeal entity determines that a denial of a claim for 
     benefits was not reasonable and reverses the denial, the plan 
     or issuer--
       ``(i) shall (upon the receipt of the determination) 
     authorize benefits in accordance with such determination;
       ``(ii) shall take such actions as may be necessary to 
     provide benefits (including items or services) in a timely 
     manner consistent with such determination; and
       ``(iii) shall submit information to the entity documenting 
     compliance with the entity's determination and this 
     subparagraph.
       ``(J) Construction.--Nothing in this paragraph shall be 
     construed as providing for coverage of items and services for 
     which benefits are not provided under the plan or coverage.
       ``(c) Qualifications of External Appeal Entities.--
       ``(1) In general.--For purposes of this section, the term 
     `qualified external appeal entity' means, in relation to a 
     plan or issuer, an entity that is certified under paragraph 
     (2) as meeting the following requirements:
       ``(A) The entity meets the independence requirements of 
     paragraph (3).
       ``(B) The entity conducts external appeal activities 
     through at least three clinical peers who are practicing 
     physicians.
       ``(C) The entity has sufficient medical, legal, and other 
     expertise and sufficient staffing to conduct external appeal 
     activities for the plan or issuer on a timely basis 
     consistent with subsection (b)(2)(G).
       ``(2) Initial certification of external appeal entities.--
       ``(A) In general.--In order to be treated as a qualified 
     external appeal entity with respect to a group health plan or 
     a health insurance issuer in connection with a group health 
     plan, the entity must be certified (and, in accordance with 
     subparagraph (B), periodically recertified), under such 
     standards as may be prescribed by the Secretary, as meeting 
     the requirements of paragraph (1)--
       ``(i) by the Secretary;
       ``(ii) under a process recognized or approved by the 
     Secretary; or
       ``(iii) to the extent provided in subparagraph (C)(i), by a 
     qualified private standard-setting organization (certified 
     under such subparagraph), if elected by the entity.
       ``(B) Recertification process.--The Secretary shall develop 
     standards for the recertification of external appeal 
     entities. Such standards shall include a review of--
       ``(i) the number of cases reviewed;
       ``(ii) a summary of the disposition of those cases;
       ``(iii) the length of time in making determinations on 
     those cases;
       ``(iv) updated information of what was required to be 
     submitted as a condition of certification for the entity's 
     performance of external appeal activities; and
       ``(v) information necessary to assure that the entity meets 
     the independence requirements (described in paragraph (3)) 
     with respect to plans and issuers for which it conducts 
     external review activities.
       ``(C) Certification of qualified private standard-setting 
     organizations.--For purposes of subparagraph (A)(iii), the 
     Secretary shall provide for a process for certification (and 
     periodic recertification) of qualified private standard-
     setting organizations which provide for certification of 
     external appeal entities. Such an organization shall only be 
     certified if the organization does not certify an external 
     appeal entity unless it meets standards at least as stringent 
     as the standards required for certification of such an entity 
     by the Secretary under subparagraph (A)(i).
       ``(D) Construction.--Nothing in subparagraph (A) shall be 
     construed as permitting the Secretary to delegate 
     certification or regulatory authority under clause (i) of 
     such subparagraph to any person outside the Department of 
     Labor.
       ``(3) Independence requirements.--
       ``(A) In general.--A clinical peer or other entity meets 
     the independence requirements of this paragraph if--
       ``(i) the peer or entity is not affiliated with any related 
     party;
       ``(ii) any compensation received by such peer or entity in 
     connection with the external review is reasonable and not 
     contingent on any decision rendered by the peer or entity;
       ``(iii) the plan and the issuer (if any) have no recourse 
     against the peer or entity in connection with the external 
     review; and
       ``(iv) the peer or entity does not otherwise have a 
     conflict of interest with a related party.
       ``(B) Related party.--For purposes of this paragraph, the 
     term `related party' means--
       ``(i) a group health plan or health insurance coverage 
     offered in connection with such a plan, the plan or the 
     health insurance issuer offering such coverage, or any plan 
     sponsor, fiduciary, officer, director, or management employee 
     of such plan or issuer;
       ``(ii) the health care professional that provided the 
     health care involved in the coverage decision;
       ``(iii) the institution at which the health care involved 
     in the coverage decision is provided; or
       ``(iv) the manufacturer of any drug or other item that was 
     included in the health care involved in the coverage 
     decision.
       ``(C) Affiliated.--For purposes of this paragraph, the term 
     `affiliated' means, in connection with any peer or entity, 
     having a familial, financial, or fiduciary relationship with 
     such peer or entity.
       ``(4) Limitation on liability of reviewers.--No qualified 
     external appeal entity having a contract with a plan or 
     issuer under this part and no person who is employed by any 
     such entity or who furnishes professional services to such 
     entity, shall be held by reason of the performance of any 
     duty, function, or activity required or authorized pursuant 
     to this section, to have violated any criminal law, or to be 
     civilly liable under any law of the United States or of any 
     State (or political subdivision thereof) if due care was 
     exercised in the performance of such duty, function, or 
     activity and there was no actual malice or gross misconduct 
     in the performance of such duty, function, or activity.
       ``(d) External Appeal Determination Binding on Plan.--

[[Page 24375]]

       ``(1) In general.--The determination by an external appeal 
     entity shall be binding on the plan (and issuer, if any) 
     involved in the determination.
       ``(2) Protection of legal rights.--Nothing in this subpart 
     shall be construed as removing any legal rights of 
     participants, beneficiaries, and others under State or 
     Federal law, including the right to file judicial actions to 
     enforce rights.
       ``(e) Penalties Against Authorized Officials for Refusing 
     to Authorize the Determination of an External Appeal 
     Entity.--
       ``(1) Monetary penalties.--In any case in which the 
     determination of an external appeal entity is not followed in 
     a timely fashion by a group health plan, or by a health 
     insurance issuer offering health insurance coverage in 
     connection with such a plan, any named fiduciary who, acting 
     in the capacity of authorizing the benefit, causes such 
     refusal may, in the discretion in a court of competent 
     jurisdiction, be liable to an aggrieved participant or 
     beneficiary 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 appeal 
     entity until the date the refusal to provide the benefit is 
     corrected.
       ``(2) Cease and desist order and order of attorney's 
     fees.--In any action described in paragraph (1) brought by a 
     participant or beneficiary with respect to a group health 
     plan, or a health insurance issuer offering health insurance 
     coverage in connection with such a plan, in which a plaintiff 
     alleges that a person referred to in such paragraph has taken 
     an action resulting in a refusal of a benefit determined by 
     an external appeal entity in violation of such terms of the 
     plan, coverage, or this subpart, or has failed to take an 
     action for which such person is responsible under the plan, 
     coverage, or this part 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--
       ``(A) to cease and desist from the alleged action or 
     failure to act; and
       ``(B) 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.
       ``(f) Protection of Legal Rights.--Nothing in this subpart 
     shall be construed as removing or limiting any legal rights 
     of participants, beneficiaries, and others under State or 
     Federal law (including section 502), including the right to 
     file judicial actions to enforce rights.

     ``SEC. 804. ESTABLISHMENT OF A GRIEVANCE PROCESS.

       ``(a) Establishment of Grievance System.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer in connection with the provision of health 
     insurance coverage in connection with such a plan, shall 
     establish and maintain a system to provide for the 
     presentation and resolution of oral and written grievances 
     brought by individuals who are participants or beneficiaries 
     or health care providers or other individuals acting on 
     behalf of an individual and with the individual's consent or 
     without such consent if the individual is medically unable to 
     provide such consent, regarding any aspect of the plan's or 
     issuer's services.
       ``(2) Grievance defined.--In this section, the term 
     `grievance' means any question, complaint, or concern brought 
     by a participant or beneficiary that is not a claim for 
     benefits.
       ``(b) Grievance System.--Such system shall include the 
     following components with respect to individuals who are 
     participants or beneficiaries:
       ``(1) Written notification to all such individuals and 
     providers of the telephone numbers and business addresses of 
     the plan or issuer personnel responsible for resolution of 
     grievances and appeals.
       ``(2) A system to record and document, over a period of at 
     least 3 previous years beginning two months after the date of 
     the enactment of this Act, all grievances and appeals made 
     and their status.
       ``(3) A process providing processing and resolution of 
     grievances within 60 days.
       ``(4) Procedures for follow-up action, including the 
     methods to inform the person making the grievance of the 
     resolution of the grievance.

     Grievances are not subject to appeal under the previous 
     provisions of this subpart.

                      ``Subpart B--Access to Care

     ``SEC. 812. CHOICE OF HEALTH CARE PROFESSIONAL.

       ``(a) Primary Care.--If a group health plan, or a health 
     insurance issuer that offers health insurance coverage in 
     connection with such a plan, requires or provides for 
     designation by a participant or beneficiary of a 
     participating primary care provider, then the plan or issuer 
     shall permit each participant and beneficiary to designate 
     any participating primary care provider who is available to 
     accept such individual.
       ``(b) Specialists.--A group health plan and a health 
     insurance issuer that offers health insurance coverage in 
     connection with such a plan shall permit each participant or 
     beneficiary to receive medically necessary or 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.

     ``SEC. 813. 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 in 
     connection with such a plan, 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 or beneficiary--
       ``(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 or beneficiary 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, 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--
       ``(i) 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; and
       ``(ii) a medical condition manifesting itself in a neonate 
     by acute symptoms of sufficient severity (including severe 
     pain) such that a prudent health care professional could 
     reasonably expect the absence of immediate medical attention 
     to result in a condition described in clause (i), (ii), or 
     (iii) of section 1867(e)(1)(A) of the Social Security Act.
       ``(B) Emergency services.--The term `emergency services' 
     means--
       ``(i) with respect to an emergency medical condition 
     described in subparagraph (A)(i)--

       ``(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; or

       ``(ii) with respect to an emergency medical condition 
     described in subparagraph (A)(ii), medical treatment for such 
     condition rendered by a health care provider in a hospital to 
     a neonate, including available hospital ancillary services in 
     response to an urgent request of a health care professional 
     and to the extent necessary to stabilize the neonate.
       ``(C) Stabilize.--The term `to stabilize' means, with 
     respect to an emergency medical condition, to provide such 
     medical treatment of the condition as may be necessary to 
     assure, within reasonable medical probability, that no 
     material deterioration of the condition is likely to result 
     from or occur during the transfer of the individual from a 
     facility.
       ``(b) Reimbursement for Maintenance Care and Post-
     Stabilization Care.--If benefits are available under a group 
     health plan, or under health insurance coverage offered by a 
     health insurance issuer in connection with such a plan, with 
     respect to maintenance care or post-stabilization care 
     covered under the guidelines established under section 
     1852(d)(2) of the Social Security Act, the plan or issuer 
     shall provide for reimbursement with respect to such services 
     provided to a participant or beneficiary other than through a 
     participating health care provider in a manner consistent 
     with subsection (a)(1)(C) (and shall otherwise comply with 
     such guidelines).
       ``(c) Coverage of Emergency Ambulance Services.--
       ``(1) In general.--If a group health plan, or health 
     insurance coverage provided by a health insurance issuer in 
     connection with such a plan, 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

[[Page 24376]]

     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. 814. ACCESS TO SPECIALTY CARE.

       ``(a) Specialty Care for Covered Services.--
       ``(1) In general.--If--
       ``(A) an individual is a participant or beneficiary under a 
     group health plan or is covered under health insurance 
     coverage offered by a health insurance issuer in connection 
     with such a plan,
       ``(B) the individual has a condition or disease of 
     sufficient seriousness and complexity to require treatment by 
     a specialist or the individual requires physician pathology 
     services, and
       ``(C) benefits for such treatment or services are provided 
     under the plan or coverage,

     the plan or issuer shall make or provide for a referral to a 
     specialist who is available and accessible (consistent with 
     standards developed under section 818) to provide the 
     treatment for such condition or disease or to provide such 
     services.
       ``(2) Specialist defined.--For purposes of this subsection, 
     the term `specialist' means, with respect to a condition or 
     services, a health care practitioner, facility, or center or 
     physician pathologist that has adequate expertise through 
     appropriate training and experience (including, in the case 
     of a child, appropriate pediatric expertise and in the case 
     of a pregnant woman, appropriate obstetrical expertise) to 
     provide high quality care in treating the condition or to 
     provide physician pathology services.
       ``(3) Care under referral.--A group health plan or health 
     insurance issuer may require that the care provided to an 
     individual pursuant to such referral under paragraph (1) with 
     respect to treatment be--
       ``(A) pursuant to a treatment plan, only if the treatment 
     plan is developed by the specialist and approved by the plan 
     or issuer, in consultation with the designated primary care 
     provider or specialist and the individual (or the 
     individual's designee), and
       ``(B) in accordance with applicable quality assurance and 
     utilization review standards of the plan or issuer.
     Nothing in this subsection shall be construed as preventing 
     such a treatment plan for an individual from requiring a 
     specialist to provide the primary care provider with regular 
     updates on the specialty care provided, as well as all 
     necessary medical information.
       ``(4) Referrals to participating providers.--A group health 
     plan or health insurance issuer is not required under 
     paragraph (1) to provide for a referral to a specialist that 
     is not a participating provider, unless the plan or issuer 
     does not have a specialist that is available and accessible 
     to treat the individual's condition or provide physician 
     pathology services and that is a participating provider with 
     respect to such treatment or services.
       ``(5) Referrals to nonparticipating providers.--In a case 
     in which a referral of an individual to a nonparticipating 
     specialist is required under paragraph (1), the group health 
     plan or health insurance issuer shall provide the individual 
     the option of at least three nonparticipating specialists.
       ``(6) Treatment of nonparticipating providers.--If a plan 
     or issuer refers an individual to a nonparticipating 
     specialist pursuant to paragraph (1), services provided 
     pursuant to the approved treatment plan (if any) shall be 
     provided at no additional cost to the individual beyond what 
     the individual would otherwise pay for services received by 
     such a specialist that is a participating provider.
       ``(b) Specialists as Gatekeeper for Treatment of Ongoing 
     Special Conditions.--
       ``(1) In general.--A group health plan, or a health 
     insurance issuer, in connection with the provision of health 
     insurance coverage in connection with such a plan, shall have 
     a procedure by which an individual who is a participant or 
     beneficiary and who has an ongoing special condition (as 
     defined in paragraph (3)) may request and receive a referral 
     to a specialist for such condition who shall be responsible 
     for and capable of providing and coordinating the 
     individual's care with respect to the condition. Under such 
     procedures if such an individual's care would most 
     appropriately be coordinated by such a specialist, such plan 
     or issuer shall refer the individual to such specialist.
       ``(2) Treatment for related referrals.--Such specialists 
     shall be permitted to treat the individual without a referral 
     from the individual's primary care provider and may authorize 
     such referrals, procedures, tests, and other medical services 
     as the individual's primary care provider would otherwise be 
     permitted to provide or authorize, subject to the terms of 
     the treatment (referred to in subsection (a)(3)(A)) with 
     respect to the ongoing special condition.
       ``(3) Ongoing special condition defined.--In this 
     subsection, the term `ongoing special condition' means a 
     condition or disease that--
       ``(A) is life-threatening, degenerative, or disabling, and
       ``(B) requires specialized medical care over a prolonged 
     period of time.
       ``(4) Terms of referral.--The provisions of paragraphs (3) 
     through (5) of subsection (a) apply with respect to referrals 
     under paragraph (1) of this subsection in the same manner as 
     they apply to referrals under subsection (a)(1).
       ``(5) Construction.--Nothing in this subsection shall be 
     construed as preventing an individual who is a participant or 
     beneficiary and who has an ongoing special condition from 
     having the individual's primary care physician assume the 
     responsibilities for providing and coordinating care 
     described in paragraph (1).
       ``(c) Standing Referrals.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer in connection with the provision of health 
     insurance coverage in connection with such a plan, shall have 
     a procedure by which an individual who is a participant or 
     beneficiary and who has a condition that requires ongoing 
     care from a specialist may receive a standing referral to 
     such specialist for treatment of such condition. If the plan 
     or issuer, or if the primary care provider in consultation 
     with the medical director of the plan or issuer and the 
     specialist (if any), determines that such a standing referral 
     is appropriate, the plan or issuer shall make such a referral 
     to such a specialist if the individual so desires.
       ``(2) Terms of referral.--The provisions of paragraphs (3) 
     through (5) of subsection (a) apply with respect to referrals 
     under paragraph (1) of this subsection in the same manner as 
     they apply to referrals under subsection (a)(1).

     ``SEC. 815. ACCESS TO OBSTETRICAL AND GYNECOLOGICAL CARE.

       ``(a) In General.--If a group health plan, or a health 
     insurance issuer in connection with the provision of health 
     insurance coverage in connection with such a plan, requires 
     or provides for a participant or beneficiary to designate a 
     participating primary care health care professional, the plan 
     or issuer--
       ``(1) may not require authorization or a referral by the 
     individual's primary care health care professional or 
     otherwise for covered gynecological care (including 
     preventive women's health examinations) or for covered 
     pregnancy-related services provided by a participating 
     physician (including a family practice physician) who 
     specializes or is trained and experienced in gynecology or 
     obstetrics, respectively, to the extent such care is 
     otherwise covered; and
       ``(2) shall treat the ordering of other gynecological or 
     obstetrical care by such a participating physician as the 
     authorization of the primary care health care professional 
     with respect to such care under the plan or coverage.
       ``(b) Construction.--Nothing in subsection (a) shall be 
     construed to--
       ``(1) waive any exclusions of coverage under the terms of 
     the plan with respect to coverage of gynecological or 
     obstetrical care;
       ``(2) preclude the group health plan or health insurance 
     issuer involved from requiring that the gynecologist or 
     obstetrician notify the primary care health care professional 
     or the plan of treatment decisions; or
       ``(3) prevent a plan or issuer from offering, in addition 
     to physicians described in subsection (a)(1), non-physician 
     health care professionals who are trained and experienced in 
     gynecology or obstetrics.

     ``SEC. 816. ACCESS TO PEDIATRIC CARE.

       ``(a) Pediatric Care.--If a group health plan, or a health 
     insurance issuer in connection with the provision of health 
     insurance coverage in connection with such a plan, requires 
     or provides for a participant or beneficiary to designate a 
     participating primary care provider for a child of such 
     individual, the plan or issuer shall permit the participant 
     or beneficiary to designate a physician (including a family 
     practice physician) who specializes or is trained and 
     experienced in pediatrics as the child's primary care 
     provider.
       ``(b) Construction.--Nothing in subsection (a) shall be 
     construed to waive any exclusions of coverage under the terms 
     of the plan with respect to coverage of pediatric care.

     ``SEC. 817. CONTINUITY OF CARE.

       ``(a) In General.--
       ``(1) Termination of provider.--If a contract between a 
     group health plan, or a health insurance issuer in connection 
     with the provision of health insurance coverage in connection 
     with such a plan, and a health care provider is terminated 
     (as defined in paragraph (3)(B)), or benefits or coverage 
     provided by a health care provider are terminated because of 
     a change in the terms of provider participation in a group 
     health plan, and an individual who is a participant or 
     beneficiary in the plan or coverage is undergoing treatment 
     from the provider for an ongoing special condition (as 
     defined in paragraph (3)(A)) at the time of such termination, 
     the plan or issuer shall--
       ``(A) notify the individual on a timely basis of such 
     termination and of the right to elect continuation of 
     coverage of treatment by the provider under this section; and

[[Page 24377]]

       ``(B) subject to subsection (c), permit the individual to 
     elect to continue to be covered with respect to treatment by 
     the provider of such condition during a transitional period 
     (provided under subsection (b)).
       ``(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) Definitions.--For purposes of this section:
       ``(A) Ongoing special condition.--The term `ongoing special 
     condition' has the meaning given such term in section 
     814(b)(3), and also includes pregnancy.
       ``(B) Termination.--The term `terminated' includes, with 
     respect to a contract, the expiration or nonrenewal of the 
     contract, but does not include a termination of the contract 
     by the plan or issuer for failure to meet applicable quality 
     standards or for fraud.
       ``(b) Transitional Period.--
       ``(1) In general.--Except as provided in paragraphs (2) 
     through (4), the transitional period under this subsection 
     shall extend up to 90 days (as determined by the treating 
     health care professional) after the date of the notice 
     described in subsection (a)(1)(A) of the provider's 
     termination.
       ``(2) Scheduled surgery and organ transplantation.--If 
     surgery or organ transplantation was scheduled for an 
     individual before the date of the announcement of the 
     termination of the provider status under subsection (a)(1)(A) 
     or if the individual on such date was on an established 
     waiting list or otherwise scheduled to have such surgery or 
     transplantation, the transitional period under this 
     subsection with respect to the surgery or transplantation 
     shall extend beyond the period under paragraph (1) and until 
     the date of discharge of the individual after completion of 
     the surgery or transplantation.
       ``(3) Pregnancy.--If--
       ``(A) a participant or beneficiary was determined to be 
     pregnant at the time of a provider's termination of 
     participation, and
       ``(B) the provider was treating the pregnancy before date 
     of the termination,

     the transitional period under this subsection with respect to 
     provider's treatment of the pregnancy shall extend through 
     the provision of post-partum care directly related to the 
     delivery.
       ``(4) Terminal illness.--If--
       ``(A) a participant or beneficiary was determined to be 
     terminally ill (as determined under section 1861(dd)(3)(A) of 
     the Social Security Act) at the time of a provider's 
     termination of participation, and
       ``(B) the provider was treating the terminal illness before 
     the date of termination,
     the transitional period under this subsection shall extend 
     for the remainder of the individual's life for care directly 
     related to the treatment of the terminal illness 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 subsection (a)(1)(B) 
     upon the individual notifying the plan of the election of 
     continued coverage and upon the provider agreeing to the 
     following terms and conditions:
       ``(1) The provider agrees to accept reimbursement from the 
     plan or issuer and individual involved (with respect to cost-
     sharing) at the rates applicable prior to the start of the 
     transitional period as payment in full (or, in the case 
     described in subsection (a)(2), at the rates applicable under 
     the replacement plan or issuer after the date of the 
     termination of the contract with the health insurance issuer) 
     and not to impose cost-sharing with respect to the individual 
     in an amount that would exceed the cost-sharing that could 
     have been imposed if the contract referred to in subsection 
     (a)(1) had not been terminated.
       ``(2) The 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 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) Construction.--Nothing in this section shall be 
     construed to require the coverage of benefits which would not 
     have been covered if the provider involved remained a 
     participating provider.

     ``SEC. 818. NETWORK ADEQUACY.

       ``(a) Requirement.--A group health plan, and a health 
     insurance issuer providing health insurance coverage in 
     connection with such a plan, shall meet such standards for 
     network adequacy as are established by law pursuant to this 
     section.
       ``(b) Development of Standards.--
       ``(1) Establishment of panel.--There is established a panel 
     to be known as the Health Care Panel to Establish Network 
     Adequacy Standards (in this section referred to as the 
     `Panel').
       ``(2) Duties of panel.--The Panel shall devise standards 
     for group health plans and health insurance issuers that 
     offer health insurance coverage in connection with such a 
     plan to ensure that--
       ``(A) participants and beneficiaries have access to a 
     sufficient number, mix, and distribution of health care 
     professionals and providers; and
       ``(B) covered items and services are available and 
     accessible to each participant and beneficiary--
       ``(i) in the service area of the plan or issuer;
       ``(ii) at a variety of sites of service;
       ``(iii) with reasonable promptness (including reasonable 
     hours of operation and after hours services);
       ``(iv) with reasonable proximity to the residences or 
     workplaces of participants and beneficiaries; and
       ``(v) in a manner that takes into account the diverse needs 
     of such individuals and reasonably assures continuity of 
     care.
       ``(c) Membership.--
       ``(1) Size and composition.--The Panel shall be composed of 
     15 members. The Secretary of Health and Human Services, the 
     Majority Leader of the Senate, and the Speaker of House of 
     Representatives shall each appoint 1 member from 
     representatives of private insurance organizations, consumer 
     groups, State insurance commissioners, State medical 
     societies, and State medical specialty societies.
       ``(2) Terms of appointment.--The members of the Panel shall 
     serve for the life of the Panel.
       ``(3) Vacancies.--A vacancy in the Panel shall not affect 
     the power of the remaining members to execute the duties of 
     the Panel, but any such vacancy shall be filled in the same 
     manner in which the original appointment was made.
       ``(d) Procedures.--
       ``(1) Meetings.--The Panel shall meet at the call of a 
     majority of its members.
       ``(2) First meeting.--The Panel shall convene not later 
     than 60 days after the date of the enactment of the Health 
     Care Quality and Choice Act of 1999.
       ``(3) Quorum.--A quorum shall consist of a majority of the 
     members of the Panel.
       ``(4) Hearings.--For the purpose of carrying out its 
     duties, the Panel may hold such hearings and undertake such 
     other activities as the Panel determines to be necessary to 
     carry out its duties.
       ``(e) Administration.--
       ``(1) Compensation.--Except as provided in paragraph (1), 
     members of the Panel shall receive no additional pay, 
     allowances, or benefits by reason of their service on the 
     Panel.
       ``(2) Travel expenses and per diem.--Each member of the 
     Panel who is not an officer or employee of the Federal 
     Government shall receive travel expenses and per diem in lieu 
     of subsistence in accordance with sections 5702 and 5703 of 
     title 5, United States Code.
       ``(3) Contract authority.--The Panel may contract with and 
     compensate government and private agencies or persons for 
     items and services, without regard to section 3709 of the 
     Revised Statutes (41 U.S.C. 5).
       ``(4) Use of mails.--The Panel may use the United States 
     mails in the same manner and under the same conditions as 
     Federal agencies and shall, for purposes of the frank, be 
     considered a commission of Congress as described in section 
     3215 of title 39, United States Code.
       ``(5) Administrative support services.--Upon the request of 
     the Panel, the Secretary of Health and Human Services shall 
     provide to the Panel on a reimbursable basis such 
     administrative support services as the Panel may request.
       ``(f) Report and Establishment of Standards.--Not later 
     than 2 years after the first meeting, the Panel shall submit 
     a report to Congress and the Secretary of Health and Human 
     Services detailing the standards devised under subsection (b) 
     and recommendations regarding the implementation of such 
     standards. Such standards shall take effect to the extent 
     provided by Federal law enacted after the date of the 
     submission of such report.
       ``(g) Termination.--The Panel shall terminate on the day 
     after submitting its report to the Secretary of Health and 
     Human Services under subsection (f).

     ``SEC. 819. ACCESS TO EXPERIMENTAL OR INVESTIGATIONAL 
                   PRESCRIPTION DRUGS.

       ``No use of a prescription drug or medical device shall be 
     considered experimental or investigational under a group 
     health plan or under health insurance coverage provided by a 
     health insurance issuer in connection with such a plan if 
     such use is included in the labeling authorized by the U.S. 
     Food and Drug Administration under section 505, 513 or 515 of 
     the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) or 
     under section 351 of the Public Health Service Act (42 U.S.C. 
     262), unless such use is demonstrated to be unsafe or 
     ineffective.

[[Page 24378]]



     ``SEC. 820. COVERAGE FOR INDIVIDUALS PARTICIPATING IN 
                   APPROVED CANCER CLINICAL TRIALS.

       ``(a) Coverage.--
       ``(1) In general.--If a group health plan (or a health 
     insurance issuer offering health insurance coverage in 
     connection with such a plan) 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 subsections (b), (c), and (d), 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 individual'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 who meets the following conditions:
       ``(1)(A) The individual has been diagnosed with cancer.
       ``(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 individual 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 
     (or health insurance issuer offering health insurance) 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 to be paid 
     for by the sponsors of an approved clinical trial.
       ``(2) Routine patient care costs.--For purposes of this 
     section--
       ``(A) In general.--The term `routine patient care costs' 
     includes the costs associated with the provision of items and 
     services that--
       ``(i) would otherwise be covered under the group health 
     plan if such items and services were not provided in 
     connection with an approved clinical trial program; and
       ``(ii) are furnished according to the protocol of an 
     approved clinical trial program.
       ``(B) Exclusion.--Such term does include the costs 
     associated with the provision of--
       ``(i) an investigational drug or device, unless the 
     Secretary has authorized the manufacturer of such drug or 
     device to charge for such drug or device; or
       ``(ii) any item or service supplied without charge by the 
     sponsor of the approved clinical trial program.
       ``(3) 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 items or services under subparagraph (A).
       ``(d) Approved Clinical Trial Defined.--In this section, 
     the term `approved clinical trial' means a cancer clinical 
     research study or cancer clinical investigation approved by 
     an Institutional Review Board.
       ``(e) Construction.--Nothing in this section shall be 
     construed to limit a plan's or issuer's coverage with respect 
     to clinical trials.
       ``(f) Plan Satisfaction of Certain Requirements; 
     Responsibilities of Fiduciaries.--
       ``(1) In general.--For purposes of this section, 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 requirements of this 
     section 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.
       ``(2) Construction.--Nothing in this section shall be 
     construed to affect or modify the responsibilities of the 
     fiduciaries of a group health plan under part 4 of subtitle 
     B.

                   ``Subpart C--Access to Information

     ``SEC. 821. PATIENT ACCESS TO INFORMATION.

       ``(a) Disclosure Requirement.--
       ``(1) Group health plans.--A group health plan shall--
       ``(A) provide to participants and beneficiaries at the time 
     of initial coverage under the plan (or the effective date of 
     this section, in the case of individuals who are participants 
     or beneficiaries as of such date), and at least annually 
     thereafter, the information described in subsection (b);
       ``(B) provide to participants and beneficiaries, within a 
     reasonable period (as specified by the Secretary) before or 
     after the date of significant changes in the information 
     described in subsection (b), information on such significant 
     changes; and
       ``(C) upon request, make available to participants and 
     beneficiaries, the Secretary, and prospective participants 
     and beneficiaries, the information described in subsection 
     (b) or (c).

     The plan may charge a reasonable fee for provision in printed 
     form of any of the information described in subsection (b) or 
     (c) more than once during any plan year.
       ``(2) Health insurance issuers.--A health insurance issuer 
     in connection with the provision of health insurance coverage 
     in connection with a group health plan shall--
       ``(A) provide to participants and beneficiaries enrolled 
     under such coverage at the time of enrollment, and at least 
     annually thereafter, the information described in subsection 
     (b);
       ``(B) provide to such participants and beneficiaries, 
     within a reasonable period (as specified by the Secretary) 
     before or after the date of significant changes in the 
     information described in subsection (b), information in 
     printed form on such significant changes; and
       ``(C) upon request, make available to the Secretary, to 
     individuals who are prospective participants and 
     beneficiaries, and to the public the information described in 
     subsection (b) or (c).
       ``(3) Employers.--Effective 5 years after the date this 
     part first becomes effective, each employer (other than an 
     employer described in paragraph (1) of subsection (d)) shall 
     provide to each employee at least annually information 
     (consistent with such subsection) on the amount that the 
     employer contributes on behalf of the employee (and any 
     dependents of the employee) for health benefits coverage.
       ``(b) Information Provided.--The information described in 
     this subsection with respect to a group health plan or health 
     insurance coverage offered by a health insurance issuer shall 
     be provided to a participant or beneficiary free of charge at 
     least once a year and includes the following:
       ``(1) Service area.--The service area of the plan or 
     issuer.
       ``(2) Benefits.--Benefits offered under the plan or 
     coverage, including--
       ``(A) those that are covered benefits ``(all of which shall 
     be referred to by such relevant CPT and DRG codes as are 
     available), limits and conditions on such benefits, and those 
     benefits that are explicitly excluded from coverage (all of 
     which shall be referred to by such relevant CPT and DRG codes 
     as are available);
       ``(B) cost sharing, such as deductibles, coinsurance, and 
     copayment amounts, including any liability for balance 
     billing, any maximum limitations on out of pocket expenses, 
     and the maximum out of pocket costs for services that are 
     provided by nonparticipating providers or that are furnished 
     without meeting the applicable utilization review 
     requirements;
       ``(C) the extent to which benefits may be obtained from 
     nonparticipating providers;
       ``(D) the extent to which a participant or beneficiary may 
     select from among participating providers and the types of 
     providers participating in the plan or issuer network;
       ``(E) process for determining experimental coverage; and
       ``(F) use of a prescription drug formulary.
       ``(3) Access.--A description of the following:
       ``(A) The number, mix, and distribution of providers under 
     the plan or coverage.
       ``(B) Out-of-network coverage (if any) provided by the plan 
     or coverage.
       ``(C) Any point-of-service option (including any 
     supplemental premium or cost-sharing for such option).
       ``(D) The procedures for participants and beneficiaries to 
     select, access, and change participating primary and 
     specialty providers.
       ``(E) The rights and procedures for obtaining referrals 
     (including standing referrals) to participating and 
     nonparticipating providers.
       ``(F) The name, address, and telephone number of 
     participating health care providers and an indication of 
     whether each such provider is available to accept new 
     patients.
       ``(G) Any limitations imposed on the selection of 
     qualifying participating health care providers, including any 
     limitations imposed under section 812(b)(2).
       ``(4) Out-of-area coverage.--Out-of-area coverage provided 
     by the plan or issuer.
       ``(5) Emergency coverage.--Coverage of emergency services, 
     including--

[[Page 24379]]

       ``(A) the appropriate use of emergency services, including 
     use of the 911 telephone system or its local equivalent in 
     emergency situations and an explanation of what constitutes 
     an emergency situation;
       ``(B) the process and procedures of the plan or issuer for 
     obtaining emergency services; and
       ``(C) the locations of (i) emergency departments, and (ii) 
     other settings, in which plan physicians and hospitals 
     provide emergency services and post-stabilization care.
       ``(6) Prior authorization rules.--Rules regarding prior 
     authorization or other review requirements that could result 
     in noncoverage or nonpayment.
       ``(7) Grievance and appeals procedures.--All appeal or 
     grievance rights and procedures under the plan or coverage, 
     including the method for filing grievances and the time 
     frames and circumstances for acting on grievances and 
     appeals, who is the applicable authority with respect to the 
     plan or issuer.
       ``(8) Accountability.--A description of the legal recourse 
     options available for participants and beneficiaries under 
     the plan including--
       ``(A) the preemption that applies under section 514 to 
     certain actions arising out of the provision of health 
     benefits; and
       ``(B) the extent to which coverage decisions made by the 
     plan are subject to internal review or any external review 
     and the proper time frames under
       ``(9) Quality assurance.--Any information made public by an 
     accrediting organization in the process of accreditation of 
     the plan or issuer or any additional quality indicators the 
     plan or issuer makes available.
       ``(10) Information on issuer.--Notice of appropriate 
     mailing addresses and telephone numbers to be used by 
     participants and beneficiaries in seeking information or 
     authorization for treatment.
       ``(11) Availability of information on request.--Notice that 
     the information described in subsection (c) is available upon 
     request.
       ``(c) Information Made Available Upon Request.--The 
     information described in this subsection is the following:
       ``(1) Utilization review activities.--A description of 
     procedures used and requirements (including circumstances, 
     time frames, and appeal rights) under any utilization review 
     program under section 801.
       ``(2) Grievance and appeals information.--Information on 
     the number of grievances and appeals and on the disposition 
     in the aggregate of such matters.
       ``(3) Formulary restrictions.--A description of the nature 
     of any drug formula restrictions.
       ``(4) Participating provider list.--A list of current 
     participating health care providers.
       ``(d) Employer Information.--
       ``(1) Small employer exemption.--Subsection (a)(3) shall 
     not apply to an employer that is a small employer (as defined 
     in section 712(c)(1)(B)) or would be such an employer if 
     `100' were substituted for `50' in such section.
       ``(2) Computation.--The amount described in subsection 
     (a)(3) may be computed on an average, per employee basis, and 
     may be based on rules similar to the rules applied in 
     computing the applicable premium under section 604.
       ``(3) Form of disclosure.--The information under subsection 
     (a)(3) may be provided in any reasonable form, including as 
     part of the summary plan description, a letter, or 
     information accompanying a W-2 form.
       ``(e) Construction.--Nothing in this section shall be 
     construed as requiring public disclosure of individual 
     contracts or financial arrangements between a group health 
     plan or health insurance issuer and any provider.

        ``Subpart D--Protecting the Doctor-Patient Relationship

     ``SEC. 831. 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 offered in connection 
     with such a plan (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 or beneficiary 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. 832. PROHIBITION OF DISCRIMINATION AGAINST PROVIDERS 
                   BASED ON LICENSURE.

       ``(a) In General.--A group health plan and a health 
     insurance issuer offering health insurance coverage in 
     connection with such a plan 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 particular benefits or 
     services 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 or beneficiaries 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;
       ``(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; or
       ``(4) as prohibiting a family practice physician with 
     appropriate expertise from providing pediatric or obstetrical 
     or gynecological care.

     ``SEC. 833. PROHIBITION AGAINST IMPROPER INCENTIVE 
                   ARRANGEMENTS.

       ``(a) In General.--A group health plan and a health 
     insurance issuer offering health insurance coverage in 
     connection with such a plan may not operate any physician 
     incentive plan (as defined in subparagraph (B) of section 
     1876(i)(8) of the Social Security Act) unless the 
     requirements described in 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 1876(i)(8) of the Social 
     Security Act to the Secretary, an eligible organization, or 
     an individual enrolled with the organization shall be treated 
     as a reference to the applicable authority, a group health 
     plan or health insurance issuer, respectively, and a 
     participant or beneficiary 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. 834. PAYMENT OF CLEAN CLAIMS.

       ``A group health plan, and a health insurance issuer 
     offering group health insurance coverage, shall provide for 
     prompt payment of claims submitted for health care services 
     or supplies furnished to a participant or beneficiary with 
     respect to benefits covered by the plan or issuer,in a manner 
     consistent with the provisions of sections 1816(c)(2) and 
     1842(c)(2) of the Social Security Act (42 U.S.C. 1395h(c)(2) 
     and 42 U.S.C. 1395u(c)(2)), except that for purposes of this 
     section, subparagraph (C) of section 1816(c)(2) of the Social 
     Security Act shall be treated as applying to claims received 
     from a participant or beneficiary as well as claims referred 
     to in such subparagraph.

                        ``Subpart E--Definitions

     ``SEC. 841. DEFINITIONS.

       ``(a) Incorporation of General Definitions.--Except as 
     otherwise provided, the provisions of section 733 shall apply 
     for purposes of this part in the same manner as they apply 
     for purposes of part 7.
       ``(b) Additional Definitions.--For purposes of this part:
       ``(1) Applicable authority.--The term `applicable 
     authority' means--
       ``(A) in the case of a group health plan, the Secretary of 
     Labor; and
       ``(B) in the case of a health insurance issuer with respect 
     to a specific provision of this part, 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) Clinical peer.--The term `clinical peer' means, with 
     respect to a review or appeal, a practicing physician or 
     other health care professional who holds a nonrestricted 
     license and who is--
       ``(A) appropriately certified by a nationally recognized, 
     peer reviewed accrediting body in the same or similar 
     specialty as typically manages the medical condition, 
     procedure, or treatment under review or appeal, or
       ``(B) is trained and experienced in managing such 
     condition, procedure, or treatment,
     and includes a pediatric specialist where appropriate; except 
     that only a physician may be a clinical peer with respect to 
     the review or appeal of treatment recommended or rendered by 
     a physician.
       ``(3) 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.
       ``(4) 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.

[[Page 24380]]

       ``(5) 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 or 
     beneficiaries.
       ``(6) Nonparticipating.--The term `nonparticipating' means, 
     with respect to a health care provider that provides health 
     care items and services to a participant or beneficiary 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.
       ``(7) Participating.--The term `participating' means, with 
     respect to a health care provider that provides health care 
     items and services to a participant or beneficiary under 
     group health plan or health insurance coverage offered by a 
     health insurance issuer in connection with such a plan, a 
     health care provider that furnishes such items and services 
     under a contract or other arrangement with the plan or 
     issuer.
       ``(8) Physician.--The term `physician' means an allopathic 
     or osteopathic physician.
       ``(9) Practicing physician.--The term `practicing 
     physician' means a physician who is licensed in the State in 
     which the physician furnishes professional services and who 
     provides professional services to individual patients on 
     average at least two full days per week.
       ``(10) 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.

     ``SEC. 842. RULE OF CONSTRUCTION.

       ``Nothing in this part or section 714 shall be construed to 
     affect or modify the provisions of section 514.

     ``SEC. 843. EXCLUSIONS.

       ``(a) No Benefit Requirements.--Nothing in this part shall 
     be construed to require a group health plan or a health 
     insurance issuer offering health insurance coverage in 
     connection with such a plan to provide specific benefits 
     under the terms of such plan or coverage, other than those 
     provided under the terms of such plan or coverage.
       ``(b) Exclusion for Fee-for-Service Coverage.--
       ``(1) In general.--
       ``(A) Group health plans.--The provisions of sections 811 
     through 821 shall not apply to a group health plan if the 
     only coverage offered under the plan is fee-for-service 
     coverage (as defined in paragraph (2)).
       ``(B) Health insurance coverage.--The provisions of 
     sections 801 through 821 shall not apply to health insurance 
     coverage if the only coverage offered under the 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 agree 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. 844. COVERAGE OF LIMITED SCOPE PLANS.

       ``Only for purposes of applying the requirements of this 
     part under section 714, section 733(c)(2)(A) shall be deemed 
     not to apply.

     ``SEC. 845. REGULATIONS.

       ``(a) Regulations.--The Secretary of Labor shall issue such 
     regulations as may be necessary or appropriate to carry out 
     this part under section 714. The Secretary may promulgate 
     such regulations in the form of interim final rules as may be 
     necessary to carry out this part in a timely manner.''.
       (b) 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--Improving Managed Care

                   ``Subpart A--Grievance and Appeals

``Sec. 801. Utilization review activities.
``Sec. 802. Internal appeals procedures.
``Sec. 803. External appeals procedures.
``Sec. 804. Establishment of a grievance process.

                      ``Subpart B--Access to Care

``Sec. 812. Choice of health care professional.
``Sec. 813. Access to emergency care.
``Sec. 814. Access to specialty care.
``Sec. 815. Access to obstetrical and gynecological care.
``Sec. 816. Access to pediatric care.
``Sec. 817. Continuity of care.
``Sec. 818. Network adequacy.
``Sec. 819. Access to experimental or investigational prescription 
              drugs.
``Sec. 820. Coverage for individuals participating in approved cancer 
              clinical trials.

                   ``Subpart C--Access to Information

``Sec. 821. Patient access to information.

        ``Subpart D--Protecting the Doctor-Patient Relationship

``Sec. 831. Prohibition of interference with certain medical 
              communications.
``Sec. 832. Prohibition of discrimination against providers based on 
              licensure.
``Sec. 833. Prohibition against improper incentive arrangements.
``Sec. 834. Payment of clean claims.

                        ``Subpart E--Definitions

``Sec. 841. Definitions.
``Sec. 842. Preemption; State flexibility; construction.
``Sec. 843. Exclusions.
``Sec. 844. Coverage of limited scope plans.
``Sec. 845. Regulations.

     SEC. 203. AVAILABILITY OF COURT 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 new subsection:
       ``(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 or plan 
     sponsor (not including a participating physician, other than 
     a physician who participated in making the final decision 
     under section 802 pursuant to section 802(b)(1)(A)) and who, 
     under the plan, has authority to make final decisions under 
     802--
       ``(i) fails to exercise ordinary care in making an 
     incorrect determination in the case of a participant or 
     beneficiary that an item or service is excluded from coverage 
     under the terms of the plan based on the fact that the item 
     or service--

       ``(I) does not meet the requirements for medical 
     appropriateness or necessity,
       ``(II) would constitute experimental treatment or 
     technology (as defined under the plan), or
       ``(III) is not a covered benefit, or

       ``(ii) fails to exercise ordinary care to ensure that--

       ``(I) any denial of claim for benefits (within the meaning 
     of section 801(f)), or
       ``(II) any decision by the plan on a request, made by a 
     participant or beneficiary under section 802 or 803, for a 
     reversal of an earlier decision of the plan,

     is made and issued to the participant or beneficiary (in such 
     form and manner as may be prescribed in regulations of the 
     Secretary) before the end of the applicable period specified 
     in section 801, 802, or 803, and
       ``(B) such failure is the proximate cause of substantial 
     harm to, or wrongful death of, the participant or 
     beneficiary,

     such person shall be liable to the participant or beneficiary 
     (or the estate of such participant or beneficiary) for 
     economic and noneconomic damages in connection with such 
     failure and such injury or death (subject to paragraph (10)). 
     For purposes of this subsection, the term `final decision' 
     means, with respect to a group health plan, the sole final 
     decision of the plan under section 802.
       ``(2) Ordinary care.--For purposes of this subsection, the 
     term `ordinary care' means the care, skill, prudence, and 
     diligence under the circumstances then prevailing that a 
     prudent individual acting in a like capacity and familiar 
     with such matters would use in the conduct of an enterprise 
     of a like character and with like aims.
       ``(3) Substantial harm.--The term `substantial harm' means 
     loss of life, loss or significant impairment of limb or 
     bodily function, significant disfigurement, or severe and 
     chronic physical pain.
       ``(4) Exception for employers and other plan sponsors.--
       ``(A) In general.--Subject to subparagraph (B), paragraph 
     (1) does not authorize--
       ``(i) any cause of action against an employer or other plan 
     sponsor maintaining the group health plan (or against an 
     employee of such an employer or sponsor acting within the 
     scope of employment),
       ``(ii) a right of recovery or indemnity 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 under paragraph (1), or
       ``(iii) any cause of action in connection with the 
     provision of excepted benefits described in section 733(c), 
     other than those described in section 733(c)(2).
       ``(B) Special rule.--Subparagraph (A) shall not preclude 
     any cause of action described in paragraph (1) commenced 
     against an employer or other plan sponsor (or against an 
     employee of such an employer or sponsor acting within the 
     scope of employment), but only if--
       ``(i) such action is based on the direct participation of 
     the employer or other plan sponsor (or employee of the 
     employer or plan sponsor) in the final decision of the plan 
     with respect to a specific participant or beneficiary on a 
     claim for benefits covered under the plan or health insurance 
     coverage in the case at issue; and

[[Page 24381]]

       ``(ii) the decision on the claim resulted in substantial 
     harm to, or the wrongful death of, such participant or 
     beneficiary.
       ``(C) Direct participation.--For purposes of this 
     subsection, the term `direct participation' means, in 
     connection with a final decision under section 802, the 
     actual making of such final decision as a plan fiduciary or 
     the actual exercise of final controlling authority in the 
     approval of such final decision. In determining whether an 
     employer or other plan sponsor (or employee of an employer or 
     other plan sponsor) is engaged in direct participation in the 
     final decision of the plan on a claim, the employer or plan 
     sponsor (or employee) shall not be construed to be engaged in 
     such direct participation (and to be liable for any damages 
     whatsoever) because of any form of decisionmaking or other 
     conduct, whether or not fiduciary in nature, that does not 
     involve a final decision with respect to a specific claim for 
     benefits by a specific 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 creation, continuation, 
     modification, or termination of the plan or of any coverage, 
     benefit, or item or service covered by the plan;
       ``(iv) any participation by the employer or other plan 
     sponsor (or employee) in the design of any coverage, benefit, 
     or item or service covered by the plan, including the amount 
     of copayment and limits connected with such coverage, and the 
     specification of any protocol, procedure, or policy for 
     determining whether any such coverage, benefit, or item or 
     service is medically necessary and appropriate or is 
     experimental or investigational;
       ``(v) any action by an agent of the employer or plan 
     sponsor in making such a final decision on behalf of such 
     employer or plan sponsor;
       ``(vi) any decision by an employer or plan sponsor (or 
     employee) or agent acting on behalf of an employer or plan 
     sponsor either to authorize coverage for, or to intercede or 
     not to intercede as an advocate for or on behalf of, any 
     specific participant or beneficiary (or group of participants 
     or beneficiaries) under the plan;
       ``(vii) the approval of, or participation in the approval 
     of, the plan provisions defining medical necessity or of 
     policies or procedures that have a direct bearing on the 
     outcome of the final decision; or
       ``(viii) any other form of decisionmaking or other conduct 
     performed by the employer or other plan sponsor (or employee) 
     in connection with the plan or coverage involved unless it 
     involves the making of a final decision of the plan 
     consisting of a failure described in clause (i) or (ii) of 
     paragraph (1)(A) as to specific participants or beneficiaries 
     who suffer substantial harm or wrongful death as a proximate 
     cause of such decision.
       ``(5) Required demonstration of direct participation.--An 
     action against an employer or plan sponsor (or employee 
     thereof) under this subsection shall be immediately 
     dismissed--
       ``(A) in the absence of an allegation in the complaint of 
     direct participation by the employer or plan sponsor in the 
     final decision of the plan with respect to a specific 
     participant or beneficiary who suffers substantial harm or 
     wrongful death, or
       ``(B) upon a demonstration to the court that such employer 
     or plan sponsor (or employee) did not directly participate in 
     the final decision of the plan.
       ``(6) Treatment of third-party providers of 
     nondiscretionary administrative services.--Paragraph (1) does 
     not authorize any action against any person providing 
     nondiscretionary administrative services to employers or 
     other plan sponsors.
       ``(7) Requirement of exhaustion of administrative 
     remedies.--
       ``(A) In general.--Paragraph (1) applies in the case of any 
     cause of action only if all remedies under section 503 
     (including remedies under sections 802 and 803, made 
     applicable under section 714) with respect to such cause of 
     action have been exhausted.
       ``(B) External review required.--For purposes of 
     subparagraph (A), administrative remedies under section 503 
     shall not be deemed exhausted until available remedies under 
     section 803 have been elected and are exhausted by issuance 
     of a final determination by an external appeal entity under 
     such section.
       ``(C) Consideration of administrative determinations.--Any 
     determinations made under section 802 or 803 made while an 
     action under this paragraph is pending shall be given due 
     consideration by the court in such action.
       ``(8) Use of external appeal entity in establishing absence 
     of substantial harm or causation in litigation.--
       ``(A) In general.--In any action under this subsection by 
     an individual in which damages are sought on the basis of 
     substantial harm to the individual, the defendant may obtain 
     (at its own expense), under procedures similar to procedures 
     applicable under section 803, a determination by a qualified 
     external appeal entity (as defined in section 803(c)(1)) that 
     has not been involved in any stage of the grievance or 
     appeals process which resulted in such action as to--
       ``(i) whether such substantial harm has been sustained, and
       ``(ii) whether the proximate cause of such injury was the 
     result of the failure of the defendant to exercise ordinary 
     care, as described in paragraph (1)(A).
       ``(B) Effect of finding in favor of defendant.--If the 
     external appeal entity determines that such an injury has not 
     been sustained or was not proximately caused by such a 
     failure, such a finding shall be an affirmative defense, and 
     the action shall be dismissed forthwith unless such finding 
     is overcome upon a showing of clear and convincing evidence 
     to the contrary. Notwithstanding subsection (g), in any case 
     in which the plaintiff fails in any attempt to make such a 
     showing to the contrary, the court shall award to the 
     defendant reasonable attorney's fees and the costs of the 
     action incurred in connection with such failed showing.
       ``(9) Rebuttable presumption.--In the case of any action 
     commenced pursuant to paragraph (1), there shall be a 
     rebuttable presumption in favor of the decision of the 
     external appeal entity rendered upon completion of any review 
     elected under section 803 and such presumption may be 
     overcome only upon a showing of clear and convincing evidence 
     to the contrary.
       ``(10) Maximum noneconomic damages.--Total liability for 
     noneconomic loss under this subsection in connection with any 
     failure with respect to any participant or beneficiary may 
     not exceed the lesser of--
       ``(A) $500,000, or
       ``(B) 2 times the amount of economic loss.
     The dollar amount under subparagraph (A), shall be increased 
     or decreased, for each calendar year that ends after December 
     31, 2001, by the same percentage as the percentage by which 
     the medical care expenditure category of the Consumer Price 
     Index for All Urban Consumers (United States city average), 
     published by the Bureau of Labor Statistics, for September of 
     the preceding calendar year has increased or decreased from 
     such index for September 2000
       ``(11) Prohibition of award of punitive damages.--
       ``(A) General rule.--Except as provided in this paragraph, 
     nothing in this subsection shall be construed as authorizing 
     a cause of action for punitive, exemplary, or similar 
     damages.
       ``(B) Exception.--Punitive damages are authorized in any 
     case described in paragraph (1)(A)(ii)(II) in which the 
     plaintiff establishes by clear and convincing evidence that 
     conduct carried out by the defendant with a conscious, 
     flagrant indifference to the rights or safety of others was 
     the proximate cause of the harm that is the subject of the 
     action and that such conduct was contrary to the 
     recommendations of an external appeal entity issued in the 
     determination in such case rendered pursuant to section 803.
       ``(C) Limitation on amount.--
       ``(i) In general.--The amount of punitive damages that may 
     be awarded in an action described in subparagraph (B) may not 
     exceed the greater of--

       ``(I) 2 times the sum of the amount awarded to the claimant 
     for economic loss; or
       ``(II) $250,000.

       ``(ii) Special rule.--Notwithstanding clause (i), in any 
     action described in subparagraph (B) against an individual 
     whose net worth does not exceed $500,000 or against an owner 
     of an unincorporated business, or any partnership, 
     corporation, association, unit of local government, or 
     organization which has fewer that 25 employees, the punitive 
     damages shall not exceed the lesser of--

       ``(I) 2 times the amount awarded to the claimant for 
     economic loss; or
       ``(II) $250,000.

       ``(iii) Controlled groups.--

       ``(I) In general.--For the purpose of determining the 
     applicability of clause (ii) to any employer, in determining 
     the number of employees of an employer who is a member of a 
     controlled group, the employees of any person in such group 
     shall be deemed to be employees of the employer.
       ``(II) Controlled group.--For purposes of subclause (I), 
     the term `controlled group' means any group treated as a 
     single employer under subsection (b), (c), (m), or (o) of 
     section 414 of the Internal Revenue Code of 1986.

       ``(D) Exception for insufficient award in cases of 
     egregious conduct.--
       ``(i) Determination by court.--If the court makes a 
     determination, based on clear and convincing evidence and 
     after considering each of the factors in subparagraph (E), 
     that the application of subparagraph (C) would result in an 
     award of punitive damages that is insufficient to punish the 
     egregious conduct of the defendant against whom the punitive 
     damages are to be awarded or to deter such conduct in the 
     future, the court shall determine the additional amount of 
     punitive damages (referred to in this subparagraph as the 
     `additional amount') in excess of the amount determined in 
     accordance with subparagraph

[[Page 24382]]

     (C) to be awarded against the defendant in a separate 
     proceeding in accordance with this subparagraph.
       ``(ii) Absolute limit on punitives.--Nothing in this 
     subtitle shall be construed to authorize the court to award 
     an additional amount greater than an amount equal to the 
     maximum amount applicable under subparagraph (C).
       ``(iii) Requirements for awarding additional amount.--If 
     the court awards an additional amount pursuant to this 
     subparagraph, the court shall state its reasons for setting 
     the amount of the additional amount in findings of fact and 
     conclusions of law.
       ``(E) Factors for consideration in cases of egregious 
     conduct.--In any proceeding under subparagraph (D), the 
     matters to be considered by the court shall include (but are 
     not limited to)--
       ``(i) the extent to which the defendant acted with actual 
     malice;
       ``(ii) the likelihood that serious harm would arise from 
     the conduct of the defendant;
       ``(iii) the degree of the awareness of the defendant of 
     that likelihood;
       ``(iv) the profitability of the misconduct to the 
     defendant;
       ``(v) the duration of the misconduct and any concurrent or 
     subsequent concealment of the conduct by the defendant;
       ``(vi) the attitude and conduct of the defendant upon the 
     discovery of the misconduct and whether the misconduct has 
     terminated;
       ``(vii) the financial condition of the defendant; and
       ``(viii) the cumulative deterrent effect of other losses, 
     damages, and punishment suffered by the defendant as a result 
     of the misconduct, reducing the amount of punitive damages on 
     the basis of the economic impact and severity of all measures 
     to which the defendant has been or may be subjected, 
     including--

       ``(I) compensatory and punitive damage awards to similarly 
     situated claimants;
       ``(II) the adverse economic effect of stigma or loss of 
     reputation;
       ``(III) civil fines and criminal and administrative 
     penalties; and
       ``(IV) stop sale, cease and desist, and other remedial or 
     enforcement orders.

       ``(F) Application by court.--This paragraph shall be 
     applied by the court and, in the case of a trial by jury, 
     application of this paragraph shall not be disclosed to the 
     jury.
       ``(G) Limitation on punitive damages.--No person shall be 
     liable for punitive, exemplary, or similar damages in an 
     action under this subsection based on any failure described 
     in paragraph (1) if such failure was in compliance with the 
     recommendations of an external appeal entity issued in a 
     determination under section 803.
       ``(H) Bifurcation at request of any party.--
       ``(i) In general.--At the request of any party the trier of 
     fact in any action that is subject to this paragraph shall 
     consider in a separate proceeding, held subsequent to the 
     determination of the amount of compensatory damages, whether 
     punitive damages are to be awarded for the harm that is the 
     subject of the action and the amount of the award.
       ``(ii) Inadmissibility of evidence relative only to a claim 
     of punitive damages in a proceeding concerning compensatory 
     damages.--If any party requests a separate proceeding under 
     clause (i), in a proceeding to determine whether the claimant 
     may be awarded compensatory damages, any evidence, argument, 
     or contention that is relevant only to the claim of punitive 
     damages, as determined by applicable State law, shall be 
     inadmissible.
       ``(12) Limitation of action.--Paragraph (1) shall not apply 
     in connection with any action commenced after the later of--
       ``(A) 1 year after (i) the date of the last action which 
     constituted a part of the failure, or (ii) in the case of an 
     omission, the latest date on which the fiduciary could have 
     cured the failure, or
       ``(B) 1 year after the earliest date on which the plaintiff 
     first knew, or reasonably should have known, of the 
     substantial harm resulting from the failure.
       ``(13) 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 803 of a denial of claim for benefits 
     (within the meaning of section 801(f)).
       ``(14) Construction.--Nothing in this subsection shall be 
     construed as authorizing a cause of action for the failure to 
     provide an item or service which is not covered under the 
     group health plan involved.
       ``(15) Protection of medical malpractice and similar 
     actions under state law.--This subsection shall not be 
     construed to preclude any action under State law (as defined 
     in section 514(c)(1)) not otherwise preempted under this 
     title with respect to the duty (if any) under such State law 
     imposed on any person to exercise a specified standard of 
     care when making a health care treatment decision in any case 
     in which medical services are provided by such person or in 
     any case in which such decision affects the quality of care 
     or treatment provided or received.
       ``(16) Coexisting actions in federal and state courts 
     disallowed.--
       ``(A) Precedence of federal action.--An action may be 
     commenced under this subsection only if no action for damages 
     has been commenced by the plaintiff under State law (as 
     defined in section 514(c)(1)) based on the same substantial 
     harm.
       ``(B) Actions under state law superseded.--Upon the 
     commencement of any action under this subsection, this 
     subsection supersedes any action authorized under State law 
     (as so defined) against any person based on the same 
     substantial harm during the pendency of the action commenced 
     under this subsection.
       ``(C) Double recovery of damages precluded.--This 
     subsection supersedes any action under State law (as so 
     defined) for damages based on any substantial harm to the 
     extent that damages for such substantial harm have been 
     recovered in an action under this subsection.
       ``(17) Limitation on relief where defendant's position 
     previously supported upon external review.--In any case in 
     which the court finds the defendant to be liable in an action 
     under this subsection, to the extent that such liability is 
     based on a finding by the court of a particular failure 
     described in paragraph (1) and such finding is contrary to a 
     determination by an external review entity in a decision 
     previously rendered under section 803 with respect to such 
     defendant, no relief shall be available under this subsection 
     in addition to the relief otherwise available under 
     subsection (a)(1)(B).''.
       (b) Conforming Amendment.--Section 502(a)(1)(A) of such Act 
     (29 U.S.C. 1132(a)(1)(A)) is amended by inserting ``or (n)'' 
     after ``subsection (c)''.
       (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 date of the 
     enactment of this Act.

     SEC. 204. AVAILABILITY OF BINDING ARBITRATION.

       (a) In General.--Section 503 of the Employee Retirement 
     Income Security Act of 1974 (as amended by the preceding 
     provisions of this Act) is amended further--
       (1) in subsection (a), by inserting ``In General.--'' after 
     ``(a)'';
       (2) in subsection (b), by striking ``(b) In the case'' and 
     inserting the following:
       ``(b) Group Health Plans.--
       ``(1) In general.--In the case''; and
       (3) by adding at the end of subsection (b) the following:
       ``(2) Binding arbitration permitted as alternative means of 
     dispute resolution.--
       ``(A) In general.--A group health plan shall not be treated 
     as failing to meet the requirements of the preceding 
     provisions of this section relating to review of any adverse 
     coverage decision rendered by or under the plan, if--
       ``(i) in lieu of the procedures otherwise provided under 
     the plan in accordance with such provisions and in lieu of 
     any subsequent review of the matter by a court under section 
     502--

       ``(I) the aggrieved participant or beneficiary elects in 
     the request for the review a procedure by which the dispute 
     is resolved by binding arbitration which is available under 
     the plan with respect to similarly situated participants and 
     beneficiaries and which meets the requirements of 
     subparagraph (B); or
       ``(II) in the case of any such plan or portion thereof 
     which is established and maintained pursuant to a bona fide 
     collective bargaining agreement, the plan provides for a 
     procedure by which such disputes are resolved by means of 
     binding arbitration which meets the requirements of 
     subparagraph (B); and

       ``(ii) the additional requirements of subparagraph (B) are 
     met.
       ``(B) Additional requirements.--The Secretary shall 
     prescribe by regulation requirements for arbitration 
     procedures under this paragraph, including at least the 
     following requirements:
       ``(i) Arbitration panel.--The arbitration shall be 
     conducted by an arbitration panel meeting the requirements of 
     subparagraph (C).
       ``(ii) Fair process; de novo determination.--The procedure 
     shall provide for a fair, de novo determination.
       ``(iii) Opportunity to submit evidence, have 
     representation, and make oral presentation.--Each party to 
     the arbitration procedure--

       ``(I) may submit and review evidence related to the issues 
     in dispute;
       ``(II) may use the assistance or representation of one or 
     more individuals (any of whom may be an attorney); and
       ``(III) may make an oral presentation.

       ``(iv) Provision of information.--The plan shall provide 
     timely access to all its records relating to the matters 
     under arbitration and to all provisions of the plan relating 
     to such matters.
       ``(v) Timely decisions.--A determination by the arbitration 
     panel on the decision shall--

       ``(I) be made in writing;
       ``(II) be binding on the parties; and
       ``(III) be made in accordance with the medical exigencies 
     of the case involved.

       ``(vi) Exhaustion of external review required.--The 
     arbitration procedures under

[[Page 24383]]

     this paragraph shall not be available to party unless the 
     party has exhausted external review procedures under section 
     804.
       ``(vii) Voluntary election.--A group health plan may not 
     require, through the plan document, a contract, or otherwise, 
     that a participant or beneficiary make the election described 
     in subparagraph (A)(i)(I).
       ``(C) Arbitration panel.--
       ``(i) In general.--Arbitrations commenced pursuant to this 
     paragraph shall be conducted by a panel of arbitrators 
     selected by the parties made up of 3 individuals, including 
     at least one practicing physician and one practicing 
     attorney.
       ``(ii) Qualifications.--Any individual who is a member of 
     an arbitration panel shall meet the following requirements:

       ``(I) There is no real or apparent conflict of interest 
     that would impede the individual conducting arbitration 
     independent of the plan and meets the independence 
     requirements of clause (iii).
       ``(II) The individual has sufficient medical or legal 
     expertise to conduct the arbitration for the plan on a timely 
     basis.
       ``(III) The individual has appropriate credentials and has 
     attained recognized expertise in the applicable medical or 
     legal field.
       ``(IV) The individual was not involved in the initial 
     adverse coverage decision or any other review thereof.

       ``(iii) Independence requirements.--An individual described 
     in clause (ii) meets the independence requirements of this 
     clause if--

       ``(I) the individual is not affiliated with any related 
     party,
       ``(II) any compensation received by such individual in 
     connection with the binding arbitration procedure is 
     reasonable and not contingent on any decision rendered by the 
     individual,
       ``(III) under the terms of the plan, the plan has no 
     recourse against the individual or entity in connection with 
     the binding arbitration procedure, and
       ``(IV) the individual does not otherwise have a conflict of 
     interest with a related party as determined under such 
     regulations as the Secretary may prescribe.

       ``(iv) Related party.--For purposes of clause (iii), the 
     term `related party' means--

       ``(I) the plan or any health insurance issuer offering 
     health insurance coverage in connection with the plan (or any 
     officer, director, or management employee of such plan or 
     issuer),
       ``(II) the physician or other medical care provider that 
     provided the medical care involved in the coverage decision,
       ``(III) the institution at which the medical care involved 
     in the coverage decision is provided,
       ``(IV) the manufacturer of any drug or other item that was 
     included in the medical care involved in the coverage 
     decision, or
       ``(V) any other party determined under such regulations as 
     the Secretary may prescribe to have a substantial interest in 
     the coverage decision .

       ``(iv) Affiliated.--For purposes of clause (iii), the term 
     `affiliated' means, in connection with any entity, having a 
     familial, financial, or professional relationship with, or 
     interest in, such entity.
       ``(D) Decisions.--
       ``(i) In general.--Decisions rendered by the arbitration 
     panel shall be binding on all parties to the arbitration and 
     shall be enforcible under section 502 as if the terms of the 
     decision were the terms of the plan, except that the court 
     may vacate any award made pursuant to the arbitration for any 
     cause described in paragraph (1), (2), (3), (4), or (5) of 
     section 10(a) of title 9, United States Code.
       ``(ii) Allowable remedies.--The remedies which may be 
     implemented by the arbitration panel shall consist of those 
     remedies which would be available in an action timely 
     commenced by a participant or beneficiary under section 502 
     after exhaustion of administrative remedies, except that a 
     money award may be made in the arbitration proceedings in any 
     amount not to exceed 3 times the maximum amount of damages 
     that would be allowable in such case in an action described 
     in section 502(n).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to adverse coverage decisions initially rendered 
     by group health plans on or after the date of the enactment 
     of this Act.

      TITLE III-- AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

     SEC. 301. 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 chapter 101.''; and

       (2) by inserting after section 9812 the following:

     ``SEC. 9813. STANDARD RELATING TO CHAPTER 101.

       ``A group health plan shall comply with the requirements of 
     chapter 101 and such requirements shall be deemed to be 
     incorporated into this section.''.

     SEC. 302. IMPROVING MANAGED CARE.

       (a) In General.--The Internal Revenue Code of 1986 is 
     amended by adding at the end the following new chapter:

                 ``CHAPTER 101--IMPROVING MANAGED CARE

``Subchapter A. Access to care.
``Subchapter B. Access to information.
``Subchapter C. Protecting the doctor-patient relationship.
``Subchapter D. Definitions.

                     ``Subchapter A--Access to Care

``Sec. 9901. Choice of health care professional.
``Sec. 9902. Access to emergency care.
``Sec. 9903. Access to specialty care.
``Sec. 9904. Access to obstetrical and gynecological care.
``Sec. 9905. Access to pediatric care.
``Sec. 9906. Continuity of care.
``Sec. 9907. Network adequacy.
``Sec. 9908. Access to experimental or investigational prescription 
              drugs.
``Sec. 9909. Coverage for individuals participating in approved cancer 
              clinical trials.

     ``SEC. 9901. CHOICE OF HEALTH CARE PROFESSIONAL.

       ``(a) Primary Care.--If a group health plan requires or 
     provides for designation by a participant or beneficiary of a 
     participating primary care provider, then the plan shall 
     permit each participant and beneficiary to designate any 
     participating primary care provider who is available to 
     accept such individual.
       ``(b) Specialists.--A group health plan shall permit each 
     participant or beneficiary to receive medically necessary or 
     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.

     ``SEC. 9902. ACCESS TO EMERGENCY CARE.

       ``(a) Coverage of Emergency Services.--
       ``(1) In general.--If a group health plan provides or 
     covers any benefits with respect to services in an emergency 
     department of a hospital, the plan 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 or beneficiary--
       ``(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 or beneficiary 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--
       ``(i) 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; and
       ``(ii) a medical condition manifesting itself in a neonate 
     by acute symptoms of sufficient severity (including severe 
     pain) such that a prudent health care professional could 
     reasonably expect the absence of immediate medical attention 
     to result in a condition described in clause (i), (ii), or 
     (iii) of section 1867(e)(1)(A) of the Social Security Act.
       ``(B) Emergency services.--The term `emergency services' 
     means--
       ``(i) with respect to an emergency medical condition 
     described in subparagraph (A)(i)--

       ``(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; or

       ``(ii) with respect to an emergency medical condition 
     described in subparagraph (A)(ii), medical treatment for such 
     condition rendered by a health care provider in a hospital to 
     a neonate, including available hospital ancillary services in 
     response to an urgent request of a health care professional 
     and to the extent necessary to stabilize the neonate.
       ``(C) Stabilize.--The term `to stabilize' means, with 
     respect to an emergency medical condition, to provide such 
     medical treatment of the condition as may be necessary to

[[Page 24384]]

     assure, within reasonable medical probability, that no 
     material deterioration of the condition is likely to result 
     from or occur during the transfer of the individual from a 
     facility.
       ``(b) Reimbursement for Maintenance Care and Post-
     Stabilization Care.--If benefits are available under a group 
     health plan with respect to maintenance care or post-
     stabilization care covered under the guidelines established 
     under section 1852(d)(2) of the Social Security Act, the plan 
     shall provide for reimbursement with respect to such services 
     provided to a participant or beneficiary other than through a 
     participating health care provider in a manner consistent 
     with subsection (a)(1)(C) (and shall otherwise comply with 
     such guidelines).
       ``(c) Coverage of Emergency Ambulance Services.--
       ``(1) In general.--If a group health plan provides any 
     benefits with respect to ambulance services and emergency 
     services, the plan shall cover emergency ambulance services 
     (as defined in paragraph (2))) furnished under the plan 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 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. 9903. ACCESS TO SPECIALTY CARE.

       ``(a) Specialty Care for Covered Services.--
       ``(1) In general.--If--
       ``(A) an individual is a participant or beneficiary under a 
     group health plan,
       ``(B) the individual has a condition or disease of 
     sufficient seriousness and complexity to require treatment by 
     a specialist or the individual requires physician pathology 
     services, and
       ``(C) benefits for such treatment or services are provided 
     under the plan,
     the plan shall make or provide for a referral to a specialist 
     who is available and accessible (consistent with standards 
     developed under section 9907) to provide the treatment for 
     such condition or disease or to provide such services.
       ``(2) Specialist defined.--For purposes of this subsection, 
     the term `specialist' means, with respect to a condition or 
     services, a health care practitioner, facility, or center or 
     physician pathologist that has adequate expertise through 
     appropriate training and experience (including, in the case 
     of a child, appropriate pediatric expertise and in the case 
     of a pregnant woman, appropriate obstetrical expertise) to 
     provide high quality care in treating the condition or to 
     provide physician pathology services.
       ``(3) Care under referral.--A group health plan may require 
     that the care provided to an individual pursuant to such 
     referral under paragraph (1) with respect to treatment be--
       ``(A) pursuant to a treatment plan, only if the treatment 
     plan is developed by the specialist and approved by the plan, 
     in consultation with the designated primary care provider or 
     specialist and the individual (or the individual's designee), 
     and
       ``(B) in accordance with applicable quality assurance and 
     utilization review standards of the plan.

     Nothing in this subsection shall be construed as preventing 
     such a treatment plan for an individual from requiring a 
     specialist to provide the primary care provider with regular 
     updates on the specialty care provided, as well as all 
     necessary medical information.
       ``(4) Referrals to participating providers.--A group health 
     plan is not required under paragraph (1) to provide for a 
     referral to a specialist that is not a participating 
     provider, unless the plan does not have a specialist that is 
     available and accessible to treat the individual's condition 
     or provide physician pathology services and that is a 
     participating provider with respect to such treatment or 
     services.
       ``(5) Referrals to nonparticipating providers.--In a case 
     in which a referral of an individual to a nonparticipating 
     specialist is required under paragraph (1), the group health 
     plan shall provide the individual the option of at least 
     three nonparticipating specialists.
       ``(6) Treatment of nonparticipating providers.--If a plan 
     refers an individual to a nonparticipating specialist 
     pursuant to paragraph (1), services provided pursuant to the 
     approved treatment plan (if any) shall be provided at no 
     additional cost to the individual beyond what the individual 
     would otherwise pay for services received by such a 
     specialist that is a participating provider.
       ``(b) Specialists as Gatekeeper for Treatment of Ongoing 
     Special Conditions.--
       ``(1) In general.--A group health plan shall have a 
     procedure by which an individual who is a participant or 
     beneficiary and who has an ongoing special condition (as 
     defined in paragraph (3)) may request and receive a referral 
     to a specialist for such condition who shall be responsible 
     for and capable of providing and coordinating the 
     individual's care with respect to the condition. Under such 
     procedures if such an individual's care would most 
     appropriately be coordinated by such a specialist, such plan 
     shall refer the individual to such specialist.
       ``(2) Treatment for related referrals.--Such specialists 
     shall be permitted to treat the individual without a referral 
     from the individual's primary care provider and may authorize 
     such referrals, procedures, tests, and other medical services 
     as the individual's primary care provider would otherwise be 
     permitted to provide or authorize, subject to the terms of 
     the treatment (referred to in subsection (a)(3)(A)) with 
     respect to the ongoing special condition.
       ``(3) Ongoing special condition defined.--In this 
     subsection, the term `ongoing special condition' means a 
     condition or disease that--
       ``(A) is life-threatening, degenerative, or disabling, and
       ``(B) requires specialized medical care over a prolonged 
     period of time.
       ``(4) Terms of referral.--The provisions of paragraphs (3) 
     through (5) of subsection (a) apply with respect to referrals 
     under paragraph (1) of this subsection in the same manner as 
     they apply to referrals under subsection (a)(1).
       ``(5) Construction.--Nothing in this subsection shall be 
     construed as preventing an individual who is a participant or 
     beneficiary and who has an ongoing special condition from 
     having the individual's primary care physician assume the 
     responsibilities for providing and coordinating care 
     described in paragraph (1).
       ``(c) Standing Referrals.--
       ``(1) In general.--A group health plan shall have a 
     procedure by which an individual who is a participant or 
     beneficiary and who has a condition that requires ongoing 
     care from a specialist may receive a standing referral to 
     such specialist for treatment of such condition. If the plan, 
     or if the primary care provider in consultation with the 
     medical director of the plan and the specialist (if any), 
     determines that such a standing referral is appropriate, the 
     plan shall make such a referral to such a specialist if the 
     individual so desires.
       ``(2) Terms of referral.--The provisions of paragraphs (3) 
     through (5) of subsection (a) apply with respect to referrals 
     under paragraph (1) of this subsection in the same manner as 
     they apply to referrals under subsection (a)(1).

     ``SEC. 9904. ACCESS TO OBSTETRICAL AND GYNECOLOGICAL CARE.

       ``(a) In General.--If a group health plan requires or 
     provides for a participant or beneficiary to designate a 
     participating primary care health care professional, the 
     plan--
       ``(1) may not require authorization or a referral by the 
     individual's primary care health care professional or 
     otherwise for covered gynecological care (including 
     preventive women's health examinations) or for covered 
     pregnancy-related services provided by a participating 
     physician (including a family practice physician) who 
     specializes or is trained and experienced in gynecology or 
     obstetrics, respectively, to the extent such care is 
     otherwise covered; and
       ``(2) shall treat the ordering of other gynecological or 
     obstetrical care by such a participating physician as the 
     authorization of the primary care health care professional 
     with respect to such care under the plan.
       ``(b) Construction.--Nothing in subsection (a) shall be 
     construed to--
       ``(1) waive any exclusions of coverage under the terms of 
     the plan with respect to coverage of gynecological or 
     obstetrical care;
       ``(2) preclude the group health plan involved from 
     requiring that the gynecologist or obstetrician notify the 
     primary care health care professional or the plan of 
     treatment decisions; or
       ``(3) prevent a plan from offering, in addition to 
     physicians described in subsection (a)(1), non-physician 
     health care professionals who are trained and experienced in 
     gynecology or obstetrics.

     ``SEC. 9905. ACCESS TO PEDIATRIC CARE.

       ``(a) Pediatric Care.--If a group health plan requires or 
     provides for a participant or beneficiary to designate a 
     participating primary care provider for a child of such 
     individual, the plan shall permit the individual to designate 
     a physician (including a family practice physician) who 
     specializes or is trained and experienced in pediatrics as 
     the child's primary care provider.
       ``(b) Construction.--Nothing in subsection (a) shall be 
     construed to waive any exclusions of coverage under the terms 
     of the plan with respect to coverage of pediatric care.

     ``SEC. 9906. CONTINUITY OF CARE.

       ``(a) In General.--
       ``(1) Termination of provider.--If a contract between a 
     group health plan and a health care provider is terminated 
     (as defined in paragraph (3)(B)), or benefits or coverage 
     provided by a health care provider are

[[Page 24385]]

     terminated because of a change in the terms of provider 
     participation in a group health plan, and an individual who 
     is a participant or beneficiary in the plan is undergoing 
     treatment from the provider for an ongoing special condition 
     (as defined in paragraph (3)(A)) at the time of such 
     termination, the plan shall--
       ``(A) notify the individual on a timely basis of such 
     termination and of the right to elect continuation of 
     coverage of treatment by the provider under this section; and
       ``(B) subject to subsection (c), permit the individual to 
     elect to continue to be covered with respect to treatment by 
     the provider of such condition during a transitional period 
     (provided under subsection (b)).
       ``(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) Definitions.--For purposes of this section:
       ``(A) Ongoing special condition.--The term `ongoing special 
     condition' has the meaning given such term in section 
     9903(b)(3), and also includes pregnancy.
       ``(B) Termination.--The term `terminated' includes, with 
     respect to a contract, the expiration or nonrenewal of the 
     contract, but does not include a termination of the contract 
     by the plan for failure to meet applicable quality standards 
     or for fraud.
       ``(b) Transitional Period.--
       ``(1) In general.--Except as provided in paragraphs (2) 
     through (4), the transitional period under this subsection 
     shall extend up to 90 days (as determined by the treating 
     health care professional) after the date of the notice 
     described in subsection (a)(1)(A) of the provider's 
     termination.
       ``(2) Scheduled surgery and organ transplantation.--If 
     surgery or organ transplantation was scheduled for an 
     individual before the date of the announcement of the 
     termination of the provider status under subsection (a)(1)(A) 
     or if the individual on such date was on an established 
     waiting list or otherwise scheduled to have such surgery or 
     transplantation, the transitional period under this 
     subsection with respect to the surgery or transplantation 
     shall extend beyond the period under paragraph (1) and until 
     the date of discharge of the individual after completion of 
     the surgery or transplantation.
       ``(3) Pregnancy.--If--
       ``(A) a participant or beneficiary was determined to be 
     pregnant at the time of a provider's termination of 
     participation, and
       ``(B) the provider was treating the pregnancy before date 
     of the termination,

     the transitional period under this subsection with respect to 
     provider's treatment of the pregnancy shall extend through 
     the provision of post-partum care directly related to the 
     delivery.
       ``(4) Terminal illness.--If--
       ``(A) a participant or beneficiary was determined to be 
     terminally ill (as determined under section 1861(dd)(3)(A) of 
     the Social Security Act) at the time of a provider's 
     termination of participation, and
       ``(B) the provider was treating the terminal illness before 
     the date of termination,
     the transitional period under this subsection shall extend 
     for the remainder of the individual's life for care directly 
     related to the treatment of the terminal illness or its 
     medical manifestations.
       ``(c) Permissible Terms and Conditions.--A group health 
     plan may condition coverage of continued treatment by a 
     provider under subsection (a)(1)(B) upon the individual 
     notifying the plan of the election of continued coverage and 
     upon the provider agreeing to the following terms and 
     conditions:
       ``(1) The provider agrees to accept reimbursement from the 
     plan and individual involved (with respect to cost-sharing) 
     at the rates applicable prior to the start of the 
     transitional period as payment in full (or, in the case 
     described in subsection (a)(2), at the rates applicable under 
     the replacement plan after the date of the termination of the 
     contract with the health insurance issuer) and not to impose 
     cost-sharing with respect to the individual in an amount that 
     would exceed the cost-sharing that could have been imposed if 
     the contract referred to in subsection (a)(1) had not been 
     terminated.
       ``(2) The provider agrees to adhere to the quality 
     assurance standards of the plan responsible for payment under 
     paragraph (1) and to provide to such plan necessary medical 
     information related to the care provided.
       ``(3) The provider agrees otherwise to adhere to such 
     plan's policies and procedures, including procedures 
     regarding referrals and obtaining prior authorization and 
     providing services pursuant to a treatment plan (if any) 
     approved by the plan.
       ``(d) Construction.--Nothing in this section shall be 
     construed to require the coverage of benefits which would not 
     have been covered if the provider involved remained a 
     participating provider.

     ``SEC. 9907. NETWORK ADEQUACY.

       ``(a) Requirement.--A group health plan shall meet such 
     standards for network adequacy as are established by law 
     pursuant to this section.
       ``(b) Development of Standards.--
       ``(1) Establishment of panel.--There is established a panel 
     to be known as the Health Care Panel to Establish Network 
     Adequacy Standards (in this section referred to as the 
     `Panel').
       ``(2) Duties of panel.--The Panel shall devise standards 
     for group health plans and to ensure that--
       ``(A) participants and beneficiaries have access to a 
     sufficient number, mix, and distribution of health care 
     professionals and providers; and
       ``(B) covered items and services are available and 
     accessible to each participant and beneficiary--
       ``(i) in the service area of the plan;
       ``(ii) at a variety of sites of service;
       ``(iii) with reasonable promptness (including reasonable 
     hours of operation and after hours services);
       ``(iv) with reasonable proximity to the residences or 
     workplaces of participants and beneficiaries; and
       ``(v) in a manner that takes into account the diverse needs 
     of such individuals and reasonably assures continuity of 
     care.
       ``(c) Membership.--
       ``(1) Size and composition.--The Panel shall be composed of 
     15 members. The Secretary of Health and Human Services, the 
     Majority Leader of the Senate, and the Speaker of House of 
     Representatives shall each appoint 1 member from 
     representatives of private insurance organizations, consumer 
     groups, State insurance commissioners, State medical 
     societies, and State medical specialty societies.
       ``(2) Terms of appointment.--The members of the Panel shall 
     serve for the life of the Panel.
       ``(3) Vacancies.--A vacancy in the Panel shall not affect 
     the power of the remaining members to execute the duties of 
     the Panel, but any such vacancy shall be filled in the same 
     manner in which the original appointment was made.
       ``(d) Procedures.--
       ``(1) Meetings.--The Panel shall meet at the call of a 
     majority of its members.
       ``(2) First meeting.--The Panel shall convene not later 
     than 60 days after the date of the enactment of the Health 
     Care Quality and Choice Act of 1999.
       ``(3) Quorum.--A quorum shall consist of a majority of the 
     members of the Panel.
       ``(4) Hearings.--For the purpose of carrying out its 
     duties, the Panel may hold such hearings and undertake such 
     other activities as the Panel determines to be necessary to 
     carry out its duties.
       ``(e) Administration.--
       ``(1) Compensation.--Except as provided in paragraph (1), 
     members of the Panel shall receive no additional pay, 
     allowances, or benefits by reason of their service on the 
     Panel.
       ``(2) Travel expenses and per diem.--Each member of the 
     Panel who is not an officer or employee of the Federal 
     Government shall receive travel expenses and per diem in lieu 
     of subsistence in accordance with sections 5702 and 5703 of 
     title 5, United States Code.
       ``(3) Contract authority.--The Panel may contract with and 
     compensate government and private agencies or persons for 
     items and services, without regard to section 3709 of the 
     Revised Statutes (41 U.S.C. 5).
       ``(4) Use of mails.--The Panel may use the United States 
     mails in the same manner and under the same conditions as 
     Federal agencies and shall, for purposes of the frank, be 
     considered a commission of Congress as described in section 
     3215 of title 39, United States Code.
       ``(5) Administrative support services.--Upon the request of 
     the Panel, the Secretary of Health and Human Services shall 
     provide to the Panel on a reimbursable basis such 
     administrative support services as the Panel may request.
       ``(f) Report and Establishment of Standards.--Not later 
     than 2 years after the first meeting, the Panel shall submit 
     a report to Congress and the Secretary of Health and Human 
     Services detailing the standards devised under subsection (b) 
     and recommendations regarding the implementation of such 
     standards. Such standards shall take effect to the extent 
     provided by Federal law enacted after the date of the 
     submission of such report.
       ``(g) Termination.--The Panel shall terminate on the day 
     after submitting its report to the Secretary of Health and 
     Human Services under subsection (f).

     ``SEC. 9908. ACCESS TO EXPERIMENTAL OR INVESTIGATIONAL 
                   PRESCRIPTION DRUGS.

       ``No use of a prescription drug or medical device shall be 
     considered experimental or investigational under a group 
     health plan if such use is included in the labeling 
     authorized by the U.S. Food and Drug Administration under 
     section 505, 513 or 515 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 355) or under section 351 of the 
     Public Health Service Act (42 U.S.C. 262), unless such use is 
     demonstrated to be unsafe or ineffective.

[[Page 24386]]



     ``SEC. 9909. COVERAGE FOR INDIVIDUALS PARTICIPATING IN 
                   APPROVED CANCER CLINICAL TRIALS.

       ``(a) Coverage.--
       ``(1) In general.--If a group health plan provides coverage 
     to a qualified individual (as defined in subsection (b)), the 
     plan--
       ``(A) may not deny the individual participation in the 
     clinical trial referred to in subsection (b)(2);
       ``(B) subject to subsections (b), (c), and (d), 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 individual'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 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 and who meets the following conditions:
       ``(1)(A) The individual has been diagnosed with cancer.
       ``(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 individual 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 
     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 to be paid 
     for by the sponsors of an approved clinical trial.
       ``(2) Routine patient care costs.--For purposes of this 
     section--
       ``(A) In general.--The term `routine patient care costs' 
     includes the costs associated with the provision of items and 
     services that--
       ``(i) would otherwise be covered under the group health 
     plan if such items and services were not provided in 
     connection with an approved clinical trial program; and
       ``(ii) are furnished according to the protocol of an 
     approved clinical trial program.
       ``(B) Exclusion.--Such term does include the costs 
     associated with the provision of--
       ``(i) an investigational drug or device, unless the 
     Secretary has authorized the manufacturer of such drug or 
     device to charge for such drug or device; or
       ``(ii) any item or service supplied without charge by the 
     sponsor of the approved clinical trial program.
       ``(3) 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 would normally pay for comparable 
     items or services under subparagraph (A).
       ``(d) Approved Clinical Trial Defined.--In this section, 
     the term `approved clinical trial' means a cancer clinical 
     research study or cancer clinical investigation approved by 
     an Institutional Review Board.
       ``(e) Construction.--Nothing in this section shall be 
     construed to limit a plan's coverage with respect to clinical 
     trials.
       ``(f) Plan Satisfaction of Certain Requirements; 
     Responsibilities of Fiduciaries.--
       ``(1) In general.--For purposes of this section, 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 requirements of this 
     section 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.
       ``(2) Construction.--Nothing in this section shall be 
     construed to affect or modify the responsibilities of the 
     fiduciaries of a group health plan under part 4 of subtitle B 
     of the Employee Retirement Income Security Act of 1974.

                 ``Subchapter B--Access to Information

``Sec. 9911. Patient access to information.

     ``SEC. 9911. PATIENT ACCESS TO INFORMATION.

       ``(a) Disclosure Requirement.--A group health plan shall--
       ``(1) provide to participants and beneficiaries at the time 
     of initial coverage under the plan (or the effective date of 
     this section, in the case of individuals who are participants 
     or beneficiaries as of such date), and at least annually 
     thereafter, the information described in subsection (b);
       ``(2) provide to participants and beneficiaries, within a 
     reasonable period (as specified by the Secretary) before or 
     after the date of significant changes in the information 
     described in subsection (b), information on such significant 
     changes; and
       ``(3) upon request, make available to participants and 
     beneficiaries, the Secretary, and prospective participants 
     and beneficiaries, the information described in subsection 
     (b) or (c).

     The plan may charge a reasonable fee for provision in printed 
     form of any of the information described in subsection (b) or 
     (c) more than once during any plan year.
       ``(b) Information Provided.--The information described in 
     this subsection with respect to a group health plan shall be 
     provided to a participant or beneficiary free of charge at 
     least once a year and includes the following:
       ``(1) Service area.--The service area of the plan.
       ``(2) Benefits.--Benefits offered under the plan, 
     including--
       ``(A) those that are covered benefits ``(all of which shall 
     be referred to by such relevant CPT and DRG codes as are 
     available), limits and conditions on such benefits, and those 
     benefits that are explicitly excluded from coverage (all of 
     which shall be referred to by such relevant CPT and DRG codes 
     as are available);
       ``(B) cost sharing, such as deductibles, coinsurance, and 
     copayment amounts, including any liability for balance 
     billing, any maximum limitations on out of pocket expenses, 
     and the maximum out of pocket costs for services that are 
     provided by nonparticipating providers or that are furnished 
     without meeting the applicable utilization review 
     requirements;
       ``(C) the extent to which benefits may be obtained from 
     nonparticipating providers;
       ``(D) the extent to which a participant or beneficiary may 
     select from among participating providers and the types of 
     providers participating in the plan network;
       ``(E) process for determining experimental coverage; and
       ``(F) use of a prescription drug formulary.
       ``(3) Access.--A description of the following:
       ``(A) The number, mix, and distribution of providers under 
     the plan.
       ``(B) Out-of-network coverage (if any) provided by the 
     plan.
       ``(C) Any point-of-service option (including any 
     supplemental premium or cost-sharing for such option).
       ``(D) The procedures for participants and beneficiaries to 
     select, access, and change participating primary and 
     specialty providers.
       ``(E) The rights and procedures for obtaining referrals 
     (including standing referrals) to participating and 
     nonparticipating providers.
       ``(F) The name, address, and telephone number of 
     participating health care providers and an indication of 
     whether each such provider is available to accept new 
     patients.
       ``(G) Any limitations imposed on the selection of 
     qualifying participating health care providers, including any 
     limitations imposed under section 9901(b)(2).
       ``(4) Out-of-area coverage.--Out-of-area coverage provided 
     by the plan.
       ``(5) Emergency coverage.--Coverage of emergency services, 
     including--
       ``(A) the appropriate use of emergency services, including 
     use of the 911 telephone system or its local equivalent in 
     emergency situations and an explanation of what constitutes 
     an emergency situation;
       ``(B) the process and procedures of the plan for obtaining 
     emergency services; and
       ``(C) the locations of (i) emergency departments, and (ii) 
     other settings, in which plan physicians and hospitals 
     provide emergency services and post-stabilization care.
       ``(6) Prior authorization rules.--Rules regarding prior 
     authorization or other review requirements that could result 
     in noncoverage or nonpayment.
       ``(7) Grievance and appeals procedures.--All appeal or 
     grievance rights and procedures under the plan, including the 
     method for filing grievances and the time frames and 
     circumstances for acting on grievances and appeals.
       ``(8) Accountability.--A description of the legal recourse 
     options available for participants and beneficiaries under 
     the plan including--
       ``(A) the preemption that applies under section 514 of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1144) to certain actions arising out of the provision of 
     health benefits; and
       ``(B) the extent to which coverage decisions made by the 
     plan are subject to internal review or any external review 
     and the proper time frames under

[[Page 24387]]

       ``(9) Quality assurance.--Any information made public by an 
     accrediting organization in the process of accreditation of 
     the plan or any additional quality indicators the plan makes 
     available.
       ``(10) Information on treatment authorization.--Notice of 
     appropriate mailing addresses and telephone numbers to be 
     used by participants and beneficiaries in seeking information 
     or authorization for treatment.
       ``(11) Availability of information on request.--Notice that 
     the information described in subsection (c) is available upon 
     request.
       ``(c) Information Made Available Upon Request.--The 
     information described in this subsection is the following:
       ``(1) Utilization review activities.--A description of 
     procedures used and requirements (including circumstances, 
     time frames, and appeal rights) under any utilization review 
     program maintained by the plan.
       ``(2) Grievance and appeals information.--Information on 
     the number of grievances and appeals and on the disposition 
     in the aggregate of such matters.
       ``(3) Formulary restrictions.--A description of the nature 
     of any drug formula restrictions.
       ``(4) Participating provider list.--A list of current 
     participating health care providers.
       ``(d) Construction.--Nothing in this section shall be 
     construed as requiring public disclosure of individual 
     contracts or financial arrangements between a group health 
     plan or health insurance issuer and any provider.

       ``Subchapter C--Protecting the Doctor-Patient Relationship

``Sec. 9921. Prohibition of interference with certain medical 
              communications.
``Sec. 9922. Prohibition of discrimination against providers based on 
              licensure.
``Sec. 9923. Prohibition against improper incentive arrangements.
``Sec. 9924. Payment of clean claims.

     ``SEC. 9921. 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 (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 or beneficiary 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, 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. 9922. PROHIBITION OF DISCRIMINATION AGAINST PROVIDERS 
                   BASED ON LICENSURE.

       ``(a) In General.--A group health plan 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 
     of particular benefits or services or to prohibit a plan from 
     including providers only to the extent necessary to meet the 
     needs of the plan's participants or beneficiaries or from 
     establishing any measure designed to maintain quality and 
     control costs consistent with the responsibilities of the 
     plan;
       ``(2) to override any State licensure or scope-of-practice 
     law;
       ``(3) as requiring a plan that offers network coverage to 
     include for participation every willing provider who meets 
     the terms and conditions of the plan; or
       ``(4) as prohibiting a family practice physician with 
     appropriate expertise from providing pediatric or obstetrical 
     or gynecological care.

     ``SEC. 9923. PROHIBITION AGAINST IMPROPER INCENTIVE 
                   ARRANGEMENTS.

       ``(a) In General.--A group health plan may not operate any 
     physician incentive plan (as defined in subparagraph (B) of 
     section 1876(i)(8) of the Social Security Act) unless the 
     requirements described in 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 1876(i)(8) of the Social 
     Security Act to the Secretary, an eligible organization, or 
     an individual enrolled with the organization shall be treated 
     as a reference to the Secretary of the Treasury, a group 
     health plan, and a participant or beneficiary with the plan, 
     respectively.
       ``(c) Construction.--Nothing in this section shall be 
     construed as prohibiting all capitation and similar 
     arrangements or all provider discount arrangements.

     ``SEC. 9924. PAYMENT OF CLEAN CLAIMS.

       ``A group health plan shall provide for prompt payment of 
     claims submitted for health care services or supplies 
     furnished to a participant or beneficiary with respect to 
     benefits covered by the plan, in a manner consistent with the 
     provisions of sections 1816(c)(2) and 1842(c)(2) of the 
     Social Security Act (42 U.S.C. 1395h(c)(2) and 42 U.S.C. 
     1395u(c)(2)), except that for purposes of this section, 
     subparagraph (C) of section 1816(c)(2) of the Social Security 
     Act shall be treated as applying to claims received from a 
     participant or beneficiary as well as claims referred to in 
     such subparagraph.

                      ``Subchapter D--Definitions

``Sec. 9931. Definitions.
``Sec. 9933. Exclusions.
``Sec. 9933. Coverage of limited scope plans.
``Sec. 9934. Regulations; coordination; application under different 
              laws.

     ``SEC. 9931. DEFINITIONS.

       For purposes of this chapter--
       ``(a) Incorporation of General Definitions.--Except as 
     otherwise provided, the provisions of section 9831 shall 
     apply for purposes of this chapter in the same manner as they 
     apply for purposes of chapter 100.
       ``(b) Additional Definitions.--For purposes of this 
     chapter:
       ``(1) Clinical peer.--The term `clinical peer' means, with 
     respect to a review or appeal, a practicing physician or 
     other health care professional who holds a nonrestricted 
     license and who is--
       ``(A) appropriately certified by a nationally recognized, 
     peer reviewed accrediting body in the same or similar 
     specialty as typically manages the medical condition, 
     procedure, or treatment under review or appeal, or
       ``(B) is trained and experienced in managing such 
     condition, procedure, or treatment,
     and includes a pediatric specialist where appropriate; except 
     that only a physician may be a clinical peer with respect to 
     the review or appeal of treatment recommended or rendered by 
     a physician.
       ``(2) 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.
       ``(3) 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.
       ``(4) Network.--The term `network' means, with respect to a 
     group health plan, the participating health care 
     professionals and providers through whom the plan provides 
     health care items and services to participants or 
     beneficiaries.
       ``(5) Nonparticipating.--The term `nonparticipating' means, 
     with respect to a health care provider that provides health 
     care items and services to a participant or beneficiary under 
     group health plan, a health care provider that is not a 
     participating health care provider with respect to such items 
     and services.
       ``(6) Participating.--The term `participating' means, with 
     respect to a health care provider that provides health care 
     items and services to a participant or beneficiary under 
     group health plan, a health care provider that furnishes such 
     items and services under a contract or other arrangement with 
     the plan.
       ``(7) Physician.--The term `physician' means an allopathic 
     or osteopathic physician.
       ``(8) Practicing physician.--The term `practicing 
     physician' means a physician who is licensed in the State in 
     which the physician furnishes professional services and who 
     provides professional services to individual patients on 
     average at least two full days per week.
       ``(9) Prior authorization.--The term `prior authorization' 
     means the process of obtaining prior approval from a group 
     health plan for the provision or coverage of medical 
     services.

     ``SEC. 9932. EXCLUSIONS.

       ``(a) No Benefit Requirements.--Nothing in this chapter 
     shall be construed to require a group health plan to provide 
     specific benefits under the terms of such plan, other than 
     those provided under the terms of such plan.
       ``(b) Exclusion for Fee-for-Service Coverage.--
       ``(1) Group health plans.--The provisions of sections 9901 
     through 9911 shall not apply to a group health plan if the 
     only coverage offered under the plan 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 that--
       ``(A) reimburses hospitals, health professionals, and other 
     providers on a fee-for-service basis without placing the 
     provider at financial risk;

[[Page 24388]]

       ``(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 agree to 
     accept the terms and conditions of payment established under 
     the plan; and
       ``(D) for which the plan does not require prior 
     authorization before providing for any health care services.

     ``SEC. 9933. COVERAGE OF LIMITED SCOPE PLANS.

       ``Only for purposes of applying the requirements of this 
     chapter under section 9813, section 9832(c)(2)(A) shall be 
     deemed not to apply.

     ``SEC. 9934. REGULATIONS.

       ``The Secretary of the Treasury shall issue such 
     regulations as may be necessary or appropriate to carry out 
     this chapter under section 9813. The Secretary may promulgate 
     such regulations in the form of interim final rules as may be 
     necessary to carry out this chapter in a timely manner.''.
       (b) Clerical Amendment.--The table of chapters for subtitle 
     K of the Internal Revenue Code of 1986 is amended by adding 
     at the end the following new item:
``Chapter 101. Improving managed care.''

       TITLE IV--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

     SEC. 401. EFFECTIVE DATES.

       (a) Group Health Coverage.--
       (1) In general.--Subject to paragraph (2), the amendments 
     made by title I (other than section 102), sections 201 and 
     202, and title III shall apply with respect to group health 
     plans, and health insurance coverage offered in connection 
     with group health plans, for plan years beginning on or after 
     January 1, 2000 (in this section referred to as the ``general 
     effective date'') and also shall apply to portions of plan 
     years occurring on and after such date.
       (2) Treatment of collective bargaining agreements.--In the 
     case of a group health plan maintained pursuant to 1 or more 
     collective bargaining agreements between employee 
     representatives and 1 or more employers ratified before the 
     date of enactment of this Act, the amendments made by title I 
     (other than section 102), sections 201 and 202, and title III 
     shall not apply to plan years beginning before the later of--
       (A) the date on which the last collective bargaining 
     agreements relating to the plan terminates (determined 
     without regard to any extension thereof agreed to after the 
     date of enactment of this Act), or
       (B) the general effective date.
     For purposes of subparagraph (A), any plan amendment made 
     pursuant to a collective bargaining agreement relating to the 
     plan which amends the plan solely to conform to any 
     requirement added by this Act shall not be treated as a 
     termination of such collective bargaining agreement.
       (b) Individual Health Insurance Coverage.--The amendments 
     made by section 102 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.

     SEC. 402. COORDINATION IN IMPLEMENTATION.

       The Secretary of Labor, the Secretary of Health and Human 
     Services, and the Secretary of the Treasury 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 both 
     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.

                       TITLE V--OTHER PROVISIONS

                 Subtitle A--Protection of Information

     SEC. 501. PROTECTION FOR CERTAIN INFORMATION.

       (a) Protection of Certain Information.--Notwithstanding any 
     other provision of Federal or State law, health care response 
     information shall be exempt from any disclosure requirement 
     (regardless of whether the requirement relates to subpoenas, 
     discover, introduction of evidence, testimony, or any other 
     form of disclosure), in connection with a civil or 
     administrative proceeding under Federal or State law, to the 
     same extent as information developed by a health care 
     provider with respect to any of the following:
       (1) Peer review.
       (2) Utilization review.
       (3) Quality management or improvement.
       (4) Quality control.
       (5) Risk management.
       (6) Internal review for purposes of reducing mortality, 
     morbidity, or for improving patient care or safety.
       (b) No Waiver of Protection Through Interaction With 
     Accrediting Body.--Notwithstanding any other provision of 
     Federal or State law, the protection of health care response 
     information from disclosure provided under subsection (a) 
     shall not be deemed to be modified or in any way waived by--
       (1) the development of such information in connection with 
     a request or requirement of an accrediting body; or
       (2) the transfer of such information to an accrediting 
     body.
       (c) Definitions.--For purposes of this section:
       (1) Accrediting body.--The term ``accrediting body'' means 
     a national, not-for-profit organization that--
       (A) accredits health care providers; and
       (B) is recognized as an accrediting body by statute or by a 
     Federal or State agency that regulates health care providers.
       (2) Health care response information.--The term ``health 
     care response information'' means information (including any 
     data, report, record, memorandum, analysis, statement, or 
     other communication) developed by, or on behalf of, a health 
     care provider in response to a serious, adverse, patient 
     related event--
       (A) during the course of analyzing or studying the event 
     and its causes; and
       (B) for the purposes of--
       (i) reducing mortality or morbidity; or
       (ii) improving patient care or safety (including the 
     provider's notification to an accrediting body and the 
     provider's plans of action in response to such event).
       (3) Health care provider.--The term ``health care 
     provider'' means a person, who with respect to a specific 
     item of protected health information, receives, creates, 
     uses, maintains, or discloses the information while acting in 
     whole or in part in the capacity of--
       (A) a person who is licensed, certified, registered, or 
     otherwise authorized by Federal or State law to provide an 
     item or service that constitutes health care in the ordinary 
     course of business, or practice of a profession;
       (B) a Federal, State, or employer-sponsored or any other 
     privately-sponsored program that directly provides items or 
     services that constitute health care to beneficiaries; or
       (C) an officer or employee of a person described in 
     subparagraph (A) or (B).
       (4) State.--The term ``State'' includes a State, the 
     District of Columbia, the Northern Mariana Islands, any 
     political subdivisions of a State or such Islands, or any 
     agency or instrumentality of either.
       (d) Effective Date.--The provisions of this section are 
     effective on the date of the enactment of this Act.

                       Subtitle B--Other Matters

     SEC. 511. HEALTH CARE PAPERWORK SIMPLIFICATION.

       (a) Establishment of Panel.--
       (1) Establishment.--There is established a panel to be 
     known as the Health Care Panel to Devise a Uniform 
     Explanation of Benefits (in this section referred to as the 
     ``Panel'').
       (2) Duties of Panel.--
       (A) In general.--The Panel shall devise a single form for 
     use by third-party health care payers for the remittance of 
     claims to providers.
       (B) Definition.--For purposes of this section, the term 
     ``third-party health care payer'' means any entity that 
     contractually pays health care bills for an individual.
       (3) Membership.--
       (A) Size and composition.--The Secretary of Health and 
     Human Services, in consultation with the Majority Leader of 
     the Senate and the Speaker of the House of Representatives, 
     shall determine the number of members and the composition of 
     the Panel. Such Panel shall include equal numbers of 
     representatives of private insurance organizations, consumer 
     groups, State insurance

[[Page 24389]]

     commissioners, State medical societies, State hospital 
     associations, and State medical specialty societies.
       (B) Terms of appointment.--The members of the Panel shall 
     serve for the life of the Panel.
       (C) Vacancies.--A vacancy in the Panel shall not affect the 
     power of the remaining members to execute the duties of the 
     Panel, but any such vacancy shall be filled in the same 
     manner in which the original appointment was made.
       (4) Procedures.--
       (A) Meetings.--The Panel shall meet at the call of a 
     majority of its members.
       (B) First meeting.--The Panel shall convene not later than 
     60 days after the date of the enactment of the Health Care 
     Quality and Choice Act of 1999.
       (C) Quorum.--A quorum shall consist of a majority of the 
     members of the Panel.
       (D) Hearings.--For the purpose of carrying out its duties, 
     the Panel may hold such hearings and undertake such other 
     activities as the Panel determines to be necessary to carry 
     out its duties.
       (5) Administration.--
       (A) Compensation.--Except as provided in subparagraph (B), 
     members of the Panel shall receive no additional pay, 
     allowances, or benefits by reason of their service on the 
     Panel.
       (B) Travel expenses and per diem.--Each member of the Panel 
     who is not an officer or employee of the Federal Government 
     shall receive travel expenses and per diem in lieu of 
     subsistence in accordance with sections 5702 and 5703 of 
     title 5, United States Code.
       (C) Contract authority.--The Panel may contract with and 
     compensate government and private agencies or persons for 
     items and services, without regard to section 3709 of the 
     Revised Statutes (41 U.S.C. 5).
       (D) Use of mails.--The Panel may use the United States 
     mails in the same manner and under the same conditions as 
     Federal agencies and shall, for purposes of the frank, be 
     considered a commission of Congress as described in section 
     3215 of title 39, United States Code.
       (E) Administrative support services.--Upon the request of 
     the Panel, the Secretary of Health and Human Services shall 
     provide to the Panel on a reimbursable basis such 
     administrative support services as the Panel may request.
       (6) Submission of form.--Not later than 2 years after the 
     first meeting, the Panel shall submit a form to the Secretary 
     of Health and Human Services for use by third-party health 
     care payers.
       (7) Termination.--The Panel shall terminate on the day 
     after submitting its the form under paragraph (6).
       (b) Requirement for Use of Form by Third-Party Care 
     Payers.--A third-party health care payer shall be required to 
     use the form devised under subsection (a) for plan years 
     beginning on or after 5 years following the date of the 
     enactment of this Act.

  The CHAIRMAN. Pursuant to House Resolution 323, the gentleman from 
Florida (Mr. Goss) and the gentleman from Michigan (Mr. Dingell) will 
each control 30 minutes.
  The Chair recognizes the gentleman from Florida (Mr. Goss).
  Mr. GOSS. Mr. Chairman, I yield myself 1\1/2\ minutes.
  Mr. Chairman, I am honored to offer this substitute along with the 
gentleman from Arizona (Mr. Shadegg), the gentleman from Oklahoma (Mr. 
Coburn), the gentleman from California (Mr. Thomas), the gentleman from 
Pennsylvania (Mr. Greenwood), the gentlewoman from Connecticut (Mrs. 
Johnson), the gentleman from Kentucky (Mr. Fletcher), and a host of 
other Members.
  A few months ago the Speaker asked me to bring all of the voices and 
viewpoints on this issue together and craft a consensus bill that was 
sound public policy and not just another sound bite. It is clear that 
the Norwood-Dingell approach, while crafted with good intention, falls 
far short of sound public policy because it invites an avalanche of 
lawsuits and unlimited, uncontrollable damages. This is unacceptably 
costly, disruptive, and hardly good medicine for anyone, except maybe 
the trial bar.
  Where Norwood is excessive, our substitute firmly stands on 
responsible middle ground. We hold all health plans accountable. I 
repeat, we hold all health plans accountable. Patients who have been 
harmed can sue and recover damages. Instead of guaranteeing lawsuits at 
the front end, we encourage patients to get the health care they need 
first.
  Some have commented about special interest endorsements in this 
process, about the various proposals before us today. I am told that 
over 100 patient and provider groups have endorsed our substitute 
amendment, but no, repeat, no trial lawyer groups or insurance 
associations have. I therefore suggest we have struck the right 
balance, and urge Members' support accordingly.
  Mr. DINGELL. Mr. Chairman, I yield myself 1\1/2\ minutes.
  Mr. Chairman, the advocates of the substitute here, for whom I have 
enormous respect and affection, are going to talk about only one thing 
this morning, trial lawyers. Let us talk about the other things that 
are important, because other issues are being ignored by them.
  Our bill, the Norwood-Dingell-Ganske bill, guarantees that your 
health plan will give you the prescription medicines you need. Theirs 
does not.
  Our bill guarantees that you will be able to get into an approved 
clinical trial if you are threatened with serious diseases such as 
multiple sclerosis, Alzheimer's or Parkinson's. Theirs does not.
  Our bill guarantees that the doctor can be an advocate for a patient, 
through internal and external appeal of a plan's decision, without any 
fear of being terminated by the HMO. Their doctor has no such 
assurance.
  Their bill allows the HMO to punish your doctor. Our bill guarantees 
that you will be told when your insurance company offers rewards to 
health care providers for not providing you with a specialist or giving 
you cheaper but less effective treatment.
  Their bill allows HMOs to keep you in the dark. Our bill allows none 
of these things.
  These are not the only real differences between the substitutes. 
Others will be addressed in further detail by different participants in 
the debate.
  In the end, the bill offered by my good friends, the gentleman from 
Oklahoma (Mr. Coburn) and the gentleman from Arizona (Mr. Shadegg), for 
whom again I repeat I have great respect and affection, is no 
substitute whatsoever for real managed care reform.
  Give managed care reform that protects the patient, that protects the 
doctor, that sees to it that medical necessity is dealt with by the 
doctor, and that the rights of the patient are assured.
  Mr. GOSS. Mr. Chairman, I am pleased to yield 5 minutes to the 
distinguished gentleman from Arizona (Mr. Shadegg), a principal author 
of this substitute.
  Mr. SHADEGG. Mr. Chairman, I am passionate about this issue. For the 
last 2 years, I have done almost nothing else. I believe this is a 
momentous debate. But I am greatly offended by what is going on on the 
floor. The truth is that there are two extreme positions here, and 
there is a lot of misrepresentation going on.
  Some of the most serious misrepresentation that is going on is the 
allegation that Republicans do not care about patients and that the 
Coburn-Shadegg bill will not protect them. I am enraged by that 
comment.
  There is not a Member of this House, not one, Republican or Democrat, 
man or woman, not the gentleman from Georgia (Mr. Norwood), not the 
gentleman from Iowa (Mr. Ganske), not the gentleman from Michigan (Mr. 
Dingell), who is more passionate that HMOs must be held liable when 
they kill or maim someone. No one. No one beats me on that issue.
  I have written a series of ``dear colleagues,'' which you all should 
have read, and given them to the press, and it says, point blank, ERISA 
abuses people. Courts cry out for reform. It is quote after quote after 
quote from Federal judges describing that absolute immunity is wrong. 
And from my conservative friends I have been beaten up because I am not 
sufficiently pro-business.
  But let me say that the gentleman from Georgia (Mr. Norwood), whom I 
love and respect, is wrong, because the gentleman from Georgia (Mr. 
Norwood) said the only bill that can become law is a bipartisan bill, 
and he would be right if yours were a bipartisan bill. But it is not a 
bipartisan bill, because just as immunity is extreme and wrong and bad 
public policy, so is outright, absolute, total liability.
  The sad truth is that in the gentleman's to change the law, and in 
his decision to throw in with the other side, including the President, 
this issue became political, and not about patients. It needs to be 
about patients.

[[Page 24390]]

  The reality is no bill we pass here on the floor can, in fact, become 
law if it is so extreme that it results in employers being sued; and 
the gentleman's provision to protect employers fails.
  Now, I know that the gentleman from Georgia intended to write it to 
protect employers, but it does not do that. If they use simple 
discretionary authority, they can be sued.
  I also know that the gentleman did not want and may not have intended 
to throw the door open to wide open liability so that one can sue 
anyone, anywhere, any time, for everything. But that is the way the 
bill is written. The gentleman's bill will result in handing the entire 
process over to the trial lawyers. That will never become law.
  What we need is a middle ground which holds plans accountable, says 
you can no longer kill and maim people the way United Health Care did 
in United Health Care versus Corcoran, killing Mrs. Corcoran's baby. 
But we also need a law that says we are not going to turn the entire 
system over to the tort lawyers and let the tort lawyers get rich and 
buy Cadillacs and Lexuses and other cars out of the winnings of this 
system, driving people away from health care.
  If American businesses walk away from insuring America's workers, we 
have not helped the system. We need a reasonable middle ground. We do 
not need one extreme immunity or another extreme turning the system 
over to the trial lawyers.
  Now, I know you are well intended, but the sad truth, contrary to the 
description of the gentleman from Michigan (Mr. Dingell), is that your 
bill goes too far. It can never be law.
  I want a law that protects American people, that gives them health 
care. Employees working for American businesses need health care, and 
giving the system to the trial lawyers will not do that, any more than 
giving the system to the greed of the trial lawyers. Greed by insurance 
company fails. Greed by trial lawyers fails.
  We need a middle ground system. We need desperately to pass a bill 
that strikes a fair balance, that says no, you do not get immunity, you 
cannot injure and kill people and, no, we are not going to give the 
whole system over to the trial lawyers. We are going to require people 
to take reasonable steps, and we are not going to let the trial lawyers 
ring the bell and get multimillion dollar judgments and have that come 
out of all of our pockets and have it drive Americans away from health 
care. Tick through your liability provision; tick through your employer 
protections. You may have intended them to work, but they do not.
  In this debate it has been said that the truth has been lost. It is 
alleged that we have preempted State law. There is no one in this 
Congress that is more States rights than John Shadegg. We have not 
preempted State law. We have specifically said that Texas, Georgia, 
Louisiana, and any other State which passes a law to protect its 
patients may do so, and that law remains in effect.
  I implore you to pass the Coburn-Shadegg substitute.
  Mr. DINGELL. Mr. Chairman, I am happy to yield 4 minutes to the 
gentleman from Georgia (Mr. Norwood), my friend that I have come to 
respect and admire greatly.
  Mr. NORWOOD. Mr. Chairman, I thank the gentleman for yielding me 
time.
  Mr. Chairman, let me start by saying I agree with the gentleman from 
Arizona (Mr. Shadegg), my good friend, that he really does, I believe, 
sincerely want to try to protect patients; and he really does think 
that he is in the middle.

                              {time}  1300

  We dealt earlier with one bill that absolutely does not at all, and 
we are dealing with their bill that does not, in some respects either, 
and my view is that we are in the middle.
  I have listened to all of my colleagues make the argument that they 
protect businesses and that we do not. I have listened to my colleagues 
take on the use of the term discretionary authority and how by using 
direct participation, my colleague's bill protects employers so much 
better. But when we look at the terms very closely, we see, really, 
that there are not really any differences.
  We protect an employer from liability for their choice of plan and 
any benefits they put in their plan. They protect an employer from 
liability for their choice of plan and any benefits they put in their 
plan. Notice, the same thing. We protect an employer who provides an 
extra contractual benefit that is not in a plan. My colleagues protect 
an employer who provides an extra contractual benefit that is not in 
the plan. Notice we are saying the same things. We protect an employer 
who does not intervene in a review. My colleagues protect an employer 
who does not intervene in a review. Notice, I am repeating myself. But 
my colleagues want to go further. My colleagues want to protect an 
employer who advocates for a patient.
  Now, I would not disagree, and I would argue that our bill does not 
make an employer liable who advocates for a patient, unless by 
advocating my colleagues mean an employer can get in and settle a 
dispute by making a medical decision about what coverage is 
appropriate, what coverage is medically needed. If that is what my 
colleagues mean by advocate, then I am not going to support that. But 
the bottom line is our efforts to protect employers really say the same 
thing.
  Our bill does not authorize any cause of action against an employer, 
plan sponsor, or employee. That will be the new Federal law that goes 
into ERISA. In our bill, there is no right of recovery by a person 
against an employer, plan sponsor, or employee for damages.
  Now, we go on further to say, there is one exception. In our bill we 
simply say, one can be liable for a cause of action against an 
employer, plan sponsor or employee if, if, any of the above exercise 
their discretionary authority to make a decision on a claim that is a 
benefit in the plan covered by the plan, and that decision results in 
personal injury or wrongful death.
  I do not know how to say that any clearer. Discretionary authority 
simply means that the employer has the power to make a decision. One 
can make a decision in our bill to give an employee a benefit that 
maybe is not in the plan. The new Federal law will say, one is not 
liable if one wishes to do that. It is clear as a bell. Look on page 
99.
  We further protect employers by allowing the employer to put in what 
they want in the plan and what they do not want in the plan. If they 
want to exclude hospitalization, that is not my business. They can 
exclude hospitalization in the plan that they buy. The new Federal law 
will make certain that they are not liable because they did that.
  One is not liable in our bill for not being involved in external 
review. My word, it is so very narrow. It simply says if the CEO, and 
it is much like the Thomas bill in the protections that it gives. We 
simply say, if the CEO really wants to get in there and make a medical 
necessity decision that takes away a benefit that is a benefit in the 
claim and the patient dies, one needs to be liable.
  Mr. GOSS. Mr. Chairman, I yield 2 minutes to the distinguished 
gentleman from the Commonwealth of Pennsylvania (Mr. Greenwood), a 
principal author also.
  Mr. GREENWOOD. Mr. Chairman, I thank the gentleman for yielding me 
this time.
  Last weekend I went to the Doylestown Township Octoberfest, and I was 
talking to some of my constituents, and a gentleman came up to me and 
he said, tell me that it is not true that you guys in Washington are 
getting ready to pass a bill that would allow me to get sued because I 
provide insurance coverage to my employees; and I said well, we are 
going to have that debate, and I am going to go down there and try to 
protect you from that consequence.
  I am not a lawyer, and I have listened to the debate go back and 
forth between the lawyers and nonlawyers and doctors and so forth. But 
here is what common sense tells me. Common sense tells me that under 
the Norwood-

[[Page 24391]]

Dingell bill, employers will get dragged into court. Now, not in all 
cases will they be found liable, but they will get dragged into court, 
because someone will make an allegation that they were harmed; someone 
will make an allegation that the employer exercised discretionary 
authority, and there is the employer, the small employer, sitting in a 
courtroom. And the first time we drag an employer into a courtroom is 
the last time that employer is going to provide health care coverage 
for his employees, because it is not worth it. He does not want to get 
dragged into a courtroom for trying to provide a benefit for his 
employees.
  This is obviously a balancing act. It has been said over and over 
again, but this is a balancing act between too little liability and too 
much liability. The Goss-Coburn-Shadegg-Greenwood-Thomas, et cetera, 
coalition product is the middle ground. It is the exact right, in my 
opinion, balance between these two extremes.
  I bet my colleagues, if the gentleman from Georgia (Mr. Norwood) and 
the gentleman from Iowa (Mr. Ganske) were sitting here at the dawn of 
the creation of malpractice liability, they would be about where we 
are, at best. They would be in the middle. They would be trying to 
design a system that leaves doctors accountable for this negligence, 
but not exposed to the maelstrom of liability cases that they are 
exposed to today.
  Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the distinguished 
gentleman from Texas (Mr. Green).
  Mr. GREEN of Texas. Mr. Chairman, I thank my colleague, the ranking 
member of the Committee on Commerce, for yielding me this time.
  I am glad to follow my colleague from Pennsylvania, because I do not 
know if I would call their amendment anywhere near middle ground. It 
may be middle ground from that side of the aisle, but it is not middle 
ground between the two aisles, and that is what the Norwood-Dingell-
Ganske amendment does. The middle ground is really the amendment that 
is the base of this bill.
  The Coburn-Shadegg proposal falls short of meeting the needs of the 
American people in the most critical issue: accountability. Unlike the 
Norwood-Dingell-Ganske, the amendment we are considering now will force 
patients harmed by their HMOs to seek remedies in Federal court. The 
practical effect of the Federal court provision would be devastating 
for patients.
  First, the Federal court system is more difficult to access than our 
State courts. People have to travel longer distances, particularly in 
large States or rural areas. Worse yet, in Federal courts, Federal 
courts give priority to criminal cases. I know in Texas we have civil 
courts, we have State civil courts, we have county civil courts; but 
the Federal courts have to give preference to criminal cases. So these 
cases will sit behind them.
  The Norwood-Dingell-Ganske builds on the success of our State's 
efforts, the State of Texas, both rural, urban, rich and poor and great 
diversity, and we need to learn by example.
  One of the concerns I have about the amendment, Coburn-Shadegg-
Greenwood, et al., is that it would actually overturn current laws that 
we have. Not only in my home State of Texas, but Missouri, Georgia, and 
California already have laws in effect to protect their citizens 
against negligent HMOs. In plain English, no State law can protect its 
citizens when HMO's medical decisions causes harm or death, and that is 
what Coburn-Shadegg says, and it is the section of the bill. They are 
preempting State law that our States have used. The State of Texas has 
had it for 2 years now, and it has stood the test of time. We have only 
had three court cases filed, but what we found out because of the 
effectiveness of the appeals process and, ultimately, judicial 
accountability, that is why we only have three cases filed, the appeals 
panel is working. They are finding for the patients over half the time, 
and that is why we need to make sure that we will not be faked out or 
pass a false amendment. The Coburn-Shadegg amendment is not a 
compromise; it may be a compromise on one side of the aisle.
  Mr. GOSS. Mr. Chairman, I yield 1 minute to the distinguished 
gentleman from Louisiana (Mr. Cooksey) who has assisted me mightily 
from his medical professional point of view.
  Mr. COOKSEY. Mr. Chairman, I want to address the American people and 
the patients.
  Since I have been in Washington, I find that there are a lot of 
groups out there that are looking out for themselves. There is big 
insurance, and they have overstepped the bounds. HMOs have ridden 
behind ERISA and overstepped their bounds, and they are guilty as 
charged. The trial lawyers are here and have been here at least for the 
last 7 years getting their message out, and they all spread a lot of 
money. And yes, the physicians are represented with their 
organizations, and I am a member of that profession and a member of 
those organizations.
  But too often I get the feeling that there is no one here really 
representing the patients, the public; and that is what we really need 
to do today. We need to address the excesses of the HMOs. But at the 
same time, we do not need to open this up to unlimited litigation, 
because litigation is not going to improve the quality of health care, 
and that is what the issue is about. It is access to health care and 
quality of health care. That is the reason I am supporting this bill.
  Mr. DINGELL. Mr. Chairman, I yield 1 minute to the gentleman from New 
Jersey (Mr. Andrews).
  Mr. ANDREWS. Mr. Chairman, I rise in strong opposition to this 
amendment. This amendment provides the illusion of accountability, but 
there is a serious flaw blocking the right of people to get to the 
courts, and that flaw has to do with apparently the unilateral right of 
managed care industries to refer findings of fact and conclusions of 
law on whether there was substantial harm and whether that substantial 
harm was proximately caused by the decisions of the managed care plans 
to a private, corporate, nonjudicial body, which can act in an ex parte 
way; which can act in a way without regard to the Rules of Procedure or 
evidence.
  Mr. Chairman, I include a letter from Dean Rand Rosenblatt of Rutgers 
Law School and Professor Rosenbaum of George Washington University 
which outlines these concerns.


                             The George Washington University,

                                  Washington, DC, October 6, 1999.
     Re: Analysis of the amendment in the nature of a substitute, 
         to be offered by Mr. Coburn to H.R. 2723, The Health Care 
         Quality and Choice Act of 1999.
     Hon. John Dingell,
     Ranking Member, Committee on Commerce, U.S. House of 
         Representatives, Washington, DC.
       Dear Representative Dingell: This letter responds to your 
     request for a legal analysis of the amendment that Mr. Coburn 
     will offer to H.R. 2723 (hereinafter referred to as the 
     Coburn amendment).
       The Coburn amendment purports to add a federal remedy to 
     the current range of judicial remedies under both ERISA and 
     state law in cases involving patient injury. In fact, 
     however, the amendment appears to be a legislative attempt to 
     preempt all available medical malpractice remedies under 
     state law as applied to managed care companies. In other 
     words, the amendment appears to give companies a complete 
     shield against any further medical malpractice cases under 
     state law in which they would be a named defendant. As such, 
     this amendment, which to the best of my knowledge has 
     received no careful analysis and has not been subject to any 
     prior debate, appears to reverse the leading case in the 
     field, Dukes versus U.S. Healthcare Inc.
       This federal legislative attempt to sweep away two 
     centuries of state malpractice law in favor of a new and 
     untested federal remedy appears to fly directly in the face 
     of recent Supreme Court decisions regarding the limitations 
     of Congressional authority to displace state law in areas 
     historically committed to the powers of the states. The 
     creation of remedies for personal injuries is the epitome of 
     historic state powers to protect the health and welfare of 
     their citizens.
       Finally, close scrutiny of the ``remedy'' created in the 
     Coburn amendment so tips the scales in favor of managed care 
     companies that the amendment, even if not an unconstitutional 
     exercise of Congressional powers in an area of law reserved 
     to the states, may violate basic principles of constitutional 
     due process.
       Our analysis follows.
       The amendment appears to preempt all state law remedies for 
     medical malpractice cases involving managed care companies.
       Section 502(n)(15) as added by the Coburn amendment 
     purports to ``save'' malpractice

[[Page 24392]]

     remedies available under state law. However, the amendment is 
     very carefully worded to limit the types of actions that 
     would in fact be ``saved:''
       Protection of medical malpractice and similar actions under 
     state law--This subsection shall not be construed to preclude 
     any action under State law * * * not otherwise preempted 
     under this title with respect to the duty (if any) under 
     state law imposed on any person to exercise a specified 
     standard of care when making a health care treatment decision 
     in any case in which medical services are provided by such 
     person, or in any case in which such decision affects the 
     quality of care or treatment provided or received.
       At first blush, the amendment appears to save both actions 
     aimed at persons who provide medical care as well as persons 
     who make decisions that affect the quality of the care. But a 
     closer look reveals that these actions are saved only to the 
     extent that they are ``not otherwise preempted under this 
     title.'' In fact, the new federal remedy is squarely aimed at 
     persons whose decisions affect the quality of care. 
     Specifically, the remedy would allow a right of action 
     against substandard decision making by health benefit plan 
     fiduciaries. It is their failure to ``exercise ordinary care 
     in making an incorrect determination'' regarding the medical 
     necessity or availability of a treatment that would be the 
     subject of the new federal remedy. As a result, this new 
     remedy would appear to preempt existing remedies grounded in 
     state malpractice theory, that are aimed at the companies 
     themselves.
       This attempt to preempt the application of medical 
     malpractice principles to managed care companies should come 
     as no surprise. This is a critical juncture in the 
     development of judicial theory regarding the conduct of 
     managed care companies. In recent years, a growing number of 
     courts have specifically have held that under various 
     theories of direct and vicarious liability, managed care 
     companies themselves--not just the doctors who work for 
     them--can be liable for injuries caused by substandard 
     decisions that affect the quality of care. These courts have 
     distinguished for ERISA preemption purposes between state 
     law-governed actions for damages as a result of injuries 
     arising out of negligent coverage decisions (which are 
     preempted) and state law actions alleging injuries as a 
     result of the poor quality of medical care (which are not).
       By appearing to ``save'' malpractice actions while at the 
     same time creating a new federal right of action for injuries 
     caused by substandard treatment decisions made by 
     fiduciaries, the amendment thus appears to reverse these 
     recent decisions and shields companies from the effects of 
     state law.
       The amendment appears to violate recent Supreme Court 
     decisions regarding the limits of Congressional authority to 
     legislate in areas historically left to the powers of the 
     states.
       The process envisioned in the new federal remedy appears to 
     run headlong into the Constitution. There are so many 
     deficiencies in the procedures set forth in the amendment 
     that it is impossible to enumerate all of them. Most 
     fundamentally in our view, the amendment appears to give 
     defendants (e.g., health plans and health insurance issuers) 
     the right to seek an ex parte determination from any 
     qualified external appeal entity regarding whether the 
     plaintiff actually sustained a personal injury, and/or 
     whether the defendant's conduct was the proximate cause of 
     the injury. Giving a private corporation the power to halt a 
     federal judicial action through the use of non-judicial 
     procedures, and with no statutory requirement of notice to 
     the plaintiff or other due process rights, is unprecedented 
     in American civil law.
       The provisions of the amendment are simply extraordinary. 
     The bill provides that even after an individual has exhausted 
     the internal and external review process and filed an action 
     in federal court, a managed care company is empowered to 
     nullify the jurisdiction of that court by unilaterally 
     deciding that the action will be heard before a private 
     entity with no clearly relevant legal expertise and with no 
     provision for a right to counsel, a jury trial or any other 
     due process protections for the plaintiff.
       Private companies would have the power to obtain a 
     definitive ruling against patients without patients ever 
     having the opportunity to be heard before the entity making 
     the certification decision. And a federal court with 
     Constitutional authority to hear a case would be stripped of 
     its Constitutional authority and directed to dismiss the case 
     with prejudice based on a ruling by a non-judicial entity.
       Nothing in the bill would prohibit a defendant from 
     consulting entity after entity until it finds one that will 
     decide in its favor. Fundamental questions of fact and law 
     would be definitively determined by employees of an external 
     review entity who could theoretically consist entirely of 
     physicians with no judicial training. The measure grants 
     neither discovery nor cross examination rights as part of the 
     certification procedure.
       Moreover, unlike a jury, employees of the external review 
     entity would make critical findings of fact, not pursuant to 
     a set of instructions from a legally trained and 
     constitutionally impartial judge, but based on their own 
     legally unguided impressions.
       Finally, these findings of fact would not be subject to 
     challenge or appeal by a judicial body, but rather would 
     become legally binding in all judicial venues. Under the 
     amendment, it appears that even the United States Supreme 
     Court could not overturn the certification of an external 
     review entity that the cause of the plaintiff's injury was 
     not the negligence of the defendant.
       Between the apparent ex parte nature of the certification 
     process and the granting of sweeping judicial powers to 
     private medical review bodies, the bill violates all notions 
     of Constitutional due process.
       Apart from its basic Constitutional problems, the right of 
     action created by the bill contains additional serious 
     shortcomings. The measure permits actions only against 
     persons who have the authority to make the final 
     determination of coverage. Such a provision could shield from 
     liability a utilization review company under subcontract to 
     the managed care organization, thereby undercutting any 
     incentive to ensure better utilization review procedures.
       Furthermore, the bill would condition the new right of 
     action on exhaustion of the internal and external review 
     process even when the injury already has occurred and 
     exhaustion is futile. This rigid requirement is contrary to 
     current law, which permits individuals to proceed directly to 
     court under ERISA Sec. 502 in situations in which exhaustion 
     would serve no purpose.
       Furthermore, in cases in which a plaintiff has commenced 
     both an action for damages under state law, as well as an 
     action under this new federal remedy, the commencement of the 
     federal action would immediately supercede ``any action 
     authorized under state law'' against any person based on the 
     same substantial harm.'' Section 502(n)(16)(B), as added. In 
     other words, even if the amendment does not completely 
     preempt actions against managed care companies that are 
     grounded in state malpractice theory, it would effectively 
     halt malpractice actions once an action under this new 
     federal remedy is filed.
       Not only does the filing of a federal action stop a state 
     malpractice action, but the resolution of the federal case 
     would fundamentally determine the course of the state case, 
     as well. Under normal principles of collateral estoppel, when 
     faced with a successful affirmative defense to the new 
     federal right of action, a court with a malpractice action 
     before it that turns on the same facts would inevitably 
     dismiss the malpractice action.
       Rather than allowing state law regarding malpractice 
     liability in managed care to evolve, the bill would impose a 
     radical, unnecessary, and untested remedy on state 
     governments in an area traditionally committed to state 
     discretion.
       The question of when and under what circumstances insurers' 
     liability for damages arising from negligent coverage 
     decisions should be recognized under the law is a complex 
     matter.
       State courts began to address this issue in the early 1970s 
     and the theory of insurer liability has slowly evolved. The 
     application of ERIS to liability claims against insurers that 
     sold products to employee benefit plans seriously affected 
     the application of such laws to injured employees. In recent 
     years, as ERISA preemption law has been refined and narrowed 
     by the courts, states once again have begun to carefully 
     approach this issue in the context of employee benefits.
       In our view, this is not the time to create a new federal 
     remedy, especially one as controversial as this. In light of 
     the evolutionary nature of American health law, and the 
     limits on Constitutional authority to displace state law, we 
     believe that it is far more advisable to permit states to 
     move the matter forward through legislation that best meets 
     the needs of the residents of their states, particularly 
     since the evidence to date indicates that the growth of such 
     state laws has not resulted in either major cost increases in 
     health insurance or a withdrawal of insurers from the market.
           Sincerely,
                                                   Sara Rosenbaum,
     Harold and Jane Hirsh Professor of Health Law and Policy, The 
     George Washington University Medical Center, School of Public 
                                       Health and Health Services.
                                                  Rand Rosenblatt,
        Associate Dean for Academic Affairs and Professor of Law, 
                            Rutgers University Law School--Camden.

  Mr. ANDREWS. Mr. Chairman, I believe that these are more than 
technical flaws. I believe they are substantive blockages which 
preclude the right of people to pursue remedies in the Federal courts. 
For these reasons, I strongly oppose the amendment.
  Mr. GOSS. Mr. Chairman, I yield 1 minute to the distinguished 
gentleman from Louisiana (Mr. Vitter), who I believe is not only one of 
the freshest new Members, but is the freshest new Member from Louisiana 
on the Republican side.
  Mr. VITTER. Mr. Chairman, I rise today as an original cosponsor of a

[[Page 24393]]

strong bill to provide patient protection, and I rise in support of 
this version in particular, because many of its provisions are the 
strongest available on the very patient protection issues we care 
about.
  This version goes further than any other proposal in granting access 
to hospital emergency rooms and ambulance services, and in ensuring 
that women have hassle-free access to OB/GYNs. It goes further by 
providing a quicker independent review process and fully protecting 
employers from lawsuits while allowing patients the right to sue their 
HMO.
  So this very version, in my opinion, goes further on so many 
important fronts on the patient protection issue, even leaving the 
liability debate to the side.
  Mr. Chairman, many would rather create partisan issues or enrich the 
coffers of trial lawyers than provide meaningful protections, the 
strongest available, to patients. Let us stop the political 
gamesmanship and pass strong patient protection.
  Mr. DINGELL. Mr. Chairman, I yield 1 minute to the distinguished 
gentlewoman from Missouri (Ms. McCarthy).
  Ms. McCARTHY of Missouri. Mr. Chairman, I thank the gentleman from 
Michigan and rise in opposition to the amendment and in strong support 
of the bipartisan Norwood-Dingell managed care act.
  We have all heard horror stories from our constituents, family 
members and friends. It is time for real reform. A constituent of mine 
in a head-on car wreck with massive trauma on his head, a collapsed 
lung, three broken ribs, and a shattered hip went through numerous 
surgeries in a struggle to regain the life he had before the accident. 
He contacted me because he had been denied productive physical therapy 
from his HMO despite his doctor and orthopedic specialist prescribing 
the physical therapy.

                              {time}  1315

  Passing the Norwood-Dingell bill will improve patient care at the 
most fundamental level, and return medical decisions to patients and 
health care professionals.
  This approach is working well at the State level. The current 
amendment we are considering will wipe out these State laws. I urge my 
colleagues to oppose the Coburn-Goss-Shadegg amendment and support the 
Norwood-Dingell bill.
  Mr. DINGELL. Mr. Chairman, I yield 1 minute to my good friend, the 
gentleman from Washington (Mr. BAIRD).
  Mr. BAIRD. Mr. Chairman, I would like to just raise two simple 
points. We have heard briefly a minute ago, who is here to represent 
patients? Well, I am here to represent patients. Prior to coming to 
serve in the Congress, I worked for 23 years in the mental health field 
as a licensed clinical psychologist.
  Every major health care organization supports the Dingell-Norwood 
bill, every single one, bar none. If you are going to see a health care 
provider, be they a doctor, nurse, a clinical psychologist, a social 
worker, a physical therapist, occupational therapist, you name it, 
their professional occupation supports Dingell-Norwood. Those same 
professionals to whom we trust our health care would oppose this poison 
pill amendment.
  As a psychologist, I am particularly concerned about one provision of 
this bill, the exemption for liability claims when mental health is 
damaged. I personally had the experience of working with a patient who 
was suicidal. Twenty-three years of clinical experience said if this 
patient did not get additional care, they very likely might go out and 
kill themselves. This bill would exempt insurance companies from 
liability for mental health damage. That is wrong. We need to support 
Norwood-Dingell.
  Mr. GOSS. Mr. Chairman, I am happy to yield 2\1/4\ minutes to the 
gentleman from Kentucky (Mr. Fletcher), who was instrumental in guiding 
us on some of the provisions of this substitute amendment.
  Mr. FLETCHER. Mr. Chairman, I thank the gentleman for yielding time 
to me. I appreciate the opportunity to address this bill.
  I want to give my thanks to the gentleman from Oklahoma (Mr. Coburn) 
and the gentleman from Arizona (Mr. Shadegg) for the extensive work 
they have done on this, coming from a great deal of concern about 
patients and a great deal of clinical experience in providing care.
  Certainly I appreciate my colleagues, the gentleman from Iowa (Mr. 
Ganske) and the gentleman from Georgia (Mr. Norwood), for all the work 
they have done to bring this debate here to the floor this day.
  I am here to support the coalition bill, the Coburn-Shadegg bill, 
because it is the best bill to provide the patients that I have taken 
care of real protection. It is real patient protection. It is not real 
trial lawyer protection, I will grant that. No ambulance chasers are 
going to be smiling today when we pass this bill.
  But patients will, because they will be assured that, first, 
physicians are making medical decisions, not insurance bureaucrats. 
Secondly, they will make sure that the cost does not go up so much that 
they end up with no insurance. Causing patients to lose their health 
insurance is not patient protection. If anyone has seen what the plight 
of patients are when they do not have health care, how they deliberate 
at home as to whether they are going to go to the physician, whether 
they are going to go to the emergency room, because they know it may 
result in bankruptcy, you know what it means to a family and patient 
not to have health insurance.
  Yet, I believe this bill, the Norwood-Dingell bill, will drive up 
health care costs and drive up the number of uninsured. It is very 
important that we pass this coalition bill.
  It is kind of interesting to me. As a physician, my primary concern 
is patients. It is not the special interest groups, whatever they are. 
I will say that this bill probably does not please a lot of the special 
interest groups. I think when we reach a bill that probably is balanced 
and fair, it really protects patients, primarily.
  It is interesting to me that, as a physician, we have cried out for 
help with tort reform for years. We have said, give us some relief and 
we can reduce the cost. I talked to an OB-GYN physician just this last 
week who said, my malpractice insurance has gone up to $40,000 a year. 
This bill will increase the cost of malpractice. It will increase the 
cost of health care. That money will go into the pockets of trial 
lawyers.
  That is not what we want to do for the patients. That is not real 
patient protection. Vote for the Coburn-Shadegg coalition bill, for our 
patients' sake.
  Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the distinguished 
gentleman from Iowa (Mr. Ganske).
  Mr. GANSKE. Mr. Chairman, I appreciate the concerns of my fellow 
physician, the gentleman from Kentucky, particularly on the issue of 
cost. This is an important issue. We think that the cost to the 
bipartisan managed care bill will be very small, and that that is part 
of the reason why Members should support it.
  Why is that? The critics of our bill have said that it is going to 
result in a lot of lawsuits, but if we look at a study that was 
recently done by Coopers & Lybrand for the Kaiser Family Foundation, 
where they compared group health plans that do not have a liability 
shield to those that do, the incidence of lawsuits was in the range of 
from .3 to 1.4 cases per 100,000 enrollees, and they showed that the 
legal costs for those group health plans that are not shielded was from 
3 to 13 cents per month per employee.
  That is a small price to pay for somebody who is spending thousands 
of dollars for their HMO coverage to be sure that that health plan then 
will not cut the corners too tight in the pursuit of profits that could 
result in harm or injury, when under current ERISA law they are 
shielded from that liability.
  Under the plain meaning limits of our bill, the provisions, as looked 
at by a leading ERISA law firm in the country, have shown that we do 
exempt employers. It is the plain meaning of our bill. That is part of 
the reason why the

[[Page 24394]]

gentleman from Oklahoma (Mr. Coburn) and the gentleman from Arizona 
(Mr. Shadegg) put in about 5 or 6 extra pages that are very circular 
that in the end, basically, in my opinion, and we will go into that in 
more detail, shield the employer, or rather, shield the health plans, 
just like the problem we are trying to correct.
  Mr. Chairman, we have a chance today to fix a problem that Congress 
created 25 years ago. The substitute we are debating now just does not 
do it.
  Mr. GOSS. Mr. Chairman, I am pleased to yield 1 minute to the 
distinguished gentleman from Wisconsin (Mr. Green), to demonstrate the 
broadness of the consensus group that we have.
  Mr. GREEN of Wisconsin. Mr. Chairman, I thank the gentleman for 
yielding time to me.
  I would like to draw attention back to one very simple thing. For 
better or worse, we have an employer-based health care system in this 
Nation. That is a fact. Some of us would like to change that, but 
today, as we are standing here, we have an employer-based system. As 
long as we do, we must reject plans that would lead employers to drop 
coverage.
  The debate over liability, and we are hearing it on both sides as to 
what that means, the debate over liability shows at the very least that 
it creates uncertainty for employers. Where they have uncertainty, we 
know in order to avoid risks they are going to drop coverage.
  In Wisconsin, we have the lowest level of uninsureds in the Nation. 
We understand that we cannot protect patients unless they have health 
insurance. Unfortunately, unless we pass this amendment, all we are 
going to do is drive up costs, drive up uninsured levels. We will not 
have access to care and we will not have patient protection. Please 
support this amendment.
  Mr. DINGELL. Mr. Chairman, I yield 1 minute to the distinguished 
gentleman from Tennessee (Mr. Ford).
  Mr. FORD. Mr. Chairman, if we listen to the debate, one could become 
easily confused that it is trial lawyers who are telling patients no, 
it is trial lawyers who are denying care.
  I understand there may be some aversion, there may be some opposition 
on the other side to the role that trial lawyers play in helping to 
even the playing field here in America, but they are not the cause or 
root of this problem.
  As a matter of fact, things have gotten so bad that some of my 
friends on the other side, and I indeed say friends because many of 
them are, that their own front-runner presidential nominee has 
suggested that they soften their image, that perhaps they have gone 
overboard and exceeded the boundaries of fairness and perhaps even 
compassion, here in this body and in this Nation.
  I applaud the leadership that the gentleman from Georgia (Mr. 
Norwood) and the gentleman from Iowa (Mr. Ganske) and the gentleman 
from Oklahoma (Mr. Coburn) and the gentleman from Louisiana (Mr. 
Cooksey) and others in this body have demonstrated on this issue. But I 
do think it is important that we put this issue in its proper context. 
This is just about accountability.
  I think there are issues that can be resolved between Coburn-Shadegg 
and Norwood-Dingell. There are legal issues which some of the lawyers 
in the Chamber perhaps understand and others do not. But around here, 
this is just about accountability. HMOs and foreign diplomats are the 
only people who are above the law. That should end, and we could do it 
with the Norwood-Dingell bill.
  Mr. GOSS. Mr. Chairman, I am happy to yield 1 minute to the 
distinguished gentleman from the Commonwealth of Pennsylvania (Mr. 
English), who has contributed, as well, to our effort.
  Mr. ENGLISH. Mr. Chairman, I rise in strong support of the Goss-
Coburn-Shadegg substitute. This amendment arguably provides better 
health care quality standards than the Dingell-Norwood plan and better 
protection for working families by, among other things, including 
emergency ambulance services in the prudent lay persons standard for 
emergency care coverage, to ensure that patients are not worried about 
calling their insurance company before calling an ambulance; by 
reducing the time limits in expedited cases from 72 hours to 48 hours; 
by providing broader access to all cancer clinical trials; by providing 
for a voluntary alternative dispute resolution system, binding 
arbitration for those who do not want to go to court; by guaranteeing 
pathology and laboratory services; by creating a panel to establish 
network adequacy standards, to ensure that each plan has enough doctors 
in specialties for plan participants; by prohibiting plans from 
considering FDA-approved drugs or medical devices, experimental or 
investigational; and by protecting employers from indiscriminately 
being held liable in lawsuits.
  Health care access will suffer if employers or even trade unions are 
exposed to legal liability for providing health care coverage for 
workers. Goss-Coburn has a commonsense liability provision that holds 
HMOs responsible, but also caps damages and puts time limits on 
lawsuits.
  Mr. DINGELL. Mr. Chairman, I yield 1 minute to the distinguished 
gentlewoman from California (Mrs. Capps).
  Mrs. CAPPS. Mr. Chairman, I rise in opposition to this amendment, 
which falls short, far short, on important patient protections.
  If a patient has been denied a screen test or a treatment which 
results in a serious health care problem, the HMO must be held 
accountable. This amendment contains a $100 threshold for patients to 
be eligible even for external review. Mammograms cost $95. A routine 
EKG is $50. A PSA for prostate cancer is $25.
  As a nurse, I am very concerned that a person who is denied a simple, 
inexpensive, lifesaving test would never be eligible for that review. 
The Coburn-Shadegg substitute will diminish fundamental constitutional 
rights of patients to seek redress in the courts when they have 
suffered serious physical harm or even been killed. This provision will 
save HMOs a few dollars and cents, but it defies common sense.
  Mr. Chairman, patients must no longer take a back seat to profits. I 
urge my colleagues to oppose this amendment and to support the Norwood-
Dingell bill.
  Mr. GOSS. Mr. Chairman, I am pleased to yield 1 minute to a close 
colleague and friend, the gentleman from Florida (Mr. Weldon), who 
obviously has been of much assistance in putting on this measure.
  Mr. WELDON of Florida. I thank the gentleman for yielding time to me, 
Mr. Chairman, and I rise in support of the Goss-Coburn-Shadegg 
substitute.
  Mr. Chairman, I came to Washington from my medical practice in 1995, 
feeling at that time that the managed care industry had placed the 
bottom line ahead of quality of care, that insurance company and HMO 
bureaucrats were practicing medicine, and that they needed to be held 
accountable, as accountable as I was when I practiced medicine.

                              {time}  1330

  However, I also felt that our society had become too litigious, that 
we had too many lawsuits. I believe that this substitute before the 
body now strikes the right balance between these two conflicting needs. 
It allows for the maintenance of quality through strong internal and 
independent external appeals processes, but it still reserves the right 
of individuals to seek redress in court for their injuries. I feel that 
it is the piece of legislation that we should be enacting.
  Mr. DINGELL. Mr. Chairman, I yield 1 minute to the distinguished 
gentlewoman from New York (Mrs. McCarthy).
  Mrs. McCARTHY of New York. Mr. Chairman, I rise in support of the 
Bipartisan Consensus Managed Care Improvement Act. I rise today to 
speak as a Congresswoman from Long Island, a mother, and a nurse.
  I spent close to over 30 years as a nurse, and I speak from 
experience when I remind my colleagues health care is about people. 
Real health care means direct access to specialists, especially in OB/
GYN for women. Real health care means access to emergency

[[Page 24395]]

room care. Real health care protects health care workers from 
retaliation from their employers when they blow the whistle on 
wrongdoing. Real health care saves lives by making clinical trials 
available to patients, not just cancer patients, but to patients that 
are suffering from many diseases. Real health care is a clean Norwood-
Dingell bill.
  The reason is, the first lesson I learned in nursing school was the 
patient always comes first. I hope we remember that when we vote today.
  One other thing that I would just like to bring up very rapidly, 5 
years ago, when I was an average citizen and had my health care 
insurance, I could not sue my HMO. Today, because I work for Congress, 
I am allowed to sue.
  Mr. GOSS. Mr. Chairman, I am privileged to yield 1 minute to the 
gentlewoman from New York (Mrs. Kelly), a distinguished medical 
professional and activist.
  Mrs. KELLY. Mr. Chairman, it is as a professional health care 
advocate that I rise in support of the Goss-Coburn-Shadegg-Greenwood-
Thomas substitute amendment.
  This amendment provides patients with vital protections that the 
Norwood-Dingell bill does not, such as shorter external appeal times, 
network adequacy standards, access to ambulance services, guaranteed 
pathology services, and a prohibition on plans labeling FDA approved 
drugs and devices as ``experimental.''
  This amendment ensures patients get the care they need when they need 
it. It leaves medical decisions up to doctors, not insurers, and not 
lawyers. It allows doctors to treat their patients and prevents 
insurers from making medical necessity decisions. Insurers will be held 
accountable for wrongful actions; and patients, if injured, can go to 
court to sue for damages.
  This substitute amendment also broadens the appeals process a patient 
may use by allowing binding arbitration as an alternative option to 
court. Arbitration will provide those patients who choose to select it 
the opportunity to appeal medical coverage decisions and to hold health 
insurers financially accountable for wrongful decisions in a 
nonthreatening forum with the same protections as court, but without 
the cost and time consumption.
  Mr. DINGELL. Mr. Chairman, I yield 1 minute to the gentleman from 
Texas (Mr. Turner).
  Mr. TURNER. Mr. Chairman, the Norwood-Dingell bill protects States' 
rights to regulate medical malpractice, a right that has existed for 
over 200 years.
  In Texas, we passed patient protection legislation. It is working. 
There is no reason to conclude that we will run to the courthouse or 
that there has been a rush of litigation.
  This House rejected the Boehner substitute because it allows 
insurance companies to avoid accountability. But equally damaging is to 
allow insurance companies to avoid medical malpractice laws of our 50 
States by creating an exclusive preemptive Federal cause of action that 
is nothing more than the insurance company protection act of 1999.
  The Coburn substitute blatantly tips the scales of justice in favor 
of the insurance companies. It privatizes justice by giving a private 
panel the authority to make judicial findings that are binding on the 
Federal court. Giving private entities the power to make findings that 
bind the Federal court is unprecedented in American law, and this 
provision should be rejected.
  This substitute gives legal protection from liability to insurance 
companies enjoyed by no other group except foreign diplomats. We must 
protect patients. We must preserve accountability. We must preserve 
States' rights and reject the Coburn substitute.
  Mr. DINGELL. Mr. Chairman, I yield 3 minutes to the distinguished 
gentleman from Georgia (Mr. Norwood), which is going to be a benefit to 
both the gentleman from Florida (Mr. Goss) and to myself.
  Mr. NORWOOD. Mr. Chairman, I thank the gentleman from Michigan for 
yielding me this time.
  Let me make this very clear. Let me also just thank the gentleman 
from Oklahoma (Mr. Coburn). I think that his bill has tremendous things 
in it in terms of patient protections. They have tried very hard. He 
and I have worked together for months and months and months.
  But the problem is, and I will try to get through some of them at 
this point, the problem is that, when they get into their liability 
section, it takes us for the first time to Federal court. There are so 
many concoctions in there that it is going to be basically very 
impossible for a patient who has been wronged to have that wrong made 
right.
  Now, there is really a reason why the California Medical Association 
and the Texas Medical Association and the Medical Association of 
Georgia have all sent letters to their Members of Congress saying that 
the Coburn bill would preempt State law. They are right.
  My colleagues tried. I congratulate them for trying. But they failed. 
Let us take a look at what the bill says. Nothing shall be construed to 
preclude any action under State law not otherwise preempted under this 
title. The title they are amending is ERISA, section 502.
  The courts have consistently ruled from the Pilot Life case on that 
any remedy that exists under ERISA, section 502, will preempt State 
law. By allowing a patient to sue in Federal court, their bill creates 
a new Federal remedy under ERISA, section 502. The courts have 
consistently ruled a Federal remedy preempts State law. Any cause of 
action under State law like California or Georgia or Texas that would 
conflict with a new Federal cause of action they have created is 
necessarily preempted. Their own language says so. There is no way the 
Texas, Georgia, and California laws would not be preempted.
  Now my colleagues tried. I do not blame them for trying. I would not 
want to tell the Members from California or Texas or Georgia that my 
colleagues are preempting their State laws. Then, again, I do not have 
to do that.
  In addition to what we are putting in ERISA, Federal law is supreme 
and has been so since 1819 and the Barron v. Baltimore case that the 
Supreme Court ruled on.
  Now, that is one of my hiccups being from Georgia, and I think a lot 
of people might have that, that we are taking away State law.
  Let us point out another little problem, because they are in there. 
Lord knows I am not against the gentleman from Oklahoma (Mr. Coburn). I 
love his bill except for these little issues, and that is why we have 
to defeat it.
  Under the Norwood-Dingell bill, a person is held accountable for the 
consequences of the decision based on the medical merits of that 
decision. If a doctor makes a decision, he is judged on whether or not 
that decision was good. Good medicine. We want an insurer who overrules 
a doctor judged by the same standard. We want an insurer who overrules 
a doctor judged by the same standard. Now, under the Coburn-Shadegg 
substitute, an insurer will be judged by whether they practice good 
accounting.
  Mr. GOSS. Mr. Chairman, I yield 1 minute to the distinguished 
gentleman from Tennessee (Mr. Bryant).
  Mr. BRYANT. Mr. Chairman, as we have heard from a number of our 
doctors today on both sides of this issue, I want to give my colleagues 
the perspective of an attorney who practiced law representing health 
care providers in malpractice cases.
  I am somewhat confused because I have seen firsthand how unrestricted 
litigation against doctors and hospitals have caused the cost of 
medical care to rise dramatically. It caused doctors to practice 
defensive medicine. It caused premiums to go up and to see the cost of 
this service, the tests, and all of that to go up to where it is almost 
unaffordable.
  Yet, here, we are today talking about trying to do the same thing to 
health care organizations. Why do we want to do that?
  I have studied these bills, and I have come to a conclusion that 
there is a need for accountability for managed care. We have to hold 
them accountable, but we can do so in a fashion that

[[Page 24396]]

does not chase people out of the health care industry, does not raise 
the expenses, does not cause more people to become uninsured. That is 
done in the Shadegg-Coburn bill.
  It is a balanced, reasoned, measured approach which holds our HMOs 
accountable for good care and, on the other hand, does not run people 
out, does not make it too expensive that we have got more uninsureds on 
the rolls.
  Mr. DINGELL. Mr. Chairman, I yield 1\1/2\ minutes to the 
distinguished gentleman from Texas (Mr. Sandlin).
  Mr. SANDLIN. Mr. Chairman, do we need a new Federal tort in this 
country? Do we want the Federal courts preempting State law in this 
country? Do we want the Federal courts taking over the traditional role 
of regulating insurance that is assumed by the States in this country?
  I submit to my colleagues that the answer to those questions is no, 
but that is exactly what Coburn-Shadegg will do, allow Federal courts 
to preempt State law and create a brand-new Federal tort. Let us create 
health care in this country for American citizens. Let us do not create 
new torts.
  What happened to local control? What happened to that argument? Do we 
not trust our own State courts in this country? Do we not respect local 
government? Do we turn everything over in this country to the Federal 
courts? Is that what we are about? That is just what this bill does.
  I am here to tell my colleagues that, under Coburn-Shadegg, our State 
courts are gagged just like the doctors are gagged. On the other hand, 
Norwood-Dingell will not override protections already provided by State 
laws, States such as Texas, New York, Michigan, Iowa all across this 
great country. Norwood-Dingell is a common-sense local approach to 
these problems. If an insurer makes a decision, the insurer is 
responsible for that decision.
  A final matter, the employer is not responsible for the decisions 
made by others. The employer is not responsible for the decisions made 
by others. The employer is not responsible for the decision made by 
others, period. That is what the States say.
  Let us create medical care. Let us do not create a new tort.
  Mr. GOSS. Mr. Chairman, I yield 3 minutes to the distinguished 
gentleman from Louisiana (Mr. McCrery).
  Mr. SHADEGG. Mr. Chairman, will the gentleman yield briefly?
  Mr. McCRERY. I yield to the gentleman from Arizona.
  Mr. SHADEGG. Mr. Chairman, I simply want to set the record straight 
on this issue. Apparently the question of whether or not State law is 
preempted under Coburn-Shadegg has become important, and I tried to ask 
the gentleman from Georgia (Mr. Norwood) about that issue.
  I want to point out that, in his argument, he said that it is 
preempted because ERISA preempts all State law. That was his premise, 
because ERISA preempts all State law, and our bill said not otherwise 
preempted. He said that is the flaw in our logic.
  The problem is he is wrong about that. ERISA does preempt all 
benefits claims, but it does not preempt quality of care claims. That 
is precisely what the Texas Legislature took advantage of. They wrote a 
law that says quality of care is not preempted. Georgia, Louisiana, and 
other States have followed, so his premise is simply wrong.
  Mr. McCRERY. Mr. Chairman, I thank the gentleman from Arizona for his 
comments.
  To the gentleman from Texas (Mr. Sandlin) who spoke so fervently 
about employers not being liable, I would simply say that, as a lawyer, 
he knows, and I am a lawyer, and I know that lawyers are not prevented 
from suing anybody no matter what the wording of any statute is.
  I can guarantee him that some lawyers are going to sue employers 
because they sue everybody, everybody in sight that they think might be 
brought into court and have a settlement at hand. Those employers are 
going to have to fight that. Even though they may ultimately win under 
the wording of the statute, they are going to have to spend a lot of 
money fighting that lawsuit, and that is part of the problem.
  Let us talk about liability for just a minute.

                              {time}  1345

  And I understand the American Medical Association is supporting 
Norwood-Dingell and not supporting Coburn-Shadegg, which is just beyond 
belief to me. The American Medical Association, as well as some of my 
colleagues who are supporting Norwood-Dingell, have been fighting for 
years for medical malpractice reform, saying that the liability system 
is out of control. And yet, by passing Norwood-Dingell, they would 
impose on health care plans the same out-of-control liability system 
they have been complaining about for years on doctors. I just do not 
get it.
  Mr. Chairman, besides the liability issue, though, which I think is 
clear, Norwood-Dingell does impose on health plans, the same out-of-
control liability system that we have everywhere else, Coburn-Shadegg, 
on the other hand, puts some reasonable restraints on that liability 
system. But let us put that aside. Let us talk about the rest of the 
bill. I think my colleagues, especially on the free market side of the 
aisle, should be very concerned about the regulatory aspects of 
Norwood-Dingell. Their bill includes language stating that external 
appeals panels, for example, can consider as evidence government-issued 
practice and treatment policies and guidelines.
  This gives bureaucrats the potential to outline practice in this 
country; bureaucrats writing down how health care will be administered, 
not doctors. Unlike the Coburn-Shadegg substitute, Norwood-Dingell 
gives unfettered discretion to Federal bureaucrats to determine if 
health care workers suffered from inappropriate retaliation from their 
employer.
  This bill, the Norwood-Dingell bill, is too heavily regulatory. Vote 
against it and support the Coburn-Shadegg substitute.
  Mr. DINGELL. Mr. Chairman, I yield 30 seconds to the gentleman from 
Georgia (Mr. Norwood).
  Mr. NORWOOD. Mr. Chairman, I would just point out that in our bill we 
have limited punitive damages. That is a step forward. We go to the 
State courts because we know that there is a great deal of tort reform 
around the States, 30 States or so have limited punitives or none, caps 
on noneconomics.
  So I would say that is another good reason not to set up a new 
Federal tort where we just simply do not have any type of tort reform. 
And we cannot depend on the States to do the right thing in an area 
that they have typically and historically controlled for the last 200 
years.
  Mr. DINGELL. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman 
from Massachusetts (Mr. Frank).
  Mr. FRANK of Massachusetts. Mr. Chairman, for those who have 
contested the theory of evolution, we have the Republican Party's 
position on this issue. It has been evolving very rapidly.
  We started out with many saying, no, there should not be any basis 
for lawsuits. They have moved. And I give credit to those who have 
helped them move, but they have been held back by some who still do not 
like the notion at all. We now have, apparently, agreement that there 
should be a right to sue HMOs. That is a considerable evolution. How 
wholeheartedly some believe in what they agree to, I am not sure. But 
we do have some agreement.
  The question is what kind of lawsuits. And, in fact, what we have are 
people who have been grudgingly brought to the notion that there should 
be lawsuits but, because it was grudging, have designed flawed 
lawsuits. They have designed, surprisingly to me, a Federal supremacy 
situation which is premised on the notion that we cannot trust the 
States. Indeed, what we have from some on the other side is a distrust 
of two entities with whom they have previously professed a lot of 
solidarity: States and doctors. They have to say that we cannot allow 
the States the freedom to deal with the lawsuits, and they also show a 
distrust of doctors.
  I also want to talk about the kind of lawsuits. Members on the other 
side

[[Page 24397]]

have said, well, how has the AMA switched their position. These are 
very different kinds of malpractice lawsuits. Whatever we think of the 
other kinds of malpractice lawsuits, they are cases where the doctor 
who treated the patient is being sued and other people who did not 
treat that patient are coming in.
  Here the lawsuits authorized are a very specific kind. They will 
require the cooperation of the doctor who treated that patient. Here 
the malpractice claim is that the doctor who actually treated the 
patient was overruled and interfered with. So the doctor who treated 
the patient stands as a gatekeeper to prevent illegitimate lawsuits.
  Mr. GOSS. Mr. Chairman, I yield 3 minutes to the distinguished 
gentleman from California (Mr. Thomas).
  Mr. THOMAS. Mr. Chairman, while we are talking about evolution, let 
us talk about the fact that there are a number of unions that support 
the Norwood-Dingell bill. And why in the world would the American 
Medical Association align itself with unions? Perhaps my colleagues 
were asleep when the American Medical Association decided to adopt 
collective bargaining.
  The arguments that we have heard, no matter how strongly or 
forcefully presented about the fact that the coalition bill tramples 
State law, are simply wrong. Let us not try to rely on each other. Let 
us go to the independent, professional attorneys that we have relied on 
since Congress created itself, the Congressional Research Service. 
Those lawyers, totally objective, analyzing the coalition bill said 
this: ``This provision would not interfere with, but would support, a 
recent holding in a Federal district court decision upholding the 
ordinary care provision of the Texas law.''
  Now, my friend is a lot of things, but the gentleman from Georgia 
(Mr. Norwood) is not an attorney. The Congressional Research Service 
says the coalition bill supports State law.
  Now, if we want to meet a trial lawyer, follow an ambulance. If we 
want to know who is supporting this measure, take a look at their list 
of supporters. On the coalition bill we will find that virtually 
medical association for medical association they match. But we cannot 
stay with them when the unions endorse their provision and the trial 
lawyers support their provision.
  Why? Because people whose lives are on the line, in terms of their 
economic survival, say this: ``The Chamber of Commerce strongly opposes 
any proposal which permits jury trial lawsuits for unlimited punitive 
and compensatory damages.''
  Do we believe the trial lawyers? No. Who will butter their bread? 
Take a look at the list of supporters of the coalition. We do not have 
the trial lawyers. Take a look at Norwood-Dingell. The trial lawyers 
and the doctors are together. Now, talk about evolution. Not only are 
they going to be following an ambulance, but they are going to be in 
the ambulance.
  This is exactly the wrong approach to take when employers still have 
the ability to say, yes, I will provide health insurance; or, no, I am 
not going to run the risk of unlimited punitive and compensatory 
damages. That is the risk that will be run if Norwood-Dingell becomes 
law. And I can assure my colleagues that employers will say, at some 
point, it is not worth the risk. Do not feed trial lawyers.
  Mr. DINGELL. Mr. Chairman, I yield 15 seconds to the gentleman from 
Georgia (Mr. Norwood).
  Mr. NORWOOD. Mr. Chairman, I just want to point out to the gentleman 
from California (Mr. Thomas) that we all try to use independent, well-
experienced lawyers. The lawyer from CRS who says that we do not 
preempt State law is out of law school for 3 years and has never 
practiced ERISA law. We tried to find some experienced people to do our 
ruling.
  Mr. DINGELL. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman 
from Missouri (Mr. Gephardt), the minority leader.
  Mr. GEPHARDT. Mr. Chairman, I rise in opposition to the Coburn-
Shadegg amendment and to speak for the Norwood-Dingell bill. And I want 
to commend the gentleman from Georgia (Mr. Norwood) and the gentleman 
from Iowa (Mr. Ganske) and all of the Republicans and Democrats who 
have worked so hard on this bill and especially the gentleman from 
Michigan (Mr. Dingell) for all that he has done to make this happen.
  The Coburn-Shadegg amendment, in my view, does not do what it claims 
to do. It fails to hold health care providers accountable. It lets them 
off the hook. It will not go far enough to guarantee that American 
families get the health care they need. In my view, only the Norwood-
Dingell bill will return control of medical care back to where it 
belongs, to doctors and patients. It will deliver much-needed patient 
protections at a small cost to consumers and to business. I believe the 
cost is a modest price to pay to restore the much-needed balance in our 
health care system.
  The health insurance lobby and their allies are spreading a false 
message that the Norwood-Dingell will and managed care reform will 
force employers to drop plans and will cause a loss of jobs and blunt 
economic growth. This is not reality. All we have to do is look at the 
experience in Texas, which has had a bill much like the Norwood-Dingell 
bill. Information filed with the Texas State Department of Insurance 
shows that there has been no unusual increases in costs in HMOs. In 
fact, national HMOs that operate in Texas and other States have higher 
cost increases outside Texas.
  A recent study by the Kaiser Family Foundation found that the premium 
increases likely to result from a bill like Norwood-Dingell would be 
very modest. In fact, their study showed that it would result in a 
premium increase of less than 1 percent to a typical HMO policyholder.
  Now, let me say to the Members that if somebody is sick in my own 
family and is not getting the care that the doctor believes they should 
get, I can assure my colleagues that paying less than 1 percent more 
for a policy that would give me enforceable rights would be something 
that I would leap at, and I think all my colleagues would leap at, if 
someone in their family was direly sick.
  I have said many times that back in the early 1970s my son was 
diagnosed with terminal cancer, given no hope. The pediatrician said, 
he is going to be dead in 6 weeks. Then another doctor came in the room 
and said, we got on the computer last night and we think we found 
something that might work. This was back in 1972. I had good insurance, 
thank God. He got the therapy. If that doctor had come in the room and 
said, we typed in the computer and we found a triple drug therapy but 
the HMO has refused it, boy, I would have wanted to pay that extra 1 
percent or half a percent to get the right to have that happen.
  And let me say, with all respect to my friends who have brought these 
other alternatives, the reason that we want enforceability and 
accountability and a right to get to court after a review by physicians 
is we want pressure on these HMOs and health insurance companies to 
make the decisions in accordance with what doctors and patients need.
  This is an important moment. This is the right bill. I urge Members 
to turn down these alternatives. I have great respect for the people 
who have written them and their motive and intent; but with all my 
heart I say to the Members of the House of Representatives today, this 
Norwood-Dingell bill is the right bill for the people of this country. 
If somebody is sick in your family, you are going to need this bill. 
Turn down these alternatives and vote for this very, very positive 
piece of legislation.

                              {time}  1400

  Mr. GOSS. Mr. Chairman, I yield 5 minutes to the distinguished 
gentleman from Oklahoma (Mr. Coburn) who is the principal author of the 
patient protection act of this substitute.
  Mr. COBURN. Mr. Chairman, I thank the gentleman for yielding me the 
time.
  Mr. Chairman, this is an issue that is very important to many of us. 
I have spent 21 years of my life in the medical field. Myself and one 
other doctor in

[[Page 24398]]

this body goes home and practices every weekend. We all agree that 
there needs to be certain basic things changed. Everybody that voted on 
the last bill all know that all those basic things need to be changed.
  Why? Because there were four Members in this body that really wrote 
them: The gentleman from Iowa (Mr. Ganske), the gentleman from Oklahoma 
(Mr. Coburn), the gentleman from Georgia (Mr. Norwood), and the 
gentleman from Arizona (Mr. Shadegg). They constitute the entire base 
bill of all the bills that are written. We all agree on that. What we 
do not agree on, however, is what the risks are of going too far.
  I believe that all in this debate are well-intended. And other than 
the statements made by our friend from Massachusetts, I believe all the 
motives are good. He said our motives are not good, we have been 
pulled. We have not been pulled. We care about patients immensely. The 
question is do we care just in the short-run? Are we only going to 
solve the problem now and then have to come back and fix a bigger 
problem?
  I am known for my independence in this body. I have taken the AMA 
foursquare for their position, which puts people's future health care 
benefit at risk. And why are they doing it? They have a persecution 
complex. They have been sued out the kazoo. And if it is good enough 
for them, it is good enough for everybody else.
  I am a pro-business conservative. I have had the ``little you know 
what'' beat out of me from the people who are my friends. Why would I 
position myself in the middle of those two? Because I want to fix 
health care. Not just now. I want to fix it down the road. And I do not 
want what we are about to do to end up being the reason why the 
Government is going to have to run health care.
  Mr. Chairman, I want to tell my colleagues, if they do not believe 
that is true, listen to this: The closest the Health Care Financing 
Administration has ever come on any estimate of any cost with Medicare/
Medicaid, they missed it by 800 percent. So just take .3 or 1 percent, 
multiply it by 800 percent, and that is what we are going to see.
  There are motivations other than caring for the patients in this 
debate, and they are big business not wanting to pay the cost of full 
care. There are HMOs who oftentimes, too often, the bottom line is the 
most important thing. And there is the trial bar who will extort, we 
cannot deny it, they will extort businesses. And they will raise costs. 
And under the claim of a good purpose but all too often as a lawsuit 
that is intended to only do one thing, extort money because it costs 
more to defend than it does to settle.
  I do not deny that there are serious problems in our health care 
delivery system. I have worked hard with my friend, the gentleman from 
Georgia (Mr. Norwood), and the gentleman from Iowa (Mr. Ganske) to try 
to solve those. But I beg this body to consider what we do. If we go 
too far and if we do not go far enough, we have failed. And if we fail, 
everyone in this country loses.
  Government-run health care will kill the quality and leading nature 
of this country's health care. That is really what we are talking 
about. We are not really talking about lawsuits. We really are not 
talking about employer-based helped care. What we are talking about is 
getting over the brink to where what is going to happen is we are going 
to fulfill our obligation with a Government-run program.
  And then talk about costs, talk about the ability to control care, 
talk about meeting our obligations to Social Security. We cannot even 
meet our obligations in Medicare now. How are we ever going to do that?
  So as my colleagues consider this vote, think about why I would place 
myself against both sides of my friends, both sides. Because it is 
right and because it is correct. It does not do everything that the 
Norwood-Dingell bill does. We know that. But let us go here first. Let 
us hold plans accountable. There is no denying that we hold them 
accountable. The gentleman from Georgia (Mr. Norwood) knows that. It is 
how we hold them accountable and what are the costs associated with 
that.
  I would beg my colleagues to look and walk before we leap. Our 
patients are worth that much.
  Mr. DINGELL. Mr. Chairman, I yield 2 minutes to my good friend the 
gentleman from Georgia (Mr. Norwood).
  Mr. NORWOOD. Mr. Chairman, this is the painful part. It is not any 
fun going against our friends. And the gentleman from Oklahoma (Mr. 
Coburn) is my friend. Of course, I wish he would not go against our 
bill which he worked so hard on and so long to help us write.
  My colleagues, what this really is all about is about two very strong 
American principles. It is about the right to choose in this country 
and choose our own doctor, and it is about the right to ask people to 
be responsible for their actions. We do that all the time, and it is 
time that we ask the insurance industry to be responsible for its 
actions.
  I am going to vote against the Coburn amendment because all the good 
things he has in his bill that he knows I agree with, he is right, I 
did help him write them, but I am going to vote against him because 
they really have gone too far with their liability part. And yes, they 
do and will make insurance companies liable in Federal court. There is 
no question that they will. But the problem is the poor patient has to 
jump through so many hurdles before they can get there.
  It is correct for us to not endorse frivolous lawsuits and extortion 
that happens out there in the legal profession today. We know that. 
That is why we have tried to do our best to protect the employers.
  But I cannot support his bill because I have to worry about and I am 
worried about and I have been for 5 years, tomorrow, today, it is about 
that mother today who took her child to the pediatrician and the doctor 
says her child needs to be hospitalized and the insurance industry 
2,000 miles away says, no, we cannot do that.
  It is about a friend of mine, Bob Schumacher, who, like me, is a 
small businessman and lives in Macon, Georgia. Bob used to be a member 
in NFIBE. He used to be a member in the Chamber of Commerce. But his 
wife is dying and the plan that he bought as the employer will not pay 
the benefits, and he basically has no recourse today. I want him to get 
recourse and get it fast, and we think in our bill that is the best way 
to do that.
  Mr. GOSS. Mr. Chairman, I yield the balance of my time to the 
distinguished gentleman from Illinois (Mr. Hastert), the Speaker of the 
House.
  Mr. HASTERT. Mr. Chairman, I rise today in strong support of the 
coalition substitute.
  As many of my colleagues know, I have been involved in this whole 
idea of health care and health care reform for a long time, probably 
longer than I want to remember.
  One of the things we have strived for is to be able to get people 
into health care, into the situation where they need to get treatment, 
try to get people into hospitals' rooms and doctors' offices and not 
necessarily going into lawyers' offices and courtrooms before they can 
get that treatment.
  I have always believed that we have three goals in health care. It 
must be affordable. It must be available. And it must be accountable. 
If it is not affordable, it is not available. Trying to change a system 
and keep a balance so that we do not change that system too much that 
we completely upset it so patients cannot get the care that they need 
is the task before this House, to try to find balance to try to do 
those things that are the right things.
  As we debate these bills and these options before us today, there are 
a lot of similarities. People getting the access, people being able to 
get into emergency care, getting to their caregiver, their 
pediatrician, or their Ob-Gyn so that they can take care of them. They 
are all the same. I have written that legislation for years. The 
gentleman from Georgia (Mr. Norwood) helped me to do it. And this is 
all the same.
  The difference in these bills is to some a fine line, but the 
difference in these bills is how far we go, how far

[[Page 24399]]

that we give license to the trial lawyers, how far that we take the 
incentive away from corporate and employers to provide health care for 
their employees.
  I am pleased that the House passed an access bill yesterday in a 
bipartisan fashion that will help address the problem of the 44 million 
uninsured today. It would be shameful to take up the important issue of 
patient protections without doing something to protect the uninsured.
  As my good friend the gentleman from Florida (Mr. Goss) put together 
a package that does both, he wrestled with many issues, how to make 
sure that managed care plans come through on their promises to their 
patients, how can we be certain that patients get the care they need 
when they need it.
  Mr. Chairman, the coalition substitute developed by the gentleman 
from Florida (Mr. Goss), the gentleman from Oklahoma (Mr. Coburn), the 
gentleman from Arizona (Mr. Shadegg), the gentleman from Pennsylvania 
(Mr. Greenwood), and the gentleman from California (Mr. Thomas) is an 
excellent product. It took us a while to reach this point. Consensus 
takes time. But we have got a solid, balanced approach that I urge my 
colleagues to support.
  This is what the coalition bill does: It provides access to binding, 
independent decisions by doctors. For patients, we enforce their rights 
in court. And if they are harmed, they have access and rights to go 
back to court and get their damages. We protect employers who offer 
health care as a voluntary benefit. And we do not end fee-for-service 
medicine. We protect States like California and Texas that have already 
passed the right to sue legislation.
  Sound reasonable? I think so. What could possibly be the reason for 
division on such a common-sense approach? It is very simple. We do not 
protect the trial lawyers. We do not force people to sue their way to 
get better health care. We do not provide windfalls for the trial 
lawyers. We want to show them something. We want to show them a common-
sense way.
  I want to also show my colleagues something else. This is a class 
list from the University of Texas Law School. It is a class list of all 
kinds of courses on how to sue an HMO. Probably that is relevant in 
Texas. Folks in Texas argue that the right to sue has not increased 
costs and they have not exploded. And they may be right so far.
  But under the Norwood-Dingell legislation, trial lawyers will be 
given unprecedented new rights to sue any time for any reason in any 
venue. The truth is no one has any idea what the cost implications can 
be when they go too far. The coalition bill, instead, gives patients 
the care they need when they need it.
  My colleagues, we have come to an important point in this Congress in 
this debate. If we want to protect patients, vote for Goss. I urge 
support for the coalition substitute. And when it passes, I want to 
urge my colleagues to vote yes on final passage to move this 
legislation forward.

                              {time}  1415

  Mr. DINGELL. Mr. Chairman, I yield the balance of my time to the 
distinguished gentleman from Arkansas (Mr. Berry).
  The CHAIRMAN. The gentleman from Arkansas is recognized for 2\1/4\ 
minutes.
  Mr. BERRY. Mr. Chairman, I rise in opposition to this amendment and 
in support of the bipartisan Norwood-Dingell bill. Let me tell my 
colleagues one of the reasons why.
  Under the Coburn-Shadegg amendment non-economic damages are limited 
to the lesser of two times economic damages or $500,000. As was already 
mentioned, the Cocoran case that the gentleman from Arizona (Mr. 
Shadegg) talked about, since the victim was a baby with no earnings, 
economic damages are minor, possibly only the cost of a funeral. Do my 
colleagues want to tell the Cocorans that the life of their baby is 
only worth a couple of thousand dollars? Under the Coburn-Shadegg 
amendment that is all that they would receive. That is one of the 
reasons I am opposed to this amendment.
  Unlike this substitute which creates a new Federal bureaucratic 
process, the Norwood-Dingell legislation would allow States to 
determine whether such liability should be expanded to self-insured 
plans.
  Let me say this again. The Norwood-Dingell bill allows States to 
determine whether HMOs should be held liable, and it allows States to 
determine which limits to set on damages.
  The gentleman from Oklahoma (Mr. Coburn) says that letting the States 
decide goes too far. I disagree. The State of Texas, which the Speaker 
just referred to, has only had three lawsuits in its experience with a 
very similar bill as we are about to pass. Only in States that allow 
such suits and only in cases where a person has gone through a 
competitive internal and external review process could a lawsuit be 
filed, and if a health insurer or HMO abided by the review process, it 
could not be sued for punitive damages.
  Most important, the Norwood-Dingell bill specifically prohibits 
lawsuits against employers, unless an employer makes a medical decision 
to deny a covered benefit and a patient is seriously harmed as a 
result. Norwood-Dingell specifically prohibits the suit to an employer.
  These safeguards virtually ensure costly trials. Unreasonable 
verdicts will not result. At the same time it will ensure insurance 
companies and HMOs provide the benefits that employers and employees 
have paid for.
  Mr. HUTCHINSON. Mr. Chairman, presently, this Nation is awash with a 
sea of discontent--a belief, in our Nation, that managed care has 
eroded the traditional reliance of patients on the decisions and 
recommendations of the physicians.
  Because of the growing discontent of patients who are subject to 
managed care agreements, Congress is prepared to step in with 
additional patient protections and rights and to make sure those rights 
are enforceable. As we consider changes to our managed care system we 
need to keep in mind our guiding principles:
  First, patients should be able to choose their own doctor--the most 
basic decision on health care. This means that a managed care agreement 
must allow a point of service option allowing patients to pay for 
procedures and physicians not covered by their plans; patients must 
also be guaranteed access to customary specialities such as OB/GYNs and 
pediatricians.
  Second, physicians should be free to discuss all medical options with 
their patients--this means a prohibition of gag rules which restrict 
physicians from recommending all medical options with the patient;
  Third, members of managed care plans should have immediate access to 
an emergency room based on a prudent lay person's standard and not be 
second guessed by an office clerk reviewing an emergency room bill 
thirty days after an emergency.
  Finally, the protections and rights for patients are useless without 
the means for accountability and liability if those rights are ignored.
  When organizations like insurance companies determine issues of 
medical necessity, they need to stand behind those decisions. However, 
while I believe there must be accountability, there also must be 
safeguards for employers who provide healthcare as a benefit and do not 
make medical decisions. Healthcare insurance is an employer sponsored 
system, and we must be careful that we maintain that system and 
encourage it to grow. Already, we have too many people who are without 
insurance, and we do not want to see those numbers rise because 
Congress irresponsibly passed legislation that drove up the cost of 
healthcare in a dramatic fashion.
  Mr. Chairman, the bill before us that protects the patient and 
follows these guiding principles is the Goss, Shadegg, Coburn, 
Greenwood and Thomas Substitute. This requires group health plans to 
have a grievance system as well as an internal and external appeals 
process.
  This would also allow a patient recourse when there is a denial of 
coverage if the benefits would exceed a hundred dollars. The 
legislation requires decisions within 14 days or 48 hours in expedited 
cases. In addition, for the first time a patient would be able to take 
the responsible party into court to protect their rights. The purpose 
of the court access is to protect rights, recoup damages and not to 
punish the healthcare plan if the plan is following the recommendation 
of the appeals review.

[[Page 24400]]

  Just as important, employers who provide a self-funded health 
insurance plan will not be held liable unless they directly participate 
in the medical decisions of the plan. This provides adequate balance 
between patient protection and avoids astronomical price increases on 
health insurance premiums.
  Mr. Chairman, I ask my colleagues to support the balanced approach of 
the patient protection provisions in Dr. Coburn's substitute amendment.
  Mr. HILL of Montana, Mr. Chairman, Americans enjoy the best quality 
health care in the world. However, our system for delivering care can 
still be frustrating for patients, providers and employers. True 
comprehensive health care reform in my opinion must include the three 
A's--Accessibility, Affordability and Accountability. Yesterday, the 
House passed H.R. 2990 which will improve the accessibility and 
affordability in health care that we need today.
  Today, we need to complete the Trifecta and address the most 
difficult of the three A's--Accountability. During the debate today we 
will have an opportunity to vote on four different ways to address the 
accountability issue. The main issue that we are debating when 
discussing patient protection legislation is how do we bring about 
accountability for insurance companies without creating a whirlwind of 
frivolous litigation.
  Americans want and deserve patient protections, they do not want more 
lawsuits. And they don't want to fight with their employer, their 
doctor, or their insurance provider.
  That is why I support the Coburn-Shadegg substitute to H.R. 2723, the 
Bipartisan Consensus Managed Care Improvement Act.
  There are a number of reasons that I feel this solution is the best 
for both patients and providers. I believe this substitute ensures 
responsibility by holding insurance companies accountable to patients 
by allowing physicians to make medical decisions. First, Coburn/Shadegg 
allows employers to provide health insurance to their employees without 
exposing them to increased litigation. Under this substitute, employers 
can not be held liable for providing health care coverage, selecting a 
plan, selecting a third-party to administer, determining coverage or 
increasing or reducing coverage, or intervening on behalf of an 
employee. Under H.R. 2723, the employer will be subject to lawsuits 
which in turn, I fear, will cause employers to drop their health plans 
for their employees.
  Second, Coburn/Shadegg instills reasonable accountability. The 
substitute requires an exhaustion of administrative remedies required. 
Patients are allowed to go through an internal and external appeals 
process before going to court. This gives patients an expedited forum 
to air grievances. Most importantly, the appeals are decided by an 
independent panel of doctors, not by bureaucrats or insurance claims 
adjusters, not by lawyers or judges.
  Under this substitute there is no liability for consequential damages 
if the plan's doctor's decision is upheld by the independent external 
appeals entity. The goal is to encourage care and the good decision 
making at the earliest point in time. We need to avoid a process such 
as that created in the Norwood/Dingell bill that would produce an 
avalanche of frivolous lawsuits. We can address the very real concern 
of patients in managed care plans by empowering patients, not trial 
lawyers, and do so by passing Coburn/Shadegg.
  I want patients to get the care they are entitled to when they need 
it, not allow their heirs to sue for some large settlement after they 
die. In the end, excessive lawsuits will only take money away from care 
and put it into the pockets of attorneys. That is an unacceptable 
result.
  By adopting the Coburn-Shadegg substitute, we will be completing the 
three A's--Accessibility, Affordability and Accountability. Only when 
we have the three A's, is when we have a common-sense approach to 
comprehensive health care reform that will make health insurance 
companies more accountable and give patients more choices.
  Mrs. FOWLER. Mr. Chairman, today I rise in support of the Goss-
Coburn-Shadegg substitute. I, too, have heard of the excesses of some 
managed care plans from constituents and doctors in my district. I 
agree that these excesses must be curtailed and that the health care 
plans should be held accountable when they practice bad medicine.
  However, I do not believe that the only way to hold them accountable 
is to open them up to lawsuits without limits.
  The Norwood-Dingell bill does not distinguish between managed care 
insurance and traditional fee-for-service insurance. Fee-for-service 
plans merely reimburse for care; they do not engage in the type of 
medical decision-making that we seek to address through this debate. 
This substitute, on the other hand, makes the distinction and protects 
fee-for-service plans from expanded liability.
  This substitute, like the Norwood-Dingell bill, establishes internal 
and external review processes through which doctors make determinations 
about what care is appropriate for their patients. But, unlike the 
Norwood-Dingell bill, this substitute allows those processes a chance 
to work before sending patients to court.
  Mr. Chairman, the ultimate goal we all share is to ensure that 
patients get the care that they need when they need it. An expedited 
review process like that set up in this substitute will get patients 
that care much more quickly than a lengthy lawsuit.
  But should the insurance company defy the determinations of those 
independent doctors, and as a result a patient is injured or dies, 
court may be the only option. This substitute allows for full recovery 
of economic damages, but caps the non-economic and punitive damages 
that can be won so that they are fair.
  Furthermore, Mr. Chairman, this substitute strikes the appropriate 
balance between the rights to patients to seek redress of their 
grievances and the legitimate concerns of employers of being subjected 
to unlimited lawsuits. Unlike the Norwood-Dingell bill, Mr. Chairman, 
this substitute, through very specific language, will protect employers 
who do the right thing and provide health insurance coverage to their 
employees.
  Without this employer protection, more employers will be forced to 
drop their insurance coverage for their employees. Without these limits 
on liability, premiums will rise and more people will be unable to 
afford insurance coverage. If these things happen, Mr. Chairman, then 
all we've done here today and yesterday will have been for naught.
  Mr. CLAY. Mr. Chairman. I rise in opposition to the Coburn 
substitute. This substitute is nothing more than a fig leaf to permit 
Members to say they voted for something on liability without giving the 
American people any real rights. Under this substitute it is so 
difficult to get to court that almost no one will be able to be 
redressed in court.
  First, under Coburn, individuals may only go to court after they have 
exhausted all internal and external plan appeals. No exception. Even if 
injury has already occurred. Or if appealing would be futile. This is 
tougher than current ERISA law which permits individuals to go to court 
if the court finds the internal process futile.
  Second, individuals may only bring suit in federal court. The backlog 
is far greater in federal court than in state court. Individuals who do 
not live in big cities will have to travel long distances if they have 
been harmed.
  Third, Coburn only permits individuals to sue the ``final decision 
maker''. This alone can be an impossible standard for an individual. 
Most individuals do not know who denied their claim and they certainly 
don't know who the final person was.
  Furthermore, Coburn includes an unprecedented and likely 
unconstitutional limitation on the court's power to hear the case. 
Under Coburn, health plans can contract with private entities and 
permit them to determine if an individual was harmed and whether it was 
due to the plan's failure. If the private contractor finds for the 
health plan, then the court must dismiss the lawsuit unless there is 
clear and convincing evidence to the contrary. This is an unprecedented 
intrusion on the power of the courts. A private entity cannot determine 
whether there is a case or not. That is for the courts and the courts 
alone.
  Even worse, Coburn mandates that the court award losing attorneys' 
fees and court costs if an individual's case is dismissed. Few working 
people can afford to go to court if they may be forced to pay the 
health plan's attorneys' fees if they lose.
  Coburn is not a serious liability amendment. It makes it so difficult 
for an individual to bring a suit that almost no one will be able to go 
to court. Don't be fooled by this Trojan Horse. The American people 
want real rights and real reform. Support the Norwood-Dingell 
compromise.
  Mr. KOLBE. Mr. Chairman, for the last 10 months, I've researched, 
analyzed, listened, and questioned, searching for the right answer to 
this policy conundrum. I believe there are four guiding principles that 
should govern any response:
  (1) Legislation should permit an individual to sue an HMO as long as 
the amount of damages are reasonably related to the economic loss.
  (2) Legislation should permit the right to sue over covered benefits 
only.
  (3) Legislation should emphasize mediation over litigation.
  (4) Legislation must provide sufficient protections for the 
employer--not the HMO--from lawsuits, unless the employer is actively 
engaged in making the health care decisions of the HMO.

[[Page 24401]]

  In my view, Norwood-Dingell runs counter to these principles. 
Specifically, the bill would:
  Allow lawsuits by anyone. No actual injury is required to recover 
damages under H.R. 2723.
  Allow lawsuits at any time. H.R. 2723 does not require patients to 
seek administrative remedies--including internal and external appeals--
before proceeding to litigation.
  Allow lawsuits over anything. Plaintiffs may challenge any coverage 
decision or action by an HMO they disagree with, even if the procedure 
or service is not a covered benefit.
  Allows lawsuits even when the HMO does everything right. Under H.R. 
2723, an HMO may be sued even when it made the right decision according 
to an external medical review conducted by independent physicians.
  Allows lawsuits without limits. This bill would let a patient sue for 
unlimited damages, driving up health care costs.
  The Coburn-Shadegg substitute, however, meets these criteria. The 
bill:
  Provides reasonable, but limited, liability for HMOs.
  Protects employers from harassing litigation unless they choose to 
directly participate in any final decision to deny care.
  Requires plaintiffs to complete an internal and external review 
process before proceeding to court.
  Restricts lawsuits to covered benefits only, eliminating judicially 
mandated benefits.
  To my colleagues here today, I say this: the Coburn-Shadegg 
substitute borrows the best of the Norwood-Dingell bill, rejects its 
worst, and improves upon the rest. It is a final example of pragmatic 
policy and deserves your support. It is essential that common sense and 
the common good prevail over rhetoric and political gamesmanship. I 
urge my colleagues to support the Coburn-Shadegg substitute. Americans 
are in need of a solution to this problem, not an issue for next year's 
elections.
  The CHAIRMAN. The question is on the amendment in the nature of a 
substitute offered by the gentleman from Florida (Mr. Goss).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.


                             Recorded Vote

  Mr. GOSS. Mr. Chairman, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 193, 
noes 238, not voting 3, as follows:

                             [Roll No. 488]

                               AYES--193

     Aderholt
     Archer
     Armey
     Baker
     Ballenger
     Barrett (NE)
     Bartlett
     Barton
     Bass
     Bateman
     Bereuter
     Biggert
     Bilirakis
     Bliley
     Blunt
     Bono
     Brady (TX)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Canady
     Cannon
     Castle
     Chabot
     Chambliss
     Chenoweth-Hage
     Coble
     Coburn
     Collins
     Combest
     Cooksey
     Crane
     Cubin
     Cunningham
     Davis (VA)
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Dickey
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ewing
     Fletcher
     Fossella
     Fowler
     Gallegly
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Goode
     Goodlatte
     Goodling
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutknecht
     Hansen
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (MT)
     Hilleary
     Hobson
     Hoekstra
     Houghton
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Istook
     Jenkins
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Kasich
     Kelly
     Kingston
     Knollenberg
     Kolbe
     Kuykendall
     LaHood
     Largent
     Latham
     LaTourette
     Lazio
     Lewis (CA)
     Lewis (KY)
     Linder
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCrery
     McHugh
     McInnis
     McKeon
     Metcalf
     Mica
     Miller (FL)
     Miller, Gary
     Moran (KS)
     Myrick
     Nethercutt
     Ney
     Northup
     Nussle
     Ose
     Oxley
     Packard
     Pease
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Radanovich
     Ramstad
     Regula
     Reynolds
     Riley
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Salmon
     Schaffer
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simpson
     Skeen
     Smith (MI)
     Smith (TX)
     Souder
     Spence
     Stearns
     Stump
     Sununu
     Sweeney
     Talent
     Tancredo
     Tauzin
     Taylor (NC)
     Thomas
     Thornberry
     Thune
     Tiahrt
     Toomey
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                               NOES--238

     Abercrombie
     Ackerman
     Allen
     Andrews
     Bachus
     Baird
     Baldacci
     Baldwin
     Barcia
     Barr
     Barrett (WI)
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bilbray
     Bishop
     Blagojevich
     Blumenauer
     Boehlert
     Boehner
     Bonilla
     Bonior
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Campbell
     Capps
     Capuano
     Cardin
     Carson
     Clay
     Clayton
     Clement
     Clyburn
     Condit
     Conyers
     Cook
     Costello
     Coyne
     Cramer
     Crowley
     Cummings
     Danner
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Dixon
     Doggett
     Dooley
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Foley
     Forbes
     Ford
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Frost
     Ganske
     Gejdenson
     Gephardt
     Gilman
     Gonzalez
     Gordon
     Green (TX)
     Gutierrez
     Hall (OH)
     Hall (TX)
     Hastings (FL)
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Hooley
     Horn
     Hostettler
     Hoyer
     Inslee
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kleczka
     Klink
     Kucinich
     LaFalce
     Lampson
     Lantos
     Larson
     Leach
     Lee
     Levin
     Lewis (GA)
     Lipinski
     LoBiondo
     Lofgren
     Lowey
     Luther
     Maloney (CT)
     Maloney (NY)
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntosh
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Minge
     Mink
     Moakley
     Mollohan
     Moore
     Moran (VA)
     Morella
     Murtha
     Nadler
     Napolitano
     Neal
     Norwood
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Paul
     Payne
     Pelosi
     Peterson (MN)
     Phelps
     Pickett
     Pomeroy
     Price (NC)
     Quinn
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Rothman
     Roukema
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sanford
     Sawyer
     Saxton
     Schakowsky
     Scott
     Serrano
     Sherman
     Shows
     Sisisky
     Skelton
     Slaughter
     Smith (NJ)
     Smith (WA)
     Snyder
     Spratt
     Stabenow
     Stark
     Stenholm
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Terry
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Vento
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Weygand
     Wise
     Woolsey
     Wu
     Wynn

                             NOT VOTING--3

     Cox
     Kaptur
     Scarborough

                              {time}  1439

  Mr. WALSH changed his vote from ``no'' to ``aye.''
  So the amendment in the nature of a substitute was rejected.
  The result of the vote was announced as above recorded.


 Amendment No. 3 in the Nature of a Substitute Offered by Mr. Houghton

  Mr. HOUGHTON. Mr. Chairman, I offer an amendment in the nature of a 
substitute.
  The CHAIRMAN. The Clerk will designate the amendment in the nature of 
a substitute.
  The text of the amendment in the nature of a substitute is as 
follows:

       Amendment No. 3 in the nature of a substitute offered by 
     Mr. Houghton:
       Strike out 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 
     Consensus Managed Care Improvement Act of 1999''.
       (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--Grievances and Appeals

Sec. 101. Utilization review activities.
Sec. 102. Internal appeals procedures.
Sec. 103. External appeals procedures.
Sec. 104. Establishment of a grievance process.

                       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. Access to specialty care.
Sec. 115. 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.

[[Page 24402]]

                   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. Coverage of limited scope plans.
Sec. 155. Regulations.

 TITLE II--APPLICATION OF QUALITY 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.

TITLE III--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                                  1974

Sec. 301. Application of patient protection standards to group health 
              plans and group health insurance coverage under the 
              Employee Retirement Income Security Act of 1974.
Sec. 302. Additional judicial remedies.
Sec. 303. Availability of binding arbitration.

TITLE IV--APPLICATION TO GROUP HEALTH PLANS UNDER THE INTERNAL REVENUE 
                              CODE OF 1986

Sec. 401. Amendments to the Internal Revenue Code of 1986.

        TITLE V--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

Sec. 501. Effective dates.
Sec. 502. Coordination in implementation.

             TITLE VI--HEALTH CARE PAPERWORK SIMPLIFICATION

Sec. 601. Health care paperwork simplification.

                    TITLE I--IMPROVING MANAGED CARE

                   Subtitle A--Grievance and 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.
       (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 an 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 an 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 or 
     appropriate.
       (d) Deadline for Determinations.--
       (1) Prior authorization services.--
       (A) In general.--Except as provided in paragraph (2), in 
     the case of a utilization review activity involving the prior 
     authorization of health care items and services for an 
     individual, the utilization review program shall make a 
     determination concerning such authorization, and provide 
     notice of the determination to the individual or the 
     individual's designee and the individual's health care 
     provider by telephone and in printed form, as soon as 
     possible in accordance with the medical exigencies of the 
     case, and in no event later than the deadline specified in 
     subparagraph (B).
       (B) Deadline.--
       (i) In general.--Subject to clauses (ii) and (iii), the 
     deadline specified in this subparagraph is 14 days after the 
     date of receipt of the request for prior authorization.
       (ii) Extension permitted where notice of additional 
     information required.--If a utilization review program--

       (I) receives a request for a prior authorization,
       (II) determines that additional information is necessary to 
     complete the review and make the determination on the 
     request, and
       (III) notifies the requester, not later than 5 business 
     days after the date of receiving the request, of the need for 
     such specified additional information,

     the deadline specified in this subparagraph is 14 days after 
     the date the program receives the specified additional 
     information, but in no case later than 28 days after the date 
     of receipt of the request for the prior authorization. This 
     clause shall not apply if the deadline is specified in clause 
     (iii).
       (iii) Expedited cases.--In the case of a situation 
     described in section 102(c)(1)(A), the deadline specified in 
     this subparagraph is 72 hours after the time of the request 
     for prior authorization.
       (2) Ongoing care.--
       (A) Concurrent review.--
       (i) In general.--Subject to subparagraph (B), in the case 
     of a concurrent review of ongoing care (including 
     hospitalization), which results in a termination or reduction 
     of such care, the plan 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 as soon as possible in 
     accordance with the medical exigencies of the case, with 
     sufficient time prior to the termination or reduction to 
     allow for an appeal under section 102(c)(1)(A) 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.
       (B) Exception.--Subparagraph (A) shall not be interpreted 
     as requiring plans or issuers to provide coverage of care 
     that would exceed the coverage limitations for such care.
       (3) Previously provided services.--In the case of a 
     utilization review activity involving retrospective review of 
     health care services previously provided for an individual, 
     the utilization review program shall make a

[[Page 24403]]

     determination concerning such services, and provide notice of 
     the determination to the individual or the individual's 
     designee and the individual's health care provider by 
     telephone and in printed form, within 30 days of the date of 
     receipt of information that is reasonably necessary to make 
     such determination, but in no case later than 60 days after 
     the date of receipt of the claim for benefits.
       (4) Failure to meet deadline.--In a case in which a group 
     health plan or health insurance issuer fails to make a 
     determination on a claim for benefit under paragraph (1), 
     (2)(A), or (3) by the applicable deadline established under 
     the respective paragraph, the failure shall be treated under 
     this subtitle as a denial of the claim as of the date of the 
     deadline.
       (5) Reference to special rules for emergency services, 
     maintenance care, and post-stabilization care.--For waiver of 
     prior authorization requirements in certain cases involving 
     emergency services and maintenance care and post-
     stabilization care, see subsections (a)(1) and (b) of section 
     113, respectively.
       (e) Notice of Denials of Claims for Benefits.--
       (1) In general.--Notice of a denial of claims for benefits 
     under a utilization review program 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 reasons for the denial (including the clinical 
     rationale);
       (B) instructions on how to initiate an appeal under section 
     102; and
       (C) notice of the availability, upon request of the 
     individual (or the individual's designee) of the clinical 
     review criteria relied upon to make such denial.
       (2) Specification of any additional information.--Such a 
     notice shall also specify what (if any) additional necessary 
     information must be provided to, or obtained by, the person 
     making the denial in order to make a decision on such an 
     appeal.
       (f) Claim for Benefits and Denial of Claim for Benefits 
     Defined.--For purposes of this subtitle:
       (1) 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.
       (2) Denial of claim for benefits.--The term ``denial'' 
     means, with respect to a claim for benefits, means a denial, 
     or a failure to act on a timely basis upon, in whole or in 
     part, the claim for benefits and includes a failure to 
     provide benefits (including items and services) required to 
     be provided under this title.

     SEC. 102. INTERNAL APPEALS PROCEDURES.

       (a) Right of Review.--
       (1) In general.--Each group health plan, and each health 
     insurance issuer offering health insurance coverage--
       (A) shall provide adequate notice in writing to any 
     participant or beneficiary under such plan, or enrollee under 
     such coverage, whose claim for benefits under the plan or 
     coverage has been denied (within the meaning of section 
     101(f)(2)), setting forth the specific reasons for such 
     denial of claim for benefits and rights to any further review 
     or appeal, written in a manner calculated to be understood by 
     the participant, beneficiary, or enrollee; and
       (B) shall afford such a participant, beneficiary, or 
     enrollee (and any provider or other person acting on behalf 
     of such an individual with the individual's consent or 
     without such consent if the individual is medically unable to 
     provide such consent) who is dissatisfied with such a denial 
     of claim for benefits a reasonable opportunity (of not less 
     than 180 days) to request and obtain a full and fair review 
     by a named fiduciary (with respect to such plan) or named 
     appropriate individual (with respect to such coverage) of the 
     decision denying the claim.
       (2) Treatment of oral requests.--The request for review 
     under paragraph (1)(B) may be made orally, but, in the case 
     of an oral request, shall be followed by a request in 
     writing.
       (b) Internal Review Process.--
       (1) Conduct of review.--
       (A) In general.--A review of a denial of claim under this 
     section shall be made by an individual who--
       (i) in a case involving medical judgment, shall be a 
     physician or, in the case of limited scope coverage (as 
     defined in subparagraph (B), shall be an appropriate 
     specialist;
       (ii) has been selected by the plan or issuer; and
       (iii) did not make the initial denial in the internally 
     appealable decision.
       (B) Limited scope coverage defined.--For purposes of 
     subparagraph (A), the term ``limited scope coverage'' means a 
     group health plan or health insurance coverage the only 
     benefits under which are for benefits described in section 
     2791(c)(2)(A) of the Public Health Service Act (42 U.S.C. 
     300gg-91(c)(2)).
       (2) Time limits for internal reviews.--
       (A) In general.--Having received such a request for review 
     of a denial of claim, the plan or issuer shall, in accordance 
     with the medical exigencies of the case but not later than 
     the deadline specified in subparagraph (B), complete the 
     review on the denial and transmit to the participant, 
     beneficiary, enrollee, or other person involved a decision 
     that affirms, reverses, or modifies the denial. If the 
     decision does not reverse the denial, the plan or issuer 
     shall transmit, in printed form, a notice that sets forth the 
     grounds for such decision and that includes a description of 
     rights to any further appeal. Such decision shall be treated 
     as the final decision of the plan. Failure to issue such a 
     decision by such deadline shall be treated as a final 
     decision affirming the denial of claim.
       (B) Deadline.--
       (i) In general.--Subject to clauses (ii) and (iii), the 
     deadline specified in this subparagraph is 14 days after the 
     date of receipt of the request for internal review.
       (ii) Extension permitted where notice of additional 
     information required.--If a group health plan or health 
     insurance issuer--

       (I) receives a request for internal review,
       (II) determines that additional information is necessary to 
     complete the review and make the determination on the 
     request, and
       (III) notifies the requester, not later than 5 business 
     days after the date of receiving the request, of the need for 
     such specified additional information,

     the deadline specified in this subparagraph is 14 days after 
     the date the plan or issuer receives the specified additional 
     information, but in no case later than 28 days after the date 
     of receipt of the request for the internal review. This 
     clause shall not apply if the deadline is specified in clause 
     (iii).
       (iii) Expedited cases.--In the case of a situation 
     described in subsection (c)(1)(A), the deadline specified in 
     this subparagraph is 72 hours after the time of the request 
     for review.
       (c) Expedited Review Process.--
       (1) In general.--A group health plan, and a health 
     insurance issuer, shall establish procedures in writing for 
     the expedited consideration of requests for review under 
     subsection (b) in situations--
       (A) in which, as determined by the plan or issuer or as 
     certified in writing by a treating health care professional, 
     the application of the normal timeframe for making a 
     determination could seriously jeopardize the life or health 
     of the participant, beneficiary, or enrollee or such an 
     individual's ability to regain maximum function; or
       (B) described in section 101(d)(2) (relating to requests 
     for continuation of ongoing care which would otherwise be 
     reduced or terminated).
       (2) Process.--Under such procedures--
       (A) the request for expedited review may be submitted 
     orally or in writing by an individual or provider who is 
     otherwise entitled to request the review;
       (B) all necessary information, including the plan's or 
     issuer's decision, shall be transmitted between the plan or 
     issuer and the requester by telephone, facsimile, or other 
     similarly expeditious available method; and
       (C) the plan or issuer shall expedite the review in the 
     case of any of the situations described in subparagraph (A) 
     or (B) of paragraph (1).
       (3) Deadline for decision.--The decision on the expedited 
     review must be made and communicated to the parties as soon 
     as possible in accordance with the medical exigencies of the 
     case, and in no event later than 72 hours after the time of 
     receipt of the request for expedited review, except that in a 
     case described in paragraph (1)(B), the decision must be made 
     before the end of the approved period of care.
       (d) Waiver of Process.--A plan or issuer may waive its 
     rights for an internal review under subsection (b). In such 
     case the participant, beneficiary, or enrollee involved (and 
     any designee or provider involved) shall be relieved of any 
     obligation to complete the review involved and may, at the 
     option of such participant, beneficiary, enrollee, designee, 
     or provider, proceed directly to seek further appeal through 
     any applicable external appeals process.

     SEC. 103. EXTERNAL APPEALS PROCEDURES.

       (a) Right to External Appeal.--
       (1) In general.--A group health plan, and a health 
     insurance issuer offering health insurance coverage, shall 
     provide for an external appeals process that meets the 
     requirements of this section in the case of an externally 
     appealable decision described in paragraph (2), for which an 
     appeal is made, within 180 days after completion of the 
     plan's internal appeals process under section 102, either by 
     the plan or issuer or by the participant, beneficiary, or 
     enrollee (and any provider or other person acting on behalf 
     of such an individual with the individual's consent or 
     without such consent if such an individual is medically 
     unable to provide such consent). The appropriate Secretary 
     shall establish standards to carry out such requirements.
       (2) Externally appealable decision defined.--
       (A) In general.--For purposes of this section, the term 
     ``externally appealable decision'' means a denial of claim 
     for benefits (as defined in section 101(f)(2))--
       (i) that is based in whole or in part on a decision that 
     the item or service is not medically necessary or appropriate 
     or is investigational or experimental; or
       (ii) in which the decision as to whether a benefit is 
     covered involves a medical judgment.

[[Page 24404]]

       (B) Inclusion.--Such term also includes a failure to meet 
     an applicable deadline for internal review under section 102.
       (C) Exclusions.--Such term does not include--
       (i) specific exclusions or express limitations on the 
     amount, duration, or scope of coverage that do not involve 
     medical judgment; or
       (ii) a decision regarding whether an individual is a 
     participant, beneficiary, or enrollee under the plan or 
     coverage.
       (3) Exhaustion of internal review process.--Except as 
     provided under section 102(d), a plan or issuer may condition 
     the use of an external appeal process in the case of an 
     externally appealable decision upon a final decision in an 
     internal review under section 102, but only if the decision 
     is made in a timely basis consistent with the deadlines 
     provided under this subtitle.
       (4) Filing fee requirement.--
       (A) In general.--Subject to subparagraph (B), a plan or 
     issuer may condition the use of an external appeal process 
     upon payment to the plan or issuer of a filing fee that does 
     not exceed $25.
       (B) Exception for indigency.--The plan or issuer may not 
     require payment of the filing fee in the case of an 
     individual participant, beneficiary, or enrollee who 
     certifies (in a form and manner specified in guidelines 
     established by the Secretary of Health and Human Services) 
     that the individual is indigent (as defined in such 
     guidelines).
       (C) Refunding fee in case of successful appeals.--The plan 
     or issuer shall refund payment of the filing fee under this 
     paragraph if the recommendation of the external appeal entity 
     is to reverse or modify the denial of a claim for benefits 
     which is the subject of the appeal.
       (b) General Elements of External Appeals Process.--
       (1) Contract with qualified external appeal entity.--
       (A) Contract requirement.--Except as provided in 
     subparagraph (D), the external appeal process under this 
     section of a plan or issuer shall be conducted under a 
     contract between the plan or issuer and one or more qualified 
     external appeal entities (as defined in subsection (c)).
       (B) Limitation on plan or issuer selection.--The applicable 
     authority shall implement procedures--
       (i) to assure that the selection process among qualified 
     external appeal entities will not create any incentives for 
     external appeal 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.
       (C) Other terms and conditions.--The terms and conditions 
     of a contract under this paragraph shall be consistent with 
     the standards the appropriate Secretary shall establish to 
     assure there is no real or apparent conflict of interest in 
     the conduct of external appeal activities. Such contract 
     shall provide that all costs of the process (except those 
     incurred by the participant, beneficiary, enrollee, or 
     treating professional in support of the appeal) shall be paid 
     by the plan or issuer, and not by the participant, 
     beneficiary, or enrollee. The previous sentence shall not be 
     construed as applying to the imposition of a filing fee under 
     subsection (a)(4).
       (D) State authority with respect qualified external appeal 
     entity 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) Elements of process.--An external appeal process shall 
     be conducted consistent with standards established by the 
     appropriate Secretary that include at least the following:
       (A) Fair and de novo determination.--The process shall 
     provide for a fair, de novo determination. However, nothing 
     in this paragraph shall be construed as providing for 
     coverage of items and services for which benefits are 
     specifically excluded under the plan or coverage.
       (B) Standard of review.--An external appeal entity shall 
     determine whether the plan's or issuer's decision is in 
     accordance with the medical needs of the patient involved (as 
     determined by the entity) taking into account, as of the time 
     of the entity's determination, the patient's medical 
     condition and any relevant and reliable evidence the entity 
     obtains under subparagraph (D). If the entity determines the 
     decision is in accordance with such needs, the entity shall 
     affirm the decision and to the extent that the entity 
     determines the decision is not in accordance with such needs, 
     the entity shall reverse or modify the decision.
       (C) Consideration of plan or coverage definitions.--In 
     making such determination, the external appeal entity shall 
     consider (but not be bound by) any language in the plan or 
     coverage document relating to the definitions of the terms 
     medical necessity, medically necessary or appropriate, or 
     experimental, investigational, or related terms.
       (D) Evidence.--
       (i) In general.--An external appeal entity shall include, 
     among the evidence taken into consideration--

       (I) the decision made by the plan or issuer upon internal 
     review under section 102 and any guidelines or standards used 
     by the plan or issuer in reaching such decision;
       (II) any personal health and medical information supplied 
     with respect to the individual whose denial of claim for 
     benefits has been appealed; and
       (III) the opinion of the individual's treating physician or 
     health care professional.

       (ii) Additional evidence.--Such entity may also take into 
     consideration but not be limited to the following evidence 
     (to the extent available):

       (I) The results of studies that meet professionally 
     recognized standards of validity and replicability or that 
     have been published in peer-reviewed journals.
       (II) The results of professional consensus conferences 
     conducted or financed in whole or in part by one or more 
     government agencies.
       (III) Practice and treatment guidelines prepared or 
     financed in whole or in part by government agencies.
       (IV) Government-issued coverage and treatment policies.
       (V) Community standard of care and generally accepted 
     principles of professional medical practice.
       (VI) To the extent that the entity determines it to be free 
     of any conflict of interest, the opinions of individuals who 
     are qualified as experts in one or more fields of health care 
     which are directly related to the matters under appeal.
       (VII) To the extent that the entity determines it to be 
     free of any conflict of interest, the results of peer reviews 
     conducted by the plan or issuer involved.

       (E) Determination concerning externally appealable 
     decisions.--A qualified external appeal entity shall 
     determine--
       (i) whether a denial of claim for benefits is an externally 
     appealable decision (within the meaning of subsection 
     (a)(2));
       (ii) whether an externally appealable decision involves an 
     expedited appeal; and
       (iii) for purposes of initiating an external review, 
     whether the internal review process has been completed.
       (F) Opportunity to submit evidence.--Each party to an 
     externally appealable decision may submit evidence related to 
     the issues in dispute.
       (G) Provision of information.--The plan or issuer involved 
     shall provide timely access to the external appeal entity to 
     information and to provisions of the plan or health insurance 
     coverage relating to the matter of the externally appealable 
     decision, as determined by the entity.
       (H) Timely decisions.--A determination by the external 
     appeal entity on the decision shall--
       (i) be made orally or in writing and, if it is made orally, 
     shall be supplied to the parties in writing as soon as 
     possible;
       (ii) be made in accordance with the medical exigencies of 
     the case involved, but in no event later than 21 days after 
     the date (or, in the case of an expedited appeal, 72 hours 
     after the time) of requesting an external appeal of the 
     decision;
       (iii) state, in layperson's language, the basis for the 
     determination, including, if relevant, any basis in the terms 
     or conditions of the plan or coverage; and
       (iv) inform the participant, beneficiary, or enrollee of 
     the individual's rights (including any limitation on such 
     rights) to seek further review by the courts (or other 
     process) of the external appeal determination.
       (I) Compliance with determination.--If the external appeal 
     entity reverses or modifies the denial of a claim for 
     benefits, the plan or issuer shall--
       (i) upon the receipt of the determination, authorize 
     benefits in accordance with such determination;
       (ii) take such actions as may be necessary to provide 
     benefits (including items or services) in a timely manner 
     consistent with such determination; and
       (iii) submit information to the entity documenting 
     compliance with the entity's determination and this 
     subparagraph.
       (c) Qualifications of External Appeal Entities.--
       (1) In general.--For purposes of this section, the term 
     ``qualified external appeal entity'' means, in relation to a 
     plan or issuer, an entity that is certified under paragraph 
     (2) as meeting the following requirements:
       (A) The entity meets the independence requirements of 
     paragraph (3).
       (B) The entity conducts external appeal activities through 
     a panel of not fewer than 3 clinical peers.
       (C) The entity has sufficient medical, legal, and other 
     expertise and sufficient staffing to conduct external appeal 
     activities for the plan or issuer on a timely basis 
     consistent with subsection (b)(2)(G).
       (D) The entity meets such other requirements as the 
     appropriate Secretary may impose.
       (2) Initial certification of external appeal entities.--
       (A) In general.--In order to be treated as a qualified 
     external appeal entity with respect to--

[[Page 24405]]

       (i) a group health plan, the entity must be certified (and, 
     in accordance with subparagraph (B), periodically 
     recertified) as meeting the requirements of paragraph (1)--

       (I) by the Secretary of Labor;
       (II) under a process recognized or approved by the 
     Secretary of Labor; or
       (III) to the extent provided in subparagraph (C)(i), by a 
     qualified private standard-setting organization (certified 
     under such subparagraph); or

       (ii) a health insurance issuer operating in a State, the 
     entity must be certified (and, in accordance with 
     subparagraph (B), periodically recertified) as meeting such 
     requirements--

       (I) by the applicable State authority (or under a process 
     recognized or approved by such authority); or
       (II) if the State has not established a certification and 
     recertification process for such entities, by the Secretary 
     of Health and Human Services, under a process recognized or 
     approved by such Secretary, or to the extent provided in 
     subparagraph (C)(ii), by a qualified private standard-setting 
     organization (certified under such subparagraph).

       (B) Recertification process.--The appropriate Secretary 
     shall develop standards for the recertification of external 
     appeal entities. Such standards shall include a review of--
       (i) the number of cases reviewed;
       (ii) a summary of the disposition of those cases;
       (iii) the length of time in making determinations on those 
     cases;
       (iv) updated information of what was required to be 
     submitted as a condition of certification for the entity's 
     performance of external appeal activities; and
       (v) such information as may be necessary to assure the 
     independence of the entity from the plans or issuers for 
     which external appeal activities are being conducted.
       (C) Certification of qualified private standard-setting 
     organizations.--
       (i) For external reviews under group health plans.--For 
     purposes of subparagraph (A)(i)(III), the Secretary of Labor 
     may provide for a process for certification (and periodic 
     recertification) of qualified private standard-setting 
     organizations which provide for certification of external 
     review entities. Such an organization shall only be certified 
     if the organization does not certify an external review 
     entity unless it meets standards required for certification 
     of such an entity by such Secretary under subparagraph 
     (A)(i)(I).
       (ii) For external reviews of health insurance issuers.--For 
     purposes of subparagraph (A)(ii)(II), the Secretary of Health 
     and Human Services may provide for a process for 
     certification (and periodic recertification) of qualified 
     private standard-setting organizations which provide for 
     certification of external review entities. Such an 
     organization shall only be certified if the organization does 
     not certify an external review entity unless it meets 
     standards required for certification of such an entity by 
     such Secretary under subparagraph (A)(ii)(II).
       (3) Independence requirements.--
       (A) In general.--A clinical peer or other entity meets the 
     independence requirements of this paragraph if--
       (i) the peer or entity does not have a familial, financial, 
     or professional relationship with any related party;
       (ii) any compensation received by such peer or entity in 
     connection with the external review is reasonable and not 
     contingent on any decision rendered by the peer or entity;
       (iii) except as provided in paragraph (4), the plan and the 
     issuer have no recourse against the peer or entity in 
     connection with the external review; and
       (iv) the peer or entity does not otherwise have a conflict 
     of interest with a related party as determined under any 
     regulations which the Secretary may prescribe.
       (B) Related party.--For purposes of this paragraph, the 
     term ``related party'' means--
       (i) with respect to--

       (I) a group health plan or health insurance coverage 
     offered in connection with such a plan, the plan or the 
     health insurance issuer offering such coverage, or
       (II) individual health insurance coverage, the health 
     insurance issuer offering such coverage,

     or any plan sponsor, fiduciary, officer, director, or 
     management employee of such plan or issuer;
       (ii) the health care professional that provided the health 
     care involved in the coverage decision;
       (iii) the institution at which the health care involved in 
     the coverage decision is provided;
       (iv) the manufacturer of any drug or other item that was 
     included in the health care involved in the coverage 
     decision; or
       (v) any other party determined under any regulations which 
     the Secretary may prescribe to have a substantial interest in 
     the coverage decision.
       (4) Limitation on liability of reviewers.--No qualified 
     external appeal entity having a contract with a plan or 
     issuer under this part and no person who is employed by any 
     such entity or who furnishes professional services to such 
     entity, shall be held by reason of the performance of any 
     duty, function, or activity required or authorized pursuant 
     to this section, to have violated any criminal law, or to be 
     civilly liable under any law of the United States or of any 
     State (or political subdivision thereof) if due care was 
     exercised in the performance of such duty, function, or 
     activity and there was no actual malice or gross misconduct 
     in the performance of such duty, function, or activity.
       (d) External Appeal Determination Binding on Plan.--The 
     determination by an external appeal entity under this section 
     is binding on the plan and issuer involved in the 
     determination.
       (e) Penalties Against Authorized Officials for Refusing To 
     Authorize the Determination of an External Review Entity.--
       (1) Monetary penalties.--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 in 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.
       (2) Cease and desist order and order of attorney's fees.--
     In any action described in paragraph (1) 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 paragraph has taken an action 
     resulting in a refusal of a benefit determined by an external 
     appeal entity in violation of such terms of the plan, 
     coverage, or this subtitle, or has failed to take an action 
     for which such person is responsible under the plan, 
     coverage, or this title 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--
       (A) to cease and desist from the alleged action or failure 
     to act; and
       (B) 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.
       (3) Additional civil penalties.--
       (A) In general.--In addition to any penalty imposed under 
     paragraph (1) or (2), 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 
     in violation of the terms of such a plan, coverage, or this 
     title; or
       (ii) any pattern or practice of repeated violations of the 
     requirements of this section with respect to such plan or 
     plans or coverage.
       (B) 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.
       (4) Removal and disqualification.--Any person acting in the 
     capacity of authorizing benefits who has engaged in any such 
     pattern or practice described in paragraph (3)(A) 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.
       (f) Protection of Legal Rights.--Nothing in this 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 actions.

     SEC. 104. ESTABLISHMENT OF A GRIEVANCE PROCESS.

       (a) Establishment of Grievance System.--
       (1) In general.--A group health plan, and a health 
     insurance issuer in connection with the provision of health 
     insurance coverage, shall establish and maintain a system to 
     provide for the presentation and resolution of oral and 
     written grievances brought by individuals who are 
     participants, beneficiaries, or enrollees, or health care 
     providers or other individuals acting on behalf of an 
     individual and with the individual's consent or without such 
     consent if the individual is medically unable to provide such 
     consent, regarding any aspect of the plan's or issuer's 
     services.
       (2) Grievance defined.--In this section, the term 
     ``grievance'' means any question,

[[Page 24406]]

     complaint, or concern brought by a participant, beneficiary 
     or enrollee that is not a claim for benefits (as defined in 
     section 101(f)(1)).
       (b) Grievance System.--Such system shall include the 
     following components with respect to individuals who are 
     participants, beneficiaries, or enrollees:
       (1) Written notification to all such individuals and 
     providers of the telephone numbers and business addresses of 
     the plan or issuer personnel responsible for resolution of 
     grievances and appeals.
       (2) A system to record and document, over a period of at 
     least 3 previous years, all grievances and appeals made and 
     their status.
       (3) A process providing for timely processing and 
     resolution of grievances.
       (4) Procedures for follow-up action, including the methods 
     to inform the person making the grievance of the resolution 
     of the grievance.

     Grievances are not subject to appeal under the previous 
     provisions of this subtitle.

                       Subtitle B--Access to Care

     SEC. 111. CONSUMER CHOICE OPTION.

       (a) In General.--If a health insurance issuer offers to 
     enrollees health insurance coverage in connection with a 
     group health plan which provides 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 issuer to provide such services, the 
     issuer shall also offer to such enrollees (at the time of 
     enrollment and during an annual open season as provided under 
     subsection (c)) the option of health insurance coverage which 
     provides for coverage of such services which are not 
     furnished through health care professionals and providers who 
     are members of such a network unless enrollees 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 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 unless it is paid by the health plan sponsor through 
     agreement with the health insurance issuer.
       (c) Open Season.--An enrollee may change to the offering 
     provided under this section only during a time period 
     determined by the health insurance issuer. 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 or 
     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.

     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 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 or not the health care provider furnishing such 
     services is a participating provider with respect to such 
     services;
       (C) in a manner so that, if such services are provided to a 
     participant, beneficiary, or enrollee--
       (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 based on prudent layperson 
     standard.--The term ``emergency medical condition'' means a 
     medical condition manifesting itself by acute symptoms of 
     sufficient severity (including severe pain) such that a 
     prudent layperson, who possesses an average knowledge of 
     health and medicine, could reasonably expect the absence of 
     immediate medical attention to result in a condition 
     described in clause (i), (ii), or (iii) of section 
     1867(e)(1)(A) of the Social Security Act.
       (B) Emergency services.--The term ``emergency services'' 
     means--
       (i) a medical screening examination (as required under 
     section 1867 of the Social Security Act) that is within the 
     capability of the emergency department of a hospital, 
     including ancillary services routinely available to the 
     emergency department to evaluate an emergency medical 
     condition (as defined in subparagraph (A)), and
       (ii) within the capabilities of the staff and facilities 
     available at the hospital, such further medical examination 
     and treatment as are required under section 1867 of such Act 
     to stabilize the patient.
       (C) Stabilize.--The term ``to stabilize'' means, with 
     respect to an emergency medical condition, to provide such 
     medical treatment of the condition as may be necessary to 
     assure, within reasonable medical probability, that no 
     material deterioration of the condition is likely to result 
     from or occur during the transfer of the individual from a 
     facility.
       (b) Reimbursement for Maintenance Care and Post-
     Stabilization Care.--If benefits are available under a group 
     health plan, or under health insurance coverage offered by a 
     health insurance issuer, with respect to maintenance care or 
     post-stabilization care covered under the guidelines 
     established under section 1852(d)(2) of the Social Security 
     Act, the plan or issuer shall provide for reimbursement with 
     respect to such services provided to a participant, 
     beneficiary, or enrollee other than through a participating 
     health care provider in a manner consistent with subsection 
     (a)(1)(C) (and shall otherwise comply with such guidelines).

     SEC. 114. ACCESS TO SPECIALTY CARE.

       (a) Specialty Care for Covered Services.--
       (1) In general.--If--
       (A) an individual is a participant or beneficiary under a 
     group health plan or an enrollee who is covered under health 
     insurance coverage offered by a health insurance issuer,
       (B) the individual has a condition or disease of sufficient 
     seriousness and complexity to require treatment by a 
     specialist, and
       (C) benefits for such treatment are provided under the plan 
     or coverage,
     the plan or issuer shall make or provide for a referral to a 
     specialist who is available and accessible to provide the 
     treatment for such condition or disease.
       (2) Specialist defined.--For purposes of this subsection, 
     the term ``specialist'' means, with respect to a condition, a 
     health care practitioner, 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.
       (3) Care under referral.--A group health plan or health 
     insurance issuer may require that the care provided to an 
     individual pursuant to such referral under paragraph (1) be--
       (A) pursuant to a treatment plan, only if the treatment 
     plan is developed by the specialist and approved by the plan 
     or issuer, in consultation with the designated primary care 
     provider or specialist and the individual (or the 
     individual's designee), and
       (B) in accordance with applicable quality assurance and 
     utilization review standards of the plan or issuer.

     Nothing in this subsection shall be construed as preventing 
     such a treatment plan for an individual from requiring a 
     specialist to provide the primary care provider with regular 
     updates on the specialty care provided, as well as all 
     necessary medical information.
       (4) Referrals to participating providers.--A group health 
     plan or health insurance issuer is not required under 
     paragraph (1) to provide for a referral to a specialist that 
     is not a participating provider, unless the plan or issuer 
     does not have an appropriate specialist that is available and 
     accessible to treat the individual's condition and that is a 
     participating provider with respect to such treatment.
       (5) Treatment of nonparticipating providers.--If a plan or 
     issuer refers an individual to a nonparticipating specialist 
     pursuant to paragraph (1), services provided pursuant to the 
     approved treatment plan (if any) shall be provided at no 
     additional cost to the individual beyond what the individual 
     would otherwise pay for services received by such a 
     specialist that is a participating provider.
       (b) Specialists as Gatekeeper for Treatment of Ongoing 
     Special Conditions.--
       (1) In general.--A group health plan, or a health insurance 
     issuer, in connection with the provision of health insurance 
     coverage,

[[Page 24407]]

     shall have a procedure by which an individual who is a 
     participant, beneficiary, or enrollee and who has an ongoing 
     special condition (as defined in paragraph (3)) may request 
     and receive a referral to a specialist for such condition who 
     shall be responsible for and capable of providing and 
     coordinating the individual's care with respect to the 
     condition. Under such procedures if such an individual's care 
     would most appropriately be coordinated by such a specialist, 
     such plan or issuer shall refer the individual to such 
     specialist.
       (2) Treatment for related referrals.--Such specialists 
     shall be permitted to treat the individual without a referral 
     from the individual's primary care provider and may authorize 
     such referrals, procedures, tests, and other medical services 
     as the individual's primary care provider would otherwise be 
     permitted to provide or authorize, subject to the terms of 
     the treatment (referred to in subsection (a)(3)(A)) with 
     respect to the ongoing special condition.
       (3) Ongoing special condition defined.--In this subsection, 
     the term ``ongoing special condition'' means a condition or 
     disease that--
       (A) is life-threatening, degenerative, or disabling, and
       (B) requires specialized medical care over a prolonged 
     period of time.
       (4) Terms of referral.--The provisions of paragraphs (3) 
     through (5) of subsection (a) apply with respect to referrals 
     under paragraph (1) of this subsection in the same manner as 
     they apply to referrals under subsection (a)(1).
       (c) Standing Referrals.--
       (1) In general.--A group health plan, and a health 
     insurance issuer in connection with the provision of health 
     insurance coverage, shall have a procedure by which an 
     individual who is a participant, beneficiary, or enrollee and 
     who has a condition that requires ongoing care from a 
     specialist may receive a standing referral to such specialist 
     for treatment of such condition. If the plan or issuer, or if 
     the primary care provider in consultation with the medical 
     director of the plan or issuer and the specialist (if any), 
     determines that such a standing referral is appropriate, the 
     plan or issuer shall make such a referral to such a 
     specialist if the individual so desires.
       (2) Terms of referral.--The provisions of paragraphs (3) 
     through (5) of subsection (a) apply with respect to referrals 
     under paragraph (1) of this subsection in the same manner as 
     they apply to referrals under subsection (a)(1).

     SEC. 115. ACCESS TO OBSTETRICAL AND GYNECOLOGICAL CARE.

       (a) In General.--If a group health plan, or a health 
     insurance issuer in connection with the provision of health 
     insurance coverage, requires or provides for a participant, 
     beneficiary, or enrollee to designate a participating primary 
     care health care professional, the plan or issuer--
       (1) may not require authorization or a referral by the 
     individual's primary care health care professional or 
     otherwise for coverage of gynecological care (including 
     preventive women's health examinations) and pregnancy-related 
     services provided by a participating health care 
     professional, including a physician, who specializes in 
     obstetrics and gynecology to the extent such care is 
     otherwise covered, and
       (2) shall treat the ordering of other obstetrical or 
     gynecological care by such a participating professional as 
     the authorization of the primary care health care 
     professional with respect to such care under the plan or 
     coverage.
       (b) Construction.--Nothing in subsection (a) shall be 
     construed to--
       (1) waive any exclusions of coverage under the terms 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.--If a group health plan, or a health 
     insurance issuer in connection with the provision of health 
     insurance coverage, requires or provides for an enrollee to 
     designate a participating primary care provider for a child 
     of such enrollee, the plan or issuer shall permit the 
     enrollee to designate a physician who specializes in 
     pediatrics as the child's primary care provider.
       (b) Construction.--Nothing in subsection (a) shall be 
     construed to waive any exclusions of coverage under the terms 
     of the plan or health insurance coverage with respect to 
     coverage of pediatric care.

     SEC. 117. CONTINUITY OF CARE.

       (a) In General.--
       (1) Termination of provider.--If a contract between a group 
     health plan, or a health insurance issuer in connection with 
     the provision of health insurance coverage, and a health care 
     provider is terminated (as defined in paragraph (3)(B)), or 
     benefits or coverage provided by a health care provider are 
     terminated because of a change in the terms of provider 
     participation in a group health plan, and an individual who 
     is a participant, beneficiary, or enrollee in the plan or 
     coverage is undergoing treatment from the provider for an 
     ongoing special condition (as defined in paragraph (3)(A)) at 
     the time of such termination, the plan or issuer shall--
       (A) notify the individual on a timely basis of such 
     termination and of the right to elect continuation of 
     coverage of treatment by the provider under this section; and
       (B) subject to subsection (c), permit the individual to 
     elect to continue to be covered with respect to treatment by 
     the provider of such condition during a transitional period 
     (provided under subsection (b)).
       (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) Definitions.--For purposes of this section:
       (A) Ongoing special condition.--The term ``ongoing special 
     condition'' has the meaning given such term in section 
     114(b)(3), and also includes pregnancy.
       (B) Termination.--The term ``terminated'' includes, with 
     respect to a contract, the expiration or nonrenewal of the 
     contract, but does not include a termination of the contract 
     by the plan or issuer for failure to meet applicable quality 
     standards or for fraud.
       (b) Transitional Period.--
       (1) In general.--Except as provided in paragraphs (2) 
     through (4), the transitional period under this subsection 
     shall extend up to 90 days (as determined by the treating 
     health care professional) after the date of the notice 
     described in subsection (a)(1)(A) of the provider's 
     termination.
       (2) Scheduled surgery and organ transplantation.--If 
     surgery or organ transplantation was scheduled for an 
     individual before the date of the announcement of the 
     termination of the provider status under subsection (a)(1)(A) 
     or if the individual on such date was on an established 
     waiting list or otherwise scheduled to have such surgery or 
     transplantation, the transitional period under 
     this subsection with respect to the surgery or 
     transplantation shall extend beyond the period under 
     paragraph (1) and until the date of discharge of the 
     individual after completion of the surgery or 
     transplantation.
       (3) Pregnancy.--If--
       (A) a participant, beneficiary, or enrollee was determined 
     to be pregnant at the time of a provider's termination of 
     participation, and
       (B) the provider was treating the pregnancy before date of 
     the termination,

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

     the transitional period under this subsection shall extend 
     for the remainder of the individual's life for care directly 
     related to the treatment of the terminal illness 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 subsection (a)(1)(B) 
     upon the individual notifying the plan of the election of 
     continued coverage and upon the provider agreeing to the 
     following terms and conditions:
       (1) The provider agrees to accept reimbursement from the 
     plan or issuer and individual involved (with respect to cost-
     sharing) at the rates applicable prior to the start of the 
     transitional period as payment in full (or, in the case 
     described in subsection (a)(2), at the rates applicable under 
     the replacement plan or issuer after the date of the 
     termination of the contract with the health insurance issuer) 
     and not to impose cost-sharing with respect to the individual 
     in an amount that would exceed the cost-sharing that could 
     have been imposed if the contract referred to in subsection 
     (a)(1) had not been terminated.
       (2) The 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 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) Construction.--Nothing in this section shall be 
     construed to require the coverage of

[[Page 24408]]

     benefits which would not have been covered if the provider 
     involved remained a participating provider.

     SEC. 118. ACCESS TO NEEDED PRESCRIPTION DRUGS.

       If a group health plan, or health insurance issuer that 
     offers health insurance coverage, provides benefits with 
     respect to prescription drugs but the coverage limits such 
     benefits to drugs included in a formulary, the plan or issuer 
     shall--
       (1) ensure participation of participating physicians and 
     pharmacists in the development of the formulary;
       (2) disclose to providers and, disclose upon request under 
     section 121(c)(5) to participants, beneficiaries, and 
     enrollees, the nature of the formulary restrictions; and
       (3) consistent with the standards for a utilization review 
     program under section 101, provide for exceptions from the 
     formulary limitation when a non-formulary alternative is 
     medically indicated.

     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 or 
     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 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 approved and funded (which may include funding 
     through in-kind contributions) by one or more of the 
     following:
       (A) The National Institutes of Health.
       (B) A cooperative group or center of the National 
     Institutes of Health.
       (C) Either of the following if the conditions described in 
     paragraph (2) are met:
       (i) The Department of Veterans Affairs.
       (ii) The Department of Defense.
       (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 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 scientific 
     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.

                   Subtitle C--Access to Information

     SEC. 121. PATIENT ACCESS TO INFORMATION.

       (a) Disclosure Requirement.--
       (1) Group health plans.--A group health plan shall--
       (A) provide to participants and beneficiaries at the time 
     of initial coverage under the plan (or the effective date of 
     this section, in the case of individuals who are participants 
     or beneficiaries as of such date), and at least annually 
     thereafter, the information described in subsection (b) in 
     printed form;
       (B) provide to participants and beneficiaries, within a 
     reasonable period (as specified by the appropriate Secretary) 
     before or after the date of significant changes in the 
     information described in subsection (b), information in 
     printed form on such significant changes; and
       (C) upon request, make available to participants and 
     beneficiaries, the applicable authority, and prospective 
     participants and beneficiaries, the information described in 
     subsection (b) or (c) in printed form.
       (2) Health insurance issuers.--A health insurance issuer in 
     connection with the provision of health insurance coverage 
     shall--
       (A) provide to individuals enrolled under such coverage at 
     the time of enrollment, and at least annually thereafter, the 
     information described in subsection (b) in printed form;
       (B) provide to enrollees, within a reasonable period (as 
     specified by the appropriate Secretary) before or after the 
     date of significant changes in the information described in 
     subsection (b), information in printed form on such 
     significant changes; and
       (C) upon request, make available to the applicable 
     authority, to individuals who are prospective enrollees, and 
     to the public the information described in subsection (b) or 
     (c) in printed form.
       (b) Information Provided.--The information described in 
     this subsection with respect to a group health plan or health 
     insurance coverage offered by a health insurance issuer 
     includes the following:
       (1) Service area.--The service area of the plan or issuer.
       (2) Benefits.--Benefits offered under the plan or coverage, 
     including--
       (A) covered benefits, including benefit limits and coverage 
     exclusions;
       (B) cost sharing, such as deductibles, coinsurance, and 
     copayment amounts, including any liability for balance 
     billing, any maximum limitations on out of pocket expenses, 
     and the maximum out of pocket costs for services that are 
     provided by nonparticipating providers or that are furnished 
     without meeting the applicable utilization review 
     requirements;
       (C) the extent to which benefits may be obtained from 
     nonparticipating providers;
       (D) the extent to which a participant, beneficiary, or 
     enrollee may select from among participating providers and 
     the types of providers participating in the plan or issuer 
     network;
       (E) process for determining experimental coverage; and
       (F) use of a prescription drug formulary.
       (3) Access.--A description of the following:
       (A) The number, mix, and distribution of providers under 
     the plan or coverage.
       (B) Out-of-network coverage (if any) provided by the plan 
     or coverage.
       (C) Any point-of-service option (including any supplemental 
     premium or cost-sharing for such option).
       (D) The procedures for participants, beneficiaries, and 
     enrollees to select, access, and change participating primary 
     and specialty providers.
       (E) The rights and procedures for obtaining referrals 
     (including standing referrals) to participating and 
     nonparticipating providers.
       (F) The name, address, and telephone number of 
     participating health care providers and an indication of 
     whether each such provider is available to accept new 
     patients.
       (G) Any limitations imposed on the selection of qualifying 
     participating health care providers, including any 
     limitations imposed under section 112(b)(2).
       (H) How the plan or issuer addresses the needs of 
     participants, beneficiaries, and enrollees and others who do 
     not speak English or who have other special communications 
     needs in accessing providers under the plan or coverage, 
     including the provision of information described in this 
     subsection and subsection (c) to such individuals.
       (4) Out-of-area coverage.--Out-of-area coverage provided by 
     the plan or issuer.
       (5) Emergency coverage.--Coverage of emergency services, 
     including--
       (A) the appropriate use of emergency services, including 
     use of the 911 telephone system or its local equivalent in 
     emergency situations and an explanation of what constitutes 
     an emergency situation;
       (B) the process and procedures of the plan or issuer for 
     obtaining emergency services; and

[[Page 24409]]

       (C) the locations of (i) emergency departments, and (ii) 
     other settings, in which plan physicians and hospitals 
     provide emergency services and post-stabilization care.
       (6) Percentage of premiums used for benefits (loss-
     ratios).--In the case of health insurance coverage only (and 
     not with respect to group health plans that do not provide 
     coverage through health insurance coverage), a description of 
     the overall loss-ratio for the coverage (as defined in 
     accordance with rules established or recognized by the 
     Secretary of Health and Human Services).
       (7) Prior authorization rules.--Rules regarding prior 
     authorization or other review requirements that could result 
     in noncoverage or nonpayment.
       (8) Grievance and appeals procedures.--All appeal or 
     grievance rights and procedures under the plan or coverage, 
     including the method for filing grievances and the time 
     frames and circumstances for acting on grievances and 
     appeals, who is the applicable authority with respect to the 
     plan or issuer.
       (9) Quality assurance.--Any information made public by an 
     accrediting organization in the process of accreditation of 
     the plan or issuer or any additional quality indicators the 
     plan or issuer makes available.
       (10) Information on issuer.--Notice of appropriate mailing 
     addresses and telephone numbers to be used by participants, 
     beneficiaries, and enrollees in seeking information or 
     authorization for treatment.
       (11) Notice of requirements.--Notice of the requirements of 
     this title.
       (12) Availability of information on request.--Notice that 
     the information described in subsection (c) is available upon 
     request.
       (c) Information Made Available Upon Request.--The 
     information described in this subsection is the following:
       (1) Utilization review activities.--A description of 
     procedures used and requirements (including circumstances, 
     time frames, and appeal rights) under any utilization review 
     program under section 101, including under any drug formulary 
     program under section 118.
       (2) Grievance and appeals information.--Information on the 
     number of grievances and appeals and on the disposition in 
     the aggregate of such matters.
       (3) Method of physician compensation.--A general 
     description by category (including salary, fee-for-service, 
     capitation, and such other categories as may be specified in 
     regulations of the Secretary) of the applicable method by 
     which a specified prospective or treating health care 
     professional is (or would be) compensated in connection with 
     the provision of health care under the plan or coverage.
       (4) Specific information on credentials of participating 
     providers.--In the case of each participating provider, a 
     description of the credentials of the provider.
       (5) Formulary restrictions.--A description of the nature of 
     any drug formula restrictions.
       (6) Participating provider list.--A list of current 
     participating health care providers.
       (d) Construction.--Nothing in this section shall be 
     construed as requiring public disclosure of individual 
     contracts or financial arrangements between a group health 
     plan or health insurance issuer and any provider.

         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 offering 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 particular benefits or services 
     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 1876(i)(8) 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 1876(i)(8) of the Social 
     Security Act to the Secretary, an eligible organization, or 
     an individual enrolled with the organization shall be treated 
     as a reference to the applicable authority, a group health 
     plan or health insurance issuer, respectively, and a 
     participant, beneficiary, or enrollee with the plan or 
     organization, respectively.
       (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 
     group 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 consistent with the provisions of sections 1816(c)(2) 
     and 1842(c)(2) of the Social Security Act (42 U.S.C. 
     1395h(c)(2) and 42 U.S.C. 1395u(c)(2)), except that for 
     purposes of this section, subparagraph (C) of section 
     1816(c)(2) of the Social Security Act shall be treated as 
     applying to claims received from a participant, beneficiary, 
     or enrollee as well as claims referred to in such 
     subparagraph.

     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 or 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 24410]]

       (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 713 of the Employee Retirement Income 
     Security Act of 1974.
       (c) Additional Definitions.--For purposes of this title:
       (1) Actively practicing.--The term ``actively practicing'' 
     means, with respect to a physician or other health care 
     professional, such a physician or professional who provides 
     professional services to individual patients on average at 
     least two full days per week.
       (2) 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.
       (3) Clinical peer.--The term ``clinical peer'' means, with 
     respect to a review or appeal, an actively practicing 
     physician (allopathic or osteopathic) or other actively 
     practicing health care professional who holds a nonrestricted 
     license, and who is appropriately credentialed in the same or 
     similar specialty or subspecialty (as appropriate) as 
     typically handles the medical condition, procedure, or 
     treatment under review or appeal and includes a pediatric 
     specialist where appropriate; except that only a physician 
     (allopathic or osteopathic) may be a clinical peer with 
     respect to the review or appeal of treatment recommended or 
     rendered by a physician.
       (4) 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.
       (5) 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 and in section 
     2791(a)(1) of the Public Health Service Act.
       (6) 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.
       (7) 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.
       (8) 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.
       (9) 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.
       (10) 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.
       (11) 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.

     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.
       (b) 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 (including abortions) 
     under the terms of such plan or coverage, other than those 
     provided under the terms of such plan or coverage.
       (b) Exclusion From Access to Care Managed Care Provisions 
     for Fee-for-Service Coverage.--

[[Page 24411]]

       (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 the basis of a rate determined by the plan or 
     issuer 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) does not restrict the selection of providers among 
     those who are lawfully authorized to provide the covered 
     services and agree 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 coverage for any services.

     SEC. 154. COVERAGE OF LIMITED SCOPE PLANS.

       Only for purposes of applying the requirements of this 
     title under sections 2707 and 2753 of the Public Health 
     Service Act and section 714 of the Employee Retirement Income 
     Security Act of 1974, section 2791(c)(2)(A), and section 
     733(c)(2)(A) of the Employee Retirement Income Security Act 
     of 1974 shall be deemed not to apply.

     SEC. 155. REGULATIONS.

       The Secretaries of Health and Human Services and Labor 
     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.

 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.

       ``(a) In General.--Each group health plan shall comply with 
     patient protection requirements under title I of the 
     Bipartisan Consensus Managed Care Improvement Act of 1999, 
     and each health insurance issuer shall comply with patient 
     protection requirements under such title with respect to 
     group health insurance coverage it offers, and such 
     requirements shall be deemed to be incorporated into this 
     subsection.
       ``(b) Notice.--A group health plan shall comply with the 
     notice requirement under section 711(d) of the Employee 
     Retirement Income Security Act of 1974 with respect to the 
     requirements referred to in subsection (a) and a health 
     insurance issuer shall comply with such notice requirement as 
     if such section applied to such issuer and such issuer were a 
     group health plan.''.
       (b) Conforming Amendment.--Section 2721(b)(2)(A) of such 
     Act (42 U.S.C. 300gg-21(b)(2)(A)) is amended by inserting 
     ``(other than section 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.

       ``(a) In General.--Each health insurance issuer shall 
     comply with patient protection requirements under title I of 
     the Bipartisan Consensus Managed Care Improvement Act of 1999 
     with respect to individual health insurance coverage it 
     offers, and such requirements shall be deemed to be 
     incorporated into this subsection.
       ``(b) Notice.--A health insurance issuer under this part 
     shall comply with the notice requirement under section 711(d) 
     of the Employee Retirement Income Security Act of 1974 with 
     respect to the requirements of such title as if such section 
     applied to such issuer and such issuer were a group health 
     plan.''.

TITLE III--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                                  1974

     SEC. 301. APPLICATION OF PATIENT PROTECTION STANDARDS TO 
                   GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE 
                   COVERAGE UNDER THE EMPLOYEE RETIREMENT INCOME 
                   SECURITY ACT OF 1974.

       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 Consensus Managed Care Improvement Act of 1999 (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 Consensus Managed Care 
     Improvement Act of 1999 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 112 (relating to choice of providers).
       ``(B) Section 113 (relating to access to emergency care).
       ``(C) Section 114 (relating to access to specialty care).
       ``(D) Section 115 (relating to access to obstetrical and 
     gynecological care).
       ``(E) Section 116 (relating to access to pediatric care).
       ``(F) Section 117(a)(1) (relating to continuity in case of 
     termination of provider contract) and section 117(a)(2) 
     (relating to continuity in case of termination of issuer 
     contract), but only insofar as a replacement issuer assumes 
     the obligation for continuity of care.
       ``(G) Section 118 (relating to access to needed 
     prescription drugs).
       ``(H) Section 119 (relating to coverage for individuals 
     participating in approved clinical trials.)
       ``(I) Section 134 (relating to payment of claims).
       ``(2) Information.--With respect to information required to 
     be provided or made available under section 121, 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) Grievance and internal appeals.--With respect to the 
     internal appeals process and the grievance system required to 
     be established under sections 102 and 104, 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 103, 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, 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) Application to certain prohibitions against 
     retaliation.--With respect to compliance with the 
     requirements of section 135(b)(1) of the Bipartisan Consensus 
     Managed Care Improvement Act of 1999, 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 Consensus Managed Care Improvement Act of 1999 
     may file with the Secretary a complaint within 180 days of 
     the date of the alleged retaliation or discrimination.

[[Page 24412]]

       ``(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 may issue 
     regulations to coordinate the requirements on group health 
     plans under this section with the requirements imposed under 
     the other provisions of this title.''.
       (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 Consensus Managed Care 
     Improvement Act of 1999 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. 302. ADDITIONAL JUDICIAL REMEDIES.

       (a) Cause of Action Relating to Denial of Health 
     Benefits.--Section 502(a) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1132(a)) is amended--
       (1) by striking ``or'' at the end of paragraph (8);
       (2) by striking ``amounts.'' at the end of paragraph (9) 
     and inserting ``amounts; or''; and
       (3) by adding at the end the following new paragraph:
       ``(10) by a participant or beneficiary of a group health 
     plan (or the estate of such a participant or beneficiary), 
     for relief described in subsection (n), against a person 
     who--
       ``(A) is a fiduciary of such plan, a health insurance 
     issuer offering health insurance coverage in connection with 
     such plan, or an agent of such plan or the plan sponsor,
       ``(B) under such plan, has authority to make the sole final 
     decision described in subsection (n)(2) regarding claims for 
     benefits, and
       ``(C) has exercised such authority in making such final 
     decision denying such a claim by such participant or 
     beneficiary in violation of the terms of the plan or this 
     title and, in making such final decision, failed to exercise 
     ordinary care in making an incorrect determination in the 
     case of such participant or beneficiary that an item or 
     service is excluded from coverage under the terms of the 
     plan,

     if the denial is the proximate cause of personal injury to, 
     or the wrongful death of, such participant or beneficiary.''.
       (b) Judicial Remedies for Denial of Health Benefits.--
     Section 502 of such Act (29 U.S.C. 1132) is amended by adding 
     at the end the following new subsections:
       ``(n) Additional Remedies for Denial of Health Benefits.--
       ``(1) In general.--In an action commenced under paragraph 
     (10) of subsection (a) by a participant or beneficiary of a 
     group health plan (or by the estate of such a participant or 
     beneficiary) against a person described in subparagraphs (A), 
     (B), and (C) of such paragraph, the court may award, in 
     addition to other appropriate equitable relief under this 
     section, monetary compensatory relief which may include both 
     economic and noneconomic damages (but which shall exclude 
     punitive damages). The amount of any such noneconomic damages 
     awarded as monetary compensatory relief--
       ``(A) in a case in which 2 times the amount of the economic 
     damages awarded as monetary compensatory relief is less than 
     or equal to $250,000, may not exceed the greater of--
       ``(i) 2 times the amount of such economic damages so 
     awarded, or
       ``(ii) $250,000; and
       ``(B) in a case in which 2 times the amount of the economic 
     damages awarded as monetary compensatory relief is greater 
     than $250,000, may not exceed $500,000.
       ``(2) Application to decisions involving medical necessity 
     and medical judgment.--This subsection and subsection (a)(10) 
     apply only with respect to final decisions described in 
     section 103(a)(2) of the Bipartisan Consensus Managed Care 
     Improvement Act of 1999.
       ``(3) Definitions.--For purposes of this subsection and 
     subsection (a)(10)--
       ``(A) Group health plan; health insurance issuer; health 
     insurance coverage.--The terms `group health plan', `health 
     insurance issuer', and `health insurance coverage' shall have 
     the meanings provided such terms under section 733, 
     respectively.
       ``(B) Final decision.--The term `final decision' means, 
     with respect to a group health plan, the final decision of 
     the plan under section 102 of the Bipartisan Consensus 
     Managed Care Improvement Act of 1999.
       ``(C) Personal injury.--The term `personal injury' means 
     loss of life, loss or significant impairment of limb or 
     bodily function, significant disfigurement, or severe and 
     chronic physical pain, and includes a physical injury arising 
     out of a failure to treat a mental illness or disease.
       ``(D) Claim for benefits.--The term `claim for benefits' 
     has the meaning provided in section 101(f)(1) of the 
     Bipartisan Consensus Managed Care Improvement Act of 1999.
       ``(E) Failure to exercise ordinary care.--The term `failure 
     to exercise ordinary care' means a negligent failure to 
     provide--
       ``(i) the consideration of appropriate medical evidence, or
       ``(ii) the regard for the health and safety of the 
     participant or beneficiary,

     that a prudent individual acting in a like capacity and 
     familiar with such matters would use in the conduct of an 
     enterprise of a like character and with same or similar 
     circumstances.
       ``(4) Exception for denials in accordance with 
     recommendation of external appeal entity.--No person shall be 
     liable under subsection (a)(10) for additional monetary 
     compensatory relief described in paragraph (1) in any case in 
     which the denial referred to in subsection (a)(10) is upheld 
     by the recommendation of an external appeal entity issued 
     with respect to such denial under section 103 of the 
     Bipartisan Consensus Managed Care Improvement Act of 1999.
       ``(5) Exception for employers and other plan sponsors.--
       ``(A) In general.--Subject to subparagraph (B), subsection 
     (a)(10) does not authorize--
       ``(i) any cause of action against an employer or other plan 
     sponsor maintaining a group health plan (or against an 
     employee of such an employer or sponsor acting within the 
     scope of employment), or
       ``(ii) a right of recovery or indemnity by a person against 
     such an employer or sponsor (or such an employee) for relief 
     assessed against the person pursuant to a cause of action 
     under subsection (a)(10).
       ``(B) Special rule.--Subparagraph (A) shall not preclude 
     any cause of action under subsection (a)(10) commenced 
     against an employer or other plan sponsor (or against an 
     employee of such an employer or sponsor acting within the 
     scope of employment), if--
       ``(i) such action is based on the direct participation of 
     the employer or sponsor (or employee) in the sole final 
     decision of the plan referred to in paragraph (2) with 
     respect to a specific participant or beneficiary on a claim 
     for benefits covered under the plan or health insurance 
     coverage in the case at issue; and
       ``(ii) the decision on the claim resulted in personal 
     injury to, or the wrongful death of, such participant or 
     beneficiary.
       ``(C) Direct participation.--For purposes of this 
     subsection, in determining whether an employer or other plan 
     sponsor (or employee of an employer or other plan sponsor) is 
     engaged in direct participation in the sole final decision of 
     the plan on a claim under section 102 of the Bipartisan 
     Consensus Managed Care Improvement Act of 1999, the employer 
     or plan sponsor (or employee) shall not be construed to be 
     engaged in such direct participation solely because of any 
     form of decisionmaking or conduct, whether or not fiduciary 
     in nature, that does not involve the final decision with 
     respect to a specific claim for benefits by a specific 
     participant or beneficiary, including (but not limited to) 
     any participation in a decision relating to:
       ``(i) the selection or retention of the group health plan 
     or health insurance coverage involved or the third party 
     administrator or other agent, including any related cost-
     benefit analysis undertaken in connection with the selection 
     of, or continued maintenance of, the plan or coverage 
     involved;
       ``(ii) the creation, continuation, modification, or 
     termination of the plan or of any coverage, benefit, or item 
     or service covered by the plan affecting a cross-section of 
     the plan participants and beneficiaries;
       ``(iii) the design of any coverage, benefit, or item or 
     service covered by the plan, including the amount of 
     copayments and limits connected with such coverage, and the 
     specification of protocols, procedures, or policies for 
     determining whether any such coverage, benefit, or item or 
     service is medically necessary and appropriate or is 
     experimental or investigational;
       ``(iv) any action by an agent of the employer or plan 
     sponsor (other than an employee of the employer or plan 
     sponsor) in making such a final decision on behalf of such 
     employer or plan sponsor;
       ``(v) any decision by an employer or plan sponsor (or 
     employee) or agent acting on behalf of an employer or plan 
     sponsor either to authorize coverage for, or to intercede or 
     not to intercede as an advocate for or on behalf of, any 
     specific participant or beneficiary (or group of participants 
     or beneficiaries) under the plan; or
       ``(vi) any other form of decisionmaking or other conduct 
     performed by the employer or plan sponsor (or employee) in 
     connection with the plan or coverage involved, unless the 
     employer makes the sole final decision of the plan consisting 
     of a failure described in paragraph (1)(A) as to specific 
     participants

[[Page 24413]]

     or beneficiaries who suffer personal injury or wrongful death 
     as a proximate cause of such decision.
       ``(6) Required demonstration of direct participation.--An 
     action under subsection (a)(10) against an employer or plan 
     sponsor (or employee thereof) for remedies described in 
     paragraph (1) shall be immediately dismissed--
       ``(A) in the absence of an evidentiary demonstration in the 
     complaint of direct participation by the employer or plan 
     sponsor (or employee) in the sole final decision of the plan 
     with respect to a specific participant or beneficiary who 
     suffers personal injury or wrongful death,
       ``(B) upon a demonstration to the court that such employer 
     or plan sponsor (or employee) did not directly participate in 
     the final decision of the plan, or
       ``(C) in the absence of an evidentiary demonstration that a 
     personal injury to, or wrongful death of, the participant or 
     beneficiary resulted.
       ``(7) Treatment of third-party providers of 
     nondiscretionary administrative services.--Subsection (a)(10) 
     does not authorize any action against any person providing 
     nondiscretionary administrative services to employers or 
     other plan sponsors.
       ``(8) Requirement of exhaustion of administrative 
     remedies.--
       ``(A) In general.--Subsection (a)(10) applies in the case 
     of any cause of action only if all remedies under section 503 
     (including remedies under sections 102 and 103 of the 
     Bipartisan Consensus Managed Care Improvement Act of 1999 
     made applicable under section 714) with respect to such cause 
     of action have been exhausted.
       ``(B) External review required.--For purposes of 
     subparagraph (A), administrative remedies under section 503 
     shall not be deemed exhausted until available remedies under 
     section 103 of the Bipartisan Consensus Managed Care 
     Improvement Act of 1999 have been elected and are exhausted.
       ``(C) Consideration of administrative determinations.--Any 
     determinations under section 102 or 103 of the Bipartisan 
     Consensus Managed Care Improvement Act of 1999 made while an 
     action under subsection (a)(10) is pending shall be given due 
     consideration by the court in such action.
       ``(9) Substantial weight given to external review 
     decisions.--In the case of any action under subsection 
     (a)(10) for remedies described in paragraph (1), the external 
     review decision under section 103 shall be given substantial 
     weight when considered along with other available evidence.
       ``(10) Limitation of action.--Subsection (a)(10) shall not 
     apply in connection with any action commenced after the later 
     of--
       ``(A) 1 year after (i) the date of the last action which 
     constituted a part of the failure, or (ii) in the case of an 
     omission, the latest date on which the fiduciary could have 
     cured the failure, or
       ``(B) 1 year after the earliest date on which the plaintiff 
     first knew, or reasonably should have known, of the personal 
     injury or wrongful death resulting from the failure.
       ``(11) 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 
     the fiduciary which consists of full compliance with the 
     reversal under section 103 of the Bipartisan Consensus 
     Managed Care Improvement Act of 1999 of a denial of a claim 
     for benefits.
       ``(12) Construction.--Nothing in this subsection or 
     subsection (a)(10) shall be construed as authorizing an 
     action--
       ``(A) for the failure to provide an item or service which 
     is not covered under the group health plan involved, or
       ``(B) for any action taken by a fiduciary which consists of 
     compliance with the reversal or modification under section 
     103 of the Bipartisan Consensus Managed Care Improvement Act 
     of 1999 of a final decision under section 102 of such Act.
       ``(13) Protection of medical malpractice under state law.--
     This subsection and subsection (a)(10) shall not be construed 
     to preclude any action under State law not otherwise 
     preempted under this section or section 503 or 514 with 
     respect to the exercise of a specified professional standard 
     of care in the provision of medical services.
       ``(14) References to the bipartisan consensus managed care 
     improvement act of 1999.--Any reference in this subsection to 
     any provision of the Bipartisan Consensus Managed Care 
     Improvement Act of 1999 shall be deemed a reference to such 
     provision as in effect on the date of the enactment of such 
     Act.
       ``(o) Expedited Court Review.--In any case in which 
     exhaustion of administrative remedies in accordance with 
     section 102 or 103 of the Bipartisan Consensus Managed Care 
     Improvement Act of 1999 otherwise necessary for an action for 
     injunctive relief under paragraph (1)(B) or (3) of subsection 
     (a) has not been obtained and it is demonstrated to the court 
     by clear and convincing evidence that such exhaustion is not 
     reasonably attainable under the facts and circumstances 
     without any further undue risk of irreparable harm to the 
     health of the participant or beneficiary, a civil action may 
     be brought by a participant or beneficiary to obtain such 
     relief. Any determinations which already have been made under 
     section 102 or 103 in such case, or which are made in such 
     case while an action under this paragraph is pending, shall 
     be given due consideration by the court in any action under 
     this subsection in such case.''.
       (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 date of the 
     enactment of this Act.

     SEC. 304. AVAILABILITY OF BINDING ARBITRATION.

       (a) In General.--Section 502 of the Employee Retirement 
     Income Security Act of 1974 (as amended by the preceding 
     provisions of this Act) is amended further by adding at the 
     end the following new subsection:
       ``(p) Binding Arbitration Permitted as Alternative Means of 
     Dispute Resolution.--
       ``(1) In general.--This subsection shall apply with respect 
     to any adverse coverage decision rendered under a group 
     health plan under section 102 or 103, if--
       ``(A) all administrative remedies under section 503 
     required for an action in court under this section have been 
     exhausted,
       ``(B) under the terms of the plan, the aggrieved 
     participant or beneficiary may elect to resolve the dispute 
     by means of a procedure of binding arbitration which is 
     available with respect to all similarly situated participants 
     and beneficiaries (or which is available under the plan 
     pursuant to a bona fide collective bargaining agreement 
     pursuant to which the plan is established and maintained), 
     and which meets the requirements of paragraph (3), and
       ``(C) the participant or beneficiary has elected such 
     procedure in accordance with the terms of the plan.
       ``(2) Effect of election.--In the case of an election by a 
     participant or beneficiary pursuant to paragraph (1)--
       ``(A) decisions rendered under the procedure of binding 
     arbitration shall be binding on all parties to the procedure 
     and shall be enforceable under the preceding subsections of 
     this section as if the terms of the decision were the terms 
     of the plan, except that the court in an action brought under 
     this section may vacate any award made pursuant to the 
     arbitration for any cause described in paragraph (1), (2), 
     (3), (4), or (5) of section 10(a) of title 9, United States 
     Code, and
       ``(B) subject to subparagraph (A), such participant or 
     beneficiary shall be treated as having effectively waived any 
     right to further review of the decision by a court under the 
     preceding subsections of this section.
       ``(3) Additional requirements.--The requirements of this 
     paragraph consist of the following:
       ``(A) Arbitration panel.--The arbitration shall be 
     conducted by an arbitration panel meeting the requirements of 
     paragraph (4).
       ``(B) Fair process; de novo determination.--The procedure 
     shall provide for a fair, de novo determination.
       ``(C) Opportunity to submit evidence, have representation, 
     and make oral presentation.--Each party to the arbitration 
     procedure--
       ``(i) may submit and review evidence related to the issues 
     in dispute;
       ``(ii) may use the assistance or representation of one or 
     more individuals (any of whom may be an attorney); and
       ``(iii) may make an oral presentation.
       ``(D) Provision of information.--The plan shall provide 
     timely access to all its records relating to the matters 
     under arbitration and to all provisions of the plan relating 
     to such matters.
       ``(E) Timely decisions.--A determination by the arbitration 
     panel on the decision shall--
       ``(i) be made in writing;
       ``(ii) be binding on the parties; and
       ``(iii) be made in accordance with the medical exigencies 
     of the case involved.
       ``(4) Arbitration panel.--
       ``(A) In general.--Arbitrations commenced pursuant to this 
     subsection shall be conducted by a panel of arbitrators 
     selected by the parties made up of 3 individuals, including 
     at least one physician and one attorney.
       ``(B) Qualifications.--Any individual who is a member of an 
     arbitration panel shall meet the following requirements:
       ``(i) There is no real or apparent conflict of interest 
     that would impede the individual conducting arbitration 
     independent of the plan and meets the independence 
     requirements of subparagraph (C).
       ``(ii) The individual has sufficient medical or legal 
     expertise to conduct the arbitration for the plan on a timely 
     basis.
       ``(iii) The individual has appropriate credentials and has 
     attained recognized expertise in the applicable medical or 
     legal field.
       ``(iv) The individual was not involved in the initial 
     adverse coverage decision or any other review thereof.
       ``(C) Independence requirements.--An individual described 
     in subparagraph (B) meets the independence requirements of 
     this subparagraph if--
       ``(i) the individual is not affiliated with any related 
     party,
       ``(ii) any compensation received by such individual in 
     connection with the binding arbitration procedure is 
     reasonable and not contingent on any decision rendered by the 
     individual,

[[Page 24414]]

       ``(iii) under the terms of the plan, the plan has no 
     recourse against the individual or entity in connection with 
     the binding arbitration procedure, and
       ``(iv) the individual does not otherwise have a conflict of 
     interest with a related party as determined under such 
     regulations as the Secretary may prescribe.
       ``(D) Related party.--For purposes of subparagraph (C), the 
     term `related party' means--
       ``(i) the plan or any health insurance issuer offering 
     health insurance coverage in connection with the plan (or any 
     officer, director, or management employee of such plan or 
     issuer),
       ``(ii) the physician or other medical care provider that 
     provided the medical care involved in the coverage decision,
       ``(iii) the institution at which the medical care involved 
     in the coverage decision is provided,
       ``(iv) the manufacturer of any drug or other item that was 
     included in the medical care involved in the coverage 
     decision, or
       ``(v) any other party determined under such regulations as 
     the Secretary may prescribe to have a substantial interest in 
     the coverage decision .
       ``(E) Affiliated.--For purposes of subparagraph (C), the 
     term `affiliated' means, in connection with any entity, 
     having a familial, financial, or professional relationship 
     with, or interest in, such entity.
       ``(5) Allowable remedies.--The remedies which may be 
     implemented by the arbitration panel shall consist of those 
     remedies which would be available in an action timely 
     commenced by a participant or beneficiary under section 502, 
     taking into account the administrative remedies exhausted by 
     the participant or beneficiary under section 503.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to adverse coverage decisions initially rendered 
     by group health plans on or after the date of the enactment 
     of this Act.

TITLE IV--APPLICATION TO GROUP HEALTH PLANS UNDER THE INTERNAL REVENUE 
                              CODE OF 1986

     SEC. 401. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

       Subchapter B of chapter 100 of the Internal Revenue Code of 
     1986 is amended--
       (1) in the table of sections, by inserting after the item 
     relating to section 9812 the following new item:
``Sec. 9813. Standard relating to patient freedom of choice.'';

     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 Consensus Managed Care Improvement 
     Act of 1999 (as in effect as of the date of the enactment of 
     such Act), and such requirements shall be deemed to be 
     incorporated into this section.''.

        TITLE V--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

     SEC. 501. EFFECTIVE DATES.

       (a) Group Health Coverage.--
       (1) In general.--Subject to paragraph (2), the amendments 
     made by sections 201(a), 301, and 401 (and title I insofar as 
     it relates to such sections) shall apply with respect to 
     group health plans, and health insurance coverage offered in 
     connection with group health plans, for plan years beginning 
     on or after January 1, 2000 (in this section referred to as 
     the ``general effective date'') and also shall apply to 
     portions of plan years occurring on and after such date.
       (2) Treatment of collective bargaining agreements.--In the 
     case of a group health plan maintained pursuant to 1 or more 
     collective bargaining agreements between employee 
     representatives and 1 or more employers ratified before the 
     date of enactment of this Act, the amendments made by 
     sections 201(a), 301, and 401 (and title I insofar as it 
     relates to such sections) shall not apply to plan years 
     beginning before the later of--
       (A) the date on which the last collective bargaining 
     agreements relating to the plan terminates (determined 
     without regard to any extension thereof agreed to after the 
     date of enactment of this Act), or
       (B) the general effective date.

     For purposes of subparagraph (A), any plan amendment made 
     pursuant to a collective bargaining agreement relating to the 
     plan which amends the plan solely to conform to any 
     requirement added by this Act shall not be treated as a 
     termination of such collective bargaining agreement.
       (b) Individual Health Insurance Coverage.--The amendments 
     made by section 202 shall apply with respect to individual 
     health insurance coverage offered, sold, issued, renewed, in 
     effect, or operated in the individual market on or after the 
     general effective date.

     SEC. 502. COORDINATION IN IMPLEMENTATION.

       The Secretary of Labor, the Secretary of Health and Human 
     Services, and the Secretary of the Treasury 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.

             TITLE VI--HEALTH CARE PAPERWORK SIMPLIFICATION

     SEC. 601. HEALTH CARE PAPERWORK SIMPLIFICATION.

       (a) Establishment of Panel.--
       (1) Establishment.--There is established a panel to be 
     known as the Health Care Panel to Devise a Uniform 
     Explanation of Benefits (in this section referred to as the 
     ``Panel'').
       (2) Duties of panel.--
       (A) In general.--The Panel shall devise a single form for 
     use by third-party health care payers for the remittance of 
     claims to providers.
       (B) Definition.--For purposes of this section, the term 
     ``third-party health care payer'' means any entity that 
     contractually pays health care bills for an individual.
       (3) Membership.--
       (A) Size and composition.--The Secretary of Health and 
     Human Services shall determine the number of members and the 
     composition of the Panel. Such Panel shall include equal 
     numbers of representatives of private insurance 
     organizations, consumer groups, State insurance 
     commissioners, State medical societies, State hospital 
     associations, and State medical specialty societies.
       (B) Terms of appointment.--The members of the Panel shall 
     serve for the life of the Panel.
       (C) Vacancies.--A vacancy in the Panel shall not affect the 
     power of the remaining members to execute the duties of the 
     Panel, but any such vacancy shall be filled in the same 
     manner in which the original appointment was made.
       (4) Procedures.--
       (A) Meetings.--The Panel shall meet at the call of a 
     majority of its members.
       (B) First meeting.--The Panel shall convene not later than 
     60 days after the date of the enactment of the Bipartisan 
     Consensus Managed Care Improvement Act of 1999.
       (C) Quorum.--A quorum shall consist of a majority of the 
     members of the Panel.
       (D) Hearings.--For the purpose of carrying out its duties, 
     the Panel may hold such hearings and undertake such other 
     activities as the Panel determines to be necessary to carry 
     out its duties.
       (5) Administration.--
       (A) Compensation.--Except as provided in subparagraph (B), 
     members of the Panel shall receive no additional pay, 
     allowances, or benefits by reason of their service on the 
     Panel.
       (B) Travel expenses and per diem.--Each member of the Panel 
     who is not an officer or employee of the Federal Government 
     shall receive travel expenses and per diem in lieu of 
     subsistence in accordance with sections 5702 and 5703 of 
     title 5, United States Code.
       (C) Contract authority.--The Panel may contract with and 
     compensate government and private agencies or persons for 
     items and services, without regard to section 3709 of the 
     Revised Statutes (41 U.S.C. 5).
       (D) Use of mails.--The Panel may use the United States 
     mails in the same manner and under the same conditions as 
     Federal agencies and shall, for purposes of the frank, be 
     considered a commission of Congress as described in section 
     3215 of title 39, United States Code.
       (E) Administrative support services.--Upon the request of 
     the Panel, the Secretary of Health and Human Services shall 
     provide to the Panel on a reimbursable basis such 
     administrative support services as the Panel may request.
       (6) Submission of form.--Not later than 2 years after the 
     first meeting, the Panel shall submit a form to the Secretary 
     of Health and Human Services for use by third-party health 
     care payers.
       (7) Termination.--The Panel shall terminate on the day 
     after submitting the form under paragraph (6).
       (b) Requirement for Use of Form by Third-Party Care 
     Payers.--A third-party health care payer shall be required to 
     use the form devised under subsection (a) for plan years 
     beginning on or after 5 years following the date of the 
     enactment of this Act.

  The CHAIRMAN. Pursuant to House Resolution 323, the gentleman from 
New York (Mr. Houghton) and the gentleman from Michigan (Mr. Dingell) 
will each control 30 minutes.
  The Chair recognizes the gentleman from New York (Mr. Houghton).
  Mr. HOUGHTON. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I, together with my colleagues the gentleman from South 
Carolina (Mr. Graham), the gentleman from Tennessee (Mr. Hilleary) and 
the gentleman from Nevada (Mr. Gibbons)

[[Page 24415]]

rise to offer an amendment in the nature of a substitute to the 
Norwood-Dingell bill, and I will make this really quite short, this 
introduction of mine. I am an original cosponsor of the Norwood-Dingell 
bill.

                              {time}  1445

  I absolutely support what it is trying to do. It is thoughtful; it 
corrects a wrong which has been around since the beginning of the 
health maintenance organizations. And all three gentlemen who are 
supporting this and promoting it are superb legislators and believers 
in health care reform.
  But I have only one problem with the bill in that what it does, it 
slides over another very, very important issue. What it does, frankly, 
is to open a huge gap for those who are simply providing the money to 
fund these plans.
  So while supporting the concept and the aim of the Norwood-Dingell 
bill, because of this huge void in funding, we almost surely will, in 
effect, be hurting the people we are trying to help. And I say this 
autobiographically from my experience in the business field.
  So I think it is irresponsible for us to ignore this issue in this 
great wave of enthusiasm for this bill. Despite the emotions of the 
day, if we do not do something, and I feel that it will be appropriate 
through our amendment, it will come back to haunt us.
  Mr. Chairman, I reserve the balance of my time.
  Mr. BROWN of Ohio. Mr. Chairman, I yield 2 minutes to the gentleman 
from New Jersey (Mr. Andrews).
  Mr. ANDREWS. Mr. Chairman, I rise in opposition to this well-
intentioned but, I think, flawed substitute. There are three 
deficiencies in the substitute which I believe compel its rejection and 
the adoption of the underlying Norwood-Dingell-Ganske bill.
  First is that this substitute usurps States' rights and States' 
causes of action with respect to tort law. One of the pieces of wisdom 
of the regulatory system in the United States is that different States 
have the authority to set different standards of care and different 
causes of action according to their State law. Each of our several 
States is very different. There are different needs of the people, 
there are different legal problems, and we recognize this by 
recognizing the fact that tort law causes of action typically, and 
sometimes exclusively, come from State law.
  This substitute creates one single Federal cause of action, and I 
believe that one-size-fits-all approach is inappropriate to solving the 
problem that is before us.
  The second defect is that this substitute does not provide full 
relief for people who are wronged. The limitation on damages is a very 
meaningful limitation on damages. For example, by tying the limitation 
to a multiple of economic damages, what about the case of a person who 
is a stay-at-home parent who does not have a job that pays in 
remuneration, but pays in psychic rewards, and that person is severely 
harmed by the actions of a managed care company. The damages that 
person would be able to recover would be significantly limited by this 
amendment, and I believe that is another reason for its rejection.
  Finally, the cause of action has some technical flaws in it which 
could exclude some managed care decision-makers from accountability. By 
creating the requirement that the decision-maker both have the 
authority to make the final decision and exercise that authority, there 
are certain decision-makers and certain decisions which would be exempt 
from accountability under this process.
  So although I congratulate the author for frankly offering a 
substitute that moves much closer in the direction of the underlying 
bill, I believe for these three reasons it should be rejected; and I 
urge the defeat of the substitute.


                      Announcement by the Chairman

  The CHAIRMAN. The Chair would ask Members to refrain from using cell 
phones and other telecommunications devices on the floor of the House.
  Mr. HOUGHTON. Mr. Chairman, I yield 5 minutes to the gentleman from 
South Carolina (Mr. Graham), my great friend.
  Mr. GRAHAM. Mr. Chairman, I thank the gentleman for yielding me this 
time. I would like to say I have thoroughly enjoyed working with the 
gentleman from New York (Mr. Houghton) and the other two Members who 
are Norwood-Dingell cosponsors on trying to bring some common sense 
reform to a very important issue.
  Where are the American people? The American people, whether one is 
Republican or Democrat alike, believe HMOs should be sued when they 
hurt people. The American people believe one should be able to choose 
one's own doctor even if one has to pay more money out of their own 
pocket. The American people believe that one should not have to call 
the insurance company before one can take a kid to the emergency room, 
and they should not be able to deny treatment and payment because one 
did not call them.
  The American people are very much for a lot of the reforms in this 
bill. The American people are also for limiting our tort system in a 
way that keeps people in business. The American people are very much 
for common sense legal reform. That is what this bill does.
  Here is the question of the 29 Republicans who have voted ``no,'' and 
here is the question to the Democratic Party: What if we kept the 
health care in Norwood-Dingell the same? What if we did not change it 
one word? What if we gave all of the patient protections that Norwood-
Dingell give the American people? What would my colleagues do if we 
asked them to move a little bit toward the American business community 
by giving them a chance to keep their employees with health care in the 
area of liability?
  My question is, can we tear down the legal wall that unfairly 
protects HMOs from liability and keep people in the health care 
business? Yes, we can, if people will work together. The answer will be 
no if we continue on this confrontational track.
  What do we do differently? We do nothing different in health care. 
Here is what we do in liability. I address my friend, the gentleman 
from New Jersey (Mr. Andrews), and his comments. We keep it at the 
Federal level. Do my colleagues know why we keep it at the Federal 
level? Because uniformity is helpful in controlling costs.
  ERISA is a Federal law that protects employees' retirement benefits. 
If one has a claim under ERISA for one's retirement, one does not go to 
50 different States. We do not let 50 different States write 401K 
plans. One goes to Federal court, and one has their day in Federal 
court because it is a Federal law that is uniform to make sure 
employers who do business in more than one State can have one set of 
rules to live by so that they know the rules of the road. We give a 
uniform forum to the people who may be aggrieved, and we give them a 
fair day in Federal court.
  Mr. Chairman, I say to my colleagues, if Norwood-Dingell passes the 
way it is today, here is what is going to happen in corporate America. 
If one can be sued as a multi-State business in 50 different States 
with 50 different legal theories of holding people accountable in the 
health care industry, we are going to have lawyers meet with the 
corporate board and say, you are going to be chasing jury verdicts all 
over this country. Get out of this business. This is voluntary on your 
part; you do not have to do it.
  You are going to spend more time in State court on lawyer fees than 
you are going to spend on health care. If we allow 50 different 
theories of being sued, we are going to not only tumble down the 
liability wall, we are going to tumble down the benefits that go to the 
people who need it the most, and that is the employees.
  What do we do in this bill? We limit damages in two areas. Economic 
damages are fully recovered.
  Let me say this to the gentleman from New Jersey (Mr. Andrews). I 
have represented housewives, people who do not have the traditional 
job. Let me tell my colleague, if we put down what it cost to run a 
family, we can add up some serious damages, because people who stay at 
home and take care of families have a job, and we can turn that

[[Page 24416]]

into money as a lawyer, because I have done it. One can get one's full 
range of damages under this bill, but we are not going to let people 
make up numbers called pain and suffering beyond a half a million 
dollars to keep people in business.

  Punitive damages are taken off the table. If we leave that as a form 
of damages, the cost of premiums are going to go through the roof. 
Punitive damages helps no one have a better quality of life except the 
lawyer who puts the money in their pocket, and I have been a lawyer 
seeking punitive damages.
  Mr. Chairman, we can have common sense legal reform that gives people 
a fair day in court, that allows businesses to be sued, but in a 
uniform manner with a national standard so that they do not get out of 
this business chasing 50 different juries.
  If we want to help patients keep the health care the same, if we want 
to help business, give them a chance to understand the rules of the 
road no matter where they do business; give them some commonsense legal 
protection so that they do not get sued to death.
  Mr. Chairman, this bill as currently written is going nowhere. With 
some common sense changes, it can become the law of the land and people 
can have the health care they deserve and paid for; they can have their 
day in court, and people like the gentleman from New York (Mr. 
Houghton) who have been in business and offered employee benefits can 
continue to do that if we will work together.
  Mr. BROWN of Ohio. Mr. Chairman, I yield 4 minutes to the gentleman 
from Georgia (Mr. Norwood).
  Mr. NORWOOD. Mr. Chairman, I indeed thank the gentleman for yielding 
me this time, and I would like to take a moment to talk about the 
gentleman from New York (Mr. Houghton) and the gentleman from South 
Carolina (Mr. Graham), not only two good friends, but two cosponsors of 
our bill, and I want both of them to know how much I appreciate the 
work they have done with us. The gentleman from New York (Mr. Houghton) 
knows that we have spent many hours trying to, within our bill, reach 
accommodation with him.

  I will just submit for the Record a CRS report that agrees that the 
changes that he has worked so hard to get in our bill we were able to 
do that and accommodate him.

                                   Congressional Research Service,


                                          Library of Congress,

                                  Washington, DC, October 5, 1999.
     To: Hon. Charlie Norwood, Attention: Rodney Whitlock.
     From: Kimberly D. Jones, Legislative Attorney, American Law 
         Division.
     Subject: Legal Analysis of Whether the Amendment in the 
         Nature of a Substitute To H.R. 2723 offered by 
         Representatives Norwood, Dingell, Ganske and Berry 
         Addresses Concern Raised by Representative Houghton.
       This memorandum is in response to your request for a legal 
     opinion whether concerns raised in regard to H.R. 2723 by 
     Representative Houghton in a document provided by your office 
     have been addressed by a substitute amendment being offered 
     by Representatives Norwood, Dingell, Ganske and Berry 
     (Substitute Amendment). H.R. 2723 would amend Section 514 of 
     ERISA to prevent ERISA's preemption provision from 
     interfering with a state law that seeks to recover damages 
     for personal injury or wrongful death resulting from acts 
     connected to or arising out of an arrangement regarding ``the 
     provision of insurance, administrative services, or medical 
     services'' by a group health plan. In addition, the bill 
     establishes standards of internal review and creates an 
     external review process. Under the bill, no punitive damages 
     may be awarded if the defendant complied with external review 
     in a timely manner, as defined under the bill. It bars from 
     review those decisions denying coverage for items 
     specifically excluded from the plan.
       In a document provided by your office, Representative 
     Houghton raises a number of concerns with H.R. 2723. The 
     first concern is that the liability clause in Section 
     302(a)(1) of H.R. 2723 shows ``no connection between 
     wrongdoing and who is sued.'' Section 302(a)(1) states:
       (1) Non-preemption of certain causes of action.--
       (A) In general.--Except as provided in this subsection, 
     nothing in this title shall be construed to invalidate, 
     impair, or supersede any cause of action by a participant or 
     beneficiary (or the estate of a participant or beneficiary) 
     under State law to recover damages resulting from personal 
     injury or for wrongful death against any person--
       (i) in connection with the provision of insurance, 
     administrative services, or medical services by such person 
     to or for a group health plan . . ., or
       (ii) that arises out of the arrangement by such person for 
     the provision of such insurance, administrative services, or 
     medical services by other persons.
       Specifically, Representative Houghton's letter expresses 
     concern about the potentially broad definition of the term 
     ``any person'' and the potential activities that could be 
     grounds for a cause of action under the bill. Representative 
     Houghton also expresses concern about the bill permitting a 
     suit based on any act of the plan, whether ``good or bad.''
       The language of section 302(a)(1) is the same in both H.R. 
     2723 and the substitute amendment. Therefore, both would 
     allow claims under state law. The potential parties to a suit 
     and the basis of a suit would be determined by state law. 
     Ultimately, the participant or beneficiary would have to 
     satisfy the elements of a state law claim and meet the 
     standard of proof required to prevail under state law.
       Another concern raised by Representative Houghton is that 
     state law may not provide an adequate remedy. Currently, many 
     states have laws that allow only a ``natural person'' to be 
     licensed as a doctor or to practice medicine. As a result, 
     many states prohibit a corporation or similar professional 
     entity from giving medical advice or practicing medicine.1 In 
     states where these corporate practice of medicine laws exist, 
     HMOs (and other managed care plans) are legally prohibited 
     from and are not considered to be practicing medicine or 
     making medical decisions, even if they contract with licensed 
     physicians to perform services on their behalf and/or make 
     benefit decisions that affect the doctor's treatment. These 
     laws could present an obstacle to HMO enrollees who seek to 
     sue their HMO for medical malpractice or negligence. However, 
     other state claims that do not address the standards for 
     practicing medicine could be brought, i.e., negligent 
     processing of a benefit, or ``bad faith'' denials. It should 
     also be noted that some states have acted to remove the 
     shield that managed care plans have against state medical 
     malpractice claims. Texas, California and Missouri have 
     enacted laws that would give patients the right to sue their 
     managed care plan for injuries resulting from acts of the 
     plan.
---------------------------------------------------------------------------
     1 Footnotes at the end of article.
---------------------------------------------------------------------------
       Another issue raised by Representative Houghton is that 
     H.R. 2723 would allow an individual to go to court without 
     exhausting internal and external review. H.R. 2723 states:
       (3) Futility of exhaustion.--An individual bringing an 
     action under this subsection is not required to exhaust 
     administrative processes [internal and external review] . . . 
     where the injury to or death of such individual has occurred 
     before completion of such processes.
       The language of the substitute amendment states:
       (e) Futility of Exhaustion.--An individual bringing an 
     action under this subsection is required to exhaust 
     administrative processes [internal and external review] . . 
     ., unless the injury to or death of such individual has 
     occurred before the completion of such processes.
       The substitute amendment clarifies the language of H.R. 
     2723 to require a participant or beneficiary to exhaust 
     internal and external review before commencing an action 
     under state law, unless the injury or death has already 
     occurred.
       The final concern raised in the letter is the possibility 
     that an employer may be liable for under H.R. 2723 for ``any 
     exercise of discretionary authority including hiring the 
     insurance company.'' Under H.R. 2723, no cause of action may 
     be brought against an employer or plan sponsor (or its 
     employees) which provides a group health plan. This provision 
     also expressly prohibits a person from seeking 
     indemnification from the employer or plan sponsor (or its 
     employees) for damages awarded under the Act. However, the 
     bill also includes an exception to these provisions where the 
     employer or plan sponsor (or its employees) exercised its 
     discretionary authority to make a benefits decision and the 
     decision resulted in harm. The exercise of discretionary 
     authority does not include the decision to include or exclude 
     certain benefits from the plan, to provide extra-contractual 
     benefits, or a decision not to provide a benefit while 
     internal or external review is being conducted. The bill does 
     not permit a cause of action under state law for failing to 
     provide a benefit or service that is not covered by the plan.

[[Page 24417]]

       Under H.R. 2723, it is possible that an employer who has a 
     self-insured plan could be liable under a state cause of 
     action. If the employer in the administration of the plan or 
     the provision of benefits uses discretionary authority to 
     make a benefits decision, it would fall under the exception 
     to the employer protection provision of the bill. This is 
     more likely to happen if the employer chooses to administer 
     the plan itself. If the employer contracts with an insurance 
     company to provide these benefits, the bill could be used to 
     protect the employer if it did not exercise discretionary 
     authority on a claims decision. It is less likely than an 
     employer would be directly involved if the administration of 
     the plan has been contracted to an insurance company. 
     However, if the employer becomes involved in a claims 
     decision it would be liable. Also, it could be argued that, 
     although the insurance company made the decision, the company 
     is an agent of the employer and acting on the employer's 
     behalf. As the employer's agent, the argument could be made 
     that the actions of the insurance company could be imputed to 
     the employer. It is not clear if this argument would be 
     successful.
       The language of the employer provision in the substitute 
     amendment is similar to H.R. 2723, except the term ``group 
     health plan'' is included in the category of parties that may 
     not be sued under this Act. The provision states, [Section 
     302(a)] ``does not authorize--(i) any cause of action against 
     a group health plan or an employer or other plan sponsor 
     maintaining the plan, or (i) a right to recovery, indemnity, 
     or contribution by a person against a group health plan or an 
     employer or other plan sponsor (or such an employee) for 
     damages assessed against the person pursuant to a cause of 
     action under [Section 302(a)(1)]. The term ``group health 
     plan'' is also included in the exception to the employer 
     provision which states:
       Subparagraph (A) shall not preclude any cause of action 
     described in [Section 302(a)] against [a] group health plan 
     or an employer or other plan sponsor (or against an employee 
     of such a plan, employer, or sponsor acting within the scope 
     of employment) if--(i) such action is based on the exercise 
     by the plan, employer, or sponsor (or employee of 
     discretionary authority to make a decision on a claim for 
     benefits covered under the plan or health insurance coverage 
     in the case at issue; and (ii) the exercise by the plan, 
     employer, or sponsor (or employee) of such authority resulted 
     in personal injury or wrongful death.
       The inclusion of the term ``group health plan'' would 
     clarify the bill's application to fully-insured plans. The 
     term ``group health plan'' is defined under ERISA as ``an 
     employee welfare benefit plan to the extent that the plan 
     provides medical care . . . to employees or their dependents 
     . . . directly or through insurance, reimbursement, or 
     otherwise.'' 2 Therefore the employer provision would protect 
     a group health plan from liability, unless it exercised 
     discretionary authority to make a decision on a claim for 
     benefits covered under the plan or health insurance coverage 
     in the case at issue.
       In a fully-insured plan, a company will contract with an 
     insurance company to provide coverage for its employees. This 
     company is known as a ``health insurance issuer'' under 
     ERISA. The term ``health insurance issuer'' is defined under 
     ERISA as ``an insurance company, insurance service, or 
     insurance organization 9including a health maintenance 
     organization . . .) which is licensed to engage in the 
     business of insurance in a State and which is subject to 
     State law which regulates insurance. . . . Such term does not 
     include a group health plan.'' 3 In essence, in the case of a 
     fully-insuredd plan, the plan and the health insurance issuer 
     are two distinct entities. By including group health plans in 
     the employer exception and special rule provisions of the 
     substitute amendment, it is unlikely that the actions of the 
     health insurance issuer will be imputed to the plan. However, 
     a fully-insured plan could face liability if it exercises 
     discretionary authority to make a decision on a claim for 
     benefits covered under the plan or health insurance coverage 
     in the case at issue.
       In the case of a self-insured plan, the result is the same 
     under both H.R. 2723 and under the substitute amendment. 
     Where the employer assumes the risk of providing health 
     insurance to its employees, the employer and the plan are for 
     practical purposes the same. As such the acts of a self-
     insured plan could subject the employer to liability due to 
     the high probability that the employer will have and use 
     discretionary authority to make a decision on a claim for 
     benefits covered under the plan or coverage in the case at 
     issue.
                                                Kimberly D. Jones,
                                             Legislative Attorney.

                               Footnotes

     \1\ D. Cameron Dobbins, Survey of State Laws Relating to the 
     Corporate Practice of Medicine, 9 Health Lawyer 18 (1997). 
     Approximately 15 states have corporate practice of medicine 
     laws.
     \2\ 29 U.S.C.A. Sec. 1191b(a) (West Supp. 1999).
     \3\ 29 U.S.C.A. Sec. 1191b(b)(2).

  The Houghton amendment would make insurers liable in Federal court 
rather than State court. That is sort of the bottom line. H.R. 2723 and 
every bill, incidentally, I have introduced on liability ensures we 
want them to face State liability.
  I would just like my colleagues to consider a thought, consider this 
quote from Chief Justice William Rehnquist, and he says, and I quote, 
``Congress should commit itself to conserving the Federal courts as a 
distinctive judicial forum of limited jurisdiction in our system of 
Federalism. Civil and criminal jurisdictions should be assigned to the 
Federal courts only to further clearly define and justify national 
interests, leaving to the State courts the responsibility for 
adjudicating all other matters.''
  Should HMO liability be considered a national interest warranting 
Federal jurisdiction?
  In the Federal courts today, there are 65 vacancies and the courts 
anticipate another 16 vacancies forthcoming. Twenty-two courts are 
considered to be emergency status, under emergency status. They do not 
have appropriate coverage from the bench to consider the cases before 
them. To this situation we are going to add a new Federal tort?
  The Speedy Trial Act of 1974 requires the Federal bench to give 
priority to criminal cases over civil cases. In 1998, criminal case 
filings were up 15 percent. A single mother whose child needs constant 
care because of a decision made by an HMO will have to stand in line 
behind all of the drug dealers before she can try to hold the HMO 
liable for its action.
  State courts are easier for patients to access. Almost every town in 
America has a State court. Federal courts are few and far between. 
States like Texas and Georgia and California already have moved to make 
insurers accountable for their actions. State courts are a more 
appropriate and accessible venue for personal injury and wrongful 
death.
  Considering the problems that patients will have in accessing Federal 
court, it is hard to imagine that HMO liability meets the Chief 
Justice's definition of a national interest. It certainly does not meet 
the single mother's definition.
  Like all politics, all health care really is local. H.R. 2723 holds 
insurers liable for their decisions that harm or kill someone in the 
most appropriate venue: State courts.

                              {time}  1500

  My dear friend, and I do mean that sincerely, my dear friend, the 
gentleman from South Carolina (Mr. Graham), he knows Frogmore, South 
Carolina, is a long way from a Federal court. You just cannot get there 
from here. We just need to do this at home. We also need to consider 
that the companies that do have a business in all 50 States, my 
goodness, they have to deal with 50 States now. Because you have a 
business in all 50 States does not preempt you from ever going into 
State court.
  What about slip and fall? That happens every day. They have to be 
ready in every State. I am not even going to ask Members to vote 
against my friends, just vote for H.R. 2723 intact on the next vote.
  Mr. Chairman, I include for the Record the following statement on 
physician pathology services:

       It is the intent of this legislation that the access to 
     care subtitle apply to clinical pathology and specialized 
     clinical pathology services. However, I am aware that the 
     language may not be specific enough on this particular issue. 
     Therefore, when we go to conference with the Senate, I am 
     willing to work to further clarify this issue by including 
     clarifying language on access to clinical pathology and 
     specialized clinical pathology services in sections 111 and 
     112 of this legislation
       It is the intent of this legislation that the access to 
     care subtitle apply in the same manner to clinical pathology 
     and specialized clinical pathology services as it would to 
     other specialty medical services in this legislation.
       It is my intention that when we go to conference with the 
     Senate that I will work to further clarify this issue by 
     including explicit language on access to clinical pathology 
     and specialized clinical pathology services in section 114 of 
     the legislation.
                                                  Charlie Norwood.

  Mr. HOUGHTON. Mr. Chairman, I yield 11/2 minutes to the gentleman 
from South Carolina (Mr. Graham).

[[Page 24418]]


  Mr. GRAHAM. Mr. Chairman, I appreciate those kind comments from my 
friend across the river in Georgia. We agree on most everything.
  One thing I am not going to do when this is over, go practice 
dentistry. I promise the Members that today. I appreciate all these 
doctors wanting to rewrite this liability section, but let me ask one 
question of my friends on the other side. Are they suggesting that if a 
fiduciary mismanages the retirement benefits of a company or employees, 
that they should be sued in State court? Is that what they are telling 
us?
  Under current law under ERISA, if there is a mismanagement by the 
fiduciary of the employees' retirement benefits, is it the gentleman's 
belief that State court is the proper place to sue?
  Mr. NORWOOD. Mr. Chairman, will the gentleman yield?
  Mr. GRAHAM. I yield to the gentleman from Georgia.
  Mr. NORWOOD. The gentleman wins. I am not a lawyer. I am not sure. I 
just know when one has liability under our bill, it has to be in State 
court.
  Mr. GRAHAM. The reason the gentleman cannot answer the question, Mr. 
Chairman, if we had that as a rule, every 401(k) plan in America would 
fold, because nobody in their right mind is going to offer these 
benefits so they can be sued in 50 States under 50 different theories 
of plan management.
  The reason we have this law at the Federal level is to encourage 
employers to offer health care and retirement benefits so they know 
what the rules are, and they cannot be nickeled and dimed in every 
State.
  This is an emotional topic from the plaintiff's point of view and 
from the business point of view. If Members want to destroy health 
care, allow 50 different theories of liability. People are going to get 
out of the business.
  Mr. HOUGHTON. Mr. Chairman, I yield 2 minutes to the gentlewoman from 
New York (Mrs. Kelly).
  Mrs. KELLY. Mr. Chairman, the Commission on Health Care Dispute 
Resolution, formed by the American Bar Association, the American 
Medical Association, and the American Arbitration Association, issued a 
draft report in 1998 recommending the use of alternative dispute 
resolutions for medical insurance disputes.
  The Houghton-Graham substitute amendment allows this, using binding 
arbitration as an alternative option for a patient to appeal the 
decisions of their health insurers, and follows the standards set by 
the commission, which include independent and impartial arbitrators 
with sufficient medical or legal expertise, appropriate credentials, 
and who have no conflicts of interest.
  Additionally, the arbitration process must include a fair de novo 
determination, the opportunity to submit evidence, have representation, 
and make oral presentation. The health insurer must also provide all 
records and provisions of the plan relating to the matter.
  Arbitration is a voluntary option to operate in lieu of court. Some 
people just do not want to go to court. Because arbitration is 
voluntary for the patient to choose, it will not take away from the 
patient's right to sue in court, but instead, adds a choice to the 
accountability process. I think we should expand choice for patients 
who are harmed by wrongful decisions. The Norwood-Dingell bill does not 
offer this choice.
  Mr. Chairman, I urge Members to support the Houghton-Graham 
substitute.
  Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the distinguished 
gentleman from New Jersey (Mr. Pascrell).
  Mr. PASCRELL. Mr. Chairman, I thank the gentleman for yielding time 
to me.
  Mr. Chairman, we have indeed been making history since we started 
this debate last evening. Americans do not have to wait for their State 
to catch up in protecting them when they become ill, in protecting 
their interests. If there is hurt, then HMOs are going to have to 
withstand the scrutiny that doctors and hospitals withstand right now.
  I applaud the efforts of the gentleman from New York (Mr. Houghton). 
There are a tremendous amount of similarities between what he wants to 
do and what is in the Dingell-Norwood bill, no doubt about it. I 
detect, if I may, and I hear the fears portrayed by my good friend, the 
gentleman from South Carolina (Mr. Lindsey), from the proponents of 
this substitute.
  But I also hear the fears and the anxiety of actual human beings who 
have to deal with the bureaucratic maze that is in front of them when 
they are ill. If I have to err, if I have to make a mistake, I believe, 
in good faith, we should make it on the side of the patient.
  What that means is that all the things that we agree upon in similar 
pieces of legislation should not be shortstopped because we cannot 
agree on where that limit is if one has to go to court. There are 
built-in processes right within this legislation internally that 
protect us from those fears and those anxieties which Members have 
expressed.
  That is why I cannot vote for this substitute, but I applaud the 
gentleman's efforts.
  Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the distinguished 
gentlewoman from California (Ms. Pelosi).
  Ms. PELOSI. Mr. Chairman, I thank the gentleman for yielding time to 
me.
  Mr. Chairman, I rise in opposition to the Houghton-Graham substitute 
and in support, strong support, of the Dingell-Norwood legislation. I 
commend both of those gentlemen for their courageous leadership.
  Nothing, I think, speaks more eloquently to the need for their 
proposal than the case of my constituent, Stephen Parrino, from San 
Francisco. Stephen was diagnosed with a brain tumor. His HMO referred 
him to Loma Linda Medical Center, which successfully removed the tumor.
  Stephen's treating physician then ordered him to undergo proton beam 
therapy no later than 2 or 3 weeks following the operation, but 
Stephen's HMO refused to pay for the therapy, saying that it was 
experimental, unapproved, and not medically necessary. For those 
reasons, it did not fall within the managed care guidelines.
  After repeated calls to the claims reviewer, Stephen was told that 
the HMO would ask for a second opinion. Seven weeks after surgery was 
completed, the second opinion came back. It was medically necessary. 
But it was now too late. Two weeks later, Stephen was informed his 
brain tumor had spread; it had reoccurred to the same place, and spread 
to the rest of his body, including his lungs. He subsequently brought 
suit against the HMO in State court, but claiming ERISA preemption, the 
HMO had the action removed to the U.S. District Court, which dismissed 
his case. With no remedy against the HMO, Stephen Parrino ultimately 
died as a result of the tumor.
  Mr. Chairman, this story has been told over and over again in our 
country, of desperately sick people who thought they had access to the 
best health care in the world, and who find themselves at the mercy of 
the managed care bureaucrats in a judicial system that provides them 
with less assistance than they need and no compensation after the 
damage has been done.
  We have a responsibility to stop this. Health care consumers must be 
able to hold their health care plans accountable and get lifesaving 
care. That is why the American Psychological Association writes that 
the Norwood-Dingell bill is the only legislation that holds HMOs 
accountable for negligent acts.
  Mr. Parrino's HMO did not provide him with the remedy to save his 
life. His family has no remedy against that HMO.
  Mr. HOUGHTON. Mr. Chairman, I yield 1 minute to the gentleman from 
South Carolina (Mr. Graham).
  Mr. GRAHAM. Mr. Chairman, I would like to address the case previously 
mentioned on the floor. It is a very emotional topic.
  Under our bill, they would have a legal remedy. They would have a 
wrongful death claim brought in Federal court. They would get a full 
range of what has been lost: the future wages,

[[Page 24419]]

past wages, past medical bills, the entire package that goes with a 
wrongful death claim, plus a half a million dollars for pain and 
suffering, which in a wrongful death claim is very hard to get anyway. 
They would get that whole range. The liability wall would come down.
  Let me just make this one statement. I am asking every member of this 
House who has voted for products liability reform, where we limit 
damages, just like we do here, to ask themselves, are they being honest 
with themselves? What is the deal, here? If someone gets hurt by a 
machine, we are entitled to limit damages, but if they get hurt by an 
HMO, for some strange reason and they go through the roof, 280 people 
in this House have voted for liability reform just like we have today, 
including the gentleman from Iowa (Mr. Ganske) and including the 
gentleman from Georgia (Mr. Norwood).
  They were willing to limit damages then, but not now. Why?
  Mr. HOUGHTON. Mr. Chairman, I yield 4 minutes to the gentleman from 
Tennessee (Mr. Hilleary).
  Mr. HILLEARY. Mr. Chairman, I am proud to be in the House today as a 
coauthor and principle cosponsor of this legislation, the Houghton-
Graham-Hilleary-Gibbons substitute to the Norwood-Dingell bill.
  Our substitute would clarify and close the loopholes that presently 
exist, in our opinion, in the liability section of the base bill before 
us. I, like the drafters of the base bill, do believe that some sort of 
accountability mechanism must exist in order to improve today's managed 
care plans. I support holding managed care plans that make negligent 
decisions accountable in a court of law.
  However, the bill ignores to a serious level, I believe, concerns 
about the potential liability that employers will face. This problem 
must be resolved or literally millions more Americans will join the 
ranks of the uninsured.
  I know that adding millions of Americans to the ranks of the 
uninsured is absolutely not the intent of anybody on the other side, or 
who supports the Norwood-Dingell bill. They do not mean to expose 
innocent employers to liability, I am quite sure. However, the language 
they use to protect the employers does not achieve their goal, and 
therefore, we will try to correct it in our substitute.
  Under the base bill, a business cannot be sued if they use 
discretionary authority in making coverage decisions. The problem is 
that the phrase ``discretionary authority'' is, in my opinion, much too 
broad.
  Let us first guess what is meant by ``discretionary authority.'' What 
if an employer sets up a clerical system that simply provides 
information on coverage decisions? Can that employer be sued under the 
base bill? Yes, it could be, under discretionary authority.
  What if a plan simply selects a third-party administrator or a 
certain type of health care plan. Can they be sued? Yes, under 
discretionary authority.
  What if an employer reverses the decision of a plan on behalf of an 
employee? Could they be sued? Shockingly, possibly, yes, under the 
phrase ``discretionary authority.'' It is too broad.
  With discretionary authority, we are, in reality, creating a system 
where lawyers can find loopholes to go after innocent companies. We 
cannot accept such loopholes that allow innocent businesses to be 
dragged into court just because they have the deepest pocket, which in 
turn incentivizes businesses to drop health care policies for their 
employees.
  Our substitute plugs this loophole. Under this substitute, only the 
business that has direct participation in making the sole, final 
decision of the plan is liable. Those are the key words, ``Sole and 
final decision.'' The loophole is closed. This will force the people in 
charge of the plan to make a good decision or be on the wrong end of 
monetary damages.
  Meanwhile, innocent employers, which had nothing to do with the 
decision on health care, will not be forced into court, as is the case 
with the base bill.
  I truly commend the gentleman from Michigan who supports the Norwood-
Dingell bill and our great friend, the gentleman from Georgia (Mr. 
Norwood). We appreciate how he has pushed this issue, pushed the issue 
of patient protections in health care, accountability in managed care. 
In my opinion, every option on the floor today has the fixes to these 
problems, in one way or another.
  In my view, part of that accountability must include having one's day 
in court, if one happens to be an employee who has been wronged. Three 
of the options we have considered today have that as a possible option, 
but we cannot let a legislative vehicle which fixes these problems also 
be used to create unlimited lawsuits, even against employers that had 
nothing to do with the health care decision.
  Our substitute leaves Norwood-Dingell's patient protections intact, 
but closes the loopholes in the liability section.
  This is the size of the Norwood-Dingell bill, a pretty thick bill. 
This is the size of the changes that we make to Norwood-Dingell. There 
are very few changes that we make. We just consider those closing those 
loopholes to the base business that might be an innocent bystander in 
this situation.

                              {time}  1515

  Everybody here that I know of is interested in the same thing, trying 
to get more patient protections into the law of the land, but we just 
believe in different solutions to the problem. Vote for our substitute.
  Mr. DINGELL. Mr. Chairman, I yield 1 minute to the distinguished 
gentleman from Georgia (Mr. Norwood).
  Mr. NORWOOD. Mr. Chairman, I thank the gentleman from Michigan for 
yielding me this time.
  Mr. Chairman, I have been rather interested about the attacks on 
discretionary authority. Of course, I am not a lawyer, but I took a 
minute, and I tried to look up what in the world are they hanging their 
hat on. I mean, all discretionary authority really means is that an 
employer can make an independent decision. He has the power to do that 
about a health care plan.
  What we do in this bill with the discretionary authority, we say that 
it is about a claim for benefits covered under the plan. That is what 
they have the authority to do. We are saying, ``do not use your 
authority to go in and deny care under this claim if it is a benefit in 
your claim, and you have to answer to that if you kill somebody.'' It 
is pretty simple.
  I say to the gentleman from South Carolina (Mr. Graham) I am all for 
limiting liability. Now, he knows that. That is why we have limited 
liability in our bill once one gets passed external review. I thought 
that it would make good sense. There is great limitation of liability 
at the State level. We see about half the States have really good 
punitive. Half the States, and sometimes not the same ones, have very 
good limitations on noneconomic. I think I am for limiting liability.
  Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the distinguished 
gentlewoman from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Chairman, let me thank the 
distinguished gentleman from Michigan for this time and his patience 
and his leadership on this legislation, along with the gentleman from 
Iowa (Mr. Ganske) and the gentleman from Georgia (Mr. Norwood) and the 
gentleman from Arkansas (Mr. Berry).
  This has not come about overnight, and I think it is important to 
emphasize that because I have the greatest respect for the gentleman 
from New York (Mr. Houghton). We have worked together. We understand 
the value of bipartisanship.
  But on the floor of the House today, I have heard doctors maligned, I 
have heard unions maligned, I have heard lawyers maligned. I thought it 
would be best if someone got up and spoke about the American people, 
spoke about the young man that is joining us, children, or little Steve 
Olson that I spoke about yesterday, the little 3-year-old who needed a 
brain scan and was denied that by his HMO; or 11-year-old Paige 
Lancaster who for a long time had headaches, and her brain

[[Page 24420]]

tumor grew for 4 years because her HMO denied her the service; or maybe 
Phyllis Cannon, a woman who died because of a lack of the ability to 
get the service she needed because of the HMO.
  Although the intentions are good for this amendment, I believe that 
we will respond to the American people, and we will not malign them if 
we pass straight up the Norwood-Dingell bill that allows the patient-
physician relationship to be the relationship that so many physicians 
who our Members of Congress have spoken about, the singular 
relationship of trust and respect and knowledge, so that that patient 
will have the ability to get the care that they need.
  My good friend who is on the Committee on the Judiciary knows what 
this amendment does. This is the back door of tort reform. This gives 
one a single Federal action, and it closes the door to those citizens 
located in Oklahoma, in Texas, and Georgia who can go to their State 
courts. It is the same thing as the reform on the class action.
  Mr. Chairman, the only bill that will respond to the American people 
is the Norwood-Dingell act. Save our children. Pass the Norwood-Dingell 
health reform package.
  Mr. Chairman, today I rise to voice my strong opposition to the three 
substitute amendments to H.R. 2723, the Bipartisan Consensus Managed 
Care Improvement Act. H.R. 2723 amends current law to establish new 
patient protections, set nationwide standards for health insurance, and 
expand medical liability. The measure establishes basic standards for 
utilization review (i.e., establishing guidelines for how a plan 
reviews the medical decisions of its practitioner). In instances where 
the insurer and practitioner disagree about a patient's treatment, the 
insurer must disclose the reason for the negative coverage decision and 
inform the patient of his right to appeal. The bill establishes basic 
standards for the internal appeal process. If the internal appeal 
upholds the coverage denial, the patient may request an external 
review. The bill allows any decision involving a medical judgment to be 
appealed; however, if a benefit is specifically excluded from a health 
plan contract, it may not be appealed.
  The measure expands health plan tort liability by permitting state 
causes of action under the 1974 Employment Retirement Income Security 
Act (ERISA; P.L. 93-406) to recover damages resulting from personal 
injury or for wrongful death for any action ``in connection with the 
provision of insurance, administrative services, or medical services'' 
by a group health plan. The bill prohibits insurers from retaliating 
against a patient or provider based on that individual's use of the 
review or appeals process and establishes other whistleblower 
protections.
  The bill also includes a number of provisions designed to protect 
patients' rights and ensure access to health care. Specifically, the 
measure: Lifts so-called ``gag rules'' to allow free and open 
communications between patients and doctors in order for the patient to 
make fully-informed decisions about the best course of treatment; 
requires insurers to provide coverage, without prior authorization, for 
emergency care if a ``prudent layperson'' would consider the situation 
an emergency (resulting in serious injury or death); requires health 
plans and insurers to allows patients to choose their own primary care 
professional from the plan or insurer's network; requires HMOs to 
provide direct access to a participating physician that specializes in 
obstetrics and gynecology (OB-GYN) and allows parents to designate a 
pediatrician as a child's primary care provider; allows patients who 
have an ongoing special condition to have continued access to their 
treating specialist for up to 90 days in cases where the provider is 
terminated from the plan or if the plan is terminated; requires HMOs to 
provide a referral to a specialist for patients with conditions that 
require ongoing treatment; and requires health plans to disclose 
information to that patients are able to learn what their plan 
specifically covers, including benefits, doctors, and facilities, in 
addition to information on premiums and claims procedures.
  In my home state of Texas, we already have effective laws that 
addresses this concern. The Health Care Liability Act, codified as Tex, 
Civ. Prac. & Rem. Code Ann. Sec. Sec. 88.001-88.003 (West 1998) allows 
an individual to sue a health insurance maintenance organization, or 
other managed care entity for damages proximately caused by the 
entity's failure to exercise ordinary care when making a health care 
treatment decision.
  In upholding portions of this forward thinking law that allows 
injured patients to bring suits for damages against health insurers for 
substandard quality medical care, District Judge Vanessa Gilmore wrote, 
``[I]n light of the fundamental changes that have taken place in the 
health delivery system, it may be that the Supreme Court has gone as 
far as it can go in addressing this area and it should be for Congress 
to further define what rights a patient has when he or she has been 
negatively affected by an HMOs decision to deny medical care . . . .
  ``If Congress wants the American citizens to have access to adequate 
health care, then Congress must accept its responsibility to define the 
scope of ERISA preemption and to enact legislation that ensures every 
patient has access to that care.'' Corporate Health Insurance v. The 
Texas Dept. of Insurance, 12 F. Supp. 2d, 597 (S. Tx. 1998). I could 
not agree more.
  The three amendments made in order, appropriately called poison 
pills, would kill the bipartisan crafted Norwood-Dingell Bill. The 
first amendment, the Boehner bill would allow no new lawsuits, while 
the Norwood-Dingell measure would provide patients relatively open 
ability to sue in state courts. This is not acceptable. A patient's 
right to sue to address the denial of care by HMO is at the heart of 
Norwood-Dingell.
  The second amendment, the Coburn-Shadegg amendment, is a wolf in 
sheep's clothing. It permits patients the right to sue. Should we 
applaud? I think not. Upon careful reading one finds that patients, 
under the Coburn-Shadegg amendment, can sue in either state or federal 
court, but not both, and would limit non-economic damages to $500,000.
  The Graham-Houghton measure does not attempt to hide its attack on a 
patient's right to sue. It would limit damages in most cases to 
$250,000 and limit suits to federal court. This is outrageous. Think of 
the economic hardship that a family would endure if they have a loved 
one who is permanently and catastrophically disabled as a result of an 
HMO's negligence. To cap damages to $250,000 at a time when health care 
costs continue to rise smacks of callous indifference on the part of 
the sponsors of this measure.
  These amendments would deny patients legal redress when he or she has 
been negatively affected by an HMOs decision to deny medical care. The 
first lawsuit to cite Texas' pioneering HMO liability law, filed 
against NYLCare of Texas, shows why the measure needed to be passed, 
according to physicians. HMOs here and around the country have argued 
that they shouldn't be liable for medical malpractice because they only 
determine insurance coverage and don't make medical care decisions. But 
the Texas suit, filed in district court in Fort Worth on Oct. 19, 
charges that a decision by NYLCare's reviewers to end hospital coverage 
for a suicidal patient led to his death. Despite his psychiatrist's 
objections, the patient did not protest the HMO's decision to release 
him from the hospital, and, shortly after discharge, he killed himself. 
``HMOs may say otherwise, but they are quite clearly practicing 
medicine,'' said Robert G. Denney, MD, a Fort Worth psychiatrists 
familiar with the case. The lawsuit could spark interest in many state 
legislatures and Congress, where legislation similar to Texas' HMO 
liability law failed this year but is expected to be reintroduced.
  Only Texas and Missouri have passed such laws, and Missouri officials 
reported that no suits have been filed yet under their 1997 law. 
Meanwhile, psychiatrists said a victory in Texas could help reverse 
massive cuts in mental health services in the past decade, as employers 
and managed care companies imposed tight coverage limits. ``HMOs and 
behavioral health companies are really going to take notice of this 
case because it's going to change how they manage their care,'' Dr. 
Denney predicted. At the time of filing, defendants in the lawsuit 
wouldn't comment on the case. In addition to NYLCare, which was 
acquired in July by Aetna U.S. Healthcare, the suit names Merit 
Behavioral Care Corp., which allegedly made the coverage decision as a 
subcontractor for NYLCare. Merit was acquired in February by Magellan 
Health Services, now the nation's largest behavioral health care 
provider.
  Look at the Fort Worth patient, 68-year-old Joseph W. Plocica, who 
became suicidal after he was diagnosed with prostate cancer and lost 
his job of 11 years. Plocica was admitted to a mental health facility 
in late June by psychiatrist Harold Eudaly Jr., MD. About a week later, 
according to the lawsuit filed, Gary K. Neller, DO, a psychiatrist 
working for Merit in Dallas, told Dr. Eudaly by telephone that Plocica 
had ``used up his [hospital] days,'' even though the HMO's limit had 
not been reached.
  Upon discharge, Plocica went home, drank a half gallon of antifreeze 
that night and died of the effects eight days later. ``This case 
appears to be very strong and raises some serious questions about 
promises made by the

[[Page 24421]]

HMO,'' said Donald P. Wilcox, general counsel of the Texas Medical 
Association. In a TV ad for NYLCare 65, the Medicare product that 
Plocica enrolled in, the HMO asserts that, ``Some health insurance 
companies limit hospital days. NYLCare 65 will give you as many 
hospital days as your doctor will authorize,'' according to a 
transcript filed with the lawsuit. Wilcox added that since Plocica was 
covered by Medicare, the case will not be affected by the Employee 
Retirement Income Security Act of 1974, which shields self-insured 
companies from state actions.
  It's no surprise that the first lawsuit under the Texas liability law 
involves mental health services, because ``the managed care industry 
has been arbitrarily cutting benefits,'' said Jefferson Nelson, MD, 
president of the Texas Society of Psychiatric Physicians. Nationwide, 
spending for behavioral health care benefits in the past 10 years has 
fallen by 54%, to $69.61 per person, compared with a 7.4% drop for 
general health care benefits, according to a 1997 study by the Hay 
Group for the National Association of Psychiatric Health Systems.
  Although some states have passed mental health parity laws requiring 
coverage at the same levels as other care, the Hay Group found that by 
1997, more than half of health plans had imposed limits on mental 
health hospital stays, typically 30 days. Coverage decisions are not 
typically made by behavioral care companies under contract to HMOs. 
Their reviewers ``constantly second-guess complicated cases that take a 
great deal of clinical judgment,'' said Houston psychiatrist Bernard 
Gerber, MD. When the HMO stops hospital coverage, patients often refuse 
to pick up the bill because they lack the funds to pay for the hospital 
stay and often want to be released, as in Plocica's case, Dr. Denney 
added. Such cases are ``frightening for psychiatrists because the 
liability rests with them,'' said Joanne Ritvo, MD, a Colorado 
psychiatrist and chair of the managed care committee at the American 
Psychiatric Association. The Texas lawsuit ``is one of the first cases 
to expose what is under the rock'' in managed mental health care.
  Critics of the Texas law predicted an avalanche of HMO suits. With 
only one lawsuit filed under the Texas law, which went into effect in 
September 1997, there is hardly the avalanche of claims that some HMOs 
predicted when the measure was being debated, said Fort Worth attorney 
George Parker Young, who represents the Plocica family in the suit.
  In other states where no such laws are on the books, there is little 
legal redress for patients suffering from negligent medical or reckless 
decisions made by their health insurance plans. Take for instance, 
Steven Olson--a once healthy, thriving two-year-old child. After 
falling on a stick while hiking with his parents, two-year-old Steven 
was rushed to the emergency room where he was treated. His mother 
returned him a week later because he was in great pain. He was treated 
for meningitis and sent home. Steven continued to complain about pain, 
but despite his parents' protests, the HMO doctors refused to perform a 
brain scan, even though it was a covered benefit. Steven eventually 
fell into a como due to a brain abscess that herniated. He now has 
cerebral palsy. An $800 brain scan would have prevented this tragedy.
  In an even more tragic case, a woman attempted to switch doctors when 
it became clear that her original doctor would not fully examine a 
growing and discolored mole on her ankle. Paperwork and bureaucracy 
resulted in a six-month wait. Once the women finally visited a second 
doctor, she was immediately sent to a dermatologist who determined that 
the mole was a malignant melanoma. The woman died one year later.
  Mr. Chairman, under the current federal law, many patients whose 
lives have been devastated or destroyed by negligent or reckless 
decisions made by their health insurance plans cannot go to court to 
obtain appropriate remedies under state law. The federal law--the 1974 
Employee Retirement Income Security Act (ERISA)--was originally 
intended to protect the interests of employees covered by pension and 
health benefit plans offered by their private-sector employers. But the 
law is not being used as a shield against state tort liability by HMOs 
and other health insurers who claim that ERISA preempts state lawsuits 
against health insurers who cover private sector employees. Based on 
rulings of some courts, participants in ERISA-covered employee health 
plans are deprived of the protections afforded by the state common law 
of negligence and medical malpractice and state wrongful death 
statutes.
  Although the courts do not all agree, many patients injured or killed 
by negligent or even deliberately reckless decisions of their HMO or 
other ERISA-covered health insurers have been unable to sue their 
health plan for damages. Injured patients and their families are 
limited to a narrow federal remedy under ERISA, which covers only the 
cost of the procedure that the plan failed to pay for, but does not 
include compensation for injuries or death resulting from the denial of 
a medical treatment.
  Mr. Chairman, this year, it should be a top priority of Congress to 
remove the ERISA preemption. Legal accountability for health insurance 
plans that make life-and-death decisions about medical care must be a 
part of any ``Patients' Rights'' bill that passes the Congress. 
Requiring plans to be legally accountable forces them to suffer 
consequences when they deny care on the basis of cost and harm results. 
If health plans are not accountable to patients for their decisions 
when harm results, they have no financial incentive to make appropriate 
medical decisions in the first instance.
  Mr. Chairman, this is a historic time to stand up for the rights of 
patients. I ask my Colleagues to join with me in rejecting these poison 
pill amendments. I urge my Colleagues to support the bipartisan 
Norwood-Dingell measure which would take away the ERISA shield health 
insurers currently hide behind.
  Mr. HOUGHTON. Mr. Chairman, I yield 3 minutes to the gentleman from 
Nevada (Mr. Gibbons).
  Mr. GIBBONS. Mr. Chairman, I thank the gentleman from New York for 
his willingness to share a little bit of his time for us folks.
  What we are trying to do today is simply avoid a catch-22 provision 
which we are all knowingly pushing this country toward. Truly, if one 
looks at the Houghton amendment, it is the most balanced approach to 
the whole question we have got here today. For those of us who talk 
about patient reform, needed patient reforms, and HMO reforms, let me 
say that I agree with my colleagues. That is why I and all the 
colleagues who have joined on in this amendment are cosponsors of H.R. 
2723, and we preserve those patient reforms. We do not change them at 
all.
  But let me say that the 1.2 million constituents that I have in the 
Second Congressional District of Nevada sent me here to make this bill 
a little better. They sent me here to try to make the Norwood-Dingell 
better by adopting this substitute.
  We have heard a lot of claims go about today about, yes, we are 
closing the door to States' lawsuits, that people will not have the 
chance, if they are in California, Texas, or Georgia, or whatever, to 
address those legal remedies that they have. Well, what about the other 
44 States who do not have those same provisions?
  By passing this bill without a uniform common approach to this law, 
we have shut the door to the citizens of those other 44 States. We are 
denying them the access to have and to seek damage and remedies that 
maybe some of these States do not have that we grant, that we allow, 
that we give this uniform approach under this bill here today.
  Let me tell my colleagues a little bit about why we need to control 
the cost in this. If we look at the overall rise in health care, and I 
am sure the gentleman from Georgia (Mr. Norwood) knows about the rise 
in health care premiums, and I think it looks like double digit and has 
been double digits for a number of years.
  In fact, in Nevada we just took a survey, and 12 percent of the 
employers, in the last year, said they have dropped their health care 
coverage for employees because of the continual rise in premiums. That 
survey also showed that 49 percent of those employers would also drop 
their health care coverage if these premiums continued to rise.
  What we are trying to do here is to get to the issue of controlling 
the cost by giving them uniformity and certainty about damages that 
they have to estimate in their payment of premiums that continually 
rise, that put them out.
  Let me say that for every 1 percent of premium increase, 
approximately 400,000 people around America go off of the insured roles 
on to the uninsured.
  What we are doing here, Mr. Chairman, of course, is trying to give 
certainty to our employers that they know what their exposure to 
liability is. We all know that punitive damages cannot be insured, that 
this comes out

[[Page 24422]]

of pocket of the employer. That is why we take punitive damages off the 
table. That is why we give a uniform approach to liability, to the 
remedies that are here. That is very important in this bill.
  I would encourage all of my colleagues to support this amendment 
because I think it gives uniformity to a much needed piece of 
legislation.
  Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the distinguished 
gentleman from Maryland (Mr. Hoyer).
  Mr. HOYER. Mr. Chairman, I thank the distinguished gentleman from 
Michigan (Mr. Dingell), the ranking member, who is the senior Member of 
this House, for yielding me this time.
  His father introduced health care legislation long before I knew 
anything about what Congress was doing. He has followed in that 
distinguished tradition.
  I congratulate the gentleman from Georgia (Mr. Norwood) for his 
courage, his commitment, his focus to ensuring that patients and 
families and doctors had the opportunity to provide the medical care 
that the patients needed.
  I rise in opposition to this amendment offered by one of the most 
distinguished and conscientious and honest Members of this House, the 
gentleman from New York (Mr. Houghton) and the gentleman from South 
Carolina (Mr. Graham).
  I say to the gentleman, with all due respect, that we stand on the 
edge of an opportunity to pass historic legislation. This amendment 
will undermine that, not because this amendment, per se, is inherently 
bad, but because this amendment raises very complicated issues that, 
frankly, could have been raised in another way and could have been 
considered, in my opinion, much more straightforwardly and honestly as 
an amendment to the bill as opposed to a substitute to the bill.
  I am reminded somewhat of what we did on campaign finance reform, not 
what the gentleman is doing, but the procedure that is being followed.
  I urge my colleagues who have come this far to ensure that we 
complete this historic effort with the Norwood-Dingell bill and reject 
this amendment.
  Vote overwhelmingly to pass this legislation. Let it go to conference 
where it will be worked on by, not only the Senate and the House, but 
by the President as well.
  We will have an opportunity this year to do something that the 
American public will say is the best thing that we have done this year 
in ensuring that patients and doctors have the right and the 
opportunity to provide health care that the patients and doctors 
believe is necessary, not some third party. Defeat this substitute.
  Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the distinguished 
gentlewoman from California (Ms. Eshoo).
  Ms. ESHOO. Mr. Chairman, first, I would like to salute all the 
Members that have worked so hard to bring forward the Dingell-Norwood 
bill. I would like to say some things today that really will remind us 
of some of the greatest things that have happened in this Chamber in 
the past chapters of American history: when a Congress and a President 
put together Social Security, when a Congress and a President put 
together Medicare.
  In our day and our time, we, too, can do something noble. The 
American people are really pleading with us. They are saying to us in 
our town hall meetings, wherever we gather in our congressional 
districts all over the country, fix the ills in this system. There are 
parts of it that are broken. We need access. We need fairness. We want 
our physicians, our doctors, that sacred relationship between a patient 
and a doctor. We want the doctor to make the calls.
  There is interference in the system, and we know what we need to do. 
The Patients' Bill of Rights is the bill that the American people 
genuinely support. We know that.
  There is politics of special interests here that take amendments and 
debates one way or another. But I am convinced that the American people 
still respect access to the courts, not overuse of the courts, but 
access to the courts, and that they want the laws to be enforceable 
ultimately if that is where it has to go.
  We can cast a vote that is going to keep faith with the American 
people. I believe that when they come back to judge us, that this will 
be the yardstick by which they will measure Members of the 106th 
Congress.
  I ask my colleagues to defeat the substitute. There is no substitute 
for the Norwood-Dingell bill. Let us pass the Patients' Bill of Rights 
and do ourselves proud in this Congress.
  Mr. HOUGHTON. Mr. Chairman, I yield 5 minutes to the gentlewoman from 
Missouri (Mrs. Emerson).
  Mrs. EMERSON. Mr. Chairman, before I even begin my formal remarks, 
let me say that the Houghton substitute incorporates all of the good in 
good work, the excellent benefits, the excellent changes in the health 
care delivery system that Norwood-Dingell has. It only changes the 
liability portion. Let me say that again. The entire Norwood-Dingell 
bill stays intact except for the liability provision. I just thought I 
ought to say that in response to the remarks of the gentlewoman from 
California (Ms. Eshoo).
  Let me also say, Mr. Chairman, that, since I have been in Congress, I 
have had to intervene on behalf of many, many of my constituents, one 
of whom has been denied or was denied health care access when she had 
to have a hysterectomy. At least three doctors told her she had to have 
a hysterectomy.
  This 43-year-old cafeteria worker from New Madrid was denied coverage 
and denied coverage and denied coverage. Her coverage said she can only 
have a uterectomy. She said, ``Well, if this is the only thing I can 
have, I will take this.'' But she had it, and she had pain and 
suffering, and she was even worse off after she had the uterectomy.
  She went back to the three doctors, two of whom by the way were part 
of her health plan, one of whom was an outside doctor. All three 
doctors said once again, if she did not have a hysterectomy 
immediately, this woman is going to die. But the plan argued, ``No, she 
had a uterectomy. She does not need further surgery,'' even though it 
was obvious she was still suffering and was in great pain.

                              {time}  1530

  And only after I intervened and I threatened the plan with exposure 
to the news media did they finally relent and say, okay, go ahead. 
Well, my colleagues all know that that should not happen. Plans should 
not be threatened by Members of Congress in order to provide needed 
services to our constituents. But this has happened on many occasions. 
And for all the good health plans out there, there are some bad ones.
  And let me say, as a former lobbyist for a small business and also as 
a former lobbyist for the insurance industry, that plans should be held 
liable in a court of law for acting irresponsibly and providing health 
care to consumers. I say that. But it should be responsible liability.
  And let me say that after talking with employers in my district as 
well as a very, very close personal friend of mine who was both a trial 
attorney and a Taft Hartley Trust Fund attorney that I think the 
liability language in Norwood-Dingell does not protect labor unions or 
employers who provide quality health care coverage for their employees.
  Let me give my colleagues an example. Let us say Joe Smith is denied 
coverage by his HMO. He is in a life-threatening situation and his 
doctor recommends experimental surgery; and because the HMO does not 
cover experimental medical practices, his coverage is denied. Now, the 
employer at this time inserts himself in the process because Joe is a 
long-time employee, his life is threatened; and, quite frankly, he 
wants to give Joe help. So the HMO grants Joe coverage because the 
employer has said I want Joe covered.
  Now, another situation comes up with a different employee where the 
employer says, I am going to stay out of this and let the HMO do its 
job. So that coverage is denied. However, in this case the employer is 
liable because he acted out of compassion in the very first case.
  This same thing happens on a daily basis with Taft Hartley Trustees 
each and every day. They grant coverage,

[[Page 24423]]

where maybe they should not have granted coverage, but they did it out 
of compassion, and under Norwood-Dingell they would expose themselves 
to liability because of this compassion.
  Now, Mr. Chairman, I have a couple of questions I would like to 
address to the gentleman from New York (Mr. Houghton), if I might. It 
is my understanding that the Houghton substitute has added language now 
to section 302 of the liability provisions that make sure that 
companies and unions who do intervene on behalf of their employees are 
not held liable.
  Mr. HOUGHTON. Mr. Chairman, will the gentlewoman yield?
  Mrs. EMERSON. I yield to the gentleman from New York.
  Mr. HOUGHTON. I would say to the gentlewoman, Mr. Chairman, that she 
is correct, we have added language that ensures that employers and 
unions who intervene on behalf of a patient in one circumstance are not 
held liable for actions committed and decisions made directly by the 
plan. Furthermore, employers and unions are not held liable for not 
intervening on behalf of their patients.
  Mr. EMERSON. So, then, it is also my understanding that one of the 
key differences between Norwood-Dingell and the Houghton substitute is 
that Houghton clarifies that employers and unions cannot be held liable 
if they did not make the decision to deny medical care.
  Mr. HOUGHTON. That is right.
  Mr. DINGELL. Mr. Chairman, I yield 1 minute to the gentleman from 
Washington (Mr. Inslee).
  Mr. INSLEE. Mr. Chairman, we should reject this amendment and pass 
the underlying bill. We should do it because America knows one thing in 
this debate with certainty. The amendment would divide this chamber. 
The Norwood-Dingell bipartisan would unite it.
  This is a bipartisan bill, intended to unite us across the aisle. And 
the one thing we should know for sure, bills that unite us are superior 
to those that divide us. And if we think about why we are here, it is 
Congress, and Congress, by its meaning, is coming together. That is an 
American value.
  If we look at the five values, and I encourage my colleagues to do 
this some day, carved on the bar of the House, there are five values: 
peace, justice, liberty, tolerance, and union. Let us vote for union 
today, union to do something meaningful for patients. It is what 
America wants.
  Mr. DINGELL. Mr. Chairman, I yield myself 30 seconds for a colloquy 
with the distinguished gentleman from Georgia.
  Mr. Chairman, I would like to engage my colleague to clarify the 
scope of the bill. I would say to my colleague that it is my 
understanding that our objective today here is to improve the delivery 
of health services, including medical, dental, and vision benefits for 
millions of Americans.
  I also understand there is no intention for the provisions of this 
bill, including the claims provision of section 301, to govern other 
lines of insurance, such as disability income insurance or long-term 
insurance. Is that correct?
  Mr. NORWOOD. Mr. Chairman, will the gentleman yield?
  Mr. DINGELL. I yield to the gentleman from Georgia.
  Mr. NORWOOD. The gentleman's understanding is exactly correct, Mr. 
Chairman.
  Mr. DINGELL. Reclaiming my time, Mr. Chairman, I fully agree with my 
good friend.
  Mr. Chairman, I yield 1 minute to the gentlewoman from Ohio (Mrs. 
Jones).
  Mrs. JONES of Ohio. Mr. Chairman, I keep hearing the only difference 
between Houghton and the Norwood-Dingell amendment is that it only 
changes the liability. It only changes the liability. When a lawsuit is 
brought, the only thing that matters is liability. No liability, no 
lawsuit, no damages. Why penalize the American public by restricting 
their ability to seek damages?
  The other thing that does not seem to want to be discussed on this 
floor today is the issue that someone who may be a victim of a 
violation of a claim or denial of a claim may be suing the doctor, may 
be suing the hospital, and the plan. The lawsuit against the doctor is 
in State court, the lawsuit against the hospital is in State court, the 
lawsuit against the plan should be in State court. Why require American 
citizens to go into Federal Court on the plan and the State court on 
the doctor and State court on the hospital?
  Again, it only changes the liability. That is it, everybody. 
Liability. Keep it in State court. Support Norwood-Dingell.
  Mr. DINGELL. Mr. Chairman, I yield 1 minute to the gentlewoman from 
California (Ms. Woolsey).
  Ms. WOOLSEY. Mr. Chairman, after fighting for almost 2 years, this 
House is finally poised to pass meaningful managed care reform. The 
American people want us to do this, and I am delighted that this House 
is rising to the occasion. We are almost there.
  We have been hearing some stories, though, about how HMO reform will 
make the sky fall. I want my colleagues to know that in my State of 
California our governor, Governor Gray Davis, recently signed landmark 
legislation that will provide HMO participants with major consumer 
protections and give health decisions back to 20 million patients and 
their doctors.
  Now Californians have HMO accountability. Now Californians have a 
fair, timely, external grievance process. It should be an eye opener 
for all of us here today, because California, a large and diverse 
State, in fact with the population and the economy of a country, has 
patients first when they think of health care.
  Mr. HOUGHTON. Mr. Chairman, I yield 2 minutes to the gentleman from 
South Carolina (Mr. Graham).
  Mr. GRAHAM. Mr. Chairman, where common ground exists, let me explain 
it. We are on the verge of doing something positive, but we are about 
to blow it. This bill, according to CBO, costs $7 billion to the 
Treasury. We have to work somehow to make that up.
  Let me say this about liability and be as direct as I know how. 280 
Members of this body have voted in the products liability area to limit 
damages, even economic damages, and change every law in every State and 
trump every court lawsuit anywhere in the country because they thought 
it was good for business and fair to plaintiffs.
  We have passed the Cox amendment that would limit damage recoveries 
if medical malpractice occurred because we want to lower the cost of 
medicine and still give people a fair day in court.
  Let me say this to my friends on the other side. We have a nice young 
man here who has probably a sad, bad story to tell. I want to help to 
make sure these things never happen again by getting the health care 
that people need. I do not want to drive people out of ERISA coverage. 
ERISA is designed at the Federal level to encourage people to have 
retirement plans and health care plans.
  What have we done in the past? If somebody gets hurt by a doctor, 
this body was willing to say nationally that a plaintiff could only get 
this much money for the good of medicine. If somebody was blown up by a 
product, and I have had those cases, and I can show my colleagues files 
that would make them sick to their stomach, emotional things happen in 
lawsuit situations. I can show my colleagues product liability cases, 
but this House was willing to say this is all a plaintiff gets for the 
good of the Nation.
  My colleagues, we are going to blow it if we do not reform the 
liability measure to keep it so people have a fair day in court but we 
do not drive well-meaning people out of business. It costs $7 billion 
already. This is the one area we have shown in the past we were willing 
to limit recovery for the greater good.
  And I do not want to discount the fact that health care needs to be 
improved, but I am a lawyer and I know what we are setting up with a 
50-State lawsuit form. We are going to drive people out of business.
  Mr. DINGELL. Mr. Chairman, I yield 3 minutes to the gentleman from 
Iowa (Mr. Ganske).
  Mr. GANSKE. Mr. Chairman, we are coming to the end of a long debate. 
We are coming to the end of 5 years of work.

[[Page 24424]]

  This bill, the Norwood-Dingell bill, is not about the gentleman from 
Georgia (Mr. Norwood), nor is it about the gentleman from Michigan (Mr. 
Dingell), the gentleman from Iowa (Mr. Ganske), the gentleman from New 
York (Mr. Houghton), or the gentleman from South Carolina (Mr. Graham). 
It is about the people out in the country.
  I want to tell a story about this little boy right here who is 
tugging on his sister's sleeve before he received HMO care. One night 
his mother found that he had a temperature of 104, 105. He was really 
sick. She phoned her HMO. The HMO said she could take him to one 
hospital, but only one, and that if she went to another one they would 
not pay for it. His mom asked where it was. And the person said, I do 
not know; find a map.
  Well, it was a long ways away. And halfway there, 30-some miles into 
the drive, with more than that to go, they were passing one emergency 
room after another, one pediatric care after another, and this little 
boy is sick. But his mom and dad, they are not doctors; they do not 
know how sick. Before he gets to that emergency room, he has a cardiac 
arrest. His mom is trying to keep him alive and his dad is driving him 
there, and they pull into the emergency room and his mom leaps out and 
says, save my baby, save my baby. And a nurse comes out and starts 
resuscitation and they save his life.
  But they do not save all of this little boy. Because of that HMO's 
medical judgment and decision, making him go 70 some miles instead of 
to the nearest emergency room, he ends up with gangrene of both hands 
and both feet. And this is that little boy after his HMO care.
  The Norwood-Dingell bill would have prevented that. We do not want 
lawsuits; we want to prevent this. This little boy has a big heart, and 
he is going to do just fine. And his mama and dad, who are here today, 
they are making a place for him and making sure that he gets the kind 
of care he needs. But this little boy, if he had a finger and we 
pricked it, it would bleed. He is not an anecdote.

                              {time}  1545

  We need to fix this problem so that these cases do not happen. This 
little boy has met a lot of my colleagues today, and I encourage others 
to meet him. His name is James Adams.
  I will tell my colleagues what we need to defeat this last 
substitute. We need to get a big vote for the Norwood-Dingell bill, and 
we need to send it to the conference. And instead of calling it the 
Talent bill, I have a suggestion. Let us call this bill the James Adams 
bill. Vote for the Norwood-Dingell bill. Vote against the substitute.
  Mr. HOUGHTON. Mr. Chairman, I yield 1 minute to the gentleman from 
Tennessee (Mr. Hilleary).
  Mr. HILLEARY. Mr. Chairman, I thank the gentleman for yielding me the 
time.
  Mr. Chairman, I am sitting here, and I am very conflicted about the 
fact that this young man is here today. I think the reason I am 
conflicted is because I think it borders, but probably does not go 
over, but borders exploitation of his condition.
  But in a way, on final analysis, I guess I am glad that our friend 
the gentleman from Iowa (Mr. Ganske) brought this up and really focuses 
exactly on what this is about. And it is about this young man.
  We only have so much money in this country to focus on health care, 
and we should focus every bit of it that we can on young men like this 
one sitting right here. The bill that is the base bill here, in my 
opinion, and I am an attorney who has never tried a case in my life, 
but I believe I could drive a Sherman tank through that discretionary 
authority in the base bill.
  So much money is available and that is it to help this young man. 
Now, if we can get to that deep pocket, which is that base company that 
contracts with that HMO, a good portion of that money available for 
this young man is going to go out the door to trial lawyers, who I do 
not malign. But if we have a choice between that limited funding of 
where that money should go, it seems to me that money should not go to 
the trial lawyers, it ought to go to young men like this young man 
right here.
  I urge a vote for the substitute.
  Mr. HOUGHTON. Mr. Chairman, I yield 30 seconds to the gentleman from 
South Carolina (Mr. Graham).
  Mr. GRAHAM. Mr. Chairman, I can show my colleagues cases of people 
that have lost their lives, lost their limbs in product liability suits 
that were treated by a doctor who was drunk. This House has in the past 
limited damage recoveries not because they are mean but because they 
want to keep people in business and lower the cost of medicine.
  This young man, under this bill, would have a full range of damages 
available to him to treat him in the future to make him as best he can 
be in terms of damages.
  What my colleagues are doing is they are not helping him. They are 
taking people with health care coverage and for no good reason letting 
50 States with unlimited damages take his mom and dad out of the health 
care market for no good reason.
  Mr. DINGELL. Mr. Chairman, I yield myself 3 minutes.
  Mr. Chairman, this has been a long and exciting debate. It has been, 
I think, one of the finest I have had the privilege of seeing. I want 
to pay tribute to all of my colleagues on whatever side of the issue 
they might have been. It has been a strong and vigorous debate, but it 
has not been one which has been bitter or acrimonious. It is a real 
credit to the sincerity of the Members on both sides of the issue and 
it reflects great credit on this institution.
  Now, my dear colleagues, if we defeat the substitute, we will move to 
vote on final passage. If we send this legislation to the other body 
for a conference, its final success is not assured. But I can tell my 
colleagues we have done our job and have done it well. We will pursue 
and try to see to it that the conference is completed to give this 
House and this Congress and this people a piece of legislation in which 
they may be proud and in which they will know that we have again made 
the HMOs of this country responsive to the needs and wishes of the 
people.
  Members of both parties are concerned that if we vote for this 
legislation, we will not observe the customary budget requirements. I 
offer my colleagues firm assurance that we will, in this process, 
observe the customary budget requirements.
  I have a letter from the President here in my hand, which I will 
insert into the Record, saying that we will do so and that the 
legislation will be paid for and offer my promise that that also will 
be so and that I will do everything that I can to see that nothing 
comes out of conference which does not pay the cost of the legislation.
  I do not want to say anything bad about any piece of legislation. I 
am sure they have all been offered sincerely. I want to pay a 
particular word of compliment to my good friend the gentleman from New 
York (Mr. Houghton). He is a great gentleman, and he is a man which I 
much admire and respect.
  I also want to say a word of thanks to my good friends the gentleman 
from Iowa (Mr. Ganske) and the gentleman from Georgia (Mr. Norwood) and 
to their fine staff and to that of ours who have worked so hard to 
bring us to where we are. There are many here who deserve great credit 
for what it is that we have accomplished today, and I want them to know 
that this legislation is something which is good.
  Many members on both sides of the aisle worked to make this day 
happen. Along with Dr. Norwood and Dr. Ganske, several other Republican 
members labored long and hard. And on the Democratic side, I'd be 
remiss if I didn't mention Marion Berry and my other good friends in 
the Blue Dogs, the cochairs of the health care task force, Frank 
Pallone, Eva Clayton, and Chris John, and, of course, Sherrod Brown, 
the subcommittee ranking member, and the other tireless Commerce 
Committee Democrats. We were well served by very capable staff, 
including Bridgett Taylor, Amy Droskoski, and Karen Folk of the 
Commerce Committee Democratic staff, and numerous excellent staffers 
from the personal offices of all involved on both sides of the aisle.
  The remarkable thing is that the House has moved to a point where we

[[Page 24425]]

now have agreement on all things save the question of litigation. But 
we have an example of what litigation means in matters involving HMOs 
in Texas under similar proposals of law, and that is that in 2 years, 4 
million people have been involved in five lawsuits.
  The total cost of those programs is less than 13 cents a month per 
subscriber. That tells us the system works, not at excessive costs but 
in a fashion which affords rights which have been denied to HMO 
subscribers and to allow them to be heard and get redressed for 
grievances and to get the abuses and the concerns which confront them 
adjusted.
  I urge my colleagues to vote against the amendment. I urge my 
colleagues to support the bill.


                      Announcement by the Chairman

  The CHAIRMAN. The Chair must ask all Members to refrain from alluding 
to any guest who might be on the floor of the House.
  Mr. HOUGHTON. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I want to thank the gentleman from Michigan (Mr. 
Dingell) for his courteousness, the dean of our House, a very 
distinguished man, a great and dear friend.
  This is the final vote to keep Norwood-Dingell intact and yet save 
the caregivers. I understand that the American people are pleading for 
something like this, and we are also.
  I wish, as my friend from Maryland has said, that this had been an 
amendment. But it just was not. It was in the form of a substitute. I 
have no control over that. But I can only talk from personal experience 
that the Norwood-Dingell bill means that the health care is now going 
to be provided at a very scary cost.
  My colleagues have got to believe me. They may not agree with me. 
They may be able to tear some of my statements apart. But having lived 
through this process and taking a look at what is now available, the 
basic thrust of my argument is absolutely right, no question about it.
  The problem is that these people who have had problems, such as the 
gentleman from Iowa (Mr. Ganske) has indicated earlier, if they do not 
have any health care, they cannot be helped at all.
  I worked for many, many years, more than I would like to recount, for 
a company that was one of the first five in the country to offer health 
care to its employees. And I never thought in terms of employers or 
employees. We were members of the same corporation. I really believe 
that these people felt that we treated them correctly.
  But as I looked over that plan, and if I put on my other hat and I 
was now a businessman, I would have to change my thinking. I could not 
stand the liability provision hanging over my head. And I would do a 
couple of things.
  One of them might be to just give individual grants to employees, but 
that would not be good. We would not have the pooling. Many people 
would not have the money when they needed it. But the problem that I 
would have in being exposed to the liabilities, no matter how you want 
to define them, is they would be so great I could not continue the 
present plan as it is.
  Now, let me just say one other thing. We have heard from people who 
care very much about this. We have heard from lawyers. We have heard 
from doctors. I would like in pleading here, as others have, to plead 
for the employees and employers of corporations and the small companies 
who are going to be dramatically affected unless something can be done 
to refine this bill.
  Mr. Chairman, I yield back the balance of my time.
  Mr. DINGELL. Mr. Chairman, I yield such time as he may consume to the 
distinguished gentleman from Texas (Mr. Stenholm).
  Mr. STENHOLM. Mr. Chairman, I rise in support of H.R. 2723.
  Mr. Chairman, I rise in support of the Bipartisan Consensus Managed 
Care Act, offered by Representatives Charlie Norwood and John Dingell. 
While I do have some remaining concerns with some of the provisions in 
this legislation, I believe that Dr. Norwood and Mr. Dingell have made 
a sincere effort to work with me and others to address the legitimate 
concerns with their bill. Whenever issues were brought to their 
attention, they took the time to consider these suggestions and worked 
to resolve them. I commend both the Members and their very capable 
staffs for their diligent efforts to develop bipartisan, meaningful 
managed care reform. I am pleased that they have been able to put 
together a bill which is much improved from the legislation considered 
by the House during the 105th Congress.
  Our health care system poses a challenging area of public policy. I 
believe that is it important that we try to strike a balance between 
the rights of patients, the duties of physicians, the operations of 
insurance companies, and the ability of employers to provide health 
insurance for their employees. One of the most difficult issues to 
address throughout this debate has been the matter of liability. If a 
health plan's actions cause harm to a patient, the plan should be held 
accountable. I believe that the internal and external appeals processes 
included in this bill will enable patients to get the care that they 
need and therefore preclude the need for litigation. In fact, this bill 
clarifies that a patient must go through an external appeals process 
before going to court unless they already have suffered an injury or 
death. Furthermore, this bill includes provisions which ensure that 
employers will not be subject to liability unless they specifically act 
as an insurer and decide that a specific enrollee shall not receive a 
certain benefit that is covered. I have long supported tort reform, and 
I certainly do not want to see an increase in litigation. I believe 
that the limited scope of this bill's liability provisions make 
lawsuits a last resort that is available only in egregious cases where 
all other avenues have been exhausted.
  I believe that the managed care plans in my district, First Care, 
offered by Hendrick Health System, and HMO Blue, offered by Abilene 
Regional, are doing a good job. I hope that the Bipartisan Consensus 
Managed Care Act will highlight the work of these responsible plans. In 
fact, the bill contains a number of provisions that these managed care 
plans already are using to provide better care for their patients.
  I am disappointed that the majority party did not allow the sponsors 
of this legislation the opportunity to pay for their bill. I believe 
that it is extremely important that we follow the budget rules that 
require us to pay for the legislation we pass. I continue to oppose any 
legislation that would use any of the budget surplus until we have an 
overall budget plan that protects Social Security and Medicare. I know 
that the authors of this bill agree with this position and offered a 
proposal to pay for the costs of the bill. The only reason that this 
bill is not paid for is because the majority leadership prevented the 
authors of the bill from doing so. I am voting for this bill today with 
the understanding and expectation that provisions paying for it will be 
added in conference. I am pleased to that the President has indicated 
he will not sign it unless its costs are fully offset by the conference 
committee.
  Even if we pass this legislation to ensure patients have rights in 
their health care, there is still much work to be done. The rising cost 
of health care and the growing number of uninsured citizens in our 
nation are alarming. In addition to giving patients who already have 
access to health care the ability to have a say in their health care 
decisions, we also have an obligation to work to see that everyone has 
access to health insurance.
  There are many valid and difficult issues to resolve as we seek to 
improve our health care system. H.R. 2723 isn't the final answer but it 
moves us in the right direction. I urge my colleagues to support the 
Norwood-Dingell bill.
  Mr. DINGELL. Mr. Chairman, I yield such time as he may consume to the 
distinguished gentleman from Illinois (Mr. Costello).
  Mr. COSTELLO. Mr. Chairman, I rise in opposition to the substitute 
and in strong support for the Norwood-Dingell bill.
  Mr. Chairman, I rise today in strong opposition to the process 
imposed in the House today by the Republican leaders. Once again the 
Republican-led Congress has made in order a rule they know will defeat 
the bipartisan Norwood-Dingell bill, the only bill that could provide 
real managed care reform for 32 million Americans. This is the 
Republicans clever way of fooling the public into thinking they would 
like to pass a real managed care bill.
  Mr. Chairman, the rule does not allow the bipartisan Norwood-Dingell 
bill to be offered in its original form and then links it with another 
poorly crafted bill that will deny access to the 32 million uninsured 
individuals in the lowest income bracket. This scheme is unacceptable, 
the Republican Leadership should be ashamed.

[[Page 24426]]

  The ``access bill'' that will be tied to the real managed care bill 
is for the healthiest and wealthiest of individuals. By expanding 
Medical Savings Account (MSAs), the access bill discourages preventive 
care, and undermines the very purpose of insurance. When we voted on 
the Kennedy-Kassebaum Health Insurance Portability Protection Act in 
1996 I supported the MSA demonstration project. However, this 
demonstration project turned out to be a failure. Of the 750,000 
policies available only 50,000 have been sold. In my own Congressional 
District in Southwestern Illinois my constituents do not have access to 
these policies.
  This access bill and the rule is just another attempt by the 
Republican-led Congress to undermine a bipartisan bill that could 
provide relief for millions of Americans. I am outraged that the Rules 
Committee denied Representative Dingell's request to offer an amendment 
to pay for this legislation. As a general rule the Republican 
leadership demands that legislation not bust the budget caps imposed in 
1997. While the Norwood-Dingell bill was not expected to require 
additional spending, the Congressional Budget Office estimated it would 
cost $7 billion. Representative Dingell offered to offset the bill so 
that Members like myself who wish to protect Social Security could cast 
their vote in support of real managed care reform while ensuring the 
Social Security Trust Fund would not be touched.
  As a cosponsor of the Bipartisan Consensus Managed Care Improvement 
Act--legislation strongly supported by doctors and by the American 
Medical Society and the Illinois State Medical Society--I believe it is 
the only real reform bill that will provide a comprehensive set of 
consumer rights that includes guaranteed access to emergency care and 
specialists, choice of providers, and strong enforcement provisions 
against health plans that put patient's lives in jeopardy. I am pleased 
the bill protects our small business owners by excluding businesses 
from liability if they do not make the decisions. This bill contains 
provisions that create safe harbors to ensure that no trial lawyer will 
accuse an employer of making a decision by simply choosing what 
benefits are in a plan or providing a patient benefit not in a plan. I 
am encouraged by the State of Texas who gave their citizens the right 
to sue HMO's for the past two years. In that time there have only been 
four cases filed.
  I urge my colleagues to oppose this rule and support real managed 
care reform legislation. Vote for the bipartisan Norwood-Dingell 
legislation.
  Mr. DINGELL. Mr. Chairman, I yield 3\1/2\ minutes to the gentleman 
from Georgia (Mr. Norwood) who has worked long and hard on this matter 
and shown extraordinary skill, ability, dedication, and energy. And 
those are characteristics I have seen in the gentleman from Iowa (Mr. 
Ganske).
  Mr. NORWOOD. Mr. Chairman, well, it is almost over. I think it has 
been a great 2 days, frankly. There are so many good ideas and so many 
good people in here, all of whom have brought the most interesting 
points of view to this debate. I am proud of this House. I agree with 
the gentleman from Michigan (Mr. Dingell) that it has been a very 
civilized, correct type of debate.
  Mr. Chairman, I have had the strangest feelings. This has been going 
on for me for a long time. I woke up today and I felt, well, it must be 
May 1969. The 101st Airborne Division was ready to take Hamburger Hill 
in a place far away in Vietnam. It had been their tenth try. They had 
to fight on bad ground. And they had to win.
  That division one more time locked and loaded and went straight 
uphill to take Hamburger Hill, and that day they won for America.
  I feel like we are running uphill our tenth time today, and we are 
going to get to the top of the mountain, and we are going to do it for 
America.
  I have tried, interestingly enough, for 4 years to make this a 
partisan debate. I did everything I could do, I think, to try to get 
the Republicans to take this issue. This is such an important issue to 
America, so important to so many people. Each one of us, each member of 
our families, each one of our constituents, every American is what this 
issue really was all about.
  I realized this year that we will not succeed that way, that for us 
to change the law in this country to protect our patients, we have to 
do it in a bipartisan fashion. That is the only thing that will work. 
That is the only thing that will really give us the new law that we 
need.
  I am asking my colleagues today, do not vote for this because they 
are a Republican, do not vote for this because they are a Democrat. 
That is not what this is about. I want them to vote for this bill, I 
want every one of them to vote for this bill today as an American.
  Let us show this country that on issues of this high quality and 
importance for the American people, we are going to come out of this 
House. And we are going to produce a good bill. We are going to 
conference, and we are going to face an uphill battle.
  Everybody knows that. We are going to go to conference and listen to 
my friend the gentleman from New York (Mr. Houghton) and the gentleman 
from South Carolina (Mr. Graham) and the gentleman from Tennessee (Mr. 
Hilleary) and others, and we are going to try to make it even better. 
And we can do that, and we can do that if we work together.
  I mean, everything maybe does not have to be bipartisan, but today's 
vote is an American vote. I ask every one of my colleagues, if they 
possibly can, vote for this bill today. And if they cannot, I respect 
them. And their opinion is important. But if you can, do.

                              {time}  1600

  Mr. Chairman, I thank my colleague, an interesting hard-working 
gentleman, a man that will tell it straight, and, boy, do I admire 
that. I thank the gentleman from Iowa (Mr. Ganske) for his hard work. I 
thank the gentleman from Oklahoma (Mr. Coburn). As my colleagues know, 
we are going to pass a bill out in an few minutes that the gentleman 
from Oklahoma wrote, or he certainly helped write. He will probably 
fuss about me saying that, maybe one or two things. But I thank the 
staffs in our offices, all of our offices that have worked so hard.
  Everybody, cast that American vote.
  The CHAIRMAN. The time of the gentleman from Georgia (Mr. Norwood) 
has expired.
  Mr. HOUGHTON. Mr. Chairman, have I any time left?
  The CHAIRMAN. The gentleman from New York has 1 minute remaining.
  Mr. HOUGHTON. Mr. Chairman, if the gentleman from Georgia would like 
another minute, I will yield him the balance of my time.
  The CHAIRMAN. The gentleman from Georgia is recognzied for 1 minute.
  Mr. NORWOOD. Mr. Chairman, I thank the gentleman from New York for 
yielding this time to me, but I will tell my colleagues I am sort of 
tired of hearing myself talk. It has all been said, and it has all been 
done, and what we need to do now is mount the top of Hamburger Hill.
  Mrs. CHRISTENSEN. Mr. Chairman, and my colleagues, while the 
Houghton-Graham amendment is a bit more reasonable than the previous 
two, and I think is an attempt at promoting a compromise--I still must 
oppose it.
  I will admit that as a physician, I may be biased on this issue. Why 
should I as a physician be liable to be sued for a decision that was 
made by an HMO plan I work for, but the plan only be subject to 
arbitration.
  This will not bring the kind of accountability necessary to make sure 
that plans act in the best interest of the health of the patient, and 
not just on cost.
  Once again I must restate, that a lot of work and compromise went 
into crafting the bipartisan Norwood-Dingell bill. No one got 
everything they wanted in the bill. In fact, I am particularly 
disappointed that my own managed care bill--to ensure access to managed 
care plans for residents and physicians living and working in medically 
underserved areas--was not included in the Dingell-Norwood bill.
  However, in spite of this, I still say that it is the best managed 
care reform bill that we could get because it addresses, in a 
comprehensive way, the problems that the corporations will not address 
without legislation.
  So while my friends, Mr. Houghton and Mr. Graham may mean well in 
offering their substitute, they don't go far enough.
  The Norwood-Dingell bill is the only proposal that offers real 
managed care reform. Let us not amend it. Let us vote for the Norwood-
Dingell-Ganske bill and against any and all amendments.
  Mr. CLAY. Mr. Chairman, I rise in opposition to the Houghton 
amendment. This amendment is no different than the Coburn substitute. 
It makes it so difficult for an individual to bring

[[Page 24427]]

a lawsuit that in effect there is no right to sue. Only if an 
individual can jump over the high hurdles that this substitute puts up, 
can anyone receive a modicum of redress.
  Under Houghton, an individual has to prove three key points. First, 
that a person who had sole final authority exercised that sole final 
authority. Second, that that person failed to exercise ordinary care in 
making an incorrect determination. And third, that the denial was the 
proximate cause of the injury of death. In most health plans, it is 
unclear who has the final authority and individuals will be hard 
pressed to know and prove who was the person who actually denied their 
care.
  Houghton furthermore, requires that the court give the plan's 
decision substantial weight. This means that there is a presumption 
that the plan was right. Individuals and courts will be hard pressed to 
override this presumption. Only in the most egregious cases will there 
ever be any relief.
  Most of the other provisions in Houghton are similar to the Coburn 
substitute. Both of these substitutes make it so difficult to bring a 
suit that only a few individuals will ever be able to meet its tough 
standards. This isn't what the American people want. The American 
people want a reasonable way to hold health plans accountable. 
Americans deserve the same protection against health plans that they 
have when they buy a car or go to the supermarket. Oppose the Houghton 
substitute.
  The CHAIRMAN. The question is on the amendment in the nature of a 
substitute offered by the gentleman from New York (Mr. Houghton).
  The question was taken; and the Chairman announced that the ayes 
appeared to have it.


                             Recorded Vote

  Mr. DINGELL. Mr. Chairman, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 160, 
noes 269, not voting 5, as follows:

                             [Roll No. 489]

                               AYES--160

     Aderholt
     Archer
     Armey
     Baker
     Ballenger
     Bartlett
     Barton
     Bateman
     Bereuter
     Bilirakis
     Bliley
     Blunt
     Bono
     Brady (TX)
     Bryant
     Callahan
     Calvert
     Camp
     Canady
     Cannon
     Castle
     Chabot
     Chambliss
     Chenoweth-Hage
     Coble
     Coburn
     Collins
     Combest
     Cooksey
     Crane
     Cubin
     Cunningham
     Davis (VA)
     Deal
     DeLay
     DeMint
     Dickey
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ewing
     Fossella
     Fowler
     Gallegly
     Gekas
     Gibbons
     Gillmor
     Goode
     Goodling
     Goss
     Graham
     Green (WI)
     Greenwood
     Gutknecht
     Hansen
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hill (MT)
     Hilleary
     Hoekstra
     Houghton
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Istook
     Jenkins
     Johnson (CT)
     Johnson, Sam
     Kelly
     Kingston
     Kolbe
     Kuykendall
     Largent
     Latham
     LaTourette
     Lazio
     Lewis (CA)
     Lewis (KY)
     Linder
     Lucas (KY)
     Lucas (OK)
     McCrery
     McHugh
     McInnis
     McKeon
     Metcalf
     Mica
     Miller (FL)
     Miller, Gary
     Myrick
     Nethercutt
     Northup
     Nussle
     Ose
     Packard
     Pease
     Pickering
     Pitts
     Porter
     Portman
     Pryce (OH)
     Radanovich
     Ramstad
     Regula
     Reynolds
     Riley
     Rogan
     Rogers
     Rohrabacher
     Ryun (KS)
     Salmon
     Sensenbrenner
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simpson
     Skeen
     Smith (MI)
     Smith (TX)
     Souder
     Spence
     Stearns
     Stump
     Sweeney
     Talent
     Tancredo
     Tauzin
     Taylor (NC)
     Thomas
     Thornberry
     Thune
     Tiahrt
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                               NOES--269

     Abercrombie
     Ackerman
     Allen
     Andrews
     Bachus
     Baird
     Baldacci
     Baldwin
     Barcia
     Barr
     Barrett (NE)
     Barrett (WI)
     Bass
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Biggert
     Bilbray
     Bishop
     Blagojevich
     Blumenauer
     Boehlert
     Boehner
     Bonilla
     Bonior
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Burr
     Burton
     Buyer
     Campbell
     Capps
     Capuano
     Cardin
     Carson
     Clay
     Clayton
     Clement
     Clyburn
     Condit
     Conyers
     Cook
     Costello
     Cox
     Coyne
     Cramer
     Crowley
     Cummings
     Danner
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Diaz-Balart
     Dicks
     Dingell
     Dixon
     Doggett
     Dooley
     Doolittle
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Foley
     Forbes
     Ford
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Frost
     Ganske
     Gejdenson
     Gephardt
     Gilchrest
     Gilman
     Gonzalez
     Goodlatte
     Gordon
     Green (TX)
     Gutierrez
     Hall (OH)
     Hall (TX)
     Hastings (FL)
     Herger
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hobson
     Hoeffel
     Holden
     Holt
     Hooley
     Horn
     Hostettler
     Hoyer
     Inslee
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E. B.
     Jones (NC)
     Jones (OH)
     Kanjorski
     Kasich
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kleczka
     Klink
     Knollenberg
     Kucinich
     LaFalce
     LaHood
     Lampson
     Lantos
     Larson
     Leach
     Lee
     Levin
     Lewis (GA)
     Lipinski
     LoBiondo
     Lofgren
     Lowey
     Luther
     Maloney (CT)
     Maloney (NY)
     Manzullo
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntosh
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Minge
     Mink
     Moakley
     Mollohan
     Moore
     Moran (KS)
     Moran (VA)
     Morella
     Murtha
     Nadler
     Napolitano
     Neal
     Ney
     Norwood
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Oxley
     Pallone
     Pascrell
     Pastor
     Paul
     Payne
     Pelosi
     Peterson (MN)
     Peterson (PA)
     Petri
     Phelps
     Pickett
     Pombo
     Pomeroy
     Price (NC)
     Quinn
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Ros-Lehtinen
     Rothman
     Roukema
     Roybal-Allard
     Royce
     Rush
     Ryan (WI)
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sanford
     Sawyer
     Saxton
     Schaffer
     Schakowsky
     Scott
     Serrano
     Sessions
     Sherman
     Shows
     Sisisky
     Skelton
     Slaughter
     Smith (NJ)
     Smith (WA)
     Snyder
     Spratt
     Stabenow
     Stark
     Stenholm
     Strickland
     Stupak
     Sununu
     Tanner
     Tauscher
     Taylor (MS)
     Terry
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Toomey
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Vento
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Weygand
     Whitfield
     Wise
     Woolsey
     Wu
     Wynn

                             NOT VOTING--5

     Fletcher
     Granger
     Kaptur
     Scarborough
     Traficant

                              {time}  1622

  Mrs. McCARTHY of New York and Messrs. BACHUS, MANZULLO, SANFORD, 
KASICH, CROWLEY and PETRI changed their vote from ``aye'' to ``no.''
  Messrs. CRANE, CHABOT and ADERHOLT and Mrs. NORTHUP changed their 
vote from ``no'' to ``aye.''
  So the amendment in the nature of a substitute was rejected.
  The result of the vote was announced as above recorded.
  Stated for:
  Mr. FLETCHER. Mr. Chairman, on rollcall No. 489, I voted in the 
machine but it did not record my vote. I voted ``aye.''
  Ms. ROYBAL-ALLARD. Mr. Chairman, I rise today in support of the 
Norwood-Dingell Bipartisan Consensus Managed Care Improvement Act of 
1999 and in support of effective use of the National Practitioner Data 
Bank.
  Unfortunately, the Republican leadership, in restricting the debate 
on managed care reform, has prevented many promising ideas from being 
discussed, including an amendment I submitted to the Rules Committee 
about the National Practitioner Data Bank. The purpose of my amendment 
was to encourage health care providers to use the existing National 
Practitioner Data Bank. This would allow health consumers to make 
accurate and informed decisions about their health care.
  We've all read about these terrible stories where doctors, whose 
licenses have been suspended by one state, to relocate to another state 
and start their harmful medical practices all over.
  The National Practitioner Data Bank was established as part of the 
Health Care Quality Improvement Act of 1986 to try to prevent this from 
happening.
  The purpose of the data bank is simple: to help prevent incompetent 
doctors, dentists, or other practitioners from moving from one state to 
another without a state discovering their previous history of unethical 
or incompetent medical practice.
  The data bank contains information on malpractice payments, licensure 
actions taken by state medical boards, professional review actions 
taken by hospitals or HMOs, actions taken by the Drug Enforcement 
Agency, and Medicare/Medicaid exclusions.
  Information is made available only to registered entities such as 
state licensing boards,

[[Page 24428]]

professional societies, HMOs, PPOs, and group practices.
  Hospitals are required to query the NPDB when hiring medical staff 
and at least once every 2 years for those already on staff or having 
clinical privileges.
  However, other health care entities may consult NPDB but are not 
required to.
  My amendment would have encouraged the use of NPDB by health plans 
and HMOs in order to give consumers confidence that bad actors are not 
employed or covered by their health plan. The amendment simply stated, 
that in the ``Patient Access to Information'' section of the bill, 
along with a doctor's name and address and availability to new 
patients, an HMO or a health care plan must indicate whether the 
National Practitioner Data Bank has been consulted--essentially, 
whether a background check has been done on the doctors in their list. 
The amendment did not require HMOs or health plans to consult the data 
base.
  The fact is, more and more Americans are now covered by HMOs.
  Many have little choice in the matter--80% of small businesses and 
over 50% of large businesses offer one and only one health care plan to 
their employees.
  In the past, most of us were able to choose a family doctor or a 
specialist because someone we knew or trusted--a relative, a family 
friend--recommended them to us.
  Under most HMOs, we are handed a list of participating doctors and 
told these are the only doctors we can pick.
  Yet we may have no idea who they are--it may be a list of complete 
strangers.
  Are they licensed? Has their license been suspended in another state? 
Has another state taken a disciplinary action? Have they been sued for 
malpractice in the past? If so, was it an aberration or is it a regular 
occurrence?
  It seems the very least we should expect is that our health care plan 
or HMO has run a background check on these doctors. These are 
legitimate questiions the health plan or HMO should know the answer to.
  Practically speaking, I had hoped such disclosure would serve as an 
incentive for health plans and HMOs to check up on who they are hiring, 
or who they are including in their list of covered physicians. My 
amendment would not have done everything, but it would have represented 
a small step forward in the area of consumer access to information that 
will help us move ahead for a more open health care system with access 
to the information people need to make informed medical decisions.
  I urge my colleagues to pass the Norwood-Dingell bill today to begin 
the long process of reforming our health care system, expanding 
coverage, and bringing quality health care to all our people. I hope 
that we can move quickly in the near future to discuss ways of making 
the National Practitioner Data Bank effective, and to consider related 
legislation to prevent medical malpractice and give consumers the 
confidence that unethical or illegal practitioners are not hiding out 
in the medical system, waiting to prey on their next unsuspecting 
patients.
  Mr. CUMMINGS. Mr. Chairman, an historic American tale teaches us the 
traits necessary to follow the road to your dreams--a brain, a heart 
and courage. Today, we must use these traits to knock down the GOP 
Substitutes that are roadblocks placed on our path toward making the 
American people's dream of a meaningful patients' bill of rights a 
reality.
  As lawmakers, we have a duty to use our brains and hearts, and to 
have the courage:
  To knock down GOP roadblocks to expanded access to specialists who 
have the requisite expertise to treat patients;
  To knock down GOP roadblocks to ensuring that individuals have access 
to emergency care, without prior authorization, if a ``prudent lay 
person'' deems it an emergency;
  To knock down GOP roadblocks to increased access to prescription 
drugs through participation of plan physicians and pharmacists in the 
development of any drug formulary;
  To knock down roadblocks to prohibiting gag rules that would allow 
patients to be informed of all of their treatment options; and
  To knock down roadblocks to holding health plans accountable for 
decisions about patient treatment that result in injury or death.
  To knock down roadblocks to allowing provisions, as requested by the 
Democratic leaders on the bill, in the bipartisan managed care 
legislation that would ensure that the Social Security Trust Fund is 
protected by including revenue offsets.
  These GOP roadblocks have been placed to steer us down an alternate 
route filled with hidden, poisonous traps and leading to a dead end, 
with no real access for the 837,000 Marylanders and 44 million 
nationwide who are uninsured.
  So, I urge my colleagues--use your brain, listen to your heart, and 
have the courage to pass the managed care reform the American people 
have mandated.
  Knock Down the GOP substitutes and support the Norwood-Dingell bill.
  Mr. CROWLEY. Mr. Chairman, I rise today in support of H.R. 2723, the 
Bi-partisan Consensus Managed Care Reform Improvement Act of 1999 and 
against any attempts to weaken its provisions. I also want to express 
my dismay at the political maneuvering by the Republican leadership to 
defeat this bipartisan legislation before it even came to the floor.
  Mr. Chairman, the American public needs our help. All too often, a 
constituent will contact my office at the end of their rope. They, or 
someone in their close family, will have received a devastating medical 
diagnosis. They attempt treatment, only to have their insurance company 
deny coverage--coverage they are entitled to! Our constituents are 
facing a declining quality of care and have basic medical decisions 
being made not by qualified medical professionals, but by insurance 
plan administrators. As United States Representatives, we cannot allow 
this to continue.
  Quality health care is a right, not a privilege. Those who have 
coverage by a Health Maintenance Organization deserve better than 
bureaucratic decisions. Additionally, access to health care is 
something that should be available to all Americans, not just those who 
can afford it. I am proud to be a cosponsor of the Norwood-Dingell bill 
which extends patient protections to the 161 million Americans who are 
covered by private health plans. Norwood-Dingell will make health plans 
accountable, offer more protections for women and children and prohibit 
gag rules. Overall, the Norwood-Dingell bill provides comprehensive 
reform which assures individuals of emergency services coverage; access 
to specialty care; chronic care referrals; ob/gyn services; continuity 
of care' access to clinical trials; access to prescription medications; 
internal and external appeals processes plus a utilization review; 
anti-gag and provider incentives; payment of health claims in a timely 
manner; paperwork simplification; and importantly, insurer liability--
giving patients the right to sue over insurance made treatment 
decisions that result in injury or death.
  The three substitutes do not provide the comprehensive reforms 
contained in H.R. 2723. The Boehner substitute fails to cover all 
privately insured Americans. It leaves out millions in the individual 
market. Additionally, its external appeals process does not provide for 
an independent and timely appeal. The Boehner substitute does not 
provide for access to specialty care. It provides for clinical trials 
for cancer victims, but not for those suffering from other debilitating 
diseases, such as multiple sclerosis. And finally, the Boehner 
substitute does not allow patients to hold their plan accountable if it 
causes injury or death. It allows HMOs to remain immune from 
accountability for their actions.
  The Coburn substitute grants sweeping judicial powers to private 
medical review bodies to determine harm and proximate cause, with no 
rights or due process requirements for the patient. The finding by the 
entity would not be subject to challenge or appeal, but would become 
legally binding in all judicial venues. Additionally, the Coburn 
substitute purports to add an untested federal remedy to the current 
range of judicial remedies under both ERISA and state law for cases 
involving patient injury. But the substitute would effectively give 
managed care companies a complete shield against any further medical 
malpractice cases under state law. Finally, the Coburn substitute only 
permits actions against individuals who have the authority to make the 
final determination of coverage. This provision could shield from 
liability a utilization review company under subcontract to the HMO, 
thereby undercutting any incentive to ensure better utilization review 
procedures.
  Lastly, here is the Houghton substitute, which is basically Coburn-
Shadegg revisited. It would strike the Norwood-Dingell state court 
accountability and put in its place a very limited and untested federal 
cause of action. The Houghton substitute does not allow for punitive 
damages at all, even compensatory damages are unavailable if the 
external review agrees with the HMO. The Houghton substitute in effect 
creates yet another system for hearing these claims by also allowing 
for binding arbitration.
  Mr. Chairman, the only true Patient's Bill of Rights is contained in 
the Norwood-Dingell Bi-Partisan Consensus Managed Care Improvement Act. 
I urge all my colleagues to put aside the partisanship and the 
political maneuvering and institute reforms that will help the majority 
of Americans.
  Mr. LEVIN. Mr. Chairman, I rise in strong support of the Dingell-
Norwood ``Patients' Bill of Rights'' legislation.

[[Page 24429]]

  Well, here we are again. More than a year has passed since the last 
time the House debated HMO reform. Last year the decision before the 
House was between the half-hearted, watered-down approach offered by 
the House Leadership and a strong, enforceable patients' bill of rights 
that would empower patients and allow health care professionals to 
perform their jobs without interference from the health insurance 
bureaucracy.
  The choice before the House is the same today. We can vote for real 
HMO reform by voting for the Dingell/Norwood bill or we can vote for 
something much less. Medical decisions should be made by doctors and 
patients, not by insurance companies. In addition, HMO's must be held 
accountable when their decisions cause a patient's injury or death. A 
right without an enforceable remedy is no right at all.
  The story of one of my constituents, Timothy, painfully illustrates 
the importance that this House pass the right reform package. After an 
accident at work, Timothy developed a rare nerve disorder, Reflex 
Sympathetic Dystrophy. People with this disease experience extreme pain 
when their skin is blown or even touched. If the condition is diagnosed 
and treated within the first few weeks, the patient can usually expect 
great relief and often complete remission of the disease.
  Reflex Sympathetic Dystrophy is treated with special injections given 
by an anesthesiologist. Both Timothy's primary care physician and 
orthopedist agreed that this treatment was needed.
  When Timothy went for treatment he was told his managed care plan 
would not cover the injections. He was told that the HMO was not 
confident that his condition warranted treatment and an appointment 
would be made to get a second opinion.
  The appointment did not occur for 3 months! By that time it was too 
late for treatment. Timothy was in constant agony. Some months later, 
Timothy had a massive heart attack and died. His cardiologist found no 
sign of heart disease, and suspected that the heart attack was directly 
related to the stress and pain caused by his condition--a condition 
that may have been cured with prompt medical treatment.
  Today we have a chance to do what the Congress failed to do last year 
and give the American people a strong, enforceable Patients' Bill of 
Rights. Vote for real reform and support Dingell/Norwood.
  Mr. EVANS. Mr. Chairman, I rise to express my strong support for H.R. 
2723, the Bipartisan Managed Care Improvement Act of 1999.
  Today, Democrats and Republicans have joined together to advocate for 
reforms that will restore control over medical decisions to patients 
and doctors and make the health care system more responsive for all 
Americans.
  The Bipartisan Managed Care Improvement Act institutes meaningful, 
common sense reforms of managed care. It will ensure that people may 
seek care in emergencies without having to wait for prior authorization 
from an insurer. It will guarantee that patients who need specialized 
care will have access to appropriate specialists. It will improve the 
quality of care for women and children, allowing women to see 
obstetrician/gynecologists without referral and ensuring that children 
can see pediatricians as their primary care physicians and pediatric 
specialists if necessary.
  This bill establishes real accountability for health insurance 
companies when they make medical decisions, accountability that has 
been lacking under ERISA. With a strong, two-stage process of internal 
and external appeals for denial of care, patients will now have 
recourse to challenge decisions and have their cases resolved by an 
independent board of health professionals. And in those extreme cases 
when a patient suffers injury or death due to denial of care by a 
health plan, patients and their families will have the same access to 
state courts for damages that is currently available to all patients 
whose plans are not covered by ERISA.
  I am also proud that H.R. 2723 will help people in the most dire of 
situations receive coverage for routine care during clinical trials. 
This issue was brought to light for me by a constituent, LaDonna 
Backmeyer, who is bravely fighting a rare form of cancer, renal 
leiomyosarcoma. LaDonna has participated in a clinical trial at a 
National Cancer Institute-designated Comprehensive Cancer Center, and 
under the bill, the costs of routine care during a clinical trial would 
be covered. I want to thank LaDonna for educating me, for inspiring all 
of us with her courage, and for being willing to speak out for the need 
for reform of our health care system.
  At its core, this bill is about giving back control over medical 
decisions to real people and their doctors, and restoring faith in the 
American health care system as the best in the world. I urge my 
colleagues to vote for H.R. 2723 and to enact these critical reforms.
  Mr. COYNE. Mr. Chairman, it is time for Congress to act on the 
Bipartisan Managed Care Improvement Act. American families have already 
waited far too long for us to pass these common-sense consumer 
protections.
  Over half of American workers are not given a choice of health 
insurance plans by their employer. Under current law, many of those 
workers and their families have no place to turn if they are harmed or 
killed by their HMO's decisions.
  The consumer protection bill we are currently debating would 
guarantee basic health rights for these workers. If this bill passes, 
families will know they can see specialists when they need to, appeal 
unfair denials, and seek emergency care when they experience severe 
pain. Doctors will be free to tell their patients all the options and 
to make medical decisions without fear of retribution from health 
plans. Health plans will be accountable if they make medical decisions, 
just as doctors are now.
  Some would suggest that this bill undermines our long-held goal of 
health coverage for all Americans. They say that if we don't let HMOs 
reduce the quality of health care, health insurance will be too 
expensive for families to afford. 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.
  I urge my colleagues to join me in supporting this important 
legislation. By enacting this legislation, we will make sure that 
health insurance coverage is worth having. Once we have done that, I 
hope we can work together on a bipartisan basis to extend that coverage 
to every American.
  Mr. SANDLIN. Mr. Chairman, I rise in strong support of H.R. 2723, the 
Bipartisan Consensus Managed Care Improvement Act of 1999 introduced by 
Representatives Norwood and Dingell. This is the only bill that would 
enact consumer protections through responsible health care reform.
  The Norwood-Dingell managed care bill provides Americans with many 
important patient protections such as access to needed health care 
specialists; access to emergency room services when and where the need 
arises; assurance that doctors and patients can openly discuss 
treatment options; an external, third- party appeals process for 
service denials; access to personal medical information; legal redress 
for injury or death due to the denial of care covered under a managed 
care plan. I am a cosponsor of H.R. 2723 because it will provide 
comprehensive and enforceable protections that American's health care 
consumers demand and deserve.
  By 1997, more than 80 percent of privately insured Americans were 
enrolled in managed care plans-up from just 13 percent in 1987. As we 
increase access to health care, we must not allow unqualified parties 
to make critical decisions about patient treatment. Patients needed to 
feel confident that their doctors are giving them all necessary 
information, without concern of retaliation by a health insurance 
provider.
  Insurance bureaucrats want to tell patients they know medicine better 
than their doctors. Let's tell them they do not. The Norwood-Dingell 
bill would prohibit health plans fro silencing any health care 
professional from advising a patient about the patient's health status 
or available treatment, regardless of whether the plan covers such a 
treatment or care.
  Americans also deserve access to emergency care services. Let me give 
an example of why this protection is so important. Jess Reed suffered a 
stroke at home. He was rushed to the closet hospital. The HMO insisted 
he be taken to another hospital, causing a 2-3 hour delay in treatment. 
Delay seriously exacerbated his condition and prevented full recovery 
from his stroke. The Norwood-Dingell bill would require health plans to 
cover the emergency care of a ``prudent layperson'' in any hospital 
emergency room, without prior authorization.
  Another reason I support the Norwood-Dingell bill is to assure 
patients access to necessary prescription drugs. Prescription 
medications should not be one-sized-fits all. For plans that use a 
formulary, Norwood-Dingell provides that beneficiaries must be able to 
access medications that are not on the formulary when the prescribing 
physician dictates.
  One of the most important distinctions in this debate is whether or 
not we truly hold health plans accountable. Opponents of real 
accountability argue that patients who have been unfairly denied health 
care should be limited to external appeals. But external reviews is 
simply not enough to protect patients

[[Page 24430]]

against the worst managed care abuses. Accountability is the ultimate 
deterrent and is an essential last resort when all else fails. Only 
legal accountability gives injured patients what they need to ensure 
that managed care does the right thing and puts patients first. And 
only Norwood-Dingell ensures legal accountability. Such accountability 
exists in all other sectors of our society, yet we continue to exempt 
health plans.
  Health plans are not currently held accountable for decisions about 
patient treatment that result in injury or death. Currently, ERISA 
preempts state laws and provides essentially no remedy for injured 
individuals whose health plans' decisions to limit care ultimately 
cause harm. If the plan was at fault, the maximum remedy is the denied 
benefit itself. Norwood-Dingell would remove ERISA's preemption and 
allow patients to hold health plans accountable according to state law. 
However, plans that comply with an external reviewer's decision may not 
be held liable for punitive damages. Additionally, any state law limits 
on damages or legal proceedings would apply.
  My home State of Texas was the first State in the Nation to pass a 
patient protection act. But because many large employers insure their 
workers themselves, giving them Federal protection from State insurance 
laws under ERISA, only about 25 percent of Texans are covered by the 
act. It is fundamentally unfair to deny this group of individuals the 
rights my State has afforded to all other Texans who do not belong to 
an ERISA health plan. Norwood-Dingell would allow Texas' liability laws 
and patient protections to apply to all Texans.
  The liability provision in Norwood-Dingell also protects employers 
from liability when they were not involved in the treatment decision. 
It explicitly states that discretionary authority does not include a 
decision about what benefits to include in the plan, or a decision not 
to address a case while an external appeal is pending or a decision to 
provide an extra-contractual benefit.
  Now, I have heard a great deal of rumbling about the impact of 
Norwood-Dingell on health care costs. During the debate in the Texas 
Capitol, business and insurance groups routinely warned that costs 
would skyrocket. In fact, Texas' health insurance premiums continue to 
trail the rest of the country even though our fellow Texans enjoy some 
of the most stringent patients' rights laws in the country. Opponents 
said, repeatedly, that holding HMOs accountable for harming patients 
would provoke a flood of lawsuits. The reality is that no more than 
five suits have been filed since the law took effect in September 1997.
  Instead of defending good, comprehensive, enforceable patients' 
rights legislation to insurance bureaucrats, we should be firing some 
questions of our own at the insurers. If managed care is supposed to 
make health care more affordable and therefore more available, why is 
it that, as HMO penetration increased in Texas, the percentage of 
working uninsured increased proportionately? Other than skyrocketing 
CEO compensation, where have all the millions of dollars in profits 
gone?
  Mr. Chairman, it's time to stop the insurance companies from putting 
profits above patients. I urge my colleagues to vote for H.R. 2723, the 
Norwood-Dingell bipartisan managed care reform bill.
  Mr. POMEROY. Mr. Chairman, I rise today in support of H.R. 2723, the 
Bipartisan Consensus Managed Care Improvement Act of 1999.
  Mr. Chairman, I believe that this legislation would ensure genuine 
accountability of health plans and put patient care ahead of profits. 
Today Congress has an historic opportunity to take steps to ensure that 
doctors and patients are in charge of health care decision-making.
  I do have serious concerns, however, that the spending offsets 
originally designated in this legislation were not permitted under the 
rule. Managed care consumer protections must be enacted, but not while 
spending the surplus generated by the Social Security trust funds. 
While I support this legislation today, I certainly hope that spending 
offsets can be designated during the conference process, and I will not 
support a conference agreement that does not do so. Congress can and 
should ensure both quality health care and a secure retirement income 
for our nation's seniors.
  Ms. KILPATRICK. Mr. Chairman, I rise today in strong support of H.R. 
2723, the Bipartisan Consensus Managed Care Improvement Act, also 
referred to as the Norwood-Dingell Act. We must help the poor, the 
uninsured, and all American citizens, in obtaining more accessible and 
more affordable health care. Over 60 percent of the U.S. population and 
over 75 percent of insured employees were covered by some form of 
managed care in 1997, and the numbers are growing. H.R. 2723, the 
Bipartisan Managed Care Improvement Act would enact important changes 
that are necessary to improve managed care.
  Individuals should be assured that if they have a health emergency, 
the necessary services will be covered by their plan. The Bipartisan 
Consensus Act states, individuals must have access to emergency care, 
without prior authorization, in any situation that a ``prudent lay 
person'' would regard as an emergency. Patients with special conditions 
must have access to providers who have the requisite expertise to treat 
their problem. This Act allows for referrals for enrollees to go out of 
the plan's network for specialty care if there is no appropriate 
provider available in the network for covered services. It provides a 
process for individuals to select a specialist when they are seriously 
ill or require continued care by a specialist. It provides direct 
access to ob/gyn care and services, as well as access for children to 
pediatric specialists. The Bipartisan Consensus Act provides special 
protections for pregnancy, terminal illness, and individuals on a 
waiting list for surgery. The Act prohibits plans from gagging doctors 
regarding the discussion of treatment options with their patients. 
Consumers have the right to know all of their treatment options. In 
addition, patients should be protected against disruptions in care due 
to a change in plan or a change in a provider's network status.
  The Bipartisan Consensus Act provides for a strong and efficient 
review process, using the insurer's internal appeals process, while 
ensuring that a health professional performs the review. If the patient 
is denied care in a decision by the plan's internal appeals process, 
they can then appeal to an external review body that is independent of 
the health plan. This review process should ensure excellent care, as 
grievances are effectively reviewed.
  The Republican Health Care Access Bill does not improve health care 
access to those who most need improved access to health care. It does 
not improve the affordability of health care unless you have the extra 
cash to pay up front. It does not help our poor. It digs into our 
social security surplus by an estimated $48 billion over ten years. It 
does not improve access to preventative health care.
  The Bipartisan Consensus Act protects patients and strengthens 
assurances that managed care programs will improve access to emergency 
care, specialists and doctor information on treatment options. 
Furthermore, the Act provides for an improved review process that works 
with current insurers' appeals processes. The Act is supported by 
doctors. It is supported by patients. And I support it. I urge my 
colleagues to join me in voting in support of the Bipartisan Consensus 
Managed Care Improvement Act. We must protect the health care needs of 
our patients and constituents, preserve social security, and ensure 
adequate access to health care for the poor.
  Mr. FILNER. Mr. Chairman, I can't believe how beholden to special 
interests the majority is. We are presented with a bipartisan bill, 
H.R. 2723, which is supported by the American Medical Association and 
300 other organizations, yet the Republican leadership is trying to 
sink it.
  Our bill offers vital patient protections in a way that has been 
shown to not raise costs. H.R. 2723 will return control of our health 
care to physicians. We, as patients, will have access to specialists 
and an appeals process. And managed care operations will be held 
accountable for any decisions that endanger our health. These important 
provisions must be embraced, not feared. Mr. Speaker, I urge support 
for H.R. 2723.
  Mr. LARSON. Mr. Chairman, I rise today in support of a Patient's Bill 
of Rights. I had hoped, however, that an amendment version of 
Connecticut's Patient's Bill of Rights could have been considered. 
Unfortunately, the debate here has been hamstrung by the rules of the 
House, which makes it nearly impossible to have a policy debate on the 
issues, and prevents amendments from being offered that would enable 
the legislative process to respond to the primary concerns of patients.
  In Connecticut, the Legislature demonstrated that if you work in a 
bi-partisan manner you can write legislation that is balanced, and gets 
to the heart of the matter, which is the protection for the patent, and 
thus, provide the care that is needed. Moreover, what most people don't 
understand is that under current law, HMOs can already be sued.
  The vote today should be about a Patient's Bill of Rights, but in 
many respects it is about the tactical differences between various 
partisan proposals.
  I remain committed to the fundamental principle that has guided me, 
which is that doctors and patients should determine how patients are 
treated and cared for, not bureaucrats. I have always tried to level 
the playing field for patients, and so has Connecticut.

[[Page 24431]]

  The HMOs should be held accountable and liable for their actions 
without opening a Pandora's box of unlimited litigation. Companies in 
my home state of Connecticut have operated under the Connecticut law 
and are to be commended for their compliance. Connecticut has 
demonstrated that it can work.
  Managed care is not without its problems, and we will need to work 
toward the goal of improvement. Fortunately, there are many fine people 
who represent the insurance industry who are working every day toward 
the goal, so that we can improve the health care delivery, control 
costs, and help the patient and family in time of need.
  Ms. RIVERS. Mr. Chairman, while I plan to cast my vote today in favor 
of the protections given by the Patients Bill of Rights, I am greatly 
concerned with the partisan politics that have worked great mischief in 
the preparation of this proposal. Specifically, I condemn the House 
majority's manipulation of the rules process to exclude the funding 
mechanism advanced by the bipartisan sponsors of this bill. In light of 
this indefensible action by the opponents of the Patients Bill of 
Rights, H.R. 2723 comes before the House without compensatory new 
revenues or budget offsets attached to it. In short, it is unclear 
where the dollars to implement this bill will come from. And, 
inevitably, the cynical and strategically constructed attack of 
``spending social security money'' will be leveled against those who 
vote in support of these protections. I cannot emphasize enough how 
dishonest, manipulative, and irresponsible the House majority strategy 
is. It puts a serious initiative support by the majority of Americans 
at risk for no other reason that partisan politics. This is among the 
most shameful things I have witnessed during my time in Congress.
  I am voting yes on H.R. 2723 because I support the protections 
contained in it. I am not voting in favor of invading the Social 
Security Trust Fund. I have made a practice of voting against unfunded 
proposals, sham emergency spending, and budget gimmicks of all types. 
In this particular case, I firmly believe the Senate will not behave in 
the egregious manner of the House. I believe the Senate will attach 
appropriate funding to this bill before it returns to the House. If 
that is done, I will happily vote to send H.R. 2721 on to the President 
for his signature. If it is not done, I will unflinchingly vote against 
it.
  Mr. DAVIS of Florida. Mr. Chairman, I rise today in strong support of 
the Bipartisan Consensus Managed Care Improvement Act, H.R. 2723. I 
commend Congressmen Dingell and Norwood for putting aside partisan 
rhetoric and developing a bipartisan compromise designed to provide 
strong patient protections and to ensure that managed care companies 
are held accountable for their decisions.
  As a member of the Florida House of Representatives, I played an 
active role in writing the Florida law on managed care. I remain a 
strong supporter of our managed care system of health care, but I 
believe that changes are needed to the current system to make the 
insurance companies accountable to their patients and that medical 
professionals rather than insurance companies' bureaucrats are making 
decisions on health care treatment.
  The Norwood-Dingell bill provides strong patient protections, many of 
which have already been implemented in states throughout this country, 
including my home state of Florida. I applaud these very needed 
protections. However, the focus of this bipartisan bill is by far its 
emphasis on holding managed care companies accountable for medical 
treatment decisions through a new independent review process and 
providing patients access to state courts to ensure the enforcement of 
the decisions of the independent review panel. The Norwood-Dingell bill 
is the only option available to this House that will remove the 
preemption currently given to managed care health plans covered under 
the Employee Retirement and Security Act (ERISA).
  Throughout the debate on managed care reform, we have all heard 
extensive arguments about the impact that providing patients the right 
to hold their health plans accountable will have on monthly premiums. I 
do not believe, however, that monthly health insurance premiums will 
significantly increase as a result of passage of the Bipartisan 
Consensus Managed Care Improvement Act of 1999. The liability 
provisions contained in this legislation are very similar to those 
included in a law passed by the State of Texas. In the two years since 
the enactment of their managed care law, Texas has experienced only 
minor increases in health insurance premiums.
  We have also heard that if we pass any liability provisions our court 
dockets will explode as patients rush to sue their managed care plans. 
Again, I refer to the experience in Texas--where in the last two years 
only five lawsuits have resulted from their law allowing patients to 
hold their managed care plans accountable. Let me repeat that 
statistic, from over four million Texans who are covered by health 
maintenance organizations (HMOs) only five lawsuits have been filed as 
a result of the Texas managed care law.
  I think it is commendable that unlike the tactics in this body, the 
Texas Legislature rose above partisan politics and worked in a 
bipartisan manner to ensure the safety of their citizens participating 
in managed care plans.
  I urge my colleagues to think of our constituents who are being 
denied treatment for very serious illnesses. I urge you to think of our 
constituents who are seriously injured or die as a result of an 
insurance company clerk either denying or delaying necessary medical 
treatment.
  I strongly urge my colleagues to support meaningful managed care 
reform. Support the Norwood-Dingell Bipartisan Consensus Managed Care 
Improvement Act.
  Mrs. MINK of Hawaii. Mr. Chairman, I rise to express my support for 
H.R. 2723, the ``Bipartisan Consensus Managed Care Improvement Act of 
1999.''
  Everyone should feel confident and assured that their managed care 
organization will fulfill what is perceived by the general public to be 
basic and reasonable health coverage in times of need. However, what 
patients consider reasonable, has often been called unjustified or 
unnecessary by health plans. These frequent disputes have resulted in a 
stream of cases where patients and their families are forced to jump 
through hoops, chase carrots, and fight tooth and nail, for benefits 
they felt they outright deserved in the first place. This is wrong.
  H.R. 2723 establishes basic rights for patients when dealing with 
managed care organizations and will help to restore public confidence 
and trust in their doctors and health care professionals. The bill will 
facilitate patients' access to care, improve doctor-patient 
relationships, provide patients with defined rights to appeal coverage 
denials, and hold health plans accountable for erroneous coverage 
decisions that have adverse effects on patients' health.
  First, the Bipartisan Consensus Managed Care Improvement Act tears 
down barriers to health care access. The bill requires plans to improve 
access by providing coverage for services that the general population 
commonly feels to be the most basic of benefits but plans often fail to 
provide. These benefits include: emergency care in any hospital 
emergency room, including outside of the health plan, and without prior 
authorization; access to specialists for patients with special 
conditions; access to outside specialists if none are available in the 
plan; the option of going outside of the plan for care as long as the 
patient agrees to pay any additional costs; and permitting patients 
with special conditions to have continued access to their specialists 
when the plan terminates the specialists or the plan is terminated.
  The bill further improves access by eliminating prerequisites of 
going through a gatekeeper before seeing certain specialists. 
Specifically, women will have direct access to Ob-Gyns and children 
could have pediatricians as their primary care providers. This will 
eliminate the burdensome and often unnecessary step of visiting a 
general practitioner for something that should obviously be handled by 
one of these specialists.
  Furthermore, H.R. 2723 will facilitate patients' access to the latest 
health care treatments. It requires health plans to: allow patients to 
participate in clinical trials while the health plan pays for routine 
patient costs associated with the trials; and provide access to 
medications that are not on the plan's drug formulary when it is 
prescribed by a physician.
  Second, the bill would restrict certain managed care plan practices 
that interfere with doctor-patient relationships. Health plans would be 
prohibited from: restricting health professionals from advising a 
patient about a treatment option regardless of whether the plan covers 
the treatment; providing doctors with incentives to limit medically 
necessary services; and from retaliating against health care 
professionals who advocate on behalf of patients or disclose 
information about quality of care to regulatory or accrediting 
agencies. Freeing doctors and health professionals from these pressures 
imposed upon by health plans will enable them to practice medicine as 
it should be, without outside intervention.
  Third, the bill would provide patients with appeal rights when 
coverage for treatment is denied. Health plans would be required to 
meet certain guidelines when considering treatment authorizations and 
provide patients and their families with specific appeal options. If 
coverage is denied, the bill provides for internal appeal processes 
involving a health professional, who was not involved in the original 
decision, followed by an external appeals process based on objective 
standards of professional medical practice. The bill sets time 
limitations on how long the plan can take to

[[Page 24432]]

render a decision in each step of the appeal process and requires that 
the reasons for the denial be communicated to the patient. Patients and 
their families are too often bewildered by the complex procedures they 
must endure to obtain coverage for care they thought was included in 
their health care insurance. These new rights will provide relief to 
all families in these situations and will accelerate the appeals 
process.
  Finally, the bill would enable patients who are wrongfully denied 
care by health plans governed by the Employee Retirement Income 
Security Act (ERISA) to sue their plan for damages. Persons in such 
situations currently may only sue to recover the cost of the care but 
not for damages. It is time that health plans be held accountable for 
the adverse effects their decisions have on patients' health and lives.
  I have always felt that health plans should not impede access to 
health care but rather they should facilitate it. H.R. 2723 will 
provide patients with the basic rights necessary to assure that they 
are treated fairly when dealing with managed care organizations. No one 
in the United States should ever again be forced to face managed care 
organizations without these rights and I urge immediate passage of H.R. 
2723, the ``Bipartisan Consensus Managed Care Improvement Act of 
1999.''
  Mr. MORAN of Virginia. Mr. Chairman, I rise in strong support of the 
Dingell-Norwood bill and in opposition to the substitute alternatives. 
I am not going to address the specifics of the bill because I am 
confident my colleagues will do a good job of that but instead I want 
to just share with you the kind of trauma that I hope this bill will 
address.
  I received a letter from one of my constituents, a police officer in 
Alexandria, who was compelled to write about her problems with her own 
managed care company. ``The entire ordeal was hideous.'' she wrote. 
Kris Gulden suffered a spinal chord injury in an accident which 
resulted in paralysis below the waist. After the accident, Kris began 
the grueling work of occupational and physical therapy that can make 
such a difference in quality of life. Her therapists told her that her 
hard work was paying off and that more therapy could continue to make a 
difference. Unfortunately, her managed care company disagreed. They 
refused to extend the standard 90 days of coverage through their 
internal appeals process because it was a ``quality of life issue'' and 
not a ``life and death issue.'' Kris appealed as many times as she 
could through the managed care organization's internal appeals and then 
had no further recourse.
  Fighting over late bills and arguing with the managed care company 
became the focus of her life when she should have been focusing on 
exercise and therapy that would have made her stronger. Fortunately, 
Officer Gulden has a compassionate employer in the City Manager of 
Alexandria who helped her deal with the unpaid bills, and a 
compassionate family and community who helped her raise additional 
money for further therapy. But she wrote because she doesn't want to 
see the same thing happen again to anyone. ``It's ridiculous that what 
most prevented me from getting better was my HMO.'' she wrote:

       Not being able to walk, not being able to stand up to take 
     a shower, living with abnormal bowel and bladder function . . 
     . in general, living with a disability is a walk in the park 
     compared to what they put me through. Truly, dealing with 
     them has been the worst part of this whole ordeal.

  Finally, the most important point of Kris' letter was to say that ``I 
am vehemently opposed to any compromise on the Patient's Bill of 
Rights.'' I close by asking my colleagues to do what Kris, and so many 
of our constituents like her wish. I urge you to support the Dingell-
Norwood bill without amendment.
  Mr. VENTO. Mr. Chairman, I rise today in support of H.R. 2723, the 
Bipartisan Consensus Managed Care Improvement Act of 1999. I'm pleased 
to have joined as a cosponsor of this measure, which acknowledges that 
all Americans deserve a strong standard of protection in managed care 
and other health insurance programs.
  There is general agreement that managed care reform should address 
the fundamental concerns of all American families that have health 
insurance. Access to specialty care, emergency care, clinical trials 
and continuity of care are just a few of the widely lauded provisions 
of this proposal. In addition to these core access provisions, H.R. 
2723 will also ensure that medical judgments are made by medical 
experts.
  Although managed care has played an important role in helping to 
efficiently utilize finite health care resources, managed care policy 
needs more balance and accountability. It is time for Congress to 
remove the current ERISA shield and permit the judicial system process 
to hold health care plans fully responsible for their negligent 
decisions and actions whether intra stat or interstate health 
insurance.
  Mr. Chairman, meaningful reform should include meaningful 
protections. Only a national policy can address the deficiencies of 
current law, which leaves too many patients without adequate recourse. 
While critics portray this legislation as the precursor to a 
proliferation of capricious lawsuits, I have more faith that the 
American public and legal system which are interested foremost in 
timely and appropriate medical care, not litigation. We need not invent 
a new medical police force, rather just permit the time tested legal 
system and rights of the individual to reasonable due process.
  Health care consumers should have aces to necessary medical 
treatment, as well as objective remedies if a health plan decision is 
alleged to cause harm. During a time of unprecedented prosperity, H.R. 
2723 reaffirms that equity and quality should be the unquestioned 
foundation of our health care system. I urge my colleagues to support 
this sound managed care reform proposal encompassed in the Dingle-
Norwood measure and as we defeat the gauntlet of amendments and detours 
to sound health insurance finally vote to pass the base bill, the 
patients healthcare bill of rights.
  Mr. McGOVERN. Mr. Chairman, I rise today in strong support of the 
Norwood/Dingell Bipartisan Consensus Managed Care Improvement Act.
  Today we are debating a very simple issue: whether we will provide 
the proper protection for patients who pay good money for their health 
insurance. We have all heard the horror stories from patients, doctors, 
nurses and employers about the need to improve basic HMO coverage. This 
bill will do that.
  We are addressing basic rights that patients should receive from 
their health plan--the right to appeal to an external review panel, the 
right to have access to a gynecologist or other specialist, and the 
right to hold an HMO accountable for its decisions. The Norwood/Dingell 
bill provides the strongest patient protections and holds HMOs 
accountable for their actions, just like doctors. The Republican 
amendments offered today are insurance protection bills and do not 
protect the patient.
  The bottom line must not dictate the amount or quality of car a 
patient receives. Profit margins should not dictate whether an injured 
person can go to the emergency room or visit a medical specialist. This 
bill will ensure that patients receive the best care and coverage from 
their HMO. We owe our constituents nothing less.
  Mr. Chairman, I urge my colleagues to support this bill, vote against 
the poison pill substitutes and vote for Norwood/Dingell.
  Mr. BENTSEN. Mr. Chairman, I rise today to express my strong support 
for H.R. 2723, the Bipartisan Consensus Managed Care Improvement Act of 
1999 or the Patient's Bill of Rights, that is sponsored by 
Representative Norwood and Representative Dingell. Today, we will 
consider four different approaches to reform managed health care plans. 
I am a strong supporter and co-sponsor of H.R. 2723 because I believe 
that this bill provides essential consumer protections to all 
Americans. I urge my colleagues to reject all three versions of the 
Republican Leadership sponsored legislation, and vote for the real 
Patients' Bill of Rights.
  Today, there are more than 160 million Americans enrolled in managed 
care plans, such as Health Maintenance Organizations (HMOs). Of these 
enrollees, approximately 125 million Americans are enrolled in managed 
care health plans that are governed by federal law, the Employee 
Retirement and Insurance Security Act (ERISA). Under ERISA, these 
Americans cannot seek legal remedy if their health plans denies or 
delays access to care. In a time when many Americans believe that their 
health plans are arbitrarily denying care and services, the Norwood-
Dingell bill would ensure that health plans must provide an appeals 
process to their decisions. Under the Norwood-Dingell bill, patients 
would be guaranteed the right to seek both an internal and external 
appeals process with a deadline for decisions to be made. If both of 
these appeals are denied, consumers would have the right to hold their 
plans accountable for their decisions through a legal case in our court 
system. In my state of Texas, where a state law has been in effect for 
two years, our experience has been that these external reviews have 
been decided on behalf of consumers in 50 percent of these cases, while 
the rest of these cases have been decided on behalf of the health 
plans. We have also seen that very few consumers have decided to use 
their new right to sue, with very few lawsuits filed to date.
  The Norwood-Dingell bill provides critical reforms that patients 
need. It guarantees that decisions will remain in the hands of doctors 
and nurses, not insurance companies. It guarantees access to 
specialists and ensures that

[[Page 24433]]

doctors and nurses can talk freely with patients without interference 
from their health plans. The Norwood-Dingell bill also prohibits the 
use of financial incentives to limit medical care. The Norwood-Dingell 
bill also ensures that patients can seek care in emergency rooms 
without prior approval and when they are suffering severe pain.
  I would like to highlight one main difference between these bills. 
The Norwood-Dingell bill also includes an important provision to ensure 
that all Americans can enroll in cutting-edge cancer clinical trials if 
they need them. As the sponsor of legislation to ensure that Medicare 
beneficiaries can enroll in cancer clinical trials, I believe we must 
guarantee this right to ensure that patients have access to the best, 
most-advanced care. As the Representative for the Texas Medical Center, 
where many of these cancer clinical trials are conducted, I believe 
that this guarantee must be included as any consumer-protection. The 
Norwood-Dingell bill would require managed care plans to pay for the 
routine costs associated with cancer clinical trials.
  I wish to be clear why I opposed the House Rule that was imposed by 
the Republican majority on this bill. This rule was fatally flawed in 
many respects. Most important was its failure to include offsetting 
provisions to pay for the costs associated with this bill. This is 
important because it would ensure that this bill if fully paid and 
would not add to the on-budget deficit. I will be supporting final 
passage of H.R. 2723 in order to ensure that this federal uniform 
consumer protections will be provided to managed care enrollees. I am 
pleased to note President Clinton's letter of October 7 in which he 
states that he will not sign a bill whose costs are not fully offset. 
Indeed, it is my hope during the conference process that these 
offsetting provisions can be added to this necessary bill. It is my 
understanding that the Senate bill on managed care reform legislation 
already includes these offsetting provisions and therefore this issue 
could be addressed as part of the conference process.
  I also opposed the rule because it linked final passage of H.R. 2723 
to another bill, H.R. 2990, a bill providing new tax deductions for 
health care costs. Although I support many provisions included in H.R. 
2990, such as providing 100 percent tax deductibility for health 
insurance costs for self-employed persons, yesterday I opposed H.R. 
2990 because of several provisions included in H.R. 2990 such as 
Association Health Plans (AHPs). These AHPs plans would not be subject 
to state insurance regulations or to the federal ERISA law. I am 
concerned that we would be establishing a loophole for employers to 
create health insurance plans without adequate regulations and solvency 
standards. Although I will support final passage of these two combined 
bills if the Norwood-Dingell bill remains in tact, I want to express my 
strong concern that this tax legislation should not have been linked to 
the Patient's Bill of Rights, I would have preferred that these two 
bills were considered separately, on their own merits. However, we in 
the House of Representatives will not have this option.
  I urge my colleagues to reject the three Republican alternative bills 
and vote for the Bipartisan Managed Care Improvement Act.
  Mr. DIXON. Mr. Chairman, I rise in strong support of H.R. 2723, the 
Dingell-Norwood Bipartisan Consensus Managed Care Improvement Act of 
1999, and in opposition to the substitute amendments being offered. I 
am proud to be a cosponsor of this important legislation, which will 
protect consumers in managed care plans.
  I have heard from many residents of California's 32nd Congressional 
district as they become increasingly skeptical of the motives behind 
the treatment decisions made by their health plans and fearful of the 
consequences of those decisions. Fortunately, the accountability 
provisions in the Dingell-Norwood bill will allow patients to hold 
health plans liable when a decision about patient treatment results in 
injury or death. At the same time, the bill protects employers who 
provide health insurance from liability when they are not involved in 
medical treatment decisions.
  The Dingell-Norwood bill ensures that health care decisions are made 
by medical experts, not insurance company administrators. The bill 
offers protection important to my constituents, including access to 
needed health care specialists, assurance that doctors and patients can 
openly discuss treatment options, and access to a timely internal and 
external appeals process when a health plan denies or delays doctor-
prescribed care.
  Mr. Chairman, the Dingell-Norwood bill is an excellent, bipartisan 
response to the problems facing health care consumers. The substitute 
measures masquerading as patients' rights legislation which will be 
offered by opponents of this bill do not offer Americans the patient 
protection they are asking for in their managed care plans. The House 
cannot squander this chance to pass meaningful managed care reform 
legislation; it is essential that we pass the Dingell-Norwood bill and 
reject any attempt to weaken its important provisions.
  Mr. CAPUANO. Mr. Chairman, I rise in support of The Bipartisan 
Consensus Managed Care Improvement Act of 1999 sponsored by 
Representatives Norwood and Dingell. This bill modeled after the 
Democratic Patient Bill of Rights, would ensure strong patient 
protections for people enrolled in Health Maintenance Organizations.
  I strongly oppose efforts by the Republican leadership to dictate the 
debate by promoting a rule that is designed to kill the Norwood-Dingell 
reform bill. I urge my colleagues to oppose the rule as it attaches the 
Quality Care for the Uninsured Act to the managed care bill. While I 
support its intent to reduce the number of Americans who are currently 
without health insurance, the tax breaks contained in the legislation 
benefit the wealthy and would have little effect on working Americans 
who have no health insurance. According to the General Accounting 
Office, more than 32 million of the uninsured fall within the 0-15 
percent income tax brackets. These tax deductions would do nothing to 
help them. H.R. 2990 is a poison pill that must be defeated.
  The Bipartisan Managed Care Improvement Act of 1999 stands in stark 
contrast to H.R. 2990. H.R. 2723 offers real managed care reform by 
providing a comprehensive, enforceable set of consumer rights. Under 
current federal law, patients covered by private employer-sponsored 
health insurance are barred from suing health plans for damages caused 
by wrongful denials. No other industry enjoys such legal immunity. H.R. 
2723 would close this loophole by giving consumers the right to sue 
health plans in state courts for injuries and deaths caused by improper 
denials of care. Furthermore, the bill guarantees patients' access to 
such critical services as emergency care, specialty care, clinical 
trials, as well as obstetrician and gynecological services for women. 
The Norwood-Dingell reform plan also would allow patients to choose 
their health plans and ensure the continuity of care when people change 
jobs.
  It is time for Congress to address the issue of managed care reform. 
I have heard time and time again from my constituents in Massachusetts 
who support these rational HMO reforms that are designed to hold these 
organizations accountable for bad decisions. The Norwood-Dingell 
proposal represents an important step in overhauling managed care and 
enabling patients and their doctors to regain control of critical 
medical decisions. Doctors and patients know best--not HMO bureaucrats. 
I urge my colleagues to vote in favor of H.R. 2723 and pass meaningful 
managed care reform.
  Mr. DOYLE. Mr. Chairman, I rise today in strong support of true and 
meaningful managed care reform that H.R. 2723 provides to all 
Americans. On behalf of my constituents back in Western Pennsylvania, I 
am proud to say I am a cosponsor of this vital bipartisan legislation 
which confronts the real problems many families face with HMO's
  My colleagues, supporting this bill is the only responsible choice 
for us to make certain that everyone in America has proper access to 
medical care, can see a medical specialist when necessary, and will 
ensure timely access to emergency room care.
  The Bipartisan Managed Care Improvement Act guarantees medical 
decisions are made by qualified health care professionals, and not by 
insurance company bureaucrats. It returns to the American people that 
which has been denied for too long; the right to hold managed care 
companies accountable if they choose to make decisions regarding 
medical treatment.
  Lately, there has been much concern expressed regarding employer 
liability provision in this bill. The overwhelming majority of 
employers rely on a third-party health plan to make medical decisions. 
Under our bill, only organizations that make negligent medical 
treatment decisions on individual claims are subject to liability. 
Independent legal analyses have confirmed that employer liability 
allegations are simply a non-issue. Managed care and insurance company 
bureaucrats have to stop shunning responsibility and realize that if 
they choose to make harmful discretionary treatment decisions, they 
will be held accountable by the public.
  Most importantly, our bill would help all American families, like my 
constituent Ellen Gasparovic, who was diagnosed with breast cancer, 
only to have her HMO refuse to pay to have the cancerous lumps removed 
from her chest. Fortunately, Mrs. Gasparovic is doing well today, but 
only after having to endure needless financial and emotional hardships, 
all because of the negligence of her HMO.

[[Page 24434]]

  It is on behalf of my constituents in Western Pennsylvania that I 
urge my colleagues to support H.R. 2723, and defeat any attempts to 
weaken this much needed legislation.
  Mr. SANDLIN. Mr. Chairman, the insurance companies are at it again. 
They are trying to deceive the American public and in the process are 
attempting to take away a fundamental right of each and every American.
  Clearly, a right without a remedy is absolutely meaningless. The 
Norwood-Dingell bill comes down to one word--Fairness. This bipartisan 
bill guarantees patient protections such as the right to choose the 
doctor that best serves your needs; the right to have medical decisions 
made by physicians and their patients, not HMO bureaucrats interested 
in the bottom line; the right to know that our families will be able to 
use the emergency room when needed; the right to obtain the information 
we need to make informed decisions about our own medical care.
  But what if our families are denied medical service? What if a delay 
in a service causes harm to our children, our spouses, our parents, our 
families? Where is the fairness then?
  The Norwood-Dingell bill would allow patients (or the estates of 
patients) who are injured or die as a result of their health plan's 
denial of care to sue the health plan in State courts for damages. This 
is what the real world calls accountability. That's fairness.
  As a strong supporter of local control, I support the Norwood-Dingell 
bill because, unlike the Coburn-Shadegg substitute, it will not 
override protections already enacted by the states. These protections 
in state laws are currently applicable to all non-ERISA employer-
sponsored health insurance and to individually purchased insurance. It 
is not fair that these protections afforded by the states to their 
residents, do not have the force of law for everyone in the state. The 
Norwood-Dingell bill would restore those protections to everyone by 
removing the preemption provision in ERISA so that state laws prevail.
  In contrast, Coburn-Shadegg would continue to preempt state liability 
law with respect to health plans and insurers. Rather than maintain the 
states' traditional role in regulating insurance by allowing state 
causes of action, Coburn-Shadegg creates an entirely new federal cause 
of action.
  Mr. Chairman, federal courts are already overburdened, particularly 
in light of the fact that the Republican majority in the other body 
refuses to confirm President Clinton's nominations to the bench, 
creating more than 50 vacancies in the federal courts. In addition to 
this obstacle, patients seeking redress for injury or death will have 
to wait in line behind drug dealers and thieves because the Speedy 
Trial Act of 1974 gives criminal cases priority in the federal court 
docket. Those criminal cases should be given priority because that's 
where they belong--in federal courts. Liability suits against HMOs, 
however, belong in state courts.
  In my home state of Texas, we have 372 state courts, but only 39 
federal courts. Obviously, Coburn-Shadegg creates so many barriers to a 
trial that patients will never want to exercise the right we are trying 
to give them. The Norwood-Dingell bill is the only bill that restores 
states' rights and provides patients with real protections under the 
law.
  Will there be a flood of litigation if Norwood-Dingell is enacted? 
Hardly. In Texas, we enacted a law in 1997 creating an external appeals 
process and allowing lawsuits against HMOs. In the two years since that 
law took effect, only five lawsuits have been filed against health 
plans in Texas. That's five lawsuits in two years--hardly an explosion.
  And contrary to all the allegations, there is no employer liability 
in the Norwood-Dingell bill. Clearly, employers cannot be held liable 
for the decisions of insurance companies and/or the decisions of 
others. This bill does not create a new cause of action. It simply 
removes the provision of ERISA that protects insurance companies from 
being sued. It specifically states that employers cannot be held liable 
unless they exercise discretionary authority--in other words, if the 
employer acts like a doctor and makes a medical decision on an 
employee's claim for benefits covered under the plan, then the employer 
must accept the accountability that comes along with playing doctor.
  I should point out that I have met with many representatives of the 
business community and I have repeatedly asked them to bring language 
to me that they believe would prevent employers from being sued. I 
assured them that I would work with Mr. Dingell and Mr. Norwood to 
address their concerns. Not one of those people has taken me up on my 
offer. That is because there is no employer liability in the bill. 
Their answer instead is to oppose the entire bill and threaten Members 
who support Norwood-Dingell.
  So why are the insurance companies so worried about the liability 
provisions of Norwood-Dingell? Because legal accountability will force 
HMOs to provide quality care, and some insurance company bean counters 
are afraid that might mean a smaller profit margin for them. They argue 
that Norwood-Dingell would force managed care plans to practice 
defensive medicine that would increase their costs and cause them to 
raise our premiums. This argument is ridiculous and actually underlines 
the need for reform. Norwood-Dingell specifically provides that plans 
are not required to cover any services beyond those provided in the 
contract. So with the liability provision in place, costs of care 
should not increase significantly as these costs are already covered by 
premiums. Care is being paid for, but not provided. Legal 
accountability will give HMOs the incentive to provide a quality of 
care that patients have every right to expect.
  Mr. Chairman, I urge my colleagues to support the Norwood-Dingell 
bill and reject this disingenuous attempt by insurance companies to 
pull the wool over the eyes of the American people.
  The CHAIRMAN. Under the rule, the Committee rises.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Pease) having assumed the chair, Mr. Hastings of Washington, 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. 
2723) to amend title I of the Employee Retirement Income Security Act 
of 1974, title XXVII of the Public Health Service Act, and the Internal 
Revenue Code of 1986 to protect consumers in managed care plans and 
other health coverage, pursuant to House Resolution 323, he reported 
the bill, as amended pursuant to that rule, back to the House.
  The SPEAKER pro tempore. Under the rule, the previous question is 
ordered.
  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.
  The SPEAKER pro tempore. 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.


                             Recorded Vote

  Mr. JOHN. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 275, 
noes 151, not voting 8, as follows:

                             [Roll No. 490]

                               AYES--275

     Abercrombie
     Ackerman
     Allen
     Andrews
     Bachus
     Baird
     Baldacci
     Baldwin
     Barcia
     Barr
     Barrett (WI)
     Bateman
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bilbray
     Bilirakis
     Bishop
     Blagojevich
     Blumenauer
     Boehlert
     Bonior
     Bono
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brady (TX)
     Brown (FL)
     Brown (OH)
     Callahan
     Canady
     Cannon
     Capps
     Capuano
     Cardin
     Carson
     Castle
     Chambliss
     Clay
     Clayton
     Clement
     Coble
     Coburn
     Condit
     Conyers
     Cook
     Cooksey
     Costello
     Coyne
     Cramer
     Crowley
     Cummings
     Danner
     Davis (FL)
     Davis (IL)
     Davis (VA)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Diaz-Balart
     Dicks
     Dingell
     Dixon
     Doggett
     Dooley
     Doyle
     Duncan
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Foley
     Forbes
     Ford
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Frost
     Gallegly
     Ganske
     Gejdenson
     Gephardt
     Gibbons
     Gilchrest
     Gilman
     Gonzalez
     Gordon
     Graham
     Green (TX)
     Greenwood
     Gutierrez
     Hall (OH)
     Hall (TX)
     Hastings (FL)
     Hefley
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Hooley
     Horn
     Hoyer
     Hunter
     Hyde
     Inslee
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Jenkins
     John
     Johnson, E. B.
     Jones (NC)
     Jones (OH)
     Kanjorski
     Kelly
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kleczka
     Klink
     Kucinich
     LaFalce
     Lampson
     Lantos
     Larson
     LaTourette
     Leach
     Lee
     Levin
     Lewis (GA)
     Lipinski
     LoBiondo
     Lofgren
     Lowey
     Lucas (KY)
     Luther
     Maloney (CT)
     Maloney (NY)
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McHugh
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Minge
     Mink
     Moakley

[[Page 24435]]


     Mollohan
     Moore
     Moran (KS)
     Moran (VA)
     Morella
     Murtha
     Nadler
     Napolitano
     Neal
     Norwood
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Phelps
     Pickett
     Pomeroy
     Porter
     Price (NC)
     Quinn
     Rahall
     Rangel
     Reyes
     Reynolds
     Rivers
     Rodriguez
     Roemer
     Ros-Lehtinen
     Rothman
     Roukema
     Roybal-Allard
     Rush
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Saxton
     Schakowsky
     Scott
     Serrano
     Sessions
     Shaw
     Shays
     Sherman
     Sherwood
     Shows
     Sisisky
     Skelton
     Slaughter
     Smith (NJ)
     Smith (WA)
     Snyder
     Spence
     Spratt
     Stabenow
     Stark
     Stenholm
     Strickland
     Stupak
     Sweeney
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Thurman
     Tierney
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Vento
     Visclosky
     Vitter
     Walsh
     Wamp
     Waters
     Watt (NC)
     Waxman
     Weiner
     Weldon (FL)
     Weldon (PA)
     Wexler
     Weygand
     Wilson
     Wise
     Wolf
     Woolsey
     Wu
     Wynn
     Young (FL)

                               NOES--151

     Aderholt
     Archer
     Armey
     Baker
     Ballenger
     Barrett (NE)
     Bartlett
     Barton
     Bass
     Bereuter
     Biggert
     Bliley
     Blunt
     Boehner
     Bonilla
     Bryant
     Burr
     Burton
     Buyer
     Calvert
     Camp
     Campbell
     Chabot
     Chenoweth-Hage
     Collins
     Combest
     Cox
     Crane
     Cubin
     Cunningham
     Deal
     DeLay
     DeMint
     Dickey
     Doolittle
     Dreier
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ewing
     Fletcher
     Fossella
     Fowler
     Gekas
     Gillmor
     Goode
     Goodlatte
     Goodling
     Goss
     Green (WI)
     Gutknecht
     Hansen
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Herger
     Hill (MT)
     Hilleary
     Hobson
     Hoekstra
     Hostettler
     Houghton
     Hutchinson
     Isakson
     Istook
     Johnson (CT)
     Johnson, Sam
     Kasich
     Kingston
     Knollenberg
     Kolbe
     Kuykendall
     LaHood
     Largent
     Latham
     Lazio
     Lewis (CA)
     Lewis (KY)
     Linder
     Lucas (OK)
     Manzullo
     McCrery
     McInnis
     McIntosh
     McKeon
     Metcalf
     Mica
     Miller (FL)
     Miller, Gary
     Myrick
     Nethercutt
     Ney
     Northup
     Nussle
     Ose
     Oxley
     Packard
     Paul
     Pease
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Pombo
     Pryce (OH)
     Radanovich
     Ramstad
     Regula
     Riley
     Rogan
     Rogers
     Rohrabacher
     Royce
     Ryan (WI)
     Ryun (KS)
     Salmon
     Sanford
     Schaffer
     Sensenbrenner
     Shadegg
     Shimkus
     Simpson
     Skeen
     Smith (MI)
     Smith (TX)
     Souder
     Stearns
     Stump
     Sununu
     Talent
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thune
     Tiahrt
     Toomey
     Upton
     Walden
     Watkins
     Watts (OK)
     Weller
     Whitfield
     Wicker
     Young (AK)

                             NOT VOTING--8

     Clyburn
     Granger
     Hulshof
     Kaptur
     Portman
     Sabo
     Scarborough
     Shuster

                              {time}  1641

  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated for:
  Mr. CLYBURN. Mr. Speaker, I was unavoidably detained in a meeting of 
the Committee on Standards of Official Conduct. Had I been present on 
the vote, I would have voted in favor.
  Mr. SABO. Mr. Speaker, I was detained by the previously mentioned in 
a meeting of the Committee on Standards of Official Conduct. If I had 
been present, I would have voted ``yes.''
  Stated against:
  Mr. PORTMAN. Mr. Speaker, I was detained in a meeting with the 
Committee on Standards of Official Conduct during the vote on the 
Norwood-Dingell legislation. Had I been present, I would have voted 
``no.''
  Mr. HULSHOF. Mr. Speaker, I was detained in the very same meeting of 
the Committee on Standards of Official Conduct during the vote on the 
Dingell legislation. Had I been present, I would have voted ``no.''

                          ____________________