[Congressional Record (Bound Edition), Volume 147 (2001), Part 9]
[Senate]
[Pages 12564-12586]
[From the U.S. Government Publishing Office, www.gpo.gov]



                           TEXT OF AMENDMENTS

  SA 850. Mr. NICKLES proposed an amendment to the bill S. 1052, to 
amend the Public Health Service Act and the Employee Retirement Income 
Security Act of 1974 to protect consumers in managed care plans and 
other health coverage; as follows:

       On page 131, after line 20, insert the following:

   TITLE III--APPLICATION OF PATIENT PROTECTION STANDARDS TO FEDERAL 
                          HEALTH CARE PROGRAMS

     SEC. 301. APPLICATION OF PATIENT PROTECTION STANDARDS TO 
                   FEDERAL HEALTH CARE PROGRAMS.

       (a) Application of Standards.--
       (1) In general.--Each Federal health care program shall 
     comply with the patient protection requirements under title 
     I, and such requirements shall be deemed to be incorporated 
     into this section.
       (2) Cause of action relating to provision of health 
     benefits.--Any individual who receives a health care item or 
     service under a Federal health care program shall have a 
     cause of action against the Federal Government under sections 
     502(n) and 514(d) of the Employee Retirement Income Security 
     Act of 1974, and the provisions of such sections shall be 
     deemed to be incorporated into this section.
       (3) Rules of construction.--For purposes of this 
     subsection--
       (A) each Federal health care program shall be deemed to be 
     a group health plan;
       (B) the Federal Government shall be deemed to be the plan 
     sponsor of each Federal health care program; and
       (C) each individual eligible for benefits under a Federal 
     health care program shall be deemed to be a participant, 
     beneficiary, or enrollee under that program.
       (b) Federal Health Care Program Defined.--In this section, 
     the term ``Federal health care program'' has the meaning 
     given that term under section 1128B(f) of the Social Security 
     Act (42 U.S.C. 1320a-7b) except that, for purposes of this 
     section, such term includes the Federal employees health 
     benefits program established under chapter 89 of title 5, 
     United States Code.
                                  ____

  SA 851. Mr. CRAIG proposed an amendment to the bill S. 1052, to amend 
the Public Health Service Act and the Employee Retirement Income 
Security Act of 1974 to protect consumers in managed care plans and 
other health coverage, as follows:

       At the appropriate place insert the following:

     SEC.   . SENSE OF THE SENATE REGARDING FULL AVAILABILITY OF 
                   MEDICAL SAVINGS ACCOUNTS.

       (a) Findings.--The Senate finds:
       (1) Medical savings accounts eliminate bureaucracy and put 
     patients in control of their health care decisions.
       (2) Medical savings accounts extend coverage to the 
     uninsured. According to the Treasury Department, one-third of 
     MSA purchasers previously had no health care coverage.
       (3) The medical savings account demonstration program has 
     been hampered with restrictions that put medical savings 
     accounts out of reach for millions of Americans.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that a patients' bill of rights should remove the 
     restrictions on the private-sector medical savings account 
     demonstration program to make medical savings accounts 
     available to more Americans.
                                  ____

  SA 852. Mr. REID proposed an amendment to the bill S. 1052, to amend 
the Public Health Service Act and the Employee Retirement Income 
Security Act of 1974 to protect consumers in managed care plans and 
other health coverage; as follows:

       On page 154, between lines 2 and 3, insert the following:
       ``(11) Limitation on award of attorneys' fees.--
       ``(A) In general.--Subject to subparagraph (B), with 
     respect to a participant or beneficiary (or the estate of 
     such participant or beneficiary) who brings a cause of action 
     under this subsection and prevails in that action, the amount 
     of attorneys' contingency fees that a court may award to such 
     participant, beneficiary, or estate under subsection (g)(1) 
     (not including the reimbursement of actual out-of-pocket 
     expenses of an attorney as approved by the court in such 
     action) may not exceed an amount equal to 1/3 of the amount 
     of the recovery.
       ``(B) Equitable discretion.--A court in its discretion may 
     adjust the amount of an award of attorneys' fees required 
     under subparagraph (A) as equity and the interests of justice 
     may require.
       On page 170, between lines 21 and 22, insert the following:
       ``(9) Limitation on attorneys' fees.--
       ``(A) In general.--Notwithstanding any other provision of 
     law, or any arrangement, agreement, or contract regarding 
     attorneys' contingency fees, subject to subparagraph (B), a 
     court shall limit the amount of attorneys' fees that may be 
     incurred for the representation of a participant or 
     beneficiary (or the estate of such participant or 
     beneficiary) who brings a cause of action under paragraph (1) 
     to the amount of attorneys' fees that may be awarded under 
     section 502(n)(11).
       ``(B) Equitable discretion.--A court in its discretion may 
     adjust the amount of attorneys' fees allowed under 
     subparagraph (A) as equity and the interests of justice may 
     require.

[[Page 12565]]

     
                                  ____
  SA 853. Mr. THOMPSON proposed an amendment to the bill S. 1052, to 
amend the Public Health Service Act and the Employee Retirement Income 
Security Act of 1974 to protect consumers in managed care plans and 
other health coverage; as follows:

       On page 170, between lines 21 and 22, insert the following:
       ``(9) Choice of law.--A cause of action brought under 
     paragraph (1) shall be governed by the law (including choice 
     of law rules) of the State in which the plaintiff resides.
                                  ____

  SA 854. Mr. KYL (for himself and Mr. Nickles) proposed an amendment 
to the bill S. 1052, to amend the Public Health Service Act and the 
Employee Retirement Income Security Act of 1974 to protect consumers in 
managed care plans and other health coverage; as follows:

       On page 156, between lines 15 and 16, insert the following:
       ``(17) Damages options.--
       ``(A) In general.--In addition to plans or coverage that 
     are subject to this Act, a plan or issuer may offer, and a 
     participant or beneficiary may accept, a plan or coverage 
     that provides for one or more of the following remedies, in 
     which case the damages authorized by this section shall not 
     apply:
       ``(i) Equitable relief as provided for in subsection 
     (a)(1)(B).
       ``(ii) Unlimited economic damages, including reasonable 
     attorneys fees.
       ``(B) Protection of the regulation of quality of medical 
     care under state law.--Nothing in this paragraph shall be 
     construed to preclude any action under State law against a 
     person or entity for liability or vicarious liability with 
     respect to the delivery of medical care. A claim that is 
     based on or otherwise relates to a group health plan's 
     administration or determination of a claim for benefits 
     (notwithstanding the definition contained in paragraph (2)) 
     shall not be deemed to be the delivery of medical care under 
     any State law for purposes of this section. Any such claim 
     shall be maintained exclusively under this section.''.
       On page 170, between lines 21 and 22, insert the following:
       ``(9) Damages options.--
       ``(A) In general.--In addition to plans or coverage that 
     are subject to this Act, a plan or issuer may offer, and a 
     participant or beneficiary may accept, a plan or coverage 
     that provides for one or more of the following remedies, in 
     which case the damages authorized by this section shall not 
     apply:
       ``(i) Equitable relief as provided for in section 
     502(a)(1)(B).
       ``(ii) Unlimited economic damages, including reasonable 
     attorneys fees.
       ``(B) Protection of the regulation of quality of medical 
     care under state law.--Nothing in this paragraph shall be 
     construed to preclude any action under State law against a 
     person or entity for liability or vicarious liability with 
     respect to the delivery of medical care. A claim that is 
     based on or otherwise relates to a group health plan's 
     administration or determination of a claim for benefits 
     (notwithstanding the definition contained in section 
     502(n)(2)) shall not be deemed to be the delivery of medical 
     care under any State law for purposes of this section. Any 
     such claim shall be maintained exclusively under section 502.
                                  ____

  SA 855. Mr. CARPER proposed an amendment to the bill S. 1052, to 
amend the Public Health Service Act and the Employee Retirement Income 
Security Act of 1974 to protect consumers in managed care plans and 
other health coverage; as follows:

       On page 153, strike line 9 and all that follows through 
     page 154, line 2, and insert the following:
       ``(10) Statutory damages.--The remedies set forth in this 
     subsection shall be the exclusive remedies for any cause of 
     action brought under this subsection. Such remedies shall 
     include economic and noneconomic damages, but shall not 
     include any punitive damages.
                                  ____

  SA 856. Mr. FRIST (for himself and Mr. Breaux) proposed an amendment 
to the bill S. 1052, to amend the Public Health Service Act and the 
Employee Retirement Income Security Act of 1974 to protect consumers in 
managed care plans and other health coverage; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Bipartisan 
     Patients' Bill of Rights Act of 2001''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                   TITLE I--PATIENTS' BILL OF RIGHTS

                  Subtitle A--Right to Advice and Care

Sec. 101. Access to emergency medical care.
Sec. 102. Offering of choice of coverage options.
Sec. 103. Patient access to obstetric and gynecological care.
Sec. 104. Access to pediatric care.
Sec. 105. Timely access to specialists.
Sec. 106. Continuity of care.
Sec. 107. Protection of patient-provider communications.
Sec. 108. Patient's right to prescription drugs.
Sec. 109. Coverage for individuals participating in approved clinical 
              trials.
Sec. 110. Required coverage for minimum hospital stay for mastectomies 
              and lymph node dissections for the treatment of breast 
              cancer and coverage for secondary consultations.
Sec. 111. Prohibition of discrimination against providers based on 
              licensure.
Sec. 112. Generally applicable provision.

       Subtitle B--Right to Information About Plans and Providers

Sec. 121. Health plan information.
Sec. 122. Information about providers.
Sec. 123. Study on the effect of physician compensation methods.

           Subtitle C--Right to Hold Health Plans Accountable

Sec. 131. Amendments to Employee Retirement Income Security Act of 
              1974.
Sec. 132. Enforcement.

                          Subtitle D--Remedies

Sec. 141. Availability of court remedies.

                     Subtitle E--State Flexibility

Sec. 151. Preemption; State flexibility; construction.
Sec. 152. Coverage of limited scope dental plans.

                  Subtitle F--Miscellaneous Provisions

Sec. 161. Definitions.

         TITLE II--AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT

Sec. 201. Application to certain health insurance coverage.
Sec. 202. Application to individual health insurance coverage.
Sec. 203. Limitation on authority of the Secretary of Health and Human 
              services with respect to non-Federal governmental plans.
Sec. 204. Cooperation between Federal and State authorities.

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. Cooperation between Federal and State authorities.

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

Sec. 401. Application to group health plans under the Internal Revenue 
              Code of 1986.
Sec. 402. Conforming enforcement for women's health and cancer rights.

                 TITLE V--EFFECTIVE DATE; SEVERABILITY

Sec. 501. Effective date and related rules.
Sec. 502. Severability.
Sec. 503. Annual review.

                   TITLE I--PATIENTS' BILL OF RIGHTS

                  Subtitle A--Right to Advice and Care

     SEC. 101. ACCESS TO EMERGENCY MEDICAL CARE.

       (a) Coverage of Emergency Services.--If a group health 
     plan, and a health insurance issuer that offers health 
     insurance coverage, provides coverage for any benefits 
     consisting of emergency medical care, except for items or 
     services specifically excluded from coverage, the plan or 
     issuer shall, without regard to prior authorization or 
     provider participation--
       (1) provide coverage for emergency medical screening 
     examinations to the extent that a prudent layperson, who 
     possesses an average knowledge of health and medicine, would 
     determine such examinations to be necessary; and
       (2) provide coverage for additional emergency medical care 
     to stabilize an emergency medical condition following an 
     emergency medical screening examination (if determined 
     necessary), pursuant to the definition of stabilize under 
     section 1867(e)(3) of the Social Security Act (42 U.S.C. 
     1395dd(e)(3)).
       (b) Coverage of Emergency Ambulance Services.--If a group 
     health plan, and a health insurance issuer that offers health 
     insurance coverage, provides coverage for any benefits 
     consisting of emergency ambulance services, except for items 
     or services specifically excluded from coverage, the plan or 
     issuer shall, without regard to prior authorization or 
     provider participation, provide coverage for emergency 
     ambulance services to the extent that a prudent layperson, 
     who possesses an average knowledge of health and medicine, 
     would determine such emergency ambulance services to be 
     necessary.
       (c) Care After Stabilization.--

[[Page 12566]]

       (1) In general.--In the case of medically necessary and 
     appropriate items or services related to the emergency 
     medical condition that may be provided to a participant, 
     beneficiary, or enrollee by a nonparticipating provider after 
     the participant, beneficiary, or enrollee is stabilized, the 
     nonparticipating provider shall contact the plan or issuer as 
     soon as practicable, but not later than 1 hour after 
     stabilization occurs, with respect to whether--
       (A) the provision of items or services is approved;
       (B) the participant, beneficiary, or enrollee will be 
     transferred; or
       (C) other arrangements will be made concerning the care and 
     treatment of the participant, beneficiary, or enrollee.
       (2) Failure to respond and make arrangements.--If a group 
     health plan, and a health insurance issuer that offers health 
     insurance coverage, fails to respond and make arrangements 
     within 1 hour of being contacted in accordance with paragraph 
     (1), then the plan or issuer shall be responsible for the 
     cost of any additional items or services provided by the 
     nonparticipating provider if--
       (A) coverage for items or services of the type furnished by 
     the nonparticipating provider is available under the plan or 
     coverage;
       (B) the items or services are medically necessary and 
     appropriate and related to the emergency medical condition 
     involved; and
       (C) the timely provision of the items or services is 
     medically necessary and appropriate.
       (3) Rule of construction.--Nothing in this subsection shall 
     be construed to apply to a group health plan, and a health 
     insurance issuer that offers health insurance coverage, that 
     does not require prior authorization for items or services 
     provided to a participant, beneficiary, or enrollee after the 
     participant, beneficiary, or enrollee is stabilized.
       (d) Reimbursement to a Nonparticipating Provider.--The 
     responsibility of a group health plan, and a health insurance 
     issuer that offers health insurance coverage, to provide 
     reimbursement to a nonparticipating provider under this 
     section shall cease accruing upon the earlier of--
       (1) the transfer or discharge of the participant, 
     beneficiary, or enrollee; or
       (2) the completion of other arrangements made by the plan 
     or issuer and the nonparticipating provider.
       (e) Responsibility of Participant.--The coverage required 
     under subsections (a), (b), and (c) shall be provided by a 
     group health plan, and a health insurance issuer that offers 
     health insurance coverage, in a manner so that, if the 
     services referred to in such subsections are provided to a 
     participant, beneficiary, or enrollee by a nonparticipating 
     provider with or 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.
       (f) Rule of Construction.--Nothing in this section shall be 
     construed to prohibit a group health plan or health insurance 
     issuer from negotiating reimbursement rates with a 
     nonparticipating provider for items or services provided 
     under this section.
       (g) Definitions.--In this section:
       (1) Emergency ambulance services.--The term ``emergency 
     ambulance services'' means, with respect to a participant, 
     beneficiary, or enrollee under a group health plan, or a 
     health insurance issuer that offers health insurance 
     coverage, ambulance services furnished to transport an 
     individual who has an emergency medical condition to a 
     treating facility for receipt of emergency medical care if--
       (A) the emergency services are covered under the group 
     health plan or health insurance coverage involved; and
       (B) a prudent layperson who possesses an average knowledge 
     of health and medicine could reasonably expect the absence of 
     such emergency transport to result in placing the health of 
     the participant, beneficiary, or enrollee (or, with respect 
     to a pregnant woman, the health of the woman or her unborn 
     child) in serious jeopardy, serious impairment to bodily 
     functions, or serious dysfunction of any bodily organ or 
     part.
       (2) Emergency medical care.--The term ``emergency medical 
     care'' means, with respect to a participant, beneficiary, or 
     enrollee under a group health plan, or a health insurance 
     issuer that offers health insurance coverage, covered 
     inpatient and outpatient items or services that--
       (A) are furnished by any provider, including a 
     nonparticipating provider, that is qualified to furnish such 
     items or services; and
       (B) are needed to evaluate or stabilize (as such term is 
     defined in section 1867(e)(3) of the Social Security Act (42 
     U.S.C. 1395dd(e)(3)) an emergency medical condition.
       (3) Emergency medical condition.--The term ``emergency 
     medical condition'' means a medical condition manifesting 
     itself by acute symptoms of sufficient severity (including 
     severe pain) such that a prudent layperson, who possesses an 
     average knowledge of health and medicine, could reasonably 
     expect the absence of immediate medical attention to result 
     in placing the health of the participant, beneficiary, or 
     enrollee (or, with respect to a pregnant woman, the health of 
     the woman or her unborn child) in serious jeopardy, serious 
     impairment to bodily functions, or serious dysfunction of any 
     bodily organ or part.

     SEC. 102. OFFERING OF CHOICE OF COVERAGE OPTIONS.

       (a) Requirement.--If a group health plan provides coverage 
     for benefits only through a defined set of participating 
     health care professionals, the plan shall offer the 
     participant the option to purchase point-of-service coverage 
     (as defined in subsection (b)) for all such benefits for 
     which coverage is otherwise so limited. Such option shall be 
     made available to the participant at the time of enrollment 
     under the plan and at such other times as the plan offers the 
     participant a choice of coverage options.
       (b) Point-of-Service Coverage Defined.--In this section, 
     the term ``point-of-service coverage'' means, with respect to 
     benefits covered under a group health plan coverage of such 
     benefits when provided by a nonparticipating health care 
     professional.
       (c) Small Employer Exemption.--
       (1) In general.--This section shall not apply to any group 
     health plan with respect to a small employer.
       (2) Small employer.--For purposes of paragraph (1), the 
     term ``small employer'' means, in connection with a group 
     health plan with respect to a calendar year and a plan year, 
     an employer who employed an average of at least 2 but not 
     more than 25 employees on business days during the preceding 
     calendar year and who employs at least 2 employees on the 
     first day of the plan year. For purposes of this paragraph, 
     the provisions of subparagraph (C) of section 712(c)(1) shall 
     apply in determining employer size.
       (d) Rule of Construction.--Nothing in this section shall be 
     construed--
       (1) as requiring coverage for benefits for a particular 
     type of health care professional;
       (2) as preventing a group health plan from imposing higher 
     premiums or cost-sharing on a participant for the exercise of 
     a point-of-service coverage option; or
       (3) to require that a group health plan include coverage of 
     health care professionals that the plan excludes because of 
     fraud, quality of care, or other similar reasons with respect 
     to such professionals.
       (e) Special Point of Service Protection for Individuals in 
     Dental Plans.--For purposes of applying the requirements of 
     this section 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) of the 
     Public Health Service Act and section 733(c)(2)(A) of the 
     Employee Retirement Income Security Act of 1974, only 
     relating to limited scope dental benefits, shall be deemed 
     not to apply.

     SEC. 103. PATIENT ACCESS TO OBSTETRIC AND GYNECOLOGICAL CARE.

       (a) General Rights.--
       (1) Direct access.--A group health plan, and a health 
     insurance issuer that offers health insurance coverage, 
     described in subsection (b) may not require authorization or 
     referral by the primary care provider described in subsection 
     (b)(2) in the case of a female participant, beneficiary, or 
     enrollee who seeks coverage for obstetrical or gynecological 
     care provided by a participating physician who specializes in 
     obstetrics or gynecology.
       (2) Obstetrical and gynecological care.--A group health 
     plan, and a health insurance issuer that offers health 
     insurance coverage, described in subsection (b) shall treat 
     the provision of obstetrical and gynecological care, and the 
     ordering of related obstetrical and gynecological items and 
     services, pursuant to the direct access described under 
     paragraph (1), by a participating health care professional 
     who specializes in obstetrics or gynecology as the 
     authorization of the primary care provider.
       (b) Application of Section.--A group health plan, and a 
     health insurance issuer that offers health insurance 
     coverage, described in this subsection is a plan or issuer, 
     that--
       (1) provides coverage for obstetric or gynecologic care; 
     and
       (2) requires the designation by a participant, beneficiary, 
     or enrollee of a participating primary care provider other 
     than a physician who specializes in obstetrics or gynecology.
       (c) Rules of Construction.--Nothing in this section shall 
     be construed--
       (1) to require that a group health plan or a health 
     insurance issuer approve or provide coverage for--
       (A) any items or services that are not covered under the 
     terms and conditions of the plan or coverage;
       (B) any items or services that are not medically necessary 
     and appropriate; or
       (C) any items or services that are provided, ordered, or 
     otherwise authorized under subsection (a)(2) by a physician 
     unless such items or services are related to obstetric or 
     gynecologic care;
       (2) to preclude a group health plan or health insurance 
     issuer from requiring that the physician described in 
     subsection (a) notify the designated primary care 
     professional or case manager of treatment decisions in

[[Page 12567]]

     accordance with a process implemented by the plan or issuer, 
     except that the plan or issuer shall not impose such a 
     notification requirement on the participant, beneficiary, or 
     enrollee involved in the treatment decision;
       (3) to preclude a group health plan or health insurance 
     issuer from requiring authorization, including prior 
     authorization, for certain items and services from the 
     physician described in subsection (a) who specializes in 
     obstetrics and gynecology if the designated primary care 
     provider of the participant, beneficiary, or enrollee would 
     otherwise be required to obtain authorization for such items 
     or services;
       (4) to require that the participant, beneficiary, or 
     enrollee described in subsection (a)(1) obtain authorization 
     or a referral from a primary care provider in order to obtain 
     obstetrical or gynecological care from a health care 
     professional other than a physician if the provision of 
     obstetrical or gynecological care by such professional is 
     permitted by the group health plan or health insurance 
     coverage and consistent with State licensure, credentialing, 
     and scope of practice laws and regulations; or
       (5) to preclude the participant, beneficiary, or enrollee 
     described in subsection (a)(1) from designating a health care 
     professional other than a physician as a primary care 
     provider if such designation is permitted by the group health 
     plan or health insurance issuer and the treatment by such 
     professional is consistent with State licensure, 
     credentialing, and scope of practice laws and regulations.

     SEC. 104. ACCESS TO PEDIATRIC CARE.

       (a) Pediatric Care.--If a group health plan, and a health 
     insurance issuer that offers health insurance coverage, 
     requires or provides for a participant, beneficiary, or 
     enrollee to designate a participating primary care provider 
     for a child of such participant, beneficiary, or enrollee, 
     the plan or issuer shall permit the participant, beneficiary, 
     or enrollee to designate a physician who specializes in 
     pediatrics as the child's primary care provider if such 
     provider participates in the network of the plan or issuer.
       (b) Rules of Construction.--With respect to the child of a 
     participant, beneficiary, or enrollee, nothing in subsection 
     (a) shall be construed to--
       (1) require that the participant, beneficiary, or enrollee 
     obtain prior authorization or a referral from a primary care 
     provider in order to obtain pediatric care from a health care 
     professional other than a physician if the provision of 
     pediatric care by such professional is permitted by the plan 
     or issuer and consistent with State licensure, credentialing, 
     and scope of practice laws and regulations; or
       (2) preclude the participant, beneficiary, or enrollee from 
     designating a health care professional other than a physician 
     as a primary care provider for the child if such designation 
     is permitted by the plan or issuer and the treatment by such 
     professional is consistent with State licensure, 
     credentialing, and scope of practice laws.

     SEC. 105. TIMELY ACCESS TO SPECIALISTS.

       (a) Timely Access.--
       (1) Requirement of coverage.--
       (A) In general.--A group health plan, and a health 
     insurance issuer that offers health insurance coverage, shall 
     ensure that participants, beneficiaries, and enrollees 
     receive timely coverage for access to appropriate medical 
     specialists when such specialty care is a covered benefit 
     under the plan or coverage.
       (B) Appropriate medical specialist defined.--In this 
     subsection, the term ``appropriate medical specialist'' means 
     a physician (including an alleopathic or osteopathic 
     physician) or health care professional who is appropriately 
     credentialed or licensed in 1 or more States and who 
     typically treats the diagnosis or condition of the 
     participant, beneficiary, or enrollee.
       (2) Rule of construction.--Nothing in paragraph (1) shall 
     be construed--
       (A) to require the coverage under a group health plan, or 
     health insurance coverage, of benefits or services;
       (B) to prohibit a plan or health insurance issuer from 
     including providers in the network only to the extent 
     necessary to meet the needs of the plan's or issuer's 
     participants, beneficiaries, or enrollees;
       (C) to prohibit a plan or issuer from establishing measures 
     designed to maintain quality and control costs consistent 
     with the responsibilities of the plan or issuer; or
       (D) to override any State licensure or scope-of-practice 
     law.
       (3) Access to certain providers.--
       (A) Participating providers.--Nothing in this section shall 
     be construed to prohibit a group health plan, or a health 
     insurance issuer that offers health insurance coverage, from 
     requiring that a participant, beneficiary, or enrollee obtain 
     specialty care from a participating specialist.
       (B) Nonparticipating providers.--
       (i) In general.--With respect to specialty care under this 
     section, if a group health plan, or a health insurance issuer 
     that offers health insurance coverage, determines that a 
     participating specialist is not available to provide such 
     care to the participant, beneficiary, or enrollee, the plan 
     or issuer shall provide for coverage of such care by a 
     nonparticipating specialist.
       (ii) Treatment of nonparticipating providers.--If a group 
     health plan, or a health insurance issuer that offers health 
     insurance coverage, refers a participant, beneficiary, or 
     enrollee to a nonparticipating specialist pursuant to clause 
     (i), such specialty care shall be provided at no additional 
     cost to the participant, beneficiary, or enrollee beyond what 
     the participant, beneficiary, or enrollee would otherwise pay 
     for such specialty care if provided by a participating 
     specialist.
       (b) Referrals.--
       (1) Authorization.--Nothing in this section shall be 
     construed to prohibit a group health plan, or a health 
     insurance issuer that offers health insurance coverage, from 
     requiring an authorization in order to obtain coverage for 
     specialty services so long as such authorization is for an 
     appropriate duration or number of referrals.
       (2) Referrals for ongoing special conditions.--
       (A) In general.--A group health plan, and a health 
     insurance issuer that offers health insurance coverage, shall 
     permit a participant, beneficiary, or enrollee who has an 
     ongoing special condition (as defined in subparagraph (B)) to 
     receive a referral to a specialist for the treatment of such 
     condition and such specialist may authorize such referrals, 
     procedures, tests, and other medical services with respect to 
     such condition, or coordinate the care for such condition, 
     subject to the terms of a treatment plan referred to in 
     subsection (c) with respect to the condition.
       (B) Ongoing special condition defined.--In this subsection, 
     the term ``ongoing special condition'' means a condition or 
     disease that--
       (i) is life-threatening, degenerative, or disabling; and
       (ii) requires specialized medical care over a prolonged 
     period of time.
       (c) Treatment Plans.--
       (1) In general.--Nothing in this section shall be construed 
     to prohibit a group health plan, or a health insurance issuer 
     that offers health insurance coverage, from requiring that 
     specialty care be provided pursuant to a treatment plan so 
     long as the treatment plan is--
       (A) developed by the specialist, in consultation with the 
     case manager or primary care provider, and the participant, 
     beneficiary, or enrollee; and
       (B) if the plan or issuer requires such approval, approved 
     in a timely manner by the plan or issuer consistent with the 
     applicable quality assurance and utilization review standards 
     of the plan or issuer.
       (2) Notification.--Nothing in paragraph (1) shall be 
     construed as prohibiting a plan or issuer from requiring the 
     specialist to provide the plan or issuer with regular updates 
     on the specialty care provided, as well as all other 
     necessary medical information.
       (d) Specialist Defined.--For purposes of this section, the 
     term ``specialist'' means, with respect to the medical 
     condition of the participant, beneficiary, or enrollee, a 
     health care professional, facility, or center (such as a 
     center of excellence) that has adequate expertise (including 
     age-appropriate expertise) through appropriate training and 
     experience.

     SEC. 106. CONTINUITY OF CARE.

       (a) Termination of Provider.--If a contract between a group 
     health plan, and a health insurance issuer that offers health 
     insurance coverage, and a treating health care provider is 
     terminated (as defined in paragraph (e)(4)), or benefits or 
     coverage provided by a health care provider are terminated 
     because of a change in the terms of provider participation in 
     such plan or coverage, and an individual who is a 
     participant, beneficiary or enrollee under such plan or 
     coverage is undergoing an active course of treatment for a 
     serious and complex condition, institutional care, pregnancy, 
     or terminal illness from the provider at the time the plan or 
     issuer receives or provides notice of such termination, the 
     plan or issuer shall--
       (1) notify the individual, or arrange to have the 
     individual notified pursuant to subsection (d)(2), on a 
     timely basis of such termination;
       (2) provide the individual with an opportunity to notify 
     the plan or issuer of the individual's need for transitional 
     care; and
       (3) subject to subsection (c), permit the individual to 
     elect to continue to be covered with respect to the active 
     course of treatment with the provider's consent during a 
     transitional period (as provided for under subsection (b)).
       (b) Transitional Period.--
       (1) Serious and complex conditions.--The transitional 
     period under this section with respect to a serious and 
     complex condition shall extend for up to 90 days from the 
     date of the notice described in subsection (a)(1) of the 
     provider's termination.
       (2) Institutional or inpatient care.--
       (A) In general.--The transitional period under this section 
     for institutional or non-elective inpatient care from a 
     provider shall extend until the earlier of--
       (i) the expiration of the 90-day period beginning on the 
     date on which the notice described in subsection (a)(1) of 
     the provider's termination is provided; or
       (ii) the date of discharge of the individual from such care 
     or the termination of the period of institutionalization.
       (B) Scheduled care.--The 90 day limitation described in 
     subparagraph (A)(i) shall

[[Page 12568]]

     include post-surgical follow-up care relating to non-elective 
     surgery that has been scheduled before the date of the notice 
     of the termination of the provider under subsection (a)(1).
       (3) Pregnancy.--If--
       (A) a participant, beneficiary, or enrollee has entered the 
     second trimester of pregnancy at the time of a provider's 
     termination of participation; and
       (B) the provider was treating the pregnancy before the date 
     of the termination;
     the transitional period under this subsection with respect to 
     provider's treatment of the pregnancy shall extend through 
     the provision of post-partum care directly related to the 
     delivery.
       (4) Terminal illness.--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 that is 
     directly related to the treatment of the terminal illness.
       (c) Permissible Terms and Conditions.--A group health plan, 
     and a health insurance issuer that offers health insurance 
     coverage, may condition coverage of continued treatment by a 
     provider under this section upon the provider agreeing to the 
     following terms and conditions:
       (1) The treating health care provider agrees to accept 
     reimbursement from the plan or issuer and individual involved 
     (with respect to cost-sharing) at the rates applicable prior 
     to the start of the transitional period as payment in full 
     (or at the rates applicable under the replacement plan after 
     the date of the termination of the contract with the plan or 
     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 
     this section had not been terminated.
       (2) The treating health care provider agrees to adhere to 
     the quality assurance standards of the plan or issuer 
     responsible for payment under paragraph (1) and to provide to 
     such plan or issuer necessary medical information related to 
     the care provided.
       (3) The treating health care provider agrees otherwise to 
     adhere to such plan's or issuer's policies and procedures, 
     including procedures regarding referrals and obtaining prior 
     authorization and providing services pursuant to a treatment 
     plan (if any) approved by the plan or issuer.
       (d) Rules of Construction.--Nothing in this section shall 
     be construed--
       (1) to require the coverage of benefits which would not 
     have been covered if the provider involved remained a 
     participating provider; or
       (2) with respect to the termination of a contract under 
     subsection (a) to prevent a group health plan or health 
     insurance issuer from requiring that the health care 
     provider--
       (A) notify participants, beneficiaries, or enrollees of 
     their rights under this section; or
       (B) provide the plan or issuer with the name of each 
     participant, beneficiary, or enrollee who the provider 
     believes is eligible for transitional care under this 
     section.
       (e) Definitions.--In this section:
       (1) Contract.--The term ``contract between a group health 
     plan, and a health insurance issuer that offers health 
     insurance coverage, and a treating health care provider'' 
     shall include a contract between such a plan or issuer and an 
     organized network of providers.
       (2) Health care provider.--The term ``health care 
     provider'' or ``provider'' means--
       (A) any individual who is engaged in the delivery of health 
     care services in a State and who is required by State law or 
     regulation to be licensed or certified by the State to engage 
     in the delivery of such services in the State; and
       (B) any entity that is engaged in the delivery of health 
     care services in a State and that, if it is required by State 
     law or regulation to be licensed or certified by the State to 
     engage in the delivery of such services in the State, is so 
     licensed.
       (3) Serious and complex condition.--The term ``serious and 
     complex condition'' means, with respect to a participant, 
     beneficiary, or enrollee under the plan or coverage, a 
     condition that is medically determinable and--
       (A) in the case of an acute illness, is a condition serious 
     enough to require specialized medical treatment to avoid the 
     reasonable possibility of death or permanent harm; or
       (B) in the case of a chronic illness or condition, is an 
     illness or condition that--
       (i) is complex and difficult to manage;
       (ii) is disabling or life- threatening; and
       (iii) requires--

       (I) frequent monitoring over a prolonged period of time and 
     requires substantial on-going specialized medical care; or
       (II) frequent ongoing specialized medical care across a 
     variety of domains of care.

       (4) Terminated.--The term ``terminated'' includes, with 
     respect to a contract (as defined in paragraph (1)), the 
     expiration or nonrenewal of the contract by the group health 
     plan or health insurance issuer, but does not include a 
     termination of the contract by the plan or issuer for failure 
     to meet applicable quality standards or for fraud.

     SEC. 107. PROTECTION OF PATIENT-PROVIDER COMMUNICATIONS.

       (a) In General.--Subject to subsection (b), a group health 
     plan, and a health insurance issuer that offers health 
     insurance coverage, (in relation to a participant, 
     beneficiary, or enrollee) 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 participant, 
     beneficiary, or enrollee or medical care or treatment for the 
     condition or disease of the participant, beneficiary, or 
     enrollee, regardless of whether coverage for such care or 
     treatment are provided under the contract, if the 
     professional is acting within the lawful scope of practice.
       (b) Rule of Construction.--Nothing in this section shall be 
     construed as requiring a group health plan, or a health 
     insurance issuer that offers health insurance coverage, to 
     provide specific benefits under the terms of such plan or 
     coverage.

     SEC. 108. PATIENT'S RIGHT TO PRESCRIPTION DRUGS.

       (a) In General.--To the extent that a group health plan, 
     and a health insurance issuer that offers health insurance 
     coverage, provides coverage for benefits with respect to 
     prescription drugs, and limits such coverage to drugs 
     included in a formulary, the plan or issuer shall--
       (1) ensure the participation of physicians and pharmacists 
     in developing and reviewing such formulary; and
       (2) in accordance with the applicable quality assurance and 
     utilization review standards of the plan or issuer, provide 
     for exceptions from the formulary limitation when a non-
     formulary alternative is medically necessary and appropriate.
       (b) Rule of Construction.--Nothing in this section shall be 
     construed to prohibit a group health plan, or a health 
     insurance issuer that offers health insurance coverage, from 
     excluding coverage for a specific drug or class of drugs if 
     such drugs or class of drugs is expressly excluded under the 
     terms and conditions of the plan or coverage.

     SEC. 109. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED 
                   CLINICAL TRIALS.

       (a) Coverage.--
       (1) In general.--If a group health plan, and a health 
     insurance issuer that offers 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 participant's, beneficiaries, or 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 an enrollee in health insurance coverage and 
     who meets the following conditions:
       (1)(A) The individual has a life-threatening or serious 
     illness for which no standard treatment is effective.
       (B) The individual is eligible to participate in an 
     approved clinical trial according to the trial protocol with 
     respect to treatment of such illness.
       (C) The individual's participation in the trial offers 
     meaningful potential for significant clinical benefit for the 
     individual.
       (2) Either--
       (A) the referring physician is a participating health care 
     professional and has concluded that the individual's 
     participation in such trial would be appropriate based upon 
     the individual meeting the conditions described in paragraph 
     (1); or
       (B) the participant, beneficiary, or enrollee provides 
     medical and scientific information establishing that the 
     individual's participation in such trial would be appropriate 
     based upon the individual meeting the conditions described in 
     paragraph (1).
       (c) Payment.--
       (1) In general.--Under this section a group health plan, 
     and a health insurance issuer that offers health insurance 
     coverage, shall

[[Page 12569]]

     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) Standards for determining routine patient costs 
     associated with clinical trial participation.--
       (A) In general.--The Secretary shall, in accordance with 
     this paragraph, establish standards relating to the coverage 
     of routine patient costs for individuals participating in 
     clinical trials that group health plans and health insurance 
     issuers must meet under this section.
       (B) Factors.--In establishing routine patient cost 
     standards under subparagraph (A), the Secretary shall consult 
     with interested parties and take into account --
       (i) quality of patient care;
       (ii) routine patient care costs versus costs associated 
     with the conduct of clinical trials, including unanticipated 
     patient care costs as a result of participation in clinical 
     trials; and
       (iii) previous and on-going studies relating to patient 
     care costs associated with participation in clinical trials.
       (C) Appointment and meetings of negotiated rulemaking 
     committee.--
       (i) Publication of notice.--Not later than November 15, 
     2002, the Secretary shall publish notice of the establishment 
     of a negotiated rulemaking committee, as provided for under 
     section 564(a) of title 5, United States Code, to develop the 
     standards described in subparagraph (A), which shall 
     include--

       (I) the proposed scope of the committee;
       (II) the interests that may be impacted by the standards;
       (III) a list of the proposed membership of the committee;
       (IV) the proposed meeting schedule of the committee;
       (V) a solicitation for public comment on the committee; and
       (VI) the procedures under which an individual may apply for 
     membership on the committee.

       (ii) Comment period.--Notwithstanding section 564(c) of 
     title 5, United States Code, the Secretary shall provide for 
     a period, beginning on the date on which the notice is 
     published under clause (i) and ending on November 30, 2002, 
     for the submission of public comments on the committee under 
     this subparagraph.
       (iii) Appointment of committee.--Not later than December 
     30, 2001, the Secretary shall appoint the members of the 
     negotiated rulemaking committee under this subparagraph.
       (iv) Facilitator.--Not later than January 10, 2003, the 
     negotiated rulemaking committee shall nominate a facilitator 
     under section 566(c) of title 5, United States Code, to carry 
     out the activities described in subsection (d) of such 
     section.
       (v) Meetings.--During the period beginning on the date on 
     which the facilitator is nominated under clause (iv) and 
     ending on March 30, 2003, the negotiated rulemaking committee 
     shall meet to develop the standards described in subparagraph 
     (A).
       (D) Preliminary committee report.--
       (i) In general.--The negotiated rulemaking committee 
     appointed under subparagraph (C) shall report to the 
     Secretary, by not later than March 30, 2003, regarding the 
     committee's progress on achieving a consensus with regard to 
     the rulemaking proceedings and whether such consensus is 
     likely to occur before the target date described in 
     subsection (F).
       (ii) Termination of process and publication of rule by 
     secretary.--If the committee reports under clause (i) that 
     the committee has failed to make significant progress towards 
     such consensus or is unlikely to reach such consensus by the 
     target date described in subsection (F), the Secretary shall 
     terminate such process and provide for the publication in the 
     Federal Register, by not later than June 30, 2003, of a rule 
     under this paragraph through such other methods as the 
     Secretary may provide.
       (E) Final committee report and publication of rule by 
     secretary.--
       (i) In general.--If the rulemaking committee is not 
     terminated under subparagraph (D)(ii), the committee shall 
     submit to the Secretary, by not later than May 30, 2003, a 
     report containing a proposed rule.
       (ii) Publication of rule.--If the Secretary receives a 
     report under clause (i), the Secretary shall provide for the 
     publication in the Federal Register, by not later than June 
     30, 2003, of the proposed rule.
       (F) Target date for publication of rule.--As part of the 
     notice under subparagraph (C)(i), and for purposes of this 
     paragraph, the ``target date for publication'' (referred to 
     in section 564(a)(5) of title 5, United States Code) shall be 
     June 30, 2003.
       (G) Effective date.--The provisions of this paragraph shall 
     apply to group health plans and health insurance issuers that 
     offer health insurance coverage for plan or coverage years 
     beginning on or after January 1, 2004.
       (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 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 or 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 preclude a plan or issuer from offering coverage 
     that is broader than the coverage required under this section 
     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.
       (g) Study and Report.--
       (1) Study.--The Secretary shall study the impact on group 
     health plans and health insurance issuers for covering 
     routine patient care costs for individuals who are entitled 
     to benefits under this section and who are enrolled in an 
     approved clinical trial program.
       (2) Report to congress.--Not later than January 1, 2006, 
     the Secretary shall submit a report to Congress that contains 
     an assessment of--
       (A) 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; and
       (C) any impact on premiums resulting from this section.

     SEC. 110. REQUIRED COVERAGE FOR MINIMUM HOSPITAL STAY FOR 
                   MASTECTOMIES AND LYMPH NODE DISSECTIONS FOR THE 
                   TREATMENT OF BREAST CANCER AND COVERAGE FOR 
                   SECONDARY CONSULTATIONS.

       (a) Inpatient Care.--
       (1) In general.--A group health plan, and a health 
     insurance issuer that offers health insurance coverage, that 
     provides medical and surgical benefits shall ensure that 
     inpatient coverage with respect to the treatment of breast 
     cancer is provided for a period of time as is determined by 
     the attending physician, in consultation with the patient, to 
     be medically necessary and appropriate following--
       (A) a mastectomy;
       (B) a lumpectomy; or
       (C) a lymph node dissection for the treatment of breast 
     cancer.
       (2) Exception.--Nothing in this section shall be construed 
     as requiring the provision of inpatient coverage if the 
     attending physician and patient determine that a shorter 
     period of hospital stay is medically appropriate.
       (b) Prohibition on Certain Modifications.--In implementing 
     the requirements of this section, a group health plan, and a 
     health insurance issuer that offers health insurance 
     coverage, may not modify the terms and conditions of coverage 
     based on the determination by a participant, beneficiary, or 
     enrollee to request less than the minimum coverage required 
     under subsection (a).
       (c) Secondary Consultations.--
       (1) In general.--A group health plan, and a health 
     insurance issuer that offers health insurance coverage, that 
     provides coverage with respect to medical and surgical 
     services provided in relation to the diagnosis and treatment 
     of cancer shall ensure that full coverage is provided for 
     secondary consultations by specialists in the appropriate 
     medical fields (including pathology, radiology, and oncology) 
     to confirm or refute such diagnosis. Such plan or issuer 
     shall ensure that full coverage is provided for such 
     secondary consultation whether such consultation is based on 
     a positive or negative initial diagnosis. In any case in 
     which the attending physician certifies in writing that 
     services necessary for such a secondary consultation

[[Page 12570]]

     are not sufficiently available from specialists operating 
     under the plan or coverage with respect to whose services 
     coverage is otherwise provided under such plan or by such 
     issuer, such plan or issuer shall ensure that coverage is 
     provided with respect to the services necessary for the 
     secondary consultation with any other specialist selected by 
     the attending physician for such purpose at no additional 
     cost to the individual beyond that which the individual would 
     have paid if the specialist was participating in the network 
     of the plan or issuer.
       (2) Exception.--Nothing in paragraph (1) shall be construed 
     as requiring the provision of secondary consultations where 
     the patient determines not to seek such a consultation.
       (d) Prohibition on Penalties or Incentives.--A group health 
     plan, and a health insurance issuer that offers health 
     insurance coverage, may not--
       (1) penalize or otherwise reduce or limit the reimbursement 
     of a provider or specialist because the provider or 
     specialist provided care to a participant, beneficiary, or 
     enrollee in accordance with this section;
       (2) provide financial or other incentives to a physician or 
     specialist to induce the physician or specialist to keep the 
     length of inpatient stays of patients following a mastectomy, 
     lumpectomy, or a lymph node dissection for the treatment of 
     breast cancer below certain limits or to limit referrals for 
     secondary consultations; or
       (3) provide financial or other incentives to a physician or 
     specialist to induce the physician or specialist to refrain 
     from referring a participant, beneficiary, or enrollee for a 
     secondary consultation that would otherwise be covered by the 
     plan or coverage involved under subsection (c).

     SEC. 111. PROHIBITION OF DISCRIMINATION AGAINST PROVIDERS 
                   BASED ON LICENSURE.

       (a) In General.--A group health plan, and a health 
     insurance issuer that offers health insurance coverage, shall 
     not discriminate with respect to participation or 
     indemnification as to any provider who is acting within the 
     scope of the provider's license or certification under 
     applicable State law, solely on the basis of such license or 
     certification.
       (b) Construction.--Subsection (a) shall not be construed--
       (1) as requiring the coverage under a group health plan or 
     health insurance coverage, of a particular benefit or service 
     or to prohibit a plan or issuer from including providers only 
     to the extent necessary to meet the needs of the plan's or 
     issuer's participants, beneficiaries, or enrollees or from 
     establishing any measure designed to maintain quality and 
     control costs consistent with the responsibilities of the 
     plan or issuer;
       (2) to override any State licensure or scope-of-practice 
     law; or
       (3) as requiring a plan or issuer that offers network 
     coverage to include for participation every willing provider 
     who meets the terms and conditions of the plan or coverage.

     SEC. 112. GENERALLY APPLICABLE PROVISION.

       Notwithstanding section 102, in the case of a group health 
     plan, and a health insurance issuer that offers health 
     insurance coverage, that provides benefits under 2 or more 
     coverage options, the requirements of this subpart shall 
     apply separately with respect to each coverage option.

       Subtitle B--Right to Information About Plans and Providers

     SEC. 121. HEALTH PLAN INFORMATION.

       (a) Requirement.--
       (1) Disclosure.--
       (A) In general.--A group health plan, and a health 
     insurance issuer that offers health insurance coverage, shall 
     provide for the disclosure of the information described in 
     subsection (b) to participants, beneficiaries, and 
     enrollees--
       (i) at the time of the initial enrollment of the 
     participant, beneficiary, or enrollee under the plan or 
     coverage;
       (ii) on an annual basis after enrollment--

       (I) in conjunction with the election period of the plan or 
     coverage if the plan or coverage has such an election period; 
     or
       (II) in the case of a plan or coverage that does not have 
     an election period, in conjunction with the beginning of the 
     plan or coverage year; and

       (iii) in the case of any material reduction to the benefits 
     or information described in paragraphs (1), (2) and (3) of 
     subsection (b), in the form of a summary notice provided not 
     later than the date on which the reduction takes effect.
       (B) Participants, beneficiaries, or enrollees.--The 
     disclosure required under subparagraph (A) shall be 
     provided--
       (i)(I) jointly to each participant and beneficiary who 
     reside at the same address; or
       (II) in the case of a beneficiary who does not reside at 
     the same address as the participant, separately to the 
     participant and such beneficiary; and
       (ii) to each enrollee.
       (2) Rule of construction.--Nothing in this section shall be 
     construed to prevent a group health plan sponsor and health 
     insurance issuer from entering into an agreement under which 
     either the plan sponsor or the issuer agrees to assume 
     responsibility for compliance with the requirements of this 
     section, in whole or in part, and the party delegating such 
     responsibility is released from liability for compliance with 
     the requirements that are assumed by the other party, to the 
     extent the party delegating such responsibility did not cause 
     such noncompliance.
       (3) Provision of information.--Information shall be 
     provided to participants, beneficiaries, and enrollees under 
     this section at the last known address maintained by the plan 
     or issuer with respect to such participants, beneficiaries, 
     or enrollees, to the extent that such information is provided 
     to participants, beneficiaries, or enrollees via the United 
     States Postal Service or other private delivery service.
       (b) Required Information.--The informational materials to 
     be distributed under this section shall include for each 
     option available under the group health plan or health 
     insurance coverage the following:
       (1) Benefits.--A description of the covered benefits, 
     including--
       (A) any in- and out-of-network benefits;
       (B) specific preventative services covered under the plan 
     or coverage if such services are covered;
       (C) any benefit limitations, including any annual or 
     lifetime benefit limits and any monetary limits or limits on 
     the number of visits, days, or services, and any specific 
     coverage exclusions; and
       (D) any definition of medical necessity used in making 
     coverage determinations by the plan, issuer, or claims 
     administrator.
       (2) Cost sharing.--A description of any cost-sharing 
     requirements, including--
       (A) any premiums, deductibles, coinsurance, copayment 
     amounts, and liability for balance billing above any 
     reasonable and customary charges, for which the participant, 
     beneficiary, or enrollee will be responsible under each 
     option available under the plan;
       (B) any maximum out-of-pocket expense for which the 
     participant, beneficiary, or enrollee may be liable;
       (C) any cost-sharing requirements for out-of-network 
     benefits or services received from nonparticipating 
     providers; and
       (D) any additional cost-sharing or charges for benefits and 
     services that are furnished without meeting applicable plan 
     or coverage requirements, such as prior authorization or 
     precertification.
       (3) Service area.--A description of the plan or issuer's 
     service area, including the provision of any out-of-area 
     coverage.
       (4) Participating providers.--A directory of participating 
     providers (to the extent a plan or issuer provides coverage 
     through a network of providers) that includes, at a minimum, 
     the name, address, and telephone number of each participating 
     provider, and information about how to inquire whether a 
     participating provider is currently accepting new patients.
       (5) Choice of primary care provider.--A description of any 
     requirements and procedures to be used by participants, 
     beneficiaries, and enrollees in selecting, accessing, or 
     changing their primary care provider, including providers 
     both within and outside of the network (if the plan or issuer 
     permits out-of-network services), and the right to select a 
     pediatrician as a primary care provider under section 104 for 
     a participant, beneficiary, or enrollee who is a child if 
     such section applies.
       (6) Preauthorization requirements.--A description of the 
     requirements and procedures to be used to obtain 
     preauthorization for health services, if such 
     preauthorization is required.
       (7) Experimental and investigational treatments.--A 
     description of the process for determining whether a 
     particular item, service, or treatment is considered 
     experimental or investigational, and the circumstances under 
     which such treatments are covered by the plan or issuer.
       (8) Specialty care.--A description of the requirements and 
     procedures to be used by participants, beneficiaries, and 
     enrollees in accessing specialty care and obtaining referrals 
     to participating and nonparticipating specialists, including 
     the right to timely coverage for access to specialists care 
     under section 105 if such section applies.
       (9) Clinical trials.--A description the circumstances and 
     conditions under which participation in clinical trials is 
     covered under the terms and conditions of the plan or 
     coverage, and the right to obtain coverage for approved 
     cancer clinical trials under section 109 if such section 
     applies.
       (10) Prescription drugs.--To the extent the plan or issuer 
     provides coverage for prescription drugs, a statement of 
     whether such coverage is limited to drugs included in a 
     formulary, a description of any provisions and cost-sharing 
     required for obtaining on- and off-formulary medications, and 
     a description of the rights of participants, beneficiaries, 
     and enrollees in obtaining access to prescription drugs under 
     section 107 if such section applies.
       (11) Emergency services.--A summary of the rules and 
     procedures for accessing emergency services, including the 
     right of a participant, beneficiary, or enrollee to obtain 
     emergency services under the prudent layperson standard under 
     section 101, if such section applies, and any educational 
     information that the plan or issuer may provide regarding the 
     appropriate use of emergency services.

[[Page 12571]]

       (12) Claims and appeals.--A description of the plan or 
     issuer's rules and procedures pertaining to claims and 
     appeals, a description of the rights of participants, 
     beneficiaries, or enrollees under sections 503, 503A and 503B 
     of the Employee Retirement Income Security Act of 1974 (or 
     sections 2707(b) and 2753(b) of the Public Health Service 
     with respect to non-Federal governmental plans and individual 
     health insurance coverage) in obtaining covered benefits, 
     filing a claim for benefits, and appealing coverage decisions 
     internally and externally (including telephone numbers and 
     mailing addresses of the appropriate authority), and a 
     description of any additional legal rights and remedies 
     available under section 502 of the Employee Retirement Income 
     Security Act of 1974.
       (13) Advance directives and organ donation.--A description 
     of procedures for advance directives and organ donation 
     decisions if the plan or issuer maintains such procedures.
       (14) Information on plans and issuers.--The name, mailing 
     address, and telephone number or numbers of the plan 
     administrator and the issuer to be used by participants, 
     beneficiaries, and enrollees seeking information about plan 
     or coverage benefits and services, payment of a claim, or 
     authorization for services and treatment. The name of the 
     designated decision-maker (or decision-makers) appointed 
     under section 502(n)(2) of the Employee Retirement Income 
     Security Act of 1974 for purposes of making final 
     determinations under section 503A of such Act and approving 
     coverage pursuant to the written determination of an 
     independent medical reviewer under section 503B of such Act. 
     Notice of whether the benefits under the plan are provided 
     under a contract or policy of insurance issued by an issuer, 
     or whether benefits are provided directly by the plan sponsor 
     who bears the insurance risk.
       (15) Translation services.--A summary description of any 
     translation or interpretation services (including the 
     availability of printed information in languages other than 
     English, audio tapes, or information in Braille) that are 
     available for non-English speakers and participants, 
     beneficiaries, and enrollees with communication disabilities 
     and a description of how to access these items or services.
       (16) Accreditation information.--Any information that is 
     made public by accrediting organizations in the process of 
     accreditation if the plan or issuer is accredited, or any 
     additional quality indicators (such as the results of 
     enrollee satisfaction surveys) that the plan or issuer makes 
     public or makes available to participants, beneficiaries, and 
     enrollees.
       (17) Notice of requirements.--A description of any rights 
     of participants, beneficiaries, and enrollees that are 
     established by this Act (excluding those described in 
     paragraphs (1) through (16)) if such rights apply. The 
     description required under this paragraph may be combined 
     with the notices required under sections 711(d), 713(b), or 
     606(a)(1) of the Employee Retirement Income Security Act of 
     1974, and with any other notice provision that the Secretary 
     determines may be combined.
       (18) Compensation methods.--A summary description of the 
     methods (including capitation, fee-for-service, salary, 
     withholds, bonuses, bundled payments, per diem, or a 
     combination thereof) used for compensating participating 
     health care professionals (including primary care providers 
     and specialists) and facilities in connection with the 
     provision of health care under the plan or coverage. The 
     requirement of this paragraph shall not be construed as 
     requiring plans or issuers to provide information concerning 
     proprietary payment methodology.
       (19) Disenrollment.--Information relating to the 
     disenrollment of a participant, beneficiary, or enrollee.
       (20) Availability of additional information.--A statement 
     that the information described in subsection (c), and 
     instructions on obtaining such information (including 
     telephone numbers and, if available, Internet websites), 
     shall be made available upon request.
       (c) Additional Information.--The informational materials to 
     be provided upon the request of a participant, beneficiary, 
     or enrollees shall include for each option available under a 
     group health plan or health insurance coverage the following:
       (1) Status of providers.--The State licensure status of the 
     plan or issuer's participating health care professionals and 
     participating health care facilities, and, if available, the 
     education, training, specialty qualifications or 
     certifications of such professionals.
       (2) Prescription drugs.--Information about whether a 
     specific prescription medication is included in the formulary 
     of the plan or issuer, if the plan or issuer uses a defined 
     formulary.
       (3) External appeals information.--Aggregate information on 
     the number and outcomes of external medical reviews, relative 
     to the sample size (such as the number of covered lives) 
     determined for the plan or issuer's book of business.
       (d) Manner of Disclosure.--The information described in 
     this section shall be disclosed in an accessible medium and 
     format that is calculated to be understood by the average 
     participant.
       (e) Rules of Construction.--Nothing in this section shall 
     be construed to prohibit a group health plan, or a health 
     insurance issuer that offers health insurance coverage, 
     from--
       (1) distributing any other additional information 
     determined by the plan or issuer to be important or necessary 
     in assisting participants, beneficiaries, and enrollees in 
     the selection of a health plan; and
       (2) complying with the provisions of this section by 
     providing information in brochures, through the Internet or 
     other electronic media, or through other similar means, so 
     long as participants, beneficiaries, and enrollees are 
     provided with an opportunity to request that informational 
     materials be provided in printed form.
       (f) Conforming Regulations.--The Secretary shall issue 
     regulations to coordinate the requirements on group health 
     plans and health insurance issuers under this section with 
     the requirements imposed under part 1, to reduce duplication 
     with respect to any information that is required to be 
     provided under any such requirements.
       (g) Secretarial Enforcement Authority.--
       (1) In general.--The Secretary of Health and Human Services 
     or the Secretary of Labor (as appropriate) may assess a civil 
     monetary penalty against the administrator of a plan or 
     issuer in connection with the failure of the plan or issuer 
     to comply with the requirements of this section.
       (2) Amount of penalty.--
       (A) In general.--The amount of the penalty to be imposed 
     under paragraph (1) shall not exceed $100 for each day for 
     each participant, beneficiary, or enrollee with respect to 
     which the failure to comply with the requirements of this 
     section occurs.
       (B) Increase in amount.--The amount referred to in 
     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 the 
     such Index for September of 2001.
       (3) Failure defined.--For purposes of this subsection, a 
     plan or issuer shall have failed to comply with the 
     requirements of this section with respect to a participant, 
     beneficiary, or enrollee if the plan or issuer failed or 
     refused to comply with the requirements of this section 
     within 30 days--
       (A) of the date described in subsection (a)(1)(A)(i);
       (B) of the date described in subsection (a)(1)(A)(ii); or
       (C) of the date on which additional information was 
     requested under subsection (c).
       (h) Conforming Amendments.--
       (1) Section 732(a) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1191a(a)) is amended by 
     striking ``section 711'' and inserting ``section 711 and 
     section 121 of the Bipartisan Patients' Bill of Rights Act of 
     2001''.
       (2) Section 502(b)(3) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1132(b)(3)) is amended by 
     striking ``733(a)(1))'' and inserting ``733(a)(1)), except 
     with respect to the requirements of section 121 of the 
     Bipartisan Patients' Bill of Rights Act of 2001''.

     SEC. 122. INFORMATION ABOUT PROVIDERS.

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

     SEC. 123. STUDY ON THE EFFECT OF PHYSICIAN COMPENSATION 
                   METHODS.

       (a) Study and Report.--
       (1) In general.--The Secretary shall enter into a contract 
     with the Institute of Medicine for the conduct of a study in 
     accordance with this section, to be submitted to the 
     Secretary and the Secretary of Labor as provided for in 
     paragraph (4).
       (2) Matters to be studied.--The study under paragraph (1) 
     shall include--
       (A) a study, including a survey if necessary, of physician 
     compensation arrangements that are utilized in employer-
     sponsored group health plans (including group health plans 
     sponsored by government and non-government employers) and 
     commercial health insurance products, including--

[[Page 12572]]

       (i) all types of compensation arrangements, including 
     financial incentive and risk sharing arrangements and 
     arrangements that do not contain such incentives and risk 
     sharing, that reflect the complexity of organizational 
     relationships between health plans and physicians;
       (ii) arrangements that are based on factors such as 
     utilization management, cost control, quality improvement, 
     and patient or enrollee satisfaction; and
       (iii) arrangements between the plan or issuer and provider, 
     as well as down-stream arrangements between providers and 
     sub-contracted providers;
       (B) an analysis of the effect of such differing 
     arrangements on physician behavior with respect to the 
     provision of medical care to patients, including whether and 
     how such arrangements affect the quality of patient care and 
     the ability of physicians to provide care that is medically 
     necessary and appropriate.
       (3) Study design.--The Secretary shall consult with the 
     Director of the Agency for Healthcare Research and Quality in 
     preparing the scope of work and study design with respect to 
     the contract under paragraph (1).
       (4) Report.--Not later than 24 months after the date of 
     enactment of this Act, the Secretary shall forward to the 
     appropriate committees of Congress a copy of the report and 
     study conducted under subsection (a).
       (b) Research.--
       (1) In general.--The Secretary, acting through the Director 
     of the Agency for Healthcare Research and Quality, shall 
     conduct and support research to develop scientific evidence 
     regarding the effects of differing physician compensation 
     methods on physician behavior with respect to the provision 
     of medical care to patients, particularly issues relating to 
     the quality of patient care and whether patients receive 
     medically necessary and appropriate care.
       (2) Authorization of appropriations.--For purposes of 
     carrying out this section, there are authorized to be 
     appropriated such sums as may be necessary.

           Subtitle C--Right to Hold Health Plans Accountable

     SEC. 131. AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY 
                   ACT OF 1974.

       (a) In General.--Part 5 of subtitle B of title I of the 
     Employee Retirement Income Security Act of 1974 is amended by 
     inserting after section 503 (29 U.S.C. 1133) the following:

     ``SEC. 503A. CLAIMS AND INTERNAL APPEALS PROCEDURES FOR GROUP 
                   HEALTH PLANS.

       ``(a) Initial Claim for Benefits Under Group Health 
     Plans.--
       ``(1) Procedures.--
       ``(A) In general.--A group health plan, or health insurance 
     issuer that offers health insurance coverage in connection 
     with a group health plan, shall ensure that procedures are in 
     place for--
       ``(i) making a determination on an initial claim for 
     benefits by a participant or beneficiary (or authorized 
     representative) regarding payment or coverage for items or 
     services under the terms and conditions of the plan or 
     coverage involved, including any cost-sharing amount that the 
     participant or beneficiary is required to pay with respect to 
     such claim for benefits; and
       ``(ii) notifying a participant or beneficiary (or 
     authorized representative) and the treating health care 
     professional involved regarding a determination on an initial 
     claim for benefits made under the terms and conditions of the 
     plan or coverage, including any cost-sharing amounts that the 
     participant or beneficiary may be required to make with 
     respect to such claim for benefits, and of the right of the 
     participant or beneficiary to an internal appeal under 
     subsection (b).
       ``(B) Access to information.--With respect to an initial 
     claim for benefits, the participant or beneficiary (or 
     authorized representative) and the treating health care 
     professional (if any) shall provide the plan or issuer with 
     access to information requested by the plan or issuer that is 
     necessary to make a determination relating to the claim, not 
     later than 5 business days after the date on which the claim 
     is filed or to meet the applicable timelines under clauses 
     (ii) and (iii) of paragraph (2)(A).
       ``(C) Oral requests.--In the case of a claim for benefits 
     involving an expedited or concurrent determination, a 
     participant or beneficiary (or authorized representative) may 
     make an initial claim for benefits orally, but a group health 
     plan, or health insurance issuer that offers health insurance 
     coverage in connection with a group health plan, may require 
     that the participant or beneficiary (or authorized 
     representative) provide written confirmation of such request 
     in a timely manner.
       ``(2) Timeline for making determinations.--
       ``(A) Prior authorization determination.--
       ``(i) In general.--A group health plan, or health insurance 
     issuer that offers health insurance coverage in connection 
     with a group health plan, shall maintain procedures to ensure 
     that a prior authorization determination on a claim for 
     benefits is made within 14 business days from the date on 
     which the plan or issuer receives information that is 
     reasonably necessary to enable the plan or issuer to make a 
     determination on the request for prior authorization, but in 
     no case shall such determination be made later than 28 
     business days after the receipt of the claim for benefits.
       ``(ii) Expedited determination.--Notwithstanding clause 
     (i), a group health plan, or health insurance issuer that 
     offers health insurance coverage in connection with a group 
     health plan, shall maintain procedures for expediting a prior 
     authorization determination on a claim for benefits described 
     in such clause when a request for such an expedited 
     determination is made by a participant or beneficiary (or 
     authorized representative) at any time during the process for 
     making a determination and the treating health care 
     professional substantiates, with the request, that a 
     determination under the procedures described in clause (i) 
     would seriously jeopardize the life or health of the 
     participant or beneficiary. Such determination shall be made 
     within 72 hours after a request is received by the plan or 
     issuer under this clause.
       ``(iii) Concurrent determinations.--A group health plan, or 
     health insurance issuer that offers health insurance coverage 
     in connection with a group health plan, shall maintain 
     procedures to ensure that a concurrent determination on a 
     claim for benefits that results in a discontinuation of 
     inpatient care is made within 24 hours after the receipt of 
     the claim for benefits.
       ``(B) Retrospective determination.--A group health plan, or 
     health insurance issuer that offers health insurance coverage 
     in connection with a group health plan, shall maintain 
     procedures to ensure that a retrospective determination on a 
     claim for benefits is made within 30 business days of the 
     date on which the plan or issuer receives information that is 
     reasonably necessary to enable the plan or issuer to make a 
     determination on the claim, but in no case shall such 
     determination be made later than 60 business days after the 
     receipt of the claim for benefits.
       ``(3) Notice of a denial of a claim for benefits.--Written 
     notice of a denial made under an initial claim for benefits 
     shall be issued to the participant or beneficiary (or 
     authorized representative) and the treating health care 
     professional not later than 2 business days after the 
     determination (or within the 72-hour or 24-hour period 
     referred to in clauses (ii) and (iii) of paragraph (2)(A) if 
     applicable).
       ``(4) Requirements of notice of determinations.--The 
     written notice of a denial of a claim for benefits 
     determination under paragraph (3) shall include--
       ``(A) the reasons for the determination (including a 
     summary of the clinical or scientific-evidence based 
     rationale used in making the determination and instruction on 
     obtaining a more complete description written in a manner 
     calculated to be understood by the average participant);
       ``(B) the procedures for obtaining additional information 
     concerning the determination; and
       ``(C) notification of the right to appeal the determination 
     and instructions on how to initiate an appeal in accordance 
     with subsection (b).
       ``(b) Internal Appeal of a Denial of a Claim for 
     Benefits.--
       ``(1) Right to internal appeal.--
       ``(A) In general.--A participant or beneficiary (or 
     authorized representative) may appeal any denial of a claim 
     for benefits under subsection (a) under the procedures 
     described in this subsection.
       ``(B) Time for appeal.--A group health plan, or health 
     insurance issuer that offers health insurance coverage in 
     connection with a group health plan, shall ensure that a 
     participant or beneficiary (or authorized representative) has 
     a period of not less than 60 days beginning on the date of a 
     denial of a claim for benefits under subsection (a) in which 
     to appeal such denial under this subsection.
       ``(C) Failure to act.--The failure of a plan or issuer to 
     issue a determination on a claim for benefits under 
     subsection (a) within the applicable timeline established for 
     such a determination under such subsection shall be treated 
     as a denial of a claim for benefits for purposes of 
     proceeding to internal review under this subsection.
       ``(D) Plan waiver of internal review.--A group health plan, 
     or health insurance issuer that offers health insurance 
     coverage in connection with a group health plan, may waive 
     the internal review process under this subsection and permit 
     a participant or beneficiary (or authorized representative) 
     to proceed directly to external review under section 503B.
       ``(2) Timelines for making determinations.--
       ``(A) Oral requests.--In the case of an appeal of a denial 
     of a claim for benefits under this subsection that involves 
     an expedited or concurrent determination, a participant or 
     beneficiary (or authorized representative) may request such 
     appeal orally, but a group health plan, or health insurance 
     issuer that offers health insurance coverage in connection 
     with a group health plan, may require that the participant or 
     beneficiary (or authorized representative) provide written 
     confirmation of such request in a timely manner.

[[Page 12573]]

       ``(B) Access to information.--With respect to an appeal of 
     a denial of a claim for benefits, the participant or 
     beneficiary (or authorized representative) and the treating 
     health care professional (if any) shall provide the plan or 
     issuer with access to information requested by the plan or 
     issuer that is necessary to make a determination relating to 
     the appeal, not later than 5 business days after the date on 
     which the request for the appeal is filed or to meet the 
     applicable timelines under clauses (ii) and (iii) of 
     subparagraph (C).
       ``(C) Prior authorization determinations.--
       ``(i) In general.--A group health plan, or health insurance 
     issuer that offers health insurance coverage in connection 
     with a group health plan, shall maintain procedures to ensure 
     that a determination on an appeal of a denial of a claim for 
     benefits under this subsection is made within 14 business 
     days after the date on which the plan or issuer receives 
     information that is reasonably necessary to enable the plan 
     or issuer to make a determination on the appeal, but in no 
     case shall such determination be made later than 28 business 
     days after the receipt of the request for the appeal.
       ``(ii) Expedited determination.--Notwithstanding clause 
     (i), a group health plan, or health insurance issuer that 
     offers health insurance coverage in connection with a group 
     health plan, shall maintain procedures for expediting a prior 
     authorization determination on an appeal of a denial of a 
     claim for benefits described in clause (i), when a request 
     for such an expedited determination is made by a participant 
     or beneficiary (or authorized representative) at any time 
     during the process for making a determination and the 
     treating health care professional substantiates, with the 
     request, that a determination under the procedures described 
     in clause (i) would seriously jeopardize the life or health 
     of the participant or beneficiary. Such determination shall 
     be made not later than 72 hours after the request for such 
     appeal is received by the plan or issuer under this clause.
       ``(iii) Concurrent determinations.--A group health plan, or 
     health insurance issuer that offers health insurance coverage 
     in connection with a group health plan, shall maintain 
     procedures to ensure that a concurrent determination on an 
     appeal of a denial of a claim for benefits that results in a 
     discontinuation of inpatient care is made within 24 hours 
     after the receipt of the request for appeal.
       ``(B) Retrospective determination.--A group health plan, or 
     health insurance issuer that offers health insurance coverage 
     in connection with a group health plan, shall maintain 
     procedures to ensure that a retrospective determination on an 
     appeal of a claim for benefits is made within 30 business 
     days of the date on which the plan or issuer receives 
     necessary information that is reasonably required by the plan 
     or issuer to make a determination on the appeal, but in no 
     case shall such determination be made later than 60 business 
     days after the receipt of the request for the appeal.
       ``(3) Conduct of review.--
       ``(A) In general.--A review of a denial of a claim for 
     benefits under this subsection shall be conducted by an 
     individual with appropriate expertise who was not directly 
     involved in the initial determination.
       ``(B) Review of medical decisions by physicians.--A review 
     of an appeal of a denial of a claim for benefits that is 
     based on a lack of medical necessity and appropriateness, or 
     based on an experimental or investigational treatment, or 
     requires an evaluation of medical facts, shall be made by a 
     physician with appropriate expertise, including age-
     appropriate expertise, who was not involved in the initial 
     determination.
       ``(4) Notice of determination.--
       ``(A) In general.--Written notice of a determination made 
     under an internal appeal of a denial of a claim for benefits 
     shall be issued to the participant or beneficiary (or 
     authorized representative) and the treating health care 
     professional not later than 2 business days after the 
     completion of the review (or within the 72-hour or 24-hour 
     period referred to in paragraph (2) if applicable).
       ``(B) Final determination.--The decision by a plan or 
     issuer under this subsection shall be treated as the final 
     determination of the plan or issuer on a denial of a claim 
     for benefits. The failure of a plan or issuer to issue a 
     determination on an appeal of a denial of a claim for 
     benefits under this subsection within the applicable timeline 
     established for such a determination shall be treated as a 
     final determination on an appeal of a denial of a claim for 
     benefits for purposes of proceeding to external review under 
     section 503B.
       ``(C) Requirements of notice.--With respect to a 
     determination made under this subsection, the notice 
     described in subparagraph (A) shall include--
       ``(i) the reasons for the determination (including a 
     summary of the clinical or scientific-evidence based 
     rationale used in making the determination and instruction on 
     obtaining a more complete description written in a manner 
     calculated to be understood by the average participant);
       ``(ii) the procedures for obtaining additional information 
     concerning the determination; and
       ``(iii) notification of the right to an independent 
     external review under section 503B and instructions on how to 
     initiate such a review.
       ``(c) Definitions.--The definitions contained in section 
     503B(i) shall apply for purposes of this section.

     ``SEC. 503B. INDEPENDENT EXTERNAL APPEALS PROCEDURES FOR 
                   GROUP HEALTH PLANS.

       ``(a) Right to External Appeal.--A group health plan, and a 
     health insurance issuer that offers health insurance coverage 
     in connection with a group health plan, shall provide in 
     accordance with this section participants and beneficiaries 
     (or authorized representatives) with access to an independent 
     external review for any denial of a claim for benefits.
       ``(b) Initiation of the Independent External Review 
     Process.--
       ``(1) Time to file.--A request for an independent external 
     review under this section shall be filed with the plan or 
     issuer not later than 60 business days after the date on 
     which the participant or beneficiary receives notice of the 
     denial under section 503A(b)(4) or the date on which the 
     internal review is waived by the plan or issuer under section 
     503A(b)(1)(D).
       ``(2) Filing of request.--
       ``(A) In general.--Subject to the succeeding provisions of 
     this subsection, a group health plan, and a health insurance 
     issuer that offers health insurance coverage in connection 
     with a group health plan, may--
       ``(i) except as provided in subparagraph (B)(i), require 
     that a request for review be in writing;
       ``(ii) limit the filing of such a request to the 
     participant or beneficiary involved (or an authorized 
     representative);
       ``(iii) except if waived by the plan or issuer under 
     section 503A(b)(1)(D), condition access to an independent 
     external review under this section upon a final determination 
     of a denial of a claim for benefits under the internal review 
     procedure under section 503A;
       ``(iv) except as provided in subparagraph (B)(ii), require 
     payment of a filing fee to the plan or issuer of a sum that 
     does not exceed $50; and
       ``(v) require that a request for review include the consent 
     of the participant or beneficiary (or authorized 
     representative) for the release of medical information or 
     records of the participant or beneficiary to the qualified 
     external review entity for purposes of conducting external 
     review activities.
       ``(B) Requirements and exception relating to general 
     rule.--
       ``(i) Oral requests permitted in expedited or concurrent 
     cases.--In the case of an expedited or concurrent external 
     review as provided for under subsection (e), the request may 
     be made orally. In such case a written confirmation of such 
     request shall be made in a timely manner. Such written 
     confirmation shall be treated as a consent for purposes of 
     subparagraph (A)(v).
       ``(ii) Exception to filing fee requirement.--

       ``(I) Indigency.--Payment of a filing fee shall not be 
     required under subparagraph (A)(iv) where there is a 
     certification (in a form and manner specified in guidelines 
     established by the Secretary) that the participant or 
     beneficiary is indigent (as defined in such guidelines). In 
     establishing guidelines under this subclause, the Secretary 
     shall ensure that the guidelines relating to indigency are 
     consistent with the poverty guidelines used by the Secretary 
     of Health and Human Services under title XIX of the Social 
     Security Act.
       ``(II) Fee not required.--Payment of a filing fee shall not 
     be required under subparagraph (A)(iv) if the plan or issuer 
     waives the internal appeals process under section 
     503A(b)(1)(D).
       ``(III) Refunding of fee.--The filing fee paid under 
     subparagraph (A)(iv) shall be refunded if the determination 
     under the independent external review is to reverse the 
     denial which is the subject of the review.
       ``(IV) Increase in amount.--The amount referred to in 
     subclause (I) shall be increased or decreased, for each 
     calendar year that ends after December 31, 2002, by the same 
     percentage as the percentage by which 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 
     the such Index for September of 2002.

       ``(c) Referral to Qualified External Review Entity Upon 
     Request.--
       ``(1) In general.--Upon the filing of a request for 
     independent external review with the group health plan, or 
     health insurance issuer that offers health insurance coverage 
     in connection with a group health plan, the plan or issuer 
     shall refer such request to a qualified external review 
     entity selected in accordance with this section.
       ``(2) Access to plan or issuer and health professional 
     information.--With respect to an independent external review 
     conducted under this section, the participant or beneficiary 
     (or authorized representative), the plan or issuer, and the 
     treating health care professional (if any) shall provide the 
     external review entity with access to information requested 
     by the external review entity that is necessary to conduct a 
     review under this

[[Page 12574]]

     section, as determined by the entity, not later than 5 
     business days after the date on which a request is referred 
     to the qualified external review entity under paragraph (1), 
     or earlier as determined appropriate by the entity to meet 
     the applicable timelines under clauses (ii) and (iii) of 
     subsection (e)(1)(A).
       ``(3) Screening of requests by qualified external review 
     entities.--
       ``(A) In general.--With respect to a request referred to a 
     qualified external review entity under paragraph (1) relating 
     to a denial of a claim for benefits, the entity shall refer 
     such request for the conduct of an independent medical review 
     unless the entity determines that--
       ``(i) any of the conditions described in subsection 
     (b)(2)(A) have not been met;
       ``(ii) the thresholds described in subparagraph (B) have 
     not been met;
       ``(iii) the denial of the claim for benefits does not 
     involve a medically reviewable decision under subsection 
     (d)(2);
       ``(iv) the denial of the claim for benefits relates to a 
     decision regarding whether an individual is a participant or 
     beneficiary who is enrolled under the terms of the plan or 
     coverage (including the applicability of any waiting period 
     under the plan or coverage); or
       ``(v) the denial of the claim for benefits is a decision as 
     to the application of cost-sharing requirements or the 
     application of a specific exclusion or express limitation on 
     the amount, duration, or scope of coverage of items or 
     services under the terms and conditions of the plan or 
     coverage unless the decision is a denial described in 
     subsection (d)(2);
     Upon making a determination that any of clauses (i) through 
     (v) applies with respect to the request, the entity shall 
     determine that the denial of a claim for benefits involved is 
     not eligible for independent medical review under subsection 
     (d), and shall provide notice in accordance with subparagraph 
     (D).
       ``(B) Thresholds.--
       ``(i) In general.--The thresholds described in this 
     subparagraph are that--

       ``(I) the total amount payable under the plan or coverage 
     for the item or service that was the subject of such denial 
     exceeds $100; or
       ``(II) a physician has asserted in writing that there is a 
     significant risk of placing the life, health, or development 
     of the participant or beneficiary in jeopardy if the denial 
     of the claim for benefits is sustained.

       ``(ii) Thresholds not applied.--The thresholds described in 
     this subparagraph shall not apply if the plan or issuer 
     involved waives the internal appeals process with respect to 
     the denial of a claim for benefits involved under section 
     503A(b)(1)(D).
       ``(C) Process for making determinations.--
       ``(i) No deference to prior determinations.--In making 
     determinations under subparagraph (A), there shall be no 
     deference given to determinations made by the plan or issuer 
     under section 503A or the recommendation of a treating health 
     care professional (if any).
       ``(ii) Use of appropriate personnel.--A qualified external 
     review entity shall use appropriately qualified personnel to 
     make determinations under this section.
       ``(D) Notices and general timelines for determination.--
       ``(i) Notice in case of denial of referral.--If the entity 
     under this paragraph does not make a referral to an 
     independent medical reviewer, the entity shall provide notice 
     to the plan or issuer, the participant or beneficiary (or 
     authorized representative) filing the request, and the 
     treating health care professional (if any) that the denial is 
     not subject to independent medical review. Such notice--

       ``(I) shall be written (and, in addition, may be provided 
     orally) in a manner calculated to be understood by an average 
     participant;
       ``(II) shall include the reasons for the determination; and
       ``(III) include any relevant terms and conditions of the 
     plan or coverage.

       ``(ii) General timeline for determinations.--Upon receipt 
     of information under paragraph (2), the qualified external 
     review entity, and if required the independent medical 
     reviewer, shall make a determination within the overall 
     timeline that is applicable to the case under review as 
     described in subsection (e), except that if the entity 
     determines that a referral to an independent medical reviewer 
     is not required, the entity shall provide notice of such 
     determination to the participant or beneficiary (or 
     authorized representative) within 2 business days of such 
     determination.
       ``(d) Independent Medical Review.--
       ``(1) In general.--If a qualified external review entity 
     determines under subsection (c) that a denial of a claim for 
     benefits is eligible for independent medical review, the 
     entity shall refer the denial involved to an independent 
     medical reviewer for the conduct of an independent medical 
     review under this subsection.
       ``(2) Medically reviewable decisions.--A denial described 
     in this paragraph is one for which the item or service that 
     is the subject of the denial would be a covered benefit under 
     the terms and conditions of the plan or coverage but for one 
     (or more) of the following determinations:
       ``(A) Denials based on medical necessity and 
     appropriateness.--The basis of the determination is that the 
     item or service is not medically necessary and appropriate.
       ``(B) Denials based on experimental or investigational 
     treatment.--The basis of the determination is that the item 
     or service is experimental or investigational.
       ``(C) Denials otherwise based on an evaluation of medical 
     facts.--A determination that the item or service or condition 
     is not covered but an evaluation of the medical facts by a 
     health care professional in the specific case involved is 
     necessary to determine whether the item or service or 
     condition is required to be provided under the terms and 
     conditions of the plan or coverage.
       ``(3) Independent medical review determination.--
       ``(A) In general.--An independent medical reviewer under 
     this section shall make a new independent determination with 
     respect to--
       ``(i) whether the item or service or condition that is the 
     subject of the denial is covered under the terms and 
     conditions of the plan or coverage; and
       ``(ii) based upon an affirmative determination under clause 
     (i), whether or not the denial of a claim for a benefit that 
     is the subject of the review should be upheld or reversed.
       ``(B) Standard for determination.--The independent medical 
     reviewer's determination relating to the medical necessity 
     and appropriateness, or the experimental or investigation 
     nature, or the evaluation of the medical facts of the item, 
     service, or condition shall be based on the medical condition 
     of the participant or beneficiary (including the medical 
     records of the participant or beneficiary) and the valid, 
     relevant scientific evidence and clinical evidence, including 
     peer-reviewed medical literature or findings and including 
     expert consensus.
       ``(C) No coverage for excluded benefits.--Nothing in this 
     subsection shall be construed to permit an independent 
     medical reviewer to require that a group health plan, or 
     health insurance issuer that offers health insurance coverage 
     in connection with a group health plan, provide coverage for 
     items or services that are specifically excluded or expressly 
     limited under the plan or coverage and that are not covered 
     regardless of any determination relating to medical necessity 
     and appropriateness, experimental or investigational nature 
     of the treatment, or an evaluation of the medical facts in 
     the case involved.
       ``(D) Evidence and information to be used in medical 
     reviews.--In making a determination under this subsection, 
     the independent medical reviewer shall also consider 
     appropriate and available evidence and information, including 
     the following:
       ``(i) The determination made by the plan or issuer with 
     respect to the claim upon internal review and the evidence or 
     guidelines used by the plan or issuer in reaching such 
     determination.
       ``(ii) The recommendation of the treating health care 
     professional and the evidence, guidelines, and rationale used 
     by the treating health care professional in reaching such 
     recommendation.
       ``(iii) Additional evidence or information obtained by the 
     reviewer or submitted by the plan, issuer, participant or 
     beneficiary (or an authorized representative), or treating 
     health care professional.
       ``(iv) The plan or coverage document.
       ``(E) Independent determination.--In making the 
     determination, the independent medical reviewer shall--
       ``(i) consider the claim under review without deference to 
     the determinations made by the plan or issuer under section 
     503A or the recommendation of the treating health care 
     professional (if any); and
       ``(ii) consider, but not be bound by the definition used by 
     the plan or issuer of `medically necessary and appropriate', 
     or `experimental or investigational', or other equivalent 
     terms that are used by the plan or issuer to describe medical 
     necessity and appropriateness or experimental or 
     investigational nature of the treatment.
       ``(F) Determination of independent medical reviewer.--An 
     independent medical reviewer shall, in accordance with the 
     deadlines described in subsection (e), prepare a written 
     determination to uphold or reverse the denial under review 
     and, in the case of a reversal, the timeframe within which 
     the plan or issuer shall authorize coverage to comply with 
     the determination. Such written determination shall include 
     the specific reasons of the reviewer for such determination, 
     including a summary of the clinical or scientific-evidence 
     based rationale used in making the determination. The 
     reviewer may provide the plan or issuer and the treating 
     health care professional with additional recommendations in 
     connection with such a determination, but any such 
     recommendations shall not be treated as part of the 
     determination.
       ``(e) Timelines and Notifications.--
       ``(1) Timelines for independent medical review.--
       ``(A) Prior authorization determination.--
       ``(i) In general.--The independent medical reviewer (or 
     reviewers) shall make a determination on a denial of a claim 
     for benefits that is referred to the reviewer under 
     subsection (c)(3) not later than 14 business days

[[Page 12575]]

     after the receipt of information under subsection (c)(2) if 
     the review involves a prior authorization of items or 
     services.
       ``(ii) Expedited determination.--Notwithstanding clause 
     (i), the independent medical reviewer (or reviewers) shall 
     make an expedited determination on a denial of a claim for 
     benefits described in clause (i), when a request for such an 
     expedited determination is made by a participant or 
     beneficiary (or authorized representative) at any time during 
     the process for making a determination, and the treating 
     health care professional substantiates, with the request, 
     that a determination under the timeline described in clause 
     (i) would seriously jeopardize the life or health of the 
     participant or beneficiary. Such determination shall be made 
     not later than 72 hours after the receipt of information 
     under subsection (c)(2).
       ``(iii) Concurrent determination.--Notwithstanding clause 
     (i), a review described in such subclause shall be completed 
     not later than 24 hours after the receipt of information 
     under subsection (c)(2) if the review involves a 
     discontinuation of inpatient care.
       ``(B) Retrospective determination.--The independent medical 
     reviewer (or reviewers) shall complete a review in the case 
     of a retrospective determination on an appeal of a denial of 
     a claim for benefits that is referred to the reviewer under 
     subsection (c)(3) not later than 30 business days after the 
     receipt of information under subsection (c)(2).
       ``(2) Notification of determination.--The external review 
     entity shall ensure that the plan or issuer, the participant 
     or beneficiary (or authorized representative) and the 
     treating health care professional (if any) receives a copy of 
     the written determination of the independent medical reviewer 
     prepared under subsection (d)(3)(F). Nothing in this 
     paragraph shall be construed as preventing an entity or 
     reviewer from providing an initial oral notice of the 
     reviewer's determination.
       ``(3) Form of notices.--Determinations and notices under 
     this subsection shall be written in a manner calculated to be 
     understood by an average participant.
       ``(4) Termination of external review process if approval of 
     a claim for benefits during process.--
       ``(A) In general.--If a plan or issuer--
       ``(i) reverses a determination on a denial of a claim for 
     benefits that is the subject of an external review under this 
     section and authorizes coverage for the claim or provides 
     payment of the claim; and
       ``(ii) provides notice of such reversal to the participant 
     or beneficiary (or authorized representative) and the 
     treating health care professional (if any), and the external 
     review entity responsible for such review,
     the external review process shall be terminated with respect 
     to such denial and any filing fee paid under subsection 
     (b)(2)(A)(iv) shall be refunded.
       ``(B) Treatment of termination.--An authorization of 
     coverage under subparagraph (A) by the plan or issuer shall 
     be treated as a written determination to reverse a denial 
     under section (d)(3)(F) for purposes of liability under 
     section 502(n)(1)(B).
       ``(f) Compliance.--
       ``(1) Application of determinations.--
       ``(A) External review determinations binding on plan.--The 
     determinations of an external review entity and an 
     independent medical reviewer under this section shall be 
     binding upon the plan or issuer involved.
       ``(B) Compliance with determination.--If the determination 
     of an independent medical reviewer is to reverse the denial, 
     the plan or issuer, upon the receipt of such determination, 
     shall authorize coverage to comply with the medical 
     reviewer's determination in accordance with the timeframe 
     established by the medical reviewer under subsection 
     (d)(3)(F).
       ``(2) Failure to comply.--If a plan or issuer fails to 
     comply with the timeframe established under paragraph (1)(B) 
     with respect to a participant or beneficiary, where such 
     failure to comply is caused by the plan or issuer, the 
     participant or beneficiary may obtain the items or services 
     involved (in a manner consistent with the determination of 
     the independent external reviewer) from any provider 
     regardless of whether such provider is a participating 
     provider under the plan or coverage.
       ``(3) Reimbursement.--
       ``(A) In general.--Where a participant or beneficiary 
     obtains items or services in accordance with paragraph (2), 
     the plan or issuer involved shall provide for reimbursement 
     of the costs of such items or services. Such reimbursement 
     shall be made to the treating health care professional or to 
     the participant or beneficiary (in the case of a participant 
     or beneficiary who pays for the costs of such items or 
     services).
       ``(B) Amount.--The plan or issuer shall fully reimburse a 
     professional, participant or beneficiary under subparagraph 
     (A) for the total costs of the items or services provided 
     (regardless of any plan limitations that may apply to the 
     coverage of such items or services) so long as--
       ``(i) the items or services would have been covered under 
     the terms of the plan or coverage if provided by the plan or 
     issuer; and
       ``(ii) the items or services were provided in a manner 
     consistent with the determination of the independent medical 
     reviewer.
       ``(4) Failure to reimburse.--Where a plan or issuer fails 
     to provide reimbursement to a professional, participant or 
     beneficiary in accordance with this subsection, the 
     professional, participant or beneficiary may commence a civil 
     action (or utilize other remedies available under law) to 
     recover only the amount of any such reimbursement that is 
     unpaid and any necessary legal costs or expenses (including 
     attorneys' fees) incurred in recovering such reimbursement.
       ``(g) Qualifications of Independent Medical Reviewers.--
       ``(1) In general.--In referring a denial to 1 or more 
     individuals to conduct independent medical review under 
     subsection (c), the qualified external review entity shall 
     ensure that--
       ``(A) each independent medical reviewer meets the 
     qualifications described in paragraphs (2) and (3);
       ``(B) with respect to each review at least 1 such reviewer 
     meets the requirements described in paragraphs (4) and (5); 
     and
       ``(C) compensation provided by the entity to the reviewer 
     is consistent with paragraph (6).
       ``(2) Licensure and expertise.--
       ``(A) In general.--Subject to subparagraph (B), each 
     independent medical reviewer shall be a physician (who may be 
     an allopathic or osteopathic physician) or health care 
     professional who--
       ``(i) is appropriately credentialed or licensed in 1 or 
     more States to deliver health care services; and
       ``(ii) typically treats the diagnosis or condition or 
     provides the type of treatment under review.
       ``(B) Physician review.--In referring a denial for 
     independent medical review under subsection (c), the 
     qualified external review entity shall ensure that, in the 
     case of the review of treatment that is recommended or 
     provided by a physician, such referral may be made only to a 
     physician for such independent medical review.
       ``(3) Independence.--
       ``(A) In general.--Subject to subparagraph (B), each 
     independent medical reviewer in a case shall--
       ``(i) not be a related party (as defined in paragraph (7));
       ``(ii) not have a material familial, financial, or 
     professional relationship with such a party; and
       ``(iii) not otherwise have a conflict of interest with such 
     a party (as determined under regulations).
       ``(B) Exception.--Nothing in this subparagraph (A) shall be 
     construed to--
       ``(i) prohibit an individual, solely on the basis of 
     affiliation with the plan or issuer, from serving as an 
     independent medical reviewer if--

       ``(I) a non-affiliated individual is not reasonably 
     available;
       ``(II) the affiliated individual is not involved in the 
     provision of items or services in the case under review;
       ``(III) the fact of such an affiliation is disclosed to the 
     plan or issuer and the participant or beneficiary (or 
     authorized representative) and neither party objects; and
       ``(IV) the affiliated individual is not an employee of the 
     plan or issuer and does not provide services exclusively or 
     primarily to or on behalf of the plan or issuer;

       ``(ii) prohibit an individual who has staff privileges at 
     the institution where the treatment involved takes place from 
     serving as an independent medical reviewer if the affiliation 
     is disclosed to the plan or issuer and the participant or 
     beneficiary (or authorized representative), and neither party 
     objects; or
       ``(iii) prohibit receipt of compensation by an independent 
     medical reviewer from an entity if the compensation is 
     provided consistent with paragraph (6).
       ``(4) Practicing health care professional in same field.--
       ``(A) In general.--The requirement of this paragraph with 
     respect to a reviewer in a case involving treatment, or the 
     provision of items or services, by--
       ``(i) a physician, is that the reviewer be a practicing 
     physician of the same or similar specialty as a physician who 
     typically treats the diagnosis or condition or provides such 
     treatment in the case under review; or
       ``(ii) a health care professional (other than a physician), 
     is that the reviewer be a practicing physician or, if 
     determined appropriate by the qualified external review 
     entity, a health care professional (other than a physician), 
     of the same or similar specialty as the health care 
     professional who typically treats the diagnosis or condition 
     or provides the treatment in the case under review.
       ``(B) Practicing defined.--For purposes of this paragraph, 
     the term `practicing' means, with respect to an individual 
     who is a physician or other health care professional that the 
     individual provides health care services to individual 
     patients on average at least 1 day per week.
       ``(5) Age-appropriate expertise.--The independent medical 
     reviewer shall have expertise under paragraph (2) that is 
     age-appropriate to the participant or beneficiary involved.
       ``(6) Limitations on reviewer compensation.--Compensation 
     provided by a qualified external review entity to an 
     independent medical reviewer in connection with a review 
     under this section shall--

[[Page 12576]]

       ``(A) not exceed a reasonable level; and
       ``(B) not be contingent on the decision rendered by the 
     reviewer.
       ``(7) Related party defined.--For purposes of this section, 
     the term `related party' means, with respect to a denial of a 
     claim under a plan or coverage relating to a participant or 
     beneficiary, any of the following:
       ``(A) The plan, plan sponsor, or issuer involved, or any 
     fiduciary, officer, director, or employee of such plan, plan 
     sponsor, or issuer.
       ``(B) The participant or beneficiary (or authorized 
     representative).
       ``(C) The health care professional that provides the items 
     of services involved in the denial.
       ``(D) The institution at which the items or services (or 
     treatment) involved in the denial are provided.
       ``(E) The manufacturer of any drug or other item that is 
     included in the items or services involved in the denial.
       ``(F) Any other party determined under any regulations to 
     have a substantial interest in the denial involved.
       ``(h) Qualified External Review Entities.--
       ``(1) Selection of qualified external review entities.--
       ``(A) Limitation on plan or issuer selection.--The 
     Secretary shall implement procedures with respect to the 
     selection of qualified external review entities by a plan or 
     issuer to assure that the selection process among qualified 
     external review entities will not create any incentives for 
     external review entities to make a decision in a biased 
     manner.
       ``(B) State authority with respect to qualified external 
     review entities for health insurance issuers.--With respect 
     to health insurance issuers offering health insurance 
     coverage in a State, the State may provide for the 
     designation or selection of qualified external review 
     entities in a manner determined by the State to assure an 
     unbiased determination in conducting external review 
     activities. In conducting reviews under this section, an 
     entity designated or selected under this subparagraph shall 
     comply with provisions of this section.
       ``(2) Contract with qualified external review entity.--
     Except as provided in paragraph (1)(B), the external review 
     process of a plan or issuer under this section shall be 
     conducted under a contract between the plan or issuer and 1 
     or more qualified external review entities (as defined in 
     paragraph (4)(A)).
       ``(3) Terms and conditions of contract.--The terms and 
     conditions of a contract under paragraph (2) shall--
       ``(A) be consistent with the standards the Secretary shall 
     establish to assure there is no real or apparent conflict of 
     interest in the conduct of external review activities; and
       ``(B) provide that the costs of the external review process 
     shall be borne by the plan or issuer.
     Subparagraph (B) shall not be construed as applying to the 
     imposition of a filing fee under subsection (b)(2)(A)(iv) or 
     costs incurred by the participant or beneficiary (or 
     authorized representative) or treating health care 
     professional (if any) in support of the review, including the 
     provision of additional evidence or information.
       ``(4) Qualifications.--
       ``(A) In general.--In this section, the term `qualified 
     external review entity' means, in relation to a plan or 
     issuer, an entity that is initially certified (and 
     periodically recertified) under subparagraph (C) as meeting 
     the following requirements:
       ``(i) The entity has (directly or through contracts or 
     other arrangements) sufficient medical, legal, and other 
     expertise and sufficient staffing to carry out duties of a 
     qualified external review entity under this section on a 
     timely basis, including making determinations under 
     subsection (b)(2)(A) and providing for independent medical 
     reviews under subsection (d).
       ``(ii) The entity is not a plan or issuer or an affiliate 
     or a subsidiary of a plan or issuer, and is not an affiliate 
     or subsidiary of a professional or trade association of plans 
     or issuers or of health care providers.
       ``(iii) The entity has provided assurances that it will 
     conduct external review activities consistent with the 
     applicable requirements of this section and standards 
     specified in subparagraph (C), including that it will not 
     conduct any external review activities in a case unless the 
     independence requirements of subparagraph (B) are met with 
     respect to the case.
       ``(iv) The entity has provided assurances that it will 
     provide information in a timely manner under subparagraph 
     (D).
       ``(v) The entity meets such other requirements as the 
     Secretary provides by regulation.
       ``(B) Independence requirements.--
       ``(i) In general.--Subject to clause (ii), an entity meets 
     the independence requirements of this subparagraph with 
     respect to any case if the entity--

       ``(I) is not a related party (as defined in subsection 
     (g)(7));
       ``(II) does not have a material familial, financial, or 
     professional relationship with such a party; and
       ``(III) does not otherwise have a conflict of interest with 
     such a party (as determined under regulations).

       ``(ii) Exception for reasonable compensation.--Nothing in 
     clause (i) shall be construed to prohibit receipt by a 
     qualified external review entity of compensation from a plan 
     or issuer for the conduct of external review activities under 
     this section if the compensation is provided consistent with 
     clause (iii).
       ``(iii) Limitations on entity compensation.--Compensation 
     provided by a plan or issuer to a qualified external review 
     entity in connection with reviews under this section shall--

       ``(I) not exceed a reasonable level; and
       ``(II) not be contingent on the decision rendered by the 
     entity or by any independent medical reviewer.

       ``(C) Certification and recertification process.--
       ``(i) In general.--The initial certification and 
     recertification of a qualified external review entity shall 
     be made--

       ``(I) under a process that is recognized or approved by the 
     Secretary; or
       ``(II) by a qualified private standard-setting organization 
     that is approved by the Secretary under clause (iii).

       ``(ii) Process.--The Secretary shall not recognize or 
     approve a process under clause (i)(I) unless the process 
     applies standards (as promulgated in regulations) that ensure 
     that a qualified external review entity--

       ``(I) will carry out (and has carried out, in the case of 
     recertification) the responsibilities of such an entity in 
     accordance with this section, including meeting applicable 
     deadlines;
       ``(II) will meet (and has met, in the case of 
     recertification) appropriate indicators of fiscal integrity;
       ``(III) will maintain (and has maintained, in the case of 
     recertification) appropriate confidentiality with respect to 
     individually identifiable health information obtained in the 
     course of conducting external review activities; and
       ``(IV) in the case recertification, shall review the 
     matters described in clause (iv).

       ``(iii) Approval of qualified private standard-setting 
     organizations.--For purposes of clause (i)(II), the Secretary 
     may approve a qualified private standard-setting organization 
     if the Secretary finds that the organization only certifies 
     (or recertifies) external review entities that meet at least 
     the standards required for the certification (or 
     recertification) of external review entities under clause 
     (ii).
       ``(iv) Considerations in recertifications.--In conducting 
     recertifications of a qualified external review entity under 
     this paragraph, the Secretary or organization conducting the 
     recertification shall review compliance of the entity with 
     the requirements for conducting external review activities 
     under this section, including the following:

       ``(I) Provision of information under subparagraph (D).
       ``(II) Adherence to applicable deadlines (both by the 
     entity and by independent medical reviewers it refers cases 
     to).
       ``(III) Compliance with limitations on compensation (with 
     respect to both the entity and independent medical reviewers 
     it refers cases to).
       ``(IV) Compliance with applicable independence 
     requirements.

       ``(v) Period of certification or recertification.--A 
     certification or recertification provided under this 
     paragraph shall extend for a period not to exceed 5 years.
       ``(vi) Revocation.--A certification or recertification 
     under this paragraph may be revoked by the Secretary or by 
     the organization providing such certification upon a showing 
     of cause.
       ``(D) Provision of information.--
       ``(i) In general.--A qualified external review entity shall 
     provide to the Secretary, in such manner and at such times as 
     the Secretary may require, such information (relating to the 
     denials which have been referred to the entity for the 
     conduct of external review under this section) as the 
     Secretary determines appropriate to assure compliance with 
     the independence and other requirements of this section to 
     monitor and assess the quality of its external review 
     activities and lack of bias in making determinations. Such 
     information shall include information described in clause 
     (ii) but shall not include individually identifiable medical 
     information.
       ``(ii) Information to be included.--The information 
     described in this subclause with respect to an entity is as 
     follows:

       ``(I) The number and types of denials for which a request 
     for review has been received by the entity.
       ``(II) The disposition by the entity of such denials, 
     including the number referred to an independent medical 
     reviewer and the reasons for such dispositions (including the 
     application of exclusions), on a plan or issuer-specific 
     basis and on a health care specialty-specific basis.

       ``(III) The length of time in making determinations with 
     respect to such denials.
       ``(IV) Updated information on the information required to 
     be submitted as a condition of certification with respect to 
     the entity's performance of external review activities.

       ``(iii) Information to be provided to certifying 
     organization.--

       ``(I) In general.--In the case of a qualified external 
     review entity which is certified (or

[[Page 12577]]

     recertified) under this subsection by a qualified private 
     standard-setting organization, at the request of the 
     organization, the entity shall provide the organization with 
     the information provided to the Secretary under clause (i).
       ``(II) Additional information.--Nothing in this 
     subparagraph shall be construed as preventing such an 
     organization from requiring additional information as a 
     condition of certification or recertification of an entity.

       ``(iv) Use of information.--

       ``(I) In general.--Information provided under this 
     subparagraph may be used by the Secretary and qualified 
     private standard-setting organizations to conduct oversight 
     of qualified external review entities, including 
     recertification of such entities, and shall be made available 
     to the public in an appropriate manner.
       ``(II) Report to congress.--Not later than 2 years after 
     the date on which the Bipartisan Patients' Bill of Rights Act 
     of 2001 takes effect under section 501 of such Act, and every 
     2 years thereafter, the Secretary, in consultation with the 
     Secretary of Health and Human Services, shall prepare and 
     submit to the appropriate committees of Congress, a report 
     that contains--

       ``(aa) a summary of the information provided to the 
     Secretary under clause (ii);
       ``(bb) a description of the effect that the appeals process 
     established under this section and section 503A had on the 
     access of individuals to health insurance and health care;
       ``(cc) a description of the effect on health care costs 
     associated with the implementation of the appeals process 
     described in item (bb); and
       ``(dd) a description of the quality and consistency of 
     determinations by qualified external review entities.

       ``(III) Recommendations.--The Secretary may from time to 
     time submit recommendations to Congress with respect to 
     proposed modifications to the appeals process based on the 
     reports submitted under subclause (II).

       ``(E) Limitation on liability.--No qualified external 
     review entity having a contract with a plan or issuer, and no 
     person who is employed by any such entity or who furnishes 
     professional services to such entity (including as an 
     independent medical reviewer), shall be held by reason of the 
     performance of any duty, function, or activity required or 
     authorized pursuant to this section, to be civilly liable 
     under any law of the United States or of any State (or 
     political subdivision thereof) if there was no actual malice 
     or gross misconduct in the performance of such duty, 
     function, or activity.
       ``(i) Definitions.--In this section:
       ``(1) Authorized representative.--The term `authorized 
     representative' means, with respect to a participant or 
     beneficiary--
       ``(A) a person to whom a participant or beneficiary has 
     given express written consent to represent the participant or 
     beneficiary in any proceeding under this section;
       ``(B) a person authorized by law to provide substituted 
     consent for the participant or beneficiary; or
       ``(C) a family member of the participant or beneficiary (or 
     the estate of the participant or beneficiary) or the 
     participant's or beneficiary's treating health care 
     professional when the participant or beneficiary is unable to 
     provide consent.
       ``(2) Claim for benefits.--The term `claim for benefits' 
     means any request by a participant or beneficiary (or 
     authorized representative) for benefits (including requests 
     that are subject to authorization of coverage or utilization 
     review), for eligibility, or for payment in whole or in part, 
     for an item or service under a group health plan or health 
     insurance coverage offered by a health insurance issuer in 
     connection with a group health plan.
       ``(3) Group health plan.--The term `group health plan' 
     shall have the meaning given such term in section 733(a). In 
     applying this paragraph, excepted benefits described in 
     section 733(c) shall not be treated as benefits consisting of 
     medical care.
       ``(4) Health insurance coverage.--The term `health 
     insurance coverage' has the meaning given such term in 
     section 733(b)(1). In applying this paragraph, excepted 
     benefits described in section 733(c) shall not be treated as 
     benefits consisting of medical care.
       ``(5) Health insurance issuer.--The term `health insurance 
     issuer' has the meaning given such term in section 733(b)(2).
       ``(6) Prior authorization determination.--The term `prior 
     authorization determination' means a determination by the 
     group health plan or health insurance issuer offering health 
     insurance coverage in connection with a group health plan 
     prior to the provision of the items and services as a 
     condition of coverage of the items and services under the 
     terms and conditions of the plan or coverage.
       ``(7) Treating health care professional.--The term 
     `treating health care professional' with respect to a group 
     health plan, health insurance issuer or provider sponsored 
     organization means a physician (medical doctor or doctor of 
     osteopathy) or other health care practitioner who is acting 
     within the scope of his or her State licensure or 
     certification for the delivery of health care services and 
     who is primarily responsible for delivering those services to 
     the participant or beneficiary.
       ``(8) Utilization review.--The term `utilization review' 
     with respect to a group health plan or health insurance 
     coverage means procedures used in the determination of 
     coverage for a participant or beneficiary, such as procedures 
     to evaluate the medical necessity, appropriateness, efficacy, 
     quality, 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) Conforming 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 503 
     the following:

``Sec. 503A. Claims and internal appeals procedures for group health 
              plans.
``Sec. 503B. Independent external appeals procedures for group health 
              plans.''.

     SEC. 132. ENFORCEMENT.

       Section 502(c) of the Employee Retirement Income Security 
     Act of 1974 (29 U.S.C. 1132(c)) is amended by adding at the 
     end the following:
       ``(8) The Secretary may assess a civil penalty against any 
     plan of up to $10,000 for the plan's failure or refusal to 
     comply with any deadline applicable under section 503B or any 
     determination under such section, except that in any case in 
     which coverage was not approved by the plan in accordance 
     with the determination of an independent external reviewer, 
     the Secretary shall assess a civil penalty of $10,000 against 
     the plan and the plan shall pay such penalty to the 
     participant or beneficiary involved.''.

                          Subtitle D--Remedies

     SEC. 141. 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:
       ``(n) Cause of Action Relating to Denial of a Claim for 
     Health Benefits.--
       ``(1) In general.--
       ``(A) Failure to comply with external medical review.--With 
     respect to an action commenced by a participant or 
     beneficiary (or the estate of the participant or beneficiary) 
     in connection with a claim for benefits under a group health 
     plan, if--
       ``(i) a designated decision-maker described in paragraph 
     (2) fails to exercise ordinary care in approving coverage 
     pursuant to the written determination of an independent 
     medical reviewer under section 503B(d) that reverses a denial 
     of the claim for benefits; and
       ``(ii) the failure described in clause (i) is the proximate 
     cause of substantial harm (as defined in paragraph (13)(G)) 
     to the participant or beneficiary;

     such designated decision-maker shall be liable to the 
     participant or beneficiary (or the estate) for economic and 
     noneconomic damages in connection with such failure and such 
     injury or death (subject to paragraph (5)).
       ``(B) Wrongful determination resulting in delay in 
     providing benefits.--With respect to an action commenced by a 
     participant or beneficiary (or the estate of the participant 
     or beneficiary) in connection with a claim for benefits under 
     a group health plan, if--
       ``(i) a designated decision-maker described in paragraph 
     (2)--

       ``(I) fails to exercise ordinary care in making a 
     determination denying the claim for benefits under section 
     503A(a) (relating to an initial claim for benefits); or
       ``(II) fails to exercise ordinary care in making a 
     determination denying the claim for benefits under section 
     503A(b) (relating to an internal appeal);

       ``(ii) the denial described in clause (i) is reversed by an 
     independent medical reviewer under section 503B(d), or the 
     coverage for the benefit involved is approved after the 
     denial is referred to the independent medical reviewer but 
     prior to the determination of the reviewer under such 
     section; and
       ``(iii) the delay attributable to the failure described in 
     clause (i) is the proximate cause of substantial harm to, or 
     the wrongful death of, the participant or beneficiary;

     such designated decision-maker shall be liable to the 
     participant or beneficiary (or the estate) for economic and 
     noneconomic damages in connection with such failure and such 
     injury or death (subject to paragraph (5)).
       ``(C) Relief from liability for employer or other plan 
     sponsor by means of designated decisionmaker.--
       ``(i) In general.--Notwithstanding the direct participation 
     (as defined in paragraph (3)(C)(i)) of an employer or plan 
     sponsor, in any case in which there is deemed to be a 
     designated decisionmaker under clause (ii) that meets the 
     requirements of paragraph (2)(A) for an employer or other 
     plan sponsor--

       ``(I) all liability of such employer or plan sponsor (and 
     any employee thereof acting within the scope of employment) 
     under this subsection in connection with any participant or 
     beneficiary shall be transferred to, and assumed by, the 
     designated decisionmaker, and

[[Page 12578]]

       ``(II) with respect to such liability, the designated 
     decisionmaker shall be substituted for the employer or plan 
     sponsor (or employee) in the action and may not raise any 
     defense that the employer or plan sponsor (or employee) could 
     not raise if such a decisionmaker were not so deemed.

       ``(ii) Automatic designation.--A health insurance issuer 
     shall be deemed to be a designated decisionmaker for purposes 
     of clause (i) with respect to the participants and 
     beneficiaries of an employer or plan sponsor, whether or not 
     the employer or plan sponsor makes such a designation, and 
     shall be deemed to have assumed unconditionally all liability 
     of the employer or plan sponsor under such designation in 
     accordance with paragraph (2), unless the employer or plan 
     sponsor affirmatively enters into a contract to prevent the 
     service of the designated decisionmaker. The deeming of a 
     designated decisionmaker under this clause shall not affect 
     the liability of the appointing employer or plan sponsor for 
     the failure of the employer or plan sponsor to comply with 
     any other requirement of this title.
       ``(D) Prevention of duplication of action with action under 
     state law.--No action may be brought under this subsection 
     based upon facts and circumstances if a cause of action under 
     State law is brought based upon the same facts and 
     circumstances.
       ``(E) Application to certain plans.--
       ``(i) In general.--Notwithstanding any other provision of 
     this subsection, no group health plan described in clause 
     (ii) shall be liable under this paragraph for the performance 
     of, or the failure to perform, any non-medically reviewable 
     duty under the plan.
       ``(ii) Definition.--A group health plan described in this 
     clause is--

       ``(I) a group health plan that is self-insured and self 
     administered by an employer (including an employee of such an 
     employer acting within the scope of employment); or
       ``(II) a multiemployer plan as defined in section 3(37)(A) 
     (including an employee of a contributing employer or of the 
     plan, or a fiduciary of the plan, acting within the scope of 
     employment or fiduciary responsibility) that is self-insured 
     and self-administered.

       ``(2) Requirements for designated decisionmakers of group 
     health plans.--
       ``(A) In general.--For purposes of this subsection and 
     section 514(c)(3), a designated decisionmaker meets the 
     requirements of this subparagraph with respect to any 
     participant or beneficiary if--
       ``(i) such designation is in such form as may be prescribed 
     in regulations of the Secretary,
       ``(ii) the designated decisionmaker--

       ``(I) meets the requirements of subparagraph (B),
       ``(II) assumes unconditionally all liability of the 
     employer or plan sponsor involved (and any employee thereof 
     acting within the scope of employment) either arising under 
     this subsection or arising in a cause of action permitted 
     under section 514(c) in connection with actions (and failures 
     to act) of the employer or plan sponsor (or employee) 
     occurring during the period in which the designation under 
     paragraph (1)(C) or section 514(c)(3) is in effect relating 
     to such participant and beneficiary,
       ``(III) agrees to be substituted for the employer or plan 
     sponsor (or employee) in the action and not to raise any 
     defense with respect to such liability that the employer or 
     plan sponsor (or employee) may not raise, and
       ``(IV) where subparagraph (B)(ii) applies, assumes 
     unconditionally the exclusive authority under the group 
     health plan to make medically reviewable decisions under the 
     plan with respect to such participant or beneficiary, and

       ``(iii) the designated decisionmaker and the participants 
     and beneficiaries for whom the decisionmaker has assumed 
     liability are identified in the written instrument required 
     under section 402(a) and as required under section 121 of the 
     Bipartisan Patients' Bill of Rights Act of 2001.

     Any liability assumed by a designated decisionmaker pursuant 
     to this subsection shall be in addition to any liability that 
     it may otherwise have under applicable law.
       ``(B) Qualifications for designated decisionmakers.--
       ``(i) In general.--Subject to clause (ii), an entity is 
     qualified under this subparagraph to serve as a designated 
     decisionmaker with respect to a group health plan if the 
     entity has the ability to assume the liability described in 
     subparagraph (A) with respect to participants and 
     beneficiaries under such plan, including requirements 
     relating to the financial obligation for timely satisfying 
     the assumed liability, and maintains with the plan sponsor 
     and the Secretary certification of such ability. Such 
     certification shall be provided to the plan sponsor or named 
     fiduciary and to the Secretary upon designation under 
     paragraph (1)(C) or section 514(c)(3)(B) and not less 
     frequently than annually thereafter, or if such designation 
     constitutes a multiyear arrangement, in conjunction with the 
     renewal of the arrangement.
       ``(ii) Special qualification in the case of certain 
     reviewable decisions.--In the case of a group health plan 
     that provides benefits consisting of medical care to a 
     participant or beneficiary only through health insurance 
     coverage offered by a single health insurance issuer, such 
     issuer is the only entity that may be qualified under this 
     subparagraph to serve as a designated decisionmaker with 
     respect to such participant or beneficiary, and shall serve 
     as the designated decisionmaker unless the employer or other 
     plan sponsor acts affirmatively to prevent such service.
       ``(C) Requirements relating to financial obligations.--For 
     purposes of subparagraph (B)(ii), the requirements relating 
     to the financial obligation of an entity for liability shall 
     include--
       ``(i) coverage of such entity under an insurance policy or 
     other arrangement, secured and maintained by such entity, to 
     effectively insure such entity against losses arising from 
     professional liability claims, including those arising from 
     its service as a designated decisionmaker under this 
     paragraph; or
       ``(ii) evidence of minimum capital and surplus levels that 
     are maintained by such entity to cover any losses as a result 
     of liability arising from its service as a designated 
     decisionmaker under this paragraph.

     The appropriate amounts of liability insurance and minimum 
     capital and surplus levels for purposes of clauses (i) and 
     (ii) shall be determined by an actuary using sound actuarial 
     principles and accounting practices pursuant to established 
     guidelines of the American Academy of Actuaries and in 
     accordance with such regulations as the Secretary may 
     prescribe and shall be maintained throughout the term for 
     which the designation is in effect. The provisions of this 
     subparagraph shall not apply in the case of a designated 
     decisionmaker that is a group health plan, plan sponsor, or 
     health insurance issuer and that is regulated under Federal 
     law or a State solvency law.
       ``(D) Limitation on appointment of treating physicians.--A 
     treating physician who directly delivered the care, 
     treatment, or provided the patient service that is the 
     subject of a cause of action by a participant or beneficiary 
     under this subsection or section 514(c) may not be designated 
     as a designated decisionmaker under this subsection with 
     respect to such participant or beneficiary.
       ``(3) Exclusion of employers and other plan sponsors.--
       ``(A) Causes of action against employers and plan sponsors 
     precluded.--Subject to subparagraph (B), paragraph (1) does 
     not authorize a cause of action against an employer or other 
     plan sponsor maintaining the plan (or against an employee of 
     such an employer or sponsor acting within the scope of 
     employment).
       ``(B) Certain causes of action permitted.--Notwithstanding 
     subparagraph (A), a cause of action may arise, subject to the 
     requirements and limitations of paragraph (1), against an 
     employer or other plan sponsor (or against an employee of 
     such an employer or sponsor acting within the scope of 
     employment) to the extent there was direct participation by 
     the employer or other plan sponsor (or employee) in the 
     decision of the plan under section 503A upon consideration of 
     a claim for benefits or under section 103 of such Act upon 
     review of a denial of a claim for benefits.
       ``(C) Direct participation.--
       ``(i) In general.--For purposes of subparagraph (B), the 
     term `direct participation' means, in connection with a 
     decision described in paragraph (1), the actual making of 
     such decision or the actual exercise of control in making 
     such decision.
       ``(ii) Rules of construction.--For purposes of clause (i), 
     the employer or plan sponsor (or employee) shall not be 
     construed to be engaged in direct participation because of 
     any form of decisionmaking or other conduct that is merely 
     collateral or precedent to the decision described in 
     paragraph (1) on a particular claim for benefits of a 
     participant or beneficiary, including (but not limited to)--

       ``(I) any participation by the employer or other plan 
     sponsor (or employee) in the selection of the group health 
     plan or health insurance coverage involved or the third party 
     administrator or other agent;
       ``(II) any engagement by the employer or other plan sponsor 
     (or employee) in any cost-benefit analysis undertaken in 
     connection with the selection of, or continued maintenance 
     of, the plan or coverage involved;
       ``(III) any participation by the employer or other plan 
     sponsor (or employee) in the process of creating, continuing, 
     modifying, or terminating the plan or any benefit under the 
     plan, if such process was not substantially focused solely on 
     the particular situation of the participant or beneficiary 
     referred to in paragraph (1); and
       ``(IV) any participation by the employer or other plan 
     sponsor (or employee) in the design of any benefit under the 
     plan, including the amount of copayment and limits connected 
     with such benefit.

       ``(iv) Irrelevance of certain collateral efforts made by 
     employer or plan sponsor.--For purposes of this subparagraph, 
     an employer or plan sponsor shall not be treated as engaged 
     in direct participation in a decision with respect to any 
     claim for benefits or denial thereof in the case of any 
     particular participant or beneficiary solely by reason of--

       ``(I) any efforts that may have been made by the employer 
     or plan sponsor to advocate for authorization of coverage for 
     that or any other participant or beneficiary (or any group of 
     participants or beneficiaries), or

[[Page 12579]]

       ``(II) any provision that may have been made by the 
     employer or plan sponsor for benefits which are not covered 
     under the terms and conditions of the plan for that or any 
     other participant or beneficiary (or any group of 
     participants or beneficiaries).

       ``(4) Requirement of exhaustion of independent medical 
     review.--
       ``(A) In general.--Paragraph (1) shall apply only if a 
     final determination denying a claim for benefits under 
     section 503A has been referred for independent medical review 
     under section 503B(d) of such Act and a written determination 
     by an independent medical reviewer to reverse such final 
     determination has been issued with respect to such review or 
     where the coverage for the benefit involved is approved after 
     the denial is referred to the independent medical reviewer 
     but prior to the determination of the reviewer under such 
     section.
       ``(B) Exception to exhaustion for needed care.--A 
     participant or beneficiary may seek relief under subsection 
     502(a)(1)(B) prior to the exhaustion of administrative 
     remedies under sections 503A or 503B (as required under 
     subparagraph (A)) if it is demonstrated to the court, by a 
     preponderance of the evidence, that the exhaustion of such 
     remedies would cause irreparable harm to the health of the 
     participant or beneficiary. Any determinations that already 
     have been made under sections 503A or 503B in such case, or 
     that are made in such case while an action under this 
     subparagraph is pending, shall be given due consideration by 
     the court in any action under this subsection in such case. 
     Notwithstanding the awarding of relief under subsection 
     502(a)(1)(B) pursuant to this subparagraph, no relief shall 
     be available under--
       ``(i) paragraph (1), with respect to a participant or 
     beneficiary, unless the requirements of subparagraph (A) are 
     met; or
       ``(ii) subsection (q) unless the requirements of such 
     subsection are met.
       ``(C) Late manifestation of injury.--
       ``(i) In general.--A participant or beneficiary shall not 
     be precluded from pursuing a review under section 503B 
     regarding an injury that such participant or beneficiary has 
     experienced if the external review entity first determines 
     that the injury of such participant or beneficiary is a late 
     manifestation of an earlier injury.
       ``(ii) Definition.--In this subparagraph, the term `late 
     manifestation of an earlier injury' means an injury sustained 
     by the participant or beneficiary which was not known, and 
     should not have been known, by such participant or 
     beneficiary by the latest date that the requirements of 
     subparagraph (A) should have been met regarding the claim for 
     benefits which was denied.
       ``(D) Receipt of benefits during appeals process.--Receipt 
     by the participant or beneficiary of the benefits involved in 
     the claim for benefits during the pendency of any 
     administrative processes referred to in subparagraph (A) or 
     of any action commenced under this subsection--
       ``(i) shall not preclude continuation of all such 
     administrative processes to their conclusion if so moved by 
     any party, and
       ``(ii) shall not preclude any liability under this 
     subsection in connection with such claim.
       ``(E) Admissible.--Any determination made by a reviewer in 
     an administrative proceeding under section 503A shall be 
     admissible in any Federal court proceeding and shall be 
     presented to the trier of fact.
       ``(F) Failure to review.--
       ``(i) In general.--If the external review entity fails to 
     make a determination within the time required under section 
     503B, a participant or beneficiary may bring an action under 
     section 514(d) after 10 additional days after the date on 
     which such time period has expired and the filing of such 
     action shall not affect the duty of the independent medical 
     reviewer (or reviewers) to make a determination pursuant to 
     section 503B.
       ``(ii) Expedited determination.--If the external review 
     entity fails to make a determination within the time required 
     under section 503B, a participant or beneficiary may bring an 
     action under this subsection and the filing of such an action 
     shall not affect the duty of the independent medical reviewer 
     (or reviewers) to make a determination pursuant to section 
     503B.
       ``(5) Limitations on recovery of damages.--
       ``(A) Maximum award of noneconomic damages.--The aggregate 
     amount of liability for noneconomic loss in an action under 
     paragraph (1) may not exceed the greater of--
       ``(i) $750,000; or
       ``(ii) an amount equal to 3 times the amount awarded for 
     economic loss.
       ``(B) Increase in amount.--The amount referred to in 
     subparagraph (A)(i) shall be increased or decreased, for each 
     calendar year that ends after December 31, 2002, by the same 
     percentage as the percentage by which 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 
     the such Index for September of 2002.
       ``(C) Several liability.--In the case of any action 
     commenced pursuant to paragraph (1), the designated decision-
     maker shall be liable only for the amount of noneconomic 
     damages attributable to such designated decision-maker in 
     direct proportion to such decision-maker's share of fault or 
     responsibility for the injury suffered by the participant or 
     beneficiary. In all such cases, the liability of a designated 
     decision-maker for noneconomic damages shall be several and 
     not joint.
       ``(D) Treatment of collateral source payments.--
       ``(i) In general.--In the case of any action commenced 
     pursuant to paragraph (1), the total amount of damages 
     received by a participant or beneficiary under such action 
     shall be reduced, in accordance with clause (ii), by any 
     other payment that has been, or will be, made to such 
     participant or beneficiary, pursuant to an order or judgment 
     of another court, to compensate such participant or 
     beneficiary for the injury that was the subject of such 
     action.
       ``(ii) Amount of reduction.--The amount by which an award 
     of damages to a participant or beneficiary for an injury 
     shall be reduced under clause (i) shall be--

       ``(I) the total amount of any payments (other than such 
     award) that have been made or that will be made to such 
     participant or beneficiary to pay costs of or compensate such 
     participant or beneficiary for the injury that was the 
     subject of the action; less
       ``(II) the amount paid by such participant or beneficiary 
     (or by the spouse, parent, or legal guardian of such 
     participant or beneficiary) to secure the payments described 
     in subclause (I).

       ``(iii) Determination of amounts from collateral sources.--
     The reduction required under clause (ii) shall be determined 
     by the court in a pretrial proceeding. At the subsequent 
     trial no evidence shall be admitted as to the amount of any 
     charge, payments, or damage for which a participant or 
     beneficiary--

       ``(I) has received payment from a collateral source or the 
     obligation for which has been assured by a third party; or
       ``(II) is, or with reasonable certainty, will be eligible 
     to receive from a collateral source which will, with 
     reasonable certainty, be assumed by a third party.

       ``(E) Prohibition of award of punitive damages.--
     Notwithstanding any other provision of law, in the case of 
     any action commenced pursuant to paragraph (1), the court may 
     not award any punitive, exemplary, or similar damages against 
     a defendant.
       ``(6) Affirmative defenses.--In the case of any cause of 
     action under paragraph (1), it shall be an affirmative 
     defense that--
       ``(A) the designated decision-maker of a group health plan, 
     or health insurance issuer that offers health insurance 
     coverage in connection with a group health plan, involved did 
     not receive from the participant or beneficiary (or 
     authorized representative) or the treating health care 
     professional (if any), the information requested by the plan 
     or issuer regarding the medical condition of the participant 
     or beneficiary that was necessary to make a determination on 
     a claim for benefits under section 503A or a final 
     determination on a claim for benefits under section 503A;
       ``(B) the participant or beneficiary (or authorized 
     representative)--
       ``(i) was in possession of facts that were sufficient to 
     enable the participant or beneficiary (or authorized 
     representative) to know that an expedited review under 
     sections 503A or 503B would have prevented the harm that is 
     the subject of the action; and
       ``(ii) failed to notify the plan or issuer of the need for 
     such an expedited review; or
       ``(C) the qualified external review entity or an 
     independent medical reviewer failed to meet the timelines 
     applicable under section 503B, or a period of time elapsing 
     after coverage has been authorized.

     Nothing in this paragraph shall be construed to limit the 
     application of any other affirmative defense that may be 
     applicable to the cause of action involved.
       ``(7) Waiver of internal review.--In the case of any cause 
     of action under paragraph (1), the waiver or nonwaiver of 
     internal review under section 503A by the group health plan, 
     or health insurance issuer that offers health insurance 
     coverage in connection with a group health plan, shall not be 
     used in determining liability.
       ``(8) Limitations on actions.--Paragraph (1) shall not 
     apply in connection with any action that is commenced more 
     than 3 years after the date on which the failure described in 
     paragraph (1) occurred.
       ``(9) Protection of the regulation of quality of medical 
     care under state law.--Nothing in this subsection shall be 
     construed to preclude any action under State law against a 
     person or entity for liability or vicarious liability with 
     respect to the delivery of medical care. A claim that is 
     based on or otherwise relates to a group health plan's 
     administration or determination of a claim for benefits (as 
     such term is defined in section 503A and notwithstanding the 
     definition contained in paragraph (13)(B)) shall not be 
     deemed to be the delivery of medical care under any State law 
     for purposes of this section. Any such claim shall be 
     maintained exclusively under section 502.
       ``(10) Construction.--Nothing in this subsection shall be 
     construed as authorizing a cause of action under paragraph 
     (1) for the failure of a group health plan or health 
     insurance issuer to provide an item or service

[[Page 12580]]

     that is specifically excluded under the plan or coverage.
       ``(11) Previously provided services.--
       ``(A) in general.--Except as provided in this paragraph, a 
     cause of action shall not arise under paragraph (1) where the 
     denial involved relates to an item or service that has 
     already been fully provided to the participant or beneficiary 
     under the plan or coverage and the claim relates solely to 
     the subsequent denial of payment for the provision of such 
     item or service.
       ``(B) Exception.--Nothing in subparagraph (A) shall be 
     construed to--
       ``(i) prohibit a cause of action under paragraph (1) where 
     the nonpayment involved results in the participant or 
     beneficiary being unable to receive further items or services 
     that are directly related to the item or service involved in 
     the denial referred to in subparagraph (A) or that are part 
     of a continuing treatment or series of procedures;
       ``(ii) prohibit a cause of action under paragraph (1) 
     relating to quality of care; or
       ``(iii) limit liability that otherwise would arise from the 
     provision of the item or services or the performance of a 
     medical procedure.
       ``(12) Exemption from personal liability for individual 
     members of boards of directors, joint boards of trustees, 
     etc.--Any individual who is--
       ``(A) a member of a board of directors of an employer or 
     plan sponsor; or
       ``(B) a member of an association, committee, employee 
     organization, joint board of trustees, or other similar group 
     of representatives of the entities that are the plan sponsor 
     of plan maintained by two or more employers and one or more 
     employee organizations;

     shall not be personally liable under this subsection for 
     conduct that is within the scope of employment of the 
     individuals unless the individual acts in a fraudulent manner 
     for personal enrichment.
       ``(13) Definitions.--In this subsection:
       ``(A) Authorized representative.--The term `authorized 
     representative' has the meaning given such term in section 
     503A.
       ``(B) Claim for benefits.--Except as provided for in 
     paragraph (9), the term `claim for benefits' shall have the 
     meaning given such term in section 503A, except that such 
     term shall only include claims for which prior authorization 
     is required.
       ``(C) Group health plan.--The term `group health plan' 
     shall have the meaning given such term in section 733(a). In 
     applying this paragraph, excepted benefits described in 
     section 733(c) shall not be treated as benefits consisting of 
     medical care.
       ``(D) Health insurance coverage.--The term `health 
     insurance coverage' has the meaning given such term in 
     section 733(b)(1). In applying this paragraph, excepted 
     benefits described in section 733(c) shall not be treated as 
     benefits consisting of medical care.
       ``(E) Health insurance issuer.--The term `health insurance 
     issuer' has the meaning given such term in section 733(b)(2).
       ``(F) Ordinary care.--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 making a 
     determination on a claim for benefits of a similar character.
       ``(G) Substantial harm.--The term `substantial harm' means 
     the loss of life, loss or significant impairment of limb or 
     bodily function, significant mental illness or disease, 
     significant disfigurement, or severe and chronic physical 
     pain.''.
       (b) Authority to Impose Civil Penalties for Failure to 
     Provide a Plan Benefit Not Eligible for Medical Review.--
     Section 502 of the Employee Retirement Income Security Act of 
     1974 (29 U.S.C. 1132), as amended by subsection (a), is 
     further amended by adding at the end the following:
       ``(o) Authority to Impose Civil Penalties for Failure to 
     Provide a Plan Benefit Not Eligible for Medical Review.--In 
     connection with any action maintained under subsection 
     (a)(1)(B), the court, in its discretion, may assess a civil 
     penalty against the designated decision-maker (as designated 
     pursuant to section 502(n)(2)) of a group health plan or a 
     health insurance issuer (that offers health insurance 
     coverage in connection with a group health plan) of not to 
     exceed $100,000 where--
       ``(1) in its final determination under section 503A, the 
     designated decision-maker fails to provide, or authorize 
     coverage of, a benefit to which a participant or beneficiary 
     is entitled under the terms and conditions of the plan;


       ``(2) the participant or beneficiary has appealed such 
     determination under section 503B and such determination is 
     not subject to independent medical review as determined by a 
     qualified external review entity under section 503B;
       ``(3) the plan has failed to exercise ordinary care in 
     making a final determination under section 503A denying a 
     claim for benefits under the plan; and
       ``(4) that denial is the proximate cause of substantial 
     harm (as defined in subsection (n)(10)(G)) the participant or 
     beneficiary.''.
       (c) Limitation on Certain Class Action Litigation.--
       (1) ERISA.--Section 502 of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1132), as amended by 
     subsections (a) and (c), is further amended by adding at the 
     end the following:
       ``(p) Limitation on Class Action Litigation.--
       ``(1) Claims under this section.--
       ``(A) In general.--Any claim or cause of action that is 
     maintained under this section in connection with a group 
     health plan, or health insurance coverage issued in 
     connection with a group health plan, as a class action, 
     derivative action, or as an action on behalf of any group of 
     2 or more claimants, may be maintained only if the class, the 
     derivative claimant, or the group of claimants is limited to 
     the participants or beneficiaries of a group health plan 
     established by only 1 plan sponsor. No action maintained by 
     such class, such derivative claimant, or such group of 
     claimants may be joined in the same proceeding with any 
     action maintained by another class, derivative claimant, or 
     group of claimants or consolidated for any purpose with any 
     other proceeding. In this paragraph, the terms `group health 
     plan' and `health insurance coverage' have the meanings given 
     such terms in section 733.
       ``(B) Effective date.--This paragraph shall apply to all 
     civil actions that are filed on or after the date of 
     enactment of the Bipartisan Patient Protection Act. This 
     paragraph shall apply to civil actions that are pending and 
     have not been finally determined by judgment or settlement 
     prior to such date of enactment.
       ``(2) No application of Rico.--
       ``(A) In general.--Any action that seeks relief under 
     1964(c) of title 18, United States Code, concerning the 
     manner in which any person has marketed, provided information 
     concerning, established, administered, or otherwise operated 
     a group health plan, or health insurance coverage in 
     connection with a group health plan. Any such action shall 
     only be brought under the Employee Retirement Income Security 
     Act of 1974. In this paragraph, the terms `group health plan' 
     and `health insurance issuer' shall have the meanings given 
     such terms in section 733 of the Employee Retirement Income 
     Security Act of 1974.
       ``(B) Effective date.--Subparagraph (A) shall apply to 
     civil actions that are pending and have not been finally 
     determined by judgment or settlement prior to the date of 
     enactment of the Bipartisan Patient Protection Act and all 
     actions commenced on or after such date.''.
       (d) Conforming Amendment.--Section 502(a)(1)(A) of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1132(a)(1)(A)) is amended by inserting ``or (n)'' after 
     ``subsection (c)''.
       (e) 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 October 1, 2002.

                     Subtitle E--State Flexibility

     SEC. 151. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.

       (a) Limitation on Preemption of State Law With Respect to 
     Health Insurance Issuers.--
       (1) In general.--Subject to paragraph (2)--
       (A) subtitles A and B of 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 plans or individual health 
     insurance coverage) and to non-Federal governmental plans 
     except to the extent that such standard or requirement 
     prevents the application of a requirement of such subtitles; 
     and
       (B) the amendments made by subtitle C 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 individual health insurance coverage and to 
     non-Federal governmental plans except to the extent that such 
     standard or requirement prevents the application of a 
     requirement of such amendments.
       (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 (29 U.S.C. 1144) with 
     respect to group health plans.
       (b) Continued Application of Certain State Laws.--
       (1) Requirements for continued application.--
       (A) General rule.--With respect to a State law described in 
     subparagraph (B), in applying the requirements of subtitles A 
     and B to health insurance issuers under sections 2707 and 
     2753 (as applicable) of the Public Health Service Act (as 
     added by title II), or health insurance issuers in connection 
     with group health plans under section 714 of the Employee 
     Retirement Income Security Act of 1974 (as added by title 
     III), subject to subsection (a)(2)--
       (i) the State law shall not be treated as being superseded 
     under subsection (a); and
       (ii) the State law shall apply in lieu of the patient 
     protection requirements otherwise applicable under such 
     subtitles with respect to health insurance issuers (in 
     connection with group health plans or individual health 
     insurance coverage) and non-Federal governmental plans.

[[Page 12581]]

       (B) State law described.--A State law described in this 
     subparagraph is a State law that imposes, with respect to 
     health insurance issuers (in connection with group health 
     plans or individual health insurance coverage) and to non-
     Federal governmental plans, a requirement that is approved by 
     the Secretary (through a certification under subsection 
     (c)(4)) as being consistent with a patient protection 
     requirement (as defined in paragraph (3)).
       (2) Limitation.--In the case of a group health plan covered 
     under title I of the Employee Retirement Income Security Act 
     of 1974, paragraph (1) shall be construed to apply only with 
     respect to the health insurance coverage (if any) offered in 
     connection with the plan.
       (3) Patient protection requirement defined.--For purposes 
     of this section, the term ``patient protection requirement'' 
     means any one or more requirements under the following:
       (A) Section 101 (relating to access to emergency care).
       (B) Section 102 (relating to consumer choice option) with 
     respect to non-Federal governmental plans only.
       (C) Section 103 (relating to patient access to obstetrical 
     and gynecological care).
       (D) Section 104 (relating to access to pediatric care).
       (E) Section 105 (relating to timely access to specialists).
       (F) Section 106 (relating to continuity of care), but only 
     insofar as a replacement issuer assumes the obligation for 
     continuity of care.
       (G) Section 108 (relating to access to needed prescription 
     drugs).
       (H) Section 109 (relating to coverage for individuals 
     participating in approved clinical trials).
       (I) Section 110 (relating to required coverage for minimum 
     hospital stay for mastectomies and lymph node dissections for 
     the treatment of breast cancer and coverage for secondary 
     consultations).
       (J) A prohibition under--
       (i) section 107 (relating to prohibition of interference 
     with certain medical communications); and
       (ii) section 111 (relating to prohibition of discrimination 
     against providers based on licensure).
       (K) An informational requirement under section 121.
       (c) Determinations With Respect to Certifications.--
       (1) In general.--For purposes of the continued application 
     of certain State laws under subsection (b)(1), a State may, 
     on or after May 1, 2002, submit to the Board established 
     under subsection (d) a certification that the State law 
     involved is consistent with those patient protections 
     requirements (as defined in subsection (b)(3)) that are 
     covered under the law for which the State is seeking a 
     certification. Such certification shall be accompanied by 
     such information as may be required to permit the Board to 
     make the determination described in paragraph (3), as 
     applicable.
       (2) Action by board.--
       (A) In general.--The Board shall promptly review a 
     certification submitted under paragraph (1) with respect to a 
     State law to make the determination required under paragraph 
     (3) with respect to the certification.
       (B) Approval deadlines.--
       (i) Initial review.--Not later than 60 days after the date 
     on which the Board receives a certification under paragraph 
     (1), the Board shall--

       (I) notify the State involved that specified additional 
     information is needed to make the determination described in 
     paragraph (3); or
       (II) submit a recommendation to the Secretary concerning 
     the approval or disapproval (and the reasons therefore) of 
     the certification.

       (ii) Additional information.--With respect to a State that 
     has been notified by the Board under clause (i)(I) that 
     specified additional information is needed to make the 
     determination described in paragraph (3), the Board shall 
     make the submission required under clause (i)(II) within 60 
     days after the date on which such specified additional 
     information is requested by the Board.
       (3) Determination.--The Board shall recommend that the 
     Secretary approve or disapprove a certification submitted 
     under paragraph (1)(A). The Board shall recommend the 
     approval of a certification under this subparagraph unless 
     the Board finds that there is no reasonable basis or evidence 
     for such approval.
       (4) Review by secretary.--
       (A) In general.--The recommendation by the Board to approve 
     or disapprove a certification submitted by a State under 
     paragraph (1) is considered to be approved by the Secretary 
     unless the Secretary notifies the State in writing, within 30 
     days after the date on which the Board submits its 
     recommendation to the Secretary under paragraph (2) 
     concerning such certification, that the certification is 
     approved or disapproved (and the reasons for the approval or 
     disapproval).
       (B) Deference to states.--The recommendation of the Board 
     to approve a certification submitted under paragraph (1) 
     shall be approved by the Secretary unless the Secretary finds 
     that there is no reasonable basis or there is insufficient 
     evidence for approving the certification.
       (C) Notice.--
       (i) State notification.--The Secretary shall provide a 
     State with written notice of the determination of the 
     Secretary to approve or disapprove the certification 
     submitted by the State under paragraph (1) within 30 days 
     after the date on which the Board submits its recommendation 
     to the Secretary under paragraph (2) concerning such 
     certification.
       (ii) Public notification.--The Secretary shall publish each 
     notice provided under clause (i) in the Federal Register and 
     as otherwise determined appropriate by the Secretary 
     (including the Internet) to inform the general public. The 
     Secretary shall annually publish (in accordance with the 
     preceding sentence) the status of all States with respect to 
     certifications.
       (5) State challenge.--A State that has a certification 
     disapproved by the Secretary under paragraph (4) may 
     challenge such disapproval in the appropriate United States 
     district court. The court shall make a de novo determination 
     with respect to a challenge brought under this paragraph.
       (6) Termination of certification.--
       (A) In general.--The Secretary, not more frequently than 
     once every 5 years, may request that a State with respect to 
     which a certification has been approved under paragraph (4), 
     submit an assurance to the Secretary that with respect to a 
     certification, the State law involved has not been--
       (i) repealed; or
       (ii) modified to such an extent that such law is no longer 
     consistent with a patient protection requirement under this 
     title.
       (B) Termination.--If a State fails to submit an assurance 
     to the Secretary under subparagraph (A) within the 60-day 
     period beginning on the date on which the Secretary makes a 
     request for such an assurance, the certification applicable 
     to the State under this section shall terminate.
       (7) Rule of construction.--Nothing in this section shall be 
     construed to prohibit a State from submitting more than one 
     certification under paragraph (1).
       (8) Petitions by plans or issuers.--
       (A) Petition process.--Effective on the date on which the 
     provisions of this Act become effective, as provided for in 
     section 501, a group health plan or health insurance issuer 
     may submit a petition to the Secretary for a determination as 
     to whether or not a standard or requirement under a State law 
     applicable to the plan or issuer, that is not the subject of 
     a certification under subsection (c), is superseded under 
     subsection (a)(1) because such standard or requirement 
     prevents the application of a requirement of this title.
       (B) Approval.--The Secretary shall issue a determination 
     with respect to a petition submitted under subparagraph (A) 
     within the 60-day period beginning on the date on which such 
     petition is submitted.
       (d) Patients' Protection Board.--
       (1) Establishment of board.--
       (A) In general.--There is hereby established in the 
     Department of Health and Human Services a Patients' 
     Protection Board. Consistent with the requirements of 
     sections 5 and 10 of the Federal Advisory Committee Act, the 
     Board shall carry out the duties described in paragraph (2).
       (B) Composition.--The Board shall be composed of 13 members 
     appointed by the Secretary with balanced representation from 
     among individuals who represent consumers, employers, health 
     professionals, health insurance issuers, and officials of 
     State government. Members shall first be appointed to the 
     Board not later than May 1, 2002.
       (C) Terms.--The terms of the members of the Board shall be 
     for 3 years except that for the members first appointed the 
     Secretary shall designate staggered terms of 3 years for 2 
     members, 2 years for 2 members, and 1 year for 1 member. A 
     vacancy on the Board shall be filled in the same manner in 
     which the original appointment was made and a 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.
       (2) Duties.--
       (A) Review of certifications submitted.--The Board shall 
     review certifications submitted under subsection (c) and make 
     recommendations to the Secretary of Health and Human Services 
     as provided for in such subsection.
       (B) Annual congressional reports.--
       (i) In general.--The Board shall submit to Congress an 
     annual report on its activities. Each such report shall 
     include the findings of the Board as to--

       (I) the States that have failed to obtain a certification 
     under subsection (c); and

       (II) whether the enforcement role of the Federal Government 
     with respect to health insurance has substantially expanded.

       (ii) Initial report.--The first annual report under clause 
     (i) shall focus specifically on the development by the Board 
     of criteria for the evaluation of State laws and any other 
     activities of the Board during its first year of operation.
       (e) Definitions.--For purposes of this section:

[[Page 12582]]

       (1) Board.--The term ``Board'' means the Patients' 
     Protection Board established under subsection (d).
       (2) State, state law.--The terms ``State'' and ``State 
     law'' shall have the meanings given such terms in section 
     2723(d) of the Public Health Service Act (42 U.S.C. 300gg-
     23(d)).

                  Subtitle F--Miscellaneous Provisions

     SEC. 161. 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.
       (c) Additional Definitions.--For purposes of this title:
       (1) 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.
       (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 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.
       (5) 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.
       (6) 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.
       (7) 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.
       (8) Terms and conditions.--The term ``terms and 
     conditions'' includes, with respect to a group health plan or 
     health insurance coverage, requirements imposed under this 
     title with respect to the plan or coverage.

         TITLE II--AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT

     SEC. 201. APPLICATION TO CERTAIN HEALTH INSURANCE COVERAGE.

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

     ``SEC. 2707. PATIENT PROTECTION STANDARDS AND ACCOUNTABILITY.

       ``(a) In General.--Each health insurance issuer shall 
     comply with the patient protection requirements under title I 
     of the Bipartisan Patients' Bill of Rights Act of 2001 with 
     respect to non-Federal governmental group health insurance 
     coverage offered by such issuers, and such requirements shall 
     be deemed to be incorporated into this section.
       ``(b) Accountability.--The provisions of sections 503 
     through 503B of the Employee Retirement Income Security Act 
     of 1974 (as in effect as of the day after the date of 
     enactment of the Bipartisan Patients' Bill of Rights Act of 
     2001) shall apply to non-Federal governmental group health 
     insurance coverage offered by health insurance issuers with 
     respect to an enrollee in the same manner as they apply to 
     health insurance coverage offered by a health insurance 
     issuer for a participant or beneficiary in connection with a 
     group health plan and the requirements referred to in such 
     sections shall be deemed to be incorporated into this 
     section. For purposes of this subsection, references in such 
     sections 503 through 503B to the Secretary shall be deemed to 
     be references to the Secretary of Health and Human 
     Services.''.
       (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 (42 
     U.S.C. 300gg-41 et seq.) is amended--
       (1) by redesignating the first subpart 3 (relating to other 
     requirements) as subpart 2; and
       (2) by inserting after section 2752 the following:

     ``SEC. 2753. PATIENT PROTECTION STANDARDS AND ACCOUNTABILITY.

       ``(a) In General.--Each health insurance issuer shall 
     comply with the patient protection requirements under 
     subtitles A and B of title I of the Bipartisan Patients' Bill 
     of Rights Act of 2001 with respect to individual health 
     insurance coverage it offers, and such requirements shall be 
     deemed to be incorporated into this section.''.
       ``(b) Accountability.--The provisions of sections 503 
     through 503B of the Employee Retirement Income Security Act 
     of 1974 (as in effect as of the day after the date of 
     enactment of the Bipartisan Patients' Bill of Rights Act of 
     2001) shall apply to health insurance coverage offered by a 
     health insurance issuer in the individual market with respect 
     to an enrollee in the same manner as they apply to health 
     insurance coverage offered by a health insurance issuer for a 
     participant or beneficiary in connection with a group health 
     plan and the requirements referred to in such sections shall 
     be deemed to be incorporated into this section. For purposes 
     of this subsection, references in such sections 503 through 
     503B to the Secretary shall be deemed to be references to the 
     Secretary of Health and Human Services.''.

     SEC. 203. LIMITATION ON AUTHORITY OF THE SECRETARY OF HEALTH 
                   AND HUMAN SERVICES WITH RESPECT TO NON-FEDERAL 
                   GOVERNMENTAL PLANS.

       Section 2722(b) of the Public Health Service Act (42 U.S.C. 
     300gg-22(b)) is amended--
       (1) in paragraph (1), by striking ``only--'' and all that 
     follows through the period and inserting ``only as provided 
     under subsection (a)(2).''; and
       (2) in paragraph (2)--
       (A) in subparagraph (A), by striking ``any non-Federal 
     governmental plan that is a group health plan and''; and
       (B) in subparagraph (B), by striking ``by--'' and all that 
     follows through the period and inserting ``by a health 
     insurance issuer, the issuer is liable for such penalty.''.

     SEC. 204. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

       Part C of title XXVII of the Public Health Service Act (42 
     U.S.C. 300gg-91 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 2793. COOPERATION BETWEEN FEDERAL AND STATE 
                   AUTHORITIES.

       ``(a) Agreement with States.--A State may enter into an 
     agreement with the Secretary for the delegation to the State 
     of some or all of the Secretary's authority under this title 
     to enforce the requirements applicable under title I of the 
     Bipartisan Patients's Bill of Rights Act of 2001 to health 
     insurance issuers in connection with non-Federal governmental 
     plans and individual health insurance coverage.
       ``(b) Delegations.--Any department, agency, or 
     instrumentality of a State to which authority is delegated 
     pursuant to an agreement entered into under this section may, 
     if authorized under State law and to the extent consistent 
     with such agreement, exercise the powers of the Secretary 
     under this title which relate to such authority.''.

TITLE III--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 (29 U.S.C. 
     1185 et seq.) is further 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 health 
     insurance coverage in connection with a group health plan) 
     shall comply with the requirements of title I of the 
     Bipartisan Patients' Bill of Rights Act of 2001 (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 Patients' Bill of Rights Act of 
     2001 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:

[[Page 12583]]

       ``(A) Section 101 (relating to access to emergency care).
       ``(B) Section 102 (relating to consumer choice option).
       ``(C) Section 103 (relating to patient access to 
     obstetrical and gynecological care).
       ``(D) Section 104 (relating to access to pediatric care).
       ``(E) Section 105 (relating to timely access to 
     specialists).
       ``(F) Section 106 (relating to continuity of care), but 
     only insofar as a replacement issuer assumes the obligation 
     for continuity of care.
       ``(G) Section 108 (relating to access to needed 
     prescription drugs).
       ``(H) Section 109 (relating to coverage for individuals 
     participating in approved clinical trials).
       ``(I) Section 110 (relating to required coverage for 
     minimum hospital stay for mastectomies and lymph node 
     dissections for the treatment of breast cancer and coverage 
     for secondary consultations).
       ``(J) Section 121 (relating to the provision of 
     information).
       ``(2) Application to prohibitions.--Pursuant to rules of 
     the Secretary, if a health insurance issuer offering health 
     insurance coverage in connection with a group health plan 
     takes an action in violation of any of the following sections 
     of the Bipartisan Patients' Bill of Rights Act of 2001, the 
     group health plan shall not be liable for such violation 
     unless the plan caused such violation:
       ``(A) Section 107 (relating to prohibition of interference 
     with certain medical communications).
       ``(B) Section 111 (relating to prohibition of 
     discrimination against providers based on licensure).
       ``(3) 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.
       ``(4) Treatment of consistent state laws.--For purposes of 
     applying this subsection, a health insurance issuer offering 
     coverage in connection with a group health plan (and such 
     group health plan) shall be deemed to be in compliance with 
     one or more of the patient protection requirements of the 
     Bipartisan Patients' Bill of Rights Act of 2001 (as defined 
     in section 151(b)(3) of such Act) that are otherwise 
     applicable to such issuer (or plan) under this section 
     where--
       ``(A) the issuer (or plan) is in compliance with a State 
     law, with respect to the patient protection requirements 
     involved, that has been certified in accordance with section 
     151(c) of such Act; or
       ``(B) the issuer (or plan) is in compliance with a State 
     law, with respect to the patient protection requirements 
     involved, that has been determined by the Secretary as not 
     preventing the application of the patient protection 
     requirements involved, in accordance with section 
     151(c)(8)(B) of such Act.
       ``(c) Conforming Regulations.--The Secretary shall issue 
     regulations to coordinate the requirements on group health 
     plans and health insurance issuers under this section with 
     the requirements imposed under the other provisions of this 
     title.''.
       (b) Satisfaction of ERISA Claims Procedure Requirement.--
     Section 503 of the Employee Retirement Income Security Act of 
     1974 (29 U.S.C. 1133) is amended--
       (1) by inserting ``(a)'' after ``Sec. 503.''; and
       (2) by adding at the end the following:
       ``(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 Patients' Bill of Rights Act of 
     2001, and compliance with regulations promulgated by the 
     Secretary, in the case of a claims denial shall be deemed 
     compliance with subsection (a) with respect to such claims 
     denial.''.
       (c) Enforcement.--Section 502(b)(3) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1132(b)(3)) 
     is amended--
       (1) by striking ``The Secretary'' and inserting ``(A) The 
     Secretary''; and
       (2) by adding at the end the following:
       ``(B) A participant, beneficiary, plan fiduciary, or the 
     Secretary may not bring an action to enforce the requirements 
     of section 714 against a health insurance issuer offering 
     coverage in connection with a group health plan (or such 
     group health plan) where the patient protection requirements 
     of the Bipartisan Patients' Bill of Rights Act of 2001 (as 
     defined in section 151(b)(3) of such Act) otherwise 
     applicable to such issuer (or plan) under section 714 do not 
     apply because the issuer (or plan) is in compliance with a 
     State law, with respect to the patient protection 
     requirements involved, that has been certified or a 
     determination made in accordance with section 151 of such 
     Act.''.
       (d) Conforming Amendments.--
       (1) Section 732(a) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1185(a)) is amended by 
     striking ``section 711'' and inserting ``sections 711 and 
     714''.
       (2) The table of contents in section 1 of the Employee 
     Retirement Income Security Act of 1974 is amended by 
     inserting after the item relating to section 713 the 
     following new item:

``Sec. 714. Patient protection standards.''.

       (3) Section 502(b)(3) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1132(b)(3)) is amended by 
     inserting ``(other than section 135(b))'' after ``part 7''.

     SEC. 302. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

       Section 506 of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1136) is amended by adding at the end the 
     following:
       ``(c) Responsibility of State with Respect to Health 
     Insurance Issuers.--
       ``(1) Agreement with states.--A State may enter into an 
     agreement with the Secretary for the delegation to the State 
     of some or all of the Secretary's authority under sections 
     502, 503A, 503B, or 504 to enforce the requirements 
     applicable under title I of the Bipartisan Patients's Bill of 
     Rights Act of 2001 to health insurance issuers in connection 
     with a group health plan.
       ``(2) Delegations.--Any department, agency, or 
     instrumentality of a State to which authority is delegated 
     pursuant to an agreement entered into under this subsection 
     may, if authorized under State law and to the extent 
     consistent with such agreement, exercise the powers of the 
     Secretary under this title which relate to such authority.''.

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

     SEC. 401. APPLICATION TO GROUP HEALTH PLANS UNDER THE 
                   INTERNAL REVENUE CODE OF 1986.

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

``Sec. 9813. Standard relating to patients' bill of rights.'';

     and
       (2) by inserting after section 9812 the following:

     ``SEC. 9813. STANDARD RELATING TO PATIENTS' BILL OF RIGHTS.

       ``A group health plan shall comply with the requirements of 
     title I of the Bipartisan Patients' Bill of Rights Act of 
     2001 (as in effect as of the date of the enactment of such 
     Act), and such requirements shall be deemed to be 
     incorporated into this section.''.

     SEC. 402. CONFORMING ENFORCEMENT FOR WOMEN'S HEALTH AND 
                   CANCER RIGHTS.

       Subchapter B of chapter 100 of the Internal Revenue Code of 
     1986, as amended by section 401, is further amended--
       (1) in the table of sections, by inserting after the item 
     relating to section 9813 the following new item:

``Sec. 9814. Standard relating to women's health and cancer rights.'';

     and
       (2) by inserting after section 9813 the following:

     ``SEC. 9814. STANDARD RELATING TO WOMEN'S HEALTH AND CANCER 
                   RIGHTS.

       ``The provisions of section 713 of the Employee Retirement 
     Income Security Act of 1974 (as in effect as of the date of 
     the enactment of this section) shall apply to group health 
     plans as if included in this subchapter.''.

                 TITLE V--EFFECTIVE DATE; SEVERABILITY

     SEC. 501. EFFECTIVE DATE AND RELATED RULES.

       Except as otherwise provided in this Act, the provisions of 
     this Act, including the amendments made by title I, shall 
     apply on the later of--
       (1) plan years beginning on or after January 1, 2003; or
       (2) plan years beginning on or after 18 months after the 
     date on which the Secretary of Health and Human Services and 
     the Secretary of Labor issue final regulations, subject to 
     the notice and comment period required under subchapter 2 of 
     chapter 5 of title 5, United States Code, necessary to carry 
     out the amendments made by this Act.

     SEC. 502. SEVERABILITY.

       (a) In General.--Except as provided in subsections (b) and 
     (c), if any provision of this Act, an amendment made by this 
     Act, or the application of such provision or amendment to any 
     person or circumstance is held to be unconstitutional, the 
     remainder of this Act, the amendments made by this Act, and 
     the application of the provisions of such to any person or 
     circumstance shall not be affected thereby.
       (b) Dependence of Remedies on Appeals.--If any provision of 
     section 131, or the amendments made by such section, or the 
     application of such section or amendments to any person or 
     circumstance is held to be unconstitutional, sections 141 and 
     143, and the amendments made by such sections, shall be 
     deemed to be null and void and shall be given no force or 
     effect.
       (c) Remedies.--If any provision of section 141, or the 
     amendments made by such section, or the application of such 
     section or amendments to any person or circumstance is held 
     to be unconstitutional, the remainder of such section, and 
     the amendments made by such section shall be deemed to be 
     null and void and shall be given no force or effect.

     SEC. 503. ANNUAL REVIEW.

       (a) In General.--Not later than 24 months after the 
     effective date referred to in section 501, and annually 
     thereafter for each of the succeeding 4 calendar years (or 
     until a repeal is effective under subsection (b)), the 
     Secretary of Health and Human Services shall

[[Page 12584]]

     request that the Institute of Medicine of the National 
     Academy of Sciences prepare and submit to the appropriate 
     committees of Congress a report concerning the impact of this 
     Act, and the amendments made by this Act, on the number of 
     individuals in the United States with health insurance 
     coverage.
       (b) Limitation With Respect to Certain Plans.--If the 
     Secretary, in any report submitted under subsection (a), 
     determines that more than 1,000,000 individuals in the United 
     States have lost their health insurance coverage as a result 
     of the enactment of this Act, as compared to the number of 
     individuals with health insurance coverage in the 12-month 
     period preceding the date of enactment of this Act, section 
     141 and the amendments made by such section shall be repealed 
     effective on the date that is 12 month after the date on 
     which the report is submitted, and the submission of any 
     further reports under subsection (a) shall not be required.
       (c) Funding.--From funds appropriated to the Department of 
     Health and Human Services for fiscal years 2003 and 2004, the 
     Secretary of Health and Human Services shall provide for such 
     funding as the Secretary determines necessary for the conduct 
     of the study of the National Academy of Sciences under this 
     section.
                                  ____

  SA 857. Mr. ENSIGN submitted an amendment intended to be proposed by 
him to the bill S. 1052, to amend the Public Health Service Act and the 
Employee Retirement Income Security Act of 1974 to protect consumers in 
managed care plans and other health coverage; which was ordered to lie 
on the table; as follows:

  On page 179, after line 14, add the following:

     SEC.  . IMMUNITY FOR HEALTH CARE PROFESSIONALS.

       Section 6(6) of the Volunteer Protection Act of 1997 (42 
     U.S.C. 14505(6)) is amended by adding at the end the 
     following flush sentence:
       ``Such term includes a health care professional (as defined 
     in section 151 of the Bipartisan Patient Protection Act) who 
     is providing pro bono medical services and who meets the 
     requirements of subparagraphs (A) and (B) with respect to the 
     provision of such services including compensation from any 
     source.''
                                  ____

  SA 858. Mrs. BOXER submitted an amendment intended to be proposed by 
her to the bill S. 976, to provide authorization and funding for the 
enhancement of ecosystems, water supply, and water quality of the State 
of California; which was referred to the Committee on Energy and 
Natural Resources; as follows:

       On page 11, line 4, strike ``and''.
       On page 11, line 10, strike ``decision'' and insert 
     ``decision; and''.
       On page 11, between lines 10 and 11, insert the following:
       (5) subject to full compliance with all Federal and State 
     environmental laws (including regulations) and hydrologic 
     variability, and consistent with water rights in existence on 
     the date of enactment of this Act, the record of decision--
       (A) anticipates that implementation of joint point 
     diversion, operational flexibility, interagency cooperation, 
     and the environmental water account will occur and likely 
     result in an increase to south-of-Delta Central Valley 
     Project agricultural water service contractors of--
       (i) 15 percent of contract totals in normal water years 
     (totaling approximately 65 to 70 percent of contract totals); 
     and
       (ii) lesser amounts in dry years; and
       (B) does not amend or otherwise affect any legal right of, 
     or remedy available to, any Central Valley Project 
     contractor.
       On page 14, strike lines 4 through 23.
       On page 14, line 24, strike ``(3)'' and insert ``(2)''.
       On page 15, line 5, strike ``(4)'' and insert ``(3)''.
                                  ____

  SA 859. Mrs. BOXER submitted an amendment intended to be proposed by 
her to the bill S. 976, to provide authorization and funding for the 
enhancement of ecosystems, water supply, and water quality of the State 
of California; which was referred to the Committee on Energy and 
Natural Resources; as follows:

       On page 29, strike line 4 and insert the following:
       (C) Reports.--The Secretary, in cooperation with the 
     Federal agencies and State agencies, shall submit to the 
     authorizing committees a report on each project identified in 
     this subsection that includes, for each such project--
       (i) a project description;
       (ii) the results of all feasibility and operational studies 
     carried out for the project;
       (iii) the results of all final environmental impact studies 
     and reports completed concerning the project;
       (iv) a finding of consistency with the record of decision 
     by the Bay-Delta Program Policy Group;
       (v) a finding of consistency, made by the Independent 
     Science Panel described in the record of decision, with 
     attainment of the objectives of the ecosystem restoration 
     program;
       (vi) an identification of the quantity of water that the 
     project would allocate to fish, wildlife, and habitat to 
     support the attainment of those objectives;
       (vii) a cost-benefit analysis;
       (viii) a description of the benefits and beneficiaries of 
     the project;
       (ix) a cost allocation plan that is consistent with the 
     requirement in the record of decision that beneficiaries pay 
     the full cost of the project (including mitigation costs); 
     and
       (x) a financing and repayment plan that specifies the 
     contribution of each project beneficiary.
       (D) Submission deadlines.--
       (i) In general.--A report under subparagraph (C) shall be 
     submitted for certain projects identified in the record of 
     decision as follows:

       (I) For enlargement of Shasta Dam, not later than January 
     1, 2004.
       (II) For new in-Delta storage, not later than January 2, 
     2002.
       (III) For enlargement of Los Vaqueros Reservoir, not later 
     than December 1, 2003.

       (ii) Failure to meet deadlines.--If a report described in 
     clause (i) is not submitted by the applicable deadline 
     described in that clause, the Secretary shall immediately 
     submit to the authorizing committees an explanation of the 
     failure to submit the report that includes--

       (I) a revised timeline for submission of the report; and
       (II) if determined to be appropriate for inclusion by the 
     Secretary--

       (aa) a partial interim report; or
       (bb) a determination by the Secretary that the project 
     appears to be infeasible, based on preliminary findings and 
     information contained in the report.
       (E) Cost sharing.--
       Beginning on page 30, strike line 9 and all that follows 
     through page 32, line 18, and insert the following:
       (3) Acquisition of water and land.--There are authorized to 
     be appropriated such sums as are necessary to pay the Federal 
     share of the cost of carrying out 1 or more projects or 
     activities to acquire water or land for the ecosystem 
     restoration program and the environmental water account, as 
     provided in the record of decision.
       On page 32, line 19, strike ``(5)'' and insert ``(4)''.
                                  ____

  SA 860. Mr. REID (for Mr. Kennedy (for himself and Mr. Gregg)) 
proposed an amendment to the bill S. 1052, to amend the Public Health 
Service Act and the Employee Retirement Income Security Act of 1974 to 
protect consumers in managed care plans and other health coverage; as 
follows:

       On page 22, lines 13 and 14, strike ``Review of medical 
     decisions by physicians'' and insert ``Peer review of medical 
     decisions by health care professionals''.
       On page 22, strike lines 18 through 22, and insert the 
     following: ``evaluation of medical facts--
       ``(A) shall be made by a physician (allopathic or 
     osteopathic); or
       ``(B) in a claim for benefits provided by a non-physician 
     health professional, shall be made by reviewer (or reviewers) 
     including at least one practicing non-physician health 
     professional of the same or similar specialty;

     ``with appropriate expertise (including, in the case of a 
     child, appropriate pediatric expertise) and acting within the 
     appropriate scope of practice within the State in which the 
     service is provided or rendered, who was not involved in the 
     initial determination.''.
       On page 52, line 4, after ``who'' insert the following: ``, 
     acting within the appropriate scope of practice within the 
     State in which the service is provided or rendered,''.
       On page 52, strike lines 7 through 17, and insert the 
     following:
       ``(ii) by a non-physician health care professional, a 
     reviewer (or reviewers) shall include at least one practicing 
     non-physician health care professional of the same or similar 
     specialty as the non-physician health care professional who, 
     acting within the appropriate scope of practice within the 
     State in which the service is provided or rendered, typically 
     treats the condition, makes the diagnosis, or provides the 
     type of treatment under review.''.
       On page 93, line 18, insert before the semicolon the 
     following: ``, such as a qualified nongovernmental research 
     entity to which the National Cancer Institute has awarded a 
     center support grant''.
       On page 94, line 13, strike ``scientific'' and insert 
     ``ethical''.
       On page 100, line 13, strike ``104(b)(3)(C)'' and insert 
     ``104(d)(3)(C)''.
       On page 142, line 1, strike ``person'' and insert ``plan, 
     plan sponsor or issuer''.
       On page 154, line 11, strike ``(5)'' and insert ``(9)''.
       On page 174, line 5, strike ``determined without regard 
     to'' and insert ``excluding''.
       On page 174, line 8, strike the period and insert a 
     semicolon.
       On page 174, line 9, strike ``For'' and insert ``but shall 
     apply not later than 1 year after the general effective date. 
     For''.

[[Page 12585]]

       On page 173, between lines 4 and 5, insert the following:

     SEC. 304. SENSE OF THE SENATE CONCERNING THE IMPORTANCE OF 
                   CERTAIN UNPAID SERVICES.

       (b) Sense of the Senate.--It is the sense of the Senate 
     that the court should consider the loss of a non-wage earning 
     spouse or parent as an economic loss for the purposes of this 
     section. Furthermore, the court should define the 
     compensation for the loss not as minimum services, but, 
     rather, in terms that fully compensate for the true and whole 
     replacement cost to the family.
       At the end of subtitle A of title I, insert the following:

     SEC. __. HEALTH CARE CONSUMER ASSISTANCE FUND.

       (a) Grants.--
       (1) In general.--The Secretary of Health and Human Services 
     (referred to in this section as the ``Secretary'') shall 
     establish a fund, to be known as the ``Health Care Consumer 
     Assistance Fund'', to be used to award grants to eligible 
     States to carry out consumer assistance activities (including 
     programs established by States prior to the enactment of this 
     Act) designed to provide information, assistance, and 
     referrals to consumers of health insurance products.
       (2) State eligibility.--To be eligible to receive a grant 
     under this subsection a State shall prepare and submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary may require, 
     including a State plan that describes--
       (A) the manner in which the State will ensure that the 
     health care consumer assistance office (established under 
     paragraph (4)) will educate and assist health care consumers 
     in accessing needed care;
       (B) the manner in which the State will coordinate and 
     distinguish the services provided by the health care consumer 
     assistance office with the services provided by Federal, 
     State and local health-related ombudsman, information, 
     protection and advocacy, insurance, and fraud and abuse 
     programs;
       (C) the manner in which the State will provide information, 
     outreach, and services to underserved, minority populations 
     with limited English proficiency and populations residing in 
     rural areas;
       (D) the manner in which the State will oversee the health 
     care consumer assistance office, its activities, product 
     materials and evaluate program effectiveness;
       (E) the manner in which the State will ensure that funds 
     made available under this section will be used to supplement, 
     and not supplant, any other Federal, State, or local funds 
     expended to provide services for programs described under 
     this section and those described in subparagraphs (C) and 
     (D);
       (F) the manner in which the State will ensure that health 
     care consumer office personnel have the professional 
     background and training to carry out the activities of the 
     office; and
       (G) the manner in which the State will ensure that 
     consumers have direct access to consumer assistance personnel 
     during regular business hours.
       (3) Amount of grant.--
       (A) In general.--From amounts appropriated under subsection 
     (b) for a fiscal year, the Secretary shall award a grant to a 
     State in an amount that bears the same ratio to such amounts 
     as the number of individuals within the State covered under a 
     group health plan or under health insurance coverage offered 
     by a health insurance issuer bears to the total number of 
     individuals so covered in all States (as determined by the 
     Secretary). Any amounts provided to a State under this 
     subsection that are not used by the State shall be remitted 
     to the Secretary and reallocated in accordance with this 
     subparagraph.
       (B) Minimum amount.--In no case shall the amount provided 
     to a State under a grant under this subsection for a fiscal 
     year be less than an amount equal to 0.5 percent of the 
     amount appropriated for such fiscal year to carry out this 
     section.
       (C) Non-federal contributions.--A State will provide for 
     the collection of non-Federal contributions for the operation 
     of the office in an amount that is not less than 25 percent 
     of the amount of Federal funds provided to the State under 
     this section.
       (4) Provision of funds for establishment of office.--
       (A) In general.--From amounts provided under a grant under 
     this subsection, a State shall, directly or through a 
     contract with an independent, nonprofit entity with 
     demonstrated experience in serving the needs of health care 
     consumers, provide for the establishment and operation of a 
     State health care consumer assistance office.
       (B) Eligibility of entity.--To be eligible to enter into a 
     contract under subparagraph (A), an entity shall demonstrate 
     that it has the technical, organizational, and professional 
     capacity to deliver the services described in subsection (b) 
     to all public and private health insurance participants, 
     beneficiaries, enrollees, or prospective enrollees.
       (C) Existing state entity.--Nothing in this section shall 
     prevent the funding of an existing health care consumer 
     assistance program that otherwise meets the requirement of 
     this section.
       (b) Use of Funds.--
       (1) By state.--A State shall use amounts provided under a 
     grant awarded under this section to carry out consumer 
     assistance activities directly or by contract with an 
     independent, non-profit organization. An eligible entity may 
     use some reasonable amount of such grant to ensure the 
     adequate training of personnel carrying out such activities. 
     To receive amounts under this subsection, an eligible entity 
     shall provide consumer assistance services, including--
       (A) the operation of a toll-free telephone hotline to 
     respond to consumer requests;
       (B) the dissemination of appropriate educational materials 
     on available health insurance products and on how best to 
     access health care and the rights and responsibilities of 
     health care consumers;
       (C) the provision of education on effective methods to 
     promptly and efficiently resolve questions, problems, and 
     grievances;
       (D) the coordination of educational and outreach efforts 
     with health plans, health care providers, payers, and 
     governmental agencies;
       (E) referrals to appropriate private and public entities to 
     resolve questions, problems and grievances; and
       (F) the provision of information and assistance, including 
     acting as an authorized representative, regarding internal, 
     external, or administrative grievances or appeals procedures 
     in nonlitigative settings to appeal the denial, termination, 
     or reduction of health care services, or the refusal to pay 
     for such services, under a group health plan or health 
     insurance coverage offered by a health insurance issuer.
       (2) Confidentiality and access to information.--
       (A) State entity.--With respect to a State that directly 
     establishes a health care consumer assistance office, such 
     office shall establish and implement procedures and protocols 
     in accordance with applicable Federal and State laws.
       (B) Contract entity.--With respect to a State that, through 
     contract, establishes a health care consumer assistance 
     office, such office shall establish and implement procedures 
     and protocols, consistent with applicable Federal and State 
     laws, to ensure the confidentiality of all information shared 
     by a participant, beneficiary, enrollee, or their personal 
     representative and their health care providers, group health 
     plans, or health insurance insurers with the office and to 
     ensure that no such information is used by the office, or 
     released or disclosed to State agencies or outside persons or 
     entities without the prior written authorization (in 
     accordance with section 164.508 of title 45, Code of Federal 
     Regulations) of the individual or personal representative. 
     The office may, consistent with applicable Federal and State 
     confidentiality laws, collect, use or disclose aggregate 
     information that is not individually identifiable (as defined 
     in section 164.501 of title 45, Code of Federal Regulations). 
     The office shall provide a written description of the 
     policies and procedures of the office with respect to the 
     manner in which health information may be used or disclosed 
     to carry out consumer assistance activities. The office shall 
     provide health care providers, group health plans, or health 
     insurance issuers with a written authorization (in accordance 
     with section 164.508 of title 45, Code of Federal 
     Regulations) to allow the office to obtain medical 
     information relevant to the matter before the office.
       (3) Availability of services.--The health care consumer 
     assistance office of a State shall not discriminate in the 
     provision of information, referrals, and services regardless 
     of the source of the individual's health insurance coverage 
     or prospective coverage, including individuals covered under 
     a group health plan or health insurance coverage offered by a 
     health insurance issuer, the medicare or medicaid programs 
     under title XVIII or XIX of the Social Security Act (42 
     U.S.C. 1395 and 1396 et seq.), or under any other Federal or 
     State health care program.
       (4) Designation of responsibilities.--
       (A) Within existing state entity.--If the health care 
     consumer assistance office of a State is located within an 
     existing State regulatory agency or office of an elected 
     State official, the State shall ensure that--
       (i) there is a separate delineation of the funding, 
     activities, and responsibilities of the office as compared to 
     the other funding, activities, and responsibilities of the 
     agency; and
       (ii) the office establishes and implements procedures and 
     protocols to ensure the confidentiality of all information 
     shared by a participant, beneficiary, or enrollee or their 
     personal representative and their health care providers, 
     group health plans, or health insurance issuers with the 
     office and to ensure that no information is disclosed to the 
     State agency or office without the written authorization of 
     the individual or their personal representative in accordance 
     with paragraph (2).
       (B) Contract entity.--In the case of an entity that enters 
     into a contract with a State under subsection (a)(3), the 
     entity shall provide assurances that the entity has no 
     conflict of interest in carrying out the activities of the 
     office and that the entity is independent of group health 
     plans, health insurance issuers, providers, payers, and 
     regulators of health care.

[[Page 12586]]

       (5) Subcontracts.--The health care consumer assistance 
     office of a State may carry out activities and provide 
     services through contracts entered into with 1 or more 
     nonprofit entities so long as the office can demonstrate that 
     all of the requirements of this section are complied with by 
     the office.
       (6) Term.--A contract entered into under this subsection 
     shall be for a term of 3 years.
       (c) Report.--Not later than 1 year after the Secretary 
     first awards grants under this section, and annually 
     thereafter, the Secretary shall prepare and submit to the 
     appropriate committees of Congress a report concerning the 
     activities funded under this section and the effectiveness of 
     such activities in resolving health care-related problems and 
     grievances.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section.

                          ____________________