[Senate Report 106-82]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 160
106th Congress                                                   Report
                                 SENATE
 1st Session                                                     106-82

======================================================================



 
                  PATIENTS' BILL OF RIGHTS ACT OF 1999

                                _______
                                

                 June 17, 1999.--Ordered to be printed.

                                _______


   Mr. Jeffords, from the Committee on Health, Education, Labor, and 
                   Pensions, submitted the following

                              R E P O R T

                             together with

              ADDITIONAL, MINORITY, AND SUPPLEMENTAL VIEWS

                         [To accompany S. 326]

    The Committee on Health, Education, Labor, and Pensions, to 
which was referred the bill (S. 326) to improve the access and 
choice of patients to quality, affordable health care, having 
considered the same, reports favorably thereon with an 
amendment in the nature of a substitute and recommends that the 
bill do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and summary of the legislation...........................1
 II. Background and need for the legislation..........................5
III. Legislative history and votes in committee......................16
 IV. Explanation of the legislation and committee views..............28
  V. Cost estimate...................................................57
 VI. Application of law to the legislative branch....................62
VII. Regulatory impact statement.....................................62
VIII.Section-by-section analysis.....................................63

 IX. Additional views................................................96
  X. Minority views.................................................100
 XI. Supplemental views.............................................109
 IX. Changes in existing law........................................110

               I. Purpose and Summary of the Legislation

    Purpose. The Employee Retirement Income Security Act 
(ERISA) of 1974 governs pension plans and employee welfare 
benefit plans, including group health plans. For group health 
plans, it contains requirements pertaining to reporting and 
disclosure, fiduciary duties, administration and enforcement, 
portability, and plan design provisions pertaining to mental 
health, breast cancer, and maternity services. When ERISA was 
passed in 1974, health benefits were delivered almost 
exclusively on a fee-for-service basis. At that time, there 
were very few restrictions on an individual's ability to seek 
services and a provider's ability to get paid for services 
rendered. Today, pure fee-for-service is virtually nonexistent. 
According to the 1998 Mercer/Foster Higgins National Survey of 
Employer-sponsored Health Plans, some 87 percent of the 124 
million Americans who have employer-sponsored health coverage 
governed by ERISA are enrolled in some type of managed care 
plan today. With the emergence of new forms of health care 
delivery systems that impose rules and restrictions on 
providers and patients, the public has called for new rights 
and protections to help them navigate these systems 
effectively.
    Since its passage, a few substantive requirements have been 
added to ERISA. In 1996, Congress passed the Health Insurance 
Portability and Accountability Act (HIPAA), which makes health 
coverage more portable by limiting the use of preexisting 
condition exclusions and prohibiting discrimination in 
eligibility and premiums for group health plans. Congress also 
passed the Mental Health Parity Act, the Newborns' and Mothers' 
Health Protection Act and the Women's Health and Cancer Rights 
Act. These laws generally address plan design and benefit 
concerns. However, these laws do not address the full range of 
quality, access, and process concerns that have been raised by 
the evolution of new delivery systems.
    In contrast, states have been actively pursuing reforms 
targeting access and delivery. A GAO report requested by the 
Chairman, indicates that, while approaches vary widely, States 
are actively pursuing the types of patient protections that are 
contained in Title I of this legislation. Many States have also 
passed reforms pertaining to utilization and grievance and 
appeals procedures, and states are beginning to pass 
legislation mandating an independent, external review of 
adverse coverage decisions.
    Similar laws and regulations have already been adopted for 
Medicare, Medicaid, and the Federal Employees Health Benefits 
Program. Although independent, external review is widely- 
recognized as an important and necessary consumer protection, 
the Department of Labor lacks the authority to implement such a 
requirement through rulemaking. Only Congress can implement 
this important consumer right by passing legislation for the 
124 million Americans covered under ERISA group health plans.
    Summary. The primary goal of S. 326, The Patients' Bill of 
Rights Act, is to improve health care quality through better 
information; improved procedures and rights to help consumers 
and patients access benefits and services; reduced barriers to 
coverage because of genetic constitution; and federal 
investments in health quality research. An equally important 
goal is to provide these new protections without significantly 
increasing the cost of health coverage and causing more 
Americans to become uninsured.
    The Patients' Bill of Rights Act will reduce many of the 
barriers that consumers with health coverage face in accessing 
health care services. It will create new rights and provide 
consumers with information to help them make appropriate 
decisions and to exercise their rights in accessing covered 
benefits and services. In addition, the legislation will reduce 
barriers to obtaining health coverage that individuals face 
because of predictive genetic information. Finally, the 
legislation will enhance the overall quality of the nation's 
health care systems and increase the national investment in 
health care quality and research. The legislation, through a 
sense of the committee, expresses support for expanding 
coverage through tax incentives over which the Finance 
Committee has jurisdiction.
    Recognizing that States have responded to consumer concerns 
associated with a rapidly evolving health care delivery system, 
the Patients' Bill of Rights Act seeks to create patient 
protections, similar to many State-enacted protections, for the 
48 million Americans who receive their health coverage from 
plans that lie outside the regulatory jurisdiction of States. 
In addition, this legislation builds on the existing Federal 
regulatory framework under ERISA that includes information 
disclosure requirements and claims and appeals procedures for 
group health plans covering 124 million Americans. The 
legislation would enhance current information disclosure 
requirements and penalties and strengthen existing requirements 
for coverage determinations, grievances, and appeals, including 
the addition of a new requirement for independent, external 
review. The genetic non-discrimination provisions in the 
legislation would apply to all types of group health plans and 
individual insurance policies, helping as many as 140 million 
Americans. Finally, the quality provisions in the legislation 
will benefit every American who receives health care services.
    The legislation achieves these goals through the following 
provisions. Provisions one through nine apply to plans that are 
not regulated by States. In these provisions, the bill amends 
ERISA to apply consumer protection provisions specifically to 
employer-sponsored group health plans that are not ``fully 
insured.'' Provisions number ten (information disclosure) and 
eleven (coverage determinations and appeals) below apply to all 
group health plans, including fully insured and self insured 
plans. Provision number twelve (genetic information) applies to 
all group health plans and health insurance issuers in the 
group and individual markets.
    1. The legislation guarantees coverage for emergencies.--
The bill requires group health plans to cover emergency medical 
screening and stabilization using the ``prudent layperson'' 
standard. These services must be provided without requiring 
prior authorization and regardless of whether the services are 
provided by a network or non-network facility.
    2. The legislation enhances health plan choice.--The bill 
requires group health plans that provide benefits through a 
single, closed network of health care professionals to offer 
participants the option to purchase point-of-service coverage. 
Plans offered by small employers(2-50 employees) and plans that 
offer coverage options with significantly different providers or 
networks are exempt from this provision.
    3. The legislation guarantees direct access to obstetric/
gynecological care.--The bill requires group health plans to 
provide female enrollees with direct access to an ob/gyn for 
routine care without requiring authorization from the plan or a 
primary care physician.
    4. The legislation guarantees direct access to pediatric 
care.--The bill requires plans to provide a child with direct 
access to a pediatrician for routine care without authorization 
from the plan or a primary care provider who is not a 
pediatrician.
    5. The legislation guarantees access to specialty care.--
The bill requires plans to ensure that participants have access 
to specialty care through network providers or through 
arrangements with non-network specialists. Plans may require 
authorization from a primary care provider so long as the 
authorization is for an adequate number of referrals under an 
approved treatment plan, if such a treatment plan is required 
by the plan.
    6. The legislation improves continuity in care.--The bill 
requires plans to continue covering institutional care or care 
for terminal illness for up to 90 days when such care would 
otherwise be disrupted or terminated due to the termination of 
a relationship between the plan and the provider. Plans must 
also continue care through the postpartum period for pregnant 
women who are in their second trimester of pregnancy at the 
time of the termination.
    7. The legislation protects communications between 
providers and their patients.--The bill bans plans from 
prohibiting or otherwise restricting a health care professional 
from advising a patient about health status and treatment 
options.
    8. The legislation improves access to medication.--The bill 
requires plans to ensure that physicians and pharmacists 
participate in the development and review of prescription drug 
formularies and provide exceptions from the formulary when a 
non-formulary alternative is medically necessary and 
appropriate.
    9. The legislation protects a participant's right to self-
pay for behavioral health services.--The bill would prohibit 
plans that offer behavioral health services from barring or 
discouraging a participant from self-paying for behavioral 
health care services or terminating a provider who accepts 
self-payment, once the plan has denied coverage for such 
services.
    10. The legislation improves the efficiency of the health 
care market through enhanced information disclosure.--The bill 
amends ERISA and the Internal Revenue Code to require all group 
health plans and issuers that provide coverage in connection 
with group health plans to disclose a wide variety of 
information, such as covered benefits, cost-sharing 
requirements, the plan's definition of medical necessity, and 
how to access specialists. Additional information must be 
provided upon request, including a summary description of the 
methods used for compensating providers and a list of 
medications included on the plan's formulary.
    11. The legislation creates new standards for coverage 
determinations and internal and external appeal rights.--The 
bill amends the claims and appeals requirements that apply to 
all group health plans under ERISA, modifying the time frames 
and standards for determinations and creating a new right to 
independent, external review. Expedited determinations must be 
made within 72 hours, if the routine time frame would 
jeopardize the individual's health. Adverse determinations on 
appeal must be made by a physician with appropriate expertise, 
if the denial is based on a lack of medical necessity. Adverse 
internal appeal decisions involving a determination of medical 
necessity (that exceeds a significant financial threshold or 
jeopardizes the health of the individual), or a determination 
that an intervention is experimental or investigational, are 
appealable to an independent, external review entity. The plan 
selects an authorized external review entity, which then 
selects an independent reviewer who must have relevant 
experience and, when reasonably available, be of the same 
speciality. The reviewer then makes an independent decision 
based on the valid, relevant, scientific, and clinical 
evidence.
    12. The legislation guarantees that health coverage will 
not be discriminatory based on predictive genetic 
information.--The bill amends ERISA, the Public Health Service 
Act, and the Internal Revenue Code and applies these 
protections to all group health plans and health insurance 
issuers in the group and individual markets. It prohibits these 
plans and issuers from requesting or requiring certain 
information and from denying coverage or adjusting premiums or 
rates based on predictive genetic information. The term 
predictive genetic information includes genetic tests of 
individuals, genetic tests of family members, and information 
about family medical history.
    13. The legislation fosters overall improvement in health 
care quality.--The bill reauthorizes the Agency for Health Care 
Policy and Research, renames it, and focuses its activities on 
improving health care quality. The newly renamed Agency is to 
foster overall improvement in health care quality by advancing 
the development, evaluation, and dissemination of quality 
measures within the Agency, as well as by participating in 
public-private partnerships; facilitating innovation in patient 
care with streamlined assessment of new technologies; 
synthesizing and making the latest health care information 
accessible and widely available to all interested audiences; 
and reporting annually to Congress on the state of quality in 
the nation. In addition, through coordination of various 
Federal quality initiatives, the Agency is to become the hub 
and driving force of Federal efforts to improve quality of 
health care in all practice environments.

              II. Background and Need for the Legislation


                   TITLE I--PATIENTS' BILL OF RIGHTS


          A. EVOLUTION OF THE PRIVATE HEALTH INSURANCE MARKET

    The marketplace has undergone substantial change in the 
past decade or so. Fee-for-service payment, enormous tax 
incentives, and increasing demand and supply of first dollar 
coverage for comprehensive medical benefits resulted in double-
digit health care inflation for employer-sponsored health 
benefits in the 1980s and early 1990s. Employer purchasers of 
health care responded by requiring employees to pay a greater 
share of the cost and by demanding greater value for their 
health care dollars. In doing so, employers increasingly looked 
to various forms of managed care as a way to control 
utilization and costs and to promote health care quality. 
According to the 1998 Mercer/Foster Higgins National Survey of 
Employer-sponsored Health Plans, some 87 percent of Americans 
who have employer-sponsored health coverage are enrolled in 
some type of managed care plan today.
    The private-sector shift to managed care has occurred 
fairly rapidly, with many employees having little say in the 
process. For individuals accustomed to fee-for-service 
benefits, the transition has not been an easy one. Limited 
choices, new restrictions and rules governing access and 
utilization, and administrative hassles have contributed to a 
public perception that managed care may sometimes restrict 
access to needed health care services.
    Ongoing pressure by purchasers to curtail health care costs 
has motivated health care plans to closely guard utilization of 
services. Problems in health care quality are documented in 
both the overuse and underuse of services, and, with the 
exception of preventive services, managed care has tended to 
focus on the overuse problem. A focus on the overuse of 
services has led to requirements and restrictions on providers 
and patients in how they access services and too little focus 
on the underuse of services that can prevent illness and 
improve health care quality. In addition, with the rise in 
managed care enrollment, more people with serious and chronic 
conditions have been added to the managed care rolls. This has 
added new strains and challenges to delivery systems that are 
accustomed to healthier populations that require fewer 
services.
    In the 1970s, when ERISA was passed, health benefits were 
delivered almost exclusively on a fee-for-service basis. At 
that time, there were very few restrictions on an individual's 
ability to seek services and a provider's ability to get paid 
for services rendered. Today, pure fee-for-service is virtually 
nonexistent, with many plans imposing utilization restrictions 
such as pre-certification for hospital admissions. With the 
emergence of new forms of health care delivery systems that 
impose rules and restrictions on providers and patients, the 
public has called for new rights and protections to help them 
navigate these systems effectively.

                     B. REGULATION OF HEALTH PLANS

    Currently, responsibility for regulating health plans is 
divided between the Federal Government and the States. Under 
ERISA, the Federal Government regulates private health plans 
offered by employers and unions. The States are responsible for 
regulating health coverage sold by insurance carriers. 
According to data from the Robert Wood Johnson Foundation, 
approximately 13 percent of all employers in 1997 self-funded 
their plans, covering 33 percent of employees enrolled in 
employer-sponsored plans. However, the rise of managed care, 
and HMOs in particular, has contributed to a decline in the 
incidence of self-funding in recent years, according to Rand 
researchers.1 Between 1993 and 1997, the number of 
self-insured employers fell from 19 percent to 13 percent in 
the seven states studied. As these trends evolve and the 
popularity of different types of delivery systems rise and 
fall, the trend in self-funding is also likely to change. 
Because ERISA prohibits States from regulating self-funded 
plans provided by employers and unions, States are not able to 
monitor the quality of the health care coverage offered to a 
significant portion of the employed population.
---------------------------------------------------------------------------
    \1\ M. Susan Marquis and Stephen H. Long, Recent Trends in Self-
Insured Employer Health Plans, Health Affairs; May/June 1999; pg. 
161.173.
---------------------------------------------------------------------------

1. Self-funded plans

    Currently, many employers self-fund their health plans by 
retaining the risk for paying the cost of claims directly out 
of company assets rather than purchasing commercial health 
insurance. In addition, multiemployer plans established 
pursuant to collective bargaining agreements (known as ``Taft 
Hartley'' plans) between workers' unions and workers' employers 
also may be self-funded.
    Although the terms ``self-funded'' and ``self-insured'' are 
perceived as being synonymous with ERISA plans, these terms are 
not currently found in ERISA, nor is the ERISA-governed 
universe limited to just self-funded plans. Instead, they have 
been created and applied by the courts and, as a result, there 
is ambiguity and uncertainty among many employers and employees 
as to the status of certain employee benefit plans. Much of the 
current ambiguity is fostered by the financial arrangements and 
risk shifting inherent in managed care. It is not clear what 
level of risk sharing might cause an arrangement to become 
insured rather than self-insured and regulators and courts have 
not yet weighed in on this issue. Another factor leading to 
ambiguity about self-funded plans is the practice of purchasing 
stop-loss coverage by employers and unions who choose not to 
bear the entire risk of providing benefits to plan 
participants.

2. Preemption

    Under current law, these ``self-funded'' and ``self-
insured'' health plans are exempt from direct State regulation 
under ERISA. ERISA was crafted to leave the content and design 
of employer health plans to employers in negotiation with their 
work force, without requiring employers and multiemployer plans 
to comply with numerous, conflicting State laws. While ERISA 
does establish certain regulations for health benefit plans in 
the area of reporting and disclosure, fiduciary standards, 
claims review, and enforcement, these regulations do little to 
ensure the access to health care services and quality of care 
in the types of delivery systems that dominate the marketplace 
today. For example, Federal law currently does not include 
anyrequirements that help a participant gain access to a particular 
type of provider.
    States have adopted regulations that pertain to access to 
services and health care quality. However, the changing nature 
of employer-sponsored arrangements coupled with evolving case 
law on preemption, has raised new questions about the 
application of some State regulations to all ERISA plans, not 
just self-funded ERISA plans. For instance, although the courts 
have established in Pilot Life v. Dedeaux that ERISA provides 
the exclusive remedy regarding the administration of plan 
benefits for all ERISA plan participants and preempts State 
remedies, it is not clear whether other State laws will be 
similarly preempted. Most State laws governing appeals, 
including the right to an external appeal, have only been 
recently adopted, and there have been very few court cases 
about preemption in this area. However, in a recent decision in 
Texas (Corporate Health Insurance, Inc. v. The Texas Department 
of Insurance), the lower court held that ERISA does preempt the 
State's external review law. 2 How these preemption 
cases play out in the States cannot be fully predicted and 
depends on a variety of factors. Despite the ambiguity about 
plan types, regulatory jurisdiction, and emerging case law, 
there is no ambiguity that States cannot directly regulate 
self-funded ERISA plans.
---------------------------------------------------------------------------
    \2\  In another part of its decision, the court in this case ruled 
that ERISA does not preempt the state's Health Care Liability Act which 
allows patients to sue their managed care organizations (MCOs) for 
damages caused by the MCO's failure to exercise ordinary care in 
providing medical treatment. This case is currently pending on review 
to the higher court.
---------------------------------------------------------------------------

                    C. STATE LAW AND FEDERAL REFORMS

    Since the passage of ERISA in 1974, a few substantive 
requirements have been added to ERISA. In 1996, Congress passed 
the Health Insurance Portability and Accountability Act 
(HIPAA), which makes health coverage more portable by limiting 
the use of preexisting condition exclusions and prohibiting 
discrimination in eligibility and premiums for group health 
plans. Congress also passed the Mental Health Parity Act, the 
Newborns' and Mothers' Health Protection Act and the Women's 
Health and Cancer Rights Act. In addition to these ERISA 
provisions, Congress also passed the Consolidated Omnibus 
Budget Reconciliation Act (COBRA) of 1985, which requires 
employers that sponsor plans to offer qualified beneficiaries 
the right to continue health care coverage as a result of a 
qualifying event. These laws primarily address plan design and 
benefit concerns. However, with the exception of the Newborns' 
and Mothers' Health Protection Act, these laws do not generally 
address the types of quality, access, and process concerns that 
have been raised by the evolution of new delivery systems.
    In contrast, states have been actively pursuing reforms 
targeting access and delivery. A GAO report requested by the 
Chairman, indicates that, while approaches vary widely, states 
are actively pursuing the types of patient protections that are 
contained in Title I of this legislation. For instance, of the 
15 States examined, most have passed legislation addressing 
access to certain specialists (including ob/gyns), protections 
pertaining to patient-provider communications, and emergency 
room coverage.
    Many States have also passed reforms pertaining to 
utilization and grievance and appeals procedures, and 
approximately one-third of States have passed legislation 
mandating an independent, external review of adverse coverage 
decisions. In addition, the National Association of Insurance 
Commissioners (NAIC) is developing a model law on external 
review that States can consider for adoption.
    In contrast, Federal law applicable to group health plans 
governed by ERISA has focused primarily on coverage and plan 
design issues and very little on access to benefits and 
services in new and evolving delivery system structures. 
Similar laws and regulations have already been adopted for 
Medicare, Medicaid, and the Federal Employees Health Benefits 
Program. Recognizing the need to update requirements and 
procedures for ERISA plans, the U.S. Department of Labor has 
recently proposed regulations that would improve standards and 
time frames for coverage determinations. However, the 
Department of Labor lacks the authority to implement the scope 
of reforms that are needed. For instance, although independent, 
external review is widely-recognized as an important and 
necessary consumer protection, the Department of Labor lacks 
the authority to implement such a requirement through 
rulemaking. In order to guarantee that all 124 million 
Americans covered under ERISA group health plans have access to 
independent, external review, Congress must pass legislation.

                          D. QUALITY CONCERNS

    Consumers and regulators have identified and documented a 
variety of problems in accessing needed health care services. A 
primary problem is the lack of information available to 
consumers to help them navigate the complexities of health 
delivery systems. Information is also necessary to access 
needed benefits and services that have been promised by the 
plan and to understand the limits of the plan. Many consumers 
also lack the necessary information to make appropriate choices 
and thus find themselves in situations where they are 
dissatisfied with the service and quality of care they receive. 
The committee believes that better information is necessary to 
improve the efficiency of the marketplace and to enhance 
consumer satisfaction.
    Other quality problems stem from the ever-changing balance 
of power in the health care marketplace. As plans, payers, 
hospitals, physicians, and other stakeholders struggle to 
maintain or improve their market positions, consumers and 
patients are sometimes overlooked. Procedures and policies 
designed to curb spending and overuse of services by providers 
can create barriers to needed health care services. For 
instance, unreasonably restrictive payment policies for 
emergency room coverage may cause some consumers to forgo 
necessary and potentially life-saving care out of concern the 
plan will not provide coverage.
    Consumers in ERISA group health plans currently have few 
rights and remedies to help them access covered benefits and 
services. The information disclosure and claims and appeals 
procedures under ERISA are seriously outdated for today's 
marketplace. Although ERISA planparticipants have the right to 
appeal coverage denials, the time frames for making decisions are 
inadequate, particularly in an environment where many services must be 
approved before they can be provided. There is little to protect a 
consumer who needs care urgently or who faces repeated denials by a 
plan with insufficient explanation, other than paying out of pocket for 
the services. This is simply not feasible for most consumers. Moreover, 
it is unacceptable if the benefit is covered by the plan and is 
medically necessary and appropriate. The committee strongly believes 
that consumers should have access to better procedures and clearly 
articulated rights with respect to accessing covered benefits and 
services and that these basic rights will reduce barriers to needed 
care and improve the quality of health care.

               TITLE II--GENETIC INFORMATION AND SERVICES

    The legislation builds upon various State reforms (over 30 
States have enacted laws related to the use of genetic 
information in health insurance) and the provisions in the 
Health Insurance Portability and Accountability Act of 1996 
(HIPAA), [P.L. 104-191]. There are two main provisions in HIPAA 
that deal with genetic information. First, the law prohibits 
discrimination in eligibility and premiums in group health 
plans and group health insurance based on health status, 
including ``genetic information'' (term is not defined in the 
statute). For example, an individual could not be singled out 
of a group and charged a higher premium contribution than 
others in the group. Second, the law states that genetic 
information is not considered to be a pre-existing condition 
``in the absence of a diagnosis'' of the condition related to 
such information. For example, carrying a genetic mutation for 
breast cancer is not considered a pre-existing condition, but a 
positive diagnosis of breast cancer would be a pre-existing 
condition. These provisions apply to group health plans and 
health insurance issuers offering coverage in connection with a 
group health plan; the provisions do not apply to the 
individual insurance market in the same manner.
    The committee's intent is to clarify and extend certain 
provisions in HIPAA with respect to genetic information, 
consistent with the original intent of the law. The committee 
agreed it was important to define genetic information and to 
extend certain provisions to protect healthy individuals from 
discrimination in certain health coverage and insurance 
practices based on predictive genetic information.
    Scientists anticipate that the entire human genome will be 
decoded within the next few years. The advances in genetics 
research are providing the ability to predict what diseases 
individuals may be at risk for in the future. These 
developments have caused great concern that predictive genetic 
information may be used to discriminate against individuals and 
their families in certain health insurance practices. For 
example, genetic testing studies at the National Institutes of 
Health revealed that nearly 32 percent of women offered a test 
for breast cancer risk declined, citing concerns about health 
insurance discrimination. Without this necessary research data, 
scientists will be limited in finding better ways to diagnose 
and treat patients. The committee wants patients to benefit 
from the Federal investment in biomedical research and fully 
utilize medical advancements to improve their health. This will 
not be possible, unless individuals are willing to be tested.
    Prohibition of genetic discrimination in insurance will 
remove the greatest barrier to testing and, thus, further 
accelerate our scientific progress. Therefore, the committee 
believed strongly that it was important to include the genetic 
nondiscrimination provisions in a health care bill designed to 
improve the quality of care that patients receive. Prohibiting 
genetic discrimination translates into a patient's right to 
quality care. Genuine quality of care means that patients and 
practitioners consider all the information available to them 
when they make health care decisions, including an individual's 
genetic profile. Patients should not be afraid to benefit from 
new genetic technologies that have the potential to improve 
care and save lives.
    Genetic testing has not yet become standard practice in the 
medical community. At a hearing held by the committee on May 
21, 1998, representatives of the health insurance industry 
testified that genetic testing is not currently utilized as 
part of medical underwriting. The intent of the legislation is 
to prohibit the use of genetic testing in health insurance 
practice before these tests become more widely available in 
medical practice or part of the underwriting process.

              TITLE III--HEALTH CARE RESEARCH AND QUALITY

    Legislative History. Public Law 101-239, the Omnibus Budget 
Reconciliation Act of 1989, authorized the establishment of the 
Agency for Health Care Policy and Research (AHCPR) for 3 years 
in Title IX, the Public Health Service Act. In 1992, the 
Congress amended Title IX and reauthorized AHCPR through FY 
1995 in P.L. 102-410. In P.L. 105-115, the Food and Drug 
Administration Modernization Act of 1997, the Congress amended 
Title IX to authorize the Agency to develop a demonstration 
program supporting Centers for Education and Research on 
Therapeutics (CERTs). In 1998, the Subcommittee on Public 
Health and Safety held three hearings on AHCPR, focusing on the 
Agency's overall research mission, its technology assessment 
function, and its role in improving quality. This title 
reauthorizes the Agency from FY 2000 to FY 2006, renames it, 
and refocuses its mission.
    Summary. In developing this legislation, the Subcommittee 
on Public Health and Safety undertook a thorough review of the 
research and other activities of the Agency for Health Care 
Policy and Research (AHCPR) to determine whether these 
activities were an appropriate Federal responsibility, whether 
they warranted the continued existence of a separate Agency, 
and, if so, whether the Agency's mission needed to be 
refocused. The committee reached several conclusions. First, 
the Agency's research and other activities provide the science-
based evidence that will improve the quality of patient care. 
Objective, reliable information, of the type developed by the 
Agency, is essential for the successful functioning of our 
competitive health care marketplace. Second, the continued 
existence of a separate Agency is justified because of its 
unique focus on the effectiveness of care in daily practice, 
its demonstrated ability to bridge the worlds of research and 
practice, and the dual focus of its research on the clinical 
aspects of care, as well as the economics, organization, and 
delivery of health care. Third, the committee believes that a 
renamed and strengthened Agency can play a critical role as the 
hub and drivingforce for the Federal Government's quality 
improvement efforts and in supporting private-sector quality efforts by 
advancing the young science of quality. Finally, the committee has 
concluded that a substantial investment in building our scientific 
knowledge regarding quality health care is an essential complement to 
the patient protections provided in the other titles of this 
legislation.
    Background. The health care system in America today is 
dramatically different from the system that existed a decade 
ago when the Congress established the Agency for Health Care 
Policy and Research (AHCPR). It is being transformed by the 
changing nature of our insurance system; the growing dominance 
of managed care plans; increased plan complexity; increasing 
concentration as a result of consolidations and mergers; 
demands of purchasers for accountability and value from health 
care providers; shifting financial incentives; and the growing 
tension between caregivers, patients, and the policies of the 
systems through which care is delivered. At the same time, 
there has been an explosion in the number of medical journals 
and peer-reviewed articles published each year, reflecting in 
part the Congressional support for basic and biomedical 
research over the last few years. As a result, even the most 
conscientious clinicians face increasing difficulty in keeping 
abreast of the medical literature and putting into perspective 
the latest scientific findings. In fact, it has been estimated 
that if physicians were to read two peer-reviewed journal 
articles each night after a long day of practice, they would be 
800 articles behind in their reading at the end of the year. 
The exponential growth in health-related web sites poses 
additional challenges for patients and caregivers alike in 
determining which information is based upon science and which 
information is less reliable.
    While concern regarding variations in the rates at which 
medical procedures are conducted contributed to the decision to 
create AHCPR in 1989, public concern regarding the quality of 
patient care is growing and requires a more direct and 
coordinated public response. While millions of Americans 
receive high-quality care every day, peer-reviewed research has 
documented too many instances of underuse, overuse, and misuse 
of services. In addition, there is growing public concern 
regarding the number of medical errors that take place, in 
which patients suffer from adverse drug events, treatment or 
amputation of the wrong limb, or other oversights. The 
pioneering Harvard study in which Dr. Lucian Leape and his 
colleagues looked at the records of more than 30,000 hospital 
patients in New York found that nearly 4 percent suffered 
serious injuries that were related to the management of their 
illness rather than the illness itself. To their credit, health 
professionals have recognized the problem. To tackle these 
``system'' issues successfully, there is a need for a sustained 
health services research initiative that is undertaken in 
partnership with the health professions and provider community.
    Other challenges continue. As the debate on the Patients' 
Bill of Rights Act has demonstrated, issues such as those 
related to the cost and appropriate use of and access to health 
services, remain significant public policy concerns. Many of 
the issues addressed in other titles of this legislation have 
arisen because of the lack of reliable evidence about the risks 
and benefits of alternative approaches for containing health 
care costs, organizing health care delivery systems, and 
structuring the policies that govern systems of care. 
Similarly, the debate on the long-term stability of the 
Medicare program only serves to reinforce the critical need for 
this type of scientific evidence.
    These developments have highlighted as never before the 
need for objective, science-based information at all levels of 
the health care system:
           at the clinical level, providing patients 
        and those who deliver care the information they need to 
        make informed decisions regarding treatment options;
           at the system level, getting good 
        information to those who manage systems of care about 
        alternative approaches to organizing and delivering 
        care, and for individual consumers and those who make 
        purchasing decisions for their employees or members, 
        information that will enable them to make more informed 
        decisions in selecting health plans and providers and 
        in comparing and assessing the value of the care that 
        they are purchasing; and
           at the public policy level, providing 
        scientific findings--about the impact on quality, cost, 
        and access--concerning the ways we structure and 
        deliver care, the incentives that are provided to 
        clinicians, decisions regarding which services to 
        offer, as well as information (not currently available) 
        on national trends in quality.
    The methods and tools of health services research are well 
suited for addressing these information needs. While AHCPR has 
served as the lead Federal Agency supporting health services 
research, it has not had the necessary budget or requisite 
coordinating authority to address these pressing information 
needs adequately. This legislation is intended to ensure that 
the newly renamed Agency for Healthcare Research and Quality 
(AHRQ) has the stature, resources, and authority to work in 
close collaboration with the private sector to meet the Federal 
responsibilities in these areas.
    Appropriate Federal Role for the Agency. The rationale for 
a significant Federal commitment to the type of health services 
research supported by the AHRQ is strong.
    First, the Federal Government has a compelling interest in 
ensuring that patients and society reap the full rewards of our 
growing investment in basic and biomedical research. This 
requires a corresponding investment in the kind of health 
services research that will support their effective use. 
Experience has repeatedly demonstrated that great opportunities 
for improving health, developed through biomedical research, 
are easily lost if physicians and patients are unable to make 
the best use of the knowledge in everyday care. The private 
sector often lacks the incentive to address these issues, 
because the cost of the research investment is far greater than 
the benefits to the individual health plan, which occurs when 
clinical conditions are common but not costly or when they are 
expensive but extremely rare. By contrast, the Federal 
Government has both an obligation to the American people and a 
responsibility to see that the goal of its investment in basic 
and biomedical research (higher quality patient care) is 
realized.
    The Agency has demonstrated its ability to close this gap 
between the promise of biomedical research and improvements in 
daily practice. For example, National Institutes of Health 
(NIH)-supported research at the University of Wisconsin 
demonstrated the potential of warfarin (an anticoagulant) to 
prevent stroke in patients with atrial fibrillation, yet this 
lifesaving innovation was underused in daily practice. An 
Agency-supported research team at Duke University conducted a 
meta-analysis that established warfarin as the treatment of 
choice, undertook research that identified the reasons that 
physicians were often reluctant to use this effective 
intervention, and conducted a trial to develop effective 
approaches for administering warfarin that addressed the 
concerns of physicians. Findings from this research project led 
in part to development of guidelines from the American College 
of Physicians, the AHA, and the Joint Council of Vascular 
Surgeons. Medicare Peer Review Organizations (PROs) implemented 
73 projects in 42 states to increase anticoagulation. Rates 
from 28 projects in 20 States showed that patients discharged 
on anticoagulation therapy increased from 58 percent to 71 
percent. Improved anticoagulation rates through the PRO 
projects is projected to have prevented 1285 strokes. As a 
result of the Agency's research, the promise of the Federal 
investment in the basic research that identified warfarin's 
potential is increasingly being realized. The final 
demonstration project, for which the private sector contributed 
$2.50 for every $1.00 of Agency funds, also demonstrated for 
the first time the Agency's ability to collaborate with and 
leverage private-sector funding.
    In addition to supporting new research that identifies what 
works best in practice and how to make more effective use of 
existing innovations, the Federal Government can support the 
work of busy health care professionals by assessing and putting 
into perspective new scientific advances. The development of 
such syntheses requires methodologists to assess the research 
design of the studies and the scientific controls and 
statistics that were employed to determine the extent to which 
clinicians can use the studies to guide their daily practice. 
This is another area for which there appear to be few 
incentives in academia or the private sector to undertake such 
studies, and health professionals are seldom trained to 
undertake such methodological assessments. Yet the development 
and updating of such assessments are essential for clinicians 
and patients to benefit from our investments in basic and 
biomedical research. They provide essential information to 
clinicians which, when combined with a patient examination, 
medical history, and clinicians' own clinical experience, can 
ensure that their patients receive care that is informed by the 
best science available.
    Second, as a purchaser and provider of health care 
services, the Federal Government has a compelling need for 
information that will help it to manage its programs more 
effectively and efficiently and provide information to 
beneficiaries of those programs. The subcommittee heard 
testimony from Dr. Stuart Butler of The Heritage Foundation 
that the Agency should play an even greater role in this area. 
Citing the potential conflicts of interest that Federal 
Agencies face in attempting both to run programs and to provide 
dispassionate and objective information, he argued for the 
importance of the Agency's independence ``free from any 
interest in a particular way of providing care.'' The unique 
focus of the health services research supported by the Agency 
on the cost and appropriate use of and access to health care 
services is especially critical to the efforts of the Congress 
to ensure the long-term viability of the Medicare program.
    Third, such research is an important public good in its own 
right. Scientific information on how to relieve suffering, 
maintain or restore health, and improve the effectiveness of 
the way we deliver health services needs to be in the public 
domain to the extent possible. Public funding ensures that the 
research methods are scrutinized, are publicly available, are 
peer reviewed, and are accessible.
    Fourth, there was agreement among witnesses regarding the 
need for a Federal role in advancing the science of quality, 
developing and validating measures and tools for evaluating and 
improving quality, and making that information widely 
available. An analogy was suggested during the subcommittee's 
hearings that the government's role in health care should be 
similar to the way it provides consumers with information that 
enables them to assess the safety of airlines or automobiles. 
In making those choices, consumers also have a variety of other 
standards or measures they can use in assessing which 
automobile to buy or which airline to fly. The committee 
concurs with this general framework and has provided the Agency 
with broad authority to develop and advance the science of 
quality but prohibits it from mandating a single approach or 
national standard toward assessing quality.
    Finally, the committee concludes that the Agency should be 
reauthorized, renamed, and strengthened to carry out these 
legitimate Federal functions. As the Food and Drug 
Administration Modernization Act of 1997 conference report 
noted on the decision to assign responsibility for CERTs to the 
Agency:

          The conferees designated AHCPR as the lead agency 
        because of its expertise in the evaluation of the 
        effectiveness of clinical care, its non-regulatory 
        role, and its close working relationship with the 
        health care community in the improvement of the quality 
        of care.

    The committee reaffirms that position in this report. The 
Agency has demonstrated an ability to maintain its role as an 
independent, objective, scientific research agency while 
developing close working relationships with disparate portions 
of the health care community. Its three-way partnership with 
the American Medical Association and the managed care trade 
association, the American Association of Health Plans, in the 
National Guideline Clearinghouse is an excellent example of its 
ability to bridge the worlds of research and practice in a way 
that supports private-sector efforts without Federal dictates 
or intrusive policy. The Agency's development of the Consumer 
Assessment of Health Plans Survey (CAHPS) kit, which has now 
been voluntarily adopted by private- and public-sector plans, 
employers, and accreditors, is another example of the Agency's 
responsiveness in providing the tools that the private-sector 
needs to improve the quality of patient care. In light of the 
increasing user-direction of its work and the growing number 
and success of these public-private sector partnerships, it is 
the committee's view that shifting these activities to another 
agency would be shortsighted and destructive. The committee's 
bill takes the opposite approach by recognizing the 
Agency'ssuccess in re-orienting its activities, and strengthening its 
mandate and its resources. The committee especially values the Agency's 
demonstrated ability to serve as a convener of groups with different 
philosophies, ideologies, and economic agendas.
    The committee recognizes that other agencies conduct and 
support health services research and quality measurement and 
improvement activities. To eliminate unnecessary duplication of 
effort and to streamline existing functions, the committee has 
included two important provisions in the bill. The first is to 
provide the Director of the Agency with authority to coordinate 
these activities across other agencies and departments. The 
second provision directs the Institute of Medicine to review 
existing quality activities across departments, with special 
emphasis on programs under Titles XVIII, XIX, and XXI of the 
Social Security Act that are administered by the Department of 
Health and Human Services, and develop recommendations for 
consolidation and coordination.
    Responding to These Needs. The committee's proposal 
strengthens the newly renamed Agency and more specifically 
outlines the Agency's mission but also recognizes the concerns 
expressed during the subcommittee's hearings on the need for 
limitations on the overall Federal role in quality. Therefore, 
the committee proposal strengthens the Agency's primary mission 
as a scientific research agency, which subjects its research 
proposals to peer review; publicly discloses the methods and 
approaches it uses to assess scientific evidence and to conduct 
technology assessments; and cites the scientific evidence and 
the strength of that evidence in publishing clinical 
recommendations.
    The committee has also structured the Agency to serve as a 
``science partner'' in its work with the private and public 
sectors. The committee has explicitly included directions for 
the Agency to work in collaboration and partnership with the 
public- and private-sector users of its research in a number of 
sections of the bill. The committee deleted the word ``Policy'' 
from the Agency's name to eliminate any potential confusion 
regarding the Agency's role in policy making. The committee 
clearly intends that the Agency's research and other activities 
inform policy, not make policy. The committee includes a 
disclaimer stating that the role of the Agency is not to 
mandate national standards of clinical practice. In response to 
testimony at its hearings, the committee included a rule of 
construction stating that the Agency is not to mandate a 
national standard of specific approach to quality measurement 
and reporting. This bill is based on the premise that 
definitions and measurement of quality is an evolving science.

            III. Legislative History and Votes in Committee

    The Patients' Bill of Rights Act, S. 326, was introduced on 
January 28, 1999, by Senators Jeffords, Frist, DeWine, Enzi, 
Hutchinson, Collins, Brownback, Hagel, Sessions, and Burns. The 
bill was referred to the Senate Committee on Health, Education, 
Labor, and Pensions. Shortly before the introduction of S. 326, 
the Patients' Bill of Rights Act Plus, S. 300, was introduced 
in the Senate with 51 cosponsors. The Patients' Bill of Rights 
Act Plus, S. 300, was referred to the Senate Committee on 
Finance. As it was introduced, S. 326 was virtually identical 
to S. 300, except that S. 300 contains a number of tax 
provisions that are within the jurisdiction of the Finance 
Committee.
    Both bills, S. 326 and S. 300, build on the efforts of the 
105th Congress' Republican Health Care Task Force, chaired by 
Senator Nickles. The Task Force developed health care consumer 
protection legislation which resulted in the introduction of S. 
2330, sponsored by Senator Nickles and 48 cosponsors. In 
preparation for the markup of S. 326, a number of changes were 
made in the nature of a Chairman's substitute. These changes 
are described in detail throughout Section IV of this report.
    Title I of S. 326 contains key protections for health care 
consumers. After S. 326 was referred to the committee, Title I 
was amended and incorporated into the Chairman's substitute 
which was considered by the committee. Title II of S. 326 (as 
adopted) relates to health coverage discrimination based on 
genetic information. It was introduced as S. 543, the Genetic 
Information Nondiscrimination in Health Insurance Act of 1999, 
on March 4, 1999, by Senators Snowe, Frist, Jeffords, Hagel, 
Collins, and Enzi. Senate bill 543 was referred to the 
Committee on Health, Education, Labor, and Pensions and 
incorporated as part of S. 326 in the Chairman's substitute. 
Title III of S. 326 (as adopted) was introduced as S. 580, the 
Healthcare Research and Quality Act of 1999, on March 10, 1999, 
by Senators Frist, Jeffords, Kennedy, Nickles, Collins, Breaux, 
Inouye, Mack, Hagel, Santorum, Mikulski, and Bingaman. Senate 
bill 580 was referred to the Committee on Health, Education, 
Labor, and Pensions and incorporated as part of S. 326 in the 
Chairman's substitute.
    Throughout the 105th and 106th Congresses, the committee 
explored thoroughly issues related to health care quality, 
consumer protections, and genetics. The committee held a total 
of 12 hearings (see below) relating to these issues. The 
Patients' Bill of Rights Act adopted by the committee reflects 
the knowledge obtained from these hearings.

Committee Hearings on Health Care Quality, Consumer Protections, and 
        Genetics

March 6, 1997, ``Health Care Quality and Consumer Protection'' 
        (S. Hrg. 105-15)
May 20, 1997, ``Health Care Quality'' (S. Hrg. 105-87)
February 11, 1998, ``Agency for Health Care Policy and Research 
        Role in Health Care Quality Improvement'' (S. Hrg. 105-
        423)
March 12, 1998, ``Assessment of New Health Care Technologies: 
        The Role of the Agency for Health Care Policy and 
        Research'' (S. Hrg. 105-503)
March 24, 1998, ``Federal Legislation Relating to Health Care 
        Quality'' (S. Hrg. 105-510)
April 20, 1998, ``Health Care Quality Education, Security, and 
        Trust Act'' (S. Hrg. 105-513)
April 30, 1998, ``Public Expectations of Health Care Quality: 
        Role of the Agency for Health Care Policy and 
        Research'' (S. Hrg. 105-548)
May 19, 1998, ``Health Care Quality: Grievance Procedures'' (S. 
        Hrg. 105-560)
May 21, 1998, ``Genetic Information and Health Care'' (S. Hrg. 
        105-580)
January 20, 1999, ``Group Health Plan Comparative Information 
        and Coverage Determination Standards'' (S. Hrg. 106-2)
March 2, 1999, ``Medical Necessity'' (S. Hrg. 106-9)
March 11, 1999, ``Key Patients' Protections: Lessons from the 
        Field'' (S. Hrg. 106-10)
    On March 17 and 18, 1999, the committee held executive 
sessions to consider S. 326. Senator Jeffords offered a 
technical corrections amendment that was accepted without 
objection. Twenty-seven additional amendments were considered 
in the executive sessions. Senate bill 326, as amended, was 
approved along party lines by a rollcall vote of 10 yeas to 8 
nays.

   A. AMENDMENTS AND MOTIONS ADOPTED BY VOICE VOTE DURING EXECUTIVE 
                                SESSIONS

    Two amendments were adopted in the executive sessions by 
voice vote:
    1. Senator Harkin offered an amendment clarifying that 
collection of data by the Agency for Healthcare Quality and 
Research would include rural areas. The amendment was adopted 
on a voice vote.
    2. Senator Frist offered an amendment regarding access to 
specialists that requires a health plan to ensure that patients 
have access to specialty care and clarifies that such access 
may be provided through contractual arrangements with 
specialized providers outside of the plan's network. The plan 
may require that specialty care be provided as part of a 
treatment plan, and a plan may require the specialist to share 
necessary medical information and provide updates on care to 
the primary care provider. The plan may require authorizations 
by the primary care provider if such authorizations provide for 
an ``adequate number of referrals.'' The amendment was adopted 
on a voice vote.
    Three amendments were filed but not offered during the 
executive session:
    1. Senator Kennedy's amendment preventing Congress from 
including Medical Savings Accounts in the Patients' Bill of 
Rights Act.
    2. Senator Kennedy's amendment requiring disclosure of 
comparative data about plans and establishing a public-private 
health care quality board.
    3. Senator Kennedy's amendment establishing participation 
rules for health professionals in all plans and giving health 
professionals notice of adverse participation decisions and a 
process for appeal.

         B. ROLLCALL VOTES TAKEN DURING THE EXECUTIVE SESSIONS

    Twenty-five rollcall votes on amendments were taken during 
the executive session:
    1. Senator Kennedy offered an amendment to strike the text 
of S. 326 and insert new language as a complete substitute. The 
complete substitute was introduced as S. 6 by Senators Daschle 
and Kennedy. Senate bill S. 6 contains protections that would 
apply to all patients in private insurance. It includes many of 
the same concerns as S. 326 and also includes additional 
protections, including access to clinical trials, a prohibition 
on plans arbitrarily overriding physician decisions, a 
definition of medical necessity, and the removal of ERISA 
preemption with respect to claims for damages brought in state 
court when a health plan injures or kills a patient. The 
amendment was defeated on a rollcall vote of 10 nays to 8 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            DeWine
Bingaman                            Enzi
Wellstone                           Hutchinson
Murray                              Collins
Reed                                Brownback
                                    Hagel
                                    Sessions

    2. Senator Collins offered an amendment requiring plans to 
ensure the participation of physicians and pharmacists in 
developing and reviewing drug formularies, for those plans 
thatcover prescription drugs limited by a formulary. It requires plans 
to provide for exceptions from the formulary limitation when a 
nonformulary alternative is medically necessary and appropriate, in 
accordance with the applicable quality assurance and utilization review 
standards. The amendment was adopted on a rollcall vote of 18 yeas.
        YEAS                          NAYS
Jeffords
Gregg
Frist
DeWine
Enzi
Hutchinson
Collins
Brownback
Hagel
Sessions
Kennedy
Dodd
Harkin
Mikulski
Bingaman
Wellstone
Murray
Reed

    3. Senator Mikulski offered an amendment that requires 90 
days of transitional coverage for all patients who are 
undergoing a course of treatment when a plan drops the provider 
from its network or the employer changes plans. Certain 
exceptions apply: patients who are terminally ill are covered 
until death; women in their second trimester of pregnancy are 
covered through post-partum care; and patients who are in a 
facility are covered until discharge. For such extended 
transitional care, no additional cost-sharing requirements may 
be imposed on the patient, and the provider must agree to 
continue abiding by the plan's procedures for prior 
authorization and quality assurance standards. The amendment 
was defeated on a rollcall vote of 10 nays to 8 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            DeWine
Bingaman                            Enzi
Wellstone                           Hutchinson
Murray                              Collins
Reed                                Brownback
                                    Hagel
                                    Sessions

    4. Senator Wellstone offered an amendment that would 
establish a State grant program to create State-level consumer 
assistance programs. The amendment was defeated on a rollcall 
vote of 10 nays to 8 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            DeWine
Bingaman                            Enzi
Wellstone                           Hutchinson
Murray                              Collins
Reed                                Brownback
                                    Hagel
                                    Sessions

    5. Senator Dodd offered an amendment that limits disclosure 
of predictive genetic information, establishes enforcement for 
the genetics provisions, and prohibits employers from 
discriminating against employees or potential employees on the 
basis of their genetic information. The amendment was defeated 
on a rollcall vote of 10 nays to 8 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            DeWine
Bingaman                            Enzi
Wellstone                           Hutchinson
Murray                              Collins
Reed                                Brownback
                                    Hagel
                                    Sessions

    6. Senator Mikulski offered an amendment that prohibits 
managed care organizations from denying payment for covered 
services provided by a continuing care senior community, 
skilled nursing facility, or other ``qualified'' facility 
regardless of whether the managed care organization has a 
contract with that facility. The amendment failed on a rollcall 
vote of 9 nays to 9 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            Enzi
Bingaman                            Hutchinson
Wellstone                           Collins
Murray                              Brownback
Reed                                Hagel
DeWine                              Sessions

    7. Senator Harkin offered an amendment that requires group 
and individual health plans to have a sufficient number, 
distribution, and variety of qualified participating health 
care providers and offer out-of-network coverage (at network 
prices) when specific types of participating providers are 
located more than 30 miles or 30 minutes' driving time from the 
enrollee. It also requires plans to allow enrollees to use any 
qualified participating primary care provider as their primary 
care provider. The amendment was defeated on a rollcall vote of 
10 nays to 8 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            DeWine
Bingaman                            Enzi
Wellstone                           Hutchinson
Murray                              Collins
Reed                                Brownback
                                    Hagel
                                    Sessions

    8. Senator Kennedy offered an amendment that expands the 
scope of patient protections in the bill to apply to all 161 
million individuals with private health plans. The amendment 
was defeated on a rollcall vote of 10 nays to 8 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            DeWine
Bingaman                            Enzi
Wellstone                           Hutchinson
Murray                              Collins
Reed                                Brownback
                                    Hagel
                                    Sessions

    9. Senator Bingaman offered an amendment that would 
prohibit plans from discriminating against providers based on a 
provider's license or based on race, color, religion, sex, 
national origin, age, sexual orientation, or disability. The 
amendment was defeated on a rollcall vote of 10 nays to 8 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            DeWine
Bingaman                            Enzi
Wellstone                           Hutchinson
Murray                              Collins
Reed                                Brownback
                                    Hagel
                                    Sessions

    10. Senator Dodd offered an amendment requiring plans to 
cover routine patient care costs for certain patients 
participating in clinical trials approved and funded by the 
National Institutes of Health, the Department of Veterans 
Affairs, or the Department of Defense. Under the Dodd 
amendment, group health plan under ERISA may not deny an 
individual participation in a clinical trial, may not deny the 
coverage of routine patient costs for items and services 
associated with participation in the trial, and may not 
discriminate against the individual on the basis of the 
enrollee's participation in such trial. The amendment was 
defeated on a rollcall vote of 10 nays to 8 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            DeWine
Bingaman                            Enzi
Wellstone                           Hutchinson
Murray                              Collins
Reed                                Brownback
                                    Hagel
                                    Sessions

    11. Senator Frist offered an amendment to order the 
Institute of Medicine (IOM) toconduct a comprehensive study to 
assess patient access to clinical trials and the coverage of routine 
patient care by private health plans and insurers. The IOM would report 
its findings and recommendations to the committee in 12 months. The 
amendment was adopted on a rollcall vote of 10 yeas to 8 nays.
        YEAS                          NAYS
Jeffords                            Kennedy
Gregg                               Dodd
Frist                               Harkin
DeWine                              Mikulski
Enzi                                Bingaman
Hutchinson                          Wellstone
Collins                             Murray
Brownback                           Reed
Hagel
Sessions

    12. Senator Frist offered an amendment that requires an 
external reviewer to make an independent determination based on 
the valid, relevant, scientific, and clinical evidence. It 
mandates consideration of appropriate and available 
information, including evidence offered by the patient and the 
patient's physician, expert consensus, peer-reviewed 
literature, as well as the plan's clinical practice guidelines 
by the external reviewer. It also requires that the independent 
external reviewer have expertise of the same specialty in the 
issue under determination. Senator Frist eliminated the 
provision of rebuttable presumption originally included in the 
amendment. The amendment was adopted on a rollcall vote of 11 
yeas to 7 nays.
        YEAS                          NAYS
Jeffords                            Kennedy
Gregg                               Dodd
Frist                               Harkin
DeWine                              Mikulski
Enzi                                Wellstone
Hutchinson                          Murray
Collins                             Reed
Brownback
Hagel
Sessions
Bingaman

    13. Senator Kennedy offered an amendment that requires all 
group health plans to have a process for making coverage 
decisions and internal appeal decisions. It also establishes a 
system of independent, external review. It requires plans to 
have a grievance process. The amendment was defeated on a 
rollcall vote of 10 nays to 8 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            DeWine
Bingaman                            Enzi
Wellstone                           Hutchinson
Murray                              Collins
Reed                                Brownback
                                    Hagel
                                    Sessions

    14. Senator Kennedy offered an amendment that prohibits a 
health plan from arbitrarily interfering with or altering the 
decision of the treating physician regarding the manner or 
setting (defined as location of treatment--inpatient/
outpatient, and duration of treatment--number of days) in which 
particular services are delivered, if the services are 
medically necessary or appropriate (defined as consistent with 
generally accepted principles of professional medical practice) 
for treatment or diagnosis to the extent that such treatment or 
diagnosis is otherwise a covered benefit. The amendment was 
defeated on a rollcall vote of 10 nays to 8 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            DeWine
Bingaman                            Enzi
Wellstone                           Hutchinson
Murray                              Collins
Reed                                Brownback
                                    Hagel
                                    Sessions

    15. Senator Wellstone offered an amendment to allow 
participants to self-pay for the services of a mental health 
provider, if the self-funded group health plan does not approve 
coverage or in cases where the participant has exhausted the 
number of visits available under the plan. The amendment was 
adopted on a rollcall vote of 17 yeas to 1 nay.
        YEAS                          NAYS
Jeffords                            Sessions
Gregg
Frist
DeWine
Enzi
Hutchinson
Collins
Brownback
Hagel
Kennedy
Dodd
Harkin
Mikulski
Bingaman
Wellstone
Murray
Reed

    16. Senator Dodd offered an amendment that requires health 
care plans that cover prescription drugs through a formulary to 
include participating physicians and pharmacists in developing 
the formulary; to disclose the nature of the formularies; and, 
consistent with the utilization review program, to provide for 
exceptions from the formulary limitation when a nonformulary 
alternative is medically indicated. In addition, it prohibits 
health care plans that offer coverage of prescription drugs or 
medical devices from denying coverage on the basis that the use 
is investigational, if it is prescribed in the manner approved 
by the FDA. The amendment was defeated on a rollcall vote of 10 
nays to 8 yeas; however, many of the provisions in this 
amendment were included in the Collins amendment (No. 2), which 
was adopted unanimously.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            DeWine
Bingaman                            Enzi
Wellstone                           Hutchinson
Murray                              Collins
Reed                                Brownback
                                    Hagel
                                    Sessions

    17. Senator Harkin offered an amendment that requires 
health plans that cover specialty care to ensure that patients 
who need specialty care have access to appropriate specialists, 
including pediatric specialists for children. If the plan 
refers an individual to a nonparticipating specialist because 
the plan does not have an appropriate or available specialist 
in its network, the care is required to be covered at no 
additional cost beyond what the individual would pay for a 
participating provider. For individuals with ongoing special 
conditions, health plans would be required to allow direct 
access to certain specialists or to choose an appropriate 
specialist as their primary care physician. The amendment was 
defeated on a rollcall vote of 10 nays to 8 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            DeWine
Bingaman                            Enzi
Wellstone                           Hutchinson
Murray                              Collins
Reed                                Brownback
                                    Hagel
                                    Sessions

    18. Senator Wellstone offered an amendment that prohibits 
self-funded group health plans from involuntarily disenrolling 
a participant for disruptive, unruly, or uncooperative behavior 
that seriously impedes the plan's ability to furnish services, 
if the participant has diminished mental capacity, severe and 
persistent mental illness, or a serious childhood mental and 
emotional disorder. The amendment was defeated on a rollcall 
vote of 10 nays to 8 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            DeWine
Bingaman                            Enzi
Wellstone                           Hutchinson
Murray                              Collins
Reed                                Brownback
                                    Hagel
                                    Sessions

    19. Senator Wellstone offered an amendment to protect 
certain health care providers from retaliation by the managed 
care organization for reporting quality of care problems to a 
supervisor, oversight agency, or accrediting organization, or 
for engaging in patient advocacy. The amendment was defeated on 
a rollcall vote of 10 nays to 8 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            DeWine
Bingaman                            Enzi
Wellstone                           Hutchinson
Murray                              Collins
Reed                                Brownback
                                    Hagel
                                    Sessions

    20. Senator Hutchinson offered an amendment that prohibits 
health care plans from denying coverage with respect to 
emergency services when an individual reasonably believes he or 
she is experiencing an emergency, under the prudent layperson 
definition of emergency. It also requires that the patient 
shall incur no more liability than he or she would have 
incurred if he or she went to a participating provider. This 
amendment prevents insurance companies from charging patients 
for the emergency care they receive from non-network hospitals. 
The amendment was adopted on a rollcall vote of 12 yeas to 6 
nays.
        YEAS                          NAYS
Jeffords                            Kennedy
Gregg                               Dodd
Frist                               Harkin
DeWine                              Mikulski
Enzi                                Murray
Hutchinson                          Reed
Collins
Brownback
Hagel
Sessions
Bingaman
Wellstone

    21. Senator Murray offered an amendment prohibiting plans 
from denying coverage with respect to emergency services when 
an individual reasonably believes that he or she is 
experiencing an emergency, under the prudent layperson 
definition of emergency. Coverage cannot be denied if a 
patient, in such an emergency, does not obtain prior 
authorization or goes to a nonparticipating provider. If a 
patient goes to a nonparticipating provider, the amendment 
provides that the patient will incur no more liability than he 
or she would have had he or she gone to a participating 
provider. Coverage includes ``post-stabilization and 
maintenance'' care, similar to coverage under Medicare. The 
amendment was defeated on a rollcall vote of 10 nays to 8 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            DeWine
Bingaman                            Enzi
Wellstone                           Hutchinson
Murray                              Collins
Reed                                Brownback
                                    Hagel
                                    Sessions

    22. Senator Murray offered an amendment that requires group 
health plans to cover inpatient care following a mastectomy, 
lumpectomy, or lymph node dissection for the treatment of 
breast cancer. The length of stay would be determined by the 
physician, in consultation with the patient. The amendment was 
defeated on a rollcall vote of 9 nays to 8 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Frist
Harkin                              DeWine
Mikulski                            Enzi
Bingaman                            Hutchinson
Wellstone                           Collins
Murray                              Brownback I43Reed
                                    Hagel
                                    Sessions

    23. Senator Wellstone offered an amendment that requires 
all group health plans to offer a point-of-service product 
option if only closed-panel network plans would otherwise be 
available. The amendment was defeated on a rollcall vote of 10 
nays to 8 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            DeWine
Bingaman                            Enzi
Wellstone                           Hutchinson
Murray                              Collins
Reed                                Brownback
                                    Hagel
                                    Sessions

    24. Senator Reed offered an amendment requiring health care 
plans to provide referrals to a pediatric specialist for a 
child with a mental or physical condition, disability, or 
disease of sufficient seriousness and complexity to require 
diagnosis, evaluation, or treatment by a specialist. If the 
plan refers the child to a nonparticipating specialist, the 
plan is required to cover the services at no additional cost 
beyond those paid-for services received from a 
participatingspecialist. The amendment was defeated on a rollcall vote 
of 10 nays to 8 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            DeWine
Bingaman                            Enzi
Wellstone                           Hutchinson
Murray                              Collins
Reed                                Brownback
                                    Hagel
                                    Sessions

    25. Senator Kennedy offered an amendment that permits 
individuals covered under ERISA plans to hold such plans 
accountable for actions that result in injury or death. The 
amendment was defeated by a rollcall vote of 10 nays to 8 yeas.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Gregg
Harkin                              Frist
Mikulski                            DeWine
Bingaman                            Enzi
Wellstone                           Hutchinson
Murray                              Collins
Reed                                Brownback
                                    Hagel
                                    Sessions

         IV. Explanation of the Legislation and Committee Views


  A. Overview of provisions amended in chairman's substitute of s. 326

    Title II, Individual Rights with Respect to Personal 
Medical Information, was struck from the Chairman's mark, which 
was adopted without objection in executive session. The 
Chairman struck this title in order to consider separately more 
comprehensive legislation on this issue. In striking this 
title, Title III, Genetic Information and Services, becomes 
Title II; and Title IV, Health Care Research and Quality, 
becomes Title III. Additional changes were made to existing 
provisions in the Chairman's substitute and are described in 
detail in the corresponding section under paragraph B.

B. detailed explanation of key provisions of the legislation adopted by 
                             the committee

                   TITLE I--PATIENTS' BILL OF RIGHTS


                  Subtitle A--Right to Advice and Care


Sec. 101. Patient right to medical advice and care

    The purpose of Subtitle A is to improve access to needed 
health care services across all types of health care delivery 
systems.

Sec. 721. Patient access to emergency medical care

    Section 721 requires a group health plan, other than a 
fully insured group health plan, that provides coverage for 
emergency services to pay for appropriate emergency medical 
screening exams using a prudent layperson standard and any 
additional emergency care necessary to stabilize an emergency 
condition after a screening exam. The legislation incorporates 
the definition of ``stabilize'' that is used in the Emergency 
Medical Treatment and Labor Act (EMTALA) (Sec. 1867(e)(3) of 
the Social Security Act) which defines ``stabilize'' as medical 
treatment for an emergency medical condition ``necessary to 
assure, within reasonable medical probability, that no material 
deterioration of the condition is likely to result from or 
occur during the transfer of the individual from a facility, 
or, with respect to'' a pregnant woman, to deliver (including 
the placenta). The committee intends for the phrase ``provide 
coverage for'' to include reimbursement. This coverage must be 
provided without requiring prior authorization and regardless 
of whether the emergency facility is within the plan's network.
    Plans may impose cost-sharing so long as it is uniformly 
applied to similarly situated individuals and to all benefits 
consisting of emergency medical care. The committee believes 
that it would be acceptable to have a differential cost-sharing 
for in-network emergency coverage and out-of-network emergency 
coverage, so long as such cost-sharing is applied consistently 
across a category (i.e., in-network, out-of-network) and 
uniformly to similarly situated individuals and communicated in 
advance to participants and beneficiaries (in accordance with 
section 714 (b)(1) and (b)(2) as added by section 111).
    Under the prudent layperson standard, a person who 
possesses an average knowledge of health and medicine would 
identify emergency care to be necessary for an emergency 
medical condition for which there are acute symptoms of 
significant severity (including severe pain). The prudent 
layperson would expect the absence of immediate medical 
attention to result in serious jeopardy to the individual's 
health, serious impairment to bodily function, or serious 
dysfunction of any bodily organ or part.
    The purpose of this provision is to address the committee's 
concern that emergencyservice denials may cause some patients 
to forgo necessary care out of concern they will have to pay for these 
services out of their own pocket. The committee is also concerned that 
some plans may refuse to cover care that is necessary and appropriately 
provided in the emergency room, even though these plans hold themselves 
out as providing coverage of emergency room services.
    Some plans and managed care organizations have also 
required prior authorization for emergency department services 
and/or have denied payment retroactively for emergency room 
services if it turns out the patient's situation does not meet 
the plan's or managed care organization's definition of an 
emergency. In such cases presently, if a plan participant seeks 
care in an emergency room and the MCO later determines that 
emergency care was not medically necessary, the participant may 
be liable for the entire bill.
    It is the committee's belief that the typical health care 
consumer who has not undergone medical training may not always 
be capable of distinguishing an emergency medical situation 
from a non-emergency medical condition with similar symptoms. 
For instance, severe chest pain could be a symptom of 
indigestion or a heart attack. In addition, there are some 
situations when obtaining advance approval is simply not 
feasible, such as if a patient is unconscious or does not have 
his or her membership card available.
    The committee adopted an amendment offered by Senator 
Hutchinson, adding a new paragraph (2) to Section 721(b), 
clarifying that plans may not hold a participant or beneficiary 
liable for any additional charges from a non-participating 
provider who has provided emergency services for the 
participant or beneficiary. In many communities, plans and MCOs 
typically contract with specific providers and hospitals. 
However, an individual acting as a prudent layperson may seek 
services at the nearest facility, depending on the severity of 
the symptoms. It is the committee's intent to ensure that 
individuals acting under the prudent layperson standards are 
not held liable financially for exercising this right when they 
seek care at a non-network facility.
    The committee recognizes that this provision will require 
plans and providers (including treating facilities) that do not 
have contractual relationships to negotiate acceptable payment 
for these services. The committee is also interested in 
encouraging a fair payment arrangement that provides reasonable 
compensation for emergency services under the prudent layperson 
standard and that is equitable to the provider and the plan 
paying for the treatment.
    The committee recognizes the reimbursement structure for 
hospitals and providers under Medicare's traditional fee-for-
service program as an example of a fair payment arrangement. 
Moreover, the committee believes that such an arrangement can 
be implemented with ease, since the prudent layperson standard 
under the Medicare+Choice program uses this payment model and 
since most facilities and managed care organizations that 
administer health benefits on behalf of group health plans also 
participate in traditional Medicare. To the extent the 
Secretary of Labor promulgates guidance addressing payment 
issues, the committee expects that such guidance would treat 
payment arrangements consistent with the Medicare reimbursement 
model as acceptable.

Sec. 722. Offering choice of coverage options

    Section 722 of the legislation requires a group health 
plan, other than a fully insured group health plan, that 
provides coverage only through a single closed-panel network of 
providers to offer participants the option to enroll in point-
of-service coverage at the time of enrollment and such other 
times when the plan offers a choice of coverage options. 
Alternatively, the requirements of this section would be 
satisfied if there is a choice of two or more closed-panel 
coverage options with significantly different provider 
networks. It is the committee's intent that the requirements of 
this section would also be satisfied if there is an option to 
enroll in a fee-for-service coverage option, a preferred 
provider organization (PPO) coverage option, or any other 
coverage option that does not limit coverage or reimbursement 
to network providers only. The legislation provides an 
exemption for small employers (2-50 employees) that sponsor 
group health plans.
    In order to satisfy the requirements of this section by 
offering two or more closed-panel options, the networks must 
differ significantly in their selection of participating health 
care professionals or networks. The committee intends that the 
requirements of this section would be satisfied, regardless of 
whether these options are provided under a single employer plan 
with two coverage options, or under two separate plans 
(regardless of whether the plans have similar or identical plan 
designs), so long as the options differ significantly in their 
provider network composition.
    The committee recognizes that there may be administrative 
costs associated with the offering of a point-of-service 
option. However, the legislation does not require employers to 
pay any additional costs associated with this section or make 
equal contributions to different health coverage options. In 
addition, the employer or plan may impose higher premiums for 
participants who select the point-of-service option. The 
committee recognizes that point-of-service plans typically 
require greater out-of-pocket cost-sharing for the use of non-
network providers and believes that such practices are 
consistent with the requirements of this section. This 
provision does not require a plan to cover the services of a 
particular type of health care professional or to cover 
services provided by health care professionals that the plan 
has excluded for reasons of fraud, poor quality, or other 
similar reasons.
    Subparagraph (A) of subsection (a)(2) was struck from the 
Chairman's substitute. This subparagraph would have extended an 
exemption to situations where there is a choice of coverage 
through more than one insurance issuer. The provision was 
deleted because it did not fit within the scope of this 
subtitle, which does not apply to fully insured group health 
plans.

Sec. 723. Access to obstetric and gynecological care

    Section 723 of the legislation requires a group health 
plan, other than a fully insuredgroup health plan, to provide 
female enrollees with direct access to routine obstetric and 
gynecological (ob/gyn) care without requiring authorization by a 
gatekeeper, such as a referral from a primary care physician or 
approval by the plan's utilization reviewer. The committee intends for 
plans that allow for the designation of an ob/gyn as a female 
participant's primary care provider to be considered in compliance with 
this requirement. However, the committee does not intend for this 
section to be interpreted to require plans to allow for the designation 
of an ob/gyn as a primary care provider. Moreover, the committee does 
not intend for a plan's rules regarding payment or cost-sharing for in-
network and out-of-network coverage to be changed by the requirements 
of this section.
    Many plans allow female enrollees direct access to an ob/
gyn for an annual visit and ``well woman exam.'' However, some 
plans require an authorization before a female participant can 
see an ob/gyn for this type of routine care. The purpose of 
this section is to provide women with access to routine ob/gyn 
care by removing any barriers that could deter women from 
seeking this type of preventive care.
    The committee intends for the term ``routine care'' to mean 
preventive and primary ob/gyn care provided in an outpatient 
setting. Primary follow-up care, including minor procedures 
which are performed in the physician's office setting, is also 
intended by the committee to be considered routine follow-up 
care. The committee does not intend for this provision to 
require direct access to an ob/gyn subspecialist or to 
secondary or tertiary ob/gyn services, such as inpatient care 
or inpatient or outpatient surgery, if a plan requires an 
authorization for such services. Nor is the committee's intent 
for this provision to allow the ob/gyn specialist to authorize 
such care or services, if the plan does not allow designation 
of an ob/gyn as a primary care provider. Section 723 does not 
prevent a plan from requiring the ob/gyn specialist to notify 
the designated primary care provider of any treatment decisions 
and interventions.
    Section 723 of the legislation was amended to add new 
subsection (c)(3) in the Chairman's substitute to clarify that 
plans would not be precluded from allowing non-physician health 
care professionals to provide routine ob/gyn care. In addition, 
the entire section 723 was redrafted and adopted as part of the 
package of technical amendments offered by the Chairman. The 
purpose of the redrafting was to clarify the language of the 
section without changing the underlying intent of the 
provision.

Sec. 724. Patient access to pediatric care

    Section 724 of the legislation requires a group health 
plan, other than a fully insured group health plan, to provide 
child enrollees with direct access to a pediatrician for 
routine pediatric care without requiring authorization by a 
gatekeeper, such as a referral from a primary care provider who 
is not a pediatrician. The committee intends for the term 
``routine care'' to mean preventive and primary pediatric care 
and primary follow-up care provided by a pediatrician in an 
outpatient setting.
    The committee is aware that many plans allow a pediatrician 
to be designated as a child's primary care provider and intends 
for this practice to be considered in compliance with the 
requirements of this section. The committee does not intend for 
this section to be interpreted as requiring the designation of 
a pediatrician as a child's primary care provider if a plan 
does not permit such a practice.
    Section 724 was amended to add a new subsection (b)(2) to 
the Chairman's substitute, specifying that this provision does 
not prevent a plan from requiring the pediatrician to notify 
the designated primary care provider of any treatment decisions 
and interventions. It was also amended to add a new section 
(b)(3) in the Chairman's substitute to clarify that plans would 
not be precluded from allowing nonphysician health care 
professionals to provide routine pediatric care. In addition, 
the entire Section 724 was redrafted and adopted as part of the 
package of technical amendments offered by the Chairman. The 
purpose of the redrafting was to clarify the language of the 
section without changing the underlying intent of the 
provision.

Sec. 725. Access to specialists

    Section 725 of the legislation was added by an amendment 
offered by Senators Frist and DeWine and adopted by voice vote 
in executive session. This section requires a group health 
plan, other than a fully insured group health plan, to ensure 
that plan enrollees have access to specialty care when such 
care is needed by an enrollee and covered under the plan and 
when such access is not otherwise available under the plan.
    The committee recognizes that many plans provide 
differential benefits or cost-sharing based on whether services 
are obtained from a network or a non-network provider and does 
not intend for this section to disrupt this practice. The 
purpose of this section is to address situations in which a 
plan that does not provide any out-of-network benefit has an 
insufficient number and mix of specialists and subspecialists 
in its network to provide all the services covered under the 
plan without unreasonable delay. The committee is concerned 
that such a situation may create a barrier to care and can 
negatively impact patient health, particularly for patients 
with complex or chronic medical conditions who require ongoing 
or frequent speciality care.
    The committee also recognizes that, in some markets, it may 
not be feasible for a plan or its network to contract with a 
sufficient number and mix of specialists, for instance, a small 
community where there is only one nephrologist who does not 
participate in any networks. In such a situation, the committee 
intends that a plan providing benefits through a closed-panel 
network would take the necessary steps to secure the services 
of a nephrologist when a covered enrollee requires such 
services. This section should not be construed as requiring a 
plan to cover specific benefits or the services of a specific 
type or class of providers. However, the committee intends that 
when the plan covers a benefit or service that is appropriately 
provided by a particular type of specialist not in the network, 
the benefit will be provided using the ``in-network'' cost-
sharing schedule.
    This section defines specialty care as care and treatment 
provided by a health care practitioner, facility, or center 
that has adequate expertise through appropriate training and 
experience, including the training and qualifications to 
perform certain specialized procedures and/or treatments. The 
committee intends for the words ``center'' and ``facility'' to 
include, for example, a center of excellence. The committee 
believes that it is important for patients to have access to 
specialists with age appropriate expertise. Thus, in using the 
term ``adequate expertise,'' the committee intends for this to 
include specialists with age appropriate expertise, such as 
pediatric and geriatric specialists.
    The committee recognizes that disagreements about 
``adequate expertise'' may often stem from an individual's 
personal preference or perception rather than from medical 
need. For instance, a plan may have ten qualified ob/gyn 
specialists in its network, but an enrollee insists that the 
plan should cover a non-network ob/gyn specialist that the 
enrollee believes is ``the best'' in the field. Or, a patient 
may prefer to receive an elective surgery at a center of 
excellence even though the plan's local network facilities 
routinely perform such procedures with good outcomes. The 
committee also recognizes that there may be some occasions when 
a plan's network providers may not, in fact, have adequate 
expertise. For instance, there may be just a few uniquely 
situated specialists across the country who have experience 
treating a certain rare form of stomach cancer and these 
specialists do not participate in the plan's network. In such a 
situation, the committee believes that a determination of 
``adequate expertise'' can be made based on the comparative 
qualifications and credentials of the network and non-network 
specialists. In general, it is the committee's desire to apply 
the requirements of this section, and other provisions of this 
Act, primarily when disagreements about ``adequate expertise'' 
hinge on the actual qualifications, experience, and credentials 
of the specialist(s).
    In arranging for specialty care, the committee anticipates 
that plans will negotiate a variety of arrangements. For 
example, a plan may seek to include the specialist in its 
network or it may negotiate an agreement with a specialist to 
provide care to an enrollee when the situation arises under the 
requirements of this provision. Section 725 (a) of this section 
permits a plan to enter into a contractual arrangement with a 
specialist outside the network to meet the requirements of this 
section.
    This section would not prevent a plan from requiring that 
the specialist adhere to a treatment plan if it: (1) is 
developed by the specialist in consultation with the patient 
and the patient's primary care provider; (2) is approved by the 
plan; and (3) meets the quality assurance and utilization 
review standards of the plan. In addition, this section would 
not prevent a plan from requiring the specialist to provide the 
patient's primary care provider with regular updates on the 
patient's health status and care, as well as all other 
necessary medical information.
    This section would not prevent a plan from requiring 
authorization by the patient's primary care provider in order 
to obtain specialty services, so long as the authorization is 
for an adequate number of visits under an approved treatment 
plan, if required by the plan. For example, a breast cancer 
patient may require 8 chemotherapy treatments according to the 
treatment plan developed by the treating oncologist in 
consultation with the patient and the primary care provider. 
The committee anticipates that a plan might approve some 
portion or the entire block of 8 referrals before requiring the 
patient to seek authorization for additional visits, depending 
on factors such as the frequency of specialist visits required, 
the time span covered by the specialty visits under the 
authorization, and the frequency of primary care visits 
necessary to coordinate and ensure the quality of the patient's 
overall care. The committee's goal with respect to this 
provision is to prevent health plans from imposing 
unnecessarily burdensome requirements when ongoing care is 
medically necessary and appropriate for patients with complex 
and chronic conditions.

Sec. 726. Continuity of care

    Section 726 of the legislation requires a group health 
plan, other than a fully insured group health plan, to provide 
continued benefits with the same provider for a patient who is 
undergoing a course of treatment (as described in this section) 
when his or her provider is terminated from the plan's network 
or when benefits or coverage are terminated because of a change 
in the terms of the provider's participation in the plan's 
network. It is the committee's intent that a change in the 
provider's participation in the network could be a result of 
the plan sponsor changing its relationship with an issuer or 
third party administrator. It is also the committee's intention 
that these requirements would not apply as a result of the 
patient's action, for example, if the patient voluntarily 
switched enrollment from coverage option A to coverage option 
B. In addition, this section requires a plan to give timely 
notice to patients who are undergoing a course of treatment 
when their provider has been terminated and to provide these 
patients with an opportunity to notify the plan of a need for 
transitional care.
    The committee recognizes that employers periodically change 
their plan designs and/or relationships with services 
providers. The committee also recognizes that MCOs, physician 
group practices, and health care facilities negotiate and 
renegotiate provider relationships on an ongoing basis. The 
purpose of this section is to ensure that in such situations 
patients undergoing active treatment are able to make a smooth 
transition in care.
    This section specifically requires a plan to continue 
coverage with a patient's provider, if the patient is 
undergoing a course of treatment that includes institutional 
care, care for a terminal illness, or care starting from the 
second trimester of pregnancy. Coverage duration is for up to 
90 days for a patient who is terminally ill, or who is 
receiving institutional care. For a pregnant woman who is in 
her second or third trimester, coverage is required to be 
continued through the postpartum period. Section 726(b)(1) of 
the Chairman's substitute was amended to clarify that the 
extension of coverage under this section is available for up to 
90 calendar days.
    The committee intends for the requirements of this section 
to apply where a plan provides benefits through a network of 
providers or provides a greater benefit or higher level of 
coverage for the use of certain designated providers or 
facilities. If a plan is required under this section to provide 
continued coverage, it is the committee's intent that such 
coverage would be provided onthe same basis as it was prior to 
the termination. For example, a plan providing coverage through a PPO 
or POS network arrangement must provide continued coverage under the 
terms of this section when it terminates a provider, even though access 
to that provider may be available at a reduced level of coverage (i.e., 
higher cost-sharing for the patient) under such arrangements.
    The committee believes that a patient undergoing a course 
of treatment (as described in this section) should not have the 
terms of his or her coverage changed during the course of 
treatment due to a change in the provider relationship or 
contract. The committee does not intend for this interpretation 
to restrict in any manner a plan's ability to change its 
general cost-sharing requirements. For example, if a plan 
increases its co-payment structure for all similarly situated 
participants and beneficiaries, or the plan's third party 
administrator changes its cost-sharing requirements across a 
product or policy line, such a change would not trigger a 
requirement to provide continued coverage under this section.
    The committee recognizes that, while some group health 
plans act as their own administrators and contract directly 
with providers, the vast majority simply purchase access to a 
third party administrator's network. The committee is also 
aware that most provider relationships and contracts are 
between providers and third party administrators or other 
service providers that provide services in connection with a 
group health plan. The committee intends that the requirements 
of this section would apply, regardless of whether a group 
health plan directly terminates the relationship with the 
provider, or a third party administrator acting on the plan's 
behalf terminates the relationship. For example, entities such 
as a managed care organization, a network management firm, or a 
physician practice management firm may be responsible for 
terminating a provider contract. To the extent such an 
organization is providing network management services to a 
group health plan and the termination of the provider 
relationship affects a participant or beneficiary in one of the 
three scenarios described in the paragraph above, the committee 
intends for the requirements of this section to apply. In 
addition, the requirements of this section would also apply 
when a plan terminates its contract with a third party 
administrator (and the third party administrator's network), 
resulting in a patient's loss of access, or significant change 
in coverage, with respect to his or her provider.
    This section defines ``terminated'' as, with respect to a 
contract, the expiration or nonrenewal of a contract by the 
plan, except for failure to meet the plan's quality standards 
or for fraud. The terminated contract could be a contract 
between a plan and a physician, a network, a group of 
physicians, and/or a facility. The committee intends for the 
word contract to encompass any arrangement, such as a contract 
or any arrangement that has a similar effect as a contract.
    This section requires that, in order to receive continued 
payment by the plan (or its third party administrator), the 
terminated provider must agree to accept the rates in effect 
before the termination of the relationship or the rates 
provided under the replacement arrangement. The provider may 
not impose additional cost-sharing on the patient above the 
cost-sharing in effect under the old relationship. The provider 
must also agree to follow the plan's quality assurance 
standards and other policies previously in effect, such as 
prior authorization and referral requirements.
    Notice Requirement: This section requires a plan to notify 
individuals undergoing a course of treatment (as described in 
this section) when the provider who is treating the individual 
is terminated from the network. The committee recognizes that 
plans will have to rely on providers in most situations to 
identify the patients who are undergoing courses of treatment 
described in this section. The committee intends that when a 
network terminates a provider from its network, it will include 
in its termination notice information about this right and the 
terms and conditions that the provider must accept to provide 
transitional care. In addition, the committee anticipates that 
if a provider is interested in continuing care for the patient 
that, in addition to agreeing to the terms and conditions under 
Section 726(c), the provider will notify the patient of his or 
her right to continued care. It is the committee's view that 
the provider and plan need not provide notice to the individual 
if the provider is unwilling or unable to provide transitional 
care under the terms outlined in Section 726(c).
    The committee anticipates that a provider who is willing to 
accept the terms and conditions of providing transitional care 
will notify the plan of the patient's desire to have 
transitional care and that the plan will then notify the 
patient that it is providing such coverage with the same 
provider. Section 726(a)(1)(C) requires that a plan provide the 
individual with an opportunity to notify the plan of a need for 
transitional care; however, it is the committee's intention 
that, once a plan has been notified by the patient's provider 
of a need for transitional care, the plan may use its 
discretion to authorize continued coverage without first 
requiring the patient to notify the plan of a need for 
transitional care.
    When the sponsor of a group health plan (i.e, employer or 
union) terminates a relationship with a third party 
administrator or service entity that results in participants 
and beneficiaries becoming eligible for continued care under 
this provision, the group health plan (or employer) may provide 
participants and beneficiaries with notice about their rights 
to continued care as part of the open enrollment process. An 
individual may then notify the plan of his or her desire to 
receive continued care. The committee recognizes that whenever 
a group health plan (or employer) changes its relationship with 
a third party administrator, and therefore the third party 
administrator's network, there will be a number of individuals 
who qualify for transitional care under this section. The 
committee is aware that such changes are usually planned 
relatively far in advance of their implementation and that many 
provider contract terminations or non-renewals can also be 
anticipated in advance. In order to minimize the compliance 
burden of notice requirements under this section, the committee 
anticipates that the Secretary's guidance will include examples 
of situations in which a plan might satisfy the requirements of 
this section by providing notice sufficiently in advance of a 
change and continuing coverage throughout that period.

Sec. 727. Protection of patient-provider communications

    Section 727 of the legislation prohibits a group health 
plan, other than a fully insuredgroup health plan, from 
imposing any prohibition or restriction, contractual or otherwise, on a 
health care professional's ability to discuss freely with the patient 
information about the patient's health status, medical care, and 
treatment options. The committee intends for a health care professional 
to be able to discuss treatment alternatives with a patient and render 
good medical advice, regardless of whether the alternatives or 
recommended treatment are covered benefits or services under the plan.
    The committee is aware that, as a result of this section, 
health care professionals may sometimes discuss or recommend 
treatment alternatives that may be excluded from coverage under 
the plan. However, this section does not require a plan to 
cover any benefits or services that are excluded from coverage 
under the plan. It is the committee's intent, with respect to a 
group health plan (other than a fully insured group health 
plan), that this section be consistent with the policy of the 
Federal Employees Health Benefits Program, as ordered by 
Executive Memorandum and executed by U.S. Office of Personnel 
Management rulemaking (Federal Register, August 10, 1998; Vol. 
63; No. 153), specifically as such policy pertains to potential 
conflict regarding ethical, moral, or religious beliefs.
    The committee intends that nothing in this section shall be 
construed as prohibiting a plan from requiring a health care 
provider to participate in, or cooperate with, programs and 
policies designed to monitor and improve the quality of health 
care services. Nor shall this section be construed as impeding 
payment and reimbursement arrangements, including capitated 
payment arrangements, that are negotiated between a plan and a 
health care provider.

Sec. 728. Patient's right to prescription drugs

    Section 728 of the legislation was offered as an amendment 
by Senators Collins and Jeffords and adopted by rollcall vote 
in executive session. This section requires a group health 
plan, other than a fully insured group health plan, that 
provides prescription drug benefits through a formulary to 
ensure that physicians and pharmacists participate in 
developing and reviewing the formulary. In addition, this 
section requires that a plan allow enrollees to access non-
formulary prescription drugs through an exceptions process when 
medically necessary, appropriate, and consistent with quality 
assurance and utilization review standards of the plan, and 
when such drug would otherwise be a covered benefit.
    The committee recognizes that formularies are an effective 
tool that health plans and their third party administrators, 
including managed care networks and pharmacy benefit managers, 
use to manage drug expenditures and promote safety. The 
committee is aware that managed care has generally expanded 
access to prescription drugs and helped to maintain their 
affordability for millions of Americans and is interested in 
ensuring that prescription drugs remain accessible and 
affordable, particularly in light of recent prescription drug 
cost trends. For a majority of people, the prescription drugs 
included in the plan's formulary will provide the desired 
therapeutic results. However, the committee is concerned that 
there may be occasions when a patient could be denied access to 
medication that is medically necessary and appropriate if a 
plan only provides coverage for medications on the formulary 
list and there is no medically necessary and appropriate 
prescription drug for the condition on that formulary list. In 
some situations, the only effective drug for a patient may not 
be on the formulary. For instance, a formulary might include 3 
cholesterol-lowering medications, but a particular patient 
might only respond to, or be less likely to experience adverse 
side effects from, a fourth alternative that is not on the 
formulary. Thus, the purpose of this provision is to ensure 
that a plan's use of a formulary does not have an adverse 
impact on quality of care by hindering a patient's access to 
needed medication.
    This section would require a group health plan to provide 
an exception to the formulary limitation, in accordance with 
the applicable quality and utilization review standards of the 
plan, when: (1) the plan's formulary does not include a 
medically necessary and appropriate medication for the 
patient's condition; (2) a non-formulary alternative is 
medically necessary and appropriate; and (3) the non-formulary 
medication is not otherwise excluded from coverage. Where a 
formulary and non-formulary drug are expected to achieve a 
similar outcome, it is the committee's intention that a plan 
need not provide coverage for the non-formulary medication 
unless the formulary medication is demonstrated to be 
ineffective or it is not appropriate for a specific patient.
    The committee recognizes that many plans already provide 
access to medications that are not on the formulary in order to 
be responsive to consumer needs as well as preferences for 
medications that are not included on the formulary. Such 
arrangements, because they allow for consumer preferences and 
generally increase costs for all enrollees, typically provide 
such access at a higher cost-sharing level for the patient. For 
example, many plans use a multi-tiered cost-sharing structure 
that requires different cost-sharing or co-payments for brand 
name formulary drugs, generic formulary drugs, and non-
formulary drugs. Similarly, some plans also require different 
cost-sharing for mail order and retail drugs.
    The committee recognizes that prescription drug benefit 
design is a rapidly evolving area and does not wish to 
interfere with the evolution of these programs or ``lock-in'' 
any particular approach. The committee believes that a 
prescription drug benefit that employs differential cost-
sharing for formulary and non-formulary medications, including 
the use a multi-tiered cost-sharing structure or a similar 
arrangement, is consistent with the intent of this section, so 
long as the patient cost-sharing requirements for medically 
necessary and appropriate non-formulary medications do not 
undermine the committee's intent of providing a meaningful 
benefit for patients.
    It is the committee's intent that a plan, in selecting to 
use a multi-tiered copayment structure, must set cost-sharing 
within a given policy, product or benefits package that is 
consistent across a category, communicated up front to 
participants and beneficiaries (in accordance with Section 714 
(b)(2), (b)(11), and (16)(E) as added by Section 111 of this 
legislation), and does not vary by medication or patient.
    The committee also intends for the requirements of this 
section to apply to each plan (and coverage option) that uses a 
formulary, including plans that provide benefits through a 
``carve-out'' prescription drug program.

Sec. 729. Self-payment for behavioral health services

    Section 729 of the legislation was offered as an amendment 
by Senator Wellstone and adopted by rollcall vote in executive 
session. This section bars a group health plan, other than a 
fully insured group health plan, from prohibiting or 
discouraging an enrollee from self-paying for behavioral health 
services once the plan has denied coverage. In addition, this 
section prohibits a plan from terminating a provider who 
permits an enrollee to self-pay for behavioral health services 
that are otherwise not covered or for which benefits are 
limited under the plan and for which the plan has denied 
coverage.
    The committee recognizes that there are no existing laws 
that prohibit self-payment for behavioral health services in 
private-sector health coverage. However, there may be some 
cases in which a plan or a third party administrator that 
provides services to a plan (e.g., a MCO or managed behavioral 
health firm) may contractually prohibit participating providers 
from accepting self-payment for services provided outside the 
scope of plan coverage. In addition, plans often limit benefits 
for behavioral health services through utilization limitations, 
such as a cap on the number of covered inpatient days on 
outpatient visits.
    A patient, in consultation with his or her treating health 
care professional, may determine that additional behavioral 
health services are needed, beyond any limits imposed by the 
plan or the plan's agent that manages the utilization of 
services for the plan. The purpose of this section is to allow 
a patient in this situation the right to seek and pay for such 
additional services from the same health care professional who 
had been treating the patient while such treatment was covered 
by the plan. The committee believes that thus maintaining a 
provider relationship can often have a positive impact on 
patient outcomes.
    The committee feels strongly that a provider should 
disclose fully to the patient that such services are rendered 
by the provider acting in his or her individual capacity as a 
solo practitioner and outside the auspices (including the terms 
and conditions) of the plan. Although a plan may not terminate 
a provider for accepting self-payment under the terms of this 
section, the committee believes that nothing in this section 
would prevent a plan from imposing reasonable parameters on a 
provider who accepts self-payment. For instance, a plan may 
impose restrictions on a provider's use of plan resources and 
facilities and may require a provider to adhere to certain 
reporting requirements such as adverse drug events. Nothing in 
this section would require a provider to accept self-payment 
for such services.
    This section would not prevent a plan from terminating a 
contract with a health care provider failing to meet applicable 
quality standards or for fraud. In using the term ``self-pay,'' 
the committee intends that the plan will pay zero percent, and 
the enrollee will pay out of pocket the entire amount 
negotiated by the provider and the patient.

Sec. 730. Generally applicable provision

    Section 730 of the legislation establishes that Subtitle A 
of Title I applies to group health plans other than fully 
insured group health plans. This section uses the definition of 
group health plan established by the Health Insurance 
Portability and Accountability Act of 1996 (HIPAA) in Section 
733(a) of ERISA. It also adds a definition of a ``fully insured 
group health plan'' under Section 733(a)(3) of ERISA. The 
definition of fully insured group health plan under this 
section refers to a plan for which the benefits under the plan 
are provided pursuant to the terms of an arrangement between a 
group health plan and a health insurance issuer, and all of the 
benefits are guaranteed by the health insurance issuer under a 
contract or policy of insurance.
    Section 730 also establishes that in the case of a group 
health plan that provides benefits under two or more coverage 
options, the requirements of Subtitle A, except for Section 
722, would apply separately to each coverage option.
    The committee intends for this section to ensure that group 
health plans that do not purchase insurance contracts or 
policies that are subject to State insurance regulations will 
be subject to the provisions of this Act. The purpose of this 
section is to apply important consumer protections to the 
segment of the market that is outside the reach of State 
authority, without disrupting or duplicating States' efforts to 
develop tailored patient protections that suit the needs of 
their populations through States' ability to regulate health 
insurance.

Sec. 102. Comprehensive independent study of patient access to clinical 
        trials and coverage of associated routine costs

    The willingness and ability of patients to participate in 
clinical trials is important both to patients seeking 
additional treatment options and to the continued success of 
biomedical research in the United States. The committee is 
interested in information about the extent to which denials of 
coverage by health plans for services provided to members who 
wish to enroll in clinical trials is impacting treatment 
options and biomedical research. The committee is also 
concerned about the ability to differentiate the incremental 
costs associated with a patient's participation in a clinical 
trial from the routine costs of medical care which would 
otherwise have been provided.
    For guidance on this issue, the committee adopted an 
amendment proposed by Senator Frist. Section 102 directs the 
Secretary of Health and Human Services to contract with the 
Institute of Medicine (IOM) to evaluate barriers to patient 
participation in clinical trials, the ability to account for 
routine costs during clinical trials, and the impact of 
coverage of routine costs associated with clinical trials on 
health insurance premiums. In conducting this study, the 
committee expects the IOM to seek input from a mix of key 
stakeholders on this issue. The Institute of Medicine will 
report findings, conclusions, and recommendations to the 
SenateCommittee on Health, Education, Labor, and Pensions no later than 
12 months after the date of execution of the contract.
    The committee is also awaiting the results of a number of 
studies currently being conducted in the private sector which 
are seeking to answer similar questions about patient 
participation in clinical trials. The recent private-public 
collaborative agreement between the American Association of 
Health Plans and the National Institutes of Health is another 
development which pertains to this issue. The agreement 
encourages health plans to cover routine patient costs for 
specific clinical trials and proposes to answer unresolved 
questions about patient participation in clinical trials and 
the impact on health insurance premiums.

       Subtitle B--Right to Information About Plans and Providers


Sec. 111. Information about plans

    Section 111 of the legislation adds to ERISA Part 7 of 
Subtitle B of Title I, a new section 714 which applies to all 
group health plans and health insurance issuers that provide 
coverage in connection with a group health plan. This section 
requires these entities to provide participants, beneficiaries, 
and individuals eligible for coverage under the plan with a 
wide range of information about their health coverage options. 
Such information includes, for instance, a description of 
covered and excluded benefits, cost-sharing requirements, 
restrictions on accessing non-network providers and services, 
and prior authorization and referral requirements. The 
committee believes that access to information and the ability 
to choose among competing options are the hallmarks of an 
efficiently functioning market. The purpose of this provision 
is to give consumers information that will help them maximize 
their decision making.
    The information specified in Section 714(b) must be 
provided automatically, 12 months after the enactment of this 
section. The information must be provided to participants and 
beneficiaries who do not live at the same address as the 
participant, as well as upon request to an individual who is 
eligible for coverage under the plan. In addition, the 
Chairman's substitute added in Section 714(a)(1) that this 
information must also be provided ``annually thereafter.'' The 
committee anticipates that, consistent with most current 
practices, this information will be provided in conjunction 
with an annual open enrollment period.
    In adding these requirements under Part 7 of ERISA, rather 
than under Part 1, it is the committee's intention to establish 
information disclosure requirements that are more responsive to 
the needs of consumers and more consistent with how employers 
and health insurance issuers currently provide this type of 
information. The committee does not desire to establish 
redundant or burdensome information requirements and therefore 
added Section 714(e) to the Chairman's substitute, requiring 
the Secretary to issue conforming regulations to reduce or 
eliminate any duplication under Part 1 that was created by the 
addition of this section.
    This section, under 714(b)(16) requires a statement by the 
plan that certain information will be be provided upon request, 
such as the names, addresses, and qualifications of providers, 
the summary description of the methods used for compensating 
providers, a summary description of utilization review 
procedures, and any information made public by accreditation 
organizations. Of course, the committee expects that in 
addition to providing a statement of availability, the plan 
will actually provide to the participant or beneficiary the 
information that has been requested.
    This section specifies that information must be provided in 
a clear and accurate form and distributed in an accessible 
format that is understandable to the average plan participant 
or beneficiary.
    In the general requirement under Section 714(a), the 
Chairman's substitute replaced the word ``or'' with ``and,'' 
clarifying that this section applies to both group health plans 
and health insurance issuers that provide coverage in 
connection with a group health plan. The committee recognizes 
that a group health plan may not have direct access to the 
various pieces of information described in this section, but 
the committee does not desire to create redundant or burdensome 
requirements on plans and their service providers. Therefore, 
Section 714(a)(2) was added to the Chairman's mark, making 
clear that nothing in this section would prevent a plan or 
issuer from entering into an agreement under which the issuer 
agrees to assume responsibility for compliance and, thus, 
releases the plan from responsibility for such compliance.
    Additional amendments were made to this section in the 
Chairman's substitute as follows:
     Section 714(a)(3) was added to clarify that 
information required under this section shall be provided to 
participants and beneficiaries at the address maintained by the 
plan or issuer. A related provision, Section 714(c), paragraph 
(2) and subparagraphs (A) and (B), were struck.
     The requirements of this section were added as a 
new Section 9813 to Subchapter B, Chapter 100 of the Internal 
Revenue Code of 1986. The addition of this section to the 
Internal Revenue Code allows for the assessment of penalties of 
$100 per day, per violation on plans that violate the terms of 
this section.
     The requirement to disclose specific exclusions 
under the plan, Section 714(b)(16)(F), was moved to Section 
714(b)(1), to require this information to be provided routinely 
as part of the description of covered items and services, 
rather than upon request.
     Paragraph (9) was added to Section 714(b), 
requiring plans to disclose the definition of medical necessity 
used in making coverage determinations by the plan.
     Paragraph (11) was added to Section 714(b), 
requiring plans to disclose any provisions for obtaining off-
formulary medications. A similar requirement was deleted from 
Section714(b)(16)(E). This subparagraph now requires a plan to 
provide, upon request, the list of specific medications included on the 
formulary.
     Section 714(b)(13)(C), a reference to the 
legislation's subtitle on medical records confidentiality, was 
struck.

Sec. 112. Information about providers

    The committee recognizes that for patients to make informed 
decisions about their health care options, they need valid and 
reliable information about the qualifications and competencies 
of health care professionals. Therefore, in Section 112, the 
committee has directed the Secretary of Health and Human 
Services to contract with the Institute of Medicine to study 
the availability and disclosure of information about health 
care professionals. The study will evaluate the current 
availability of such information on a State-by-State basis, 
examine patient preferences with respect to information, 
evaluate legal and other barriers to the disclosure of 
information, and make recommendations about the future 
disclosure of this information.

           Subtitle C--Right To Hold Health Plans Accountable


Sec. 121. Amendment to Employee Retirement Income Security Act of 1974

    This section of the legislation amends Section 503 of ERISA 
to create new procedures for grievances, coverage 
determinations, and appeals, including the right to an 
independent external review, that apply to all group health 
plans, including self-insured and fully insured plans, and 
health insurance issuers providing coverage in connection with 
group health plans. The committee also intends for this section 
to apply to utilization reviewers, managed care organizations, 
and other third party administrators to the extent that they 
contract with, act on behalf of, or provide services in 
connection with a group health plan. For simplicity, the 
remainder of this section will refer only to group health 
plans. The term ``enrollee'' was stricken throughout this 
section of the Chairman's substitute and replaced with 
participants and beneficiaries; however, for purposes of this 
report, the term ``enrollee'' refers to participants and 
beneficiaries.
    Today, there are many structures, delivery systems, sources 
of coverage, and methods of financing for health care coverage. 
Various forms of managed care are now commonplace for the 
delivery of health care services. All of these changes, plus 
the complexity of the marketplace, have exposed a need for 
improved procedures governing coverage decisions, grievances, 
and appeals. The purpose of this section is to improve the 
standards and time frames for these determinations and to 
ensure that the process for making coverage determinations is 
fair and reliable. The committee believes that timely 
utilization and coverage decisions, as well as a defined 
process for appealing such decisions, is key to ensuring that 
individuals have appropriate access to care. In addition, the 
committee believes that improving these procedures will impact 
positively the quality of care.
            Initial coverage determinations
    The legislation sets new standards and specific time frames 
for health plans' coverage determinations. A group health plan 
must ensure that procedures are in place to (i) determine 
eligibility, coverage, payment, and cost-sharing amounts; (ii) 
notify the enrollee and treating health care professional of 
the determination plus any additional payments the enrollee 
must make; and (iii) respond to written and oral requests for 
coverage or appeal determinations made by the enrollee or 
treating health care professional with the consent of the 
enrollee. ``With the consent of the participant or 
beneficiary'' was added to the Chairman's substitute. The 
committee believes that, because providers have interests of 
their own, it is important for the provider to act with the 
consent of the enrollee in these kinds of situations. For all 
of Section 121, the committee intends for any time frame 
requirement to be interpreted as ``calendar days'' unless 
otherwise specified.
    The legislation requires a plan to make a non-emergency 
routine coverage determination for prior authorization within 
30 calendar days from the date of the request. The Secretary 
may extend this period in certain circumstances determined by 
the Secretary to be beyond the control of the plan or issuer. A 
plan is required to provide notice of its decision to the 
individual and the treating health professional, if the medical 
circumstances indicate it is appropriate, no later than two 
working days after the date the determination is made.
    A plan must have in place procedures to ensure that a 
retrospective determination is made within 30 working days of 
the plan's receipt of the necessary information. The committee 
considers a retrospective determination to be one in which the 
care or service has already been provided and for which there 
is a claim for payment or reimbursement. The plan is required 
to provide notice within five working days once it has made the 
determination.
            Expedited determination
    A plan must maintain procedures for expediting a prior 
authorization determination in cases when the normal time frame 
for making a determination would seriously jeopardize the life 
or health of the individual. In such a case, the plan is 
required to make an expedited prior authorization determination 
within 72 hours, in accordance with the medical exigencies of 
the case, after a request is received by the plan or issuer. 
The legislation requires a plan to provide an expedited 
determination when it receives a request for an expedited 
determination from an enrollee or when the treating health care 
professional has reasonably documented that the time frame for 
a routine coverage decision (i.e., 30 days) could seriously 
jeopardize the life or health of the individual. Notice must be 
provided within the 72-hour period.
            Concurrent review
    A plan is required to have procedures to conduct concurrent 
review to approve an extended stay or additional services. The 
committee recognizes that concurrent review is adynamic process 
that depends on the circumstances of the individual case. The committee 
does intend for a plan's concurrent review process to match the 
circumstances of the situation and provide for timely decisions that do 
not allow for disruption in care in a manner that adversely impacts 
health quality. Once a plan makes a concurrent determination, it must 
notify the participant and his or her treating health care professional 
within one working day.
            Notice
    When a plan makes an adverse coverage decision, regardless 
of whether such a decision is routine, expedited, or 
retrospective, it must provide notice. Notice of an adverse 
coverage determination is required to include: (i) the reasons 
for the determination (including the clinical or scientific 
evidence-based rationale used in making the determination) 
written in an understandable manner; (ii) procedures for 
obtaining additional information; and (iii) notice of the right 
to appeal and instructions on how to initiate an appeal.
            Grievances
    This section requires a plan to establish and maintain 
grievance procedures for addressing complaints between the 
plan, or a plan's third party administrator, and an enrollee 
concerning issues that are not related to a plan's denial of 
coverage. For instance, a grievance procedure would allow 
enrollees the opportunity to comment on telephone and 
appointment waiting times, facilities, or personnel, or 
complain that a preferred physician is not in the network. 
These complaints are non-appealable. The committee anticipates 
that the grievance procedures will provide plans with valuable 
information that will help plans and their service providers 
respond to customer concerns and preferences.
            Internal appeals
    Added to the Chairman's substitute was language that would 
allow a health plan enrollee, or the treating health 
professional with the consent of the enrollee, to appeal to the 
plan any adverse coverage decision up to 180 days after the 
enrollee has been notified of an adverse coverage 
determination. Any adverse coverage decision refers to routine 
coverage determinations, expedited decisions, retrospective 
determinations, and concurrent determinations, as described 
above.
    The time frame for making a routine internal appeal 
determination is 30 working days from the request for the 
appeal. Notice must be provided not later than 2 working days 
after completion of the review. The time frame and standards 
for expedited internal appeals are the same as they are for the 
initial coverage decision--72 hours, in accordance with the 
medical exigencies of the case, after a request is received by 
the plan or issuer. For expedited appeals, notice must be 
provided within the 72 hour period.
    An adverse coverage determination that involves an issue of 
medical necessity or appropriateness is required to be reviewed 
by a physician who has appropriate expertise and who was not 
directly involved in the initial determination. Throughout this 
section, any use of the term ``medical necessity'' was stricken 
in the Chairman's substitute and replaced with ``medical 
necessity or appropriateness.''
            Independent external review
    A plan must have procedures providing an enrollee with the 
right to an independent external appeal, when the initial 
decision to deny coverage of the benefit is upheld by the 
internal reviewer. An enrollee has the right to appeal a 
decision to an independent medical reviewer in writing no later 
than 30 working days after the receipt of the final plan denial 
or the date on which the plan's time frame for making the 
internal appeal determination expired.
    Participants must complete each phase of the appeals 
process, including the internal appeals process, before moving 
to the next. However, the Chairman's substitute includes a 
provision that stipulates that if a plan fails to meet the time 
frame for a determination, the coverage is deemed denied and 
the participant may pursue the next level of appeal.
    The trigger for independent external review was modified as 
follows for the Chairman's substitute. An enrollee, or his or 
her authorized representative, which may be the treating health 
care professional, may request an independent, external review 
when the particular item or service involved:
          1. Would be a covered benefit, when medically 
        necessary and appropriate under the terms of the plan, 
        except that the plan has determined that it is not 
        medically necessary and appropriate; and the amount of 
        the item involved exceeds a significant financial 
        threshold, or there is a significant risk of placing 
        the life or health of the individual in jeopardy; or
          2. Would be a covered benefit, when not considered 
        experimental or investigational under the terms of the 
        plan, except that the plan has determined that the item 
        or service is experimental or investigational.
    The committee intends for adverse coverage determinations 
of covered benefits that involve a denial based on medical 
necessity and appropriateness, or a denial based on a 
determination about whether an item or service is experimental 
or investigational, to be eligible for external review. The 
committee recognizes that some coverage determinations involve 
an element of medical judgment or a determination of medical 
necessity and appropriateness. For instance, a plan might cover 
surgery that is medically necessary and appropriate, but 
exclude from coverage surgery that is performed solely to 
enhance physical appearance. In these cases, a plan must make a 
determination of medical necessity and appropriateness in order 
to determine whether the procedure is a covered benefit.
    It is the committee's intention that coverage denials that 
involve a determination about medical necessity and 
appropriateness, such as the example above, would be eligible 
for external review. The committee expects that a dispute would 
be a dispute between the plan, the plan's issuer or a plan's 
third party administrator, or any other entity that provides 
services for or acts on behalf of the group health plan, and 
the enrollee or the enrollee's treating health care 
professional acting under the consent of the enrollee. 
Throughout this section, the term ``legal,'' when used before 
``representative,'' was stricken and replaced with 
``authorized'' in the Chairman's substitute. The committee 
believes that this change will maintain the integrity of 
ERISA's fiduciary duties, but remove any undue legal barriers, 
such as having to obtain a legal power of attorney, for 
enrollees who require and authorize assistance.
    The committee also recognizes that plan documents sometimes 
do not provide clear distinctions of what is, or is not, a 
covered benefit in the area of experimental or investigational 
treatment because of the constantly evolving nature of science. 
For instance, a plan might say that it does not cover any 
benefit or service that is experimental or investigational 
without listing any specific item or service by name and 
allowing the determination to be made on a case-by-case basis 
whether an item or service is experimental. Or, a plan might 
simply say that it covers all FDA-approved devices, or all FDA 
devices approved as of a certain date.
    The committee does not intend to interfere with 
arrangements such as those above, or with a plan's or 
employer's general ability to define its coverage policy in the 
plan document. However, the committee is interested in ensuring 
that, in cases where a plan document's coverage policy on 
experimental or investigational treatment is not explicit or is 
linked to another policy that requires interpretation, disputes 
arising out of these kinds of situations will be eligible for 
external review. For instance, in making a coverage 
determination based on the current list of FDA-approved 
products, a plan administrator might mistakenly rely on out of 
date information and render an adverse coverage decision. The 
committee intends that such a dispute would be eligible for 
external review.
    In cases where a plan or its agent would deny coverage 
based on both external review standards (i.e., not medically 
necessary and appropriate and experimental or investigational), 
the committee intends that such a determination cite both 
reasons in the initial denial and that the time frames and 
requirements for such a denial run concurrently. For example, a 
plan should not deny coverage on the grounds that it is 
experimental and then subsequently deny coverage on the grounds 
that it is not medically necessary and appropriate, after the 
decision has been appealed to an external reviewer who has 
overturned the plan's initial decision.
    Once an external review has been requested, a plan must 
select a qualified external review entity, in accordance with 
the medical exigencies of the case, but not later than five 
working days after receipt of the request. The legislation 
requires a plan to select an entity in an unbiased manner and 
one that meets the qualifications of an external review entity 
established in this section of the legislation. A qualified 
external review entity must be: (I) an independent external 
review entity licensed or credentialed by a State; (II) a State 
agency established for the purpose of conducting independent 
external review; (III) an entity under contract with the 
Federal Government to provide independent external review 
services; or (IV) any other entity meeting criteria established 
by the Secretary of Labor.
    The external review entity then selects the independent 
expert medical reviewer(s), who would render an independent 
decision based on the valid, relevant, scientific, and clinical 
evidence. This selection of the external reviewer(s) must be 
made in accordance with the medical exigencies of the case but 
not later than 30 working days after the plan designates the 
external review entity. An external reviewer must be an 
independent medical expert, who has appropriate expertise and 
credentials and who does not have any material, professional, 
familial, or financial affiliation with the case or any of the 
parties involved. The reviewer must have expertise in the 
diagnosis or treatment under review and, when reasonably 
available, be of the same specialty as the treating physician. 
The committee intends for expertise to include age appropriate 
expertise such as pediatrics and geriatrics. Throughout this 
section, the term ``external review'' was stricken in the 
Chairman's substitute and replaced with ``independent, external 
review.'' In making this change, it was the committee's wish to 
emphasize the importance of an impartial and unbiased process.
    The health plan is required to forward the necessary 
information to the external reviewer, provide notice to the 
enrollee that the review has been initiated, and pay for the 
cost of the review. The external reviewer may receive 
reasonable and customary compensation and may not receive 
compensation that is contingent on the outcome of the decision. 
A reviewer may not be held liable for decisions regarding 
medical determinations, but may be held liable for actions that 
are arbitrary and capricious.
    The committee adopted an amendment offered by Senator Frist 
that requires an external reviewer to make an independent 
determination based on the valid, relevant, scientific, and 
clinical evidence. In so doing, an external review shall take 
into consideration appropriate and available information, 
including any evidence-based decision making or clinical 
practice guidelines used by the group health plan; evidence or 
information submitted by the plan, issuers, patient, or 
patient's physician; the patient's medical record; expert 
consensus; and peer reviewed medical literature as defined in 
Section 556(5) of the Federal Food, Drug, and Cosmetic Act.
    The committee believes that requiring the external reviewer 
to make an assessment that takes into account the spectrum of 
appropriate and available information illustrates the 
committee's intent that the reviewer make an independent 
determination and not be bound by any one particular element. 
The committee believes that the bill's independent standard of 
review cannot, and should not, be interpreted as an ``arbitrary 
and capricious'' standard of review. The only reference to an 
``arbitrary and capricious'' standard of proof in this bill 
pertains to the reviewer's liability. Should either party--the 
plan or the patient--sue the external reviewer, that party must 
prove that the external reviewer's actions were arbitrary and 
capricious. The committee believes that this high bar provides 
an additional guarantee that the external reviewer will be able 
to make a truly independent decision.
    For purposes of this section, the committee intends that 
``scientific and clinical evidence'' means the following 
sources:
    ``(1) Peer-reviewed scientific studies published in or 
accepted for publication by medical journals that meet 
nationally recognized requirements for scientific manuscripts 
and submit most of their published articles for review by 
experts who are not part of the editorial staff.
    ``(2) Peer-reviewed literature, biomedical compendia, and 
other medical literature that meet the criteria of the National 
Institutes of Health's National Library of Medicine for 
indexing in Index Medicus, Excerpta (EMBASE), Medline, and 
MEDLARS database Health Services Technology Assessment Research 
(HSTAR).
    ``(3) Medical journals recognized by the Secretary of 
Health and Human Services, under Section 1861(t)(2) of the 
Social Security Act.
    ``(4) The following standard reference compendia: The 
American Hospital Formulary Service-Drug Information, the 
American Dental Association Accepted Dental Therapeutics, and 
the United States Pharmacopoeia-Drug Information.
    ``(5) Findings, studies, or research conducted by or under 
auspices of Federal Government agencies and nationally 
recognized Federal research institutes including the Agency for 
Healthcare Research and Quality, National Institutes of Health, 
National Academy of Sciences, Health Care Financing 
Administration, and any national board recognized by the 
National Institutes of Health for the purpose of evaluating the 
medical value of health services.''
    The external reviewer is required to complete the review in 
a time frame that is in accordance with the medical exigencies 
of the case but no later than 30 working days after the date 
the reviewer is designated or the date on which all information 
necessary to complete the review is received. An external 
review decision is binding on the plan, if the procedures of 
this subsection were followed.
    The committee interprets ``expert consensus'' as including 
both what is generally accepted medical practice and recognized 
best practice. The independent external reviewer is required to 
consider information from the treating physician, the patient's 
medical record, expert consensus, and peer-reviewed medical 
literature to assure that standards of care are reviewed in a 
manner that takes into account the unique medical needs of the 
patient.
            Enforcement
    Plans that fail to comply with a coverage determination by 
an independent, external reviewer are subject to new 
enforcement provisions under ERISA, including financial 
penalties that heretofore have not been available for 
violations under Section 503 of ERISA. Specifically, a 
participant or beneficiary may sue a plan for a violation under 
this provision, and if the court decides in favor of the 
participant, assess a financial penalty of up to $100/day from 
the date of the violation and award other relief as the court 
deems proper. The committee also intends for the court to have 
the option of requiring the plan to provide the benefit, 
awarding attorney fees, costs, and expert witness fees, and 
other relief the court deems appropriate under the 
circumstances. This new remedy will be in addition to remedies 
already available under ERISA, including equitable and 
injunctive relief for a violation of ERISA's requirements.

               TITLE II--GENETIC INFORMATION AND SERVICES

    The intent of the legislation in Title II is to provide 
patients with protections against discrimination in certain 
health insurance practices based on predictive genetic 
information.
    The legislation amends the Employee Retirement Income 
Security Act of 1974, the Public Health Service Act, and the 
Internal Revenue Code of 1986. The legislation prohibits group 
health plans and health insurance issuers offering health 
insurance coverage in connection with a group health plan from 
conditioning enrollment or adjusting premium or contribution 
amounts for a group on the basis of predictive genetic 
information concerning an individual or a family member of the 
individual (including information about a request for or 
receipt of genetic services).
    The legislation prohibits health insurance issuers in the 
individual market from using predictive genetic information as 
a condition of eligibility for the individual market. The 
legislation prohibits health insurance issuers in the 
individual market from adjusting premium rates for individuals 
based on predictive genetic information concerning enrollees or 
their family members.
    The legislation prohibits group health plans or health 
insurance issuers from requesting or requiring predictive 
genetic information concerning an individual or a family 
member. The legislation allows for the request of predictive 
genetic information for diagnosis, treatment, or payment 
purposes but requires health plans or health insurance issuers 
to provide a description of the procedures in place to 
safeguard the confidentiality of such information. The 
committee intends to address the full range of issues with 
respect to the confidentiality of all medical information this 
year. A separate legislative proposal will be undertaken to 
enact a comprehensive Federal law to protect patients' medical 
records as stipulated by the statutory deadline of August, 
1999, mandated in the Health Insurance Portability and 
Accountability Act of 1996 (HIPAA).
    The term ``genetic information'' is defined as information 
about genes, gene products, or inherited characteristics that 
may derive from an individual or family member (including 
information about a request for or receipt of genetic 
services). ``Genetic services'' are defined as health services 
provided to obtain, assess, or interpret genetic information 
for diagnostic and therapeutic purposes, and for genetic 
education and counseling.
    The term ``predictive genetic information'' is defined as, 
in the absence of symptoms, clinical signs, or a diagnosis of 
the condition related to that information, information about an 
individual's genetic tests; information about genetic tests of 
family members of that individual; or information about the 
occurrence of a disease or disorder in family members. This 
definition does not include the following: information about 
the sex or age of the individual; information derived from 
physical tests, such as chemical, blood, or urine analyses of 
the individual, including cholesterol tests and information 
about physical exams of the individual.
    The term ``genetic test'' means the analysis of human DNA, 
RNA, chromosomes, proteins, and certain metabolites, including 
analysis of genotypes, mutations, phenotypes, or karyotypes, 
for the purpose of predicting risk of disease in asymptomatic 
or undiagnosed individuals. Such term does not include 
information derived from physical tests, such as the chemical, 
blood, or urine analyses of the individual, including 
cholesterol tests, and information about physical exams of the 
individual, in order to detect symptoms, clinical signs, or a 
diagnosis of disease.
    Because scientists believe that most individuals carry 
genetic mutations that may place them at risk for future 
disease, the legislation is intended to prohibit discrimination 
against individuals who are currently healthy but may carry a 
genetic mutation or have a family history of a genetic disease. 
The legislation does not prohibit health plans and issuers from 
medical underwriting based on an individual's current health 
status. If an individual has been diagnosed with breast cancer 
or has exhibited symptoms or clinical signs of the disease, 
this is not considered predictive genetic information. If the 
individual carries a mutation for breast cancer but is not 
symptomatic or diagnosed with the disease, this is considered 
to be predictive genetic information that may not be utilized 
for determining eligibility or setting premiums in health 
insurance coverage.
    Title II is intended to be applicable to group health 
plans, health insurance issuers offering group health insurance 
in connection with group health plans, and health insurance 
issuers offering health insurance coverage in the individual 
market. The approach taken in Title II is intended to model the 
approach taken in the Health Insurance Portability and 
Accountability Act of 1996 [P.L. 104-191]. This title is not 
intended to be applicable to life insurance, disability income 
insurance, long-term care insurance, or any of the other forms 
of insurance coverage described as ``Excepted Benefits'' in 
Section 733 of the Employee Retirement Income Security Act of 
1974, Section 2791 of the Public Health Service Act, or Section 
9832 of the Internal Revenue Code of 1986.

              TITLE III--HEALTH CARE RESEARCH AND QUALITY


                Part A--Establishment and General Duties

    The legislation changes the name of the Agency for Health 
Care Policy and Research to the Agency for Healthcare Research 
and Quality (AHRQ). The mission statement retains much of the 
current statute but adds language regarding the Agency's 
responsibility to promote health care quality through: (1) 
research; (2) synthesizing and disseminating available 
scientific evidence for use by patients, consumers, 
practitioners, providers, purchasers, policy makers, and 
educators; and (3) advancing private and public efforts to 
improve health care quality. The list of General Duties 
continues to recognize the Agency's unique role in supporting 
and conducting research on the ways that health care services 
are organized, managed, and financed, the productivity, 
efficiency, and effectiveness of the ways health care is 
delivered, and the forces that shape the healthcare 
marketplace. The Committee believes that the Agency's work on 
the cost and appropriate use of and access to health care 
services is essential for addressing the types of patient 
protection issues raised in this bill and will be essential for 
the long-term stability of the Medicare program.
    The legislation adds a clarifying disclaimer and rule of 
construction to the statute which prohibits the Agency from 
mandating ``national standards of clinical practice or quality 
healthcare standards.'' The committee intent is that nothing in 
this section shall be construed to imply that the Agency's role 
is to mandate a national standard or specific approach to 
quality measurement and reporting. These two provisions are 
intended to reinforce the point that the Agency has no 
regulatory authority; the Agency's role is to build the science 
of health care and quality and let private- and public-sector 
purchasers, professional groups, and accreditation agencies set 
quality ``standards.''
    The committee has expanded the list of priority populations 
in the statute to encourage research pertaining to children and 
people with special health care needs, such as chronic care, 
care for persons with disabilities, and end-of-life care. While 
the Agency has increased its commitment to child health 
research in recent years, children have not been a major focus 
of health services research, reflecting a shortage of child 
health services researchers, methodological issues, and the 
fact that children account for only a small portion of total 
health expenditures. The committee strongly believes that the 
nation will receive a significant return from an increased 
investment in research on children's health. The Agency should 
support the training of additional child health researchers and 
expand the focus on child health throughout its research 
portfolio. Recognizing that the critical need in this area is 
to build the knowledge base about what works best for children 
in daily practice, the committee has included provisions in the 
bill to foster the development of interdisciplinary Healthcare 
Improvement Research Centers and provider-based research 
networks. This new authority will facilitate the development of 
that knowledge and its prompt translation into improved 
practice for all patients.
    The committee is also supportive of the Agency's past 
research related to end-of-life care and its current emphasis 
on chronic care. The committee believes that current 
demographic trends warrant an ongoing emphasis on such special 
health care needs, including disabilities, and has added this 
category to the list of priority populations. People with 
disabilities interact with the health care system at a higher 
rate than many other populations, and so research on their 
experience in accessing and receiving health care provides 
valuable insight into the overalleffectiveness of the nation's 
health care system. The Agency should address those with special health 
care needs throughout its research portfolio, with special attention to 
the most effective ways of managing care for those with multiple 
chronic conditions and disabilities, the burden of disease for 
individual patients and the demands on care givers, for instance, with 
respect to pain management and end-of-life care.
    The committee expects the Agency to stress to the research 
community the importance of addressing the challenges faced by 
all of the groups listed in this section--those living in rural 
areas and each of these priority populations--in its general 
grant solicitations and, as appropriate, in more targeted 
solicitations.
    The committee strongly supports the Agency's role as the 
major source of Federal funding for pre- and postdoctoral 
training in health services research. As a major sponsor and 
consumer of health services research, the Federal Government 
has a continuing interest in fostering the development of a 
vital health services research work force, and the Agency must 
be a leader in that effort. We understand that limited 
resources have restricted the Agency's ability to support the 
level of training envisioned in the Institute of Medicine's 
1995 report on the health services research work force, 
however, the committee urges the Director to make support for 
training a high priority. As additional funding becomes 
available, the Committee also urges the Director to supplement 
the training funds the Agency receives under the National 
Research Service Award program with appropriated funds.
    In administering these training programs, the committee 
expects the Director to take into account shortages in the 
number of researchers addressing priority populations. This has 
long been recognized as a problem in minority and rural health, 
and more recently, as a problem in child health. In fact, it 
was an Agency-funded conference on Improving the Quality of 
Care for Children that recently noted that no Federal agencies 
have child health services research training initiatives. 
Training new researchers in these shortage areas is an 
important long-term investment in improving the health of each 
of these priority populations.

                Part B--Health Care Improvement Research


Sec. 911. Health care outcome improvement research

    The legislation requires the Agency to identify and 
disseminate the evidence rating methods or systems that it uses 
to assess health care research results. Any Agency publications 
containing health care recommendations will indicate, using 
such methods or systems, the level of substantiating evidence 
for its clinical recommendations. The committee included this 
provision to ensure that the processes used by the Agency and 
its contractors are understood by and can be used by others.
    The Agency is also required to employ research strategies 
and dissemination mechanisms that will assist in translating 
health services and quality improvement research into practice 
through grants to Healthcare Improvement Research Centers, 
multidisciplinary research centers linked with relevant sites 
of care, e.g., Provider-based Research Networks, and similar 
innovative organizational constructs. The committee believes 
that through this provision promising research findings can be 
translated more rapidly into improvements in daily practice.

Sec. 912. Private-public partnerships to improve organization and 
        Delivery

    The legislation outlines 6 roles for the Agency to provide 
scientific and technical support for private and public 
research relating to health care quality, including: (1) 
identification and assessment of methods for the evaluation of 
health of enrollees in health plans and those receiving long-
term care services; (2) development and testing of quality 
measures; (3) compilation and dissemination of measures; (4) 
assistance in the development of information systems; (5) 
development of survey tools; and (6) research on the ways that 
purchasers and consumers use quality information in making 
decisions.
    The legislation eliminates the demonstration status of the 
Centers for Education and Research on Therapeutics (CERTs), 
which was added to the Agency's statute by the Food and Drug 
Administration Modernization Act of 1997. The CERTs program was 
established to conduct research and increase awareness of 
products and ways to improve their effective use, and to 
increase awareness of risks of both new uses and combinations 
of therapies. These centers will evaluate, develop options and 
methods, and conduct state-of-the-art clinical, laboratory, and 
health services research. The committee intends that the 
important clinical and safety information gained through this 
program will be provided on an ongoing basis to consumers as 
well as health care practitioners and insurers.
    The committee is gravely concerned about preventable health 
care errors and resulting patient injury. Therefore, the 
legislation further directs the Agency to conduct and support 
research and build partnerships to support research on reducing 
errors in medicine. The legislation states that this research 
shall include the identification of the causes of preventable 
health care errors and patient injury in health care delivery; 
strategies for reducing errors and improving patient safety; 
and promoting the implementation of effective strategies 
throughout the health care industry.

Sec. 913. Information on quality and cost of care

    The Agency's current Medical Expenditure Panel Survey 
(MEPS) is a unique resource for information about the cost, 
use, and access of Americans to health care services. The 
Committee has recognized the importance of the survey by 
providing a statutory mandate for MEPS. The legislation also 
builds upon MEPS by directing the Agency to support a 
nationally representative survey and to expand its sample size, 
beginning in FY 2001, so that MEPS can provide information on 
the quality of patient care and outcomes for frequently 
occurring conditions. The Agency is required to develop 
information on children and persons with special health care 
needs through over-sampling or periodic updates. Beginning in 
FY2003, the Secretary, acting through the Director, is to 
submit an annual report on national trends in health care quality, 
drawing upon the enhanced MEPS survey and other available data. The 
Committee expects the Agency to use a variety of measures to develop 
this annual picture of how health care quality is faring. The 
legislation directs the Agency to take into account any outcomes 
measurements generally collected by private-sector accreditation 
organizations to assure that the reported information is not 
inconsistent with what is being collected through other programs. The 
committee hopes that this annual report will provide an opportunity for 
quality performance comparisons.

Sec. 914. Information systems for health care improvement

    The committee recognizes the importance of supporting the 
development of health care information systems to enable the 
collection and dissemination of information. Therefore, the 
legislation directs the Agency to support research to evaluate 
and support initiatives to advance: (1) the use of information 
systems for the study of health care quality; (2) training for 
health care researchers and practitioners in the use of 
information systems; (3) creation of effective linkages between 
various sources of health care information, including 
development of health care information networks; (4) the 
linking of health care information networks and real-time 
decision support systems; (5) the utility and comparability of 
health information data and medical vocabularies; (6) 
evaluation of the use of computer-based records to create a 
personal health record and to monitor public health and 
outcomes of care for particular populations; and (7) the 
protection of individually identifiable information in health 
services research and quality improvement. The committee 
believes that the Federal Government should encourage patient 
participation in clinical decision making and notes that the 
legislation directs the Agency to support demonstrations on the 
use of new information tools to improve shared decision making 
between patients and care givers.

Sec. 915. Research supporting primary care delivery and access in 
        underserved areas

    The legislation codifies current activities of the Agency, 
including support for the work of a Preventive Services Task 
Force and a mandate to maintain a Center for Primary Care 
Research, focusing on several areas of primary care research.

Sec. 916. Clinical practice and technology innovation

    During its hearings, the committee heard testimony urging 
that the Agency's technology assessment process and the Health 
Care Financing Administration (HCFA) Medicare coverage process 
needed to be more transparent, open, and conducted within 
clearly defined time frames. The committee strongly concurs. 
That is why the committee has directed the Agency to make 
available, i.e., post on its web site and update as needed, a 
description of the process and methodology that the Agency and 
its contractors use for practice and technology assessments. 
The committee understands that HCFA's upcoming Federal Register 
notice outlining proposed regulation governing the Medicare 
coverage process will provide public notice when a technology 
assessment is commissioned, and the notice will indicate the 
proposed time frame for each assessment. The committee expects 
AHRQ to complement this effort by ensuring that an adequate 
description of the planned assessment and the time frame for 
completing it can also be accessed through its web site, 
providing an opportunity for the submission of pertinent data 
and analyses for consideration during the assessment, and 
making the text of completed technology assessments available 
in a reasonable and timely manner.

Sec. 917. Coordination of Federal Government quality improvement 
        efforts

    The committee envisions the Agency for Healthcare Research 
and Quality (AHRQ) as the hub and driving force for Federal 
health care quality improvement efforts. Therefore, this 
legislation directs the Secretary, acting through the Director, 
to coordinate all research, evaluations, and demonstrations 
related to health services research and health care quality 
measurement and improvement supported by the Federal 
Government. The Director is to develop and manage a process to 
improve interagency coordination, strengthen the Federal health 
care research infrastructure, set specific goals for Federal 
support and furthering of health services research and quality 
improvement, and strengthen the management of Federal health 
care quality improvement programs. The legislation also 
requires the Secretary to contract with the Institute of 
Medicine to develop two reports on the organization and 
coordination of the health care quality research, improvement, 
and oversight activities of the Federal Government, with 
particular attention to DHHS activities under Titles XVIII, 
XIX, and XXI of the Social Security Act, and recommendations on 
how to improve the efficiency and effectiveness of quality 
improvement activities.

                       Part C--General Provisions

    Part C governs the day-to-day functioning of the Agency. 
Most of these subsections are a restatement of current law with 
the following changes.
    Section 921 makes several modifications to the Agency's 
existing National Advisory Committee. The name of the Council 
is changed to reflect the renaming of the Agency, the statement 
of its mission is altered to reflect the changes in the 
Agency's overall mission outlined in Part A of the legislation, 
the size of the Council is increased by four members to permit 
a broader representation of the Agency's stakeholders, and 
there are minor changes in the requirements for the composition 
of the Council and the list of designated ex officio members.
    The Committee has added language to section 922, governing 
the Agency's peer review process, to codify Agency practice 
requiring recusal of any study section member where there is 
even the appearance of a potential conflict-of-interest and 
requiring that all information received by study section 
members, other than public records or public information, must 
be treated as confidential information. At the same time, the 
Committee has eliminated overly prescriptive language in 
current statute regarding the types of study sections that the 
Agency needs to maintain and has adjusted the maximum level of 
small grant awards to reflect changes in inflation.
    The Committee has made a number of technical changes to the 
language in Section 923 dealing with the development, 
collection, and dissemination of data. The Committee broadened 
the Agency's authority to ``tabulate and analyze statistics'' 
on a reimbursable basis to conducting research or analyses 
otherwise authorized under this title.
    Among other changes, the Agency is directed to ensure that 
the information disseminated is science-based and useful and 
appropriate to the target audience (sec. 924).
    To improve the quality of health care, the committee 
stresses the importance of translating biomedical research into 
clinical practice. Therefore, the legislation expresses the 
intent of Congress to provide a proportionate increase in 
translational, interdisciplinary health care research as 
funding for biomedical research increases.
    The legislation establishes a funding level of $250 million 
for FY 2000 and ``such sums as necessary'' for FY 2001-FY 2006. 
The separate authorization for the Centers for Education and 
Research on Therapeutics (CERTs) is eliminated. The committee 
assumes CERTs will be funded by the Agency's main authorization 
and that elimination of the separate line item will allow the 
Agency greater flexibility to support this program.

                            V. Cost Estimate


               congressional budget office cost estimate

    Summary: Title I of the Patients' Bill of Rights Act would 
amend the Employee Retirement Income Security Act (ERISA) to 
give members of self-insured health plans rights to obtain 
certain services, require group health plans and health 
insurance issuers to provide certain information to enrollees 
and potential enrollees, and establish internal and external 
review procedures for group health plans and health insurance 
issuers. Title II would prohibit health plans from 
discriminating on the basis of genetic information. Title III 
would redesignate the Agency for Health Care Policy and 
Research as the Agency for Healthcare Research and Quality and 
would reauthorize the agency.
    The proposed patient protections and grievance procedures 
would increase the premiums for employer-sponsored health 
insurance, substitute nontaxable fringe benefits for taxable 
wages, and reduce federal receipts from income and payroll 
taxes. The Congressional Budget Office (CBO) estimates that 
these provisions would reduce federal tax revenues by $15 
million in 2000 and by $1.0 billion over the 2000-2004 period.
    S. 326 contains no intergovernmental mandates as defined in 
the Unfunded Mandates Reform Act (UMRA). State, local, and 
tribal governments either would be exempt from the bill's 
requirements governing health care benefits and insurance or 
would be able to opt out of the requirements.
    Estimated cost to the Federal Government: The estimated 
effect of the bill on direct spending and receipts is shown in 
Table 1. The costs of this legislation fall within budget 
function 550 (health).

                                     TABLE 1.--ESTIMATE OF THE BUDGETARY EFFECTS OF THE PATIENTS' BILL OF RIGHTS ACT
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        By fiscal years, in millions of dollars--
                                                               -----------------------------------------------------------------------------------------
                                                                  2000     2001     2002     2003     2004     2005     2006     2007     2008     2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        REVENUES

Income and HI Payroll Taxes...................................      -10      -70     -140     -210     -260     -290     -310     -320     -340     -360
Social Security Payroll Taxes.................................       -5      -30      -65      -90     -110     -130     -130     -140     -150     -160
                                                               -----------------------------------------------------------------------------------------
      Total...................................................      -15     -100     -205     -300     -370     -420     -440     -460     -490     -520
                                                               =========================================================================================
                                                            AUTHORIZATIONS OF APPROPRIATIONS

Study of Access to Clinical Trials............................        1    (\1\)        0        0        0        0        0        0        0        0
Healthcare Research and Quality...............................       25      138      217      247      261      267      272      250      123       37
                                                               -----------------------------------------------------------------------------------------
      Total...................................................       26      138      217      247      261      267      272      250      123       37
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.

Note.--HI=Hospital Insurance.

Source: Congressional Budget Office.

Basis of estimate

            Revenues
    The proposed rights to medical care and advice, 
informational requirements, and grievance procedures would 
affect the federal budget through their effect on premiums for 
employer-sponsored health insurance. Although the rights to 
medical advice and care would apply only to self-insured ERISA 
plans, other plans are likely to be affected by them as well. 
Federal legislation to regulate a significant part of the 
health insurance market could stimulate action by states and 
health plans to develop consistent policies on coverage. Taking 
such spillover effects into account, CBO estimates that the 
provisions for medical care and advice, patient information, 
grievance procedures, and confidentiality of patient 
information would raise average premiums by about 0.8 percent. 
Table 2 shows the estimated effect of each provision on 
premiums, before employers modify their behavior to offset some 
of the increase. The effects are expressed as a percentage of 
total premiums for all nonfederal employer-sponsored plans, 
including plans that would face no increase in costs.

    TABLE 2.--ESTIMATED EFFECT OF THE PATIENTS' BILL OF RIGHTS ACT ON
            PREMIUMS FOR EMPLOYER-SPONSORED HEALTH INSURANCE
                              [In percent]
------------------------------------------------------------------------
                                                           Increase in
                       Provision                             premiums
------------------------------------------------------------------------
                                 TITLE I

Subtitle A--Right to Medical Advice and Care:
    Access to emergency care...........................             0.2
    Offering choice of coverage options................              (1)
    Access to obstetric and gynecological care.........              (1)
    Access to pediatric care...........................              (1)
    Access to specialists..............................              (1)
    Continuity of care.................................             0.2
    Protection of patient-provider communications......              (1)
    Right to prescription drugs........................              (1)
    Self-payment for behavioral health care services...              (1)
Subtitle B--Right to Information About Plans and                    0.1
 Providers.............................................
Subtitle C--Right to Hold Health Plans Accountable.....             0.3

                                TITLE II

Genetic Information and Services.......................            (\1\)
      Total............................................             0.8
------------------------------------------------------------------------
\1\ Less than 0.05 percent.

    The estimate assumes that about 60 percent of the increase 
in premiums would be offset through decreases in fringe 
benefits and that about 40 percent would be passed on to 
employees as lower wages. CBO estimates that the increase in 
premiums would reduce federal tax revenues by $15 million in 
2000 and by $1.0 billion over the 2000-2004 period. Social 
Security payroll taxes, which are off-budget, account for $300 
million of the five-year total.
    Right to Medical Advice and Care. Subtitle A of title I 
contains a number of patient protections for enrollees in self-
insured ERISA health plans. Those provisions include:
           a prohibition of interference by health 
        plans with medical communications between physicians 
        and their patients;
           a requirement that plans pay for hospital 
        emergency services--until the patient is stabilized--
        when the prudent layperson standard is met, and that 
        beneficiaries be charged no more than would be required 
        if such services were furnished by a participating 
        provider;
           a requirement for direct access to an 
        obstetrical and gynecological specialist for covered 
        routine obstetrical and gynecological care;
           a requirement for direct access to 
        pediatricians for covered routine pediatric services;
           a requirement that beneficiaries have access 
        to specialty care when such care is covered by the 
        plan;
           the right to continue care for 90 days with 
        a provider whose contract has been terminated by a 
        health plan;
           a requirement that plans with a formulary 
        for prescription drugs involve physicians and 
        pharmacists in the development of the formulary and 
        provide for exceptions from the formulary limitation;
           prohibitions on discouraging beneficiaries 
        from paying for behavioral health care services not 
        covered by the plan and terminating providers because 
        they permit beneficiaries to pay for such services; and
           a requirement that health plans offer 
        employees a point-of-service option when the existing 
        health plan offerings do not provide choice among 
        provider groups.
    CBO estimates that those rights to medical care and advice 
would ultimately increase costs across all nonfederal employer-
sponsored health plans by about 0.4 percent.
    Right to Information About Plans and Providers. Subtitle B 
of title I would require all ERISA group health plans to 
provide certain kinds of information on plan provisions 
toenrollees and to make other kinds available on request. Most of the 
required information is typically provided now as part of a plan's 
handbook or could easily be incorporated into that document. Although 
some documents would have to be amended to meet the requirements of 
this provision, such documents are continually changed to reflect new 
terms. Plans would be responsible for making available to participants 
any data on quality or performance that they collect, but they would 
not be required to collect such data. Plans would have to make minor 
investments in personnel and systems to assure and monitor compliance 
with those requirements. CBO estimates that the informational 
requirements would increase costs across all nonfederal employee-
sponsored health plans by 0.1 percent.
    Right to Hold Health Plans Accountable. Subtitle C of title 
I would require all ERISA group health plans to abide by 
specific time limits for making coverage determinations and to 
have an internal review process for reconsidering coverage 
decisions within defined time limits at the request of the 
enrollee. For those coverage decisions involving medical 
necessity or investigational treatments, a physician with the 
appropriate expertise would have to conduct the internal 
review. Plans would also have to provide for external review of 
medical necessity decisions involving claims exceeding a 
significant dollar threshold or investigational treatments for 
life threatening illnesses. The findings of the external review 
would be binding on the health plan.
    Most plans today have a functioning internal appeals 
process, but they operate with more flexibility on timing than 
they might have under this provision. Consequently, a few plans 
would have to invest in more review personnel to meet the 
specified time limits. Costs would also increase because of the 
requirement for external review, which would be new to most 
plans. CBO estimates that the net cost of this subtitle would 
be about 0.3 percent of employer- sponsored health plan costs.
    Genetic Information and Services. Title II would prohibit 
all health plans and health insurers from using predictive 
genetic information in setting premiums for groups or 
individuals. It would also prohibit plans from requesting such 
information except when the information was needed for 
diagnosis, treatment, or payment relating to the provision of 
health services. Even then, plans could not require such 
information and would have to provide the individual with a 
description of the procedures in place for protecting the 
confidentiality of such information. Although this provision 
would keep health insurers and health plans from reducing their 
costs through favorable risk selection based on genetic 
information, its cost to private employer-sponsored health 
plans as a whole would be negligible.
            Authorizations of appropriations
    Clinical Trials. Title I would require the Secretary of 
Health and Human Services to contract with the Institute of 
Medicine to conduct a study of access by patients to clinical 
trials and the coverage of routine health care costs by private 
health plans and insurers. CBO estimates that this provision 
would increase discretionary spending by $1 million in 2000.
    Healthcare Research and Quality. Title III would 
redesignate the Agency for Healthcare Policy and Research as 
the Agency for Healthcare Research and Quality and respecify 
its mission. To support the activities of AHRQ, S. 326 would 
authorize $250 million in fiscal year 2000 and such sums as may 
be necessary for fiscal years 2001-2006. Assuming 
appropriations of the authorized amounts, CBO estimates that 
this title would increase discretionary spending by $25 million 
in fiscal year 2000 and $888 million over the 2000-2004 period.
    Pay-as-you-go Considerations: Section 252 of the Balanced 
Budget and Emergency Deficit Control Act sets up pay-as-you-go 
procedures for legislation affecting direct spending and 
receipts. The net changes in outlays and governmental receipts 
that are subject to pay-as-you-go procedures are shown in Table 
3. For purposes of enforcing pay-as-you-go procedures, only the 
effects in the current year, the budget year, and the 
succeeding four years are counted.

                                                       TABLE 3.--SUMMARY OF PAY-AS-YOU-GO EFFECTS
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         By fiscal years, in millions of dollars--
                                                                 ---------------------------------------------------------------------------------------
                                                                   2000    2001     2002     2003     2004     2005     2006     2007     2008     2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in outlays...............................................       0       0        0        0        0        0        0        0        0        0
Change in receipts..............................................     -10     -70     -140     -210     -260     -290     -310     -320     -340     -360
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Estimated impact on state, local, and tribal governments: 
The bill's amendments to ERISA and to the Public Health 
Services Act would establish a number of new requirements 
governing health care benefits and insurance. However, plans 
offered by state, local, and tribal governments are exempt from 
the requirements of ERISA, and they may opt out of the 
requirements of the Public Health Service Act. Consequently, 
the new provisions would not be intergovernmental mandates as 
defined by UMRA, and they would have an impact on the budgets 
of states, local, or tribal governments only if those 
governments chose to comply.
    Estimated impact on the private sector: The bill would 
impose several private-sector mandates as defined in UMRA. They 
include the rights to medical care and advice and requirements 
for plans to establish appeals procedures for handling 
patients' grievances. CBO estimates that the direct costs of 
those mandates to private-sector entities would significantly 
exceed the threshold specified in UMRA($100 million in 1996, 
adjusted annually for inflation) every year after 2000.
    Previous CBO Estimate: On March 17, 1999, CBO provided an 
estimate of S. 326, as introduced on January 28, 1999. This 
estimate reflects changes in the bill as reported by the 
committee on March 18, 1999, more recent information on the 
health care system, and reanalysis of the impact of certain 
provisions in light of new information. In total, the estimated 
effect on premiums for employer-sponsored health insurance has 
increased from 0.5 percent to 0.8 percent.
    The committee added a new standard for external review of 
denials of coverage to subtitle C. That standard would require 
independent external reviewers to take into account information 
submitted by the patient's physician and the medical records as 
well as scientific and clinical literature. The standard would 
substitute those criteria for the plan's own definition of 
medical necessity and would therefore lead to more decisions 
favorable to patients. That change adds 0.2 percentage points 
to the estimate.
    The estimate of the prudent layperson standard for 
emergency care has been increased by 0.1 percentage point 
because the committee added a new restriction on health plans' 
ability to charge patients higher copayments when they seek 
emergency care at nonparticipating providers.
    New provisions involving prescription drugs and the right 
to receive behavioral health care at the participant's expense 
add little to the estimate. In addition, the title regarding 
privacy of medical records and access to medical records was 
removed.
    New information obtained about the frequency with which 
employers, especially those with few employees, switch plans 
has led to a slight increase in the estimate of the effect of 
the provision involving continuity of care. New data also led 
to a slight decrease in the estimate of the costs of offering a 
choice of coverage options.
    Estimate prepared by: Federal Cost Estimate: Linda 
Bilheimer, Tom Bradley, Jeanne De Sa, and Judith Wagner. Impact 
on State, Local, and Tribal Governments: Leo Lex. Impact on the 
Private Sector: Judith Wagner.
    Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

            VI. Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1, the Congressional 
Accountability Act (CAA), requires a description of the 
application of this bill to the legislative branch. S. 326 
amends various Federal laws and reauthorizes a federal agency, 
but does not amend any act that applies directly to the 
legislative branch. However, Title II of the Act, Genetic 
Information and Services, applies to insurance issuers and thus 
would apply indirectly to the Federal Employees Health Benefits 
Program (FEHBP) which contracts with insurance issuers. The 
impact of this provision on the FEHBP may not be relevant, 
however, given that the FEHBP has broad non-discrimination 
rules already in place.

                    VII. Regulatory Impact Statement

    Title I of the bill will impose several new mandates on the 
private-sector, including the mandatory provision of care or 
access to providers in certain situations, new information 
disclosure requirements, and new procedures for coverage 
determination and appeals, including the requirement to provide 
independent, external review. For the most part, these mandates 
build on existing regulatory structures and private-sector 
practices. Thus, the committee has determined that the overall 
regulatory impact of Title I will be modest. This view is 
consistent with the CBO cost estimate of 0.8 percent.
    Through voluntary measures and private-sector accreditation 
programs, many private-sector health plans have already adopted 
the kinds of access provisions contained in subtitle A. The 
committee believes that the impact of this subtitle is further 
limited by the fact that self insured group health plans do not 
as frequently employ the techniques targeted by some provisions 
in this bill and characteristic of, for example, a fully 
insured HMO. For instance, a plan, other than a fully insured 
plan, that does not require the authorization or referral of a 
primary care physician in order to access speciality care, is 
likely to experience less regulatory burden as a result of this 
bill. Consequently, specific requirements, such as the notice 
and time frame requirements contained in the continuity of care 
section and the prudent layperson standard for emergency room 
coverage are likely to have only a modest regulatory impact.
    Subtitle B, Right to Information About Plans and Providers, 
requires all group health plans to provide a range of 
information on plan provisions to participants and 
beneficiaries. The information requirements in this bill 
significantly exceed ERISA's existing information requirements, 
particularly with respect to the range, quantity, depth, and 
timing of the information. However, much of the information 
required by this provision is currently provided as part of the 
plan's member handbook or the employer's open enrollment 
process. Therefore, the committee believes that plans may 
experience some new regulatory burdens as a result of this 
provision, but the impact will be minor.
    ERISA currently contains procedures for coverage 
determinations and internal appeals, but does not require 
independent, external review. Most, if not all plans, already 
have a functioning internal appeals process, and some have 
implemented external review on a voluntary basis. However, 
plans operate with considerably more flexibility in the current 
environment than they might under this provision, particularly 
with respect to time frames and the standards governing 
decisions that involve a determination of medical necessity or 
investigational treatment. Therefore, the committee has 
determined that this provision will have a modest regulatory 
impact, particularly for plans that do not currently offer 
independent, external review.
    The committee believes that policy gains derived from Title 
I of this bill--better consumer information, improved access to 
care and services, and procedures to ensure that care promised 
by the plan is delivered--far outweigh the modest regulatory 
impact of these provisions.
    The committee has determined that the regulatory impact of 
Title II will be negligible and that Title III of this bill 
will result in no increase in the regulatory burden.

                   VIII. Section-by-Section Analysis

    Section 1. Short Title; Table of Contents. This Act may be 
cited as the ``Patients' Bill of Rights Act,'' and includes a 
table of contents.

                   TITLE I--PATIENTS' BILL OF RIGHTS


                  Subtitle A--Right to Advice and Care


         Section 101. Patient Right to Medical Advice and Care

    Subsection (a). In General. Part 7 of subtitle B of title I 
of the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1185 et seq.) is amended to include a new Subpart C, as 
follows:

          Subpart C--Patient Right to Medical Advice and Care


         Section 721. Patient Access to Emergency Medical Care

    Subsection (a). In General. To the extent that the group 
health plan (other than a fully insured group health plan) 
provides coverage for benefits consisting of emergency medical 
care (except for items or services specifically excluded), the 
plan must meet the following two requirements:
    (1) The plan must provide coverage for benefits, without 
requiring preauthorization, for appropriate emergency medical 
screening examinations (within the capability of the emergency 
facility) to the extent that a prudent layperson, who possesses 
an average knowledge of health and medicine, would determine 
such examinations to be necessary to determine whether 
emergency medical care is necessary.
    (2) The plan must provide coverage for benefits, without 
requiring preauthorization, for additional emergency care to 
stabilize an emergency medical condition following an emergency 
medical screening examination.
    Subsection (b). Uniform Cost-Sharing Required. Nothing in 
this section should be construed as preventing a group health 
plan from imposing any form of cost-sharing (including 
coinsurance, copayments, and deductibles) on any participant or 
beneficiary for coverage of benefits described above, so long 
as the following condition is met:

          Cost-sharing must be uniformly applied with respect 
        to similarly situated participants and beneficiaries, 
        and to all benefits consisting of emergency medical 
        care provided to such participants and beneficiaries 
        under the plan.

    The plan must cover emergency medical care that is provided 
to a participant by a nonparticipating health care provider in 
an amount that does not exceed the liability that would have 
been incurred for services provided by a participating 
provider.
    Subsection (c). Definition of Emergency Medical Care. In 
this section:
    (1) The term ``emergency medical care'' relates to a 
participant or beneficiary under a group health plan and refers 
to covered inpatient and outpatient services that:
          (A) are furnished by a provider that is qualified to 
        furnish such services; and
          (B) are needed to evaluate or stabilize an emergency 
        medical condition.
    (2) The term ``emergency medical care'' means a medical 
condition manifesting itself by acute symptoms of sufficient 
severity (including severe pain) such that a prudent layperson, 
who possesses an average knowledge of health and medicine, 
could reasonably expect the absence of immediate medical 
attention to result in:
          (A) placing the health of the participant or 
        beneficiary (or, with respect to a pregnant woman, the 
        health of the woman or her unborn child) in serious 
        jeopardy,
          (B) serious impairment to bodily functions, or
          (C) serious dysfunction of any bodily organ or part.

          Section 722. Offering of Choice of Coverage Options

    Subsection (a). Requirement. Except as provided in the next 
paragraph, if a group health plan provides coverage for 
benefits only through a defined set of participating health 
care professionals, the plan must offer the participant the 
option to purchase point-of-service coverage for all such 
benefits for which coverage is otherwise so limited. This 
option must 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.
    Exception in the case of multiple issuer or coverage 
options. This requirement does not apply with respect to a 
participant in a group health plan if the plan offers the 
participant two or more coverage options that differ 
significantly with respect to the use of participating health 
care professionals or the networks of such professionals that 
are used.
    Subsection (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.
    Subsection (c). Small Employer Exemption. The point-of-
service option requirement does not apply to any group health 
plan of a small employer. Here, 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 two but not more than 50 employees on 
business days during the preceding calendar year and who 
employs at least two employees on the first day of the plan 
year. For purposes of this paragraph, the provisions of 
subparagraph (C) of section 712(c)(1) of ERISA shall apply in 
determining employer size.
    Subsection (d). Rule of Construction. Nothing in this 
section should be construed:
          (1) as requiring coverage for benefits for a 
        particular type of health care professional;
          (2) as requiring an employer to pay any costs as a 
        result of this section or to make equal contributions 
        with respect to different health coverage options;
          (3) 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
          (4) 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.

    Section 723. Patient Access to Obstetric and Gynecological Care

    Subsection (a). General Rights. A group health plan must 
waive any referral requirement in the case of a female 
participant who seeks coverage for routine obstetrical or 
gynecological care. The plan must treat the ordering of other 
routine obstetrical or gynecological care by a physician who 
specializes in obstetrics and gynecology as authorization by 
the primary care provider for such other routine care.
    Subsection (b). Application of Section. A group health plan 
described in this section:
          (1) provides coverage for routine obstetric care 
        (such as pregnancy-related services) or routine 
        gynecologic care (such as preventive women's health 
        examinations); and
          (2) requires the designation by a participant or 
        beneficiary of a participating primary care provider 
        who is not a physician in obstetrics or gynecology.
    Subsection (c). Rules of Construction. Nothing in this 
section:
          (1) waives any coverage requirements relating to 
        medical necessity or appropriateness with respect to 
        coverage of obstetric or gynecological care;
          (2) precludes the plan from requiring that the 
        specialist in obstetric or gynecology notify the 
        designated primary care provider or the plan of 
        treatment decisions; or
          (3) precludes a group health plan from allowing 
        health care professionals other than physicians to 
        provide routine obstetric or gynecologic care.

             Section 724. Patient Access to Pediatric Care

    Subsection (a). In General. In the case of a group health 
plan that provides coverage for routine pediatric care and 
requires the designation by a participant or beneficiary of a 
participating primary care provider, if the designated primary 
care provider is not a physician who specializes in pediatrics:
          (1) the plan may not require authorization or 
        referral by the primary care provider in order for a 
        participant to obtain coverage for routine pediatric 
        care; and
          (2) the plan must treat the ordering of other related 
        routine pediatric care by such a specialist as 
        authorized by the designated primary care provider.
    Subsection (b). Rules of Construction. Nothing in this 
section:
          (1) waives any coverage requirements relating to 
        medical necessity or appropriateness with respect to 
        coverage of pediatric care;
          (2) precludes the plan from requiring that a 
        pediatric specialist notify the designated primary care 
        provider or the plan of treatment decisions; or
          (3) precludes a group health plan from allowing 
        health care professionals other than physicians to 
        provide routine pediatric care.

                   Section 725. Access to Specialists

    Subsection (a). In General. A group health plan must ensure 
that participants and beneficiaries have access to specialty 
care when such care is covered under the plan. Allows such 
access to be provided through contractual arrangements with 
specialized providers outside the plan network.
    Subsection (b). Treatment Plans. A group health plan is not 
prohibited from requiring that specialty care be provided under 
a treatment plan so long as the plan is: (1) developed by the 
specialist, in consultation with the primary care provider, and 
the participant or beneficiary; (2) approved by the plan; and 
(3) in accordance with applicable quality assurance and 
utilization review standards. A plan may require the specialist 
to notify the primary care provider with regular updates on the 
specialty care provided, as well as all other necessary medical 
information.
    Subsection (c). Referrals. A plan is not prohibited from 
requiring an authorization by the primary care provider of the 
participant or beneficiary in order to obtain coverage for 
specialty services so long as such authorization is for an 
adequate number of referrals under an approved treatment plan.
    Subsection (d). Specialty Care Defined. ``Specialty care'' 
means, with respect to a condition, care and treatment provided 
by a health care practitioner, facility, or center (such as a 
center of excellence) that has adequate expertise (including 
age-appropriate expertise) through appropriate training and 
experience.

                    Section 726. Continuity of Care

    Subsection (a). In General.
    Termination of provider. If a contract between a group 
health plan and a health care provider is terminated (see 
definition below), or benefits or coverage provided by a health 
care provider are terminated because of a change in the terms 
of provider participation in a group health plan, and an 
individual who is a participant orbeneficiary in the plan is 
undergoing a course of treatment from the provider at the time of such 
termination, the plan must:
          (A) notify the individual on a timely basis of such 
        termination;
          (B) provide the individual with an opportunity to 
        notify the plan of a need for transitional care; and
          (C) in the case of termination described in paragraph 
        (2), (3), and (4) of subsection (b), and subject to 
        subsection (c), permit the individual to continue or be 
        covered with respect to the course of treatment with 
        the provider's consent during a transitional period (as 
        provided under subsection (b)).
    Termination. In this section, the term ``terminated'' 
includes, with respect to a contract, the expiration or 
nonrenewal of the contract by the group health plan, but does 
not include a termination of the contract by the plan for 
failure to meet applicable quality standards or for fraud.
    Subsection (b). Transitional Period.
    (1) General rule. Except as provided in paragraph (3), the 
transitional period under this subsection shall extend for up 
to 90 days from the date of the notice of the provider's 
termination (described above).
    (2) Institutional care. Subject to paragraph (1), the 
transitional period under this subsection for institutional or 
inpatient care from a provider shall extend until the discharge 
or termination of the period of institutionalization and also 
shall include institutional care provided within a reasonable 
time of the date of termination of the provider status if the 
care was scheduled before the date of the notice of the 
provider's termination (described above) or if the individual 
on such date was on an established waiting list or otherwise 
scheduled to have such care.
    (3) Pregnancy. Notwithstanding paragraph (1), if:
          (A) a participant or beneficiary 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. Subject to paragraph (1), if:
          (A) a participant or beneficiary was determined to be 
        terminally ill (as determined under Medicare law) prior 
        to a provider's termination of participation; and
          (B) the provider was treating the terminal illness 
        before the date of termination; and the care is 
        directly related to the treatment of the terminal 
        illness.
    Subsection (c). Permissible Terms and Conditions.--A group 
health plan may condition coverage of continued treatment by a 
provider upon the provider agreeing to the following terms and 
conditions:
    (1) The provider agrees to accept reimbursement from the 
plan and individual involved (with respect to cost-sharing) at 
the rates applicable prior to the start of the transitional 
period as payment in full (or, in the case described in 
subsection (b)(2), at the rates applicable under the 
replacement plan after the date of the termination of the 
contract with the group health plan) and not to impose cost-
sharing with respect to the individual in an amount that would 
exceed the cost-sharing that could have been imposed if the 
contract referred to in subsection (a)(1) had not been 
terminated.
    (2) The provider agrees to adhere to the quality assurance 
standards of the plan responsible for payment under paragraph 
(1) and to provide to such plan necessary medical information 
related to the care provided.
    (3) The provider agrees otherwise to adhere to such plan's 
policies and procedures, including procedures regarding 
referrals and obtaining prior authorization and providing 
services pursuant to a treatment plan (if any) approved by the 
plan.
    Subsection (d). Rule of Construction. Nothing in this 
section shall be construed to require the coverage of benefits 
which would not have been covered if the provider involved 
remained a participating provider.
    Subsection (e). Definition. In this section, the term 
``health care provider'' or ``provider'' means: (1) 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 (2) 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.

       Section 727. Protection of Patient-Provider Communications

    Subsection (a). In General. A group health plan may not 
prohibit or otherwise restrict a health care professional, 
acting within the lawful scope of practice, from advising a 
participant who is a patient of the professional about the 
health status of the participant or medical care or treatment 
for the condition or disease of the participant, regardless of 
whether coverage for such care or treatment are provided under 
the plan.
    Subsection (b). Rule of Construction. Nothing in this 
section requires a group health plan to provide specific 
benefits under the terms of such plan.

           Section 728. Patient's Right to Prescription Drugs

    To the extent that a group health plan provides coverage 
for benefits with respect to prescription drugs, and limits 
such coverage to drugs included in a formulary, the plan must:
          (1) ensure the participation of physicians and 
        pharmacists in developing and reviewing such formulary; 
        and
          (2) in accordance with applicable quality assurance 
        and utilization review standards, provide for 
        exceptions from the formulary limitation when a non-
        formulary alternative is medically necessary and 
        appropriate.

     Section 729. Self-Payment for Behavioral Health Care Services

    Subsection (a). In General. A group health plan may not:
          (1) prohibit or otherwise discourage a participant or 
        beneficiary from self-paying for behavioral health care 
        services once the plan has denied coverage for such 
        services;
          (2) terminate a health care provider because such 
        provider permits participants or beneficiaries to self-
        pay for behavioral health care services that are not 
        otherwise covered or for which the plan provides 
        limited coverage, to the extent that the plan denies 
        coverage of the services.
    Subsection (b). Rule of Construction. Nothing in subsection 
(a)(2) prohibits a group health plan from terminating a 
contract with a health care provider for failure to meet 
applicable quality standards or for fraud.

              Section 730. Generally Applicable Provisions

    Subsection (a). In the case of a group health plan that 
provides benefits under 2 or more coverage options, the 
requirements of this subpart, other than section 722, shall 
apply separately with respect to each coverage option.
    Subsection (b). Definition. Section 733(a) of the Employee 
Retirement Income Security Act of 1974 (ERISA) is amended by 
adding a definition for ``fully insured group health plan'' to 
mean a plan where benefits under the plan are provided pursuant 
to the terms of an arrangement between a group health plan and 
a health insurance issuer and are guaranteed by the health 
insurance issuer under a contract or policy of insurance.
    Subsection (c). Conforming Amendment. Amends the table of 
contents in section 1 of ERISA.

   Section 102. Comprehensive Independent Study of Patient Access to 
        Clinical Trials and Coverage of Associated Routine Costs

    Subsection (a). Study by the Institute of Medicine. The 
Secretary of Health and Human Services is directed to enter 
into a contract with the Institute of Medicine to conduct a 
comprehensive study of patient access to clinical trials and 
the coverage of routine patient care costs by private health 
plans and insurers.
    Subsection (b). Matters to be Assessed. The study must 
assess the following: (1) factors that hinder patient 
participation in clinical trials, including health plan and 
insurance policies and practices; (2) the ability of health 
plans and investigators to distinguish between routine patient 
care costs and costs associated with clinical trials; and (3) 
the potential impact of health plan coverage of routine costs 
associated with clinical trials on health care premiums.
    Subsection (c). Report. The Institute of Medicine must 
submit a report on the study to the Senate Committee on Health, 
Education, Labor and Pensions and the Secretary of Health and 
Human Services not later than 12 months after the date of 
execution of a contract under subsection (a). The report must 
set forth the findings, conclusions, and recommendations of the 
Institute for increasing patient participation in clinical 
trials, encouraging collaboration between the public and 
private sectors, and improving analysis of determining routine 
costs associated with the conduct of clinical trials.
    Subsection (d). Funding. The Secretary must provide for 
funding of the report and study out of funds appropriated to 
the Department of Health and Human Services for FY2000.

             Section 103. Effective Date And Related Rules

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

       Subtitle B--Right to Information About Plans and Providers


                  Section 111. Information about Plans

    Subsection (a). Employee Retirement Income Security Act of 
1974. Amends 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.) by adding at the end the following:

            Section 714. Health Plan Comparative Information

    Subsection (a). (1). General Requirement. A group health 
plan, and a health insurance issuer that provides coverage in 
connection with group health insurance coverage, shall, not 
later than 12 months after the date of enactment of this 
section, and at least annually thereafter, provide for the 
disclosure, in a clear and accurate form to each participant 
and each beneficiary who does not reside at the same address as 
the participant, or upon request to an individual eligible for 
coverage under the plan, or plan sponsor with which the plan or 
issuer has contracted, of the information described in 
subsection (b).
    (2). Rule of Construction. Nothing in this section shall be 
construed to prevent a plan or issuer from entering into any 
agreement under which the issuer agrees to assume 
responsibility for compliance with the requirements of this 
section and the plan is released from liability for such 
compliance.
    (3). Provision of Information. Information shall be 
provided to participants and beneficiaries under this section 
at the address maintained by the plan or issuer with respect to 
such participants or beneficiaries.
    Subsection (b). Required Information. The informational 
materials to be distributed under this section shall include 
for each package option available under a group health benefit 
plan the following:
    (1) A description of the covered items and services under 
each such plan and any in- and out-of-network features of each 
such plan, including a summary description of the specific 
exclusions from coverage under the plan.
    (2) A description of any cost-sharing, including premiums, 
deductibles, coinsurance, and copayment amounts, for which the 
participant or beneficiary will be responsible, including any 
annual or lifetime limits on benefits, for each such plan.
    (3) A description of any optional supplemental benefits 
offered by each such plan and the terms and conditions 
(including premiums or cost-sharing) for such supplemental 
coverage.
    (4) A description of any restrictions on payments for 
services furnished to a participant or beneficiary by a health 
care professional that is not a participating professional and 
the liability of the participant or beneficiary for additional 
payments for these services.
    (5) A description of the service area of each such plan, 
including the provision of any out-of-area coverage.
    (6) A description of the extent to which participants or 
beneficiaries may select the primary care provider of their 
choice, including providers both within the network and outside 
the network of each such plan (if the plan permits out-of-
network services).
    (7) A description of the procedures for advance directives 
and organ donation decisions if the plan maintains such 
procedures.
    (8) A description of the requirements and procedures to be 
used to obtain preauthorization for health services (including 
telephone numbers and mailing addresses), including referrals 
for specialty care.
    (9) A description of the definition of medical necessity 
used in making coverage determinations by each such plan.
    (10) A summary of the rules and methods for appealing 
coverage decisions and filing grievances (including telephone 
numbers and mailing addresses), as well as other available 
remedies.
    (11) A summary description of any provisions for obtaining 
off-formulary medications if the plan utilizes a defined 
formulary for providing specific prescription medications.
    (12) A summary of the rules for access to emergency room 
care. Also, any available educational material regarding proper 
use of emergency services.
    (13) A description of whether or not coverage is provided 
for experimental treatments, investigational treatments, or 
clinical trials and the circumstances under which access to 
such treatments or trials is made available.
    (14) A description of the specific preventative services 
covered under the plan if such services are covered.
    (15) A statement regarding the manner in which a 
participant or beneficiary: (a) may access an obstetrician, 
gynecologist, or pediatrician; and (b) obtains continuity of 
care.
    (16) A statement that the following information, and 
instructions on obtaining such information (including telephone 
numbers and, if available, Internet websites), shall be made 
available upon request:
    (A) The names, addresses, telephone numbers, and state 
licensure status of the plan's participating health care 
professionals and participating health care facilities, and, if 
available, the education, training, speciality qualifications 
or certifications of such professionals.
    (B) A summary description of the methods used for 
compensating participating health care professionals, such as 
capitation, fee-for-service, salary, or a combination thereof. 
(The requirement of this subparagraph shall not be construed as 
requiring plans to provide information concerning proprietary 
payment methodology.)
    (C) A summary description of the methods used for 
compensating health care facilities, including per diem, fee-
for-service, capitation, bundled payments, or a combination 
thereof. (The requirement of this subparagraph shall not be 
construed as requiring plans to provide information concerning 
proprietary payment methodology.)
    (D) A summary description of the procedures used for 
utilization review.
    (E) The list of the specific prescription medications 
included in the formulary of the plan, if the plan uses a 
defined formulary.
    (F) A description of the specific exclusions from coverage 
under the plan.
    (G) Any available information related to the availability 
of translation or interpretation services for non-English 
speakers and people with communication disabilities, including 
the availability of audio tapes or information in Braille.
    (H) Any information that is made public by accrediting 
organizations in the process of accreditation if the plan is 
accredited, or any additional quality indicators that the plan 
makes available.
    Subsection (c) Manner of Distribution. The information 
described in this section must be distributed in an accessible 
format that is understandable to an average plan participant or 
beneficiary.
    Subsection (d) Rule of Construction. Nothing in this 
section may be construed to prohibit a group health plan, or 
health insurance issuer in connection with group health 
insurance coverage, from distributing any other additional 
information determined by the plan or issuer to be important or 
necessary in assisting participants and beneficiaries (or upon 
request, potential participants) in the selection of a health 
plan or from providing information under subsection (b)(15) as 
part of the required information.
    Subsection (e) Conforming Regulations. The Secretary must 
issue regulations to coordinate the requirements on group 
health plans and health insurance issuers under this section 
with the requirements imposed under part 1 of ERISA, to reduce 
duplication of information required to be provided.
    Subsection (f). Health care professional. In this section, 
the term `health care professional' means a physician (as 
defined in Section 1861(r) of the Social Security Act) or other 
health care professional if coverage for the professional's 
services is provided under the health plan involved for the 
services of the professional. Such term includes a podiatrist, 
optometrist, chiropractor, psychologist, dentist, physician 
assistant, physical or occupational therapist and therapy 
assistant, speech-language pathologist, audiologist, registered 
or licensed practical nurse (including nurse practitioner, 
clinical nurse specialist, certified registered nurse 
anesthetist, and certified nurse-midwife), licensed certified 
social worker, registered respiratory therapist, and certified 
respiratory therapy technician.
    Subsection (b). Internal Revenue Code. The Internal Revenue 
Code is amended to include the following new section:

           Section 9813. Health Plan Comparative Information

    Subsection (a). (1). General Requirement. A group health 
plan must, not later than 12 months after the date of enactment 
of this section and, at least annually thereafter, disclose in 
a clear and accurate form to each participant and beneficiary 
who does not reside at the same address as the participant, or 
upon request to an individual eligible for coverage under the 
plan, the information described in subsection (b).
    (2). Rule of Construction. Nothing in this section shall be 
construed to prevent a plan or issuer from entering into any 
agreement under which the issuer agrees to assume 
responsibility for compliance with the requirements of this 
section and the plan is released from liability for such 
compliance.
    (3). Provision of Information. Information shall be 
provided to participants and beneficiaries under this section 
at the address maintained by the plan or issues with respect to 
such participants or beneficiaries.
    Subsection (b) through subsection (f). Provisions are the 
same as subsection (b) through subsection (f) under Section 714 
of the Employee Retirement Income Security Act of 1974, as 
added by Section 111 of this Act.

                section 112. information about providers

    Subsection (a). Study. The Secretary of Health and Human 
Services must enter into a contract with the Institute of 
Medicine for 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.
          Subsection (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.

           Subtitle C--Right to Hold Health Plans Accountable


 section 121. amendment to employee retirement income security act of 
                                  1974

    Subsection (a). In General. Section 503 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1133) is 
amended as follows:

 section 503. claims procedure, coverage determination, grievances and 
                                appeals

    Subsection (a). Claims Procedure. In accordance with 
regulations of the Secretary, every employee benefit plan must:
          (1) provide adequate notice in writing to a covered 
        participant or beneficiary whose claim for benefits 
        under the plan has been denied, setting forth the 
        specific reasons for such denial, written in a manner 
        calculated to be understood by the participant, and
          (2) afford a reasonable opportunity to any covered 
        participant or beneficiary whose claim for benefits has 
        been denied for a full and fair review by the 
        appropriate named fiduciary of the decision denying the 
        claim.
    Subsection (b). Coverage Determinations Under Group Health 
Plans.
    (1) Procedures.
    (A) In general. A group health plan or health insurance 
issuer conducting utilization review shall ensure that 
procedures are in place for:
          (i) making determinations regarding whether a 
        participant or beneficiary is eligible to receive a 
        payment or coverage for health services under the plan 
        or coverage involved and any cost-sharing amount that 
        the enrollee is required to pay with respect to such 
        service;
          (ii) notifying a covered participant or beneficiary 
        (or their authorized representatives) and the treating 
        health care professionals involved regarding 
        determinations made under the plan or issuer and any 
        additional payments that the participant or beneficiary 
        may be required to make with respect to such service; 
        and
          (iii) responding to requests, either written or oral, 
        for coverage determinations or for internal appeals 
        from a participant or beneficiary (or the legal 
        representative of such enrollee) or the treating health 
        care professional with consent.
    (B) Oral requests. With respect to an oral request 
described in subparagraph (A)(iii), a group health plan or 
health insurance issuer may require that the requesting 
individual provide written evidence of such request.
    (2) Timeline for making determinations.
    (A) Routine determination. A group health plan or a health 
insurance issuer shall maintain procedures to ensure that prior 
authorization determinations concerning the provision of non-
emergency items or services are made within 30 days from the 
date on which the request for a determination is submitted, 
except that such period may be extended where certain 
circumstances exist that are determined by the Secretary to be 
beyond control of the plan or issuer.
    (B) Expedited determination.
    (i) A prior authorization determination under this 
subsection shall be made within 72 hours after a request is 
received by the plan or issuer under clause (ii) or (iii).
    (ii) A plan or issuer shall maintain procedures for 
expediting a prior authorization determination under this 
subsection upon the request of a participant or beneficiary if, 
based on such a request, the plan or issuer determines that the 
normal time for making such a determination could seriously 
jeopardize the life or health of the participant or 
beneficiary.
    (iii) A plan or issuer shall maintain procedures for 
expediting a prior authorization determination under this 
subsection if the request involved indicates that the treating 
health care professional has reasonably documented, based on 
the medical exigencies, that a determination under the 
procedures described in subparagraph (A) could seriously 
jeopardize the life or health of the participant or 
beneficiary.
    (C) Concurrent determinations. A plan or issuer shall 
maintain procedures to certify or deny coverage of an extended 
stay or additional services.
    (D) Retrospective determination. A plan or issuer shall 
maintain procedures to ensure that, with respect to the 
retrospective review of a determination made under paragraph 
(1), the determination shall be made within 30 working days of 
the date on which the plan or issuer receives necessary 
information.
    (3) Notice of determinations.
    (A) Routine determination. With respect to a coverage 
determination of a plan or issuer under paragraph (2)(A), the 
plan or issuer shall issue notice of such determination to the 
enrollee (or the authorized representative), and consistent 
with the medical exigencies of the case, to the treating health 
care professional involved not later than 2 working days after 
the date on which the determination is made.
    (B) Expedited determination. With respect to a coverage 
determination of a plan or issuer under paragraph (2)(B), the 
plan or issuer shall issue notice of such determination to the 
participant or beneficiary (or the authorized representative), 
and consistent with the medical exigencies of the case, to the 
treating health care professional involved within the 72 hour 
period described in paragraph (2)(B).
    (C) Concurrent reviews. With respect to the determination 
under a plan or issuer to certify or deny coverage of an 
extended stay or additional services, the plan or issuer shall 
issue notice of such determination to the treating health care 
professional and to the participant or beneficiary involved (or 
the authorized representative) within 1 working day of the 
determination.
    (D) Retrospective reviews. With respect to the 
retrospective review under a plan or issuer of a retrospective 
determination, the plan or issuer shall issue written notice of 
an approval or disapproval of a determination under this 
subparagraph to the participant or beneficiary (or the 
authorized representative) and health care provider involved 
within 5 working days of the date on which such determination 
is made.
    (E) A written notice of an adverse coverage determination 
under this subsection, or of an expedited adverse coverage 
determination, shall be provided to the participant or 
beneficiary (or the authorized representative) and treating 
health care professional (if any) involved and shall include:
          (i) the reasons for the determination (including the 
        clinical or scientific-evidence based rationale used in 
        making the determination) written in a manner to be 
        understandable to the average enrollee;
          (ii) the procedures for obtaining additional 
        information concerning the determination; and
          (iii) notification of the right to appeal the 
        determination and instructions on how to initiate an 
        appeal in accordance with subsection (d).
    Subsection (c). Grievances. A group health plan or issuer 
offering health insurance coverage in connection with a group 
health plan shall have written procedures foraddressing 
grievances between the plan or issuer and a participant or beneficiary. 
Determinations under such procedures shall be non-appealable.
    Subsection (d). Internal Appeal of Coverage Determinations.
    (1) Right to Appeal. (A) In general. A participant or 
beneficiary (or the authorized representative) and the treating 
health care professional with the consent of the enrollee (or 
the legal representative of the enrollee), may appeal any 
adverse coverage determination under the procedures described 
in this subsection.
    (B) Time for Appeal. A participant or beneficiary must be 
ensured of not less than 180 days, beginning on the date of an 
adverse coverage determination, to appeal such determination.
    (C) Failure to Act. The failure of a plan or issuer to 
issue a coverage within applicable timelines shall be treated 
as an adverse coverage determination for purposes of proceeding 
to internal review.
    (2) Records. A group health plan and a health insurance 
issuer shall maintain written records, for at least 6 years, 
with respect to any appeal under this subsection for purposes 
of internal quality assurance and improvement.
    (3) Routine determinations. A group health plan or a health 
insurance issuer shall complete the consideration of an appeal 
of an adverse routine determination not later than 30 working 
days after the date on which a request for such appeal is 
received.
    (4) Expedited determination.
    (A) In general. An expedited determination with respect to 
an appeal shall be made in accordance with the medical 
exigencies of the case, but in no case more than 72 hours after 
the request for such appeal is received by the plan or issuer.
    (B) Request by participant or beneficiary. A plan or issuer 
shall maintain procedures for expediting a prior authorization 
determination upon the request of an participant or beneficiary 
if, based on such a request, the plan or issuer determines that 
the normal time for making such a determination could seriously 
jeopardize the life or health of the participant or 
beneficiary.
    (C) Documentation by health care professional. A plan or 
issuer shall maintain procedures for expediting a prior 
authorization determination if the request involved indicates 
that the treating health care professional has documented, 
based on the medical exigencies that a routine determination 
could seriously jeopardize the life or health of the enrollee.
    (5) Conduct of review. A review of an adverse coverage 
determination shall be conducted by an individual with 
appropriate expertise who was not directly involved in the 
initial determination.
    (6) Lack of medical necessity. An appeal under this 
subsection relating to a determination to deny coverage based 
on a lack of medical necessity or appropriateness, or based on 
an experimental or investigational treatment, shall be made 
only by a physician with appropriate expertise in the field of 
medicine involved who was not involved in the initial 
determination.
    (7) Notice.
    (A) In general. Written notice of a determination made 
under an internal review process shall be issued to the 
participant or beneficiary (or the authorized representative) 
and the treating health care professional not later than 2 
working days after the completion of the review (or within the 
72-hour period, if applicable).
    (B) Adverse coverage determinations. With respect to an 
adverse coverage determination made under this subsection, the 
notice described in subparagraph (A) shall include:
          (i) the reasons for the determination (including the 
        clinical or scientific-evidence based rationale used in 
        making the determination) written in a manner to be 
        understandable to the average participant or 
        beneficiary;
          (ii) the procedures for obtaining additional 
        information concerning the determination; and
          (iii) notification of the right to an external review 
        under subsection (e) and instructions on how to 
        initiate such a review.
    Subsection (e). Independent External Review.
    (1) Access to Review.
    (A). In General. A group health plan or a health insurance 
issuer offering health insurance coverage in connection with a 
group health plan shall have written procedures to permit a 
participant or beneficiary (or the authorized representative) 
access to an independent external review with respect to an 
adverse coverage determination concerning a particular item or 
service ((including a circumstance treated as an adverse 
coverage determination) under subparagraph (B)) where:
          (i) the particular item or service involved,
          (I) (aa) would be a covered benefit when medically 
        necessary and appropriate, under the terms of the plan, 
        and the item or service has been determined not to be 
        medically necessary and appropriate under the internal 
        appeals process required; or there has been a failure 
        to issue a timely coverage determination; and
          (bb) (AA) the amount of the item or service exceeds a 
        significant financial threshold, or
          (BB) or there is a significant risk of placing the 
        life or health of the participant or beneficiary in 
        jeopardy, or
          (II) would be a covered benefit, when not considered 
        experimental or investigational under the terms and 
        conditions of the plan, and the item or service has 
        been determined to be experimental or investigational 
        under the internal appeals process or there has been a 
        failure to issue a timely coverage determination; and
          (ii) the participant or beneficiary has completed the 
        internal appeals process under subsection (d) with 
        respect to such determination.
    (B) The failure to issue a coverage determination within 
the applicable timeline shall be treated as an adverse coverage 
determination for purposes of proceeding to independent 
external review.
    (2) Initiation of the external review process.
    (A) Filing of request. A participant or beneficiary (or the 
authorized representative) who desires to have an external 
review conducted shall file a written request for such review 
with the plan or issuer involved not later than 30 working days 
after the receipt of a final denial of a claim. Any such 
request shall include the consent of the participant or 
beneficiary (or the authorized representative) for the release 
of medical information and records to independent external 
reviewers.
    (B) Information and notice. Not later than 5 working days 
after the receipt of a request, the plan or issuer involved 
shall select an external appeals entity that shall be 
responsible for designating an external reviewer.
    (C) Provision of information. The plan or issuer involved 
shall forward necessary information (including medical records, 
any relevant review criteria, the clinical rationale consistent 
with the terms and conditions of the contract between the plan 
or issuer and the participant or beneficiary for the coverage 
denial, and evidence of the enrollee's coverage) to the 
independent, external reviewer.
    (D) Notification. The plan or issuer involved shall send a 
written notification to the participant or beneficiary (or the 
authorized representative) and the plan administrator, 
indicating that an external review has been initiated.
    (3) Conduct of external review.
    (A) Designation of external appeals entity by plan or 
issuer. A plan or issuer that receives a request for an 
external review shall designate a qualified external appeals 
entity that will make a decision in an unbiased manner. 
Describes a qualified entity as: (i) one licensed or 
credentialed by a state; (ii) a state agency established for 
the purpose of conducting independent external reviews; (iii) 
any entity under contract with the federal government to 
provide external review services; (iv) any entity accredited as 
an external review entity by an accrediting body recognized by 
the Secretary for such purpose; or (v) any other entity meeting 
criteria established by the Secretary.
    (B) Designation of external reviewer by external appeals 
entity. The external appeals entity shall designate one or more 
individuals to serve as external reviewers. Such reviewers 
shall be independent medical experts who shall:
          (i) be appropriately credentialed or licensed in any 
        state to deliver health care services;
          (ii) not have any material, professional, familial, 
        or financial affiliation with the case under review, 
        the participant or beneficiary involved, the treating 
        health care professional, the institution where the 
        treatment would take place, or the manufacturer or any 
        drug, device, procedure, or other therapy proposed for 
        the participant or beneficiary whose treatment is under 
        review;
          (iii) have expertise (including age-appropriate 
        expertise) in the diagnosis or treatment under review 
        and, when reasonably available, be of the same 
        specialty as the physician treating the participant or 
        beneficiary or recommending or prescribing the 
        treatment in question;
          (iv) receive only reasonable and customary 
        compensation from the group health plan or health 
        insurance issuer in connection with the external review 
        that is not contingent on the decision rendered by the 
        reviewer; and
          (v) not be held liable for decisions regarding 
        medical determinations (but may be held liable for 
        actions that are arbitrary and capricious).
    (4) Standard of review.
    (A) In general. An independent external reviewer shall:
          (i) make an independent determination based on the 
        valid, relevant, scientific and clinical evidence to 
        determine the medical necessity, appropriateness, 
        experimental or investigational nature of the proposed 
        treatment; and
          (ii) take into consideration appropriate and 
        available information including any evidence-based 
        decision making or clinical practice guidelines used by 
        the group health plan or health insurance issuer; 
        timely evidence or information submitted by the plan, 
        issuer, patient or patient's physician; the patient's 
        medical record; expert consensus; and medical 
        literature.
    (B) Notice. The plan or issuer involved shall ensure that 
the participant or beneficiary receives notice, within 30 days 
after the determination of the independent medical expert, 
regarding the actions of the plan or issuer with respect to the 
determination of such expert under the independent external 
review.
    (5) Timeframe for review. An independent external reviewer 
shall complete a review of an adverse coverage determination in 
accordance with the medical exigencies of the case, but in no 
case later than 30 working days after the later of:
          (A) the date on which such reviewer is designated; or
          (B) the date on which all information necessary to 
        completing such review is received.
    (6) Binding determination. The determination of an external 
reviewer under this subsection shall be binding upon the plan 
or issuer if the provisions of this subsection or theprocedures 
implemented under such provisions were complied with by the independent 
external reviewer.
    (7) Study. Not later than 2 years after the date of 
enactment of this section, the General Accounting Office shall 
conduct a study of a statistically appropriate sample of 
completed independent external reviews. Such study shall 
include an assessment of the process involved during an 
independent external review and the basis of decision making by 
the independent external reviewer. The results of such study 
shall be submitted to the appropriate committees of Congress.
    (8) Effect of certain provisions. Nothing in this section 
shall be construed as affecting or modifying the Employee 
Retirement Income Security Act provisions governing supersedure 
of state law with respect to a group health plan.
    Subsection (f). Rule of Construction. Nothing in this 
section shall be construed to prohibit a plan administrator or 
plan fiduciary or health plan medical director from requesting 
an independent external review by an independent external 
reviewer without first completing the internal review process.
    Subsection (g). Definitions. In this section:
    The term adverse coverage determination means a coverage 
determination under the plan which results in a denial of 
coverage or reimbursement.
    The term coverage determination means with respect to items 
and services for which coverage may be provided under a health 
plan, a determination of whether or not such items and services 
are covered or reimbursable under the coverage and terms of the 
contract.
    The term grievance means any complaint made by a 
participant or beneficiary that does not involve a coverage 
determination.
    The term group health plan means an employee welfare 
benefit plan to the extent that the plan provides medical care 
to employees or their dependents directly or through insurance, 
reimbursement, or otherwise.
    The term health insurance coverage means benefits 
consisting of medical care under any hospital or medical 
service policy or certificate, hospital or medical service plan 
contract, or health maintenance organization (HMO) contract 
offered by a health insurance issuer.
    The term health insurance issuer means an insurance 
company, insurance service, or insurance organization 
(including an HMO) which is licensed to engage in the business 
of insurance in a state and which is subject to state law which 
regulates insurance. The term does not include a group health 
plan.
    The term prior authorization determination means a coverage 
determination prior to the provision of the items and services 
as a condition of coverage of the items and services under the 
coverage.
    The term treating health care professional with respect to 
a group health plan, health insurance issuer or provider 
sponsored organization means a practitioner who is acting 
within the scope of their state licensure or certification for 
the delivery of health care services and who is primarily 
responsible for delivering those services to the enrollee.
    The term utilization review with respect to a group health 
plan or health insurance coverage means a set of formal 
techniques designed to monitor the use of, or evaluate the 
clinical necessity, appropriateness, efficacy, or efficiency 
of, health care services, procedures, or settings. Techniques 
may include ambulatory review, prospective review, second 
opinion, certification, concurrent review, case management, 
discharge planning or retrospective review.
    Subsection (b). Enforcement. Amends the Employee Retirement 
Income Security Act of 1974 to provide for a civil penalty for 
plan failures to comply with coverage determinations.
    Subsection (c). Conforming Amendment. Amends the table of 
contents in Section 1 of the Employee Retirement Income 
Security Act of 1974.
    Subsection (d). Effective Date. The amendments made by this 
section are effective for plan years beginning on or after one 
year after the date of enactment of this Act. The Secretary 
must issue all regulations necessary to carry out such 
amendments before the effective date.

               TITLE II--GENETIC INFORMATION AND SERVICES


                        Section 201. Short Title

    This title may be cited as the ``Genetic Information 
Nondiscrimination in Health Insurance Act of 1999.''

 Section 202. Amendments To Employee Retirement Income Security Act of 
                                  1974

    Subsection (a). Prohibition of Health Discrimination on the 
Basis of Genetic Information or Genetic Services.
    (1). No Enrollment Restriction For Genetic Services. ERISA 
is amended by extending the prohibition against discrimination 
based on genetic information to include information about a 
request for or receipt of genetic services
    (2). No Discrimination in Group Premiums Based on 
Predictive Genetic Information. ERISA (as amended by Section 
111(a) of this bill) is amended further by adding a new Section 
715, which follows:

 Section 715. Prohibiting Premium Discrimination Against Groups on the 
                Basis of Predictive Genetic Information

    Group health plans or health insurance issuers offering 
insurance coverage in connection with a group health plan are 
prohibited from adjusting premium or contribution amounts for a 
group on the basis of predictive genetic information concerning 
an individual (including a dependent) or family member of the 
individual (including information about a request for or 
receipt of genetic services).
    (3). Conforming Amendment. Section 702(b) of ERISA of 1974 
is amended by adding the following:
    (3) Reference to Related Provision. ``For a provision 
prohibiting the adjustment of premium or contribution amounts 
for a group under a group health plan on the basis of 
predictive genetic information (including information about a 
request for or receipt of genetic services), see Section 715.
    Subsection (b). Limitation on Collection of Predictive 
Genetic Information. This subsection amends Section 702 of 
ERISA by adding the following new subsection.
    Subsection (c). Collection of Predictive Genetic 
Information.
    (1). Limitation on Requesting or Requiring Predictive 
Genetic Information. Group health plans or health insurance 
issuers offering insurance coverage in connection with a group 
health plan are prohibited from requesting or requiring 
predictive genetic information concerning an individual 
(including a dependent) or family member of the individual 
(including information about a request for, or, receipt of, 
genetic services), except as provided in paragraph (2) which 
follows.
    (2). Information Needed For Diagnosis, Treatment, or 
Payment.
    (A). In General. This paragraph permits group health plans 
or health insurance issuers that provide health care to an 
individual or dependent to request (but not require) that 
individuals or dependents disclose or authorize the collection 
of predictive genetic information for diagnosis, treatment, or 
payment purposes relating to the provision of health care.
    (B). Notice of Confidentiality Practices and Description of 
Safeguards. As part of a request of subparagraph (A), group 
health plans or health insurance issuers that provide health 
care to an individual or dependent must provide them with a 
description of the procedures in place to safeguard 
confidentiality of such predictive genetic information.
    Subsection (d). Confidentiality with Respect to Predictive 
Genetic Information.
    (1) Notice of Confidentiality Practices.
    (A) Preparation of Written Notice. A group health plan, or 
a health insurance issuer offering health insurance coverage in 
connection with a group health plan, must post or provide, in 
writing and in a clear and conspicuous manner, notice of the 
plan or issuer's confidentiality practices, including: a 
description of an individual's rights with respect to 
predictive genetic information; the procedures established by 
the plan or issuer for the exercise of the individual's rights; 
and the right to obtain a copy of the notice of the required 
confidentiality practices.
    (B) Model Notice. The Secretary, in consultation with the 
National Committee on Vital and Health Statistics and the 
National Association of Insurance Commissioners, and after 
notice and opportunity for public comment, is required to 
develop and disseminate model notices of confidentiality 
practices.
    (2) Establishment of Safeguards. A group health plan, or a 
health insurance issuer offering health insurance coverage in 
connection with a group health plan, must establish and 
maintain appropriate administrative, technical, and physical 
safeguards to protect the confidentiality, security, accuracy, 
and integrity of predictive genetic information.
    Subsection (c). Definitions. This subsection amends Section 
733(d) of ERISA by adding at the end the following definitions:
    Family Member.--means, with respect to an individual, the 
spouse or a dependent child of that individual, including a 
child who is born to, or placed for adoption with, the 
individual, and all other individuals related by blood to that 
individual, spouse, or child.
    Genetic Information.--information about genes, gene 
products, or inherited characteristics that may derive from an 
individual or a family member (including information about a 
request for, or, receipt of, genetic services).
    Genetic Services.--health services provided to obtain, 
assess, or interpret genetic information for diagnostic and 
therapeutic purposes, and for genetic education and counseling.
    Predictive Genetic Information.--in the absence of 
symptoms, clinical signs, or a diagnosis of the condition 
related to such information: information about an individual's 
genetic tests; information about genetic tests of family 
members of the individual; or information about the occurrence 
of a disease or disorder in family members. The term does not 
include the following: information about the sex or age of the 
individual; information derived from routine physical tests, 
such as chemical, blood, or urine analyses of the individual 
including cholesterol tests; and information about physical 
exams of the individual.
    Genetic Test.--the analysis of human DNA, RNA, chromosomes, 
proteins, and certain metabolites, including analysis of 
genotypes, mutations, phenotypes, or karyotypes, for the 
purpose of predicting risk of disease in asymptomatic or 
undiagnosed individuals. The term provides the same exclusions 
as the term predictive genetic information.
    Subsection (d). Effective Date. This subsection and its 
amendments will go into effect, with respect to group health 
plans, for plan years beginning 1 year after enactment of this 
bill.

        Section 203. Amendments to the Public Health Service Act

    Subsection (a). Amendments Relating to the Group Market.
    The Public Health Service Act is amended by adding 
provisions prohibiting health discrimination on the basis of 
predictive genetic information in the group market. Such 
provisions are very similar to those above (Section 202 of this 
Act) that amended ERISA. The changes create a new section:

 ``Section 2707. Prohibiting Premium Discrimination Against Groups on 
   the Basis of Predictive Genetic Information in the Group Market''

    Subsection (b). Amendment Relating to the Individual 
Market. The Public Health Service Act is amended by adding 
provisions prohibiting health discrimination on the basis of 
genetic information in the individual market. The provisions 
prohibit the use of predictive genetic information as a 
condition of eligibility and for setting premium rates in the 
individual market. Such provisions are very similar to those 
above (Section 202 of this Act) that amended ERISA. The changes 
create a new section:

 ``Section 2753. Prohibition of Health Discrimination on the Basis of 
                    Predictive Genetic Information''

      Section 204. Amendments to the Internal Revenue Code of 1986

    Subsection (a). Prohibition of Health Discrimination on the 
Basis of Genetic Information or Genetic Services. The Internal 
Revenue Code of 1986 is amended by adding provisions 
prohibiting health discrimination on the basis of genetic 
information in the group market. Such provisions very similar 
to those above (section 202 of this Act) that amended ERISA. 
The amendments apply to group health plans and create a new 
section:

``Section 9814. Prohibiting Health Discrimination Against Groups on the 
               Basis of Predictive Genetic Information''

               TITLE III--HEALTHCARE RESEARCH AND QUALITY


                        Section 301. Short Title

    This section cites the title as ``Healthcare Research and 
Quality Act of 1999''.

        Section 302. Amendment to the Public Health Service Act

    Title IX of the Public Health Service (PHS) Act is amended 
to read as follows:

          TITLE IX--AGENCY FOR HEALTHCARE RESEARCH AND QUALITY


                Part A--Establishment and General Duties


                    Section 901. Mission and Duties

    Subsection (a). In General. This subsection redesignates 
the Agency for Health Care Policy and Research as the Agency 
for Healthcare Research and Quality (hereinafter referred to as 
``the Agency''.
    Subsection (b). Mission. The purpose of the Agency is to 
enhance the quality, appropriateness, and effectiveness of 
healthcare services, and access to such services, through the 
establishment of a broad base of scientific research and 
through the promotion of improvements in clinical practice, 
including the prevention of diseases and other health 
conditions. The Agency is required to promote healthcare 
quality improvement by:
          (1) conducting and supporting research that develops 
        and presents scientific evidence regarding all aspects 
        of healthcare, including--
          (A) methods of enhancing patient participation in 
        their own care and for facilitating shared patient-
        physician decision-making;
          (B) the outcomes, effectiveness, and cost-
        effectiveness of healthcare practices, including 
        preventive measures and long-term care;
          (C) existing and innovative technologies;
          (D) the costs, utilization, and access to healthcare;
          (E) the ways in which healthcare services are 
        organized, delivered, and financed and the interaction 
        and impact of these factors on the quality of patient 
        care;
          (F) methods for measuring and strategies for 
        improving quality; and
          (G) ways in which patients, consumers, and 
        practitioners acquire and use new information about 
        best practices and health benefits;
          (2) synthesizing and disseminating available 
        scientific evidence for use by patients, consumers, 
        practitioners, providers, purchasers, policy makers, 
        and educators; and
          (3) advancing private and public efforts to improve 
        healthcare quality.
    Subsection (c). Requirements With Respect to Rural Areas 
and Priority Populations. The Director of the Agency is 
required to undertake and support research, demonstration 
projects, and evaluations with respect to the delivery of 
health services (a) in rural areas (including frontier areas); 
(b) for low-income groups, and minority groups; (c) for 
children; (d) for the elderly; and (e) for people with special 
healthcare needs, including disabilities, chronic care, and 
end-of-life healthcare.
    Subsection (d). Appointment of Director. This subsection 
designates the head of the Agency as appointed by the Secretary 
to be known as the Director for Healthcare Research and 
Quality. The Secretary, acting through the Director, is 
required to carry out the authorities and duties established 
under this title of the bill.

                    Section 902. General Authorities

    The Director is required to support demonstration projects, 
conduct and support research, evaluations, training, research 
networks, multidisciplinary centers, technical assistance, and 
the dissemination of information, on healthcare, and on systems 
for the delivery of such care, including activities with 
respect to--
          (1) the quality, effectiveness, efficiency, 
        appropriateness and value of healthcare services;
          (2) quality measurement and improvement;
          (3) the outcomes, cost, cost-effectiveness, and use 
        of healthcare services and access to such services;
          (4) clinical practice, including primary care and 
        practice-oriented research;
          (5) healthcare technologies, facilities, and 
        equipment;
          (6) healthcare costs, productivity, and market 
        forces;
          (7) health promotion and disease prevention, 
        including clinical preventive services;
          (8) health statistics, surveys, database development, 
        and epidemiology, and
          (9) medical liability.
    Subsection (b). Health Services Training Grants. The 
Director may provide training grants in the field of health 
services research to include pre- and post-doctoral fellowships 
and training programs, young investigator awards, and other 
programs and activities as appropriate. Training funds for 
carrying out these activities are made available under Section 
487 as well as funds appropriated directly to the Agency. In 
developing priorities for the allocation of such funds, the 
Director is required to take into consideration shortages of 
trained researchers addressing priority populations.
    Subsection (c). Multidisciplinary Centers. The Director may 
provide financial assistance toward the costs of planning, 
establishing and operating centers for multidisciplinary health 
services research, demonstration projects, evaluations, 
training, and policy analysis.
    Subsection (d). Relation to Certain Authorities Regarding 
Social Security. Activities of the Agency should be 
appropriately coordinated with experiments, demonstration 
projects, and other related activities authorized by the Social 
Security Act and the Social Security Amendments of 1967. 
Activities that affect Medicare, Medicaid, and the State Child 
Health Insurance Program are required to be carried out 
consistent with provisions of the Social Security Act affecting 
outcomes research.
    Subsection (e). Disclaimer. The Agency is prohibited from 
mandating national standards of clinical practice or healthcare 
quality. Published recommendations that result from the 
Agency's projects shall include a disclaimer to that effect.
    Subsection (f). Rule of Construction. This section 
clarifies that the provisions are not to be construed to imply 
that the Agency's role is to mandate a national standard or 
specific approach to quality measurement and reporting. In 
determining research and quality improvement activities, the 
Agency must consider a wide range of choices, providers, 
healthcare delivery systems, and individual preferences.

                Part B--Healthcare Improvement Research


          Section 911. Healthcare Outcome Improvement Research

    Subsection (a). Evidence Rating Systems. The Agency shall 
collaborate with experts from the public and private sector to 
identify and disseminate methods or systems to assess health 
care research results, and to rate the strength of the 
scientific evidence behind healthcare practice, recommendations 
in the research literature, and technology assessments. The 
Agency is required to make such evidence assessment methods and 
systems widely available. Agency publications containing 
recommendations must indicate the level of substantiating 
evidence using such methods or systems.
    Subsection (b). Healthcare Improvement Research Centers and 
Provider-Based Research Networks. Requires the Agency to use 
research strategies and mechanisms to link research directly 
with clinical practice in geographically diverse locations 
including Health Improvement Research Centers that provide 
access to multidisciplinary expertise in outcomes or quality 
improvement research; Practice-based Research Networks, 
including plan, facility, or delivery systems sites of care 
(especially primary care), that can evaluate and promote 
quality improvement; and other innovative mechanisms or 
strategies.

 Section 912. Private-Public Partnerships to Improve Organization and 
                                Delivery

    Subsection (a). Support for Efforts to Develop Information 
on Quality.
    (1) Scientific and Technical Support. As the principal 
agency for healthcare quality research, the Agency may provide 
scientific and technical support for public and private efforts 
to improve healthcare quality, including accrediting 
organizations.
    (2) Role of the Agency. The role of the Agency is to:
          (A) identify and assess methods for evaluating the 
        health of health plan enrollees by type of plan, 
        provider, and provider arrangements; and of other 
        populations, including those receiving long-term care 
        services;
          (B) develop, test, and disseminate quality measures, 
        including measures of health and functional outcomes;
          (C) compile and disseminate healthcare quality 
        measures developed in the private and public sector;
          (D) assist in the development of improved healthcare 
        information systems;
          (E) develop survey tools to measure enrollee 
        assessments of their healthcare; and
          (F) identify and disseminate information on 
        mechanisms to integrate quality information into 
        purchaser and consumer decision-making.
    Subsection (b). Centers for Education and Research on 
Therapeutics.
    (1) In General. Requires the Secretary, acting through the 
Director and in consultation with the Commissioner of Food and 
Drugs, to establish a program for making one or more grants to 
establish centers to conduct research to: (i) increase 
awareness of new uses, improvements in the use, and risks of 
drugs, biological products, and devices, (ii) provide objective 
clinical information to healthcare providers, insurers, 
government agencies, patients and consumers; and (iii) improve 
the quality of healthcare while reducing the cost of healthcare 
through the appropriate use of drugs, biological products, or 
devices; and prevent adverse effects. In addition, requires the 
conduct of research on the comparative effectiveness, cost-
effectiveness, and safety of drugs, biological products, and 
devices and such other activities as the Secretary determines 
to be appropriate.
    Subsection (c). Reducing Errors in Medicine. This section 
directs the Secretary to conduct and support research and build 
public-private partnerships to identify the causes of 
preventable errors and patient injury in healthcare delivery 
to: develop, demonstrate, and evaluate strategies for reducing 
errors and improving patient safety; and promote implementation 
of strategies for improving patient safety.

          Section 913. Information on Quality and Cost of Care

    Subsection (a). This section requires the Director to:
          (1) conduct a survey to gather data on the cost and 
        use of healthcare services and, beginning in FY 2001 
        and subsequent years, quality of health care, including 
        the types of healthcare services Americans use, their 
        access to healthcare services, frequency of use, how 
        much is paid for the services used, the source of those 
        payments, the types and costs of private health 
        insurance, access, satisfaction, and quality of care 
        for the general population including rural residents 
        and also for children, the uninsured, poor and near-
        poor individuals, and persons with special healthcare 
        needs; and
          (2) develop databases and tools that enable States to 
        track the quality, access, and use of healthcare 
        services.
    Subsection (b)(1). This section further requires that the 
above survey: (A) identify determinants of health outcomes and 
functional status, the needs of special populations with 
respect to such variables as well as an understanding of these 
changes over time, relationships to healthcare access and use, 
and to monitor the overall national impact of Federal and State 
policy changes on healthcare; (B) provide information on the 
quality of care and patient outcomes for frequently occurring 
clinical conditions for a nationally representative sample of 
the population; and (C) provide reliable national estimates for 
children and persons with special healthcare needs through the 
use of supplements or periodic expansions of the survey.
    (2). Beginning in fiscal year 2003, an annual report is 
required to be submitted to Congress on national trends in the 
quality of healthcare.

      Section 914. Information Systems for Healthcare Improvement

    This section directs the agency to support research, 
initiatives on:
          (1) the use of information systems for the study of 
        healthcare quality;
          (2) training for healthcare practitioners and 
        researchers in the use of information systems;
          (3) the creation of linkages between various sources 
        of health information;
          (4) the delivery and coordination of evidence-based 
        healthcare services, including the use of real-time 
        decision-support programs;
          (5) the utility and comparability of health 
        information data and medical vocabularies by addressing 
        issues related to the structure, content, definition, 
        and coding of health information and data in 
        consultation with other Federal, State and Private 
        entities;
          (6) the evaluation and use of computer-based health 
        records; and
          (7) the protection of confidential patient 
        information.
    In addition, the Agency is directed to support 
demonstrations into the use of new information tools for 
improving shared decision-making between patients and 
providers.

 Section 915. Research Supporting Primary Care Delivery and Access in 
                           Underserved Areas

    Subsection (a). Preventive Services Task Force. This 
section defines a Preventive Services Task Force to review the 
evidence related to the effectiveness, appropriateness, and 
cost-effectiveness of clinical preventive services for the 
purpose of developing recommendations, regarding the usefulness 
in daily clinical practice. The Agency is directed to provide 
ongoing administrative, research, and technical support for the 
operation of the Preventive Services Task Force and to 
coordinate and support the dissemination of the Preventive 
Services Task Force recommendations.
    Subsection (b). Primary Care Delivery Research.
    This section establishes a Center for Primary Care Delivery 
Research within the Agency (referred to in this subsection as 
the ``Center'') to serve as the principal source of funding for 
primary care delivery research in the Department of Health and 
Human Services. Specifies the focus of primary care delivery 
research as the first contact when illness or health concerns 
arise, the diagnosis, treatment or referral to specialty care, 
preventive care, and the relationship between the clinician and 
the patient in the context of the family and community.
    The Center is required to conduct and support research on 
the nature and characteristics of primary care delivery 
practice; producing evidence for the management of common 
clinical problems; the management of undifferentiated clinical 
problems; and the continuity and coordination of health 
services.

        Section 916. Clinical Practice and Technology Innovation

    Subsection (a). In General. Requires the Director to 
promote innovation in evidence-based clinical practice and 
healthcare technologies by: conducting and supporting research; 
developing, evaluating, and disseminating methodologies for 
assessments; and conducting and supporting assessments of 
healthcare practices and technologies; promoting education, 
training, and providing technical assistance; and working with 
the National Library of Medicine and the public and private 
sector to develop an electronic clearinghouse of currently 
available assessments and those in progress.
    Subsection (b). This section specifies the process for 
clinical practice and technology assessment. It requires the 
Director to develop and publish a description of the methods 
used by the Agency and its contractors in conducting such 
assessments not later thanDecember 31, 2000. It requires the 
Director to cooperate and consult with the administrators of other 
federal agencies, professional societies, and other private and public 
entities and it requires methods used in such assessments to consider 
safety, efficacy, and effectiveness; legal, social, and ethical 
implications; costs, benefits, and cost-effectiveness; comparisons to 
alternative technologies and practices; and requirements of the Food 
and Drug Administration.
    Subsection (c). Specific Assessments. Requires the Director 
to conduct and support specific assessments of healthcare 
technologies and practices and allows the Director to conduct 
or support assessments on a reimbursable bases for other 
federal agencies. In addition, the Director may make grants to, 
or enter into cooperative agreements or contracts for the 
purpose of conducting assessments of experimental, emerging, 
existing, or potentially outmoded healthcare technologies, and 
for related activities with entities determined to be 
appropriate by the Director. Such entities can include academic 
medical centers, research institutions, professional 
organizations, third party payers, other governmental agencies, 
and consortia of appropriate research entities established for 
the purpose of conducting technology assessments.

  Section 917. Coordination of Federal Government Quality Improvement 
                                Efforts

    Subsection (a). This section requires the Secretary, acting 
through the Director, to coordinate all federal research, 
evaluations, and demonstrations related to health services 
research and quality measurement and improvement activities. 
The Director, in collaboration with the appropriate federal 
officials, is required to develop and manage a process to 
improve interagency coordination, priority setting, and the use 
and sharing of research findings; strengthen the research 
information infrastructure, including databases, set specific 
goals; and strengthen the management of Federal healthcare 
quality improvement programs.
    Subsection (b)(1). Study by the Institute of Medicine. This 
section directs the Secretary to enter into a contract with the 
Institute of Medicine to describe and evaluate current quality 
improvement, quality research and quality monitoring processes 
to identify options and make recommendations to improve the 
efficiency and effectiveness of such quality improvement 
programs.
    (2) Requirements. This section describes the requirements 
of the contract to include the preparation of (i) not later 
than 12 months after the date of enactment of this title, a 
report providing an overview of the quality improvement 
programs of the Department of Health and Human Services for the 
Medicare, Medicaid, and CHIP programs under Titles XVIII, XIX, 
and XXI of the Social Security Act; and (ii) not later than 24 
months after the date of enactment of this title, of a final 
report containing recommendations for a comprehensive system 
and public-private partnerships for healthcare quality 
improvement. The Secretary is required to submit the reports to 
the Committee on Finance and the Committee on Health, 
Education, Labor, and Pensions of the Senate and the Committee 
on Ways and Means and the Committee on Commerce of the House of 
Representatives.

                       Part C--General Provisions


     Section 921. Advisory Council for Healthcare Quality Research.

    This section establishes the Advisory Council for 
Healthcare Quality Research. The Advisory Council is required 
to advise the Secretary and the Director with respect to 
activities to carry out the purpose of the Agency under Section 
901(b) and to make recommendations to the Director regarding:
          (A) healthcare research priorities, especially 
        studies related to quality, outcomes, cost and the 
        utilization of, and access to, healthcare services;
          (B) the field of healthcare research and related 
        disciplines, especially issues related to training 
        needs, and dissemination of information on quality; and
          (C) the appropriate role of the Agency in each of 
        these areas in light of private sector activity and 
        identification of opportunities for public-private 
        sector partnerships.
    Membership is to be comprised of appointed members, who are 
voting members, and ex-officio members. The Secretary will 
appoint 21 members and ensure that they represent professions 
and entities concerned with, or affected by, activities under 
this title and under Section 1142 of the Social Security Act. 
The appointed members must include 4 distinguished researchers, 
four individuals distinguished in the practice of medicine of 
which at least one is a primary care practitioner; three 
individuals distinguished in other health professions; four 
individuals either representing the private healthcare sector, 
including health plans, providers, and purchasers or 
individuals distinguished as health care administrators; four 
individuals distinguished in the fields of healthcare quality, 
economics, information systems, law, ethics, business, or 
public policy; and two individuals representing the interests 
of patients and consumers. At least 17 members are required to 
be representatives of the public who are not officers or 
employees of the United States.
    The Secretary is required to designate as ex officio 
members of the Advisory Council the Assistant Secretary for 
Health, the Director of the National Institutes of Health, the 
Director of the Centers for Disease Control and Prevention, the 
Administrator of the Health Care Financing Administration, the 
Assistant Secretary of Defense (Health Affairs), and the Under 
Secretary for Health of the Department of Veterans Affairs; and 
such other Federal officials as the Secretary considers 
appropriate.
    Members of the Advisory Council appointed are required to 
serve for a term of 3 years and may continue to serve after the 
expiration of the term until a successor is appointed. If a 
member of the Advisory Council does not serve the full term, 
the individual appointed to fill the resulting vacancy shall be 
appointed for the remainder of the predecessor's term. The 
Director is required to designate an individual, from among the 
membership, to serve as the chair of the Advisory Council. The 
Advisory Council will meet not less than once during each 
discrete 4-month period and shall otherwise meet at the call of 
the Director or the chair.
    Members of the Advisory Council shall receive compensation 
for each day (including travel time) engaged in carrying out 
the duties of the Advisory Council unless declined by the 
member. Such compensation may not be in an amount in excess of 
the ExecutiveLevel IV of the General Schedule. Ex officio 
members may not receive compensation for service on the Advisory 
Council in addition to the compensation otherwise received for duties 
carried out as officers of the United States.
    The Director is required to provide to the Advisory Council 
such staff, information, and other assistance as may be 
necessary to carry out the duties of the Council.

     Section 922. Peer review with respect to grants and contracts

    Subsection (a). Requires that appropriate technical and 
scientific peer review be conducted with respect to each 
application for a grant, cooperative agreement, or contract 
under this title. Each peer review group to which an 
application is submitted shall report its finding and 
recommendations respecting the application to the Director in 
such form and in such manner as the Director shall require.
    Subsection (b). Approval as Precondition of Awards. The 
Director may not approve an application described above unless 
the application is recommended for approval by a peer review 
group established under subsection (c).
    Subsection (c). Establishment of Peer Review Groups. The 
Director is required to establish technical and scientific peer 
review groups to carry out this section. Such groups shall be 
established without regard to the provisions of Title 5, United 
States Code, that govern appointments in the competitive 
service, and without regard to the provisions of chapter 51, 
and subchapter III of chapter 53, of such title that relate to 
classification and pay rates under the General Schedule.
    Peer review group members are to be eminently qualified 
individuals. Not more than 25% of such groups' membership are 
to be officers and employees of the United States and such 
officers and employees may not receive additional compensation 
for service. Such groups shall continue in existence until 
otherwise provided by law.
    Peer review group members shall agree in writing to (A) 
treat information received, records, reports, and 
recommendations as confidential information and (B) recuse 
themselves from participation in the peer-review of specific 
applications which present a potential personal conflict of 
interest or appearance of such conflict.
    In the case of applications for financial assistance whose 
direct costs will not exceed $100,000, the Director can make 
adjustments in the peer review procedures to encourage the 
entry of individuals into the field of research and to 
encourage clinical practice-oriented research, and for such 
other purposes as the Director may determine to be appropriate.
    The Secretary shall issue regulations for the conduct of 
peer review under this section.

     Section 923. Certain Provisions with Respect to Development, 
                 Collection, and Dissemination of Data

    Subsection (a). Standards With Respect to Utility of Data. 
Requires the Director to establish standard methods to assure 
the utility, accuracy, and sufficiency of data collected by or 
for the Agency. Requires the Director to take into account 
other Federal data collection requirements and differences 
among health care plans, delivery systems, providers, and 
provider arrangements. If the methods affect the administration 
of other programs, including the programs under titles XVIII, 
XIX or XXI of the Social Security Act, they shall be in the 
form of recommendations to the Secretary.
    Subsection (b). Statistics. Requires the Director to take 
appropriate action to assure that statistics developed under 
this title are of high quality, timely, and comprehensive, as 
well as specific, standardized, and adequately analyzed and 
indexed; and make such information available on as wide a basis 
as is practicable.
    Subsection (c). Authority Regarding Certain Requests. Upon 
request of a public or private entity, the Director may 
undertake research or analyses otherwise authorized under this 
title, the cost of which would be paid by the entity and such 
funds would remain available to the Agency until expended.

               Section 924. Dissemination of Information

    Subsection (a). The Director is required to (a) promptly 
publish, or make broadly available, in an understandable form, 
the results of research, demonstration projects, and 
evaluations; (b) ensure that information disseminated by the 
agency is science-based, objective, and useful; (c) promptly 
make data available to the public; (d) provide, in 
collaboration with the National Library of Medicine where 
appropriate, indexing, abstracting, translating, publishing, 
and other services leading to a more effective dissemination of 
research information, and undertake programs to develop new or 
improved methods for making such information available; and (e) 
as appropriate, provide technical assistance to State and local 
government and health agencies and conduct liaison activities 
to such agencies to foster dissemination.
    Subsection (b). The Director may not restrict the 
publication or dissemination of data or results from projects 
conducted or supported under this title except for those 
limitations described below.
    Subsection (c). Information that allows one to identify a 
person or establishment supplying the information or allows one 
to identify a person or establishment described if it cannot be 
used for any purpose other than the purpose for which it was 
supplied unless such establishment or person has consented to 
its use for such other purpose and it may not be published or 
released in any form unless any person identified therein or 
the person who supplied the data has consented to its 
publication or release.
    Subsection (d). Establishes a civil monetary penalty of not 
more than $10,000 for violation of the above rule.

Section 925. Additional Provisions with Respect to Grants and Contracts

    Subsection (a). Financial Conflicts of Interest. The 
Director is required to define by regulation the circumstances 
under which financial interests in projects may be reasonably 
expected to create a bias in favor of obtaining results that 
are consistent with such interests and the actions the Director 
will take in response to such interests.
    Subsection (b). Requirement of Application. Applications 
for grants, cooperative agreements, or contracts, may not be 
approved unless the application is submitted to the Secretary 
in the required form and contains such agreements, assurances, 
andinformation as determined by the Director to be necessary to 
carry out the program involved.
    Subsection (c). Provision of Supplies and Services in Lieu 
of Funds.
    (1) In general. Upon request of an entity receiving a 
grant, cooperative agreement, or contract, the Secretary may, 
subject to paragraph (2), provide supplies, equipment, and 
services for the purpose of aiding an entity in carrying out 
the project involved and, for such purpose, may detail to the 
entity any officer or employee of the Department of Health and 
Human Services.
    (2) Corresponding reduction in funds. With respect to a 
request described for services supplies or equipment, the 
Secretary is required to reduce the amount of the financial 
assistance involved by an amount equal to the costs of 
detailing personnel and the fair market value of any supplies, 
equipment, or services provided by the Director. The Secretary 
shall, for the payment of expenses incurred in complying with 
such request, expend the amounts withheld.
    Subsection (e). Applicability of Certain Provisions With 
Respect to Contracts. Contracts may be entered into under this 
part without regard to sections 3648 and 3709 of the Revised 
Statutes (31 U.S.C. 529; 41 U.S.C. 5).

            Section 926. Certain Administrative Authorities

    Subsection (a). Deputy Director and Other Officers and 
Employees.
    (1) Deputy director. The Director may appoint a deputy 
director for the Agency.
    (2) Other officers and employees. The Director may appoint 
and fix the compensation of such officers and employees as may 
be necessary to carry out this title. Except as otherwise 
provided by law, such officers and employees shall be appointed 
in accordance with the civil service and compensation laws.
    Subsection (b). Facilities. Authorizes the Secretary to 
lease or otherwise acquire through the Director of General 
Services, buildings or portions of buildings in the District of 
Columbia or communities located adjacent to the District of 
Columbia for use for a period not to exceed 10 years; and 
acquire, construct, improve, repair, operate, and maintain 
laboratory, research, and other necessary facilities and 
equipment, and such other real or personal property (including 
patents) as the Secretary deems necessary.
    Subsection (c). Provision of Financial Assistance. 
Authorizes the Director to make grants to public and nonprofit 
entities and individuals, and enter into cooperative agreements 
or contracts with public and private entities and individuals.
    Subsection (d). Utilization of Certain Personnel and 
Resources. Authorizes the Director to utilize personnel and 
equipment, facilities, and other physical resources of the 
Department of Health and Human Services, permit appropriate (as 
determined by the Secretary) entities and individuals to 
utilize the physical resources of such Department, and provide 
technical assistance and advice. In addition, the Director, may 
use, with their consent, the services, equipment, personnel, 
information, and facilities of other federal, state, or local 
public agencies, or of any foreign government, with or without 
reimbursement of such agencies.
    Subsection (e). Consultants. Authorizes the Secretary to 
engage consultants from time to time and for such periods as 
the Director deems advisable in accordance with provisions of 
section 3109 of Government Organization and Employees on the 
assistance and advice of consultants from the United States or 
abroad.
    Subsection (f). Experts. (1). Authorizes the Secretary to 
obtain the services of not more than 50 experts or consultants 
who have appropriate scientific or professional qualifications.
    (2) Travel expenses. Experts and consultants whose services 
are obtained under paragraph (1) shall be paid or reimbursed 
for their expenses associated with traveling to and from their 
assignment location in accordance with sections of Government 
Organization and Employees (Title 5, United States Code) on 
travel, transportation and subsistence expenses for government 
employees. Expenses may not be allowed in connection with an 
expert or consultant unless the expert agrees in writing to 
complete the entire period of assignment, or 1 year, whichever 
is shorter, unless separated or reassigned for reasons that are 
beyond the control of the expert or consultant and that are 
acceptable to the Secretary. If the expert or consultant 
violates the agreement, the money spent by the United States 
for the expenses specified in subparagraph (A) is recoverable 
from the expert or consultant as a debt of the United States. 
The Secretary may waive in whole or in part a right of recovery 
under this subparagraph.
    Subsection (g). Voluntary and Uncompensated Services. 
Allows the Director to accept voluntary and uncompensated 
services.

                          Section 937. Funding

    Subsection (a). This section states that the intent of the 
writers Committee is to ensure that the United States' 
investment in biomedical research is rapidly translated into 
improvements in the quality of patient care, with a 
corresponding investment in research on the most effective 
clinical and organizational strategies for use of these 
findings in daily practice is necessary, and notes that funds 
provided allow for a proportionate increase in healthcare 
research as the United State's States' investment in biomedical 
research increases.
    Subsection (b). Authorization of Appropriations. For the 
purpose of carrying out this title, there are authorized to be 
appropriated $250,000,000 for fiscal year 2000, and such sums 
as may be necessary for each of the fiscal years 2001 through 
2006.
    Subsection (c). Evaluations. In addition to appropriated 
amounts available above, there shall be made available for each 
fiscal year an amount equal to 40% of the maximum amount 
authorized in Section 241 (relating to evaluations).

                        Section 928. Definitions

    Defines advisory council, agency and director.

                        Section 303. References

    Effective upon the date of enactment of this Act, any 
reference in law to the ``Agency for Health Care Policy and 
Research'' shall be deemed to be a reference to the ``Agency 
for Healthcare Research and Quality''.

                   TITLE VI--MISCELLANEOUS PROVISIONS


                  Section 401. Sense of the Committee

    This section expresses the sense of the Committee that 
Congress should take measures to further the purposes of this 
Act, including making any necessary changes to the Internal 
Revenue Code of 1986 or other Acts to (1) promote equity and 
prohibit discrimination based on genetic information with 
respect to the availability of health benefits; (2) provide for 
the full deduction of health insurance costs for self-employed 
individuals; (3) provide for the full availability of medical 
savings accounts; (4) provide for the carryover of unused 
benefits from cafeteria plans, flexible spending arrangements 
and health flexible spending accounts; and (5) permit 
contributions towards medical savings account through the 
federal employees health benefits program.

                    XI. ADDITIONAL VIEWS OF MAJORITY

    The Patients' Bill of Rights Act (S. 326) passed by the 
Committee on Health, Education, Labor, and Pensions is a strong 
and responsible patient protection bill that improves the 
quality of care and ensures that patients get the medical care 
they need. We stand by this bill and our interpretation of its 
provisions.
    Although S. 326 was ultimately passed along party lines, 
the Committee has a long standing tradition of reporting out 
bills with honesty, integrity, and in a manner that adds value 
to the policy debate. Additional and minority views are common 
practice and afford committee members with the opportunity to 
add additional and opposing policy perspectives. The minority 
is entitled to their views and we respect that their views are 
different from the majority's on certain issues in the 
Patients' Bill of Rights debate.
    Unfortunately, the minority has chosen to submit 
inflammatory views that go well beyond expressing an opposing 
policy position. These views not only attack the integrity of 
the majority, but they also misrepresent a number of critical 
facts. We feel compelled to comment on these errors because, if 
they should become part of the legislative history, they could 
have detrimental implications for consumers and patients, the 
very people we are trying to protect with this legislation. 
Although their views contain many inaccuracies, we only focus 
on a few key errors and examples where the minority directly 
contradicts the committee interpretation.
    First, the minority views incorrectly state that under S. 
326 denials for emergency room care are ineligible for external 
review, and that the only recourse a patient has is to go to 
court. S. 326 makes independent, external review available for 
any denial or dispute based on medical necessity, regardless of 
whether the denial is for emergency or non-emergency care (Sec. 
503(e)(1)(A)(i)(I)(aa)). Moreover, the bill also provides 
expedited procedures, including expedited appeal procedures, 
for emergency situations.
    Second, the minority views state that under S. 326, the 
external reviewer cannot overrule a plan decision unless the 
plan actions have been ``arbitrary and capricious.'' The 
minority views also provide an example about cosmetic surgery 
that directly contradicts an example in the committee report 
(Section IV; Sec. 121; Independent, external review). The 
minority interpretation is wrong--S. 326 has a standard of 
review that requires independent medical judgment. An 
independent reviewer must make an independent determination 
based on the valid, relevant, scientific, and clinical 
evidence. (Sec. 503(e)(4)(A)(i)). Although plan information, 
such as evidence-based decisionmaking and clinical practice 
guidelines, are some of the factors that a reviewer must 
consider, there are many additional factors that a reviewer is 
required to consider under S. 326. For example, a reviewer is 
also required to consider the treating physician's 
recommendation, peer review literature, and the patient's 
medical record. The reviewer makes an independent determination 
and is not bound by any particular element.
    Perhaps the most egregious misrepresentation of facts in 
the minority views is their reference to a CBO score of 4.8 
percent. In fact, CBO has scored the star print of S. 6, the 
bill that was introduced in the Senate and offered as a 
complete substitute to S. 326 during markup, as increasing 
premiums by an average of 6.1 percent (see attached letter from 
CBO). The committee is aware that the Democrats are proposing 
to amend S. 6 in order to receive a score of 4.8 percent from 
CBO. Such a substantial premium increase, whether it be 6.1 
percent, as introduced and offered during markup, or 4.8 
percent, if amended in some future debate, will have serious 
consequences for consumers, particularly when added to already 
increasing health care premiums.
    As mentioned in the report, the primary goals of S. 326, 
The Patients' Bill of Rights Act, are to improve health care 
quality through better information; improve procedures and 
rights to help consumers and patients access benefits and 
services; reduce barriers to coverage based on genetic 
information; and support federal investments in health quality 
research. An equally important goal is to provide these new 
protections without significantly increasing the cost of health 
coverage and causing more Americans to become uninsured.
    Whether S. 6 increases premiums by 6.1 percent or 4.8 
percent, based on a GAO report it will result in approximately 
1.8 to 1.5 million Americans losing their health insurance 
coverage. Enacting legislation that will significantly increase 
the number of the uninsured is an unacceptable outcome for the 
majority and one that we will consistently oppose.

                                   Jim Jeffords.
                                   Judd Gregg.
                                   Bill Frist.
                                   Susan Collins.
                                   Mike DeWine.
                                   Michael B. Enzi.
                                   Tim Hutchinson.
                                   Chuck Hagel.
                                   Jeff Sessions.
                                   Sam Brownback.

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 15, 1999.
Hon. Don Nickles,
Assistant Majority Leader, U.S. Senate,
Washington, DC.
    Dear Senator: You have asked CBO to clarify its estimate of 
the effect of the introduced version (star print) of S. 6 on 
health insurance premiums. As stated in our cost estimate of 
April 23, CBO estimates that the version of S. 6 introduced on 
January 19 would increase premiums for empoyer-sponsored health 
plans by an average of 6.1 percent.
            Sincerely,
                                          Dan L. Crippen, Director.

                    ADDITIONAL VIEWS OF SENATOR ENZI

    During the Health, Education, Labor and Pensions Committee 
consideration of S. 326, I asserted strong positions on several 
key components of the managed care reform debate. These 
additional views are intended to reiterate my support for S. 
326, provide the Committee with a cohesive explanation of my 
position on specific policy, and express my appreciation to the 
Committee for reporting to the full Senate a good bill for 
health care consumers.
    S. 326 offers a series of patient protections to consumers 
in Employee Retirement Income Security Act (ERISA) regulated 
health plans. Direct access to OB/GYN and pediatric providers, 
a ban on gag clauses, a prudent layperson standard for 
emergency services, a point-of-service option, continuity of 
care and access to specialists will provide consumers in self-
funded plans the same protections being offered to state-
regulated plan participants. Additionally, all ERISA regulated 
plans will be required to disclose extensive comparative 
information about coverage, networks and cost-sharing. This 
requirement is complemented by the establishment of a new 
binding, independent external appeals process, the lynch pin of 
any successful consumer protection effort.
    I believe the two most contentious elements of the managed 
care reform debate are addressed favorably for consumers in S. 
326. The first is holding health plans accountable for medical 
versus coverage decisions; the second is ensuring that health 
plans cannot manipulate the definition of ``medical necessity'' 
to deny patient care.
    S. 326 does not expand the liability of ERISA plans by 
exposure to state tort laws, which has been proposed as a way 
to hold health plans accountable for medical decisions. Rather, 
S. 326 gets patients the medical treatment they need right away 
through a timely appeals process. It doesn't require them to 
earn it through a lawsuit. I do understand the frustration 
expressed by physicians who are held liable for their medical 
decisions. It is for that very reason that the bill I support 
securely places the responsibility for medical decisions in the 
hands of independent medical experts. These decisions are 
binding on health plans, who run the risk of losing their 
accreditation, daily fines and, ultimately, their stake in the 
market.
    Likewise, the external appeals process in S. 326 prohibits 
plans from hiding behind an arbitrary definition of medical 
necessity to deny care. S. 326 expressly establishes a standard 
of review, including: the medical necessity and 
appropriateness, experimental or investigational nature of the 
coverage denial; and, any evidence-based decision making or 
clinical practice guidelines, including, but not limited to, 
those used by the health plan (Subtitle C.Sec.503(e)(4)). In 
other words, the independent external reviewer--required by the 
bill to have appropriate medical expertise--will have access to 
the patient's medical record, evidence offered by the treating 
physician and all other documents introduced during the 
internal review process. Additionally, the reviewer will 
consider expert consensus and peer-reviewed literature, thus 
incorporating standards of ``medical necessity'' clearly 
outside those prescribed by the plan. The bill also requires 
that, during the internal appeals process, the medical 
necessity determination is made by an independent physician 
with the appropriate medical expertise--not by the plan.
    Since its inception in 1974, this is the first major reform 
effort of ERISA as it pertains to the regulation of group 
health plans. The focus of the mission--regardless of 
politics--should be to protect patients. Protecting patients 
means not only improving the quality of care but expanding 
access to care and allowing consumers and purchasers the 
flexibility to acquire the care that best fits their needs. The 
contention has been how to do this in the context of our health 
delivery system. I believe S. 326 is a responsible approach to 
protecting consumers in the managed care market.
    While bipartisanship was in short order during Committee 
consideration of S. 326, it is my hope that we can continue 
discussions among all members to advance needed patient 
protections without jeopardizing access to health care. I look 
forward to my continued role in the process.
                                                   Michael B. Enzi.

                           X. MINORITY VIEWS

    More than 75 percent of privately insured Americans are 
enrolled in managed care health plans. Managed care at its best 
offers the opportunity to improve care and keep patients 
healthy while controlling spending. However, too often managed 
care has been mismanaged care. Too many HMOs put profits before 
patients. Congress has delayed far too long in correcting the 
abuses of managed care, and this legislation further delays the 
prospect of essential reform.
    For 2 years, this committee has contemplated whether it 
should approve legislation to establish needed patient 
protections. Unfortunately, the measure reported out of this 
committee fails to meet the test of real reform. Most of its 
meager protections are extended to only those patients who work 
for large private companies that do not actually purchase 
private insurance. it leaves out more than 100 million 
Americans, approximately two-thirds of those with private 
health insurance. It falls short of the recommendations of 
President Clinton's nonpartisan blue ribbon advisory 
commission. It does not reflect the comparable model laws 
created by the National Association of Insurance Commissioners 
and enacted by many States. It does not even require HMOs to 
follow the Code of Conduct designed and advocated by their own 
trade association.
    The result, if this inadequate bill is enacted, is that 
most Americans will continue to wait for the protections they 
deserve. Each day that Congress delays meaningful reform, 
health plan abuses cause unnecessary suffering, financial loss, 
and major frustration for millions of families.
    The legislation approved by the committee fails to grant 
key protections for children, women, persons with disabilities, 
and those with chronic conditions or special health care needs. 
Above all, it fails to ensure that medical decisions are made 
by physicians and patients, rather than insurance company 
executives. It sum, its flaws are deep and its gaps are 
numerous.
    Republicans attempt to justify their decisions to limit 
protections to the minority of Americans who work for employers 
that self-fund their plans by saying that state laws should 
cover the rest. They say they want to ``protect the 
unprotected.'' But they are more interested in protecting 
insurance companies, and the authority and bureaucracy of state 
regulatory agencies than protecting patients. It is a travesty 
that the majority of the provisions of the committee bill cover 
only 48 million of the 161 million Americans covered by private 
insurance plans. There is no justification for denying these 
protections to the other 113 million Americans in private 
plans.
    The committee claims that our approach embodies a ``one 
size fits all'' philosophy and would shift insurance 
administration from state capitals to Washington. Nothing could 
be farther from the truth. Our proposal follows a time-tested 
principle that does not violate the historical division of 
Federal-State responsibility. The Federal Government would 
establish a national floor of protection, with States free to 
go farther, if they choose. The program would be implemented 
and administered by State. The Federal Government would step in 
only if a state fails to act.
    This approach received strong bipartisan support in the 
past, when Congress enacted legislation establishing 
continuation coverage under COBRA in 1986, health insurance 
portability and accountability under the Kassebaum-Kennedy Act 
in 1996, mental health parity, minimum protections for mothers 
and newborns, and, last year, reconstructive surgery coverage 
following a mastectomy. And, of course, the approach of 
establishing a Federal floor of protection with States free to 
go farther if they choose is common in areas as diverse as 
civil rights, the minimum wage, and occupational safety 
requirements. The committee majority even uses this model for 
their genetic discrimination provisions. Yet they continue to 
insist that all constituents are not created equal when it 
comes to patient protections.
    The following table shows the number of people left behind 
under the Republican proposal.

             TABLE 1.--THE REPUBLICAN BILL LEAVES TWO-THIRDS OF AMERICANS OUT--STATE-BY-STATE IMPACT
----------------------------------------------------------------------------------------------------------------
                                                                                   Number of
                                                                  Number of       persons not      % of persons
                            State                                 privately      covered under     not covered
                                                               insured persons   the Republican     under the
                                                                                      bill       Republican bill
----------------------------------------------------------------------------------------------------------------
Alabama......................................................        2,700,000        1,745,000               65
Alaska.......................................................          400,000          313,000               78
Arizona......................................................        2,400,000        1,705,000               71
Arkansas.....................................................        1,400,000          934,000               67
California...................................................       18,400,000       13,162,000               72
Colorado.....................................................        2,600,000        1,873,000               72
Connecticut..................................................        2,200,000        1,430,000               65
Delaware.....................................................          500,000          325,000               65
Florida......................................................        7,700,000        5,194,000               67
Georiga......................................................        4,500,000        2,899,000               64
Hawaii.......................................................          700,000          497,000               71
Idaho........................................................          800,000          597,000               75
Illinois.....................................................        8,100,000        5,282,000               65
Indiana......................................................        4,100,000        2,596,000               63
Iowa.........................................................        2,100,000        1,461,000               70
Kansas.......................................................        1,700,000        1,137,000               67
Kentucky.....................................................        2,300,000        1,493,000               65
Louisiana....................................................        2,300,000        1,507,000               66
Maine........................................................          800,000          524,000               66
Maryland.....................................................        3,500,000        2,453,000               70
Massachusetts................................................        4,100,000        2,561,000               62
Michigan.....................................................        6,700,000        4,287,000               64
Minnesota....................................................        3,300,000        2,220,000               67
Mississippi..................................................        1,700,000        1,174,000               69
Missouri.....................................................        3,400,000        2,329,000               69
Montana......................................................          500,000          365,000               73
Nebraska.....................................................        1,100,000          762,000               69
Nevada.......................................................        1,100,000          758,000               69
New Hampshire................................................          800,000          529,000               66
New Jersey...................................................        5,500,000        3,815,000               69
New Mexico...................................................          900,000          682,000               76
New York.....................................................       10,600,000        7,243,000               68
North Carolina...............................................        4,600,000        2,985,000               65
North Dakota.................................................          400,000          274,000               69
Ohio.........................................................        7,500,000        5,813,000               78
Oklahoma.....................................................        1,900,000        1,323,000               70
Oregon.......................................................        2,100,000        1,492,000               71
Pennsylvania.................................................        8,100,000        5,391,000               67
Rhode Island.................................................          600,000          399,000               67
South Carolina...............................................        2,400,000        1,611,000               67
South Dakota.................................................          500,000          360,000               72
Tennessee....................................................        3,200,000        2,121,000               66
Texas........................................................       11,000,000        7,250,000               66
Utah.........................................................        1,500,000         1,119,00               75
Vermont......................................................          400,000          273,000               68
Virginia.....................................................        4,100,000        2,670,000               65
Washington...................................................        3,900,000        2,879,000               74
West Virginia................................................        1,000,000          686,000               69
Wisconsin....................................................        3,800,000        2,490,000               66
Wyoming......................................................          300,000          225,000               75
----------------------------------------------------------------------------------------------------------------
Source: Estimates based on data provided by the United States Department of Labor.

    Republicans justify this extraordinary omission by saying 
that State laws should cover these persons. But, while some 
states have acted, significant gaps remain. Thirty States have 
no continuity of care protections; 30 States do not require 
that consumers be offered a point-of-service option; 13 States 
do not use a prudent layperson or similar standard for coverage 
of emergency services; and 12 States do not provide direct 
access to ob-gyn care. These are the same rights that the 
majority grants to people in self-funded plans--yet millions 
will be left out because of an ideological decision to protect 
states instead of patients.
    Doesn't hard-working policeman who puts his life on the 
line every day deserve protections equal to that of his 
neighbor, who works for a large corporation? Democrats say yes, 
but Republicans say no. Doesn't a young mother who works at a 
small business for the minimum wage deserve the same assurances 
as the salesman for a large corporation? Democrats say yes. 
Republicans say no. Doesn't a worker at a large firm who joins 
an HMO deserve the same protection as the co-worker at the next 
desk who happens to be in the company's self-funded plan? 
Doesn't the struggling small businessman who buys a policy to 
protect his family and his two employees deserve strong 
protections? Senators are elected to represent all of the 
people in our states. It is abundantly clear that individuals 
and families across the country strongly support key patient 
protections. They want to know that their health insurance will 
be there when they need it.
    During the course of the committee's actions, we had hoped 
to be able to agree on bipartisan legislation that would have 
assured all patients in the private market the protections they 
need and deserve.
    First, we offered our alternative legislation as a 
substitute. The Democratic Patients' Bill of Rights (S. 6) is 
the original patient protection legislation. It is a 
responsible and effective answer to the widespread problems 
that patients and their families face every day. It is 
supported by a coalition of 200 organizations that represent 
doctors, nurses, patients, small businesses, religious 
organizations and advocates for children, women, and working 
families. The coalitionincludes the American Medical 
Association, the Consortium of Citizens with Disabilities, Families 
USA, the American Cancer Society, the American Heart Association, the 
National Alliance for the Mentally III, the National Partnership for 
Women and Families, the American Nurses Association, the National 
Association of Children's Hospitals, and the AFL-CIO.
    It is rare for such a broad and diverse group to come 
together in support of legislation. But they have done so to 
end the flagrant abuses that hurt so many families. In 
contrast, the committee legislation is not supported by a 
single organization that speaks for patients or the people who 
care for them.
    The committee repeatedly rejected our attempts to improve 
the legislation. More than 20 strengthening amendments were 
voted down on party lines. We offered numerous amendments to 
simply guarantee that S. 326 follows through on its claims, 
including those that would:
          --extend protections to all 161 million Americans 
        with private insurance;
          --correct the flaws in the independent appeal system 
        by expanding the scope of decisions eligible for 
        external review and by assuring that the review is 
        fair, binding on the plan, truly independent, and 
        resolved in a timely fashion;
          --assure that patients with on-going health needs can 
        keep their doctor during a transition period if their 
        doctor is dropped from the plan's network or their 
        employer changes plans;
          --protect patients who go to the emergency room with 
        the symptoms of heart attack, stroke, or other serious 
        condition from facing thousands of dollars in medical 
        bills for medical care given by an emergency room 
        doctor but turned down by their health plan; and
          --assure a meaningful opportunity for all patients, 
        including those who operate or work for small 
        businesses, to choose a real point-of-service option.
    The majority rejected every Democratic attempt to clarify 
or improve the provisions in the committee bill. Democrats also 
tried to address the gaps in the bill by offering amendments to 
add provisions from the original Democratic Patients' Bill of 
Rights (S. 6), including those that would:
          --guarantee access to needed specialty care for those 
        with serious illnesses and disabling conditions, 
        including access to pediatric specialists and doctors 
        outside the plan if the plan does not have the 
        appropriate specialist in its network;
          --allow patients with cancer, Parkinson's disease, 
        epilepsy, Alzheimer's disease, and other serious 
        illnesses to participate in clinical trials if 
        conventional therapy offers no hope;
          --restore the right of all patients in HMOs to hold 
        their plans accountable in state courts for abuses that 
        result in injury or death;
          --prevent HMOs from arbitrarily interfering with a 
        doctor's decision to treat patients in the hospital 
        rather than in an outpatient clinic, or to recommend 
        additional days in the hospital following surgery;
          --assure that women with breast cancer are not forced 
        to undergo drive-through mastectomies;
          --protect health providers from retaliation for 
        supporting their patients in the appeal process, or 
        reporting quality of care concerns to a supervisor, a 
        private accreditation organization or a regulatory 
        authority;
          --establish an independent state-level consumer 
        assistance program to help patients understand and 
        exercise their rights and responsibilities under their 
        health insurance plans;
          --prohibit insurance companies from denying coverage 
        by falsely declaring that FDA-approved products are 
        ``experimental;'' and
          --ensure that managed care plans have an adequate 
        number, distribution and variety of health providers to 
        care for their patients.
    The basic proposals are strongly supported by the American 
people. Virtually all are provided to millions of elderly and 
disabled citizens by Medicare. Many have been recommended by 
the insurance industry itself. Yet, the committee majority 
refused to accept or support any of these proposals.
    The right to appeal decisions by a plan to deny care or 
coverage to an independent entity is the cornerstone of any 
patient protection proposal. Today, if a health plan breaks its 
promise, there is no recourse that can provide relief in time 
to save a life or prevent a disability. Instead, when the 
issues are sickness or health, and are often as serious as life 
or death, health insurance companies are allowed to be both 
judge and jury. A strong independent review mechanism is needed 
to assure that patients receive the care recommended by their 
doctors and covered by their premiums, without having to resort 
to litigation.
    Independent review was recommended unanimously by the 
President's Commission. It has worked successfully in Medicare 
for more than thirty years. Families deserve the basic fairness 
that only impartial appeals can provide. Without such a remedy, 
any ``rights'' of patients exist on paper only--and they are 
often worth no more than the paper on which they are printed 
when a health plan ignores its responsibilities.
    Both the Democratic and the committee proposals provide for 
an appeal to a third party for resolution of disputes. The 
appeal right is one area in which the Republican bill extends 
protection beyond employer self-funded plans. Even here, 
however, millions of Americans are left out under the 
Republican bill. This provision only applies to people in 
private employment-based health plans. Employees of state and 
local governments--such as teachers, policemen, firemen, nurses 
in public hospitals--are left out. So are self-employed small 
businessmen--such as farmers, home day care providers, 
entrepreneurs and others--who purchase their insurance as individuals, 
rather than as part of an employment group. A total of almost 40 
million Americans would be denied independent appeal rights under the 
Republican bill.
    Even for those fortunate enough to be included in the 
provision, the protection is more illusory than real--because 
the process in the Republican bill is full of loopholes. It 
stacks the deck against patients and in favor of health plans.
    Without a realistic right of external appeal, a patient's 
only option in the case of an unfair plan decision is to go to 
court--a slow, expensive, and often unsatisfactory procedure.
    We all recognize that a good, independent external review 
is critical to fully protect patients. Unfortunately, the 
committee legislation has five fundamental flaws in its review 
section.
    First, it does not provide ``de novo'' review. The 
independent reviewer is not entitled to take a fresh look at 
all the evidence in the case and make a fair decision. Under 
current ERISA law, which is not changed by the Republican 
proposal, the reviewer can only overrule the plan if its 
actions have been ``arbitrary and caprcious''--a very high 
standard for a patient to meet. To be fair to patients, the 
independent review should take a fresh look at the case and 
decide based on the best medical evidence and unique position 
of the patient, not just whether the plan's actions are or are 
not arbitrary and capricious.
    Second, the Republican plan nullified the promise of fair 
dispute resolution by limiting the decisions eligible for 
external review to issues where the plan says the basis of its 
denial is whether care is medically necessary or experimental. 
This limitation would prevent reviewers from overruling plan 
decisions that are based on contract provisions. For example, 
if a plan falsely claimed that reconstructive surgery for a 
deformed child was ``cosmetic,'' and thus not covered by the 
contract, there would be no appeal. If a plan falsely claimed 
that a life-saving piece of medical equipment recommended by 
physician was not durable medical equipment as defined in the 
contract and therefore not covered, there would be no appeal. 
It is especially ironic that third-party review is not 
available for the rights supposedly granted under the committee 
bill. For example, if patients go to the emergency room with 
symptoms that they believe are caused by a heart attack, the 
committee proposal says that if the patients acted as a prudent 
layperson would act, the plan is supposed to pay the bill. This 
is the right thing to do. No one's life should be put at risk 
because they are afraid to go to the nearest emergency room. 
But, if the plan says, ``Your chest didn't hurt enough. You 
don't qualify under the prudent layperson standard,'' there is 
no recourse under this proposal, except going to court. Your 
case would not be eligible for third-party review.
    To add insult to injury, the plan determines whether or not 
a denial is based on medical necessity. As a result, the plan 
ultimately decides whether a case even qualifies for third-
party review. Clearly, the plan has a conflict of interest in 
making such decisions.
    Third, the review under the Republican proposal is far from 
independent. That plan chooses the review organization, which 
then selects the reviewer who will decide the case. This also 
creates an obvious conflict of interest. No other dispute 
resolution system allows one of the parties to the dispute to 
make a unilateral choice of the decision-maker because such a 
selection procedure is inherently unfair. It doesn't happen 
under Medicare. Fifteen out of 18 states that have established 
independent review programs do not allow it. The standards for 
arbitration of the American Arbitration Association, the 
American Bar Association, and the Federal Arbitration Act all 
reject this inherently unfair approach. But health plans want 
to stack the deck--and so this unfair approach was included in 
the committee bill.
    Fourth, the Republican plan allows HMOs and insurance 
companies to go to court to avoid or delay an otherwise binding 
decision by challenging whether the external review entity 
correctly followed the guidelines.
    Finally, and perhaps most critical, the committee bill has 
no definition of medical necessity. It therefore requires the 
reviewer to accept the plan's definition. As a result, 
insurance companies can write their contracts in ways to make 
external review meaningless. An external reviewer would have to 
decide whether a procedure was medically necessary based on the 
definition in the plan's contract, no matter how narrow or 
unfair to patients. For example, if a plan defined medially 
necessary care as care that had been proven by double-blind 
clinical trials to be safe and effective, 80 percent or more of 
medicine would not meet the standard and the plan would have 
almost total discretion to deny care it felt would cost too 
much. Such a provision makes a mockery of the right to fair 
review.
    Our proposal would correct each of these defects. It would 
provide full, fair, timely, and truly independent review. Yet 
the committee rejected it. Instead, the committee legislation 
offers the appearance of patient protection without the 
reality.
    In addition, when the misconduct of managed care plans 
actually results in serious injury or death, patients and their 
families should be able to hold the plan liable in court. Our 
legislation would shield employers from liability, unless they 
intervene to make the decision to deny or delay care that 
results in injury or death. The concept is clear-accountability 
follows decision-making. Every other industry in America can be 
held responsible in this way for its actions. HMOs, whose 
decisions truly can mean life or death, do not deserve this 
unique and unfair immunity--an immunity that creates a 
systematic bias against providing patients necessary but costly 
care.
    Some say that you cannot sue your way to better health. But 
it is obvious that the fear of liability is a powerful 
incentive for HMOs to do the right thing when decisions on 
health care are being made.
    The bottom line is that our alternative would guarantee 
patients and physicians the rights that every honorable 
insurance company already grants-- and provide effective, 
timely mechanisms to enforce these rights. These protections 
are essential components of good health care that every family 
believes that were promised when they purchased health 
insurance and paid their premiums.
    No patient with symptoms of a stroke should be forced to 
delay treatment to the point where paralysis and disability are 
permanent, because a managed care accountant does not respond 
promptly and correctly. Yet that would be allowed under the 
committee legislation.
    No patient should question whether their doctor, nurse or 
therapist can practice medicine as they know best. Gag clauses 
and improper incentive arrangements should have no place in 
American medicine. Doctors and other providers must be able to 
give every patient their best possible advice, without fear of 
retaliation or financial penalties. Our plan bans abusive 
insurance industry practices that undermine the integrity of 
the doctor-patient relationship. The committee legislation does 
not.
    No woman with breast cancer should be forced to endure a 
``drive-through'' mastectomy against the advice of her doctor. 
No children with cancer should be told that only the physicians 
in the plan's network can treat them, when those physicians 
have no experience or expertise with children or with that type 
of cancer. Yet these situations will continue to occur under 
the committee plan.
    No patient with a serious illness--like cancer or 
Alzheimer's disease or osteoporosis or rheumatoid arthritis--
who cannot be helped by standard treatments should be denied 
access to the clinical trials that may be the only hope for a 
cure or improvement. Traditionally, health insurance has given 
patients this opportunity--but managed care plans today are 
often saying ``no''--and both patients and medical research are 
suffering. The committee legislation does nothing to assure 
access to life-saving clinical trials.
    Every family knows that it will some day have to confront 
the challenge of serious illness for a parent, or a 
grandparent, or a child. When that day comes, all of us want 
the best possible medical care for our loved ones. Members of 
the Senate deserve good medical care for their loved ones--and 
we generally get it. Every other family is equally deserving of 
high quality care--but too often they do not get it.
    The committee has also included in its legislation a 
proposal to stop health insurers from discriminating on the 
basis of predictive genetic information. While we support this 
concept, the committee heard from experts in a hearing last May 
that such legislation must take additional precautions beyond 
those that included in the committee plan if it is to be 
effective.
    Most important, such legislation must also prohibit 
employers from using predictive genetic information to 
discriminate in hiring or firing of employees. A recent survey 
of management professionals found that 5 percent of responding 
companies engage in genetic testing in the workplace, and 
nearly 20 percent of those companies have not hired someone 
because of their genetic information. Clearly, this information 
is being used against men and women in the workplace. If we 
want to encourage Americans to take advantage of new 
opportunities to test for genetic conditions that have not yet 
become manifest and to obtain preventive treatment or gene 
therapy, we must act to prohibit genetic discrimination in the 
workplace as well as in health insurance. Otherwise, employers 
will fire or refuse to hire those who may have a genetic 
predisposition to a particular disease. Democrats offered an 
amendment to provide this protection, but the committee 
rejected it.
    Unfortunately, our legislation has been subjected to a 
relentless campaign of disinformation and distortion by those 
who profit from the abuses of the status quo. Insurance 
companies, HMOs and their allies spent more than $100 million 
on advertising and lobbying against it last year. And they are 
at it again this year.
    Our opponents make unsubstantiated allegations that our 
Patients' Bill of Rights will dramatically raise costs and 
increase the number of uninsured. The same groups that have for 
years charged excessive premiums and opposed attempts to expand 
insurance coverage now weep crocodile tears about the effects 
of actually having to deliver the benefits they have promised. 
When the General Accounting Office (GAO/HEHS-98-203R) examined 
the potential interaction between premium increases and 
insurance status, they concluded that patient protection 
legislation could actually increase coverage.
    Every independent estimate of the impact of our Patients' 
Bill of Rights on medical costs has found it to be minimal. The 
Congressional Budget Office said that the expected increase in 
average health insurance premiums after five years would be 4.8 
percent. This is an increase that averages less than one 
percent per year, split between the employer and employee. A 
typical worker would pay less than the cost of a McDonald's 
Happy Meal for these much needed protections, and much less 
than the 6-10 percent average annual increase that insurance 
companies are currently imposing to improve their bottom line. 
If the groups opposed to our legislation are serious in their 
concern for the uninsured, we invite them to join us in 
supporting protections that will give every American affordable 
and genuine health insurance.
    The votes by the committee were a litmus test that 
determined whether the Patients' Bill of Rights should protect 
profits or patients. Unfortunately, patients lost this round. 
But we will continue to seek strong patient protections for all 
Americans until they are signed into law. We will not give up 
this struggle until every American is able to receive the best 
care that American medicine can provide.

                                   Edward Kennedy.
                                   Chris Dodd.
                                   Tom Harkin.
                                   Barbara A. Mikulski.
                                   Jeff Bingaman.
                                   Paul D. Wellstone.
                                   Patty Murray.
                                   Jack Reed.

                         XI. SUPPLEMENTAL VIEWS

    We wish to clarify one issue surrounding the cost of 
enacting the Patients' Bill of Rights that we support. The 
substitute amendment offered by Senator Kennedy during the 
Executive Session reflected legislative language in S. 1890 
from the 105th Congress and in S. 6, which was introduced 
earlier this year. At the time of the Executive Session, on 
March 17 and 18, the Congressional Budget Office (CBO) had not 
provided an estimate of S. 6. However, the CBO analysis of S. 
1890 estimated that the legislation would ultimately result in 
a 4.0 percent increase in premiums after 10 years.
    On April 23, at the request of Chairman Jeffords, CBO 
released an estimate that S. 6 would result in a premium 
increase of 6.1 percent when the costs are fully phased in, but 
the accompanying letter from CBO indicated that the estimate 
would drop to 4.8 percent if the sponsors provided clarifying 
language. A copy of this letter follows. In reviewing the 
Patients' Bill of Rights, CBO assumed an interpretation of our 
legislation that did not reflect our intent. We provided CBO 
with language to clarify our intent, and CBO has formally 
reduced the estimate of the premium increase to 4.8 percent.
    The 6.1 percent increase does not refer to any legislation 
that will be considered by the Senate. Use of this number is 
irresponsible and misleading, and serves only to distort the 
discussion of managed care reform.
                                                    Edward Kennedy.

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 23, 1999.
Hon. James M. Jeffords,
Chairman, Committee on Health, Education, Labor, and Pensions,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: At your request, the Congressional 
Budget Office (CBO) has prepared the enclosed cost estimate for 
S. 6, the Patients' Bill of Rights Act of 1999, as introduced 
(Star Print) on January 19, 1999.
    CBO estimates that the ultimate effect, over a period of 
years, would be to increase premiums for employer-sponsored 
health insurance by an average of 6.1 percent. However, the 
sponsors have indicated their intention to clarify the bill in 
ways that could reduce the premium increase to 4.8 percent.
            Sincerely,
                                          Dan L. Crippen, Director.

                      XII. Changes in Existing Law

    In compliance with rule XXVI paragraph 12 of the Standing 
Rules of the Senate, the following provides a print of the 
statute or the part or section thereof to be amended or 
replaced (existing law proposed to be omitted is enclosed in 
black brackets, new matter is printed in italic, existing law 
in which no change is proposed is shown in roman):

            EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974

           *       *       *       *       *       *       *


    Section 1. * * *

           *       *       *       *       *       *       *

Sec. 714. Health plan comparative information.
Sec. 715. Prohibiting premium discrimination against groups on the basis 
          of predictive genetic information.

            Subpart C--Patient Right to Medical Advice and Care

Sec. 721. Patient access to emergency medical care.
Sec. 722. Offering of choice of coverage options.
Sec. 723. Patient access to obstetric and gynecological care.
Sec. 724. Patient access to pediatric care.
Sec. 725. Access to specialists.
Sec. 726. Continuity of care.
Sec. 727. Protection of patient-provider communications.
Sec. 728. Patient's right to prescription drugs.
Sec. 729. Self-payment for behavioral health care services.
Sec. 730. Generally applicable provisions.

               [Subpart C] Subpart D--General Provisions

          * * * * * * *
    Sec. 502. (a) A civil action may be brought--(1) by a 
participant or beneficiary--

           *       *       *       *       *       *       *

    (c)(1) Any administrator (A) who fails to meet the 
requirements of paragraph (1) or (4) of section 606 or section 
101(e)(1), or fails to comply with a coverage determination as 
required under section 503(e)(6), with respect to a participant 
or beneficiary, or (B) who fails or refuses to comply with a 
request for any information which such administrator is 
required by this title to furnish to a participant or 
beneficiary (unless such failure or refusal results from 
matters reasonably beyond the control of the administrator) by 
mailing the material requested to the last known address of the 
requesting participant or beneficiary within 30 days after such 
request may in the court's discretion be personally liable to 
such participant or beneficiary in the amount of up to $100 a 
day from the date of such failure or refusal, and the court may 
in its discretion order such other relief as it deems proper. 
For purposes of this paragraph, each violation described in 
subparagraph (A) with respect to any single participant, and 
each violation described in subparagraph (B) with respect to 
any single participant or beneficiary, shall be treated as a 
separate violation.
    [Sec. 503. In accordance with regulation of the Secretary, 
every employee benefit plan shall--
          [(1) provide adequate notice in writing to any 
        participant or beneficiary whose claim for benefits 
        under the plan has been denied, setting forth the 
        specific reasons for such denial, written in a manner 
        calculated to be understood by the participant, and
          [(2) afford a reasonable opportunity to any 
        participant whose claim for benefits has been denied 
        for a full and fair review by the appropriate named 
        fiduciary of the decision denying the claim.]

SEC. 503. CLAIMS PROCEDURE, COVERAGE DETERMINATION, GRIEVANCES AND 
                    APPEALS.

  (a) Claims Procedure.--In accordance with regulations of the 
Secretary, every employee benefit plan shall--
          (1) provide adequate notice in writing to any 
        participant or beneficiary whose claim for benefits 
        under the plan has been denied, setting forth the 
        specific reasons for such denial, written in a manner 
        calculated to be understood by the participant; and
          (2) afford a reasonable opportunity to any 
        participant whose claim for benefits has been denied 
        for a full and fair review by the appropriate named 
        fiduciary of the decision denying the claim.
  (b) Coverage Determinations Under Group Health Plans.--
          (1) Procedures.--
                  (A) In general.--A group health plan or 
                health insurance issuer conducting utilization 
                review shall ensure that procedures are in 
                place for--
                          (i) making determinations regarding 
                        whether a participant or beneficiary is 
                        eligible to receive a payment or 
                        coverage for health services under the 
                        plan or coverage involved and any cost-
                        sharing amount that the participant or 
                        beneficiary is required to pay with 
                        respect to such service;
                          (ii) notifying a covered participant 
                        or beneficiary (or the authorized 
                        representative of such participant or 
                        beneficiary) and the treating health 
                        care professionals involved regarding 
                        determinations made under the plan or 
                        issuer and any additional payments that 
                        the participant or beneficiary may be 
                        required to make with respect to such 
                        service; and
                          (iii) responding to requests, either 
                        written or oral, for coverage 
                        determinations or for internal appeals 
                        from a participant or beneficiary (or 
                        the authorized representative of such 
                        participant or beneficiary) or the 
                        treating health care professional with 
                        the consent of the participant or 
                        beneficiary.
                  (B) Oral requests.--With respect to an oral 
                request described in subparagraph (A)(iii), a 
                group health plan or health insurance issuer 
                may require that the requesting individual 
                provide written evidence of such request.
          (2) Timeline for making determinations.--
                  (A) Routine determination.--A group health 
                plan or a health insurance issuer shall 
                maintain procedures to ensure that prior 
                authorization determinations concerning the 
                provision of non-emergency items or services 
                are made within 30 days from the date on which 
                the request for a determination is submitted, 
                except that such period may be extended where 
                certain circumstances exist that are determined 
                by the Secretary to be beyond control of the 
                plan or issuer.
                  (B) Expedited determination.--
                          (i) In general.--A prior 
                        authorization determination under this 
                        subsection shall be made within 72 
                        hours, in accordance with the medical 
                        exigencies of the case,after a request 
                        is received by the plan or issuer under 
                        clause (ii) or (iii).
                          (ii) Request by participant or 
                        beneficiary.--A plan or issuer shall 
                        maintain procedures for expediting a 
                        prior authorization determination under 
                        this subsection upon the request of a 
                        participant or beneficiary if, based on 
                        such a request, the plan or issuer 
                        determines that the normal time for 
                        making such a determination could 
                        seriously jeopardize the life or health 
                        of the participant or beneficiary.
                          (iii) Documentation by health care 
                        professional.--A plan or issuer shall 
                        maintain procedures for expediting a 
                        prior authorization determination under 
                        this subsection if the request involved 
                        indicates that the treating health care 
                        professional has reasonably documented, 
                        based on the medical exigencies, that a 
                        determination under the procedures 
                        described in subparagraph (A) could 
                        seriously jeopardize the life or health 
                        of the participant or beneficiary.
                  (C) Concurrent determinations.--A plan or 
                issuer shall maintain procedures to certify or 
                deny coverage of an extended stay or additional 
                services.
                  (D) Retrospective determination.--A plan or 
                issuer shall maintain procedures to ensure 
                that, with respect to the retrospective review 
                of a determination made under paragraph (1), 
                the determination shall be made within 30 
                working days of the date on which the plan or 
                issuer receives necessary information.
          (3) Notice of determinations.--
                  (A) Routine determination.--With respect to a 
                coverage determination of a plan or issuer 
                under paragraph (2)(A), the plan or issuer 
                shall issue notice of such determination to the 
                participant or beneficiary (or the authorized 
                representative of the participant or 
                beneficiary) and, consistent with the medical 
                exigencies of the case, to the treating health 
                care professional involved not later than 2 
                working days after the date on which the 
                determination is made.
                  (B) Expedited determination.--With respect to 
                a coverage determination of a plan or issuer 
                under paragraph (2)(B), the plan or issuer 
                shall issue notice of such determination to the 
                participant or beneficiary (or the authorized 
                representative of the participant or 
                beneficiary), and consistent with the medical 
                exigencies of the case, to the treating health 
                care professional involved within the 72 hour 
                period described in paragraph (2)(B).
                  (C) Concurrent reviews.--With respect to the 
                determination under a plan or issuer under 
                paragraph (2)(C) to certify or deny coverage of 
                an extended stay or additional services, the 
                plan or issuer shall issue notice of such 
                determination to the treating health care 
                professional and to the participant or 
                beneficiary involved (or the authorized 
                representative of the participant or 
                beneficiary) within 1 working day of the 
                determination.
                  (D) Retrospective reviews.--With respect to 
                the retrospective review under a plan or issuer 
                of a determination made under paragraph (2)(D), 
                the plan or issuer shall issue written notice 
                of an approval or disapproval of a 
                determination under this subparagraph to the 
                participant or beneficiary (or the authorized 
                representative of the participant or 
                beneficiary) and health care provider involved 
                within 5 working days of the date on which such 
                determination is made.
                  (E) Requirements of notice of adverse 
                coverage determinations.--A written notice of 
                an adverse coverage determination under this 
                subsection, or of an expedited adverse coverage 
                determination under paragraph (2)(B), shall be 
                provided to the participant or beneficiary (or 
                the authorized representative of the 
                participant or beneficiary) and treating health 
                care professional (if any) involved and shall 
                include--
                          (i) the reasons for the determination 
                        (including the clinical or scientific-
                        evidence based rationale used in making 
                        the determination) written in a manner 
                        to be understandable to the average 
                        participant or beneficiary;
                          (ii) the procedures for obtaining 
                        additional information concerning the 
                        determination; and
                          (iii) notification of the right to 
                        appeal the determination and 
                        instructions on how to initiate an 
                        appeal in accordance with subsection 
                        (d).
  (c) Grievances.--A group health plan or a health insurance 
issuer shall have written procedures for addressing grievances 
between the plan or issuer offering health insurance coverage 
in connection with a group health plan and a participant or 
beneficiary. Determinations under such procedures shall be non-
appealable.
  (d) Internal Appeal of Coverage Determinations.--
          (1) Right to appeal.--
                  (A) In general.--A participant or beneficiary 
                (or the authorized representative of the 
                participant or beneficiary) or the treating 
                health care professional with the consent of 
                the participant or beneficiary (or the 
                authorized representative of the participant or 
                beneficiary), may appeal any adverse coverage 
                determination under subsection (b) under the 
                procedures described in this subsection.
                  (B) Time for appeal.--A plan or issuer shall 
                ensure that a participant or beneficiary has a 
                period of not less than 180 days beginning on 
                the date of an adverse coverage determination 
                under subsection (b) in which to appeal such 
                determination under this subsection.
                  (C) Failure to act.--The failure of a plan or 
                issuer to issue a determination under 
                subsection (b) within the applicable timeline 
                established for such a determination under such 
                subsection shall be treated as an adverse 
                coverage determination for purposes of 
                proceeding to internal review under this 
                subsection.
          (2) Records.--A group health plan and a health 
        insurance issuer shall maintain written records, for at 
        least 6 years, with respect to any appeal under this 
        subsection for purposes of internal quality assurance 
        and improvement. Nothing in the preceding sentence 
        shall be construed as preventing a plan and issuer from 
        entering into an agreement under which the issuer 
        agrees to assume responsibility for compliance with the 
        requirements of this section and the plan is released 
        from liability for such compliance.
          (3) Routine determinations.--A group health plan or a 
        health insurance issuer shall complete the 
        consideration of an appeal of an adverse routine 
        determination under this subsection not later than 30 
        working days after the date on which a request for such 
        appeal is received.
          (4) Expedited determination.--
                  (A) In general.--An expedited determination 
                with respect to an appeal under this subsection 
                shall be made in accordance with the medical 
                exigencies of the case, but in no case more 
                than 72 hours after the request for such appeal 
                is received by the plan or issuer under 
                subparagraph (B) or (C).
                  (B) Request by participant or beneficiary.--A 
                plan or issuer shall maintain procedures for 
                expediting a prior authorization determination 
                under this subsection upon the request of a 
                participant or beneficiary if, based on such a 
                request, the plan or issuer determines that the 
                normal time for making such a determination 
                could seriously jeopardize the life or health 
                of the participant or beneficiary.
                  (C) Documentation by health care 
                professional.--A plan or issuer shall maintain 
                procedures for expediting a prior authorization 
                determination under this subsection if the 
                request involved indicates that the treating 
                health care professional has reasonably 
                documented, based on the medical exigencies of 
                the case that a determination under the 
                procedures described in paragraph (2) could 
                seriously jeopardize the life or health of the 
                participant or beneficiary.
          (5) Conduct of review.--A review of an adverse 
        coverage determination under this subsection shall be 
        conducted by an individual with appropriate expertise 
        who was not directly involved in the initial 
        determination.
          (6) Lack of medical necessity.--A review of an appeal 
        under this subsection relating to a determination to 
        deny coverage based on a lack of medical necessity and 
        appropriateness, or based on an experimental or 
        investigational treatment, shall be made only by a 
        physician with appropriate expertise, including age-
        appropriate expertise, who was not involved in the 
        initial determination.
          (7) Notice.--
                  (A) In general.--Written notice of a 
                determination made under an internal review 
                process shall be issued to the participant or 
                beneficiary (or the authorized representative 
                of the participant or beneficiary) and the 
                treating health care professional not later 
                than 2 working days after the completion of the 
                review (or within the 72-hour period referred 
                to in paragraph (4) if applicable).
                  (B) Adverse coverage determinations.--With 
                respect to an adverse coverage determination 
                made under this subsection, the notice 
                described in subparagraph (A) shall include--
                          (i) the reasons for the determination 
                        (including the clinical or scientific-
                        evidence based rationale used in making 
                        the determination) written in a manner 
                        to be understandable to the average 
                        participant or beneficiary;
                          (ii) the procedures for obtaining 
                        additional information concerning the 
                        determination; and
                          (iii) notification of the right to an 
                        independent external review under 
                        subsection (e) and instructions on how 
                        to initiate such a review.
    (e) Independent External Review.--
          (1) Access to review.--
                  (A) In general.--A group health plan or a 
                health insurance issuer offering health 
                insurance coverage in connection with a group 
                health plan shall have written procedures to 
                permit a participant or beneficiary (or the 
                authorized representative of the participant or 
                beneficiary) access to an independent external 
                review with respect to an adverse coverage 
                determination concerning a particular item or 
                service (including a circumstance treated as an 
                adverse coverage determination under 
                subparagraph (B)) where--
                          (i) the particular item or service 
                        involved--
                                  (I)(aa) would be a covered 
                                benefit, when medically 
                                necessary and appropriate under 
                                the terms and conditions of the 
                                plan, and the item or service 
                                has been determined not to be 
                                medically necessary and 
                                appropriate under the internal 
                                appeals process required under 
                                subsection (d) or there has 
                                been a failure to issue a 
                                coverage determination as 
                                described in subparagraph (B); 
                                and
                                  (bb)(AA) the amount of such 
                                item or service involved 
                                exceeds a significant financial 
                                threshold; or
                                  (BB) there is a significant 
                                risk of placing the life or 
                                health of the participant or 
                                beneficiary in jeopardy; or
                                  (II) would be a covered 
                                benefit, when not considered 
                                experimental or investigational 
                                under the terms and conditions 
                                of the plan, and the item or 
                                service has been determined to 
                                be experimental or 
                                investigational under the 
                                internal appeals process 
                                required under subsection (d) 
                                or there has been a failure to 
                                issue a coverage determination 
                                as described in subparagraph 
                                (B); and
                          (ii) the participant or beneficiary 
                        has completed the internal appeals 
                        process under subsection (d) with 
                        respect to such determination.
                  (B) Failure to act.--The failure of a plan or 
                issuer to issue a coverage determination under 
                subsection (d) within the applicable timeline 
                established for such a determination under such 
                subsection shall be treated as an adverse 
                coverage determination for purposes of 
                proceeding to independent external review under 
                this subsection.
          (2) Initiation of the independent external review 
        process.--
                  (A) Filing of request.--A participant or 
                beneficiary (or the authorized representative 
                of the participant or beneficiary) who desires 
                to have an independent external review 
                conducted under this subsection shall file a 
                written request for such a review with the plan 
                or issuer involved not later than 30 working 
                days after the receipt of a final denial of a 
                claim under subsection (d). Any such request 
                shall include the consent of the participant or 
                beneficiary (or the authorized representative 
                of the participant or beneficiary) for the 
                release of medical information and records to 
                independent external reviewers regarding the 
                participant or beneficiary.
                  (B) Information and notice.--Not later than 5 
                working days after the receipt of a request 
                under subparagraph (A), or earlier in 
                accordance with the medical exigencies of the 
                case, the plan or issuer involved shall select 
                an external appeals entity under paragraph 
                (3)(A) that shall be responsible for 
                designating an independent external reviewer 
                under paragraph (3)(B).
                  (C) Provision of information.--The plan or 
                issuer involved shall forward necessary 
                information (including medical records, any 
                relevant review criteria, the clinical 
                rationale consistent with the terms and 
                conditions of the contract between the plan or 
                issuer and the participant or beneficiary for 
                the coverage denial, and evidence of the 
                coverage of the participant or beneficiary) to 
                the independent external reviewer selected 
                under paragraph (3)(B).
                  (D) Notification.--The plan or issuer 
                involved shall send a written notification to 
                the participant or beneficiary (or the 
                authorized representative of the participant or 
                beneficiary) and the plan administrator, 
                indicating that an independent external review 
                has been initiated.
          (3) Conduct of independent external review.--
                  (A) Designation of external appeals entity by 
                plan or issuer.--
                          (i) In general.--A plan or issuer 
                        that receives a request for an 
                        independent external review under 
                        paragraph (2)(A) shall designate a 
                        qualified entity described in clause 
                        (ii), in a manner designed to ensure 
                        that the entity so designated will make 
                        a decision in an unbiased manner, to 
                        serve as the external appeals entity.
                          (ii) Qualified entities.--A qualified 
                        entity shall be--
                                  (I) an independent external 
                                review entity licensed or 
                                credentialed by a State;
                                  (II) a State agency 
                                established for the purpose of 
                                conducting independent external 
                                reviews;
                                  (III) any entity under 
                                contract with the Federal 
                                Government to provide 
                                independent external review 
                                services;
                                  (IV) any entity accredited as 
                                an independent external review 
                                entity by an accrediting body 
                                recognized by the Secretary for 
                                such purpose; or
                                  (V) any other entity meeting 
                                criteria established by the 
                                Secretary for purposes of this 
                                subparagraph.
                  (B) Designation of independent external 
                reviewer by external appeals entity.--The 
                external appeals entity designated under 
                subparagraph (A) shall, not later than 30 days 
                after the date on which such entity is 
                designated under subparagraph (A), or earlier 
                in accordance with the medical exigencies of 
                the case, designate one or more individuals to 
                serve as independent external reviewers with 
                respect to a request received under paragraph 
                (2)(A). Such reviewers shall be independent 
                medical experts who shall--
                          (i) be appropriately credentialed or 
                        licensed in any State to deliver health 
                        care services;
                          (ii) not have any material, 
                        professional, familial, or financial 
                        affiliation with the case under review, 
                        the participant or beneficiary 
                        involved, the treating health care 
                        professional, the institution where the 
                        treatment would take place, or the 
                        manufacturer of any drug, device, 
                        procedure, or other therapy proposed 
                        for the participant or beneficiary 
                        whose treatment is under review;
                          (iii) have expertise (including age-
                        appropriate expertise) in the diagnosis 
                        or treatment under review and, when 
                        reasonably available, be of the same 
                        specialty as the physician treating the 
                        participant or beneficiary or 
                        recommending or prescribing the 
                        treatment in question;
                          (iv) receive only reasonable and 
                        customary compensation from the group 
                        health plan or health insurance issuer 
                        in connection with the independent 
                        external review that is not contingent 
                        on the decision rendered by the 
                        reviewer; and
                          (v) not be held liable for decisions 
                        regarding medical determinations (but 
                        may be held liable for actions that are 
                        arbitrary and capricious).
          (4) Standard of review.--
                  (A) In general.--An independent external 
                reviewer shall--
                          (i) make an independent determination 
                        based on the valid, relevant, 
                        scientific and clinical evidence to 
                        determine the medical necessity, 
                        appropriateness, experimental or 
                        investigational nature of the proposed 
                        treatment; and
                          (ii) take into consideration 
                        appropriate and available information, 
                        including any evidence-based decision 
                        making or clinical practice guidelines 
                        used by the group health plan or health 
                        insurance issuer; timely evidence or 
                        information submitted by the plan, 
                        issuer, patient or patient's physician; 
                        the patient's medical record; expert 
                        consensus; and medical literature as 
                        defined in section 556(5) of the 
                        Federal Food, Drug, and Cosmetic Act.
                  (B) Notice.--The plan or issuer involved 
                shall ensure that the participant or 
                beneficiary receives notice, within 30 days 
                after the determination of the independent 
                medical expert, regarding the actions of the 
                plan or issuer with respect to the 
                determination of such expert under the 
                independent external review.
          (5) Timeframe for review.--
                  (A) In general.--The independent external 
                reviewer shall complete a review of an adverse 
                coverage determination in accordance with the 
                medical exigencies of the case.
                  (B) Limitation.--Notwithstanding subparagraph 
                (A), a review described in such subparagraph 
                shall be completed not later than 30 working 
                days after the later of--
                          (i) the date on which such reviewer 
                        is designated; or
                          (ii) the date on which all 
                        information necessary to completing 
                        such review is received.
          (6) Binding determination.--The determination of an 
        independent external reviewer under this subsection 
        shall be binding upon the plan or issuer if the 
        provisions of this subsection or the procedures 
        implemented under such provisions were complied with by 
        the independent external reviewer.
          (7) Study.--Not later than 2 years after the date of 
        enactment of this section, the General Accounting 
        Office shall conduct a study of a statistically 
        appropriate sample of completed independent external 
        reviews. Such study shall include an assessment of the 
        process involved during an independent external review 
        and the basis of decisionmaking by the independent 
        external reviewer. The results of such study shall be 
        submitted to the appropriate committees of Congress.
          (8) Effect on certain provisions.--Nothing in this 
        section shall be construed as affecting or modifying 
        section 514 of this Act with respect to a group health 
        plan.
    (f) Rule of Construction.--Nothing in this section shall be 
construed to prohibit a plan administrator or plan fiduciary or 
health plan medical director from requesting an independent 
external review by an independent external reviewer without 
first completing the internal review process.
    (g) Definitions.--In this section:
          (1) Adverse coverage determination.--The term 
        ``adverse coverage determination'' means a coverage 
        determination under the plan which results in a denial 
        of coverage or reimbursement.
          (2) Coverage determination.--The term ``coverage 
        determination'' means with respect to items and 
        services for which coverage may be provided under a 
        health plan, a determination of whether or not such 
        items and services are covered or reimbursable under 
        the coverage and terms of the contract.
          (3) Grievance.--The term ``grievance'' means any 
        complaint made by a participant or beneficiary that 
        does not involve a coverage determination.
          (4) 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.
          (5) 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.
          (6) Health insurance issuer.--The term ``health 
        insurance issuer'' has the meaning given such term in 
        section 733(b)(2).
          (7) Prior authorization determination.--The term 
        ``prior authorization determination'' means a coverage 
        determination prior to the provision of the items and 
        services as a condition of coverage of the items and 
        services under the coverage.
          (8) 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.
          (9) Utilization review.--The term ``utilization 
        review'' with respect to a group health plan or health 
        insurance coverage means a set of formal techniques 
        designed to monitor the use of, or evaluate the 
        clinical necessity, appropriateness, efficacy, or 
        efficiency of, health care services, procedures, or 
        settings. Techniques may include ambulatory review, 
        prospective review, second opinion, certification, 
        concurrent review, case management, discharge planning 
        or retrospective review.

           *       *       *       *       *       *       *


                 Part 7--Group Health Plan Requirements


     Subpart A--Requirements Relating to Portability, Access, and 
                              Renewability

    Sec. 701. * * *

           *       *       *       *       *       *       *


SEC. 702. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL PARTICIPANTS 
                    AND BENEFICIARIES BASED ON HEALTH STATUS.

    (a) In Eligibility To Enroll.--
          (1) In general. * * *

           *       *       *       *       *       *       *

                  (F) Genetic information (including 
                information about a request for or receipt of 
                genetic services).

           *       *       *       *       *       *       *

          (3) Reference to related provision.--For a provision 
        prohibiting the adjustment of premium or contribution 
        amounts for a group under a group health plan on the 
        basis of predictive genetic information (including 
        information about a request for or receipt of genetic 
        services), see section 715.
  (c) Collection of Predictive Genetic Information.--
          (1) Limitation on requesting or requiring predictive 
        genetic information.--Except as provided in paragraph 
        (2), a group health plan, or a health insurance issuer 
        offering health insurance coverage in connection with a 
        group health plan, shall not request or require 
        predictive genetic information concerning any 
        individual (including a dependent) or family member of 
        the individual (including information about a request 
        for or receipt of genetic services).
          (2) Information needed for diagnosis, treatment, or 
        payment.--
                  (A) In general.--Notwithstanding paragraph 
                (1), a group health plan, or a health insurance 
                issuer offering health insurance coverage in 
                connection with a group health plan, that 
                provides health care items and services to an 
                individual or dependent may request (but may 
                not require) that such individual or dependent 
                disclose, or authorize the collection or 
                disclosure of, predictive genetic information 
                for purposes of diagnosis, treatment, or 
                payment relating to the provision of health 
                care items and services to such individual or 
                dependent.
                  (B) Notice of confidentiality practices and 
                description of safeguards.--As a part of a 
                request under subparagraph (A), the group 
                health plan, or a health insurance issuer 
                offering health insurance coverage in 
                connection with a group health plan, shall 
                provide to the individual or dependent a 
                description of the procedures in place to 
                safeguard the confidentiality, as described in 
                subsection (d), of such predictive genetic 
                information.
  (d) Confidentiality With Respect to Predictive Genetic 
Information.--
          (1) Notice of confidentiality practices.--
                  (A) Preparation of written notice.--A group 
                health plan, or a health insurance issuer 
                offering health insurance coverage in 
                connection with a group health plan, shall post 
                or provide, in writing and in a clear and 
                conspicuous manner, notice of the plan or 
                issuer's confidentiality practices, that shall 
                include--
                          (i) a description of an individual's 
                        rights with respect to predictive 
                        genetic information;
                          (ii) the procedures established by 
                        the plan or issuer for the exercise of 
                        the individual's rights; and
                          (iii) the right to obtain a copy of 
                        the notice of the confidentiality 
                        practices required under this 
                        subsection.
                  (B) Model notice.--The Secretary, in 
                consultation with the National Committee on 
                Vital and Health Statistics and the National 
                Association of Insurance Commissioners, and 
                after notice and opportunity for public 
                comment, shall develop and disseminate model 
                notices of confidentiality practices. Use of 
                the model notice shall serve as a defense 
                against claims of receiving inappropriate 
                notice.
          (2) Establishment of safeguards.--A group health 
        plan, or a health insurance issuer offering health 
        insurance coverage in connection with a group health 
        plan, shall establish and maintain appropriate 
        administrative, technical, and physical safeguards to 
        protect the confidentiality, security, accuracy, and 
        integrity of predictive genetic information created, 
        received, obtained, maintained, used, transmitted, or 
        disposed of by such plan or issuer.

           *       *       *       *       *       *       *


SEC. 714. HEALTH PLAN COMPARATIVE INFORMATION.

  (a) Requirement.--
          (1) In general.--A group health plan, and a health 
        insurance issuer that provides coverage in connection 
        with group health insurance coverage, shall, not later 
        than 12 months after the date of enactment of this 
        section, and at least annually thereafter, provide for 
        the disclosure, in a clear and accurate form to each 
        participant and each beneficiary who does not reside at 
        the same address as the participant, or upon request to 
        an individual eligible for coverage under the plan, of 
        the information described in subsection (b).
          (2) Rule of construction.--Nothing in this section 
        shall be construed to prevent a plan or issuer from 
        entering into any agreement under which the issuer 
        agrees to assume responsibility for compliance with the 
        requirements of this section and the plan is released 
        from liability for such compliance.
          (3) Provision of information.--Information shall be 
        provided to participants and beneficiaries under this 
        section at the address maintained by the plan or issuer 
        with respect to such participants or beneficiaries.
  (b) Required Information.--The informational materials to be 
distributed under this section shall include for each package 
option available under a group health plan the following:
          (1) A description of the covered items and services 
        under each such plan and any in- and out-of-network 
        features of each such plan, including a summary 
        description of the specific exclusions from coverage 
        under the plan.
          (2) A description of any cost-sharing, including 
        premiums, deductibles, coinsurance, and copayment 
        amounts, for which the participant or beneficiary will 
        be responsible, including any annual or lifetime limits 
        on benefits, for each such plan.
          (3) A description of any optional supplemental 
        benefits offered by each such plan and the terms and 
        conditions (including premiums or cost-sharing) for 
        such supplemental coverage.
          (4) A description of any restrictions on payments for 
        services furnished to a participant or beneficiary by a 
        health care professional that is not a participating 
        professional and the liability of the participant or 
        beneficiary for additional payments for these services.
          (5) A description of the service area of each such 
        plan, including the provision of any out-of-area 
        coverage.
          (6) A description of the extent to which participants 
        and beneficiaries may select the primary care provider 
        of their choice, including providers both within the 
        network and outside the network of each such plan (if 
        the plan permits out-of-network services).
          (7) A description of the procedures for advance 
        directives and organ donation decisions if the plan 
        maintains such procedures.
          (8) A description of the requirements and procedures 
        to be used to obtain preauthorization for health 
        services (including telephone numbers and mailing 
        addresses), including referrals for specialty care.
          (9) A description of the definition of medical 
        necessity used in making coverage determinations by 
        each such plan.
          (10) A summary of the rules and methods for appealing 
        coverage decisions and filing grievances (including 
        telephone numbers and mailing addresses), as well as 
        other available remedies.
          (11) A summary description of any provisions for 
        obtaining off-formulary medications if the plan 
        utilizes a defined formulary for providing specific 
        prescription medications.
          (12) A summary of the rules for access to emergency 
        room care. Also, any available educational material 
        regarding proper use of emergency services.
          (13) A description of whether or not coverage is 
        provided for experimental treatments, investigational 
        treatments, or clinical trials and the circumstances 
        under which access to such treatments or trials is made 
        available.
          (14) A description of the specific preventative 
        services covered under the plan if such services are 
        covered.
          (15) A statement regarding--
                  (A) the manner in which a participant or 
                beneficiary may access an obstetrician, 
                gynecologist, or pediatrician in accordance 
                with section 723 or 724; and
                  (B) the manner in which a participant or 
                beneficiary obtains continuity of care as 
                provided for in section 726.
          (16) A statement that the following information, and 
        instructions on obtaining such information (including 
        telephone numbers and, if available, Internet 
        websites), shall be made available upon request:
                  (A) The names, addresses, telephone numbers, 
                and State licensure status of the plan's 
                participating health care professionals and 
                participating health care facilities, and, if 
                available, the education, training, speciality 
                qualifications or certifications of such 
                professionals.
                  (B) A summary description of the methods used 
                for compensating participating health care 
                professionals, such as capitation, fee-for-
                service, salary, or a combination thereof. The 
                requirement of this subparagraph shall not be 
                construed as requiring plans to provide 
                information concerning proprietary payment 
                methodology.
                  (C) A summary description of the methods used 
                for compensating health care facilities, 
                including per diem, fee-for-service, 
                capitation, bundled payments, or a combination 
                thereof. The requirement of this subparagraph 
                shall not be construed as requiring plans to 
                provide information concerning proprietary 
                payment methodology.
                  (D) A summary description of the procedures 
                used for utilization review.
                  (E) The list of the specific prescription 
                medications included in the formulary of the 
                plan, if the plan uses a defined formulary.
                  (F) A description of the specific exclusions 
                from coverage under the plan.
                  (G) Any available information related to the 
                availability of translation or interpretation 
                services for non-English speakers and people 
                with communication disabilities, including the 
                availability of audio tapes or information in 
                Braille.
                  (H) Any information that is made public by 
                accrediting organizations in the process of 
                accreditation if the plan is accredited, or any 
                additional quality indicators that the plan 
                makes available.
  (c) Manner of Distribution.--The information described in 
this section shall be distributed in an accessible format that 
is understandable to an average plan participant or 
beneficiary.
  (d) Rule of Construction.--Nothing in this section may be 
construed to prohibit a group health plan, or health insurance 
issuer in connection with group health insurance coverage, from 
distributing any other additional information determined by the 
plan or issuer to be important or necessary in assisting 
participants and beneficiaries or upon request potential 
participants and beneficiaries in the selection of a health 
plan or from providing information under subsection (b)(15) as 
part of the required information.
  (e) 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.
  (f) Health Care Professional.--In this section, the term 
``health care professional'' means a physician (as defined in 
section 1861(r) of the Social Security Act) or other health 
care professional if coverage for the professional's services 
is provided under the health plan involved for the services of 
the professional. Such term includes a podiatrist, optometrist, 
chiropractor, psychologist, dentist, physician assistant, 
physical or occupational therapist and therapy assistant, 
speech-language pathologist, audiologist, registered or 
licensed practical nurse (including nurse practitioner, 
clinical nurse specialist, certified registered nurse 
anesthetist, and certified nurse-midwife), licensed certified 
social worker, registered respiratory therapist, and certified 
respiratory therapy technician.

SEC. 715. PROHIBITING PREMIUM DISCRIMINATION AGAINST GROUPS ON THE 
                    BASIS OF PREDICTIVE GENETIC INFORMATION.

  A group health plan, or a health insurance issuer offering 
group health insurance coverage in connection with a group 
health plan, shall not adjust premium or contribution amounts 
for a group on the basis of predictive genetic information 
concerning any individual (including a dependent) or family 
member of the individual (including information about a request 
for or receipt of genetic services).

           *       *       *       *       *       *       *


          Subpart C--Patient Right to Medical Advice and Care

SEC. 721. PATIENT ACCESS TO EMERGENCY MEDICAL CARE.

  (a) In General.--To the extent that the group health plan 
(other than a fully insured group health plan) provides 
coverage for benefits consisting of emergency medical care (as 
defined in subsection (c)), except for items or services 
specifically excluded--
          (1) the plan shall provide coverage for benefits, 
        without requiring preauthorization, for appropriate 
        emergency medical screening examinations (within the 
        capability of the emergency facility, including 
        ancillary services routinely available to the emergency 
        facility) to the extent that a prudent layperson, who 
        possesses an average knowledge of health and medicine, 
        would determine such examinations to be necessary to 
        determine whether emergency medical care (as so 
        defined) is necessary; and
          (2) the plan shall provide coverage for benefits, 
        without requiring preauthorization, for additional 
        emergency medical care to stabilize an emergency 
        medical condition following an emergency medical 
        screening examination (if determined necessary under 
        paragraph (1)), pursuant to the definition of stabilize 
        under section 1867(e)(3) of the Social Security Act (42 
        U.S.C. 1395dd(e)(3)).
  (b) Uniform Cost-Sharing Required and Out-of-Network Care.--
          (1) Uniform cost-sharing.--Nothing in this section 
        shall be construed as preventing a group health plan 
        (other than a fully insured group health plan) from 
        imposing any form of cost-sharing applicable to any 
        participant or beneficiary (including coinsurance, 
        copayments, deductibles, and any other charges) in 
        relation to coverage for benefits described in 
        subsection (a), if such form of cost-sharing is 
        uniformly applied under such plan, with respect to 
        similarly situated participants and beneficiaries, to 
        all benefits consisting of emergency medical care (as 
        defined in subsection (c)) provided to such similarly 
        situated participants and beneficiaries under the plan.
          (2) Out-of-network care.--If a group health plan 
        (other than a fully insured group health plan) provides 
        any benefits with respect to emergency medical care (as 
        defined in subsection (c)), the plan shall cover 
        emergency medical care under the plan in a manner so 
        that, if such care is provided to a participant or 
        beneficiary by a nonparticipating health care provider, 
        the participant or beneficiary is not liable for 
        amounts that exceed the amounts of liability that would 
        be incurred if the services were provided by a 
        participating provider.
  (c) Definition of Emergency Medical Care.--In this section:
          (1) In general.--The term ``emergency medical care'' 
        means, with respect to a participant or beneficiary 
        under a group health plan (other than a fully insured 
        group health plan), covered inpatient and outpatient 
        services that--
                  (A) are furnished by any provider, including 
                a nonparticipating provider, that is qualified 
                to furnish such 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 
                (as defined in paragraph (2)).
          (2) Emergency medical condition.--The term 
        ``emergency medical condition'' means a medical 
        condition manifesting itself by acute symptoms of 
        sufficient severity (including severe pain) such that a 
        prudent layperson, who possesses an average knowledge 
        of health and medicine, could reasonably expect the 
        absence of immediate medical attention to result in--
                  (A) placing the health of the participant or 
                beneficiary (or, with respect to a pregnant 
                woman, the health of the woman or her unborn 
                child) in serious jeopardy,
                  (B) serious impairment to bodily functions, 
                or
                  (C) serious dysfunction of any bodily organ 
                or part.

SEC. 722. OFFERING OF CHOICE OF COVERAGE OPTIONS.

  (a) Requirement.--
          (1) Offering of point-of-service coverage option.--
        Except as provided in paragraph (2), if a group health 
        plan (other than a fully insured 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.
          (2) Exception in the case of multiple issuer or 
        coverage options.--Paragraph (1) shall not apply with 
        respect to a participant in a group health plan (other 
        than a fully insured group health plan) if the plan 
        offers the participant 2 or more coverage options that 
        differ significantly with respect to the use of 
        participating health care professionals or the networks 
        of such professionals that are used.
  (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 (other than a fully 
insured 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 (other than a fully insured group 
        health plan) of a small employer.
          (2) Small employer.--For purposes of paragraph (1), 
        the term ``small employer'' means, in connection with a 
        group health plan (other than a fully insured 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 50 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 requiring an employer to pay any costs as a 
        result of this section or to make equal contributions 
        with respect to different health coverage options;
          (3) as preventing a group health plan (other than a 
        fully insured group health plan) from imposing higher 
        premiums or cost-sharing on a participant for the 
        exercise of a point-of-service coverage option; or
          (4) to require that a group health plan (other than a 
        fully insured 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.

SEC. 723. PATIENT ACCESS TO OBSTETRIC AND GYNECOLOGICAL CARE.

  (a) General Rights.--
          (1) Waiver of plan referral requirement.--If a group 
        health plan described in subsection (b) requires a 
        referral to obtain coverage for speciality care, the 
        plan shall waive the referral requirement in the case 
        of a female participant or beneficiary who seeks 
        coverage for routine obstetrical care or routine 
        gynecological care.
          (2) Related routine care.--With respect to a 
        participant or beneficiary described in paragraph (1), 
        a group health plan described in subsection (b) shall 
        treat the ordering of other routine care that is 
        related to routine obstetric or gynecologic care, by a 
        physician who specializes in obstetrics and gynecology 
        as the authorization of the primary care provider for 
        such other routine care.
  (b) Application of Section.--A group health plan described in 
this subsection is a group health plan (other than a fully 
insured group health plan), that--
          (1) provides coverage for routine obstetric care 
        (such as pregnancy-related services) or routine 
        gynecologic care (such as preventive women's health 
        examinations); and
          (2) requires the designation by a participant or 
        beneficiary of a participating primary care provider 
        who is not a physician who specializes in obstetrics or 
        gynecology.
  (c) Rules of Construction.--Nothing in this section shall be 
construed--
          (1) as waiving any coverage requirement relating to 
        medical necessity or appropriateness with respect to 
        the coverage of obstetric or gynecologic care described 
        in subsection (a);
          (2) to preclude the plan from requiring that the 
        physician who specializes in obstetrics or gynecology 
        notify the designated primary care provider or the plan 
        of treatment decisions; or
          (3) to preclude a group health plan from allowing 
        health care professionals other than physicians to 
        provide routine obstetric or routine gynecologic care.

SEC. 724. PATIENT ACCESS TO PEDIATRIC CARE.

  (a) In General.--In the case of a group health plan (other 
than a fully insured group health plan) that provides coverage 
for routine pediatric care and that requires the designation by 
a participant or beneficiary of a participating primary care 
provider, if the designated primary care provider is not a 
physician who specializes in pediatrics--
          (1) the plan may not require authorization or 
        referral by the primary care provider in order for a 
        participant or beneficiary to obtain coverage for 
        routine pediatric care; and
          (2) the plan shall treat the ordering of other 
        routine care related to routine pediatric care by such 
        a specialist as having been authorized by the 
        designated primary care provider.
  (b) Rules of Construction.--Nothing in subsection (a) shall 
be construed--
          (1) as waiving any coverage requirement relating to 
        medical necessity or appropriateness with respect to 
        the coverage of any pediatric care provided to, or 
        ordered for, a participant or beneficiary;
          (2) to preclude a group health plan from requiring 
        that a specialist described in subsection (a) notify 
        the designated primary care provider or the plan of 
        treatment decisions; or
          (3) to preclude a group health plan from allowing 
        health care professionals other than physicians to 
        provide routine pediatric care.

SEC. 725. ACCESS TO SPECIALISTS.

  (a) In General.--A group health plan (other than a fully 
insured group health plan) shall ensure that participants and 
beneficiaries have access to specialty care when such care is 
covered under the plan. Such access may be provided through 
contractual arrangements with specialized providers outside of 
the network of the plan.
  (b) Treatment Plans.--
          (1) In general.--Nothing in this section shall be 
        construed to prohibit a group health plan (other than a 
        fully insured group health plan) from requiring that 
        speciality care be provided pursuant to a treatment 
        plan so long as the treatment plan is--
                  (A) developed by the specialist, in 
                consultation with the primary care provider, 
                and the participant or beneficiary;
                  (B) approved by the plan; and
                  (C) in accordance with the applicable quality 
                assurance and utilization review standards of 
                the plan.
          (2) Notification.--Nothing in paragraph (1) shall be 
        construed as prohibiting a plan from requiring the 
        specialist to provide the primary care provider with 
        regular updates on the specialty care provided, as well 
        as all other necessary medical information.
  (c) Referrals.--Nothing in this section shall be construed to 
prohibit a plan from requiring an authorization by the primary 
care provider of the participant or beneficiary in order to 
obtain coverage for speciality servicesso long as such 
authorization is for an adequate number of referrals under an approved 
treatment plan if such a treatment plan is required by the plan.
  (d) Speciality Care Defined.--For purposes of this 
subsection, the term speciality care means, with respect to a 
condition, care and treatment provided by a health care 
practitioner, facility, or center (such as a center of 
excellence) that has adequate expertise (including age-
appropriate expertise) through appropriate training and 
experience.

SEC. 726. CONTINUITY OF CARE.

  (a) In General.--
          (1) Termination of provider.--If a contract between a 
        group health plan (other than a fully insured group 
        health plan) and a health care provider is terminated 
        (as defined in paragraph (2)), or benefits or coverage 
        provided by a health care provider are terminated 
        because of a change in the terms of provider 
        participation in such group health plan, and an 
        individual who is a participant or beneficiary in the 
        plan is undergoing a course of treatment from the 
        provider at the time of such termination, the plan 
        shall--
                  (A) notify the individual on a timely basis 
                of such termination;
                  (B) provide the individual with an 
                opportunity to notify the plan of a need for 
                transitional care; and
                  (C) in the case of termination described in 
                paragraph (2), (3), or (4) of subsection (b), 
                and subject to subsection (c), permit the 
                individual to continue or be covered with 
                respect to the course of treatment with the 
                provider's consent during a transitional period 
                (as provided under subsection (b)).
          (2) Terminated.--In this section, the term 
        ``terminated'' includes, with respect to a contract, 
        the expiration or nonrenewal of the contract by the 
        group health plan, but does not include a termination 
        of the contract by the plan for failure to meet 
        applicable quality standards or for fraud.
          (3) Contracts.--For purposes of this section, the 
        term ``contract between a group health plan (other than 
        a fully insured group health plan) and a health care 
        provider'' shall include a contract between such a plan 
        and an organized network of providers.
  (b) Transitional Period.--
          (1) General rule.--Except as provided in paragraph 
        (3), the transitional period under this subsection 
        shall permit the participant or beneficiary to extend 
        the coverage involved for up to 90 days from the date 
        of the notice described in subsection (a)(1)(A) of the 
        provider's termination.
          (2) Institutional care.--Subject to paragraph (1), 
        the transitional period under this subsection for 
        institutional or inpatient care from a provider shall 
        extend until the discharge or termination of the period 
        of institutionalization and also shall include 
        institutional care provided within a reasonable time of 
        the date of termination of the provider status if the 
        care was scheduled before the date of the announcement 
        of the termination of the provider status under 
        subsection (a)(1)(A) or if the individual on such date 
        was on an established waiting list or otherwise 
        scheduled to have such care.
          (3) Pregnancy.--Notwithstanding paragraph (1), if--
                  (A) a participant or beneficiary 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.--Subject to paragraph (1), if--
                  (A) a participant or beneficiary was 
                determined to be terminally ill (as determined 
                under section 1861(dd)(3)(A) of the Social 
                Security Act) prior to 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 be 
        for care directly related to the treatment of the 
        terminal illness.
  (c) Permissible Terms and Conditions.--A group health plan 
(other than a fully insured group health plan) may condition 
coverage of continued treatment by a provider under subsection 
(a)(1)(C) upon the provider agreeing to the following terms and 
conditions:
          (1) The provider agrees to accept reimbursement from 
        the plan and individual involved (with respect to cost-
        sharing) at the rates applicable prior to the start of 
        the transitional period as payment in full (or at the 
        rates applicable under the replacement plan after the 
        date of the termination of the contract with the group 
        health plan) and not to impose cost-sharing with respect 
        to the individual in an amount that would exceed the 
        cost-sharing that could have been imposed if the contract 
        referred to in subsection (a)(1) had not been terminated.
          (2) The provider agrees to adhere to the quality 
        assurance standards of the plan responsible for payment 
        under paragraph (1) and to provide to such plan 
        necessary medical information related to the care 
        provided.
          (3) The provider agrees otherwise to adhere to such 
        plan's policies and procedures, including procedures 
        regarding referrals and obtaining prior authorization 
        and providing services pursuant to a treatment plan (if 
        any) approved by the plan.
  (d) Rule of Construction.--Nothing in this section shall be 
construed to require the coverage of benefits which would not 
have been covered if the provider involved remained a 
participating provider.
  (e) Definition.--In this section, the term ``health care 
provider'' or ``provider'' means--
          (1) 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
          (2) 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.

SEC. 727. PROTECTION OF PATIENT-PROVIDER COMMUNICATIONS.

  (a) In General.--Subject to subsection (b), a group health 
plan (other than a fully insured group health plan and in 
relation to a participant or beneficiary) shall not prohibit or 
otherwise restrict a health care professional from advising 
such a participant or beneficiary who is a patient of the 
professional about the health status of the participant or 
beneficiary or medical care or treatment for the condition or 
disease of the participant or beneficiary, 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 (other than a fully 
insured group health plan) to provide specific benefits under 
the terms of such plan.

SEC. 728. PATIENT'S RIGHT TO PRESCRIPTION DRUGS.

  To the extent that a group health plan (other than a fully 
insured group health plan) provides coverage for benefits with 
respect to prescription drugs, and limits such coverage to 
drugs included in a formulary, the plan 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, 
        provide for exceptions from the formulary limitation 
        when a non-formulary alternative is medically necessary 
        and appropriate.

SEC. 729. SELF-PAYMENT FOR BEHAVIORAL HEALTH CARE SERVICES.

  (a) In General.--A group health plan (other than a fully 
insured group health plan) may not--
          (1) prohibit or otherwise discourage a participant or 
        beneficiary from self-paying for behavioral health care 
        services once the plan has denied coverage for such 
        services; or
          (2) terminate a health care provider because such 
        provider permits participants or beneficiaries to self-
        pay for behavioral health care services--
                  (A) that are not otherwise covered under the 
                plan; or
                  (B) for which the group health plan provides 
                limited coverage, to the extent that the group 
                health plan denies coverage of the services.
  (b) Rule of Construction.--Nothing in subsection (a)(2)(B) 
shall be construed as prohibiting a group health plan from 
terminating a contract with a health care provider for failure 
to meet applicable quality standards or for fraud.

SEC. 730. GENERALLY APPLICABLE PROVISION.

  In the case of a group health plan that provides benefits 
under 2 or more coverage options, the requirements of this 
subpart, other than section 722, shall apply separately with 
respect to each coverage option.

           *       *       *       *       *       *       *


SEC. 732. SPECIAL RULES RELATING TO GROUP HEALTH PLANS.

    (a) General Exception for Certain Small Group Health 
Plans.--The requirements of this part (other than [section 711] 
sections 711 and 714) shall not apply to any group health plan 
(and group health insurance coverage offered in connection with 
a group health plan) for any plan year if, on the first day of 
such plan year, such plan has less than 2 participants who are 
current employees.

           *       *       *       *       *       *       *


[Subpart C] Subpart D--General Provisions

           *       *       *       *       *       *       *



SEC. 733. DEFINITIONS.

    (a) Group Health Plan. * * *
          (1) In general. * * *

           *       *       *       *       *       *       *

          (3) Fully insured group health plan.--The term 
        ``fully insured group health plan'' means a group 
        health plan where benefits under the plan are provided 
        pursuant to the terms of an arrangement between a group 
        health plan and a health insurance issuer and are 
        guaranteed by the health insurance issuer under a 
        contract or policy of insurance.

           *       *       *       *       *       *       *

    (d) Other Definitions.--For purposes of this part--
          (1) COBRA continuation provision. * * *

           *       *       *       *       *       *       *

          (5) Family member.--The term ``family member'' means 
        with respect to an individual--
                  (A) the spouse of the individual;
                  (B) a dependent child of the individual, 
                including a child who is born to or placed for 
                adoption with the individual; and
                  (C) all other individuals related by blood to 
                the individual or the spouse or child described 
                in subparagraph (A) or (B).
          (6) Genetic information.--The term ``genetic 
        information'' means information about genes, gene 
        products, or inherited characteristics that may derive 
        from an individual or a family member (including 
        information about a request for or receipt of genetic 
        services).
          (7) Genetic services.--The term ``genetic services'' 
        means health services provided to obtain, assess, or 
        interpret genetic information for diagnostic and 
        therapeutic purposes, and for genetic education and 
        counseling.
          (8) Predictive genetic information.--
                  (A) In general.--The term ``predictive 
                genetic information'' means, in the absence of 
                symptoms, clinical signs, or a diagnosis of the 
                condition related to such information--
                          (i) information about an individual's 
                        genetic tests;
                          (ii) information about genetic tests 
                        of family members of the individual; or
                          (iii) information about the 
                        occurrence of a disease or disorder in 
                        family members.
                  (B) Exceptions.--The term ``predictive 
                genetic information'' shall not include--
                          (i) information about the sex or age 
                        of the individual;
                          (ii) information derived from 
                        physical tests, such as the chemical, 
                        blood, or urine analyses of the 
                        individual including cholesterol tests; 
                        and
                          (iii) information about physical 
                        exams of the individual.
          (9) Genetic test.--The term ``genetic test'' means 
        the analysis of human DNA, RNA, chromosomes, proteins, 
        and certain metabolites, including analysis of 
        genotypes, mutations, phenotypes, or karyotypes, for 
        the purpose of predicting risk of disease in 
        asymptomatic or undiagnosed individuals. Such term does 
        not include physical tests, such as the chemical, 
        blood, or urine analyses of the individual including 
        cholesterol tests, and physical exams of the 
        individual, in order to detect symptoms, clinical 
        signs, or a diagnosis of disease.

           *       *       *       *       *       *       *


         [TITLE IX--AGENCY FOR HEALTH CARE POLICY AND RESEARCH


               [Part A--Establishment and General Duties


[SEC. 901. ESTABLISHMENT.

    [(a) In general.--There is established within the Service 
an agency to be known as the Agency for Health Care Policy and 
Research.
    [(b) Purpose.--The purpose of the Agency is to enhance the 
quality, appropriateness, and effectiveness of health care 
services, and access to such services, through the 
establishment of a board base of scientific research and 
through the promotion of improvements in clinical practice 
(including the prevention of diseases and other health 
conditions) and in the organization, financing, and delivery of 
health care services.
    [(c) Appointment of Administrator.--There shall be at the 
head of the Agency an official to be known as the Administrator 
for Health Care Policy and Research. The Administrator shall be 
appointed by the Secretary. The Secretary, acting through the 
Administrator, shall carry out the authorities and duties 
established in this title.

[SEC. 902. GENERAL AUTHORITIES AND DUTIES.

    [(a) In general.--In carrying out section 901(b), the 
Administrator shall conduct and support research, demonstration 
projects, evaluations, training, guideline development, and the 
dissemination of information, on health care services and on 
systems for the delivery of such services, including activities 
with respect to--
          [(1) the effectiveness, efficiency, and quality of 
        health care services;
          [(2) subject to subsection (d), the outcomes of 
        health care services and procedures;
          [(3) clinical practice, including primary care and 
        practice-oriented research;
          [(4) health care technologies, facilities, and 
        equipment;
          [(5) health care costs, productivity, and market 
        forces;
          [(6) health promotion and disease prevention;
          [(7) health statistics and epidemiology; and
          [(8) medical liability.
    [(b) Requirements With Respect to Rural Areas and 
Underserved Populations.--In carrying out subsection (a), the 
Administrator shall undertake and support research, 
demonstration projects, and evaluations with respect to--
          [(1) the delivery of health care services in rural 
        areas (including frontier areas); and
          [(2) the health of low-income groups, minority 
        groups, and the elderly.

                      PUBLIC HEALTH SERVICE ACT

           *       *       *       *       *       *       *



Section 1. * * *

           *       *       *       *       *       *       *



          TITLE IX--AGENCY FOR HEALTHCARE RESEARCH AND QUALITY

                Part A--Establishment and General Duties

Sec. 901. Mission and duties.
Sec. 902. General authorities.

                 Part B--Healthcare Improvement Research

Sec. 911. Healthcare outcome improvement research.
Sec. 912. Private-public partnerships to improve organization and 
          delivery.
Sec. 913. Information on quality and cost of care.
Sec. 914. Information systems for healthcare improvement.
Sec. 915. Research supporting primary care and access in underserved 
          areas.
Sec. 916. Clinical practice and technology innovation.
Sec. 917. Coordination of Federal Government quality improvement 
          efforts.

                       Part C--General Provisions

Sec. 921. Advisory Council for Healthcare Research and Quality.
Sec. 922. Peer review with respect to grants and contracts.
Sec. 923. Certain provisions with respect to development, collection, 
          and dissemination of data.
Sec. 924. Dissemination of information.
Sec. 925. Additional provisions with respect to grants and contracts.
Sec. 926. Certain administrative authorities.
Sec. 927. Funding.
Sec. 928. Definitions.
          * * * * * * *
    [(c) Health Services Training Grants.--The Administrator 
may provide training grants in the field of health services 
research related to activities authorized under subsection (a), 
to include pre- and post-doctoral fellowships and training 
programs, young investigator awards, and other programs and 
activities as appropriate.
    [(d) Multidisciplinary Centers.--The Administrator may 
provide financial assistance to public or nonprofit private 
entities for meeting the costs of planning and establishing new 
centers, and operating existing and new centers, for 
multidisciplinary health services research, demonstration 
projects, evaluations, training, policy analysis, and 
demonstrations respecting the matters referred to in subsection 
(a).
    [(e) Relation to Certain Authorities Regarding Social 
Security.--Activities authorized in this section may include, 
and shall be appropriately coordinated with, experiments, 
demonstration projects, and other related activities authorized 
by the Social Security Act and the Social Security Amendments 
of 1967. Activities under subsection (a)(2) of this section 
that affect the programs under titles XVIII and XIX of the 
Social Security Act shall be carried out consistent with 
section 1142 of such Act.

[SEC. 903. DISSEMINATION.

    [(a) In General.--The Administrator shall--
          [(1) promptly publish, make available, and otherwise 
        disseminate, in a form understandable and on as broad a 
        basis as practicable so as to maximize its use, the 
        results of research, demonstration projects, and 
        evaluation conducted or supported under this title and 
        the guidelines, standards, and review criteria 
        developed under this title;
          [(2) promptly make available to the public data 
        developed in such research, demonstration projects, and 
        evaluations;
          [(3) provide indexing, abstracting, translating, 
        publishing and other services leading to a more 
        effective and timely dissemination of information on 
        research, demonstration projects, and evaluations with 
        respect to health care to public and private entities 
        and individuals engaged in the improvement of health 
        care delivery and the general public, and undertake 
        programs to develop new or improved methods for making 
        such information available; and
          [(4) as appropriate, provide technical assistance to 
        State and local government and health agencies and 
        conduct liaison activities to such agencies to foster 
        dissemination.
    [(b) Prohibition Against Restrictions.--Except as provided 
in subsection (c), the Administrator may not restrict the 
publication or dissemination of date from, or the results of, 
projects conducted or supported under this title.
    [(c) Limitation on Use of Certain Information.--No 
information, if an establishment or person supplying the 
information or described in it is identifiable, obtained in the 
course of activities undertaken or supported under this title 
may be used for any purpose other than the purpose for which it 
was supplied unless such establishment or person has consented 
(as determined under regulations of the Secretary) to its use 
for such purpose. Such information may not be published or 
released in other form if the person who supplied the 
information or who is described in it is identifiable unless 
such person has consented (as determined under regulations of 
the Secretary) to its publication or release in other form.
    [(d) Certain Interagency Agreement.--The Administrator and 
the Director of the National Library of Medicine shall enter 
into an agreement providing for the implementation of 
subsection (a)(3).
    [(e) Required Interagency Agreement.--The Administrator and 
the Director of the National Library of Medicine shall enter 
into an agreement providing for the implementation of section 
478A.

[SEC. 904. HEALTH CARE TECHNOLOGY AND TECHNOLOGY ASSESSMENT.

    [(a) In general.--In carrying out section 901(b), the 
Administrator shall promote the development and application of 
appropriate health care technology assessments--
          [(1) by identifying needs in, and establishing 
        priorities for, the assessment of specific health care 
        technologies;
          [(2) by developing and evaluating criteria and 
        methodologies for health care technology assessment;
          [(3) by conducting and supporting research on the 
        development and diffusion of health care technology;
          [(4) by conducting and supporting research on 
        assessment methodologies;
          [(5) by promoting education, training, and technical 
        assistance in the use of health care technology 
        assessment methodologies and results; and
          [(6) by conducting assessments and reassessments of 
        existing and new health care technologies.
    (b) Specific Assessments.--
          [(1) In general.--In carrying out section 901(b), the 
        Administrator shall conduct and support specific 
        assessments of health care technologies.
          [(2) Consideration of Certain Factors.--In carrying 
        out paragraph (1), the Administrator shall consider the 
        safety, efficacy, and effectiveness, and, as 
        appropriate, the legal, social, and ethical 
        implications, and appropriate uses of such 
        technologies, including consideration of geographic 
        factors. In carrying out such paragraph, the 
        Administrator shall also consider the cost 
        effectiveness of such technologies where cost 
        information is available and reliable.
    [(c) Agenda and Priorities.--
          [(1) Establishment of priorities.--In accordance with 
        paragraph (2), the Administrator, in consultation with 
        the Advisory Council established under section 921, 
        shall establish an annual list of technology 
        assessments under consideration by the Agency, 
        including those assessments performed at the request of 
        the Health Care Financing Administration and the 
        Department of Defense and those assessments performed 
        under subsections (d) and (f).
          [(2) Public notice.--The Administrator, in 
        consultation with the Advisory Council shall publish 
        the list established in paragraph (1) annually in the 
        Federal Register.
    [(d) Conduct of Assessments.--
          [(1) Recommendations with respect to health care 
        technology.--The Administrator shall make 
        recommendations to the Secretary with respect to 
        whether specific health care technologies should be 
        reimbursable under federally financed health programs, 
        including recommendations with respect to any 
        conditions and requirements under which any such 
        reimbursement should be made.
          [(2) Considerations of certain factors.--In making 
        recommendations respecting health care technologies, 
        the Administrator shall consider the safety, efficacy, 
        and effectiveness, and, as appropriate, the appropriate 
        uses of such technologies. The Administrator shall 
        consider the cost effectiveness of such technologies 
        where cost information is available and reliable.
          [(3) Additional assessments.--The Administrator may 
        conduct technology assessments in addition to those 
        assessments performed at the request of the 
        Administrator of the Health Care Financing 
        Administration or of the Secretary of Defense.
          [(4) .--The Administrator shall develop criteria for 
        determining the priority of assessments performed under 
        this subsection. Such criteria shall include--
                  [(A) the prevalence of the health condition 
                for which the technology aims to prevent, 
                diagnose, treat and clinically manage;
                  [(B) variations in current practice;
                  [(C) the economic burden posed by the 
                prevention, diagnosis, treatment, and clinical 
                management of the health condition, including 
                the impact on publicly-funded programs;
                  [(D) aggregate cost of the use of technology;
                  [(E) the morbidity and mortality associated 
                with health condition; and
                  [(F) the potential of an assessment to 
                improve health outcomes or affect costs 
                associated with the prevention, diagnosis, or 
                treatment of the condition.
          [(5) Consultations.--In carrying out this subsection, 
        the Administrator shall cooperate and consult with the 
        Director of the National Institutes of Health, the 
        Commissioner of Food and Drugs, and the heads of any 
        other interested Federal department or agency.
    [(e) Description of Process.--Not later than January 1, 
1994, the Administrator shall develop and publish a description 
of the methodology used to establish priorities for technology 
assessment and the process used to conduct its technology 
assessments under this section.
    [(f) Program of Innovative Assessments.--
          [(1) In general.--The Administrator may make grants 
        to, or enter cooperative agreements or contracts with, 
        entities described in paragraph (2) for the 
        establishment of collaborative arrangements for the 
        purpose of conducting assessments of experimental, 
        emerging, existing, or potentially outmoded health care 
        technologies, and for related activities. Such 
        assessments may include controlled clinical trials, 
        large simple trials, and other methodologies that can 
        be conducted in partnership between the public and 
        private sectors or among multiple government agencies.
          [(2) Elibigle entities.--The entities referred to in 
        paragraph (1) are entities determined to be appropriate 
        by the Administrator, which entities may include 
        academic medical centers, research institutions, 
        nonprofit professional organizations, public or private 
        third party payers, other governmental agencies, and 
        consortia of appropriate research entities established 
        for the purpose of conducting technology assessments.
          [(3) Use of award.--A grant, cooperative agreement, 
        or contract under paragraph (1) may be expended for 
        data collection, data analysis, protocol development, 
        report development, dissemination and evaluation, and 
        other activities determined to be appropriate by the 
        Administrator. Such funds shall not be used for direct 
        services.
          [(4) Application for award.--To be eligible to 
        receive a grant, cooperative agreement, or contract 
        under paragraph (1), an entity shall prepare and submit 
        to the Administrator an application, at such time, in 
        such form, and containing such information as the 
        Administrator may require.
          [(5) Interagency memoranda of understanding.--In 
        carrying out paragraph (1), the Administrator may enter 
        into memoranda of understanding with the heads of other 
        Federal agencies.

      [Part B--Forum for Quality and Effectiveness in Health Care


[SEC. 911. ESTABLISHMENT OF OFFICE.

    [There is established within the Agency an office to known 
as the Office of the Forum for Quality and Effectiveness in 
Health Care. The office shall be headed by a director, who 
shall be appointed by the Administrator. The Administrator 
shall carry out this part acting through the Director.

[SEC. 912. DUTIES.

    [(a) Establishment of Forum Program.--The Administrator 
shall establish a program to be known as the Forum for Quality 
and Effectiveness in Health Care. For the purpose of promoting 
the quality, appropriateness, and effectiveness of health care, 
the Administrator, using the process set forth in section 913, 
shall arrange for the development and periodic review and 
updating of--
          [(1) clinically relevant guidelines that may be used 
        by physicians, educators, and health care practitioners 
        to assist in determining how diseases, disorders, and 
        other health conditions can most effectively and 
        appropriately be prevented, diagnosed, treated and 
        managed clinically; and
          [(2) standards of quality, performance measures, and 
        medical review criteria through which health care 
        providers and other appropriate entities may assess or 
        review the provision of health care and assure the 
        quality of such care.
    [(b) Certain Requirements.--Guidelines, standards, 
performance measures, and review criteria under subsection (a) 
shall--
          [(1) be based on the best available research and 
        professional judgment regarding the effectiveness and 
        appropriateness of health care services and procedures;
          [(2) be presented in formats appropriate for use by 
        physicians, health care practitioners, providers, 
        medical educators, and medical review organizations and 
        in formats appropriate for use by consumers of health 
        care;
          [(3) include treatment-specific or condition-specific 
        practice guidelines for clinical treatments and 
        conditions in forms appropriate for use in educational 
        programs, and for use in reviewing quality and 
        appropriateness of medical care; and
          [(4) include information on risks and benefits of 
        alternative strategies for prevention, diagnosis, 
        treatment, and management of a given disease, disorder, 
        or other health condition; and
          [(5) include information on the costs of alternative 
        strategies for the prevention, diagnosis, treatment, 
        and management of a given disease, disorder, or other 
        health condition, where cost information is available 
        and reliable.
    [(c) Authority for Contracts.--In carrying out this part, 
the Administrator may enter into contracts with public or 
nonprofit private entities.
    [(d) Date Certain for Initial Guidelines and Standards.--
The Administrator, by not later than January 1, 1991, shall 
assure the development of an initial set of guidelines, 
standards, performance measures, and review criteria under 
subsection (a) that includes not less than 3 clinical 
treatments or conditions described in section 1142(a)(3) of the 
Social Security Act.
    [(e) Relationship with Medicare Program.--To assure an 
appropriate reflection of the needs and priorities of the 
program under title XVIII of the Social Security Act, 
activities under this part that affect such programs shall be 
conducted consistent with section 1142 of such Act.
    [(f) Development of Certain Guidelines and Standards.--Not 
later than January 1, 1996, the Administrator shall ensure that 
a set of guidelines, standards, performance measures, and 
review criteria, are developed under subsection (a)(1) that 
address the prevention of not fewer than three conditions that 
account for significant national health expenditures. In 
carrying out this subsection the Administrator shall consult 
with the United States Preventive Services Task Force and other 
recognized experts in the field of disease prevention.

[SEC. 913. PROCESS FOR DEVELOPMENT OF GUIDELINES AND STANDARDS.

    [(a) Development through Contracts and Panels.--The 
Administrator shall--
          [(1) enter into contracts with public and nonprofit 
        private entities for the purpose of developing and 
        periodically reviewing and updating the guidelines, 
        standards, performance measures, and review criteria 
        described in section 912(a); and
          [(2) convene panels of appropriately qualified 
        experts (including practicing physicians with 
        appropriate expertise) and health care consumers for 
        the purpose of--
                  [(A) developing and periodically reviewing 
                and updating the guidelines, standards, 
                performance measures, and review criteria 
                described in section 912(a); and
                  [(B) reviewing the guidelines, standards, 
                performance measures, and review criteria 
                developed under contracts under paragraph (1).
    [(b) Authority for Additional Panels.--The Administrator 
may convene panels of appropriately qualified experts 
(including practicing physicians with appropriate expertise) 
and health care consumers for the purpose of--
          [(1) developing the standards and criteria described 
        in section 914(b); and
          [(2) providing advice to the Administrator and the 
        Director with respect to any other activities carried 
        out under this part or under section 902(a)(2).
    [(c) Selection of Panel Members.--The Administrator shall 
select the chairpersons and the members of the panels convened 
as well as other participants in the guideline process under 
this section. In selecting individuals to serve on panels 
convened under this section, the Administrator shall consult 
with a broad range of interested individuals and organizations, 
including organizations representing physicians in the general 
practice of medicine and organizations representing physicians 
in specialties and subspecialties pertinent to the purposes of 
the panel involved. The Administrator shall seek to appoint 
physicians reflecting a variety of practice settings. In making 
such selecting, the Administrator shall ensure that a balance 
is maintained between individuals selected from academic 
settings and individuals selected without full-time academic 
appointments. At least two other members of such panels shall 
be individuals who do not derive their primary source of 
revenue directly from the performance of procedures discussed 
in the guideline. The Administrator shall ensure that at least 
one participant in the guideline process shall have expertise 
in epidemiology as well as familiarity with the clinical 
condition or treatment in question. The Administrator shall 
also ensure that at least one participant in the guideline 
process shall have expertise in health services research or 
health economics as well as familiarity with the clinical 
condition or treatment in question.

[SEC. 914. ADDITIONAL REQUIREMENTS.

    [(a) Program Agenda.--
          [(1) In general.--The Administrator shall provide for 
        an agenda for the development of the guidelines, 
        standards, performance measures, and review criteria 
        described in section 912(a), including--
                  [(A) with respect to the guidelines, 
                identifying specific diseases, disorders, and 
                other health conditions for which the 
                guidelines are to be developed and those that 
                are to be given priority in the development of 
                the guidelines; and
                  [(B) with respect to the standards, 
                performance measures, and review criteria, 
                identifying specific aspects of health care for 
                which the standards, performance measures, and 
                review criteria, are to be developed and those 
                that are to be given priority in the 
                development of the standards, performance 
                measures, and review criteria.
          [(2) Consideration of certain factors in establishing 
        priorities.--
                  [(A) Factors considered by the Administrator 
                in establishing priorities for purposes of 
                paragraph (1) shall include consideration of 
                the extent to which the guidelines, standards, 
                performance measures, and review criteria 
                involved can be expected--
                          [(i) to improve methods for disease 
                        prevention;
                          [(ii) to improve methods of 
                        diagnosis, treatment, and clinical 
                        management for the benefit of a 
                        significant number of individuals;
                          [(iii) to reduce clinically 
                        significant variations among physicians 
                        in the particular services and 
                        procedures utilized in making diagnoses 
                        and providing treatments; and
                          [(iv) to reduce clinically 
                        significant variations in the outcomes 
                        of health care services and procedures.
                  [(B) In providing for the agenda required in 
                paragraph (1), including the priorities, the 
                Administrator shall consult with the 
                Administrator of the Health Care Financing 
                Administration and otherwise act consistent 
                with section 1142(b)(3) of the Social Security 
                Act.
                  [(C) The Administrator shall develop and 
                publish a methodology for establishing 
                priorities for guideline topics. Such 
                methodology may include the considerations 
                described in section 904(d)(2) or 914(a)(2), 
                and other considerations determined by the 
                Administrator to be appropriate. Using such 
                methodology, the Administrator shall establish 
                and publish annually in the Federal Register a 
                list of guideline topics under consideration.
    [(b) Standards and Criteria.--
          [(1) Process for development, review, and updating.--
        The Administrator shall establish standards and 
        criteria to be utilized by the recipients of contracts 
        under section 913, and by the expert panels convened 
        under such section, with respect to the development and 
        periodic review and updating of the guidelines, 
        standards, performance measures, and review criteria 
        described in section 912(a).
          [(2) Award of contracts.--The Administrator shall 
        establish standards and criteria to be utilized for the 
        purpose of ensuring that contracts entered into for the 
        development or periodic review or updating of the 
        guidelines, standards, performance measures, and review 
        criteria described in section 912(a) will be entered 
        into only with appropriately qualified entities.
          [(3) Certain requirements for standards and 
        criteria.--The Administrator shall ensure that the 
        standards and criteria established under paragraphs (1) 
        and (2) specify that--
                  [(A) appropriate consultations with 
                interested individuals and organizations are to 
                be conducted in the development of the 
                guidelines, standards, performance measures, 
                and review criteria described in section 
                912(a); and
                  [(B) such development may be accomplished 
                through the adoption, with or without 
                modification, of guidelines, standards, 
                performance measures, and review criteria 
                that--
                          [(i) meet the requirements of this 
                        part; and
                          [(ii) are developed by entities 
                        independently of the program 
                        established in this part.
          [(4)Improvements of standards and criteria.--The 
        Administrator shall conduct and support research with 
        respect to improving the standards and criteria 
        developed under this subsection.
    [(c) Dissemination.--The Administrator shall promote and 
support the dissemination of the guidelines, standards, 
performance measures, and review criteria described in section 
912(a). Such dissemination shall be carried out through 
organizations representing health care providers, organizations 
representing health care consumers, peer review organizations, 
accrediting bodies, and other appropriate entities.
    [(d) Pilot Testing.--The Administrator may conduct or 
support pilot testing of the guidelines, standards, performance 
measures, and review criteria developed under section 912(a). 
Any such pilot testing may be conducted prior to, or 
concurrently with, their dissemination under subsection (c).
    [(e) Evaluations.--The Administrator shall conduct and 
support evaluations of the extent to which the guidelines, 
standards, performance standards, and review criteria developed 
under section 912 have had an effect on the clinical practice 
of medicine. Evaluations shall be developed prior to the 
completion and release of the guideline, so that baseline data 
concerning practice patterns and health care costs may be 
obtained as part of the evaluation.
    [(f) Recommendations to Administrator.--The Director shall 
make recommendations to the Administrator on activities that 
should be carried out under section 902(a)(2) and under section 
1142 of the Social Security Act, including recommendations of 
particular research projects that should be carried out with 
respect to--
          [(1) evaluating the outcomes of health care services 
        and procedures;
          [(2) developing the standards and criteria required 
        in sub-section (b); and
          [(3) promoting the utilization of the guidelines, 
        standards, performance standards, and review criteria 
        developed under section 912(a).

                      [Part C--General Provisions


[SEC 921. ADVISORY COUNCIL FOR HEALTH CARE POLICY, RESEARCH, AND 
                    EVALUATION.

    [(a) Establishment.--There is established an advisory 
council to be known as the National Advisory Council for Health 
Care Policy, Research, and Evaluation.
    [(b) Duties.--
          [(1) In general.--The Council shall advise the 
        Secretary and the Administrator with respect to 
        activities to carry out the purpose of the Agency under 
        section 901(b).
          [(2) Certain recommendations.--Activiites of the 
        Council under paragraph (1) shall include making 
        recommendations to the Administrator regarding 
        priorities for a national agenda and strategy for--
                  [(A) the conduct of research, demonstration 
                projects, and evaluations with respect to 
                health care, including clinical practice and 
                primary care;
                  [(B) the development and application of 
                appropriate health care technology assessments;
                  [(C) the development and periodic review and 
                updating of guidelines for clinical practice, 
                standards of quality, performance measures, and 
                medical review criteria with respect to health 
                care; and
                  [(D) the conduct of research on outcomes of 
                health care services and procedures.
    [(c) Membership.--
          [(1) In general.--The council shall, in accordance 
        with this subsection, be composed of appointed members 
        and ex officio members. All members of the Council 
        shall be voting members, other than officials 
        designated under paragraph (3)(B) as ex officio members 
        of the Council.
          [(2) Appointed members.--The Secretary shall appoint 
        to the Council 17 appropriately qualified 
        representatives of the public who are not officers or 
        employees of the United States. The Secretary shall 
        ensure that the appointed members of the Council, as a 
        group, are representative of professions and entities 
        concerned with, or affected by, activities under this 
        title and under section 1142 of the Social Security 
        Act. Of such members--
                  [(A) 8 shall be individuals distinguished in 
                the conduct of research, demonstration 
                projects, and evaluations with respect to 
                health care;
                  [(B) 3 shall be individuals distinguished in 
                the practice of medicine;
                  [(C) 2 shall be individuals distinguished in 
                the health professions;
                  [(D) 2 shall be individuals distinguished in 
                the fields of business, law, ethics, economics, 
                and pubic policy; and
                  [(E) 2 shall be individuals representing the 
                interests of consumers of health care.
          [(3) Ex officio members.--The Secretary shall 
        designate as ex officio members of the Council--
                  [(A) the Director of the National Institutes 
                of Health, the Director of the Centers for 
                Disease Control, the Administrator of the 
                Health Care Financing Administration, the 
                Assistant Secretary of Defense (Health 
                Affairs), the Chief Medical Officer of the 
                Department of Veterans Affairs; and
                  [(B) such other Federal officials as the 
                Secretary may consider appropriate.
    [(d) Terms.--
          [(1) In general.--Except as provided in paragraph 
        (2), members of the Council appointed under subsection 
        (c)(2) shall serve for a term of 3 years.
          [(2) Staggered rotation.--Of the members first 
        appointed to the Council under subsection (c)(2), the 
        Secretary shall appoint 6 members to serve for a term 
        of 3 years, 6 members to serve for a term of 2 years, 
        and 5 members to serve for a term of 1 year.
          [(3) Service beyond term.--A member of the Council 
        appointed under subsection (c)(2) may continue to serve 
        after the expiration of the term of the member until a 
        successor is appointed.
    [(e) Vacancies.--If a member of the Council appointed under 
subsection (c)(2) does not serve the full term applicable under 
subsection (d), the individual appointed to fill the resulting 
vacancy shall be appointed for the remainder of the term of the 
predecessor of the individual.
    [(f) Chair.--The Administrator shall, from among the 
members of the Council appointed under subsection (c)(2), 
designate an individual to serve as the chair of the Council.
    [(g) Meetings.--The Council shall meet not less than once 
during each discrete 4-month period and shall otherwise meet at 
the call of the Administrator or the chair.
    [(h) Compensation and Reimbursement of Expenses.--
          [(1) Appointed members.--Members of the Council 
        appointed under subsection (c)(2) shall receive 
        compensation for each day (including traveltime) 
        engaged in carrying out the duties of the Council. Such 
        compensation may not be in an amount in excess of the 
        maximum rate of basic pay payable for GS-18 of the 
        General Schedule.
          [(2) Ex officio members.--Officials designated under 
        subsection (c)(3) as ex officio members of the Council 
        may not receive compensation for service on the Council 
        in addition to the compensation otherwise received for 
        duties carried out as officers of the United States.
    [(i) Staff.--The Administrator shall provide to the Council 
such staff, information, and other assistance as may be 
necessary to carry out the duties of the Council.
    [(j) Duration.--Notwithstanding section 14(a) of the 
Federal Advisory Committee Act, the Council shall continue in 
existence until otherwise provided by law.

[SEC. 922. PEER REVIEW WITH RESPECT TO GRANTS AND CONTRACTS.

    [(a) Requirement of Review.--
          [(1) In general.--Appropriate technical and 
        scientific peer review shall be conducted with respect 
        to each application for a grant, cooperative agreement, 
        or contract under this title.
          [(2) Reports to administrator.--Each peer review 
        group to which an application is submitted pursuant to 
        paragraph (1) shall report its finding and 
        recommendations respecting the application to the 
        Administrator in such form and in such manner as the 
        Administrator shall require.
    [(b) Approval as precondition of awards.--The Administrator 
may not approve an application described in subsection (a)(1) 
unless the application is recommended for approval by a peer 
review group established under subsection (c).
    [(c) Establishment of Peer Review Groups.--
          [(1) In general.--The Administrator shall establish 
        such technical and scientific peer review groups as may 
        be necessary to carry out this section. Such groups 
        shall be established without regard to the provisions 
        of title 5, United States Code, that govern 
        appointments in the competitive service, and without 
        regard to the provisions of chapter 51, and subchapter 
        III of chapter 53, of such title that relate to 
        classification and pay rates under the General 
        Schedule.
          [(2) Membership.--The members of any peer review 
        group established under this section shall be appointed 
        from among individuals who by virtue of their training 
        or experience are eminently qualified to carry out the 
        duties of such peer review group. Officers and 
        employees of the United States may not constitute more 
        than 25 percent of the membership of any such group. 
        Such officers and employees may not receive 
        compensation for service on such groups in addition to 
        the compensation otherwise received for duties carried 
        out as such officers and employees.
          [(3) Duration.--Notwithstanding section 14(a) of the 
        Federal Advisory Committee Act, peer review groups 
        established under this section shall continue in 
        existence until otherwise provided by law.
    [(d) Categories of Review.--
          [(1) In general.--With respect to technical and 
        scientific peer review under this section, there shall 
        be two categories of peer review groups as follows:
                  [(A) One category of such groups shall, 
                subject to subparagraph (B), review 
                applications with respect to research, 
                demonstration projects, or evaluations.
                  [(B) The other category of such groups shall 
                review applications with respect to 
                dissemination activities or the development of 
                research agendas (including conferences, 
                workshops, and meetings). If the purpose of a 
                proposal presented in an application is a 
                matter described in the preceding sentence, the 
                application shall be reviewed by the groups 
                referred to in such sentence, notwithstanding 
                that the proposal involves research, 
                demonstration projects, or evaluations.
          [(2) Authority for procedural adjustments in certain 
        cases.--In the case of application described in 
        subsection (a)(1) for financial assistance whose direct 
        costs will not exceed $50,000, the Administrator may 
        make appropriate adjustments in the procedures 
        otherwise established by the Administrator for the 
        conduct of peer review under this section. Such 
        adjustments may be made for the purpose of encouraging 
        the entry of individuals into the field of research, 
        for the purpose of encouraging clinical practice-
        oriented research, and for such other purposes as the 
        Administrator may determine to be appropriate.
    [(e) Regulations.--The Secretary shall issue regulations 
for the conduct of peer review under this section.

[SEC. 923. CERTAIN PROVISIONS WITH RESPECT TO DEVELOPMENT, COLLECTION, 
                    AND DISSEMINATION OF DATA.

    [(a) Standards with Respect to Utility of Data.--
          [(1) In general.--With respect to data developed or 
        collected by any entity for the purpose described in 
        section 901(b), the administrator shall, in order to 
        assure the utility, accuracy, and sufficiency of such 
        data for all interested entities, establish guidelines 
        for uniform methods of developing and collecting such 
        data. Such guidelines shall include specifications for 
        the development and collection of data on the outcomes 
        of health care services and procedures.
          [(2) Relationship with medicare program.--In any case 
        where guidelines under paragraph (1) may affect the 
        administration of the program under title XVIII of the 
        Social Security Act, the guidelines shall be in the 
        form of recommendations to the Secretary for such 
        program.
    [(b) Statistics.--The Administrator shall--
          [(1) take such action as may be necessary to assure 
        that statistics developed under this title are of high 
        quality, timely, and comprehensive, as well as 
        specific, standardized, and adequately analyzed and 
        indexed; and
          [(2) publish, make available, and disseminate such 
        statistics on as well a basis as is practicable.
    [(c) Authority Regarding Certain Requests.--Upon the 
request of a public or nonprofit private entity, the 
Administrator may tabulate and analyze statistics under 
arrangements under which such entity will pay the cost of the 
service provided. Amounts appropriated to the Administrator 
from payments made under such arrangements shall be available 
to the Administrator for obligation until expended.

[SEC. 924. ADDITIONAL PROVISIONS WITH RESPECT TO GRANTS AND CONTRACTS.

    [(a) Financial Conflicts of Interest.--With respect to 
projects for which awards of grants, cooperative agreement, or 
contracts are authorized to be made under this title, the 
Administrator shall by regulation define----
          [(1) the specific circumstances that constitute 
        financial interests in such projects that will, or may 
        be reasonably expected to, create a bias in favor of 
        obtaining results in the projects that are consistent 
        with such interests; and
          [(2) the actions that will be taken by the 
        Administrator in response to any such interests 
        identified by the Administrator.
    [(b) Requirement of Application.--The Administrator may 
not, with respect to any program under this title authorizing 
the provision of grants, cooperative agreements, or contracts, 
provide any such financial assistance unless an application for 
the assistance is submitted to the Secretary and the 
application is in such form, is made in such manner, and 
contains such agreements, assurances, and information as the 
Administrator determines to be necessary to carry out the 
program involved.
    [(c) Provision of Supplies and Services in Lieu of Funds.--
          [(1) In general.--Upon the request of an entity 
        receiving a grant, cooperative agreement, or contract 
        under this title, the Secretary may, subject to 
        paragraph (2), provide supplies, equipment, and 
        services for the purpose of aiding the entity in 
        carrying out the project involved and, for such 
        purpose, may detail to the entity any officer or 
        employee of the Department of Health and Human 
        Services.
          [(2) Corresponding reduction in funds.--With respect 
        to a request described in paragraph (1), the Secretary 
        shall reduce the amount of the financial assistance 
        involved by an amount equal to the costs of detailing 
        assistance involved by amount equal to the costs of 
        detailing personnel and the fair market value of any 
        supplies, equipment, or services provided by the 
        Administrator. The Secretary shall, for the payment of 
        expenses incurred in complying with such request, 
        expend the amounts withheld.
    [(d) Applicability of Certain Provisions with Respect to 
Contracts.--Contracts may be entered into under this part with 
out regard to sections 3648 and 3709 of the Revised Statutes 
(31 U.S.C. 529; 41 U.S.C. 5).

[SEC. 925. CERTAIN ADMINISTRATIVE AUTHORITIES.

    [(a) Deputy Administrator and Other Officers and 
Employees.--
          [(1) Deputy administrator.--The Administrator may 
        appoint a deupty administrator for the Agency.
          [(2) Other officers and employees.--The Administrator 
        may appoint and fix the compensation of such officers 
        and employees as may be necessary to carry out this 
        title. Except as otherwise provided by law, such 
        officers and employees shall be appointed in accordance 
        with the civil service laws and their compensation 
        fixed in accordance with title 5, United States Code.
    [(b) Facilities.--The Secretary, in carrying out this 
title--
          [(1) may acquire, without regard to the Act of March 
        3, 1877 (40 U.S.C. 34), by lease or otherwise through 
        the Administrator of General Services, buildings or 
        portions of buildings in the District of Columbia or 
        communities located adjacent to the District of 
        Columbia for use for a period not to exceed 10 years; 
        and
          [(2) may acquire, construct, improve, repair, 
        operate, and maintain laboratory, research, and other 
        necessary facilities and equipment, and such other real 
        or personal property (including patents) as the 
        Secretary deems necessary.
    [(c) Provision of Financial Assistance.--The Administrator, 
in carrying out this title, may make grants to, and enter into 
cooperative agreements with, public and nonprofit private 
entities and individuals, and when appropriate, may enter into 
contracts with public and private entities and individuals.
    [(d) Utilization of Certain Personnel and Resources.--
          [(1) Department of health and human services.--The 
        Administrator, in carrying out this title, may utilize 
        personnel and equipment, facilities, and other physical 
        resources of the Department of Health and Human 
        Services, permit appropriate (as determined by the 
        Secretary) entities and individuals to utilize the 
        physical resources of such Department, and provide 
        technical assistance and advice.
          [(2) Other agencies.--The Administrator, in carrying 
        out this title, may use, with their consent, the 
        services, equipment, personnel, information, and 
        facilities of other Federal, State, or local public 
        agencies, or of any foreign government, with or without 
        reimbursement of such agencies.
    [(e) Consultants.--The Secretary, in carrying out this 
title, may secure, from time to time and for such periods as 
the Administrator deems advisable but in accordance with 
section 3109 of title 5, United States Code, the assistance and 
advice of consultants from the United States or abroad.
    [(f) Experts.--
          [(1) In general.--The Secretary may, in carrying out 
        this title, obtain the services of not more than 50 
        experts or consultants who have appropriate scientific 
        or professional qualifications. Such experts or 
        consultants shall be obtained in accordance with 
        section 3109 of title 5, United States Code, except 
        that the limitation in such section on the duration of 
        service shall not apply.
          [(2) Travel expenses.--
                  [(A) Experts and consultants whose services 
                are obtained under paragraph (1) shall be paid 
                or reimbursed for their expenses associated 
                with traveling to and from their assignment 
                location in accordance with sections 5724, 
                5724a(a), 5724a(c), and 5726(c) of title 5, 
                United States Code.
                  [(B) Expenses specified in subparagraph (A) 
                may not be allowed in connection with the 
                assignment of an expert or consultant whose 
                services are obtained under paragraph (1) 
                unless and until the expert agrees in writing 
                to complete the entire period of assignment, or 
                one year, whichever is shorter, unless 
                separated or reassigned for reasons that are 
                beyond the control of the expert or consultant 
                and that are acceptable to the Secretary. If 
                the expert or consultant violates the 
                agreement, the money spent by the United States 
                for the expenses specified in subparagraph (a) 
                is recoverable from the expert or consultant as 
                a debt of the United States. The Secretary may 
                waive in whole or in part a right of recovery 
                under this subparagraph.
    [(g) Voluntary and Uncompensated Services.--The 
Administrator, in carrying out this title, may accept voluntary 
and uncompensated services.

SEC. 926. FUNDING.

    [(a) Authorization of Appropriations.--For the purpose of 
carrying out this title, there are authorized to be 
appropriated $115,000,000 for fiscal year 1993, $145,000,000 
for fiscal year 1994, and $175,000,000 for fiscal year 1995.
    [(b) Evaluations.--In addition to amounts available 
pursuant to subsection (a) for carrying out this title, there 
shall be made available for such purpose, from the amounts made 
available pursuant to section 241 of this Act (relating to 
evaluations), an amount equal to 40 percent of the maximum 
amount authorized in such section 241 to be made available.
    [(c) Information Center.--For purposes of carrying out the 
activities under section 903(e), there are authorized to be 
appropriate $3,000,000 for fiscal year 1993, and such sums as 
may be necessary for each of the fiscal years 1994 and 1995.
    [(d) Health Care Technology Assessment.--For the purpose of 
carrying out technology assessment activities under section 
904(d), there are authorized to be appropriate $2,000,000 for 
fiscal year 1993, and such sums as may be necessary for each of 
the fiscal years 1994 and 1995.
    [(e) Program of Innovative Assessments.--For purposes of 
establishing the program of innovative assessments under 
section 904(f), there are authorized to be appropriated 
$2,000,000 for fiscal year 1993, and such sums as may be 
necessary in each of the fiscal years 1994 and 1995.

[SEC. 927. DEFINITIONS.

    [For purposes of this title:
          [(1) The term ``Administrator'' means the 
        Administrator for Health Care Policy and Research.
          [(2) The term ``Agency'' means the Agency for Health 
        Care Policy and Research.
          [(3) The term ``Council'' means the National Advisory 
        Council on Health Care Policy, Research, and 
        Evaluation.
          [(4) The term ``Director'' means the Director of the 
        Office of the Forum for Quality and Effectiveness in 
        Health Care.]

          TITLE IX--AGENCY FOR HEALTHCARE RESEARCH AND QUALITY

                PART A--ESTABLISHMENT AND GENERAL DUTIES

SEC. 901. MISSION AND DUTIES.

    (a) In General.--There is established within the Public 
Health Service an agency to be known as the Agency for 
Healthcare Research and Quality. In carrying out this 
subsection, the Secretary shall redesignate the Agency for 
Health Care Policy and Research as the Agency for Healthcare 
Research and Quality.
    (b) Mission.--The purpose of the Agency is to enhance the 
quality, appropriateness, and effectiveness of healthcare 
services, and access to such services, through the 
establishment of a broad base of scientific research and 
through the promotion of improvements in clinical and health 
system practices, including the prevention of diseases and 
other health conditions. The Agency shall promote healthcare 
quality improvement by--
          (1) conducting and supporting research that develops 
        and presents scientific evidence regarding all aspects 
        of healthcare, including--
                  (A) the development and assessment of methods 
                for enhancing patient participation in their 
                own care and for facilitating shared patient-
                physician decision-making;
                  (B) the outcomes, effectiveness, and cost-
                effectiveness of healthcare practices, 
                including preventive measures and long-term 
                care;
                  (C) existing and innovative technologies;
                  (D) the costs and utilization of, and access 
                to healthcare;
                  (E) the ways in which healthcare services are 
                organized, delivered, and financed and the 
                interaction and impact of these factors on the 
                quality of patient care;
                  (F) methods for measuring quality and 
                strategies for improving quality; and
                  (G) ways in which patients, consumers, 
                purchasers, and practitioners acquire new 
                information about best practices and health 
                benefits, the determinants and impact of their 
                use of this information;
          (2) synthesizing and disseminating available 
        scientific evidence for use by patients, consumers, 
        practitioners, providers, purchasers, policy makers, 
        and educators; and
          (3) advancing private and public efforts to improve 
        healthcare quality.
    (c) Requirements With Respect to Rural Areas and Priority 
Populations.--In carrying out subsection (b), the Director 
shall undertake and support research, demonstration projects, 
and evaluations with respect to the delivery of health 
services--
          (1) the delivery of health services in rural areas 
        (including frontier areas);
          (2) health services for low-income groups, and 
        minority groups;
          (3) the health of children;
          (4) for elderly; and
          (5) for people with special healthcare needs, 
        including disabilities, chronic care and end-of-life 
        healthcare.
    (d) Appointment of Director.--There shall be at the head of 
the Agency an official to be known as the Director for 
Healthcare Research and Quality. The Director shall be 
appointed by the Secretary. The Secretary, acting through the 
Director, shall carry out the authorities and duties 
established in this title.

SEC. 902. GENERAL AUTHORITIES.

    (a) In General.--In carrying out section 901(b), the 
Director shall support demonstration projects, conduct and 
support research, evaluations, training, research networks, 
multi-disciplinary centers, technical assistance, and the 
dissemination of information, on healthcare, and on systems for 
the delivery of such care, including activities with respect 
to--
          (1) the quality, effectiveness, efficiency, 
        appropriateness and value of healthcare services;
          (2) quality measurement and improvement;
          (3) the outcomes, cost, cost-effectiveness, and use 
        of healthcare services and access to such services;
          (4) clinical practice, including primary care and 
        practice-oriented research;
          (5) healthcare technologies, facilities, and 
        equipment;
          (6) healthcare costs, productivity, organization, and 
        market forces;
          (7) health promotion and disease prevention, 
        including clinical preventive services;
          (8) health statistics, surveys, database development, 
        and epidemiology; and
          (9) medical liability.
    (b) Health Services Training Grants.--
          (1) In general.--The Director may provide training 
        grants in the field of health services research related 
        to activities authorized under subsection (a), to 
        include pre- and post-doctoral fellowships and training 
        programs, young investigator awards, and other programs 
        and activities as appropriate. In carrying out this 
        subsection, the Director shall make use of funds made 
        available under section 487 as well as other 
        appropriated funds.
          (2) Requirements.--In developing priorities for the 
        allocation of training funds under this subsection, the 
        Director shall take into consideration shortages in the 
        number of trained researchers addressing the priority 
        populations.
    (c) Multidisciplinary Centers.--The Director may provide 
financial assistance to assist in meeting the costs of planning 
and establishing new centers, and operating existing and new 
centers, for multidisciplinary health services research, 
demonstration projects, evaluations, training, and policy 
analysis with respect to the matters referred to in subsection 
(a).
    (d) Relation to Certain Authorities Regarding Social 
Security.--Activities authorized in this section shall be 
appropriately coordinated with experiments, demonstration 
projects, and other related activities authorized by the Social 
Security Act and the Social Security Amendments of 1967. 
Activities under subsection (a)(2) of this section that affect 
the programs under titles XVIII, XIX and XXI of the Social 
Security Act shall be carried out consistent with section 1142 
of such Act.
    (e) Disclaimer.--The Agency shall not mandate national 
standards of clinical practice or quality healthcare standards. 
Recommendations resulting from projects funded and published by 
the Agency shall include a corresponding disclaimer.
    (f) Rule of Construction.--Nothing in this section shall be 
construed to imply that the Agency's role is to mandate a 
national standard or specific approach to quality measurement 
and reporting. In research and quality improvement activities, 
the Agency shall consider a wide range of choices, providers, 
healthcare delivery systems, and individual preferences.

                PART B--HEALTHCARE IMPROVEMENT RESEARCH

SEC. 911. HEALTHCARE OUTCOME IMPROVEMENT RESEARCH.

    (a) Evidence Rating Systems.--In collaboration with experts 
from the public and private sector, the Agency shall identify 
and disseminate methods or systems that it uses to assess 
healthcare research results, particularly methods or systems 
that it uses to rate the strength of the scientific evidence 
behind healthcare practice, recommendations in the research 
literature, and technology assessments. The Agency shall make 
methods and systems for evidence rating widely available. 
Agency publications containing healthcare recommendations shall 
indicate the level of substantiating evidence using such 
methods or systems.
    (b) Healthcare Improvement Research Centers and Provider-
Based Research Networks.--
          (1) In general.--In order to address the full 
        continuum of care and outcomes research, to link 
        research to practice improvement, and to speed the 
        dissemination of research findings to community 
        practice settings, the Agency shall employ research 
        strategies and mechanisms that will link research 
        directly with clinical practice in geographically 
        diverse locations throughout the United States, including--
          (A) Healthcare Improvement Research Centers that 
        combine demonstrated multidisciplinary expertise in 
        outcomes or quality improvement research with linkages 
        to relevant sites of care;
          (B) Provider-based Research Networks, including plan, 
        facility, or delivery system sites of care (especially 
        primary care), that can evaluate and promote quality 
        improvement; and
          (C) other innovative mechanisms or strategies to link 
        research with clinical practice.
          (2) Requirements.--The Director is authorized to 
        establish the requirements for entities applying for 
        grants under this subsection.

SEC. 912. PRIVATE-PUBLIC PARTNERSHIPS TO IMPROVE ORGANIZATION AND 
                    DELIVERY.

    (a) Support for Efforts To Develop Information on 
Quality.--
          (1) Scientific and technical support.--In its role as 
        the principal agency for healthcare research and 
        quality, the Agency may provide scientific and 
        technical support for private and public efforts to 
        improve healthcare quality, including the activities of 
        accrediting organizations.
          (2) Role of the agency.--With respect to paragraph 
        (1), the role of the Agency shall include--
                  (A) the identification and assessment of 
                methods for the evaluation of the health of--
                          (i) enrollees in health plans by type 
                        of plan, provider, and provider 
                        arrangements; and
                          (ii) other populations, including 
                        those receiving long-term care 
                        services;
                  (B) the ongoing development, testing, and 
                dissemination of quality measures, including 
                measures of health and functional outcomes;
                  (C) the compilation and dissemination of 
                healthcare quality measures developed in the 
                private and public sector;
                  (D) assistance in the development of improved 
                healthcare information systems;
                  (E) the development of survey tools for the 
                purpose of measuring participant and 
                beneficiary assessments of their healthcare; 
                and
                  (F) identifying and disseminating information 
                on mechanisms for the integration of 
                information on quality into purchaser and 
                consumer decision-making processes.
    (b) Centers for Education and Research on Therapeutics.--
          (1) In general.--The Secretary, acting through the 
        Director and in consultation with the Commissioner of 
        Food and Drugs, shall establish a program for the 
        purpose of making one or more grants for the 
        establishment and operation of one or more centers to 
        carry out the activities specified in paragraph (2).
          (2) Required activities.--The activities referred to 
        in this paragraph are the following:
                  (A) The conduct of state-of-the-art clinical 
                research for the following purposes:
                          (i) To increase awareness of--
                                  (I) new uses of drugs, 
                                biological products, and 
                                devices;
                                  (II) ways to improve the 
                                effective use of drugs, 
                                biological products, and 
                                devices; and
                                  (III) risks of new uses and 
                                risks of combinations of drugs 
                                and biological products.
                          (ii) To provide objective clinical 
                        information to the following 
                        individuals and entities:
                                  (I) Healthcare practitioners 
                                and other providers of 
                                healthcare goods or services.
                                  (II) Pharmacists, pharmacy 
                                benefit managers and 
                                purchasers.
                                  (III) Health maintenance 
                                organizations and other managed 
                                healthcare organizations.
                                  (IV) Healthcare insurers and 
                                governmental agencies.
                                  (V) Patients and consumers.
                          (iii) To improve the quality of 
                        healthcare while reducing the cost of 
                        Healthcare through--
                                  (I) an increase in the 
                                appropriate use of drugs, 
                                biological products, or 
                                devices; and
                                  (II) the prevention of 
                                adverse effects of drugs, 
                                biological products, and 
                                devices and the consequences of 
                                such effects, such as 
                                unnecessary hospitalizations.
                  (B) The conduct of research on the 
                comparative effectiveness, cost-effectiveness, 
                and safety of drugs, biological products, and 
                devices.
                  (C) Such other activities as the Secretary 
                determines to be appropriate, except that grant 
                funds may not be used by the Secretary in 
                conducting regulatory review of new drugs.
  (c) Reducing Errors in Medicine.--The Director shall conduct 
and support research and build private-public partnerships to--
          (1) identify the causes of preventable healthcare 
        errors and patient injury in healthcare delivery;
          (2) develop, demonstrate, and evaluate strategies for 
        reducing errors and improving patient safety; and
          (3) promote the implementation of effective 
        strategies throughout the healthcare industry.

SEC. 913. INFORMATION ON QUALITY AND COST OF CARE.

  (a) In General.--In carrying out 902(a), the Director shall--
          (1) conduct a survey to collect data on a nationally 
        representative sample of the population on the cost, 
        use and, for fiscal year 2001 and subsequent fiscal 
        years, quality of healthcare, including the types of 
        healthcare services Americans use, their access to 
        healthcare services, frequency of use, how much is paid 
        for the services used, the source of those payments, 
        the types and costs of private health insurance, 
        access, satisfaction, and quality of care for the 
        general population including rural residents and for 
        the populations identified in section 901(c); and
          (2) develop databases and tools that provide 
        information to States on the quality, access, and use 
        of healthcare services provided to their residents.
  (b) Quality and Outcomes Information.--
          (1) In general.--Beginning in fiscal year 2001, the 
        Director shall ensure that the survey conducted under 
        subsection (a)(1) will--
                  (A) identify determinants of health outcomes 
                and functional status, and their relationships 
                to healthcare access and use, determine the 
                ways and extent to which the priority 
                populations enumerated in section 901(c) differ 
                from the general population with respect to 
                such variables, measure changes over time with 
                respect to such variable, and monitor the 
                overall national impact of changes in Federal 
                and State policy on healthcare;
                  (B) provide information on the quality of 
                care and patient outcomes for frequently 
                occurring clinical conditions for a nationally 
                representative sample of the population 
                including rural residents; and
                  (C) provide reliable national estimates for 
                children and persons with special healthcare 
                needs through the use of supplements or 
                periodic expansions of the survey.
        In expanding the Medical Expenditure Panel Survey, as 
        in existence on the date of enactment of this title, in 
        fiscal year 2001 to collect information on the quality 
        of care, the Director shall take into account any 
        outcomes measurements generally collected by private 
        sector accreditation organizations.
          (2) Annual report.--Beginning in fiscal year 2003, 
        the Secretary, acting through the Director, shall 
        submit to Congress an annual report on national trends 
        in the quality of healthcare provided to the American 
        people.

SEC. 914. INFORMATION SYSTEMS FOR HEALTHCARE IMPROVEMENT.

  (a) In General.--In order to foster a range of innovative 
approaches to the management and communication of health 
information, the Agency shall support research, evaluations and 
initiatives to advance--
          (1) the use of information systems for the study of 
        healthcare quality, including the generation of both 
        individual provider and plan-level comparative 
        performance data;
          (2) training for healthcare practitioners and 
        researchers in the use of information systems;
          (3) the creation of effective linkages between 
        various sources of health information, including the 
        development of information networks;
          (4) the delivery and coordination of evidence-based 
        healthcare services, including the use of real-time 
        healthcare decision-support programs;
          (5) the utility and comparability of health 
        information data and medical vocabularies by addressing 
        issues related to the content, structure, definitions 
        and coding of such information and data in consultation 
        with appropriate Federal, State and private entities;
          (6) the use of computer-based health records in all 
        settings for the development of personal health records 
        for individual health assessment and maintenance, and 
        for monitoring public health and outcomes of care 
        within populations; and
          (7) the protection of individually identifiable 
        information in health services research and healthcare 
        quality improvement.
  (b) Demonstration.--The Agency shall support demonstrations 
into the use of new information tools aimed at improving shared 
decision-making between patients and their care-givers.

SEC. 915. RESEARCH SUPPORTING PRIMARY CARE AND ACCESS IN UNDERSERVED 
                    AREAS.

  (a) Preventive Services Task Force.--
          (1) Establishment and purpose.--The Director may 
        periodically convene a Preventive Services Task Force 
        to be composed of individuals with appropriate 
        expertise. Such a task force shall review the 
        scientific evidence related to the effectiveness, 
        appropriateness, and cost-effectiveness of clinical 
        preventive services for the purpose of developing 
        recommendations for the healthcare community, and 
        updating previous clinical preventive recommendations.
          (2) Role of agency.--The Agency shall provide ongoing 
        administrative, research, and technical support for the 
        operations of the Preventive Services Task Force, 
        including coordinating and supporting the dissemination 
        of the recommendations of the Task Force.
          (3) Operation.--In carrying out its responsibilities 
        under paragraph (1), the Task Force is not subject to 
        the provisions of Appendix 2 of title 5, United States 
        Code.
  (b) Primary Care Research.--
          (1) In general.--There is established within the 
        Agency a Center for Primary Care Research (referred to 
        in this subsection as the `Center') that shall serve as 
        the principal source of funding for primary care 
        practice research in the Department of Health and Human 
        Services. For purposes of this paragraph, primary care 
        research focuses on the first contact when illness or 
        health concerns arise, the diagnosis, treatment or 
        referral to specialty care, preventive care, and the 
        relationship between the clinician and the patient in 
        the context of the family and community.
          (2) Research.--In carrying out this section, the 
        Center shall conduct and support research concerning--
                  (A) the nature and characteristics of primary 
                care practice;
                  (B) the management of commonly occurring 
                clinical problems;
                  (C) the management of undifferentiated 
                clinical problems; and
                  (D) the continuity and coordination of health 
                services.

SEC. 916. CLINICAL PRACTICE AND TECHNOLOGY INNOVATION.

  (a) In General.--The Director shall promote innovation in 
evidence-based clinical practice and healthcare technologies 
by--
          (1) conducting and supporting research on the 
        development, diffusion, and use of healthcare 
        technology;
          (2) developing, evaluating, and disseminating 
        methodologies for assessments of healthcare practices 
        and healthcare technologies;
          (3) conducting intramural and supporting extramural 
        assessments of existing and new healthcare practices 
        and technologies;
          (4) promoting education, training, and providing 
        technical assistance in the use of healthcare practice 
        and healthcare technology assessment methodologies and 
        results; and
          (5) working with the National Library of Medicine and 
        the public and private sector to develop an electronic 
        clearinghouse of currently available assessments and 
        those in progress.
  (b) Specification of Process.--
          (1) In general.--Not later than December 31, 2000, 
        the Director shall develop and publish a description of 
        the methodology used by the Agency and its contractors 
        in conducting practice and technology assessment.
          (2) Consultations.--In carrying out this subsection, 
        the Director shall cooperate and consult with the 
        Assistant Secretary for Health, the Administrator of 
        the Health Care Financing Administration, the Director 
        of the National Institutes of Health, the Commissioner 
        of Food and Drugs, and the heads of any other 
        interested Federal department or agency, and shall seek 
        input, where appropriate, from professional societies 
        and other private and public entities.
          (3) Methodology.--The Director shall, in developing 
        assessment methodology, consider--
                  (A) safety, efficacy, and effectiveness;
                  (B) legal, social, and ethical implications;
                  (C) costs, benefits, and cost-effectiveness;
                  (D) comparisons to alternate technologies and 
                practices; and
                  (E) requirements of Food and Drug 
                Administration approval to avoid duplication.
  (c) Specific Assessments.--
          (1) In general.--The Director shall conduct or 
        support specific assessments of healthcare technologies 
        and practices.
          (2) Requests for assessments.--The Director is 
        authorized to conduct or support assessments, on a 
        reimbursable basis, for the Health Care Financing 
        Administration, the Department of Defense, the 
        Department of Veterans Affairs, the Office of Personnel 
        Management, and other public or private entities.
          (3) Grants and contracts.--In addition to conducting 
        assessments, the Director may make grants to, or enter 
        into cooperative agreements or contracts with, entities 
        described in paragraph (4) for the purpose of conducting 
        assessments of experimental, emerging, existing, or 
        potentially outmoded healthcare technologies, and for 
        related activities.
          (4) Eligible entities.--An entity described in this 
        paragraph is an entity that is determined to be 
        appropriate by the Director, including academic medical 
        centers, research institutions and organizations, 
        professional organizations, third party payers, 
        governmental agencies, and consortia of appropriate 
        research entities established for the purpose of 
        conducting technology assessments.

SEC. 917. COORDINATION OF FEDERAL GOVERNMENT QUALITY IMPROVEMENT 
                    EFFORTS.

  (a) Requirement.--
          (1) In general.--To avoid duplication and ensure that 
        Federal resources are used efficiently and effectively, 
        the Secretary, acting through the Director, shall 
        coordinate all research, evaluations, and 
        demonstrations related to health services research, 
        quality measurement and quality improvement activities 
        undertaken and supported by the Federal Government.
          (2) Specific activities.--The Director, in 
        collaboration with the appropriate Federal officials 
        representing all concerned executive agencies and 
        departments, shall develop and manage a process to--
                  (A) improve interagency coordination, 
                priority setting, and the use and sharing of 
                research findings and data pertaining to 
                Federal quality improvement programs, 
                technology assessment, and health services 
                research;
                  (B) strengthen the research information 
                infrastructure, including databases, pertaining 
                to Federal health services research and 
                healthcare quality improvement initiatives;
                  (C) set specific goals for participating 
                agencies and departments to further health 
                services research and healthcare quality 
                improvement; and
                  (D) strengthen the management of Federal 
                healthcare quality improvement programs.
  (b) Study by the Institute of Medicine.--
          (1) In general.--To provide Congress, the Department 
        of Health and Human Services, and other relevant 
        departments with an independent, external review of 
        their quality oversight, quality improvement and 
        quality research programs, the Secretary shall enter 
        into a contract with the Institute of Medicine--
                  (A) to describe and evaluate current quality 
                improvement, quality research and quality 
                monitoring processes through--
                          (i) an overview of pertinent health 
                        services research activities and 
                        quality improvement efforts conducted 
                        by all Federal programs, with 
                        particular attention paid to those 
                        under titles XVIII, XIX, and XXI of the 
                        Social Security Act; and
                          (ii) a summary of the partnerships 
                        that the Department of Health and Human 
                        Services has pursued with private 
                        accreditation, quality measurement and 
                        improvement organizations; and
                  (B) to identify options and make 
                recommendations to improve the efficiency and 
                effectiveness of quality improvement programs 
                through--
                          (i) the improved coordination of 
                        activities across the medicare, 
                        medicaid and child health insurance 
                        programs under titles XVIII, XIX and 
                        XXI of the Social Security Act and 
                        health services research programs;
                          (ii) the strengthening of patient 
                        choice and participation by 
                        incorporating state-of-the-art quality 
                        monitoring tools and making information 
                        on quality available; and
                          (iii) the enhancement of the most 
                        effective programs, consolidation as 
                        appropriate, and elimination of 
                        duplicative activities within various 
                        federal agencies.
          (2) Requirements.--
                  (A) In general.--The Secretary shall enter 
                into a contract with the Institute of Medicine 
                for the preparation--
                          (i) not later than 12 months after 
                        the date of enactment of this title, of 
                        a report providing an overview of the 
                        quality improvement programs of the 
                        Department of Health and Human Services 
                        for the medicare, medicaid, and CHIP 
                        programs under titles XVIII, XIX, and 
                        XXI of the Social Security Act; and
                          (ii) not later than 24 months after 
                        the date of enactment of this title, of 
                        a final report containing 
                        recommendations.
                  (B) Reports.--The Secretary shall submit the 
                reports described in subparagraph (A) to the 
                Committee on Finance and the Committee on 
                Health, Education, Labor, and Pensions of 
                the Senate and the Committee on Ways and Means 
                and the Committee on Commerce of the House of 
                Representatives.

                       PART C--GENERAL PROVISIONS

SEC. 921. ADVISORY COUNCIL FOR HEALTHCARE RESEARCH AND QUALITY.

  (a) Establishment.--There is established an advisory council 
to be known as the Advisory Council for Healthcare Research and 
Quality.
  (b) Duties.--
          (1) In general.--The Advisory Council shall advise 
        the Secretary and the Director with respect to 
        activities proposed or undertaken to carry out the 
        purpose of the Agency under section 901(b).
          (2) Certain recommendations.--Activities of the 
        Advisory Council under paragraph (1) shall include 
        making recommendations to the Director regarding--
                  (A) priorities regarding healthcare research, 
                especially studies related to quality, 
                outcomes, cost and the utilization of, and 
                access to, healthcare services;
                  (B) the field of healthcare research and 
                related disciplines, especially issues related 
                to training needs, and dissemination of 
                information pertaining to healthcare quality; 
                and
                  (C) the appropriate role of the Agency in 
                each of these areas in light of private sector 
                activity and identification of opportunities 
                for public-private sector partnerships.
  (c) Membership.--
          (1) In general.--The Advisory Council shall, in 
        accordance with this subsection, be composed of 
        appointed members and ex officio members. All members 
        of the Advisory Council shall be voting members other 
        than the individuals designated under paragraph (3)(B) 
        as ex officio members.
          (2) Appointed members.--The Secretary shall appoint 
        to the Advisory Council 21 appropriately qualified 
        individuals. At least 17 members of the Advisory 
        Council shall be representatives of the public who are 
        not officers or employees of the United States. The 
        Secretary shall ensure that the appointed members of 
        the Council, as a group, are representative of 
        professions and entities concerned with, or affected 
        by, activities under this title and under section 1142 
        of the Social Security Act. Of such members--
                  (A) 4 shall be individuals distinguished in 
                the conduct of research, demonstration 
                projects, and evaluations with respect to 
                healthcare;
                  (B) 4 shall be individuals distinguished in 
                the practice of medicine of which at least 1 
                shall be a primary care practitioner;
                  (C) 3 shall be individuals distinguished in 
                the other health professions;
                  (D) 4 shall be individuals either 
                representing the private healthcare sector, 
                including health plans, providers, and 
                purchasers or individuals distinguished as 
                administrators of healthcare delivery systems;
                  (E) 4 shall be individuals distinguished in 
                the fields of healthcare quality improvement, 
                economics, information systems, law, ethics, 
                business, or public policy, including at least 
                1 individual specializing in rural aspects in 1 
                or more of these fields; and
                  (F) 2 shall be individuals representing the 
                interests of patients and consumers of 
                healthcare.
          (3) Ex officio members.--The Secretary shall 
        designate as ex officio members of the Advisory 
        Council--
                  (A) the Assistant Secretary for Health, the 
                Director of the National Institutes of Health, 
                the Director of the Centers for Disease Control 
                and Prevention, the Administrator of the Health 
                Care Financing Administration, the Assistant 
                Secretary of Defense (Health Affairs), and the 
                Under Secretary for Health of the Department of 
                Veterans Affairs; and
                  (B) such other Federal officials as the 
                Secretary may consider appropriate.
  (d) Terms.--Members of the Advisory Council appointed under 
subsection (c)(2) shall serve for a term of 3 years. A member 
of the Council appointed under such subsection may continue to 
serve after the expiration of the term of the members until a 
successor is appointed.
  (e) Vacancies.--If a member of the Advisory Council appointed 
under subsection (c)(2) does not serve the full term applicable 
under subsection (d), the individual appointed to fill the 
resulting vacancy shall be appointed for the remainder of the 
term of the predecessor of the individual.
  (f) Chair.--The Director shall, from among the members of the 
Advisory Council appointed under subsection (c)(2), designate 
an individual to serve as the chair of the Advisory Council.
  (g) Meetings.--The Advisory Council shall meet not less than 
once during each discrete 4-month period and shall otherwise 
meet at the call of the Director or the chair.
  (h) Compensation and Reimbursement of Expenses.--
          (1) Appointed members.--Members of the Advisory 
        Council appointed under subsection (c)(2) shall receive 
        compensation for each day (including travel time) 
        engaged in carrying out the duties of the Advisory 
        Council unless declined by the member. Such 
        compensation may not be in an amount in excess of the 
        daily equivalent of the annual rate of basic pay 
        prescribed for level IV of the Executive Schedule under 
        section 5315 of title 5, United States Code, for each 
        day during which such member is engaged in the 
        performance of the duties of the Advisory Council.
          (2) Ex officio members.--Officials designated under 
        subsection (c)(3) as ex officio members of the Advisory 
        Council may not receive compensation for service on the 
        Advisory Council in addition to the compensation 
        otherwise received for duties carried out as officers 
        of the United States.
  (i) Staff.--The Director shall provide to the Advisory 
Council such staff, information, and other assistance as may be 
necessary to carry out the duties of the Council.

SEC. 922. PEER REVIEW WITH RESPECT TO GRANTS AND CONTRACTS.

  (a) Requirement of Review.--
          (1) In general.--Appropriate technical and scientific 
        peer review shall be conducted with respect to each 
        application for a grant, cooperative agreement, or 
        contract under this title.
          (2) Reports to director.--Each peer review group to 
        which an application is submitted pursuant to paragraph 
        (1) shall report its finding and recommendations 
        respecting the application to the Director in such form 
        and in such manner as the Director shall require.
  (b) Approval as Precondition of Awards.--The Director may not 
approve an application described in subsection (a)(1) unless 
the application is recommended for approval by a peer review 
group established under subsection (c).
  (c) Establishment of Peer Review Groups.--
          (1) In general.--The Director shall establish such 
        technical and scientific peer review groups as may be 
        necessary to carry out this section. Such groups shall 
        be established without regard to the provisions of 
        title 5, United States Code, that govern appointments 
        in the competitive service, and without regard to the 
        provisions of chapter 51, and subchapter III of chapter 
        53, of such title that relate to classification and pay 
        rates under the General Schedule.
          (2) Membership.--The members of any peer review group 
        established under this section shall be appointed from 
        among individuals who by virtue of their training or 
        experience are eminently qualified to carry out the 
        duties of such peer review group. Officers and 
        employees of the United States may not constitute more 
        than 25 percent of the membership of any such group. 
        Such officers and employees may not receive 
        compensation for service on such groups in addition to 
        the compensation otherwise received for these duties 
        carried out as such officers and employees.
          (3) Duration.--Notwithstanding section 14(a) of the 
        Federal Advisory Committee Act, peer review groups 
        established under this section may continue in 
        existence until otherwise provided by law.
          (4) Qualifications.--Members of any peer-review group 
        shall, at a minimum, meet the following requirements:
                  (A) Such members shall agree in writing to 
                treat information received, pursuant to their 
                work for the group, as confidential 
                information, except that this subparagraph 
                shall not apply to public records and public 
                information.
                  (B) Such members shall agree in writing to 
                recuse themselves from participation in the 
                peer-review of specific applications which 
                present a potential personal conflict of 
                interest or appearance of such conflict, 
                including employment in a directly affected 
                organization, stock ownership, or any financial 
                or other arrangement that might introduce bias 
                in the process of peer-review.
  (d) Authority for Procedural Adjustments in Certain Cases.--
In the case of applications for financial assistance whose 
direct costs will not exceed $100,000, the Director may make 
appropriate adjustments in the procedures otherwise established 
by the Director for the conduct of peer review under this 
section. Such adjustments may be made for the purpose of 
encouraging the entry of individuals into the field of 
research, for the purpose of encouraging clinical practice-
oriented or provider-based research, and for such other 
purposes as the Director may determine to be appropriate.
  (e) Regulations.--The Director shall issue regulations for 
the conduct of peer review under this section.

SEC. 923. CERTAIN PROVISIONS WITH RESPECT TO DEVELOPMENT, COLLECTION, 
                    AND DISSEMINATION OF DATA.

  (a) Standards With Respect to Utility of Data.--
          (1) In general.--To ensure the utility, accuracy, and 
        sufficiency of data collected by or for the Agency for 
        the purpose described in section 901(b), the Director 
        shall establish standard methods for developing and 
        collecting such data, taking into consideration--
                  (A) other Federal health data collection 
                standards; and
                  (B) the differences between types of 
                healthcare plans, delivery systems, healthcare 
                providers, and provider arrangements.
          (2) Relationship with other department programs.--In 
        any case where standards under paragraph (1) may affect 
        the administration of other programs carried out by the 
        Department of Health and Human Services, including the 
        programs under title XVIII, XIX or XXI of the Social 
        Security Act, or may affect health information that is 
        subject to a standard developed under part C of title 
        XI of the Social Security Act, they shall be in the 
        form of recommendations to the Secretary for such 
        program.
  (b) Statistics and Analyses.--The Director shall--
          (1) take appropriate action to ensure that statistics 
        and analyses developed under this title are of high 
        quality, timely, and duly comprehensive, and that the 
        statistics are specific, standardized, and adequately 
        analyzed and indexed; and
          (2) publish, make available, and disseminate such 
        statistics and analyses on as wide a basis as is 
        practicable.
  (c) Authority Regarding Certain Requests.--Upon request of a 
public or private entity, the Director may conduct or support 
research or analyses otherwise authorized by this title 
pursuant to arrangements under which such entity will pay the 
cost of the services provided. Amounts received by the Director 
under such arrangements shall be available to the Director for 
obligation until expended.

SEC. 924. DISSEMINATION OF INFORMATION.

  (a) In General.--The Director shall--
          (1) without regard to section 501 of title 44, United 
        States Code, promptly publish, make available, and 
        otherwise disseminate, in a form understandable and on 
        as broad a basis as practicable so as to maximize its 
        use, the results of research, demonstration projects, 
        and evaluations conducted or supported under this 
        title;
          (2) ensure that information disseminated by the 
        Agency is science-based and objective and undertakes 
        consultation as necessary to assess the appropriateness 
        and usefulness of the presentation of information that 
        is targeted to specific audiences;
          (3) promptly make available to the public data 
        developed in such research, demonstration projects, and 
        evaluations;
          (4) provide, in collaboration with the National 
        Library of Medicine where appropriate, indexing, 
        abstracting, translating, publishing, and other 
        services leading to a more effective and timely 
        dissemination of information on research, demonstration 
        projects, and evaluations with respect to healthcare to 
        public and private entities and individuals engaged in 
        the improvement of healthcare delivery and the general 
        public, and undertake programs to develop new or 
        improved methods for making such information available; 
        and
          (5) as appropriate, provide technical assistance to 
        State and local government and health agencies and 
        conduct liaison activities to such agencies to foster 
        dissemination.
  (b) Prohibition Against Restrictions.--Except as provided in 
subsection (c), the Director may not restrict the publication 
or dissemination of data from, or the results of, projects 
conducted or supported under this title.
  (c) Limitation on Use of Certain Information.--No 
information, if an establishment or person supplying the 
information or described in it is identifiable, obtained in the 
course of activities undertaken or supported under this title 
may be used for any purpose other than the purpose for which it 
was supplied unless such establishment or person has consented 
(as determined under regulations of the Director) to its use 
for such other purpose. Such information may not be published 
or released in other form if the person who supplied the 
information or who is described in it is identifiable unless 
such person has consented (as determined under regulations of 
the Director) to its publication or release in other form.
  (d) Penalty.--Any person who violates subsection (c) shall be 
subject to a civil monetary penalty of not more than $10,000 
for each such violation involved. Such penalty shall be imposed 
and collected in the same manner as civil money penalties under 
subsection (a) of section 1128A of the Social Security Act are 
imposed and collected.

SEC. 925. ADDITIONAL PROVISIONS WITH RESPECT TO GRANTS AND CONTRACTS.

  (a) Financial Conflicts of Interest.--With respect to 
projects for which awards of grants, cooperative agreements, or 
contracts are authorized to be made under this title, the 
Director shall by regulation define--
          (1) the specific circumstances that constitute 
        financial interests in such projects that will, or may 
        be reasonably expected to, create a bias in favor of 
        obtaining results in the projects that are consistent 
        with such interests; and
          (2) the actions that will be taken by the Director in 
        response to any such interests identified by the 
        Director.
  (b) Requirement of Application.--The Director may not, with 
respect to any program under this title authorizing the 
provision of grants, cooperative agreements, or contracts, 
provide any such financial assistance unless an application for 
the assistance is submitted to the Secretary and the 
application is in such form, is made in such manner, and 
contains such agreements, assurances, and information as the 
Director determines to be necessary to carry out the program 
involved.
  (c) Provision of Supplies and Services in Lieu of Funds.--
          (1) In general.--Upon the request of an entity 
        receiving a grant, cooperative agreement, or contract 
        under this title, the Secretary may, subject to 
        paragraph (2), provide supplies, equipment, and 
        services for the purpose of aiding the entity in 
        carrying out the project involved and, for such 
        purpose, may detail to the entity any officer or 
        employee of the Department of Health and Human 
        Services.
          (2) Corresponding reduction in funds.--With respect 
        to a request described in paragraph (1), the Secretary 
        shall reduce the amount of the financial assistance 
        involved by an amount equal to the costs of detailing 
        personnel and the fair market value of any supplies, 
        equipment, or services provided by the Director. The 
        Secretary shall, for the payment of expenses incurred 
        in complying with such request, expend the amounts 
        withheld.
  (d) Applicability of Certain Provisions With Respect to 
Contracts.--Contracts may be entered into under this part 
without regard to sections 3648 and 3709 of the Revised 
Statutes (31 U.S.C. 529; 41 U.S.C. 5).

SEC. 926. CERTAIN ADMINISTRATIVE AUTHORITIES.

  (a) Deputy Director and Other Officers and Employees.--
          (1) Deputy director.--The Director may appoint a 
        deputy director for the Agency.
          (2) Other officers and employees.--The Director may 
        appoint and fix the compensation of such officers and 
        employees as may be necessary to carry out this title. 
        Except as otherwise provided by law, such officers and 
        employees shall be appointed in accordance with the 
        civil service laws and their compensation fixed in 
        accordance with title 5, United States Code.
  (b) Facilities.--The Secretary, in carrying out this title--
          (1) may acquire, without regard to the Act of March 
        3, 1877 (40 U.S.C. 34), by lease or otherwise through 
        the Director of General Services, buildings or portions 
        of buildings in the District of Columbia or communities 
        located adjacent to the District of Columbia for use 
        for a period not to exceed 10 years; and
          (2) may acquire, construct, improve, repair, operate, 
        and maintain laboratory, research, and other necessary 
        facilities and equipment, and such other real or 
        personal property (including patents) as the Secretary 
        deems necessary.
  (c) Provision of Financial Assistance.--The Director, in 
carrying out this title, may make grants to public and 
nonprofit entities and individuals, and may enter into 
cooperative agreements or contracts with public and private 
entities and individuals.
  (d) Utilization of Certain Personnel and Resources.--
          (1) Department of health and human services.--The 
        Director, in carrying out this title, may utilize 
        personnel and equipment, facilities, and other physical 
        resources of the Department of Health and Human 
        Services, permit appropriate (as determined by the 
        Secretary) entities and individuals to utilize the 
        physical resources of such Department, and provide 
        technical assistance and advice.
          (2) Other agencies.--The Director, in carrying out 
        this title, may use, with their consent, the services, 
        equipment, personnel, information, and facilities of 
        other Federal, State, or local public agencies, or of 
        any foreign government, with or without reimbursement 
        of such agencies.
  (e) Consultants.--The Secretary, in carrying out this title, 
may secure, from time to time and for such periods as the 
Director deems advisable but in accordance with section 3109 of 
title 5, United States Code, the assistance and advice of 
consultants from the United States or abroad.
  (f) Experts.--
          (1) In general.--The Secretary may, in carrying out 
        this title, obtain the services of not more than 50 
        experts or consultants who have appropriate scientific 
        or professional qualifications. Such experts or 
        consultants shall be obtained in accordance withsection 
3109 of title 5, United States Code, except that the limitation in such 
section on the duration of service shall not apply.
          (2) Travel expenses.--
                  (A) In general.--Experts and consultants 
                whose services are obtained under paragraph (1) 
                shall be paid or reimbursed for their expenses 
                associated with traveling to and from their 
                assignment location in accordance with sections 
                5724, 5724a(a), 5724a(c), and 5726(C) of title 
                5, United States Code.
                  (B) Limitation.--Expenses specified in 
                subparagraph (A) may not be allowed in 
                connection with the assignment of an expert or 
                consultant whose services are obtained under 
                paragraph (1) unless and until the expert 
                agrees in writing to complete the entire period 
                of assignment, or 1 year, whichever is shorter, 
                unless separated or reassigned for reasons that 
                are beyond the control of the expert or 
                consultant and that are acceptable to the 
                Secretary. If the expert or consultant violates 
                the agreement, the money spent by the United 
                States for the expenses specified in 
                subparagraph (A) is recoverable from the expert 
                or consultant as a statutory obligation owed to 
                the United States. The Secretary may waive in 
                whole or in part a right of recovery under this 
                subparagraph.
  (g) Voluntary and Uncompensated Services.--The Director, in 
carrying out this title, may accept voluntary and uncompensated 
services.

SEC. 927. FUNDING.

  (a) Intent.--To ensure that the United States's investment in 
biomedical research is rapidly translated into improvements in 
the quality of patient care, there must be a corresponding 
investment in research on the most effective clinical and 
organizational strategies for use of these findings in daily 
practice. The authorization levels in subsection (b) and (c) 
provide for a proportionate increase in healthcare research as 
the United States investment in biomedical research increases.
  (b) Authorization of Appropriations.--For the purpose of 
carrying out this title, there are authorized to be 
appropriated $250,000,000 for fiscal year 2000, and such sums 
as may be necessary for each of the fiscal years 2001 through 
2006.
  (c) Evaluations.--In addition to amounts available pursuant 
to subsection (b) for carrying out this title, there shall be 
made available for such purpose, from the amounts made 
available pursuant to section 241 (relating to evaluations), an 
amount equal to 40 percent of the maximum amount authorized in 
such section 241 to be made available for a fiscal year.

SEC. 928. DEFINITIONS.

  In this title:
          (1) Advisory council.--The term ``Advisory Council'' 
        means the Advisory Council on Healthcare Research and 
        Quality established under section 921.
          (2) Agency.--The term ``Agency'' means the Agency for 
        Healthcare Research and Quality.
          (3) Director.--The term ``Director'' means the 
        Director for the Agency for Healthcare Research and 
        Quality.

           *       *       *       *       *       *       *


    TITLE XXVII--REQUIREMENTS RELATING TO HEALTH INSURANCE COVERAGE


                      Part A--Group Market Reforms


     Subpart 1--Portability, Access, and Renewability Requirements


SEC. 2701. INCREASED PORTABILITY THROUGH LIMITATION ON PREEXISTING 
                    CONDITION EXCLUSIONS.

    (a) Limitation on Preexisting Condition Exclusion Period; 
Crediting for Periods of Previous Coverage. * * *

           *       *       *       *       *       *       *


SEC. 2702. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL PARTICIPANTS 
                    AND BENEFICIARIES BASED ON HEALTH STATUS.

    (a) In Eligibility To Enroll.--
         (1) In general. * * *

           *       *       *       *       *       *       *

                  (F) Genetic information (including 
                information about a request for or receipt of 
                genetic services).

           *       *       *       *       *       *       *

          (3) Reference to related provision.--For a provision 
        prohibiting the adjustment of premium or contribution 
        amounts for a group under a group health plan on the 
        basis of predictive genetic information (including 
        information about a request for or receipt of genetic 
        services), see section 2707.
    (c) Collection of Predictive Genetic Information.--
          (1) Limitation on requesting or requiring predictive 
        genetic information.--Except as provided in paragraph 
        (2), a group health plan, or a health insurance issuer 
        offering health insurance coverage in connection with a 
        group health plan, shall not request or require 
        predictive genetic information concerning any 
        individual (including a dependent) or a family member 
        of the individual (including information about a 
        request for or receipt of genetic services).
          (2) Information needed for diagnosis, treatment, or 
        payment.--
                  (A) In general.--Notwithstanding paragraph 
                (1), a group health plan, or a health insurance 
                issuer offering health insurance coverage in 
                connection with a group health plan, that 
                provides health care items and services to an 
                individual or dependent may request (but may 
                not require) that such individual or dependent 
                disclose, or authorize the collection or 
                disclosure of, predictive genetic information 
                for purposes of diagnosis, treatment, or 
                payment relating to the provision of health 
                care items and services to such individual or 
                dependent.
                  (B) Notice of confidentiality practices and 
                description of safeguards.--As a part of a 
                request under subparagraph (A), the group 
                health plan, or a health insurance issuer 
                offering health insurance coverage in 
                connection with a group health plan, shall 
                provide to the individual or dependent a 
                description of the procedures in place to 
                safeguard the confidentiality, as described in 
                subsection (d), of such predictive genetic 
                information.
    (d) Confidentiality with Respect to Predictive Genetic 
Information.--
          (1) Notice of confidentiality practices.--
                  (A) Preparation of written notice.--A group 
                health plan, or a health insurance issuer 
                offering health insurance coverage in 
                connection with a group health plan, shall post 
                or provide, in writing and in a clear and 
                conspicuous manner, notice of the plan or 
                issuer's confidentiality practices, that shall 
                include--
                          (i) a description of an individual's 
                        rights with respect to predictive 
                        genetic information;
                          (ii) the procedures established by 
                        the plan or issuer for the exercise of 
                        the individual's rights; and
                          (iii) the right to obtain a copy of 
                        the notice of the confidentiality 
                        practices required under this 
                        subsection.
                  (B) Model notice.--The Secretary, in 
                consultation with the National Committee on 
                Vital and Health Statistics and the National 
                Association of Insurance Commissioners, and 
                after notice and opportunity for public 
                comment, shall develop and disseminate model 
                notices of confidentiality practices. Use of 
                the model notice shall serve as a defense 
                against claims of receiving inappropriate 
                notice.
          (2) Establishment of safeguards.--A group health 
        plan, or a health insurance issuer offering health 
        insurance coverage in connection with a group health 
        plan, shall establish and maintain appropriate 
        administrative, technical, and physical safeguards to 
        protect the confidentiality, security, accuracy, and 
        integrity of predictive genetic information created, 
        received, obtained, maintained, used, transmitted, or 
        disposed of by such plan or issuer.

           *       *       *       *       *       *       *


SEC. 2707. PROHIBITING PREMIUM DISCRIMINATION AGAINST GROUPS ON THE 
                    BASIS OF PREDICTIVE GENETIC INFORMATION IN THE 
                    GROUP MARKET.

    A group health plan, or a health insurance issuer offering 
group health insurance coverage in connection with a group 
health plan shall not adjust premium or contribution amounts 
for a group on the basis of predictive genetic information 
concerning any individual (including a dependent) or family 
member of the individual (including information about a request 
for or receipt of genetic services).

           *       *       *       *       *       *       *


                    Subpart [3]2--Other Requirements


SEC. 2751. STANDARDS RELATING TO BENEFITS FOR MOTHERS AND NEWBORNS.

           *       *       *       *       *       *       *


SEC. 2753. PROHIBITION OF HEALTH DISCRIMINATION ON THE BASIS OF 
                    PREDICTIVE GENETIC INFORMATION.

    (a) Prohibition on Predictive Genetic Information as a 
Condition of Eligibility.--A health insurance issuer offering 
health insurance coverage in the individual market may not use 
predictive genetic information as a condition of eligibility of 
an individual to enroll in individual health insurance coverage 
(including information about a request for or receipt of 
genetic services).
    (b) Prohibition on Predictive Genetic Information in 
Setting Premium Rates.--A health insurance issuer offering 
health insurance coverage in the individual market shall not 
adjust premium rates for individuals on the basis of predictive 
genetic information concerning such an individual (including a 
dependent) or a family member of the individual (including 
information about a request for or receipt of genetic 
services).
    (c) Collection of Predictive Genetic Information.--
          (1) Limitation on requesting or requiring predictive 
        genetic information.--Except as provided in paragraph 
        (2), a health insurance issuer offering health 
        insurance coverage in the individual market shall not 
        request or require predictive genetic information 
        concerning any individual (including a dependent) or a 
        family member of the individual (including information 
        about a request for or receipt of genetic services).
          (2) Information needed for diagnosis, treatment, or 
        payment.--
                  (A) in general.--Notwithstanding paragraph 
                (1), a health insurance issuer offering health 
                insurance coverage in the individual market 
                that provides health care items and services to 
                an individual or dependent may request (but may 
                not require) that such individual or dependent 
                disclose, or authorize the collection or 
                disclosure of, predictive genetic information 
                for purposes of diagnosis, treatment, or 
                payment relating to the provision of health 
                care items and services to such individual or 
                dependent.
                  (B) Notice of confidentiality practices and 
                description of safeguards.--As a part of a 
                request under subparagraph (A), the health 
                insurance issuer offering health insurance 
                coverage in the individual market shall provide 
                to the individual or dependent a description of 
                the procedures in place to safeguard the 
                confidentiality, as described in subsection 
                (d), of such predictive genetic information.
    (d) Confidentiality With Respect to Predictive Genetic 
Information.--
          (1) Notice of confidentiality practices.--
                  (A) Preparation of written notice.--A health 
                insurance issuer offering health insurance 
                coverage in the individual market shall post or 
                provide, in writing and in a clear and 
                conspicuous manner, notice of the issuer's 
                confidentiality practices, that shall include--
                          (i) a description of an individual's 
                        rights with respect to predictive 
                        genetic information;
                          (ii) the procedures established by 
                        the issuer for the exercise of the 
                        individual's rights; and
                          (iii) the right to obtain a copy of 
                        the notice of the confidentiality 
                        practices required under this 
                        subsection.
                  (B) Model notice.--The Secretary, in 
                consultation with the National Committee on 
                Vital and Health Statistics and the National 
                Association of Insurance Commissioners, and 
                after notice and opportunity for public 
                comment, shall develop and disseminate model 
                notices of confidentiality practices. Use of 
                the model notice shall serve as a defense 
                against claims of receiving inappropriate 
                notice.
          (2) Establishment of safeguards.--A health insurance 
        issuer offering health insurance coverage in the 
        individual market shall establish and maintain 
        appropriate administrative, technical, and physical 
        safeguards to protect the confidentiality, security, 
        accuracy, and integrity of predictive genetic 
        information created, received, obtained, maintained, 
        used, transmitted, or disposed of by such issuer.

           *       *       *       *       *       *       *


             Part C--Definitions; Miscellaneous Provisions


SEC. 2791. DEFINITIONS.

    (a) Group Health Plan.--
          (1) Definition. * * *

           *       *       *       *       *       *       *

    (d) Other Definitions.--
          (1) Applicable state authority. * * *

           *       *       *       *       *       *       *

          (15) Family member.--The term ``family member'' 
        means, with respect to an individual--
                  (A) the spouse of the individual;
                  (B) a dependent child of the individual, 
                including a child who is born to or placed for 
                adoption with the individual; and
                  (C) all other individuals related by blood to 
                the individual or the spouse or child described 
                in subparagraph (A) or (B).
          (16) Genetic information.--The term ``genetic 
        information'' means information about genes, gene 
        products, or inherited characteristics that may derive 
        from an individual or a family member (including 
        information about a request for or receipt of genetic 
        services).
          (17) Genetic services.--The term ``genetic services'' 
        means health services provided to obtain, assess, or 
        interpret genetic information for diagnostic and 
        therapeutic purposes, and for genetic education and 
        counseling.
          (18) Predictive genetic information.--
                  (A) In general.--The term ``predictive 
                genetic information'' means, in the absence of 
                symptoms, clinical signs, or a diagnosis of the 
                condition related to such information--
                          (i) information about an individual's 
                        genetic tests;
                          (ii) information about genetic tests 
                        of family members of the individual; or
                          (iii) information about the 
                        occurrence of a disease or disorder in 
                        family members.
                  (B) Exceptions.--The term ``predictive 
                genetic information'' shall not include--
                          (i) information about the sex or age 
                        of the individual;
                          (ii) information derived from 
                        physical tests, such as the chemical, 
                        blood, or urine analyses of the 
                        individual including cholesterol tests; 
                        and
                          (iii) information about physical 
                        exams of the individual.
          (19) Genetic test.--The term ``genetic test'' means 
        the analysis of human DNA, RNA, chromosomes, proteins, 
        and certain metabolites, including analysis of 
        genotypes, mutations, phenotypes, or karyotypes, for 
        the purpose of predicting risk of disease in 
        asymptomatic or undiagnosed individuals. Such term does 
        not include physical tests, such as the chemical, 
        blood, or urine analyses of the individual including 
        cholesterol tests, and physical exams of the 
        individual, in order to detect symptoms, clinical 
        signs, or a diagnosis of disease.

           *       *       *       *       *       *       *


                     INTERNAL REVENUE ACT OF 1986

           *       *       *       *       *       *       *



Section 1. * * *

           *       *       *       *       *       *       *


Sec. 9813. Health plan comparative information.
Sec. 9814. Prohibiting premium discrimination against groups on the 
          basis of predictive genetic information.

SEC. 9802. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL PARTICIPANTS 
                    AND BENEFICIARIES BASED ON HEALTH STATUS.

    (a) In eligibility to enroll.--
          (1) In general. * * *

           *       *       *       *       *       *       *

                  (F) Genetic information (including 
                information about a request for or receipt of 
                genetic services).

           *       *       *       *       *       *       *

    (b) In Premium Contributions.--
          (1) In general. * * *

           *       *       *       *       *       *       *

          (3) Reference to related provision.--For a provision 
        prohibiting the adjustment of premium or contribution 
        amounts for a group under a group health plan on the 
        basis of predictive genetic information (including 
        information about a request for or the receipt of 
        genetic services), see section 9814.

           *       *       *       *       *       *       *

    (d) Collection of Predictive Genetic Information.--
          (1) Limitation on requesting or requiring predictive 
        genetic information.--Except as provided in paragraph 
        (2), a group health plan shall not request or require 
        predictive genetic information concerning any 
        individual (including a dependent) or a family member 
        of the individual (including information about a 
        request for or receipt of genetic services).
          (2) Information needed for diagnosis, treatment, or 
        payment.--
                  (A) In general.--Notwithstanding paragraph 
                (1), a group health plan that provides health 
                care items and services to an individual or 
                dependent may request (but may not require) 
                that such individual or dependent disclose, or 
                authorize the collection or disclosure of, 
                predictive genetic information for purposes of 
                diagnosis, treatment, or payment relating to 
                the provision of health care items and services 
                to such individual or dependent.
                  (B) Notice of confidentiality practices; 
                description of safeguards.--As a part of a 
                request under subparagraph (A), the group 
                health plan shall provide to the individual or 
                dependent a description of the procedures in 
                place to safeguard the confidentiality, as 
                described in subsection (e), of such predictive 
                genetic information.
    (e) Confidentiality With Respect to Predictive Genetic 
Information.--
          (1) Notice of confidentiality practices.--
                  (A) Preparation of written notice.--A group 
                health plan shall post or provide, in writing 
                and in a clear and conspicuous manner, notice 
                of the plan's confidentiality practices, that 
                shall include--
                          (i) a description of an individual's 
                        rights with respect to predictive 
                        genetic information;
                          (ii) the procedures established by 
                        the plan for the exercise of the 
                        individual's rights; and
                          (iii) the right to obtain a copy of 
                        the notice of the confidentiality 
                        practices required under this 
                        subsection.
                  (B) Model notice.--The Secretary, in 
                consultation with the National Committee on 
                Vital and Health Statistics and the National 
                Association of Insurance Commissioners, and 
                after notice and opportunity for public 
                comment, shall develop and disseminate model 
                notices of confidentiality practices. Use of 
                the model notice shall serve as a defense 
                against claims of receiving inappropriate 
                notice.
          (2) Establishment of safeguards.--A group health plan 
        shall establish and maintain appropriate 
        administrative, technical, and physical safeguards to 
        protect the confidentiality, security, accuracy, and 
        integrity of predictive genetic information created, 
        received, obtained, maintained, used, transmitted, or 
        disposed of by such plan.

           *       *       *       *       *       *       *


SEC. 9813. HEALTH PLAN COMPARATIVE INFORMATION.

    (a) Requirement.--
          (1) In general.--A group health plan shall, not later 
        than 12 months after the date of enactment of this 
        section, and at least annually thereafter, provide for 
        the disclosure, in a clear and accurate form to each 
        participant and beneficiary, or upon request to a 
        potential participant or beneficiary eligible to 
        receive benefits under the plan, of the information 
        described in subsection (b).
          (2) Rules of construction.--Nothing in this section 
        shall be construed to prevent a plan from entering into 
        any agreement under which a health insurance issuer 
        agrees to assume responsibility for compliance with the 
        requirements of this section and the plan is released 
        from liability for such compliance.
          (3) Provision of information.--Information shall be 
        provided to participants and beneficiaries under this 
        section at the address maintained by the plan with 
        respect to such participants or beneficiaries.
    (b) Required Information.--The informational materials to 
be distributed under this section shall include for each 
package option available under a group health plan the 
following:
          (1) A description of the covered items and services 
        under each such plan and any in- and out-of-network 
        features of each such plan, including a summary 
        description of the specific exclusions from coverage 
        under the plan.
          (2) A description of any cost-sharing, including 
        premiums, deductibles, coinsurance, and copayment 
        amounts, for which the participant or beneficiary will 
        be responsible, including any annual or lifetime limits 
        on benefits, for each such plan.
          (3) A description of any optional supplemental 
        benefits offered by each such plan and the terms and 
        conditions (including premiums or cost-sharing) for 
        such supplemental coverage.
          (4) A description of any restrictions on payments for 
        services furnished to a participant or beneficiary by a 
        health care professional that is not a participating 
        professional and the liability of the participant or 
        beneficiary for additional payments for these services.
          (5) A description of the service area of each such 
        plan, including the provision of any out-of-area 
        coverage.
          (6) A description of the extent to which participants 
        and beneficiaries may select the primary care provider 
        of their choice, including providers both within the 
        network and outside the network of each such plan (if 
        the plan permits out-of-network services).
          (7) A description of the procedures for advance 
        directives and organ donation decisions if the plan 
        maintains such procedures.
          (8) A description of the requirements and procedures 
        to be used to obtain preauthorization for health 
        services (including telephone numbers and mailing 
        addresses), including referrals for specialty care.
          (9) A description of the definition of medical 
        necessity used in making coverage determinations by 
        each such plan.
          (10) A summary of the rules and methods for appealing 
        coverage decisions and filing grievances (including 
        telephone numbers and mailing addresses), as well as 
        other available remedies.
          (11) A summary description of any provisions for 
        obtaining off-formulary medications if the plan 
        utilizes a defined formulary for providing specific 
        prescription medications.
          (12) A summary of the rules for access to emergency 
        room care. Also, any available educational material 
        regarding proper use of emergency services.
          (13) A description of whether or not coverage is 
        provided for experimental treatments, investigational 
        treatments, or clinical trials and the circumstances 
        under which access to such treatments or trials is made 
        available.
          (14) A description of the specific preventative 
        services covered under the plan if such services are 
        covered.
          (15) A statement regarding--
                  (A) the manner in which a participant or 
                beneficiary may access an obstetrician, 
                gynecologist, or pediatrician in accordance 
                with section 723 or 724; and
                  (B) the manner in which a participant or 
                beneficiary obtains continuity of care as 
                provided for in section 726.
          (16) A statement that the following information, and 
        instructions on obtaining such information (including 
        telephone numbers and, if available, Internet 
        websites), shall be made available upon request:
                  (A) The names, addresses, telephone numbers, 
                and State licensure status of the plan's 
                participating health care professionals and 
                participating health care facilities, and, if 
                available, the education, training, speciality 
                qualifications or certifications of such 
                professionals.
                  (B) A summary description of the methods used 
                for compensating participating health care 
                professionals, such as capitation, fee-for-
                service, salary, or a combination thereof. The 
                requirement of this subparagraph shall not be 
                construed as requiring plans to provide 
                information concerning proprietary payment 
                methodology.
                  (C) A summary description of the methods used 
                for compensating health care facilities, 
                including per diem, fee-for-service, 
                capitation, bundled payments, or a combination 
                thereof. The requirement of this subparagraph 
                shall not be construed as requiring plans to 
                provide information concerning proprietary 
                payment methodology.
                  (D) A summary description of the procedures 
                used for utilization review.
                  (E) The list of the specific prescription 
                medications included in the formulary of the 
                plan, if the plan uses a defined formulary.
                  (F) A description of the specific exclusions 
                from coverage under the plan.
                  (G) Any available information related to the 
                availability of translation or interpretation 
                services for non-English speakers and people 
                with communication disabilities, including the 
                availability of audio tapes or information in 
                Braille.
                  (H) Any information that is made public by 
                accrediting organizations in the process of 
                accreditation if the plan is accredited, or any 
                additional quality indicators that the plan 
                makes available.
    (c) Manner of Distribution.--The information described in 
this section shall be distributed in an accessible format that 
is understandable to an average plan participant or 
beneficiary.
    (d) Rule of Construction.--Nothing in this section may be 
construed to prohibit a group health plan from distributing any 
other additional information determined by the plan to be 
important or necessary in assisting participants and 
beneficiaries or upon request potential participants and 
beneficiaries in the selection of a health plan or from 
providing information under subsection (b)(15) as part of the 
required information.

SEC. 9814. PROHIBITING PREMIUM DISCRIMINATION AGAINST GROUPS ON THE 
                    BASIS OF PREDICTIVE GENETIC INFORMATION.

    A group health plan shall not adjust premium or 
contribution amounts for a group on the basis of predictive 
genetic information concerning any individual (including a 
dependent) or a family member of the individual (including 
information about a request for or receipt of genetic 
services).

           *       *       *       *       *       *       *


SEC. 9832. DEFINITIONS.

    (a) Group health plan.

           *       *       *       *       *       *       *

    (d) Other Definitions.--For purposes of this chapter--
          (1) COBRA Continuation provisions. * * *

           *       *       *       *       *       *       *

          (6) Family member.--The term ``family member'' means, 
        with respect to an individual--
                  (A) the spouse of the individual;
                  (B) a dependent child of the individual, 
                including a child who is born to or placed for 
                adoption with the individual; and
                  (C) all other individuals related by blood to 
                the individual or the spouse or child described 
                in subparagraph (A) or (B).
          (7) Genetic information.--The term ``genetic 
        information'' means information about genes, gene 
        products, or inherited characteristics that may derive 
        from an individual or a family member (including 
        information about a request for or receipt of genetic 
        services).
          (8) Genetic services.--The term ``genetic services'' 
        means health services provided to obtain, assess, or 
        interpret genetic information for diagnostic and 
        therapeutic purposes, and for genetic education and 
        counseling.
          (9) Predictive genetic information.--
                  (A) In general.--The term ``predictive 
                genetic information'' means, in the absence of 
                symptoms, clinical signs, or a diagnosis of the 
                condition related to such information--
                          (i) information about an individual's 
                        genetic tests;
                          (ii) information about genetic tests 
                        of family members of the individual; or
                          (iii) information about the 
                        occurrence of a disease or disorder in 
                        family members.
                  (B) Exceptions.--The term ``predictive 
                genetic information'' shall not include--
                          (i) information about the sex or age 
                        of the individual;
                          (ii) information derived from 
                        physical tests, such as the chemical, 
                        blood, or urine analyses of the 
                        individual including cholesterol tests; 
                        and
                          (iii) information about physical 
                        exams of the individual.
          (10) Genetic test.--The term ``genetic test'' means 
        the analysis of human DNA, RNA, chromosomes, proteins, 
        and certain metabolites, including analysis of 
        genotypes, mutations, phenotypes, or karyotypes, for 
        the purpose of predicting risk of disease in 
        asymptomatic or undiagnosed individuals. Such term does 
        not include physical tests, such as the chemical, 
        blood, or urine analyses of the individual including 
        cholesterol tests, and physical exams of the 
        individual, in order to detect symptoms, clinical 
        signs, or a diagnosis of disease.

           *       *       *       *       *       *       *


                                  
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