Patients' Bill of Rights Act of 2005 - Amends the Public Health Service Act, the Employee Retirement Income Security Act of 1974 (ERISA), and the Internal Revenue Code to set forth requirements for health plans or issuers of health insurance coverage, including requirements for: (1) utilization review activities; (2) procedures for claims benefits processing, prior authorization determinations, appeals, and internal reviews; and (3) access for an independent, external review.
Requires the Secretary of Health and Human Services to establish the Health Care Consumer Assistance Fund to award grants to States for consumer assistance activities designed to provide information, assistance, and referrals to consumers of health insurance products.
Sets forth requirements for managed care programs and their access to care, including requiring such programs to: (1) offer coverage that allows for non-network coverage through another plan or issuer; (2) provide access to out-of-network emergency care without prior authorization; and (3) provide timely access to specialists.
Requires certain annual disclosures from health plans or issuers, including disclosures of covered benefits, cost-sharing requirements, and participating providers.
Prohibits a plan or issuer from: (1) restricting a health care professional's ability to advise a patient on the health of an individual or on medical care or treatment for the individual's condition or disease; and (2) operating any physician incentive plan.
Establishes a cause of action against a plan or issuer that fails to exercise ordinary care in making a decision that results in a personal injury or death to a participant or beneficiary.
Provides a tax credit to small businesses for expenses paid by the business for health insurance coverage of employees.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1012 Introduced in Senate (IS)]
109th CONGRESS
1st Session
S. 1012
To amend the Public Health Service Act, the Employee Retirement Income
Security Act of 1974, and the Internal Revenue Code of 1986 to protect
consumers in managed care plans and other health coverage.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 12, 2005
Mr. Kennedy (for himself, Mr. Harkin, Ms. Mikulski, Mrs. Murray, Mr.
Reed, Mr. Levin, Mr. Lautenberg, Mrs. Boxer, Mr. Dorgan, Mr. Schumer,
Ms. Cantwell, Mr. Corzine, Mr. Dayton, and Ms. Stabenow) introduced the
following bill; which was read twice and referred to the Committee on
Finance
_______________________________________________________________________
A BILL
To amend the Public Health Service Act, the Employee Retirement Income
Security Act of 1974, and the Internal Revenue Code of 1986 to protect
consumers in managed care plans and other health coverage.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Patients' Bill of
Rights Act of 2005''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--IMPROVING MANAGED CARE
Subtitle A--Utilization Review; Claims; and Internal and External
Appeals
Sec. 101. Utilization review activities.
Sec. 102. Procedures for initial claims for benefits and prior
authorization determinations.
Sec. 103. Internal appeals of claims denials.
Sec. 104. Independent external appeals procedures.
Sec. 105. Health Care Consumer Assistance Fund.
Subtitle B--Access to Care
Sec. 111. Consumer choice option.
Sec. 112. Choice of health care professional.
Sec. 113. Access to emergency care.
Sec. 114. Timely access to specialists.
Sec. 115. Patient access to obstetrical and gynecological care.
Sec. 116. Access to pediatric care.
Sec. 117. Continuity of care.
Sec. 118. Access to needed prescription drugs.
Sec. 119. Coverage for individuals participating in approved clinical
trials.
Sec. 120. Required coverage for minimum hospital stay for mastectomies
and lymph node dissections for the
treatment of breast cancer and coverage for
secondary consultations.
Subtitle C--Access to Information
Sec. 121. Patient access to information.
Subtitle D--Protecting the Doctor-Patient Relationship
Sec. 131. Prohibition of interference with certain medical
communications.
Sec. 132. Prohibition of discrimination against providers based on
licensure.
Sec. 133. Prohibition against improper incentive arrangements.
Sec. 134. Payment of claims.
Sec. 135. Protection for patient advocacy.
Subtitle E--Definitions
Sec. 151. Definitions.
Sec. 152. Preemption; State flexibility; construction.
Sec. 153. Exclusions.
Sec. 154. Treatment of excepted benefits.
Sec. 155. Regulations.
Sec. 156. Incorporation into plan or coverage documents.
Sec. 157. Preservation of protections.
TITLE II--APPLICATION OF QUALITY CARE STANDARDS TO GROUP HEALTH PLANS
AND HEALTH INSURANCE COVERAGE UNDER THE PUBLIC HEALTH SERVICE ACT
Sec. 201. Application to group health plans and group health insurance
coverage.
Sec. 202. Application to individual health insurance coverage.
Sec. 203. Cooperation between Federal and State authorities.
TITLE III--APPLICATION OF PATIENT PROTECTION STANDARDS TO FEDERAL
HEALTH INSURANCE PROGRAMS
Sec. 301. Application of patient protection standards to Federal health
insurance programs.
TITLE IV--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974
Sec. 401. Application of patient protection standards to group health
plans and group health insurance coverage
under the Employee Retirement Income
Security Act of 1974.
Sec. 402. Availability of civil remedies.
Sec. 403. Cooperation between Federal and State authorities.
TITLE V--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986
Subtitle A--Application of Patient Protection Provisions
Sec. 501. Application to group health plans under the Internal Revenue
Code of 1986.
Sec. 502. Conforming enforcement for women's health and cancer rights.
Subtitle B--Health Care Coverage Access Tax Incentives
Sec. 511. Credit for health insurance expenses of small businesses.
Sec. 512. Certain grants by private foundations to qualified health
benefit purchasing coalitions.
Sec. 513. State grant program for market innovation.
Sec. 514. Grant program to facilitate health benefits information for
small employers.
Sec. 515. State grant program for market innovation.
TITLE VI--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION
Sec. 601. Effective dates.
Sec. 602. Coordination in implementation.
Sec. 603. Severability.
TITLE VII--MISCELLANEOUS PROVISIONS
Sec. 701. No impact on Social Security Trust Fund.
TITLE I--IMPROVING MANAGED CARE
Subtitle A--Utilization Review; Claims; and Internal and External
Appeals
SEC. 101. UTILIZATION REVIEW ACTIVITIES.
(a) Compliance With Requirements.--
(1) In general.--A group health plan, and a health
insurance issuer that provides health insurance coverage, shall
conduct utilization review activities in connection with the
provision of benefits under such plan or coverage only in
accordance with a utilization review program that meets the
requirements of this section and section 102.
(2) Use of outside agents.--Nothing in this section shall
be construed as preventing a group health plan or health
insurance issuer from arranging through a contract or otherwise
for persons or entities to conduct utilization review
activities on behalf of the plan or issuer, so long as such
activities are conducted in accordance with a utilization
review program that meets the requirements of this section.
(3) Utilization review defined.--For purposes of this
section, the terms ``utilization review'' and ``utilization
review activities'' mean procedures used to monitor or evaluate
the use or coverage, clinical necessity, appropriateness,
efficacy, or efficiency of health care services, procedures or
settings, and includes prospective review, concurrent review,
second opinions, case management, discharge planning, or
retrospective review.
(b) Written Policies and Criteria.--
(1) Written policies.--A utilization review program shall
be conducted consistent with written policies and procedures
that govern all aspects of the program.
(2) Use of written criteria.--
(A) In general.--Such a program shall utilize
written clinical review criteria developed with input
from a range of appropriate actively practicing health
care professionals, as determined by the plan, pursuant
to the program. Such criteria shall include written
clinical review criteria that are based on valid
clinical evidence where available and that are directed
specifically at meeting the needs of at-risk
populations and covered individuals with chronic
conditions or severe illnesses, including gender-
specific criteria and pediatric-specific criteria where
available and appropriate.
(B) Continuing use of standards in retrospective
review.--If a health care service has been specifically
pre-authorized or approved for a participant,
beneficiary, or enrollee under such a program, the
program shall not, pursuant to retrospective review,
revise or modify the specific standards, criteria, or
procedures used for the utilization review for
procedures, treatment, and services delivered to the
enrollee during the same course of treatment.
(C) Review of sample of claims denials.--Such a
program shall provide for a periodic evaluation of the
clinical appropriateness of at least a sample of
denials of claims for benefits.
(c) Conduct of Program Activities.--
(1) Administration by health care professionals.--A
utilization review program shall be administered by qualified
health care professionals who shall oversee review decisions.
(2) Use of qualified, independent personnel.--
(A) In general.--A utilization review program shall
provide for the conduct of utilization review
activities only through personnel who are qualified and
have received appropriate training in the conduct of
such activities under the program.
(B) Prohibition of contingent compensation
arrangements.--Such a program shall not, with respect
to utilization review activities, permit or provide
compensation or anything of value to its employees,
agents, or contractors in a manner that encourages
denials of claims for benefits.
(C) Prohibition of conflicts.--Such a program shall
not permit a health care professional who is providing
health care services to an individual to perform
utilization review activities in connection with the
health care services being provided to the individual.
(3) Accessibility of review.--Such a program shall provide
that appropriate personnel performing utilization review
activities under the program, including the utilization review
administrator, are reasonably accessible by toll-free telephone
during normal business hours to discuss patient care and allow
response to telephone requests, and that appropriate provision
is made to receive and respond promptly to calls received
during other hours.
(4) Limits on frequency.--Such a program shall not provide
for the performance of utilization review activities with
respect to a class of services furnished to an individual more
frequently than is reasonably required to assess whether the
services under review are medically necessary and appropriate.
SEC. 102. PROCEDURES FOR INITIAL CLAIMS FOR BENEFITS AND PRIOR
AUTHORIZATION DETERMINATIONS.
(a) Procedures of Initial Claims for Benefits.--
(1) In general.--A group health plan, and a health
insurance issuer offering health insurance coverage, shall--
(A) make a determination on an initial claim for
benefits by a participant, beneficiary, or enrollee (or
authorized representative) regarding payment or
coverage for items or services under the terms and
conditions of the plan or coverage involved, including
any cost-sharing amount that the participant,
beneficiary, or enrollee is required to pay with
respect to such claim for benefits; and
(B) notify a participant, beneficiary, or enrollee
(or authorized representative) and the treating health
care professional involved regarding a determination on
an initial claim for benefits made under the terms and
conditions of the plan or coverage, including any cost-
sharing amounts that the participant, beneficiary, or
enrollee may be required to make with respect to such
claim for benefits, and of the right of the
participant, beneficiary, or enrollee to an internal
appeal under section 103.
(2) Access to information.--
(A) Timely provision of necessary information.--
With respect to an initial claim for benefits, the
participant, beneficiary, or enrollee (or authorized
representative) and the treating health care
professional (if any) shall provide the plan or issuer
with access to information requested by the plan or
issuer that is necessary to make a determination
relating to the claim. Such access shall be provided
not later than 5 days after the date on which the
request for information is received, or, in a case
described in subparagraph (B) or (C) of subsection
(b)(1), by such earlier time as may be necessary to
comply with the applicable timeline under such
subparagraph.
(B) Limited effect of failure on plan or issuer's
obligations.--Failure of the participant, beneficiary,
or enrollee to comply with the requirements of
subparagraph (A) shall not remove the obligation of the
plan or issuer to make a decision in accordance with
the medical exigencies of the case and as soon as
possible, based on the available information, and
failure to comply with the time limit established by
this paragraph shall not remove the obligation of the
plan or issuer to comply with the requirements of this
section.
(3) Oral requests.--In the case of a claim for benefits
involving an expedited or concurrent determination, a
participant, beneficiary, or enrollee (or authorized
representative) may make an initial claim for benefits orally,
but a group health plan, or health insurance issuer offering
health insurance coverage, may require that the participant,
beneficiary, or enrollee (or authorized representative) provide
written confirmation of such request in a timely manner on a
form provided by the plan or issuer. In the case of such an
oral request for benefits, the making of the request (and the
timing of such request) shall be treated as the making at that
time of a claim for such benefits without regard to whether and
when a written confirmation of such request is made.
(b) Timeline for Making Determinations.--
(1) Prior authorization determination.--
(A) In general.--A group health plan, and a health
insurance issuer offering health insurance coverage,
shall make a prior authorization determination on a
claim for benefits (whether oral or written) in
accordance with the medical exigencies of the case and
as soon as possible, but in no case later than 14 days
from the date on which the plan or issuer receives
information that is reasonably necessary to enable the
plan or issuer to make a determination on the request
for prior authorization and in no case later than 28
days after the date of the claim for benefits is
received.
(B) Expedited determination.--Notwithstanding
subparagraph (A), a group health plan, and a health
insurance issuer offering health insurance coverage,
shall expedite a prior authorization determination on a
claim for benefits described in such subparagraph when
a request for such an expedited determination is made
by a participant, beneficiary, or enrollee (or
authorized representative) at any time during the
process for making a determination and a health care
professional certifies, with the request, that a
determination under the procedures described in
subparagraph (A) would seriously jeopardize the life or
health of the participant, beneficiary, or enrollee or
the ability of the participant, beneficiary, or
enrollee to maintain or regain maximum function. Such
determination shall be made in accordance with the
medical exigencies of the case and as soon as possible,
but in no case later than 72 hours after the time the
request is received by the plan or issuer under this
subparagraph.
(C) Ongoing care.--
(i) Concurrent review.--
(I) In general.--Subject to clause
(ii), in the case of a concurrent
review of ongoing care (including
hospitalization), which results in a
termination or reduction of such care,
the plan or issuer must provide by
telephone and in printed form notice of
the concurrent review determination to
the individual or the individual's
designee and the individual's health
care provider in accordance with the
medical exigencies of the case and as
soon as possible, with sufficient time
prior to the termination or reduction
to allow for an appeal under section
103(b)(3) to be completed before the
termination or reduction takes effect.
(II) Contents of notice.--Such
notice shall include, with respect to
ongoing health care items and services,
the number of ongoing services
approved, the new total of approved
services, the date of onset of
services, and the next review date, if
any, as well as a statement of the
individual's rights to further appeal.
(ii) Rule of construction.--Clause (i)
shall not be construed as requiring plans or
issuers to provide coverage of care that would
exceed the coverage limitations for such care.
(2) Retrospective determination.--A group health plan, and
a health insurance issuer offering health insurance coverage,
shall make a retrospective determination on a claim for
benefits in accordance with the medical exigencies of the case
and as soon as possible, but not later than 30 days after the
date on which the plan or issuer receives information that is
reasonably necessary to enable the plan or issuer to make a
determination on the claim, or, if earlier, 60 days after the
date of receipt of the claim for benefits.
(c) Notice of a Denial of a Claim for Benefits.--Written notice of
a denial made under an initial claim for benefits shall be issued to
the participant, beneficiary, or enrollee (or authorized
representative) and the treating health care professional in accordance
with the medical exigencies of the case and as soon as possible, but in
no case later than 2 days after the date of the determination (or, in
the case described in subparagraph (B) or (C) of subsection (b)(1),
within the 72-hour or applicable period referred to in such
subparagraph).
(d) Requirements of Notice of Determinations.--The written notice
of a denial of a claim for benefits determination under subsection (c)
shall be provided in printed form and written in a manner calculated to
be understood by the participant, beneficiary, or enrollee and shall
include--
(1) the specific reasons for the determination (including a
summary of the clinical or scientific evidence used in making
the determination);
(2) the procedures for obtaining additional information
concerning the determination; and
(3) notification of the right to appeal the determination
and instructions on how to initiate an appeal in accordance
with section 103.
(e) Definitions.--For purposes of this part:
(1) Authorized representative.--The term ``authorized
representative'' means, with respect to an individual who is a
participant, beneficiary, or enrollee, any health care
professional or other person acting on behalf of the individual
with the individual's consent or without such consent if the
individual is medically unable to provide such consent.
(2) Claim for benefits.--The term ``claim for benefits''
means any request for coverage (including authorization of
coverage), for eligibility, or for payment in whole or in part,
for an item or service under a group health plan or health
insurance coverage.
(3) Denial of claim for benefits.--The term ``denial''
means, with respect to a claim for benefits, a denial (in whole
or in part) of, or a failure to act on a timely basis upon, the
claim for benefits and includes a failure to provide benefits
(including items and services) required to be provided under
this title.
(4) Treating health care professional.--The term ``treating
health care professional'' means, with respect to services to
be provided to a participant, beneficiary, or enrollee, a
health care professional who is primarily responsible for
delivering those services to the participant, beneficiary, or
enrollee.
SEC. 103. INTERNAL APPEALS OF CLAIMS DENIALS.
(a) Right to Internal Appeal.--
(1) In general.--A participant, beneficiary, or enrollee
(or authorized representative) may appeal any denial of a claim
for benefits under section 102 under the procedures described
in this section.
(2) Time for appeal.--
(A) In general.--A group health plan, and a health
insurance issuer offering health insurance coverage,
shall ensure that a participant, beneficiary, or
enrollee (or authorized representative) has a period of
not less than 180 days beginning on the date of a
denial of a claim for benefits under section 102 in
which to appeal such denial under this section.
(B) Date of denial.--For purposes of subparagraph
(A), the date of the denial shall be deemed to be the
date as of which the participant, beneficiary, or
enrollee knew of the denial of the claim for benefits.
(3) Failure to act.--The failure of a plan or issuer to
issue a determination on a claim for benefits under section 102
within the applicable timeline established for such a
determination under such section is a denial of a claim for
benefits for purposes this subtitle as of the date of the
applicable deadline.
(4) Plan waiver of internal review.--A group health plan,
or health insurance issuer offering health insurance coverage,
may waive the internal review process under this section. In
such case the plan or issuer shall provide notice to the
participant, beneficiary, or enrollee (or authorized
representative) involved, the participant, beneficiary, or
enrollee (or authorized representative) involved shall be
relieved of any obligation to complete the internal review
involved, and may, at the option of such participant,
beneficiary, enrollee, or representative proceed directly to
seek further appeal through external review under section 104
or otherwise.
(b) Timelines for Making Determinations.--
(1) Oral requests.--In the case of an appeal of a denial of
a claim for benefits under this section that involves an
expedited or concurrent determination, a participant,
beneficiary, or enrollee (or authorized representative) may
request such appeal orally. A group health plan, or health
insurance issuer offering health insurance coverage, may
require that the participant, beneficiary, or enrollee (or
authorized representative) provide written confirmation of such
request in a timely manner on a form provided by the plan or
issuer. In the case of such an oral request for an appeal of a
denial, the making of the request (and the timing of such
request) shall be treated as the making at that time of a
request for an appeal without regard to whether and when a
written confirmation of such request is made.
(2) Access to information.--
(A) Timely provision of necessary information.--
With respect to an appeal of a denial of a claim for
benefits, the participant, beneficiary, or enrollee (or
authorized representative) and the treating health care
professional (if any) shall provide the plan or issuer
with access to information requested by the plan or
issuer that is necessary to make a determination
relating to the appeal. Such access shall be provided
not later than 5 days after the date on which the
request for information is received, or, in a case
described in subparagraph (B) or (C) of paragraph (3),
by such earlier time as may be necessary to comply with
the applicable timeline under such subparagraph.
(B) Limited effect of failure on plan or issuer's
obligations.--Failure of the participant, beneficiary,
or enrollee to comply with the requirements of
subparagraph (A) shall not remove the obligation of the
plan or issuer to make a decision in accordance with
the medical exigencies of the case and as soon as
possible, based on the available information, and
failure to comply with the time limit established by
this paragraph shall not remove the obligation of the
plan or issuer to comply with the requirements of this
section.
(3) Prior authorization determinations.--
(A) In general.--Except as provided in this
paragraph or paragraph (4), a group health plan, and a
health insurance issuer offering health insurance
coverage, shall make a determination on an appeal of a
denial of a claim for benefits under this subsection in
accordance with the medical exigencies of the case and
as soon as possible, but in no case later than 14 days
from the date on which the plan or issuer receives
information that is reasonably necessary to enable the
plan or issuer to make a determination on the appeal
and in no case later than 28 days after the date the
request for the appeal is received.
(B) Expedited determination.--Notwithstanding
subparagraph (A), a group health plan, and a health
insurance issuer offering health insurance coverage,
shall expedite a prior authorization determination on
an appeal of a denial of a claim for benefits described
in subparagraph (A), when a request for such an
expedited determination is made by a participant,
beneficiary, or enrollee (or authorized representative)
at any time during the process for making a
determination and a health care professional certifies,
with the request, that a determination under the
procedures described in subparagraph (A) would
seriously jeopardize the life or health of the
participant, beneficiary, or enrollee or the ability of
the participant, beneficiary, or enrollee to maintain
or regain maximum function. Such determination shall be
made in accordance with the medical exigencies of the
case and as soon as possible, but in no case later than
72 hours after the time the request for such appeal is
received by the plan or issuer under this subparagraph.
(C) Ongoing care determinations.--
(i) In general.--Subject to clause (ii), in
the case of a concurrent review determination
described in section 102(b)(1)(C)(i)(I), which
results in a termination or reduction of such
care, the plan or issuer must provide notice of
the determination on the appeal under this
section by telephone and in printed form to the
individual or the individual's designee and the
individual's health care provider in accordance
with the medical exigencies of the case and as
soon as possible, with sufficient time prior to
the termination or reduction to allow for an
external appeal under section 104 to be
completed before the termination or reduction
takes effect.
(ii) Rule of construction.--Clause (i)
shall not be construed as requiring plans or
issuers to provide coverage of care that would
exceed the coverage limitations for such care.
(4) Retrospective determination.--A group health plan, and
a health insurance issuer offering health insurance coverage,
shall make a retrospective determination on an appeal of a
denial of a claim for benefits in no case later than 30 days
after the date on which the plan or issuer receives necessary
information that is reasonably necessary to enable the plan or
issuer to make a determination on the appeal and in no case
later than 60 days after the date the request for the appeal is
received.
(c) Conduct of Review.--
(1) In general.--A review of a denial of a claim for
benefits under this section shall be conducted by an individual
with appropriate expertise who was not involved in the initial
determination.
(2) Peer review of medical decisions by health care
professionals.--A review of an appeal of a denial of a claim
for benefits that is based on a lack of medical necessity and
appropriateness, or based on an experimental or investigational
treatment, or requires an evaluation of medical facts--
(A) shall be made by a physician (allopathic or
osteopathic); or
(B) in a claim for benefits provided by a non-
physician health professional, shall be made by
reviewer (or reviewers) including at least one
practicing non-physician health professional of the
same or similar specialty;
with appropriate expertise (including, in the case of a child,
appropriate pediatric expertise) and acting within the
appropriate scope of practice within the State in which the
service is provided or rendered, who was not involved in the
initial determination.
(d) Notice of Determination.--
(1) In general.--Written notice of a determination made
under an internal appeal of a denial of a claim for benefits
shall be issued to the participant, beneficiary, or enrollee
(or authorized representative) and the treating health care
professional in accordance with the medical exigencies of the
case and as soon as possible, but in no case later than 2 days
after the date of completion of the review (or, in the case
described in subparagraph (B) or (C) of subsection (b)(3),
within the 72-hour or applicable period referred to in such
subparagraph).
(2) Final determination.--The decision by a plan or issuer
under this section shall be treated as the final determination
of the plan or issuer on a denial of a claim for benefits. The
failure of a plan or issuer to issue a determination on an
appeal of a denial of a claim for benefits under this section
within the applicable timeline established for such a
determination shall be treated as a final determination on an
appeal of a denial of a claim for benefits for purposes of
proceeding to external review under section 104.
(3) Requirements of notice.--With respect to a
determination made under this section, the notice described in
paragraph (1) shall be provided in printed form and written in
a manner calculated to be understood by the participant,
beneficiary, or enrollee and shall include--
(A) the specific reasons for the determination
(including a summary of the clinical or scientific
evidence used in making the determination);
(B) the procedures for obtaining additional
information concerning the determination; and
(C) notification of the right to an independent
external review under section 104 and instructions on
how to initiate such a review.
SEC. 104. INDEPENDENT EXTERNAL APPEALS PROCEDURES.
(a) Right to External Appeal.--A group health plan, and a health
insurance issuer offering health insurance coverage, shall provide in
accordance with this section participants, beneficiaries, and enrollees
(or authorized representatives) with access to an independent external
review for any denial of a claim for benefits.
(b) Initiation of the Independent External Review Process.--
(1) Time to file.--A request for an independent external
review under this section shall be filed with the plan or
issuer not later than 180 days after the date on which the
participant, beneficiary, or enrollee receives notice of the
denial under section 103(d) or notice of waiver of internal
review under section 103(a)(4) or the date on which the plan or
issuer has failed to make a timely decision under section
103(d)(2) and notifies the participant or beneficiary that it
has failed to make a timely decision and that the beneficiary
must file an appeal with an external review entity within 180
days if the participant or beneficiary desires to file such an
appeal.
(2) Filing of request.--
(A) In general.--Subject to the succeeding
provisions of this subsection, a group health plan, or
health insurance issuer offering health insurance
coverage, may--
(i) except as provided in subparagraph
(B)(i), require that a request for review be in
writing;
(ii) limit the filing of such a request to
the participant, beneficiary, or enrollee
involved (or an authorized representative);
(iii) except if waived by the plan or
issuer under section 103(a)(4), condition
access to an independent external review under
this section upon a final determination of a
denial of a claim for benefits under the
internal review procedure under section 103;
(iv) except as provided in subparagraph
(B)(ii), require payment of a filing fee to the
plan or issuer of a sum that does not exceed
$25; and
(v) require that a request for review
include the consent of the participant,
beneficiary, or enrollee (or authorized
representative) for the release of necessary
medical information or records of the
participant, beneficiary, or enrollee to the
qualified external review entity only for
purposes of conducting external review
activities.
(B) Requirements and exception relating to general
rule.--
(i) Oral requests permitted in expedited or
concurrent cases.--In the case of an expedited
or concurrent external review as provided for
under subsection (e), the request for such
review may be made orally. A group health plan,
or health insurance issuer offering health
insurance coverage, may require that the
participant, beneficiary, or enrollee (or
authorized representative) provide written
confirmation of such request in a timely manner
on a form provided by the plan or issuer. Such
written confirmation shall be treated as a
consent for purposes of subparagraph (A)(v). In
the case of such an oral request for such a
review, the making of the request (and the
timing of such request) shall be treated as the
making at that time of a request for such a
review without regard to whether and when a
written confirmation of such request is made.
(ii) Exception to filing fee requirement.--
(I) Indigency.--Payment of a filing
fee shall not be required under
subparagraph (A)(iv) where there is a
certification (in a form and manner
specified in guidelines established by
the appropriate Secretary) that the
participant, beneficiary, or enrollee
is indigent (as defined in such
guidelines).
(II) Fee not required.--Payment of
a filing fee shall not be required
under subparagraph (A)(iv) if the plan
or issuer waives the internal appeals
process under section 103(a)(4).
(III) Refunding of fee.--The filing
fee paid under subparagraph (A)(iv)
shall be refunded if the determination
under the independent external review
is to reverse or modify the denial
which is the subject of the review.
(IV) Collection of filing fee.--The
failure to pay such a filing fee shall
not prevent the consideration of a
request for review but, subject to the
preceding provisions of this clause,
shall constitute a legal liability to
pay.
(c) Referral to Qualified External Review Entity Upon Request.--
(1) In general.--Upon the filing of a request for
independent external review with the group health plan, or
health insurance issuer offering health insurance coverage, the
plan or issuer shall immediately refer such request, and
forward the plan or issuer's initial decision (including the
information described in section 103(d)(3)(A)), to a qualified
external review entity selected in accordance with this
section.
(2) Access to plan or issuer and health professional
information.--With respect to an independent external review
conducted under this section, the participant, beneficiary, or
enrollee (or authorized representative), the plan or issuer,
and the treating health care professional (if any) shall
provide the external review entity with information that is
necessary to conduct a review under this section, as determined
and requested by the entity. Such information shall be provided
not later than 5 days after the date on which the request for
information is received, or, in a case described in clause (ii)
or (iii) of subsection (e)(1)(A), by such earlier time as may
be necessary to comply with the applicable timeline under such
clause.
(3) Screening of requests by qualified external review
entities.--
(A) In general.--With respect to a request referred
to a qualified external review entity under paragraph
(1) relating to a denial of a claim for benefits, the
entity shall refer such request for the conduct of an
independent medical review unless the entity determines
that--
(i) any of the conditions described in
clauses (ii) or (iii) of subsection (b)(2)(A)
have not been met;
(ii) the denial of the claim for benefits
does not involve a medically reviewable
decision under subsection (d)(2);
(iii) the denial of the claim for benefits
relates to a decision regarding whether an
individual is a participant, beneficiary, or
enrollee who is enrolled under the terms and
conditions of the plan or coverage (including
the applicability of any waiting period under
the plan or coverage); or
(iv) the denial of the claim for benefits
is a decision as to the application of cost-
sharing requirements or the application of a
specific exclusion or express limitation on the
amount, duration, or scope of coverage of items
or services under the terms and conditions of
the plan or coverage unless the decision is a
denial described in subsection (d)(2).
Upon making a determination that any of clauses (i)
through (iv) applies with respect to the request, the
entity shall determine that the denial of a claim for
benefits involved is not eligible for independent
medical review under subsection (d), and shall provide
notice in accordance with subparagraph (C).
(B) Process for making determinations.--
(i) No deference to prior determinations.--
In making determinations under subparagraph
(A), there shall be no deference given to
determinations made by the plan or issuer or
the recommendation of a treating health care
professional (if any).
(ii) Use of appropriate personnel.--A
qualified external review entity shall use
appropriately qualified personnel to make
determinations under this section.
(C) Notices and general timelines for
determination.--
(i) Notice in case of denial of referral.--
If the entity under this paragraph does not
make a referral to an independent medical
reviewer, the entity shall provide notice to
the plan or issuer, the participant,
beneficiary, or enrollee (or authorized
representative) filing the request, and the
treating health care professional (if any) that
the denial is not subject to independent
medical review. Such notice--
(I) shall be written (and, in
addition, may be provided orally) in a
manner calculated to be understood by a
participant or enrollee;
(II) shall include the reasons for
the determination;
(III) include any relevant terms
and conditions of the plan or coverage;
and
(IV) include a description of any
further recourse available to the
individual.
(ii) General timeline for determinations.--
Upon receipt of information under paragraph
(2), the qualified external review entity, and
if required the independent medical reviewer,
shall make a determination within the overall
timeline that is applicable to the case under
review as described in subsection (e), except
that if the entity determines that a referral
to an independent medical reviewer is not
required, the entity shall provide notice of
such determination to the participant,
beneficiary, or enrollee (or authorized
representative) within such timeline and within
2 days of the date of such determination.
(d) Independent Medical Review.--
(1) In general.--If a qualified external review entity
determines under subsection (c) that a denial of a claim for
benefits is eligible for independent medical review, the entity
shall refer the denial involved to an independent medical
reviewer for the conduct of an independent medical review under
this subsection.
(2) Medically reviewable decisions.--A denial of a claim
for benefits is eligible for independent medical review if the
benefit for the item or service for which the claim is made
would be a covered benefit under the terms and conditions of
the plan or coverage but for one (or more) of the following
determinations:
(A) Denials based on medical necessity and
appropriateness.--A determination that the item or
service is not covered because it is not medically
necessary and appropriate or based on the application
of substantially equivalent terms.
(B) Denials based on experimental or
investigational treatment.--A determination that the
item or service is not covered because it is
experimental or investigational or based on the
application of substantially equivalent terms.
(C) Denials otherwise based on an evaluation of
medical facts.--A determination that the item or
service or condition is not covered based on grounds
that require an evaluation of the medical facts by a
health care professional in the specific case involved
to determine the coverage and extent of coverage of the
item or service or condition.
(3) Independent medical review determination.--
(A) In general.--An independent medical reviewer
under this section shall make a new independent
determination with respect to whether or not the denial
of a claim for a benefit that is the subject of the
review should be upheld, reversed, or modified.
(B) Standard for determination.--The independent
medical reviewer's determination relating to the
medical necessity and appropriateness, or the
experimental or investigational nature, or the
evaluation of the medical facts, of the item, service,
or condition involved shall be based on the medical
condition of the participant, beneficiary, or enrollee
(including the medical records of the participant,
beneficiary, or enrollee) and valid, relevant
scientific evidence and clinical evidence, including
peer-reviewed medical literature or findings and
including expert opinion.
(C) No coverage for excluded benefits.--Nothing in
this subsection shall be construed to permit an
independent medical reviewer to require that a group
health plan, or health insurance issuer offering health
insurance coverage, provide coverage for items or
services for which benefits are specifically excluded
or expressly limited under the plan or coverage in the
plain language of the plan document (and which are
disclosed under section 121(b)(1)(C)). Notwithstanding
any other provision of this Act, any exclusion of an
exact medical procedure, any exact time limit on the
duration or frequency of coverage, and any exact dollar
limit on the amount of coverage that is specifically
enumerated and defined (in the plain language of the
plan or coverage documents) under the plan or coverage
offered by a group health plan or health insurance
issuer offering health insurance coverage and that is
disclosed under section 121(b)(1) shall be considered
to govern the scope of the benefits that may be
required: Provided, That the terms and conditions of
the plan or coverage relating to such an exclusion or
limit are in compliance with the requirements of law.
(D) Evidence and information to be used in medical
reviews.--In making a determination under this
subsection, the independent medical reviewer shall also
consider appropriate and available evidence and
information, including the following:
(i) The determination made by the plan or
issuer with respect to the claim upon internal
review and the evidence, guidelines, or
rationale used by the plan or issuer in
reaching such determination.
(ii) The recommendation of the treating
health care professional and the evidence,
guidelines, and rationale used by the treating
health care professional in reaching such
recommendation.
(iii) Additional relevant evidence or
information obtained by the reviewer or
submitted by the plan, issuer, participant,
beneficiary, or enrollee (or an authorized
representative), or treating health care
professional.
(iv) The plan or coverage document.
(E) Independent determination.--In making
determinations under this section, a qualified external
review entity and an independent medical reviewer
shall--
(i) consider the claim under review without
deference to the determinations made by the
plan or issuer or the recommendation of the
treating health care professional (if any); and
(ii) consider, but not be bound by, the
definition used by the plan or issuer of
``medically necessary and appropriate'', or
``experimental or investigational'', or other
substantially equivalent terms that are used by
the plan or issuer to describe medical
necessity and appropriateness or experimental
or investigational nature of the treatment.
(F) Determination of independent medical
reviewer.--An independent medical reviewer shall, in
accordance with the deadlines described in subsection
(e), prepare a written determination to uphold,
reverse, or modify the denial under review. Such
written determination shall include--
(i) the determination of the reviewer;
(ii) the specific reasons of the reviewer
for such determination, including a summary of
the clinical or scientific evidence used in
making the determination; and
(iii) with respect to a determination to
reverse or modify the denial under review, a
timeframe within which the plan or issuer must
comply with such determination.
(G) Nonbinding nature of additional
recommendations.--In addition to the determination
under subparagraph (F), the reviewer may provide the
plan or issuer and the treating health care
professional with additional recommendations in
connection with such a determination, but any such
recommendations shall not affect (or be treated as part
of) the determination and shall not be binding on the
plan or issuer.
(e) Timelines and Notifications.--
(1) Timelines for independent medical review.--
(A) Prior authorization determination.--
(i) In general.--The independent medical
reviewer (or reviewers) shall make a
determination on a denial of a claim for
benefits that is referred to the reviewer under
subsection (c)(3) in accordance with the
medical exigencies of the case and as soon as
possible, but in no case later than 14 days
after the date of receipt of information under
subsection (c)(2) if the review involves a
prior authorization of items or services and in
no case later than 21 days after the date the
request for external review is received.
(ii) Expedited determination.--
Notwithstanding clause (i) and subject to
clause (iii), the independent medical reviewer
(or reviewers) shall make an expedited
determination on a denial of a claim for
benefits described in clause (i), when a
request for such an expedited determination is
made by a participant, beneficiary, or enrollee
(or authorized representative) at any time
during the process for making a determination,
and a health care professional certifies, with
the request, that a determination under the
timeline described in clause (i) would
seriously jeopardize the life or health of the
participant, beneficiary, or enrollee or the
ability of the participant, beneficiary, or
enrollee to maintain or regain maximum
function. Such determination shall be made in
accordance with the medical exigencies of the
case and as soon as possible, but in no case
later than 72 hours after the time the request
for external review is received by the
qualified external review entity.
(iii) Ongoing care determination.--
Notwithstanding clause (i), in the case of a
review described in such clause that involves a
termination or reduction of care, the notice of
the determination shall be completed not later
than 24 hours after the time the request for
external review is received by the qualified
external review entity and before the end of
the approved period of care.
(B) Retrospective determination.--The independent
medical reviewer (or reviewers) shall complete a review
in the case of a retrospective determination on an
appeal of a denial of a claim for benefits that is
referred to the reviewer under subsection (c)(3) in no
case later than 30 days after the date of receipt of
information under subsection (c)(2) and in no case
later than 60 days after the date the request for
external review is received by the qualified external
review entity.
(2) Notification of determination.--The external review
entity shall ensure that the plan or issuer, the participant,
beneficiary, or enrollee (or authorized representative) and the
treating health care professional (if any) receives a copy of
the written determination of the independent medical reviewer
prepared under subsection (d)(3)(F). Nothing in this paragraph
shall be construed as preventing an entity or reviewer from
providing an initial oral notice of the reviewer's
determination.
(3) Form of notices.--Determinations and notices under this
subsection shall be written in a manner calculated to be
understood by a participant.
(f) Compliance.--
(1) Application of determinations.--
(A) External review determinations binding on
plan.--The determinations of an external review entity
and an independent medical reviewer under this section
shall be binding upon the plan or issuer involved.
(B) Compliance with determination.--If the
determination of an independent medical reviewer is to
reverse or modify the denial, the plan or issuer, upon
the receipt of such determination, shall authorize
coverage to comply with the medical reviewer's
determination in accordance with the timeframe
established by the medical reviewer.
(2) Failure to comply.--
(A) In general.--If a plan or issuer fails to
comply with the timeframe established under paragraph
(1)(B) with respect to a participant, beneficiary, or
enrollee, where such failure to comply is caused by the
plan or issuer, the participant, beneficiary, or
enrollee may obtain the items or services involved (in
a manner consistent with the determination of the
independent external reviewer) from any provider
regardless of whether such provider is a participating
provider under the plan or coverage.
(B) Reimbursement.--
(i) In general.--Where a participant,
beneficiary, or enrollee obtains items or
services in accordance with subparagraph (A),
the plan or issuer involved shall provide for
reimbursement of the costs of such items or
services. Such reimbursement shall be made to
the treating health care professional or to the
participant, beneficiary, or enrollee (in the
case of a participant, beneficiary, or enrollee
who pays for the costs of such items or
services).
(ii) Amount.--The plan or issuer shall
fully reimburse a professional, participant,
beneficiary, or enrollee under clause (i) for
the total costs of the items or services
provided (regardless of any plan limitations
that may apply to the coverage of such items or
services) so long as the items or services were
provided in a manner consistent with the
determination of the independent medical
reviewer.
(C) Failure to reimburse.--Where a plan or issuer
fails to provide reimbursement to a professional,
participant, beneficiary, or enrollee in accordance
with this paragraph, the professional, participant,
beneficiary, or enrollee may commence a civil action
(or utilize other remedies available under law) to
recover only the amount of any such reimbursement that
is owed by the plan or issuer and any necessary legal
costs or expenses (including attorney's fees) incurred
in recovering such reimbursement.
(D) Available remedies.--The remedies provided
under this paragraph are in addition to any other
available remedies.
(3) Penalties against authorized officials for refusing to
authorize the determination of an external review entity.--
(A) Monetary penalties.--
(i) In general.--In any case in which the
determination of an external review entity is
not followed by a group health plan, or by a
health insurance issuer offering health
insurance coverage, any person who, acting in
the capacity of authorizing the benefit, causes
such refusal may, in the discretion of a court
of competent jurisdiction, be liable to an
aggrieved participant, beneficiary, or enrollee
for a civil penalty in an amount of up to
$1,000 a day from the date on which the
determination was transmitted to the plan or
issuer by the external review entity until the
date the refusal to provide the benefit is
corrected.
(ii) Additional penalty for failing to
follow timeline.--In any case in which
treatment was not commenced by the plan in
accordance with the determination of an
independent external reviewer, the Secretary
shall assess a civil penalty of $10,000 against
the plan and the plan shall pay such penalty to
the participant, beneficiary, or enrollee
involved.
(B) Cease and desist order and order of attorney's
fees.--In any action described in subparagraph (A)
brought by a participant, beneficiary, or enrollee with
respect to a group health plan, or a health insurance
issuer offering health insurance coverage, in which a
plaintiff alleges that a person referred to in such
subparagraph has taken an action resulting in a refusal
of a benefit determined by an external appeal entity to
be covered, or has failed to take an action for which
such person is responsible under the terms and
conditions of the plan or coverage and which is
necessary under the plan or coverage for authorizing a
benefit, the court shall cause to be served on the
defendant an order requiring the defendant--
(i) to cease and desist from the alleged
action or failure to act; and
(ii) to pay to the plaintiff a reasonable
attorney's fee and other reasonable costs
relating to the prosecution of the action on
the charges on which the plaintiff prevails.
(C) Additional civil penalties.--
(i) In general.--In addition to any penalty
imposed under subparagraph (A) or (B), the
appropriate Secretary may assess a civil
penalty against a person acting in the capacity
of authorizing a benefit determined by an
external review entity for one or more group
health plans, or health insurance issuers
offering health insurance coverage, for--
(I) any pattern or practice of
repeated refusal to authorize a benefit
determined by an external appeal entity
to be covered; or
(II) any pattern or practice of
repeated violations of the requirements
of this section with respect to such
plan or coverage.
(ii) Standard of proof and amount of
penalty.--Such penalty shall be payable only
upon proof by clear and convincing evidence of
such pattern or practice and shall be in an
amount not to exceed the lesser of--
(I) 25 percent of the aggregate
value of benefits shown by the
appropriate Secretary to have not been
provided, or unlawfully delayed, in
violation of this section under such
pattern or practice; or
(II) $500,000.
(D) Removal and disqualification.--Any person
acting in the capacity of authorizing benefits who has
engaged in any such pattern or practice described in
subparagraph (C)(i) with respect to a plan or coverage,
upon the petition of the appropriate Secretary, may be
removed by the court from such position, and from any
other involvement, with respect to such a plan or
coverage, and may be precluded from returning to any
such position or involvement for a period determined by
the court.
(4) Protection of legal rights.--Nothing in this subsection
or subtitle shall be construed as altering or eliminating any
cause of action or legal rights or remedies of participants,
beneficiaries, enrollees, and others under State or Federal law
(including sections 502 and 503 of the Employee Retirement
Income Security Act of 1974), including the right to file
judicial actions to enforce rights.
(g) Qualifications of Independent Medical Reviewers.--
(1) In general.--In referring a denial to 1 or more
individuals to conduct independent medical review under
subsection (c), the qualified external review entity shall
ensure that--
(A) each independent medical reviewer meets the
qualifications described in paragraphs (2) and (3);
(B) with respect to each review at least 1 such
reviewer meets the requirements described in paragraphs
(4) and (5); and
(C) compensation provided by the entity to the
reviewer is consistent with paragraph (6).
(2) Licensure and expertise.--Each independent medical
reviewer shall be a physician (allopathic or osteopathic) or
health care professional who--
(A) is appropriately credentialed or licensed in 1
or more States to deliver health care services; and
(B) typically treats the condition, makes the
diagnosis, or provides the type of treatment under
review.
(3) Independence.--
(A) In general.--Subject to subparagraph (B), each
independent medical reviewer in a case shall--
(i) not be a related party (as defined in
paragraph (7));
(ii) not have a material familial,
financial, or professional relationship with
such a party; and
(iii) not otherwise have a conflict of
interest with such a party (as determined under
regulations).
(B) Exception.--Nothing in subparagraph (A) shall
be construed to--
(i) prohibit an individual, solely on the
basis of affiliation with the plan or issuer,
from serving as an independent medical reviewer
if--
(I) a non-affiliated individual is
not reasonably available;
(II) the affiliated individual is
not involved in the provision of items
or services in the case under review;
(III) the fact of such an
affiliation is disclosed to the plan or
issuer and the participant,
beneficiary, or enrollee (or authorized
representative) and neither party
objects; and
(IV) the affiliated individual is
not an employee of the plan or issuer
and does not provide services
exclusively or primarily to or on
behalf of the plan or issuer;
(ii) prohibit an individual who has staff
privileges at the institution where the
treatment involved takes place from serving as
an independent medical reviewer merely on the
basis of such affiliation if the affiliation is
disclosed to the plan or issuer and the
participant, beneficiary, or enrollee (or
authorized representative), and neither party
objects; or
(iii) prohibit receipt of compensation by
an independent medical reviewer from an entity
if the compensation is provided consistent with
paragraph (6).
(4) Practicing health care professional in same field.--
(A) In general.--In a case involving treatment, or
the provision of items or services--
(i) by a physician, a reviewer shall be a
practicing physician (allopathic or
osteopathic) of the same or similar specialty,
as a physician who, acting within the
appropriate scope of practice within the State
in which the service is provided or rendered,
typically treats the condition, makes the
diagnosis, or provides the type of treatment
under review; or
(ii) by a non-physician health care
professional, a reviewer (or reviewers) shall
include at least one practicing non-physician
health care professional of the same or similar
specialty as the non-physician health care
professional who, acting within the appropriate
scope of practice within the State in which the
service is provided or rendered, typically
treats the condition, makes the diagnosis, or
provides the type of treatment under review.
(B) Practicing defined.--For purposes of this
paragraph, the term ``practicing'' means, with respect
to an individual who is a physician or other health
care professional that the individual provides health
care services to individual patients on average at
least 2 days per week.
(5) Pediatric expertise.--In the case of an external review
relating to a child, a reviewer shall have expertise under
paragraph (2) in pediatrics.
(6) Limitations on reviewer compensation.--Compensation
provided by a qualified external review entity to an
independent medical reviewer in connection with a review under
this section shall--
(A) not exceed a reasonable level; and
(B) not be contingent on the decision rendered by
the reviewer.
(7) Related party defined.--For purposes of this section,
the term ``related party'' means, with respect to a denial of a
claim under a plan or coverage relating to a participant,
beneficiary, or enrollee, any of the following:
(A) The plan, plan sponsor, or issuer involved, or
any fiduciary, officer, director, or employee of such
plan, plan sponsor, or issuer.
(B) The participant, beneficiary, or enrollee (or
authorized representative).
(C) The health care professional that provides the
items or services involved in the denial.
(D) The institution at which the items or services
(or treatment) involved in the denial are provided.
(E) The manufacturer of any drug or other item that
is included in the items or services involved in the
denial.
(F) Any other party determined under any
regulations to have a substantial interest in the
denial involved.
(h) Qualified External Review Entities.--
(1) Selection of qualified external review entities.--
(A) Limitation on plan or issuer selection.--The
appropriate Secretary shall implement procedures--
(i) to assure that the selection process
among qualified external review entities will
not create any incentives for external review
entities to make a decision in a biased manner;
and
(ii) for auditing a sample of decisions by
such entities to assure that no such decisions
are made in a biased manner.
No such selection process under the procedures
implemented by the appropriate Secretary may give
either the patient or the plan or issuer any ability to
determine or influence the selection of a qualified
external review entity to review the case of any
participant, beneficiary, or enrollee.
(B) State authority with respect to qualified
external review entities for health insurance
issuers.--With respect to health insurance issuers
offering health insurance coverage in a State, the
State may provide for external review activities to be
conducted by a qualified external appeal entity that is
designated by the State or that is selected by the
State in a manner determined by the State to assure an
unbiased determination.
(2) Contract with qualified external review entity.--Except
as provided in paragraph (1)(B), the external review process of
a plan or issuer under this section shall be conducted under a
contract between the plan or issuer and 1 or more qualified
external review entities (as defined in paragraph (4)(A)).
(3) Terms and conditions of contract.--The terms and
conditions of a contract under paragraph (2) shall--
(A) be consistent with the standards the
appropriate Secretary shall establish to assure there
is no real or apparent conflict of interest in the
conduct of external review activities; and
(B) provide that the costs of the external review
process shall be borne by the plan or issuer.
Subparagraph (B) shall not be construed as applying to the
imposition of a filing fee under subsection (b)(2)(A)(iv) or
costs incurred by the participant, beneficiary, or enrollee (or
authorized representative) or treating health care professional
(if any) in support of the review, including the provision of
additional evidence or information.
(4) Qualifications.--
(A) In general.--In this section, the term
``qualified external review entity'' means, in relation
to a plan or issuer, an entity that is initially
certified (and periodically recertified) under
subparagraph (C) as meeting the following requirements:
(i) The entity has (directly or through
contracts or other arrangements) sufficient
medical, legal, and other expertise and
sufficient staffing to carry out duties of a
qualified external review entity under this
section on a timely basis, including making
determinations under subsection (b)(2)(A) and
providing for independent medical reviews under
subsection (d).
(ii) The entity is not a plan or issuer or
an affiliate or a subsidiary of a plan or
issuer, and is not an affiliate or subsidiary
of a professional or trade association of plans
or issuers or of health care providers.
(iii) The entity has provided assurances
that it will conduct external review activities
consistent with the applicable requirements of
this section and standards specified in
subparagraph (C), including that it will not
conduct any external review activities in a
case unless the independence requirements of
subparagraph (B) are met with respect to the
case.
(iv) The entity has provided assurances
that it will provide information in a timely
manner under subparagraph (D).
(v) The entity meets such other
requirements as the appropriate Secretary
provides by regulation.
(B) Independence requirements.--
(i) In general.--Subject to clause (ii), an
entity meets the independence requirements of
this subparagraph with respect to any case if
the entity--
(I) is not a related party (as
defined in subsection (g)(7));
(II) does not have a material
familial, financial, or professional
relationship with such a party; and
(III) does not otherwise have a
conflict of interest with such a party
(as determined under regulations).
(ii) Exception for reasonable
compensation.--Nothing in clause (i) shall be
construed to prohibit receipt by a qualified
external review entity of compensation from a
plan or issuer for the conduct of external
review activities under this section if the
compensation is provided consistent with clause
(iii).
(iii) Limitations on entity compensation.--
Compensation provided by a plan or issuer to a
qualified external review entity in connection
with reviews under this section shall--
(I) not exceed a reasonable level;
and
(II) not be contingent on any
decision rendered by the entity or by
any independent medical reviewer.
(C) Certification and recertification process.--
(i) In general.--The initial certification
and recertification of a qualified external
review entity shall be made--
(I) under a process that is
recognized or approved by the
appropriate Secretary; or
(II) by a qualified private
standard-setting organization that is
approved by the appropriate Secretary
under clause (iii).
In taking action under subclause (I), the
appropriate Secretary shall give deference to
entities that are under contract with the
Federal Government or with an applicable State
authority to perform functions of the type
performed by qualified external review
entities.
(ii) Process.--The appropriate Secretary
shall not recognize or approve a process under
clause (i)(I) unless the process applies
standards (as promulgated in regulations) that
ensure that a qualified external review
entity--
(I) will carry out (and has carried
out, in the case of recertification)
the responsibilities of such an entity
in accordance with this section,
including meeting applicable deadlines;
(II) will meet (and has met, in the
case of recertification) appropriate
indicators of fiscal integrity;
(III) will maintain (and has
maintained, in the case of
recertification) appropriate
confidentiality with respect to
individually identifiable health
information obtained in the course of
conducting external review activities;
and
(IV) in the case of
recertification, shall review the
matters described in clause (iv).
(iii) Approval of qualified private
standard-setting organizations.--For purposes
of clause (i)(II), the appropriate Secretary
may approve a qualified private standard-
setting organization if such Secretary finds
that the organization only certifies (or
recertifies) external review entities that meet
at least the standards required for the
certification (or recertification) of external
review entities under clause (ii).
(iv) Considerations in recertifications.--
In conducting recertifications of a qualified
external review entity under this paragraph,
the appropriate Secretary or organization
conducting the recertification shall review
compliance of the entity with the requirements
for conducting external review activities under
this section, including the following:
(I) Provision of information under
subparagraph (D).
(II) Adherence to applicable
deadlines (both by the entity and by
independent medical reviewers it refers
cases to).
(III) Compliance with limitations
on compensation (with respect to both
the entity and independent medical
reviewers it refers cases to).
(IV) Compliance with applicable
independence requirements.
(V) Compliance with the requirement
of subsection (d)(1) that only
medically reviewable decisions shall be
the subject of independent medical
review and with the requirement of
subsection (d)(3) that independent
medical reviewers may not require
coverage for specifically excluded
benefits.
(v) Period of certification or
recertification.--A certification or
recertification provided under this paragraph
shall extend for a period not to exceed 2
years.
(vi) Revocation.--A certification or
recertification under this paragraph may be
revoked by the appropriate Secretary or by the
organization providing such certification upon
a showing of cause. The Secretary, or
organization, shall revoke a certification or
deny a recertification with respect to an
entity if there is a showing that the entity
has a pattern or practice of ordering coverage
for benefits that are specifically excluded
under the plan or coverage.
(vii) Petition for denial or withdrawal.--
An individual may petition the Secretary, or an
organization providing the certification
involves, for a denial of recertification or a
withdrawal of a certification with respect to
an entity under this subparagraph if there is a
pattern or practice of such entity failing to
meet a requirement of this section.
(viii) Sufficient number of entities.--The
appropriate Secretary shall certify and
recertify a number of external review entities
which is sufficient to ensure the timely and
efficient provision of review services.
(D) Provision of information.--
(i) In general.--A qualified external
review entity shall provide to the appropriate
Secretary, in such manner and at such times as
such Secretary may require, such information
(relating to the denials which have been
referred to the entity for the conduct of
external review under this section) as such
Secretary determines appropriate to assure
compliance with the independence and other
requirements of this section to monitor and
assess the quality of its external review
activities and lack of bias in making
determinations. Such information shall include
information described in clause (ii) but shall
not include individually identifiable medical
information.
(ii) Information to be included.--The
information described in this subclause with
respect to an entity is as follows:
(I) The number and types of denials
for which a request for review has been
received by the entity.
(II) The disposition by the entity
of such denials, including the number
referred to a independent medical
reviewer and the reasons for such
dispositions (including the application
of exclusions), on a plan or issuer-
specific basis and on a health care
specialty-specific basis.
(III) The length of time in making
determinations with respect to such
denials.
(IV) Updated information on the
information required to be submitted as
a condition of certification with
respect to the entity's performance of
external review activities.
(iii) Information to be provided to
certifying organization.--
(I) In general.--In the case of a
qualified external review entity which
is certified (or recertified) under
this subsection by a qualified private
standard-setting organization, at the
request of the organization, the entity
shall provide the organization with the
information provided to the appropriate
Secretary under clause (i).
(II) Additional information.--
Nothing in this subparagraph shall be
construed as preventing such an
organization from requiring additional
information as a condition of
certification or recertification of an
entity.
(iv) Use of information.--Information
provided under this subparagraph may be used by
the appropriate Secretary and qualified private
standard-setting organizations to conduct
oversight of qualified external review
entities, including recertification of such
entities, and shall be made available to the
public in an appropriate manner.
(E) Limitation on liability.--No qualified external
review entity having a contract with a plan or issuer,
and no person who is employed by any such entity or who
furnishes professional services to such entity
(including as an independent medical reviewer), shall
be held by reason of the performance of any duty,
function, or activity required or authorized pursuant
to this section, to be civilly liable under any law of
the United States or of any State (or political
subdivision thereof) if there was no actual malice or
gross misconduct in the performance of such duty,
function, or activity.
(5) Report.--Not later than 12 months after the general
effective date referred to in section 601, the General
Accounting Office shall prepare and submit to the appropriate
committees of Congress a report concerning--
(A) the information that is provided under
paragraph (3)(D);
(B) the number of denials that have been upheld by
independent medical reviewers and the number of denials
that have been reversed by such reviewers; and
(C) the extent to which independent medical
reviewers are requiring coverage for benefits that are
specifically excluded under the plan or coverage.
SEC. 105. HEALTH CARE CONSUMER ASSISTANCE FUND.
(a) Grants.--
(1) In general.--The Secretary of Health and Human Services
(referred to in this section as the ``Secretary'') shall
establish a fund, to be known as the ``Health Care Consumer
Assistance Fund'', to be used to award grants to eligible
States to carry out consumer assistance activities (including
programs established by States prior to the enactment of this
Act) designed to provide information, assistance, and referrals
to consumers of health insurance products.
(2) State eligibility.--To be eligible to receive a grant
under this subsection a State shall prepare and submit to the
Secretary an application at such time, in such manner, and
containing such information as the Secretary may require,
including a State plan that describes--
(A) the manner in which the State will ensure that
the health care consumer assistance office (established
under paragraph (4)) will educate and assist health
care consumers in accessing needed care;
(B) the manner in which the State will coordinate
and distinguish the services provided by the health
care consumer assistance office with the services
provided by Federal, State and local health-related
ombudsman, information, protection and advocacy,
insurance, and fraud and abuse programs;
(C) the manner in which the State will provide
information, outreach, and services to underserved,
minority populations with limited English proficiency
and populations residing in rural areas;
(D) the manner in which the State will oversee the
health care consumer assistance office, its activities,
product materials and evaluate program effectiveness;
(E) the manner in which the State will ensure that
funds made available under this section will be used to
supplement, and not supplant, any other Federal, State,
or local funds expended to provide services for
programs described under this section and those
described in subparagraphs (C) and (D);
(F) the manner in which the State will ensure that
health care consumer office personnel have the
professional background and training to carry out the
activities of the office; and
(G) the manner in which the State will ensure that
consumers have direct access to consumer assistance
personnel during regular business hours.
(3) Amount of grant.--
(A) In general.--From amounts appropriated under
subsection (b) for a fiscal year, the Secretary shall
award a grant to a State in an amount that bears the
same ratio to such amounts as the number of individuals
within the State covered under a group health plan or
under health insurance coverage offered by a health
insurance issuer bears to the total number of
individuals so covered in all States (as determined by
the Secretary). Any amounts provided to a State under
this subsection that are not used by the State shall be
remitted to the Secretary and reallocated in accordance
with this subparagraph.
(B) Minimum amount.--In no case shall the amount
provided to a State under a grant under this subsection
for a fiscal year be less than an amount equal to 0.5
percent of the amount appropriated for such fiscal year
to carry out this section.
(C) Non-federal contributions.--A State will
provide for the collection of non-Federal contributions
for the operation of the office in an amount that is
not less than 25 percent of the amount of Federal funds
provided to the State under this section.
(4) Provision of funds for establishment of office.--
(A) In general.--From amounts provided under a
grant under this subsection, a State shall, directly or
through a contract with an independent, nonprofit
entity with demonstrated experience in serving the
needs of health care consumers, provide for the
establishment and operation of a State health care
consumer assistance office.
(B) Eligibility of entity.--To be eligible to enter
into a contract under subparagraph (A), an entity shall
demonstrate that it has the technical, organizational,
and professional capacity to deliver the services
described in subsection (b) to all public and private
health insurance participants, beneficiaries,
enrollees, or prospective enrollees.
(C) Existing state entity.--Nothing in this section
shall prevent the funding of an existing health care
consumer assistance program that otherwise meets the
requirements of this section.
(b) Use of Funds.--
(1) By state.--A State shall use amounts provided under a
grant awarded under this section to carry out consumer
assistance activities directly or by contract with an
independent, non-profit organization. An eligible entity may
use some reasonable amount of such grant to ensure the adequate
training of personnel carrying out such activities. To receive
amounts under this subsection, an eligible entity shall provide
consumer assistance services, including--
(A) the operation of a toll-free telephone hotline
to respond to consumer requests;
(B) the dissemination of appropriate educational
materials on available health insurance products and on
how best to access health care and the rights and
responsibilities of health care consumers;
(C) the provision of education on effective methods
to promptly and efficiently resolve questions,
problems, and grievances;
(D) the coordination of educational and outreach
efforts with health plans, health care providers,
payers, and governmental agencies;
(E) referrals to appropriate private and public
entities to resolve questions, problems and grievances;
and
(F) the provision of information and assistance,
including acting as an authorized representative,
regarding internal, external, or administrative
grievances or appeals procedures in nonlitigative
settings to appeal the denial, termination, or
reduction of health care services, or the refusal to
pay for such services, under a group health plan or
health insurance coverage offered by a health insurance
issuer.
(2) Confidentiality and access to information.--
(A) State entity.--With respect to a State that
directly establishes a health care consumer assistance
office, such office shall establish and implement
procedures and protocols in accordance with applicable
Federal and State laws.
(B) Contract entity.--With respect to a State that,
through contract, establishes a health care consumer
assistance office, such office shall establish and
implement procedures and protocols, consistent with
applicable Federal and State laws, to ensure the
confidentiality of all information shared by a
participant, beneficiary, enrollee, or their personal
representative and their health care providers, group
health plans, or health insurance insurers with the
office and to ensure that no such information is used
by the office, or released or disclosed to State
agencies or outside persons or entities without the
prior written authorization (in accordance with section
164.508 of title 45, Code of Federal Regulations) of
the individual or personal representative. The office
may, consistent with applicable Federal and State
confidentiality laws, collect, use or disclose
aggregate information that is not individually
identifiable (as defined in section 164.501 of title
45, Code of Federal Regulations). The office shall
provide a written description of the policies and
procedures of the office with respect to the manner in
which health information may be used or disclosed to
carry out consumer assistance activities. The office
shall provide health care providers, group health
plans, or health insurance issuers with a written
authorization (in accordance with section 164.508 of
title 45, Code of Federal Regulations) to allow the
office to obtain medical information relevant to the
matter before the office.
(3) Availability of services.--The health care consumer
assistance office of a State shall not discriminate in the
provision of information, referrals, and services regardless of
the source of the individual's health insurance coverage or
prospective coverage, including individuals covered under a
group health plan or health insurance coverage offered by a
health insurance issuer, the medicare or medicaid programs
under title XVIII or XIX of the Social Security Act (42 U.S.C.
1395 and 1396 et seq.), or under any other Federal or State
health care program.
(4) Designation of responsibilities.--
(A) Within existing state entity.--If the health
care consumer assistance office of a State is located
within an existing State regulatory agency or office of
an elected State official, the State shall ensure
that--
(i) there is a separate delineation of the
funding, activities, and responsibilities of
the office as compared to the other funding,
activities, and responsibilities of the agency;
and
(ii) the office establishes and implements
procedures and protocols to ensure the
confidentiality of all information shared by a
participant, beneficiary, or enrollee or their
personal representative and their health care
providers, group health plans, or health
insurance issuers with the office and to ensure
that no information is disclosed to the State
agency or office without the written
authorization of the individual or their
personal representative in accordance with
paragraph (2).
(B) Contract entity.--In the case of an entity that
enters into a contract with a State under subsection
(a)(3), the entity shall provide assurances that the
entity has no conflict of interest in carrying out the
activities of the office and that the entity is
independent of group health plans, health insurance
issuers, providers, payers, and regulators of health
care.
(5) Subcontracts.--The health care consumer assistance
office of a State may carry out activities and provide services
through contracts entered into with 1 or more nonprofit
entities so long as the office can demonstrate that all of the
requirements of this section are complied with by the office.
(6) Term.--A contract entered into under this subsection
shall be for a term of 3 years.
(c) Report.--Not later than 1 year after the Secretary first awards
grants under this section, and annually thereafter, the Secretary shall
prepare and submit to the appropriate committees of Congress a report
concerning the activities funded under this section and the
effectiveness of such activities in resolving health care-related
problems and grievances.
(d) Authorization of Appropriations.--There are authorized to be
appropriated such sums as may be necessary to carry out this section.
Subtitle B--Access to Care
SEC. 111. CONSUMER CHOICE OPTION.
(a) In General.--If--
(1) a health insurance issuer providing health insurance
coverage in connection with a group health plan offers to
enrollees health insurance coverage which provides for coverage
of services (including physician pathology services) only if
such services are furnished through health care professionals
and providers who are members of a network of health care
professionals and providers who have entered into a contract
with the issuer to provide such services, or
(2) a group health plan offers to participants or
beneficiaries health benefits which provide for coverage of
services only if such services are furnished through health
care professionals and providers who are members of a network
of health care professionals and providers who have entered
into a contract with the plan to provide such services,
then the issuer or plan shall also offer or arrange to be offered to
such enrollees, participants, or beneficiaries (at the time of
enrollment and during an annual open season as provided under
subsection (c)) the option of health insurance coverage or health
benefits which provide for coverage of such services which are not
furnished through health care professionals and providers who are
members of such a network unless such enrollees, participants, or
beneficiaries are offered such non-network coverage through another
group health plan or through another health insurance issuer in the
group market.
(b) Additional Costs.--The amount of any additional premium charged
by the health insurance issuer or group health plan for the additional
cost of the creation and maintenance of the option described in
subsection (a) and the amount of any additional cost sharing imposed
under such option shall be borne by the enrollee, participant, or
beneficiary unless it is paid by the health plan sponsor or group
health plan through agreement with the health insurance issuer.
(c) Open Season.--An enrollee, participant, or beneficiary, may
change to the offering provided under this section only during a time
period determined by the health insurance issuer or group health plan.
Such time period shall occur at least annually.
SEC. 112. CHOICE OF HEALTH CARE PROFESSIONAL.
(a) Primary Care.--If a group health plan, or a health insurance
issuer that offers health insurance coverage, requires or provides for
designation by a participant, beneficiary, or enrollee of a
participating primary care provider, then the plan or issuer shall
permit each participant, beneficiary, and enrollee to designate any
participating primary care provider who is available to accept such
individual.
(b) Specialists.--
(1) In general.--Subject to paragraph (2), a group health
plan and a health insurance issuer that offers health insurance
coverage shall permit each participant, beneficiary, or
enrollee to receive medically necessary and appropriate
specialty care, pursuant to appropriate referral procedures,
from any qualified participating health care professional who
is available to accept such individual for such care.
(2) Limitation.--Paragraph (1) shall not apply to specialty
care if the plan or issuer clearly informs participants,
beneficiaries, and enrollees of the limitations on choice of
participating health care professionals with respect to such
care.
(3) Construction.--Nothing in this subsection shall be
construed as affecting the application of section 114 (relating
to access to specialty care).
SEC. 113. ACCESS TO EMERGENCY CARE.
(a) Coverage of Emergency Services.--
(1) In general.--If a group health plan, or health
insurance coverage offered by a health insurance issuer,
provides or covers any benefits with respect to services in an
emergency department of a hospital, the plan or issuer shall
cover emergency services (as defined in paragraph (2)(B))--
(A) without the need for any prior authorization
determination;
(B) whether the health care provider furnishing
such services is a participating provider with respect
to such services;
(C) in a manner so that, if such services are
provided to a participant, beneficiary, or enrollee--
(i) by a nonparticipating health care
provider with or without prior authorization,
or
(ii) by a participating health care
provider without prior authorization,
the participant, beneficiary, or enrollee is not liable
for amounts that exceed the amounts of liability that
would be incurred if the services were provided by a
participating health care provider with prior
authorization; and
(D) without regard to any other term or condition
of such coverage (other than exclusion or coordination
of benefits, or an affiliation or waiting period,
permitted under section 2701 of the Public Health
Service Act, section 701 of the Employee Retirement
Income Security Act of 1974, or section 9801 of the
Internal Revenue Code of 1986, and other than
applicable cost-sharing).
(2) Definitions.--In this section:
(A) Emergency medical condition.--The term
``emergency medical condition'' means a medical
condition manifesting itself by acute symptoms of
sufficient severity (including severe pain) such that a
prudent layperson, who possesses an average knowledge
of health and medicine, could reasonably expect the
absence of immediate medical attention to result in a
condition described in clause (i), (ii), or (iii) of
section 1867(e)(1)(A) of the Social Security Act.
(B) Emergency services.--The term ``emergency
services'' means, with respect to an emergency medical
condition--
(i) a medical screening examination (as
required under section 1867 of the Social
Security Act) that is within the capability of
the emergency department of a hospital,
including ancillary services routinely
available to the emergency department to
evaluate such emergency medical condition, and
(ii) within the capabilities of the staff
and facilities available at the hospital, such
further medical examination and treatment as
are required under section 1867 of such Act to
stabilize the patient.
(C) Stabilize.--The term ``to stabilize'', with
respect to an emergency medical condition (as defined
in subparagraph (A)), has the meaning given in section
1867(e)(3) of the Social Security Act (42 U.S.C.
1395dd(e)(3)).
(b) Reimbursement for Maintenance Care and Post-stabilization
Care.--A group health plan, and health insurance coverage offered by a
health insurance issuer, must provide reimbursement for maintenance
care and post-stabilization care in accordance with the requirements of
section 1852(d)(2) of the Social Security Act (42 U.S.C. 1395w-
22(d)(2)). Such reimbursement shall be provided in a manner consistent
with subsection (a)(1)(C).
(c) Coverage of Emergency Ambulance Services.--
(1) In general.--If a group health plan, or health
insurance coverage provided by a health insurance issuer,
provides any benefits with respect to ambulance services and
emergency services, the plan or issuer shall cover emergency
ambulance services (as defined in paragraph (2)) furnished
under the plan or coverage under the same terms and conditions
under subparagraphs (A) through (D) of subsection (a)(1) under
which coverage is provided for emergency services.
(2) Emergency ambulance services.--For purposes of this
subsection, the term ``emergency ambulance services'' means
ambulance services (as defined for purposes of section
1861(s)(7) of the Social Security Act) furnished to transport
an individual who has an emergency medical condition (as
defined in subsection (a)(2)(A)) to a hospital for the receipt
of emergency services (as defined in subsection (a)(2)(B)) in a
case in which the emergency services are covered under the plan
or coverage pursuant to subsection (a)(1) and a prudent
layperson, with an average knowledge of health and medicine,
could reasonably expect that the absence of such transport
would result in placing the health of the individual in serious
jeopardy, serious impairment of bodily function, or serious
dysfunction of any bodily organ or part.
SEC. 114. TIMELY ACCESS TO SPECIALISTS.
(a) Timely Access.--
(1) In general.--A group health plan and a health insurance
issuer offering health insurance coverage shall ensure that
participants, beneficiaries, and enrollees receive timely
access to specialists who are appropriate to the condition of,
and accessible to, the participant, beneficiary, or enrollee,
when such specialty care is a covered benefit under the plan or
coverage.
(2) Rule of construction.--Nothing in paragraph (1) shall
be construed--
(A) to require the coverage under a group health
plan or health insurance coverage of benefits or
services;
(B) to prohibit a plan or issuer from including
providers in the network only to the extent necessary
to meet the needs of the plan's or issuer's
participants, beneficiaries, or enrollees; or
(C) to override any State licensure or scope-of-
practice law.
(3) Access to certain providers.--
(A) In general.--With respect to specialty care
under this section, if a participating specialist is
not available and qualified to provide such care to the
participant, beneficiary, or enrollee, the plan or
issuer shall provide for coverage of such care by a
nonparticipating specialist.
(B) Treatment of nonparticipating providers.--If a
participant, beneficiary, or enrollee receives care
from a nonparticipating specialist pursuant to
subparagraph (A), such specialty care shall be provided
at no additional cost to the participant, beneficiary,
or enrollee beyond what the participant, beneficiary,
or enrollee would otherwise pay for such specialty care
if provided by a participating specialist.
(b) Referrals.--
(1) Authorization.--Subject to subsection (a)(1), a group
health plan or health insurance issuer may require an
authorization in order to obtain coverage for specialty
services under this section. Any such authorization--
(A) shall be for an appropriate duration of time or
number of referrals, including an authorization for a
standing referral where appropriate; and
(B) may not be refused solely because the
authorization involves services of a nonparticipating
specialist (described in subsection (a)(3)).
(2) Referrals for ongoing special conditions.--
(A) In general.--Subject to subsection (a)(1), a
group health plan and a health insurance issuer shall
permit a participant, beneficiary, or enrollee who has
an ongoing special condition (as defined in
subparagraph (B)) to receive a referral to a specialist
for the treatment of such condition and such specialist
may authorize such referrals, procedures, tests, and
other medical services with respect to such condition,
or coordinate the care for such condition, subject to
the terms of a treatment plan (if any) referred to in
subsection (c) with respect to the condition.
(B) Ongoing special condition defined.--In this
subsection, the term ``ongoing special condition''
means a condition or disease that--
(i) is life-threatening, degenerative,
potentially disabling, or congenital; and
(ii) requires specialized medical care over
a prolonged period of time.
(c) Treatment Plans.--
(1) In general.--A group health plan or health insurance
issuer may require that the specialty care be provided--
(A) pursuant to a treatment plan, but only if the
treatment plan--
(i) is developed by the specialist, in
consultation with the case manager or primary
care provider, and the participant,
beneficiary, or enrollee, and
(ii) is approved by the plan or issuer in a
timely manner, if the plan or issuer requires
such approval; and
(B) in accordance with applicable quality assurance
and utilization review standards of the plan or issuer.
(2) Notification.--Nothing in paragraph (1) shall be
construed as prohibiting a plan or issuer from requiring the
specialist to provide the plan or issuer with regular updates
on the specialty care provided, as well as all other reasonably
necessary medical information.
(d) Specialist Defined.--For purposes of this section, the term
``specialist'' means, with respect to the condition of the participant,
beneficiary, or enrollee, a health care professional, facility, or
center that has adequate expertise through appropriate training and
experience (including, in the case of a child, appropriate pediatric
expertise) to provide high quality care in treating the condition.
SEC. 115. PATIENT ACCESS TO OBSTETRICAL AND GYNECOLOGICAL CARE.
(a) General Rights.--
(1) Direct access.--A group health plan, and a health
insurance issuer offering health insurance coverage, described
in subsection (b) may not require authorization or referral by
the plan, issuer, or any person (including a primary care
provider described in subsection (b)(2)) in the case of a
female participant, beneficiary, or enrollee who seeks coverage
for obstetrical or gynecological care provided by a
participating health care professional who specializes in
obstetrics or gynecology.
(2) Obstetrical and gynecological care.--A group health
plan and a health insurance issuer described in subsection (b)
shall treat the provision of obstetrical and gynecological
care, and the ordering of related obstetrical and gynecological
items and services, pursuant to the direct access described
under paragraph (1), by a participating health care
professional who specializes in obstetrics or gynecology as the
authorization of the primary care provider.
(b) Application of Section.--A group health plan, or health
insurance issuer offering health insurance coverage, described in this
subsection is a group health plan or coverage that--
(1) provides coverage for obstetric or gynecologic care;
and
(2) requires the designation by a participant, beneficiary,
or enrollee of a participating primary care provider.
(c) Construction.--Nothing in subsection (a) shall be construed
to--
(1) waive any exclusions of coverage under the terms and
conditions of the plan or health insurance coverage with
respect to coverage of obstetrical or gynecological care; or
(2) preclude the group health plan or health insurance
issuer involved from requiring that the obstetrical or
gynecological provider notify the primary care health care
professional or the plan or issuer of treatment decisions.
SEC. 116. ACCESS TO PEDIATRIC CARE.
(a) Pediatric Care.--In the case of a person who has a child who is
a participant, beneficiary, or enrollee under a group health plan, or
health insurance coverage offered by a health insurance issuer, if the
plan or issuer requires or provides for the designation of a
participating primary care provider for the child, the plan or issuer
shall permit such person to designate a physician (allopathic or
osteopathic) who specializes in pediatrics as the child's primary care
provider if such provider participates in the network of the plan or
issuer.
(b) Construction.--Nothing in subsection (a) shall be construed to
waive any exclusions of coverage under the terms and conditions of the
plan or health insurance coverage with respect to coverage of pediatric
care.
SEC. 117. CONTINUITY OF CARE.
(a) Termination of Provider.--
(1) In general.--If--
(A) a contract between a group health plan, or a
health insurance issuer offering health insurance
coverage, and a treating health care provider is
terminated (as defined in paragraph (e)(4)), or
(B) benefits or coverage provided by a health care
provider are terminated because of a change in the
terms of provider participation in such plan or
coverage,
the plan or issuer shall meet the requirements of paragraph (3)
with respect to each continuing care patient.
(2) Treatment of termination of contract with health
insurance issuer.--If a contract for the provision of health
insurance coverage between a group health plan and a health
insurance issuer is terminated and, as a result of such
termination, coverage of services of a health care provider is
terminated with respect to an individual, the provisions of
paragraph (1) (and the succeeding provisions of this section)
shall apply under the plan in the same manner as if there had
been a contract between the plan and the provider that had been
terminated, but only with respect to benefits that are covered
under the plan after the contract termination.
(3) Requirements.--The requirements of this paragraph are
that the plan or issuer--
(A) notify the continuing care patient involved, or
arrange to have the patient notified pursuant to
subsection (d)(2), on a timely basis of the termination
described in paragraph (1) (or paragraph (2), if
applicable) and the right to elect continued
transitional care from the provider under this section;
(B) provide the patient with an opportunity to
notify the plan or issuer of the patient's need for
transitional care; and
(C) subject to subsection (c), permit the patient
to elect to continue to be covered with respect to the
course of treatment by such provider with the
provider's consent during a transitional period (as
provided for under subsection (b)).
(4) Continuing care patient.--For purposes of this section,
the term ``continuing care patient'' means a participant,
beneficiary, or enrollee who--
(A) is undergoing a course of treatment for a
serious and complex condition from the provider at the
time the plan or issuer receives or provides notice of
provider, benefit, or coverage termination described in
paragraph (1) (or paragraph (2), if applicable);
(B) is undergoing a course of institutional or
inpatient care from the provider at the time of such
notice;
(C) is scheduled to undergo non-elective surgery
from the provider at the time of such notice;
(D) is pregnant and undergoing a course of
treatment for the pregnancy from the provider at the
time of such notice; or
(E) is or was determined to be terminally ill (as
determined under section 1861(dd)(3)(A) of the Social
Security Act) at the time of such notice, but only with
respect to a provider that was treating the terminal
illness before the date of such notice.
(b) Transitional Periods.--
(1) Serious and complex conditions.--The transitional
period under this subsection with respect to a continuing care
patient described in subsection (a)(4)(A) shall extend for up
to 90 days (as determined by the treating health care
professional) from the date of the notice described in
subsection (a)(3)(A).
(2) Institutional or inpatient care.--The transitional
period under this subsection for a continuing care patient
described in subsection (a)(4)(B) shall extend until the
earlier of--
(A) the expiration of the 90-day period beginning
on the date on which the notice under subsection
(a)(3)(A) is provided; or
(B) the date of discharge of the patient from such
care or the termination of the period of
institutionalization, or, if later, the date of
completion of reasonable follow-up care.
(3) Scheduled non-elective surgery.--The transitional
period under this subsection for a continuing care patient
described in subsection (a)(4)(C) shall extend until the
completion of the surgery involved and post-surgical follow-up
care relating to the surgery and occurring within 90 days after
the date of the surgery.
(4) Pregnancy.--The transitional period under this
subsection for a continuing care patient described in
subsection (a)(4)(D) shall extend through the provision of
post-partum care directly related to the delivery.
(5) Terminal illness.--The transitional period under this
subsection for a continuing care patient described in
subsection (a)(4)(E) shall extend for the remainder of the
patient's life for care that is directly related to the
treatment of the terminal illness or its medical
manifestations.
(c) Permissible Terms and Conditions.--A group health plan or
health insurance issuer may condition coverage of continued treatment
by a provider under this section upon the provider agreeing to the
following terms and conditions:
(1) The treating health care provider agrees to accept
reimbursement from the plan or issuer and continuing care
patient involved (with respect to cost-sharing) at the rates
applicable prior to the start of the transitional period as
payment in full (or, in the case described in subsection
(a)(2), at the rates applicable under the replacement plan or
coverage after the date of the termination of the contract with
the group health plan or health insurance issuer) and not to
impose cost-sharing with respect to the patient in an amount
that would exceed the cost-sharing that could have been imposed
if the contract referred to in subsection (a)(1) had not been
terminated.
(2) The treating health care provider agrees to adhere to
the quality assurance standards of the plan or issuer
responsible for payment under paragraph (1) and to provide to
such plan or issuer necessary medical information related to
the care provided.
(3) The treating health care provider agrees otherwise to
adhere to such plan's or issuer's policies and procedures,
including procedures regarding referrals and obtaining prior
authorization and providing services pursuant to a treatment
plan (if any) approved by the plan or issuer.
(d) Rules of Construction.--Nothing in this section shall be
construed--
(1) to require the coverage of benefits which would not
have been covered if the provider involved remained a
participating provider; or
(2) with respect to the termination of a contract under
subsection (a) to prevent a group health plan or health
insurance issuer from requiring that the health care provider--
(A) notify participants, beneficiaries, or
enrollees of their rights under this section; or
(B) provide the plan or issuer with the name of
each participant, beneficiary, or enrollee who the
provider believes is a continuing care patient.
(e) Definitions.--In this section:
(1) Contract.--The term ``contract'' includes, with respect
to a plan or issuer and a treating health care provider, a
contract between such plan or issuer and an organized network
of providers that includes the treating health care provider,
and (in the case of such a contract) the contract between the
treating health care provider and the organized network.
(2) Health care provider.--The term ``health care
provider'' or ``provider'' means--
(A) any individual who is engaged in the delivery
of health care services in a State and who is required
by State law or regulation to be licensed or certified
by the State to engage in the delivery of such services
in the State; and
(B) any entity that is engaged in the delivery of
health care services in a State and that, if it is
required by State law or regulation to be licensed or
certified by the State to engage in the delivery of
such services in the State, is so licensed.
(3) Serious and complex condition.--The term ``serious and
complex condition'' means, with respect to a participant,
beneficiary, or enrollee under the plan or coverage--
(A) in the case of an acute illness, a condition
that is serious enough to require specialized medical
treatment to avoid the reasonable possibility of death
or permanent harm; or
(B) in the case of a chronic illness or condition,
is an ongoing special condition (as defined in section
114(b)(2)(B)).
(4) Terminated.--The term ``terminated'' includes, with
respect to a contract, the expiration or nonrenewal of the
contract, but does not include a termination of the contract
for failure to meet applicable quality standards or for fraud.
SEC. 118. ACCESS TO NEEDED PRESCRIPTION DRUGS.
(a) In General.--To the extent that a group health plan, or health
insurance coverage offered by a health insurance issuer, provides
coverage for benefits with respect to prescription drugs, and limits
such coverage to drugs included in a formulary, the plan or issuer
shall--
(1) ensure the participation of physicians and pharmacists
in developing and reviewing such formulary;
(2) provide for disclosure of the formulary to providers;
and
(3) in accordance with the applicable quality assurance and
utilization review standards of the plan or issuer, provide for
exceptions from the formulary limitation when a non-formulary
alternative is medically necessary and appropriate and, in the
case of such an exception, apply the same cost-sharing
requirements that would have applied in the case of a drug
covered under the formulary.
(b) Coverage of Approved Drugs and Medical Devices.--
(1) In general.--A group health plan (and health insurance
coverage offered in connection with such a plan) that provides
any coverage of prescription drugs or medical devices shall not
deny coverage of such a drug or device on the basis that the
use is investigational, if the use--
(A) in the case of a prescription drug--
(i) is included in the labeling authorized
by the application in effect for the drug
pursuant to subsection (b) or (j) of section
505 of the Federal Food, Drug, and Cosmetic
Act, without regard to any postmarketing
requirements that may apply under such Act; or
(ii) is included in the labeling authorized
by the application in effect for the drug under
section 351 of the Public Health Service Act,
without regard to any postmarketing
requirements that may apply pursuant to such
section; or
(B) in the case of a medical device, is included in
the labeling authorized by a regulation under
subsection (d) or (3) of section 513 of the Federal
Food, Drug, and Cosmetic Act, an order under subsection
(f) of such section, or an application approved under
section 515 of such Act, without regard to any
postmarketing requirements that may apply under such
Act.
(2) Construction.--Nothing in this subsection shall be
construed as requiring a group health plan (or health insurance
coverage offered in connection with such a plan) to provide any
coverage of prescription drugs or medical devices.
SEC. 119. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED CLINICAL
TRIALS.
(a) Coverage.--
(1) In general.--If a group health plan, or health
insurance issuer that is providing health insurance coverage,
provides coverage to a qualified individual (as defined in
subsection (b)), the plan or issuer--
(A) may not deny the individual participation in
the clinical trial referred to in subsection (b)(2);
(B) subject to subsection (c), may not deny (or
limit or impose additional conditions on) the coverage
of routine patient costs for items and services
furnished in connection with participation in the
trial; and
(C) may not discriminate against the individual on
the basis of the enrollee's participation in such
trial.
(2) Exclusion of certain costs.--For purposes of paragraph
(1)(B), routine patient costs do not include the cost of the
tests or measurements conducted primarily for the purpose of
the clinical trial involved.
(3) Use of in-network providers.--If one or more
participating providers is participating in a clinical trial,
nothing in paragraph (1) shall be construed as preventing a
plan or issuer from requiring that a qualified individual
participate in the trial through such a participating provider
if the provider will accept the individual as a participant in
the trial.
(b) Qualified Individual Defined.--For purposes of subsection (a),
the term ``qualified individual'' means an individual who is a
participant or beneficiary in a group health plan, or who is an
enrollee under health insurance coverage, and who meets the following
conditions:
(1) (A) The individual has a life-threatening or serious
illness for which no standard treatment is effective.
(B) The individual is eligible to participate in an
approved clinical trial according to the trial protocol with
respect to treatment of such illness.
(C) The individual's participation in the trial offers
meaningful potential for significant clinical benefit for the
individual.
(2) Either--
(A) the referring physician is a participating
health care professional and has concluded that the
individual's participation in such trial would be
appropriate based upon the individual meeting the
conditions described in paragraph (1); or
(B) the participant, beneficiary, or enrollee
provides medical and scientific information
establishing that the individual's participation in
such trial would be appropriate based upon the
individual meeting the conditions described in
paragraph (1).
(c) Payment.--
(1) In general.--Under this section a group health plan and
a health insurance issuer shall provide for payment for routine
patient costs described in subsection (a)(2) but is not
required to pay for costs of items and services that are
reasonably expected (as determined by the appropriate
Secretary) to be paid for by the sponsors of an approved
clinical trial.
(2) Payment rate.--In the case of covered items and
services provided by--
(A) a participating provider, the payment rate
shall be at the agreed upon rate; or
(B) a nonparticipating provider, the payment rate
shall be at the rate the plan or issuer would normally
pay for comparable services under subparagraph (A).
(d) Approved Clinical Trial Defined.--
(1) In general.--In this section, the term ``approved
clinical trial'' means a clinical research study or clinical
investigation--
(A) approved and funded (which may include funding
through in-kind contributions) by one or more of the
following:
(i) the National Institutes of Health;
(ii) a cooperative group or center of the
National Institutes of Health, including a
qualified nongovernmental research entity to
which the National Cancer Institute has awarded
a center support grant;
(iii) either of the following if the
conditions described in paragraph (2) are met--
(I) the Department of Veterans
Affairs;
(II) the Department of Defense; or
(B) approved by the Food and Drug Administration.
(2) Conditions for departments.--The conditions described
in this paragraph, for a study or investigation conducted by a
Department, are that the study or investigation has been
reviewed and approved through a system of peer review that the
appropriate Secretary determines--
(A) to be comparable to the system of peer review
of studies and investigations used by the National
Institutes of Health; and
(B) assures unbiased review of the highest ethical
standards by qualified individuals who have no interest
in the outcome of the review.
(e) Construction.--Nothing in this section shall be construed to
limit a plan's or issuer's coverage with respect to clinical trials.
SEC. 120. REQUIRED COVERAGE FOR MINIMUM HOSPITAL STAY FOR MASTECTOMIES
AND LYMPH NODE DISSECTIONS FOR THE TREATMENT OF BREAST
CANCER AND COVERAGE FOR SECONDARY CONSULTATIONS.
(a) Inpatient Care.--
(1) In general.--A group health plan, and a health
insurance issuer providing health insurance coverage, that
provides medical and surgical benefits shall ensure that
inpatient coverage with respect to the treatment of breast
cancer is provided for a period of time as is determined by the
attending physician, in consultation with the patient, to be
medically necessary and appropriate following--
(A) a mastectomy;
(B) a lumpectomy; or
(C) a lymph node dissection for the treatment of
breast cancer.
(2) Exception.--Nothing in this section shall be construed
as requiring the provision of inpatient coverage if the
attending physician and patient determine that a shorter period
of hospital stay is medically appropriate.
(b) Prohibition on Certain Modifications.--In implementing the
requirements of this section, a group health plan, and a health
insurance issuer providing health insurance coverage, may not modify
the terms and conditions of coverage based on the determination by a
participant, beneficiary, or enrollee to request less than the minimum
coverage required under subsection (a).
(c) Secondary Consultations.--
(1) In general.--A group health plan, and a health
insurance issuer providing health insurance coverage, that
provides coverage with respect to medical and surgical services
provided in relation to the diagnosis and treatment of cancer
shall ensure that full coverage is provided for secondary
consultations by specialists in the appropriate medical fields
(including pathology, radiology, and oncology) to confirm or
refute such diagnosis. Such plan or issuer shall ensure that
full coverage is provided for such secondary consultation
whether such consultation is based on a positive or negative
initial diagnosis. In any case in which the attending physician
certifies in writing that services necessary for such a
secondary consultation are not sufficiently available from
specialists operating under the plan or coverage with respect
to whose services coverage is otherwise provided under such
plan or by such issuer, such plan or issuer shall ensure that
coverage is provided with respect to the services necessary for
the secondary consultation with any other specialist selected
by the attending physician for such purpose at no additional
cost to the individual beyond that which the individual would
have paid if the specialist was participating in the network of
the plan or issuer.
(2) Exception.--Nothing in paragraph (1) shall be construed
as requiring the provision of secondary consultations where the
patient determines not to seek such a consultation.
(d) Prohibition on Penalties or Incentives.--A group health plan,
and a health insurance issuer providing health insurance coverage, may
not--
(1) penalize or otherwise reduce or limit the reimbursement
of a provider or specialist because the provider or specialist
provided care to a participant, beneficiary, or enrollee in
accordance with this section;
(2) provide financial or other incentives to a physician or
specialist to induce the physician or specialist to keep the
length of inpatient stays of patients following a mastectomy,
lumpectomy, or a lymph node dissection for the treatment of
breast cancer below certain limits or to limit referrals for
secondary consultations; or
(3) provide financial or other incentives to a physician or
specialist to induce the physician or specialist to refrain
from referring a participant, beneficiary, or enrollee for a
secondary consultation that would otherwise be covered by the
plan or coverage involved under subsection (c).
Subtitle C--Access to Information
SEC. 121. PATIENT ACCESS TO INFORMATION.
(a) Requirement.--
(1) Disclosure.--
(A) In general.--A group health plan, and a health
insurance issuer that provides coverage in connection
with health insurance coverage, shall provide for the
disclosure to participants, beneficiaries, and
enrollees--
(i) of the information described in
subsection (b) at the time of the initial
enrollment of the participant, beneficiary, or
enrollee under the plan or coverage;
(ii) of such information on an annual
basis--
(I) in conjunction with the
election period of the plan or coverage
if the plan or coverage has such an
election period; or
(II) in the case of a plan or
coverage that does not have an election
period, in conjunction with the
beginning of the plan or coverage year;
and
(iii) of information relating to any
material reduction to the benefits or
information described in such subsection or
subsection (c), in the form of a notice
provided not later than 30 days before the date
on which the reduction takes effect.
(B) Participants, beneficiaries, and enrollees.--
The disclosure required under subparagraph (A) shall be
provided--
(i) jointly to each participant,
beneficiary, and enrollee who reside at the
same address; or
(ii) in the case of a beneficiary or
enrollee who does not reside at the same
address as the participant or another enrollee,
separately to the participant or other
enrollees and such beneficiary or enrollee.
(2) Provision of information.--Information shall be
provided to participants, beneficiaries, and enrollees under
this section at the last known address maintained by the plan
or issuer with respect to such participants, beneficiaries, or
enrollees, to the extent that such information is provided to
participants, beneficiaries, or enrollees via the United States
Postal Service or other private delivery service.
(b) Required Information.--The informational materials to be
distributed under this section shall include for each option available
under the group health plan or health insurance coverage the following:
(1) Benefits.--A description of the covered benefits,
including--
(A) any in- and out-of-network benefits;
(B) specific preventive services covered under the
plan or coverage if such services are covered;
(C) any specific exclusions or express limitations
of benefits described in section 104(d)(3)(C);
(D) any other benefit limitations, including any
annual or lifetime benefit limits and any monetary
limits or limits on the number of visits, days, or
services, and any specific coverage exclusions; and
(E) any definition of medical necessity used in
making coverage determinations by the plan, issuer, or
claims administrator.
(2) Cost sharing.--A description of any cost-sharing
requirements, including--
(A) any premiums, deductibles, coinsurance,
copayment amounts, and liability for balance billing,
for which the participant, beneficiary, or enrollee
will be responsible under each option available under
the plan;
(B) any maximum out-of-pocket expense for which the
participant, beneficiary, or enrollee may be liable;
(C) any cost-sharing requirements for out-of-
network benefits or services received from
nonparticipating providers; and
(D) any additional cost-sharing or charges for
benefits and services that are furnished without
meeting applicable plan or coverage requirements, such
as prior authorization or precertification.
(3) Disenrollment.--Information relating to the
disenrollment of a participant, beneficiary, or enrollee.
(4) Service area.--A description of the plan or issuer's
service area, including the provision of any out-of-area
coverage.
(5) Participating providers.--A directory of participating
providers (to the extent a plan or issuer provides coverage
through a network of providers) that includes, at a minimum,
the name, address, and telephone number of each participating
provider, and information about how to inquire whether a
participating provider is currently accepting new patients.
(6) Choice of primary care provider.--A description of any
requirements and procedures to be used by participants,
beneficiaries, and enrollees in selecting, accessing, or
changing their primary care provider, including providers both
within and outside of the network (if the plan or issuer
permits out-of-network services), and the right to select a
pediatrician as a primary care provider under section 116 for a
participant, beneficiary, or enrollee who is a child if such
section applies.
(7) Preauthorization requirements.--A description of the
requirements and procedures to be used to obtain
preauthorization for health services, if such preauthorization
is required.
(8) Experimental and investigational treatments.--A
description of the process for determining whether a particular
item, service, or treatment is considered experimental or
investigational, and the circumstances under which such
treatments are covered by the plan or issuer.
(9) Specialty care.--A description of the requirements and
procedures to be used by participants, beneficiaries, and
enrollees in accessing specialty care and obtaining referrals
to participating and nonparticipating specialists, including
any limitations on choice of health care professionals referred
to in section 112(b)(2) and the right to timely access to
specialists care under section 114 if such section applies.
(10) Clinical trials.--A description of the circumstances
and conditions under which participation in clinical trials is
covered under the terms and conditions of the plan or coverage,
and the right to obtain coverage for approved clinical trials
under section 119 if such section applies.
(11) Prescription drugs.--To the extent the plan or issuer
provides coverage for prescription drugs, a statement of
whether such coverage is limited to drugs included in a
formulary, a description of any provisions and cost-sharing
required for obtaining on- and off-formulary medications, and a
description of the rights of participants, beneficiaries, and
enrollees in obtaining access to access to prescription drugs
under section 118 if such section applies.
(12) Emergency services.--A summary of the rules and
procedures for accessing emergency services, including the
right of a participant, beneficiary, or enrollee to obtain
emergency services under the prudent layperson standard under
section 113, if such section applies, and any educational
information that the plan or issuer may provide regarding the
appropriate use of emergency services.
(13) Claims and appeals.--A description of the plan or
issuer's rules and procedures pertaining to claims and appeals,
a description of the rights (including deadlines for exercising
rights) of participants, beneficiaries, and enrollees under
subtitle A in obtaining covered benefits, filing a claim for
benefits, and appealing coverage decisions internally and
externally (including telephone numbers and mailing addresses
of the appropriate authority), and a description of any
additional legal rights and remedies available under section
502 of the Employee Retirement Income Security Act of 1974 and
applicable State law.
(14) Advance directives and organ donation.--A description
of procedures for advance directives and organ donation
decisions if the plan or issuer maintains such procedures.
(15) Information on plans and issuers.--The name, mailing
address, and telephone number or numbers of the plan
administrator and the issuer to be used by participants,
beneficiaries, and enrollees seeking information about plan or
coverage benefits and services, payment of a claim, or
authorization for services and treatment. Notice of whether the
benefits under the plan or coverage are provided under a
contract or policy of insurance issued by an issuer, or whether
benefits are provided directly by the plan sponsor who bears
the insurance risk.
(16) Translation services.--A summary description of any
translation or interpretation services (including the
availability of printed information in languages other than
English, audio tapes, or information in Braille) that are
available for non-English speakers and participants,
beneficiaries, and enrollees with communication disabilities
and a description of how to access these items or services.
(17) Accreditation information.--Any information that is
made public by accrediting organizations in the process of
accreditation if the plan or issuer is accredited, or any
additional quality indicators (such as the results of enrollee
satisfaction surveys) that the plan or issuer makes public or
makes available to participants, beneficiaries, and enrollees.
(18) Notice of requirements.--A description of any rights
of participants, beneficiaries, and enrollees that are
established by the Patients' Bill of Rights Act of 2005
(excluding those described in paragraphs (1) through (17)) if
such sections apply. The description required under this
paragraph may be combined with the notices of the type
described in sections 711(d), 713(b), or 606(a)(1) of the
Employee Retirement Income Security Act of 1974 and with any
other notice provision that the appropriate Secretary
determines may be combined, so long as such combination does
not result in any reduction in the information that would
otherwise be provided to the recipient.
(19) Availability of additional information.--A statement
that the information described in subsection (c), and
instructions on obtaining such information (including telephone
numbers and, if available, Internet websites), shall be made
available upon request.
(20) Designated decisionmakers.--A description of the
participants and beneficiaries with respect to whom each
designated decisionmaker under the plan has assumed liability
under section 502(o) of the Employee Retirement Income Security
Act of 1974 and the name and address of each such
decisionmaker.
(c) Additional Information.--The informational materials to be
provided upon the request of a participant, beneficiary, or enrollee
shall include for each option available under a group health plan or
health insurance coverage the following:
(1) Status of providers.--The State licensure status of the
plan or issuer's participating health care professionals and
participating health care facilities, and, if available, the
education, training, specialty qualifications or certifications
of such professionals.
(2) Compensation methods.--A summary description by
category of the applicable methods (such as capitation, fee-
for-service, salary, bundled payments, per diem, or a
combination thereof) used for compensating prospective or
treating health care professionals (including primary care
providers and specialists) and facilities in connection with
the provision of health care under the plan or coverage.
(3) Prescription drugs.--Information about whether a
specific prescription medication is included in the formulary
of the plan or issuer, if the plan or issuer uses a defined
formulary.
(4) Utilization review activities.--A description of
procedures used and requirements (including circumstances,
timeframes, and appeals rights) under any utilization review
program under sections 101 and 102, including any drug
formulary program under section 118.
(5) External appeals information.--Aggregate information on
the number and outcomes of external medical reviews, relative
to the sample size (such as the number of covered lives) under
the plan or under the coverage of the issuer.
(d) Manner of Disclosure.--The information described in this
section shall be disclosed in an accessible medium and format that is
calculated to be understood by a participant or enrollee.
(e) Rules of Construction.--Nothing in this section shall be
construed to prohibit a group health plan, or a health insurance issuer
in connection with health insurance coverage, from--
(1) distributing any other additional information
determined by the plan or issuer to be important or necessary
in assisting participants, beneficiaries, and enrollees in the
selection of a health plan or health insurance coverage; and
(2) complying with the provisions of this section by
providing information in brochures, through the Internet or
other electronic media, or through other similar means, so long
as--
(A) the disclosure of such information in such form
is in accordance with requirements as the appropriate
Secretary may impose, and
(B) in connection with any such disclosure of
information through the Internet or other electronic
media--
(i) the recipient has affirmatively
consented to the disclosure of such information
in such form,
(ii) the recipient is capable of accessing
the information so disclosed on the recipient's
individual workstation or at the recipient's
home,
(iii) the recipient retains an ongoing
right to receive paper disclosure of such
information and receives, in advance of any
attempt at disclosure of such information to
him or her through the Internet or other
electronic media, notice in printed form of
such ongoing right and of the proper software
required to view information so disclosed, and
(iv) the plan administrator appropriately
ensures that the intended recipient is
receiving the information so disclosed and
provides the information in printed form if the
information is not received.
Subtitle D--Protecting the Doctor-patient Relationship
SEC. 131. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL
COMMUNICATIONS.
(a) General Rule.--The provisions of any contract or agreement, or
the operation of any contract or agreement, between a group health plan
or health insurance issuer in relation to health insurance coverage
(including any partnership, association, or other organization that
enters into or administers such a contract or agreement) and a health
care provider (or group of health care providers) shall not prohibit or
otherwise restrict a health care professional from advising such a
participant, beneficiary, or enrollee who is a patient of the
professional about the health status of the individual or medical care
or treatment for the individual's condition or disease, regardless of
whether benefits for such care or treatment are provided under the plan
or coverage, if the professional is acting within the lawful scope of
practice.
(b) Nullification.--Any contract provision or agreement that
restricts or prohibits medical communications in violation of
subsection (a) shall be null and void.
SEC. 132. PROHIBITION OF DISCRIMINATION AGAINST PROVIDERS BASED ON
LICENSURE.
(a) In General.--A group health plan, and a health insurance issuer
with respect to health insurance coverage, shall not discriminate with
respect to participation or indemnification as to any provider who is
acting within the scope of the provider's license or certification
under applicable State law, solely on the basis of such license or
certification.
(b) Construction.--Subsection (a) shall not be construed--
(1) as requiring the coverage under a group health plan or
health insurance coverage of a particular benefit or service or
to prohibit a plan or issuer from including providers only to
the extent necessary to meet the needs of the plan's or
issuer's participants, beneficiaries, or enrollees or from
establishing any measure designed to maintain quality and
control costs consistent with the responsibilities of the plan
or issuer;
(2) to override any State licensure or scope-of-practice
law; or
(3) as requiring a plan or issuer that offers network
coverage to include for participation every willing provider
who meets the terms and conditions of the plan or issuer.
SEC. 133. PROHIBITION AGAINST IMPROPER INCENTIVE ARRANGEMENTS.
(a) In General.--A group health plan and a health insurance issuer
offering health insurance coverage may not operate any physician
incentive plan (as defined in subparagraph (B) of section 1852(j)(4) of
the Social Security Act) unless the requirements described in clauses
(i), (ii)(I), and (iii) of subparagraph (A) of such section are met
with respect to such a plan.
(b) Application.--For purposes of carrying out paragraph (1), any
reference in section 1852(j)(4) of the Social Security Act to the
Secretary, a MedicareAdvantage organization, or an individual enrolled
with the organization shall be treated as a reference to the applicable
authority, a group health plan or health insurance issuer,
respectively, and a participant, beneficiary, or enrollee with the plan
or organization, respectively.
(c) Construction.--Nothing in this section shall be construed as
prohibiting all capitation and similar arrangements or all provider
discount arrangements.
SEC. 134. PAYMENT OF CLAIMS.
A group health plan, and a health insurance issuer offering health
insurance coverage, shall provide for prompt payment of claims
submitted for health care services or supplies furnished to a
participant, beneficiary, or enrollee with respect to benefits covered
by the plan or issuer, in a manner that is no less protective than the
provisions of section 1842(c)(2) of the Social Security Act (42 U.S.C.
1395u(c)(2)).
SEC. 135. PROTECTION FOR PATIENT ADVOCACY.
(a) Protection for Use of Utilization Review and Grievance
Process.--A group health plan, and a health insurance issuer with
respect to the provision of health insurance coverage, may not
retaliate against a participant, beneficiary, enrollee, or health care
provider based on the participant's, beneficiary's, enrollee's or
provider's use of, or participation in, a utilization review process or
a grievance process of the plan or issuer (including an internal or
external review or appeal process) under this title.
(b) Protection for Quality Advocacy by Health Care Professionals.--
(1) In general.--A group health plan and a health insurance
issuer may not retaliate or discriminate against a protected
health care professional because the professional in good
faith--
(A) discloses information relating to the care,
services, or conditions affecting one or more
participants, beneficiaries, or enrollees of the plan
or issuer to an appropriate public regulatory agency,
an appropriate private accreditation body, or
appropriate management personnel of the plan or issuer;
or
(B) initiates, cooperates, or otherwise
participates in an investigation or proceeding by such
an agency with respect to such care, services, or
conditions.
If an institutional health care provider is a participating
provider with such a plan or issuer or otherwise receives
payments for benefits provided by such a plan or issuer, the
provisions of the previous sentence shall apply to the provider
in relation to care, services, or conditions affecting one or
more patients within an institutional health care provider in
the same manner as they apply to the plan or issuer in relation
to care, services, or conditions provided to one or more
participants, beneficiaries, or enrollees; and for purposes of
applying this sentence, any reference to a plan or issuer is
deemed a reference to the institutional health care provider.
(2) Good faith action.--For purposes of paragraph (1), a
protected health care professional is considered to be acting
in good faith with respect to disclosure of information or
participation if, with respect to the information disclosed as
part of the action--
(A) the disclosure is made on the basis of personal
knowledge and is consistent with that degree of
learning and skill ordinarily possessed by health care
professionals with the same licensure or certification
and the same experience;
(B) the professional reasonably believes the
information to be true;
(C) the information evidences either a violation of
a law, rule, or regulation, of an applicable
accreditation standard, or of a generally recognized
professional or clinical standard or that a patient is
in imminent hazard of loss of life or serious injury;
and
(D) subject to subparagraphs (B) and (C) of
paragraph (3), the professional has followed reasonable
internal procedures of the plan, issuer, or
institutional health care provider established for the
purpose of addressing quality concerns before making
the disclosure.
(3) Exception and special rule.--
(A) General exception.--Paragraph (1) does not
protect disclosures that would violate Federal or State
law or diminish or impair the rights of any person to
the continued protection of confidentiality of
communications provided by such law.
(B) Notice of internal procedures.--Subparagraph
(D) of paragraph (2) shall not apply unless the
internal procedures involved are reasonably expected to
be known to the health care professional involved. For
purposes of this subparagraph, a health care
professional is reasonably expected to know of internal
procedures if those procedures have been made available
to the professional through distribution or posting.
(C) Internal procedure exception.--Subparagraph (D)
of paragraph (2) also shall not apply if--
(i) the disclosure relates to an imminent
hazard of loss of life or serious injury to a
patient;
(ii) the disclosure is made to an
appropriate private accreditation body pursuant
to disclosure procedures established by the
body; or
(iii) the disclosure is in response to an
inquiry made in an investigation or proceeding
of an appropriate public regulatory agency and
the information disclosed is limited to the
scope of the investigation or proceeding.
(4) Additional considerations.--It shall not be a violation
of paragraph (1) to take an adverse action against a protected
health care professional if the plan, issuer, or provider
taking the adverse action involved demonstrates that it would
have taken the same adverse action even in the absence of the
activities protected under such paragraph.
(5) Notice.--A group health plan, health insurance issuer,
and institutional health care provider shall post a notice, to
be provided or approved by the Secretary of Labor, setting
forth excerpts from, or summaries of, the pertinent provisions
of this subsection and information pertaining to enforcement of
such provisions.
(6) Constructions.--
(A) Determinations of coverage.--Nothing in this
subsection shall be construed to prohibit a plan or
issuer from making a determination not to pay for a
particular medical treatment or service or the services
of a type of health care professional.
(B) Enforcement of peer review protocols and
internal procedures.--Nothing in this subsection shall
be construed to prohibit a plan, issuer, or provider
from establishing and enforcing reasonable peer review
or utilization review protocols or determining whether
a protected health care professional has complied with
those protocols or from establishing and enforcing
internal procedures for the purpose of addressing
quality concerns.
(C) Relation to other rights.--Nothing in this
subsection shall be construed to abridge rights of
participants, beneficiaries, enrollees, and protected
health care professionals under other applicable
Federal or State laws.
(7) Protected health care professional defined.--For
purposes of this subsection, the term ``protected health care
professional'' means an individual who is a licensed or
certified health care professional and who--
(A) with respect to a group health plan or health
insurance issuer, is an employee of the plan or issuer
or has a contract with the plan or issuer for provision
of services for which benefits are available under the
plan or issuer; or
(B) with respect to an institutional health care
provider, is an employee of the provider or has a
contract or other arrangement with the provider
respecting the provision of health care services.
Subtitle E--Definitions
SEC. 151. DEFINITIONS.
(a) Incorporation of General Definitions.--Except as otherwise
provided, the provisions of section 2791 of the Public Health Service
Act shall apply for purposes of this title in the same manner as they
apply for purposes of title XXVII of such Act.
(b) Secretary.--Except as otherwise provided, the term
``Secretary'' means the Secretary of Health and Human Services, in
consultation with the Secretary of Labor and the term ``appropriate
Secretary'' means the Secretary of Health and Human Services in
relation to carrying out this title under sections 2706 and 2751 of the
Public Health Service Act and the Secretary of Labor in relation to
carrying out this title under section 714 of the Employee Retirement
Income Security Act of 1974.
(c) Additional Definitions.--For purposes of this title:
(1) Applicable authority.--The term ``applicable
authority'' means--
(A) in the case of a group health plan, the
Secretary of Health and Human Services and the
Secretary of Labor; and
(B) in the case of a health insurance issuer with
respect to a specific provision of this title, the
applicable State authority (as defined in section
2791(d) of the Public Health Service Act), or the
Secretary of Health and Human Services, if such
Secretary is enforcing such provision under section
2722(a)(2) or 2761(a)(2) of the Public Health Service
Act.
(2) Enrollee.--The term ``enrollee'' means, with respect to
health insurance coverage offered by a health insurance issuer,
an individual enrolled with the issuer to receive such
coverage.
(3) Group health plan.--The term ``group health plan'' has
the meaning given such term in section 733(a) of the Employee
Retirement Income Security Act of 1974, except that such term
includes a employee welfare benefit plan treated as a group
health plan under section 732(d) of such Act or defined as such
a plan under section 607(1) of such Act.
(4) Health care professional.--The term ``health care
professional'' means an individual who is licensed, accredited,
or certified under State law to provide specified health care
services and who is operating within the scope of such
licensure, accreditation, or certification.
(5) Health care provider.--The term ``health care
provider'' includes a physician or other health care
professional, as well as an institutional or other facility or
agency that provides health care services and that is licensed,
accredited, or certified to provide health care items and
services under applicable State law.
(6) Network.--The term ``network'' means, with respect to a
group health plan or health insurance issuer offering health
insurance coverage, the participating health care professionals
and providers through whom the plan or issuer provides health
care items and services to participants, beneficiaries, or
enrollees.
(7) Nonparticipating.--The term ``nonparticipating'' means,
with respect to a health care provider that provides health
care items and services to a participant, beneficiary, or
enrollee under group health plan or health insurance coverage,
a health care provider that is not a participating health care
provider with respect to such items and services.
(8) Participating.--The term ``participating'' means, with
respect to a health care provider that provides health care
items and services to a participant, beneficiary, or enrollee
under group health plan or health insurance coverage offered by
a health insurance issuer, a health care provider that
furnishes such items and services under a contract or other
arrangement with the plan or issuer.
(9) Prior authorization.--The term ``prior authorization''
means the process of obtaining prior approval from a health
insurance issuer or group health plan for the provision or
coverage of medical services.
(10) Terms and conditions.--The term ``terms and
conditions'' includes, with respect to a group health plan or
health insurance coverage, requirements imposed under this
title with respect to the plan or coverage.
SEC. 152. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.
(a) Continued Applicability of State Law With Respect to Health
Insurance Issuers.--
(1) In general.--Subject to paragraph (2), this title shall
not be construed to supersede any provision of State law which
establishes, implements, or continues in effect any standard or
requirement solely relating to health insurance issuers (in
connection with group health insurance coverage or otherwise)
except to the extent that such standard or requirement prevents
the application of a requirement of this title.
(2) Continued preemption with respect to group health
plans.--Nothing in this title shall be construed to affect or
modify the provisions of section 514 of the Employee Retirement
Income Security Act of 1974 with respect to group health plans.
(3) Construction.--In applying this section, a State law
that provides for equal access to, and availability of, all
categories of licensed health care providers and services shall
not be treated as preventing the application of any requirement
of this title.
(b) Application of Substantially Compliant State Laws.--
(1) In general.--In the case of a State law that imposes,
with respect to health insurance coverage offered by a health
insurance issuer and with respect to a group health plan that
is a non-Federal governmental plan, a requirement that
substantially complies (within the meaning of subsection (c))
with a patient protection requirement (as defined in paragraph
(3)) and does not prevent the application of other requirements
under this Act (except in the case of other substantially
compliant requirements), in applying the requirements of this
title under section 2707 and 2753 (as applicable) of the Public
Health Service Act (as added by title II), subject to
subsection (a)(2)--
(A) the State law shall not be treated as being
superseded under subsection (a); and
(B) the State law shall apply instead of the
patient protection requirement otherwise applicable
with respect to health insurance coverage and non-
Federal governmental plans.
(2) Limitation.--In the case of a group health plan covered
under title I of the Employee Retirement Income Security Act of
1974, paragraph (1) shall be construed to apply only with
respect to the health insurance coverage (if any) offered in
connection with the plan.
(3) Definitions.--In this section:
(A) Patient protection requirement.--The term
``patient protection requirement'' means a requirement
under this title, and includes (as a single
requirement) a group or related set of requirements
under a section or similar unit under this title.
(B) Substantially compliant.--The terms
``substantially compliant'', substantially complies'',
or ``substantial compliance'' with respect to a State
law, mean that the State law has the same or similar
features as the patient protection requirements and has
a similar effect.
(c) Determinations of Substantial Compliance.--
(1) Certification by states.--A State may submit to the
Secretary a certification that a State law provides for patient
protections that are at least substantially compliant with one
or more patient protection requirements. Such certification
shall be accompanied by such information as may be required to
permit the Secretary to make the determination described in
paragraph (2)(A).
(2) Review.--
(A) In general.--The Secretary shall promptly
review a certification submitted under paragraph (1)
with respect to a State law to determine if the State
law substantially complies with the patient protection
requirement (or requirements) to which the law relates.
(B) Approval deadlines.--
(i) Initial review.--Such a certification
is considered approved unless the Secretary
notifies the State in writing, within 90 days
after the date of receipt of the certification,
that the certification is disapproved (and the
reasons for disapproval) or that specified
additional information is needed to make the
determination described in subparagraph (A).
(ii) Additional information.--With respect
to a State that has been notified by the
Secretary under clause (i) that specified
additional information is needed to make the
determination described in subparagraph (A),
the Secretary shall make the determination
within 60 days after the date on which such
specified additional information is received by
the Secretary.
(3) Approval.--
(A) In general.--The Secretary shall approve a
certification under paragraph (1) unless--
(i) the State fails to provide sufficient
information to enable the Secretary to make a
determination under paragraph (2)(A); or
(ii) the Secretary determines that the
State law involved does not provide for patient
protections that substantially comply with the
patient protection requirement (or
requirements) to which the law relates.
(B) State challenge.--A State that has a
certification disapproved by the Secretary under
subparagraph (A) may challenge such disapproval in the
appropriate United States district court.
(C) Deference to states.--With respect to a
certification submitted under paragraph (1), the
Secretary shall give deference to the State's
interpretation of the State law involved with respect
to the patient protection involved.
(D) Public notification.--The Secretary shall--
(i) provide a State with a notice of the
determination to approve or disapprove a
certification under this paragraph;
(ii) promptly publish in the Federal
Register a notice that a State has submitted a
certification under paragraph (1);
(iii) promptly publish in the Federal
Register the notice described in clause (i)
with respect to the State; and
(iv) annually publish the status of all
States with respect to certifications.
(4) Construction.--Nothing in this subsection shall be
construed as preventing the certification (and approval of
certification) of a State law under this subsection solely
because it provides for greater protections for patients than
those protections otherwise required to establish substantial
compliance.
(5) Petitions.--
(A) Petition process.--Effective on the date on
which the provisions of this Act become effective, as
provided for in section 601, a group health plan,
health insurance issuer, participant, beneficiary, or
enrollee may submit a petition to the Secretary for an
advisory opinion as to whether or not a standard or
requirement under a State law applicable to the plan,
issuer, participant, beneficiary, or enrollee that is
not the subject of a certification under this
subsection, is superseded under subsection (a)(1)
because such standard or requirement prevents the
application of a requirement of this title.
(B) Opinion.--The Secretary shall issue an advisory
opinion with respect to a petition submitted under
subparagraph (A) within the 60-day period beginning on
the date on which such petition is submitted.
(d) Definitions.--For purposes of this section:
(1) State law.--The term ``State law'' includes all laws,
decisions, rules, regulations, or other State action having the
effect of law, of any State. A law of the United States
applicable only to the District of Columbia shall be treated as
a State law rather than a law of the United States.
(2) State.--The term ``State'' includes a State, the
District of Columbia, Puerto Rico, the Virgin Islands, Guam,
American Samoa, the Northern Mariana Islands, any political
subdivisions of such, or any agency or instrumentality of such.
SEC. 153. EXCLUSIONS.
(a) No Benefit Requirements.--Nothing in this title shall be
construed to require a group health plan or a health insurance issuer
offering health insurance coverage to include specific items and
services under the terms of such a plan or coverage, other than those
provided under the terms and conditions of such plan or coverage.
(b) Exclusion From Access to Care Managed Care Provisions for Fee-
for-service Coverage.--
(1) In general.--The provisions of sections 111 through 117
shall not apply to a group health plan or health insurance
coverage if the only coverage offered under the plan or
coverage is fee-for-service coverage (as defined in paragraph
(2)).
(2) Fee-for-service coverage defined.--For purposes of this
subsection, the term ``fee-for-service coverage'' means
coverage under a group health plan or health insurance coverage
that--
(A) reimburses hospitals, health professionals, and
other providers on a fee-for-service basis without
placing the provider at financial risk;
(B) does not vary reimbursement for such a provider
based on an agreement to contract terms and conditions
or the utilization of health care items or services
relating to such provider;
(C) allows access to any provider that is lawfully
authorized to provide the covered services and that
agrees to accept the terms and conditions of payment
established under the plan or by the issuer; and
(D) for which the plan or issuer does not require
prior authorization before providing for any health
care services.
SEC. 154. TREATMENT OF EXCEPTED BENEFITS.
(a) In General.--The requirements of this title and the provisions
of sections 502(a)(1)(C), 502(n), and 514(d) of the Employee Retirement
Income Security Act of 1974 (added by section 402) shall not apply to
excepted benefits (as defined in section 733(c) of such Act), other
than benefits described in section 733(c)(2)(A) of such Act, in the
same manner as the provisions of part 7 of subtitle B of title I of
such Act do not apply to such benefits under subsections (b) and (c) of
section 732 of such Act.
(b) Coverage of Certain Limited Scope Plans.--Only for purposes of
applying the requirements of this title under sections 2707 and 2753 of
the Public Health Service Act, section 714 of the Employee Retirement
Income Security Act of 1974, and section 9813 of the Internal Revenue
Code of 1986, the following sections shall be deemed not to apply:
(1) Section 2791(c)(2)(A) of the Public Health Service Act.
(2) Section 733(c)(2)(A) of the Employee Retirement Income
Security Act of 1974.
(3) Section 9832(c)(2)(A) of the Internal Revenue Code of
1986.
SEC. 155. REGULATIONS.
The Secretaries of Health and Human Services, Labor, and the
Treasury shall issue such regulations as may be necessary or
appropriate to carry out this title. Such regulations shall be issued
consistent with section 104 of Health Insurance Portability and
Accountability Act of 1996. Such Secretaries may promulgate any interim
final rules as the Secretaries determine are appropriate to carry out
this title.
SEC. 156. INCORPORATION INTO PLAN OR COVERAGE DOCUMENTS.
The requirements of this title with respect to a group health plan
or health insurance coverage are, subject to section 154, deemed to be
incorporated into, and made a part of, such plan or the policy,
certificate, or contract providing such coverage and are enforceable
under law as if directly included in the documentation of such plan or
such policy, certificate, or contract.
SEC. 157. PRESERVATION OF PROTECTIONS.
(a) In General.--The rights under this Act (including the right to
maintain a civil action and any other rights under the amendments made
by this Act) may not be waived, deferred, or lost pursuant to any
agreement not authorized under this Act.
(b) Exception.--Subsection (a) shall not apply to an agreement
providing for arbitration or participation in any other nonjudicial
procedure to resolve a dispute if the agreement--
(1) is entered into knowingly and voluntarily by the
parties involved after the dispute has arisen; or
(2) is pursuant to the terms of a collective bargaining
agreement.
Nothing in this subsection shall be construed to permit the waiver of
the requirements of sections 103 and 104 (relating to internal and
external review).
TITLE II--APPLICATION OF QUALITY CARE STANDARDS TO GROUP HEALTH PLANS
AND HEALTH INSURANCE COVERAGE UNDER THE PUBLIC HEALTH SERVICE ACT
SEC. 201. APPLICATION TO GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE
COVERAGE.
(a) In General.--Subpart 2 of part A of title XXVII of the Public
Health Service Act is amended by adding at the end the following new
section:
``SEC. 2707. PATIENT PROTECTION STANDARDS.
``Each group health plan shall comply with patient protection
requirements under title I of the Patients' Bill of Rights Act of 2005,
and each health insurance issuer shall comply with patient protection
requirements under such title with respect to group health insurance
coverage it offers, and such requirements shall be deemed to be
incorporated into this subsection.''.
(b) Conforming Amendment.--Section 2721(b)(2)(A) of such Act (42
U.S.C. 300gg-21(b)(2)(A)) is amended by inserting ``(other than section
2707)'' after ``requirements of such subparts''.
SEC. 202. APPLICATION TO INDIVIDUAL HEALTH INSURANCE COVERAGE.
Part B of title XXVII of the Public Health Service Act is amended
by inserting after section 2752 the following new section:
``SEC. 2753. PATIENT PROTECTION STANDARDS.
``Each health insurance issuer shall comply with patient protection
requirements under title I of the Patients' Bill of Rights Act of 2005
with respect to individual health insurance coverage it offers, and
such requirements shall be deemed to be incorporated into this
subsection.''.
SEC. 203. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
Part C of title XXVII of the Public Health Service Act (42 U.S.C.
300gg-91 et seq.) is amended by adding at the end the following:
``SEC. 2793. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
``(a) Agreement With States.--A State may enter into an agreement
with the Secretary for the delegation to the State of some or all of
the Secretary's authority under this title to enforce the requirements
applicable under title I of the Patients' Bill of Rights Act of 2005
with respect to health insurance coverage offered by a health insurance
issuer and with respect to a group health plan that is a non-Federal
governmental plan.
``(b) Delegations.--Any department, agency, or instrumentality of a
State to which authority is delegated pursuant to an agreement entered
into under this section may, if authorized under State law and to the
extent consistent with such agreement, exercise the powers of the
Secretary under this title which relate to such authority.''.
TITLE III--APPLICATION OF PATIENT PROTECTION STANDARDS TO FEDERAL
HEALTH INSURANCE PROGRAMS
SEC. 301. APPLICATION OF PATIENT PROTECTION STANDARDS TO FEDERAL HEALTH
INSURANCE PROGRAMS.
(a) Sense of Congress.--It is the sense of Congress that enrollees
in Federal health insurance programs should have the same rights and
privileges as those afforded under title I and under the amendments
made by title IV to participants and beneficiaries under group health
plans.
(b) Conforming Federal Health Insurance Programs.--It is the sense
of Congress that the President should require, by executive order, the
Federal official with authority over each Federal health insurance
program, to the extent feasible, to take such steps as are necessary to
implement the rights and privileges described in subsection (a) with
respect to such program.
(c) GAO Report on Additional Steps Required.--Not later than 1 year
after the date of the enactment of this Act, the Comptroller General of
the United States shall submit to Congress a report on statutory
changes that are required to implement such rights and privileges in a
manner that is consistent with the missions of the Federal health
insurance programs and that avoids unnecessary duplication or
disruption of such programs.
(d) Federal Health Insurance Program.--In this section, the term
``Federal health insurance program'' means a Federal program that
provides creditable coverage (as defined in section 2701(c)(1) of the
Public Health Service Act) and includes a health program of the
Department of Veterans Affairs.
TITLE IV--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974
SEC. 401. APPLICATION OF PATIENT PROTECTION STANDARDS TO GROUP HEALTH
PLANS AND GROUP HEALTH INSURANCE COVERAGE UNDER THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.
Subpart B of part 7 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 is amended by adding at the end
the following new section:
``SEC. 714. PATIENT PROTECTION STANDARDS.
``(a) In General.--Subject to subsection (b), a group health plan
(and a health insurance issuer offering group health insurance coverage
in connection with such a plan) shall comply with the requirements of
title I of the Patients' Bill of Rights Act of 2005 (as in effect as of
the date of the enactment of such Act), and such requirements shall be
deemed to be incorporated into this subsection.
``(b) Plan Satisfaction of Certain Requirements.--
``(1) Satisfaction of certain requirements through
insurance.--For purposes of subsection (a), insofar as a group
health plan provides benefits in the form of health insurance
coverage through a health insurance issuer, the plan shall be
treated as meeting the following requirements of title I of the
Patients' Bill of Rights Act of 2005 with respect to such
benefits and not be considered as failing to meet such
requirements because of a failure of the issuer to meet such
requirements so long as the plan sponsor or its representatives
did not cause such failure by the issuer:
``(A) Section 111 (relating to consumer choice
option).
``(B) Section 112 (relating to choice of health
care professional).
``(C) Section 113 (relating to access to emergency
care).
``(D) Section 114 (relating to timely access to
specialists).
``(E) Section 115 (relating to patient access to
obstetrical and gynecological care).
``(F) Section 116 (relating to access to pediatric
care).
``(G) Section 117 (relating to continuity of care),
but only insofar as a replacement issuer assumes the
obligation for continuity of care.
``(H) Section 118 (relating to access to needed
prescription drugs).
``(I) Section 119 (relating to coverage for
individuals participating in approved clinical trials).
``(J) Section 120 (relating to required coverage
for minimum hospital stay for mastectomies and lymph
node dissections for the treatment of breast cancer and
coverage for secondary consultations).
``(K) Section 134 (relating to payment of claims).
``(2) Information.--With respect to information required to
be provided or made available under section 121 of the
Patients' Bill of Rights Act of 2005, in the case of a group
health plan that provides benefits in the form of health
insurance coverage through a health insurance issuer, the
Secretary shall determine the circumstances under which the
plan is not required to provide or make available the
information (and is not liable for the issuer's failure to
provide or make available the information), if the issuer is
obligated to provide and make available (or provides and makes
available) such information.
``(3) Internal appeals.--With respect to the internal
appeals process required to be established under section 103 of
such Act, in the case of a group health plan that provides
benefits in the form of health insurance coverage through a
health insurance issuer, the Secretary shall determine the
circumstances under which the plan is not required to provide
for such process and system (and is not liable for the issuer's
failure to provide for such process and system), if the issuer
is obligated to provide for (and provides for) such process and
system.
``(4) External appeals.--Pursuant to rules of the
Secretary, insofar as a group health plan enters into a
contract with a qualified external appeal entity for the
conduct of external appeal activities in accordance with
section 104 of such Act, the plan shall be treated as meeting
the requirement of such section and is not liable for the
entity's failure to meet any requirements under such section.
``(5) Application to prohibitions.--Pursuant to rules of
the Secretary, if a health insurance issuer offers health
insurance coverage in connection with a group health plan and
takes an action in violation of any of the following sections
of the Patients' Bill of Rights Act of 2005, the group health
plan shall not be liable for such violation unless the plan
caused such violation:
``(A) Section 131 (relating to prohibition of
interference with certain medical communications).
``(B) Section 132 (relating to prohibition of
discrimination against providers based on licensure).
``(C) Section 133 (relating to prohibition against
improper incentive arrangements).
``(D) Section 135 (relating to protection for
patient advocacy).
``(6) Construction.--Nothing in this subsection shall be
construed to affect or modify the responsibilities of the
fiduciaries of a group health plan under part 4 of subtitle B.
``(7) Treatment of substantially compliant state laws.--For
purposes of applying this subsection in connection with health
insurance coverage, any reference in this subsection to a
requirement in a section or other provision in the Patients'
Bill of Rights Act of 2005 with respect to a health insurance
issuer is deemed to include a reference to a requirement under
a State law that substantially complies (as determined under
section 152(c) of such Act) with the requirement in such
section or other provisions.
``(8) Application to certain prohibitions against
retaliation.--With respect to compliance with the requirements
of section 135(b)(1) of the Patients' Bill of Rights Act of
2005, for purposes of this subtitle the term `group health
plan' is deemed to include a reference to an institutional
health care provider.
``(c) Enforcement of Certain Requirements.--
``(1) Complaints.--Any protected health care professional
who believes that the professional has been retaliated or
discriminated against in violation of section 135(b)(1) of the
Patients' Bill of Rights Act of 2005 may file with the
Secretary a complaint within 180 days of the date of the
alleged retaliation or discrimination.
``(2) Investigation.--The Secretary shall investigate such
complaints and shall determine if a violation of such section
has occurred and, if so, shall issue an order to ensure that
the protected health care professional does not suffer any loss
of position, pay, or benefits in relation to the plan, issuer,
or provider involved, as a result of the violation found by the
Secretary.
``(d) Conforming Regulations.--The Secretary shall issue
regulations to coordinate the requirements on group health plans and
health insurance issuers under this section with the requirements
imposed under the other provisions of this title. In order to reduce
duplication and clarify the rights of participants and beneficiaries
with respect to information that is required to be provided, such
regulations shall coordinate the information disclosure requirements
under section 121 of the Patients' Bill of Rights Act of 2005 with the
reporting and disclosure requirements imposed under part 1, so long as
such coordination does not result in any reduction in the information
that would otherwise be provided to participants and beneficiaries.''.
(b) Satisfaction of ERISA Claims Procedure Requirement.--Section
503 of such Act (29 U.S.C. 1133) is amended by inserting ``(a)'' after
``Sec. 503.'' and by adding at the end the following new subsection:
``(b) In the case of a group health plan (as defined in section
733), compliance with the requirements of subtitle A of title I of the
Patients' Bill of Rights Act of 2005, and compliance with regulations
promulgated by the Secretary, in the case of a claims denial, shall be
deemed compliance with subsection (a) with respect to such claims
denial.''.
(c) Conforming Amendments.--(1) Section 732(a) of such Act (29
U.S.C. 1185(a)) is amended by striking ``section 711'' and inserting
``sections 711 and 714''.
(2) The table of contents in section 1 of such Act is amended by
inserting after the item relating to section 713 the following new
item:
``714. Patient protection standards''.
(3) Section 502(b)(3) of such Act (29 U.S.C. 1132(b)(3)) is amended
by inserting ``(other than section 135(b) of the Patients' Bill of
Rights Act of 2005, as deemed by subsection (a) of section 714 of this
Act to be incorporated into such subsection)'' after ``part 7''.
SEC. 402. AVAILABILITY OF CIVIL REMEDIES.
(a) Availability of Federal Civil Remedies in Cases Not Involving
Medically Reviewable Decisions.--
(1) In general.--Section 502 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1132) is amended by
adding at the end the following new subsections:
``(n) Cause of Action Relating to Provision of Health Benefits.--
``(1) In general.--In any case in which--
``(A) a person who is a fiduciary of a group health
plan, a health insurance issuer offering health
insurance coverage in connection with the plan, or an
agent of the plan, issuer, or plan sponsor, upon
consideration of a claim for benefits of a participant
or beneficiary under section 102 of the Patients' Bill
of Rights Act of 2005 (relating to procedures for
initial claims for benefits and prior authorization
determinations) or upon review of a denial of such a
claim under section 103 of such Act (relating to
internal appeal of a denial of a claim for benefits),
fails to exercise ordinary care in making a decision--
``(i) regarding whether an item or service
is covered under the terms and conditions of
the plan or coverage,
``(ii) regarding whether an individual is a
participant or beneficiary who is enrolled
under the terms and conditions of the plan or
coverage (including the applicability of any
waiting period under the plan or coverage), or
``(iii) as to the application of cost-
sharing requirements or the application of a
specific exclusion or express limitation on the
amount, duration, or scope of coverage of items
or services under the terms and conditions of
the plan or coverage, and
``(B) such failure is a proximate cause of personal
injury to, or the death of, the participant or
beneficiary,
such plan, plan sponsor, or issuer shall be liable to the
participant or beneficiary (or the estate of such participant
or beneficiary) for economic and noneconomic damages (but not
exemplary or punitive damages) in connection with such personal
injury or death.
``(2) Cause of action must not involve medically reviewable
decision.--
``(A) In general.--A cause of action is established
under paragraph (1)(A) only if the decision referred to
in paragraph (1)(A) does not include a medically
reviewable decision.
``(B) Medically reviewable decision.--For purposes
of this subsection, the term `medically reviewable
decision' means a denial of a claim for benefits under
the plan which is described in section 104(d)(2) of the
Patients' Bill of Rights Act of 2005 (relating to
medically reviewable decisions).
``(3) Limitation regarding certain types of actions saved
from preemption of state law.--A cause of action is not
established under paragraph (1)(A) in connection with a failure
described in paragraph (1)(A) to the extent that a cause of
action under State law (as defined in section 514(c)) for such
failure would not be preempted under section 514.
``(4) Definitions and related rules.--For purposes of this
subsection.--
``(A) Ordinary care.--The term `ordinary care'
means, with respect to a determination on a claim for
benefits, that degree of care, skill, and diligence
that a reasonable and prudent individual would exercise
in making a fair determination on a claim for benefits
of like kind to the claims involved.
``(B) Personal injury.--The term `personal injury'
means a physical injury and includes an injury arising
out of the treatment (or failure to treat) a mental
illness or disease.
``(C) Claim for benefits; denial.--The terms `claim
for benefits' and `denial of a claim for benefits' have
the meanings provided such terms in section 102(e) of
the Patients' Bill of Rights Act of 2005.
``(D) Terms and conditions.--The term `terms and
conditions' includes, with respect to a group health
plan or health insurance coverage, requirements imposed
under title I of the Patients' Bill of Rights Act of
2005.
``(E) Treatment of excepted benefits.--Under
section 154(a) of the Patients' Bill of Rights Act of
2005, the provisions of this subsection and subsection
(a)(1)(C) do not apply to certain excepted benefits.
``(5) Exclusion of employers and other plan sponsors.--
``(A) Causes of action against employers and plan
sponsors precluded.--Subject to subparagraph (B),
paragraph (1)(A) does not authorize a cause of action
against an employer or other plan sponsor maintaining
the plan (or against an employee of such an employer or
sponsor acting within the scope of employment).
``(B) Certain causes of action permitted.--
Notwithstanding subparagraph (A), a cause of action may
arise against an employer or other plan sponsor (or
against an employee of such an employer or sponsor
acting within the scope of employment) under paragraph
(1)(A), to the extent there was direct participation by
the employer or other plan sponsor (or employee) in the
decision of the plan under section 102 of the Patients'
Bill of Rights Act of 2005 upon consideration of a
claim for benefits or under section 103 of such Act
upon review of a denial of a claim for benefits.
``(C) Direct participation.--
``(i) In general.--For purposes of
subparagraph (B), the term `direct
participation' means, in connection with a
decision described in paragraph (1)(A), the
actual making of such decision or the actual
exercise of control in making such decision.
``(ii) Rules of construction.--For purposes
of clause (i), the employer or plan sponsor (or
employee) shall not be construed to be engaged
in direct participation because of any form of
decisionmaking or other conduct that is merely
collateral or precedent to the decision
described in paragraph (1)(A) on a particular
claim for benefits of a participant or
beneficiary, including (but not limited to)--
``(I) any participation by the
employer or other plan sponsor (or
employee) in the selection of the group
health plan or health insurance
coverage involved or the third party
administrator or other agent;
``(II) any engagement by the
employer or other plan sponsor (or
employee) in any cost-benefit analysis
undertaken in connection with the
selection of, or continued maintenance
of, the plan or coverage involved;
``(III) any participation by the
employer or other plan sponsor (or
employee) in the process of creating,
continuing, modifying, or terminating
the plan or any benefit under the plan,
if such process was not substantially
focused solely on the particular
situation of the participant or
beneficiary referred to in paragraph
(1)(A); and
``(IV) any participation by the
employer or other plan sponsor (or
employee) in the design of any benefit
under the plan, including the amount of
copayment and limits connected with
such benefit.
``(iii) Irrelevance of certain collateral
efforts made by employer or plan sponsor.--For
purposes of this subparagraph, an employer or
plan sponsor shall not be treated as engaged in
direct participation in a decision with respect
to any claim for benefits or denial thereof in
the case of any particular participant or
beneficiary solely by reason of--
``(I) any efforts that may have
been made by the employer or plan
sponsor to advocate for authorization
of coverage for that or any other
participant or beneficiary (or any
group of participants or
beneficiaries), or
``(II) any provision that may have
been made by the employer or plan
sponsor for benefits which are not
covered under the terms and conditions
of the plan for that or any other
participant or beneficiary (or any
group of participants or
beneficiaries).
``(D) Application to certain plans.--
``(i) In general.--Notwithstanding any
other provision of this subsection, no group
health plan described in clause (ii) (or plan
sponsor of such a plan) shall be liable under
paragraph (1) for the performance of, or the
failure to perform, any non-medically
reviewable duty under the plan.
``(ii) Definition.--A group health plan
described in this clause is--
``(I) a group health plan that is
self-insured and self administered by
an employer (including an employee of
such an employer acting within the
scope of employment); or
``(II) a multiemployer plan as
defined in section 3(37)(A) (including
an employee of a contributing employer
or of the plan, or a fiduciary of the
plan, acting within the scope of
employment or fiduciary responsibility)
that is self-insured and self-
administered.
``(6) Exclusion of physicians and other health care
professionals.--
``(A) In general.--No treating physician or other
treating health care professional of the participant or
beneficiary, and no person acting under the direction
of such a physician or health care professional, shall
be liable under paragraph (1) for the performance of,
or the failure to perform, any non-medically reviewable
duty of the plan, the plan sponsor, or any health
insurance issuer offering health insurance coverage in
connection with the plan.
``(B) Definitions.--For purposes of subparagraph
(A)--
``(i) Health care professional.--The term
`health care professional' means an individual
who is licensed, accredited, or certified under
State law to provide specified health care
services and who is operating within the scope
of such licensure, accreditation, or
certification.
``(ii) Non-medically reviewable duty.--The
term `non-medically reviewable duty' means a
duty the discharge of which does not include
the making of a medically reviewable decision.
``(7) Exclusion of hospitals.--No treating hospital of the
participant or beneficiary shall be liable under paragraph (1)
for the performance of, or the failure to perform, any non-
medically reviewable duty (as defined in paragraph (6)(B)(ii))
of the plan, the plan sponsor, or any health insurance issuer
offering health insurance coverage in connection with the plan.
``(8) Rule of construction relating to exclusion from
liability of physicians, health care professionals, and
hospitals.--Nothing in paragraph (6) or (7) shall be construed
to limit the liability (whether direct or vicarious) of the
plan, the plan sponsor, or any health insurance issuer offering
health insurance coverage in connection with the plan.
``(9) Requirement of exhaustion.--
``(A) In general.--A cause of action may not be
brought under paragraph (1) in connection with any
denial of a claim for benefits of any individual until
all administrative processes under sections 102 and 103
of the Patients' Bill of Rights Act of 2005 (if
applicable) have been exhausted.
``(B) Exception for needed care.--A participant or
beneficiary may seek relief exclusively in Federal
court under subsection 502(a)(1)(B) prior to the
exhaustion of administrative remedies under sections
102, 103, or 104 of the Patients' Bill of Rights Act of
2005 (as required under subparagraph (A)) if it is
demonstrated to the court that the exhaustion of such
remedies would cause irreparable harm to the health of
the participant or beneficiary. Notwithstanding the
awarding of relief under subsection 502(a)(1)(B)
pursuant to this subparagraph, no relief shall be
available as a result of, or arising under, paragraph
(1)(A) or paragraph (10)(B), with respect to a
participant or beneficiary, unless the requirements of
subparagraph (A) are met.
``(C) Receipt of benefits during appeals process.--
Receipt by the participant or beneficiary of the
benefits involved in the claim for benefits during the
pendency of any administrative processes referred to in
subparagraph (A) or of any action commenced under this
subsection--
``(i) shall not preclude continuation of
all such administrative processes to their
conclusion if so moved by any party, and
``(ii) shall not preclude any liability
under subsection (a)(1)(C) and this subsection
in connection with such claim.
The court in any action commenced under this subsection
shall take into account any receipt of benefits during
such administrative processes or such action in
determining the amount of the damages awarded.
``(D) Admissible.--Any determination made by a
reviewer in an administrative proceeding under section
103 of the Patients' Bill of Rights Act of 2005 shall
be admissible in any Federal court proceeding and shall
be presented to the trier of fact.
``(10) Statutory damages.--
``(A) In general.--The remedies set forth in this
subsection (n) shall be the exclusive remedies for
causes of action brought under this subsection.
``(B) Assessment of civil penalties.--In addition
to the remedies provided for in paragraph (1) (relating
to the failure to provide contract benefits in
accordance with the plan), a civil assessment, in an
amount not to exceed $5,000,000, payable to the
claimant may be awarded in any action under such
paragraph if the claimant establishes by clear and
convincing evidence that the alleged conduct carried
out by the defendant demonstrated bad faith and
flagrant disregard for the rights of the participant or
beneficiary under the plan and was a proximate cause of
the personal injury or death that is the subject of the
claim.
``(11) Limitation on attorneys' fees.--
``(A) In general.--Notwithstanding any other
provision of law, or any arrangement, agreement, or
contract regarding an attorney's fee, the amount of an
attorney's contingency fee allowable for a cause of
action brought pursuant to this subsection shall not
exceed \1/3\ of the total amount of the plaintiff's
recovery (not including the reimbursement of actual
out-of-pocket expenses of the attorney).
``(B) Determination by district court.--The last
Federal district court in which the action was pending
upon the final disposition, including all appeals, of
the action shall have jurisdiction to review the
attorney's fee to ensure that the fee is a reasonable
one.
``(12) Limitation of action.--Paragraph (1) shall not apply
in connection with any action commenced after 3 years after the
later of--
``(A) the date on which the plaintiff first knew,
or reasonably should have known, of the personal injury
or death resulting from the failure described in
paragraph (1), or
``(B) the date as of which the requirements of
paragraph (9) are first met.
``(13) Tolling provision.--The statute of limitations for
any cause of action arising under State law relating to a
denial of a claim for benefits that is the subject of an action
brought in Federal court under this subsection shall be tolled
until such time as the Federal court makes a final disposition,
including all appeals, of whether such claim should properly be
within the jurisdiction of the Federal court. The tolling
period shall be determined by the applicable Federal or State
law, whichever period is greater.
``(14) Purchase of insurance to cover liability.--Nothing
in section 410 shall be construed to preclude the purchase by a
group health plan of insurance to cover any liability or losses
arising under a cause of action under subsection (a)(1)(C) and
this subsection.
``(15) Exclusion of directed recordkeepers.--
``(A) In general.--Subject to subparagraph (C),
paragraph (1) shall not apply with respect to a
directed recordkeeper in connection with a group health
plan.
``(B) Directed recordkeeper.--For purposes of this
paragraph, the term `directed recordkeeper' means, in
connection with a group health plan, a person engaged
in directed recordkeeping activities pursuant to the
specific instructions of the plan or the employer or
other plan sponsor, including the distribution of
enrollment information and distribution of disclosure
materials under this Act or title I of the Patients'
Bill of Rights Act of 2005 and whose duties do not
include making decisions on claims for benefits.
``(C) Limitation.--Subparagraph (A) does not apply
in connection with any directed recordkeeper to the
extent that the directed recordkeeper fails to follow
the specific instruction of the plan or the employer or
other plan sponsor.
``(16) Exclusion of health insurance agents.--Paragraph (1)
does not apply with respect to a person whose sole involvement
with the group health plan is providing advice or
administrative services to the employer or other plan sponsor
relating to the selection of health insurance coverage offered
in connection with the plan.
``(17) No effect on state law.--No provision of State law
(as defined in section 514(c)(1)) shall be treated as
superseded or otherwise altered, amended, modified,
invalidated, or impaired by reason of the provisions of
subsection (a)(1)(C) and this subsection.
``(18) Relief from liability for employer or other plan
sponsor by means of designated decisionmaker.--
``(A) In general.--Notwithstanding the direct
participation (as defined in paragraph (5)(C)(i)) of an
employer or plan sponsor, in any case in which there is
(or is deemed under subparagraph (B) to be) a
designated decisionmaker under subparagraph (B) that
meets the requirements of subsection (o)(1) for an
employer or other plan sponsor--
``(i) all liability of such employer or
plan sponsor involved (and any employee of such
employer or sponsor acting within the scope of
employment) under this subsection in connection
with any participant or beneficiary shall be
transferred to, and assumed by, the designated
decisionmaker, and
``(ii) with respect to such liability, the
designated decisionmaker shall be substituted
for the employer or sponsor (or employee) in
the action and may not raise any defense that
the employer or sponsor (or employee) could not
raise if such a decisionmaker were not so
deemed.
``(B) Automatic designation.--A health insurance
issuer shall be deemed to be a designated decisionmaker
for purposes of subparagraph (A) with respect to the
participants and beneficiaries of an employer or plan
sponsor, whether or not the employer or plan sponsor
makes such a designation, and shall be deemed to have
assumed unconditionally all liability of the employer
or plan sponsor under such designation in accordance
with subsection (o), unless the employer or plan
sponsor affirmatively enters into a contract to prevent
the service of the designated decisionmaker.
``(C) Treatment of certain trust funds.--For
purposes of this paragraph, the terms `employer' and
`plan sponsor', in connection with the assumption by a
designated decisionmaker of the liability of employer
or other plan sponsor pursuant to this paragraph, shall
be construed to include a trust fund maintained
pursuant to section 302 of the Labor Management
Relations Act, 1947 (29 U.S.C. 186) or the Railway
Labor Act (45 U.S.C. 151 et seq.).
``(19) Previously provided services.--
``(A) In general.--Except as provided in this
paragraph, a cause of action shall not arise under
paragraph (1) where the denial involved relates to an
item or service that has already been fully provided to
the participant or beneficiary under the plan or
coverage and the claim relates solely to the subsequent
denial of payment for the provision of such item or
service.
``(B) Exception.--Nothing in subparagraph (A) shall
be construed to--
``(i) prohibit a cause of action under
paragraph (1) where the nonpayment involved
results in the participant or beneficiary being
unable to receive further items or services
that are directly related to the item or
service involved in the denial referred to in
subparagraph (A) or that are part of a
continuing treatment or series of procedures;
or
``(ii) limit liability that otherwise would
arise from the provision of the item or
services or the performance of a medical
procedure.
``(20) Exemption from personal liability for individual
members of boards of directors, joint boards of trustees,
etc.--Any individual who is--
``(A) a member of a board of directors of an
employer or plan sponsor; or
``(B) a member of an association, committee,
employee organization, joint board of trustees, or
other similar group of representatives of the entities
that are the plan sponsor of plan maintained by two or
more employers and one or more employee organizations;
shall not be personally liable under this subsection for
conduct that is within the scope of employment or of plan-
related duties of the individuals unless the individual acts in
a fraudulent manner for personal enrichment.
``(o) Requirements for Designated Decisionmakers of Group Health
Plans.--
``(1) In general.--For purposes of subsection (n)(18) and
section 514(d)(9), a designated decisionmaker meets the
requirements of this paragraph with respect to any participant
or beneficiary if--
``(A) such designation is in such form as may be
prescribed in regulations of the Secretary,
``(B) the designated decisionmaker--
``(i) meets the requirements of paragraph
(2),
``(ii) assumes unconditionally all
liability of the employer or plan sponsor
involved (and any employee of such employer or
sponsor acting within the scope of employment)
either arising under subsection (n) or arising
in a cause of action permitted under section
514(d) in connection with actions (and failures
to act) of the employer or plan sponsor (or
employee) occurring during the period in which
the designation under subsection (n)(18) or
section 514(d)(9) is in effect relating to such
participant and beneficiary,
``(iii) agrees to be substituted for the
employer or plan sponsor (or employee) in the
action and not to raise any defense with
respect to such liability that the employer or
plan sponsor (or employee) may not raise, and
``(iv) where paragraph (2)(B) applies,
assumes unconditionally the exclusive authority
under the group health plan to make medically
reviewable decisions under the plan with
respect to such participant or beneficiary, and
``(C) the designated decisionmaker and the
participants and beneficiaries for whom the
decisionmaker has assumed liability are identified in
the written instrument required under section 402(a)
and as required under section 121(b)(19) of the
Patients' Bill of Rights Act of 2005.
Any liability assumed by a designated decisionmaker pursuant to
this subsection shall be in addition to any liability that it
may otherwise have under applicable law.
``(2) Qualifications for designated decisionmakers.--
``(A) In general.--Subject to subparagraph (B), an
entity is qualified under this paragraph to serve as a
designated decisionmaker with respect to a group health
plan if the entity has the ability to assume the
liability described in paragraph (1) with respect to
participants and beneficiaries under such plan,
including requirements relating to the financial
obligation for timely satisfying the assumed liability,
and maintains with the plan sponsor and the Secretary
certification of such ability. Such certification shall
be provided to the plan sponsor or named fiduciary and
to the Secretary upon designation under subsection
(n)(18)(B) or section 517(d)(9)(B) and not less
frequently than annually thereafter, or if such
designation constitutes a multiyear arrangement, in
conjunction with the renewal of the arrangement.
``(B) Special qualification in the case of certain
reviewable decisions.--In the case of a group health
plan that provides benefits consisting of medical care
to a participant or beneficiary only through health
insurance coverage offered by a single health insurance
issuer, such issuer is the only entity that may be
qualified under this paragraph to serve as a designated
decisionmaker with respect to such participant or
beneficiary, and shall serve as the designated
decisionmaker unless the employer or other plan sponsor
acts affirmatively to prevent such service.
``(3) Requirements relating to financial obligations.--For
purposes of paragraph (2)(A), the requirements relating to the
financial obligation of an entity for liability shall include--
``(A) coverage of such entity under an insurance
policy or other arrangement, secured and maintained by
such entity, to effectively insure such entity against
losses arising from professional liability claims,
including those arising from its service as a
designated decisionmaker under this part; or
``(B) evidence of minimum capital and surplus
levels that are maintained by such entity to cover any
losses as a result of liability arising from its
service as a designated decisionmaker under this part.
The appropriate amounts of liability insurance and minimum
capital and surplus levels for purposes of subparagraphs (A)
and (B) shall be determined by an actuary using sound actuarial
principles and accounting practices pursuant to established
guidelines of the American Academy of Actuaries and in
accordance with such regulations as the Secretary may prescribe
and shall be maintained throughout the term for which the
designation is in effect. The provisions of this paragraph
shall not apply in the case of a designated decisionmaker that
is a group health plan, plan sponsor, or health insurance
issuer and that is regulated under Federal law or a State
financial solvency law.
``(4) Limitation on appointment of treating physicians.--A
treating physician who directly delivered the care, treatment,
or provided the patient service that is the subject of a cause
of action by a participant or beneficiary under subsection (n)
or section 514(d) may not be designated as a designated
decisionmaker under this subsection with respect to such
participant or beneficiary.''.
(2) Conforming amendment.--Section 502(a)(1) of such Act
(29 U.S.C. 1132(a)(1)) is amended--
(A) by striking ``or'' at the end of subparagraph
(A);
(B) in subparagraph (B), by striking ``plan;'' and
inserting ``plan, or''; and
(C) by adding at the end the following new
subparagraph:
``(C) for the relief provided for in subsection (n)
of this section.''.
(b) Rules Relating to ERISA Preemption.--Section 514 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1144) is
amended--
(1) by redesignating subsection (d) as subsection (f); and
(2) by inserting after subsection (c) the following new
subsections:
``(d) Preemption Not to Apply to Causes of Action Under State Law
Involving Medically Reviewable Decision.--
``(1) Non-preemption of certain causes of action.--
``(A) In general.--Except as provided in this
subsection, nothing in this title (including section
502) shall be construed to supersede or otherwise
alter, amend, modify, invalidate, or impair any cause
of action under State law of a participant or
beneficiary under a group health plan (or the estate of
such a participant or beneficiary) against the plan,
the plan sponsor, any health insurance issuer offering
health insurance coverage in connection with the plan,
or any managed care entity in connection with the plan
to recover damages resulting from personal injury or
for wrongful death if such cause of action arises by
reason of a medically reviewable decision.
``(B) Medically reviewable decision.--For purposes
of subparagraph (A), the term `medically reviewable
decision' means a denial of a claim for benefits under
the plan which is described in section 104(d)(2) of the
Patients' Bill of Rights Act of 2005 (relating to
medically reviewable decisions).
``(C) Limitation on punitive damages.--
``(i) In general.--Except as provided in
clauses (ii) and (iii), with respect to a cause
of action described in subparagraph (A) brought
with respect to a participant or beneficiary,
State law is superseded insofar as it provides
any punitive, exemplary, or similar damages if,
as of the time of the personal injury or death,
all the requirements of the following sections
of the Patients' Bill of Rights Act of 2005
were satisfied with respect to the participant
or beneficiary:
``(I) Section 102 (relating to
procedures for initial claims for
benefits and prior authorization
determinations).
``(II) Section 103 of such Act
(relating to internal appeals of claims
denials).
``(III) Section 104 of such Act
(relating to independent external
appeals procedures).
``(ii) Exception for certain actions for
wrongful death.--Clause (i) shall not apply
with respect to an action for wrongful death if
the applicable State law provides (or has been
construed to provide) for damages in such an
action which are only punitive or exemplary in
nature.
``(iii) Exception for willful or wanton
disregard for the rights or safety of others.--
Clause (i) shall not apply with respect to any
cause of action described in subparagraph (A)
if, in such action, the plaintiff establishes
by clear and convincing evidence that conduct
carried out by the defendant with willful or
wanton disregard for the rights or safety of
others was a proximate cause of the personal
injury or wrongful death that is the subject of
the action.
``(2) Definitions and related rules.--For purposes of this
subsection and subsection (e)--
``(A) Treatment of excepted benefits.--Under
section 154(a) of the Patients' Bill of Rights Act of
2005, the provisions of this subsection do not apply to
certain excepted benefits.
``(B) Personal injury.--The term `personal injury'
means a physical injury and includes an injury arising
out of the treatment (or failure to treat) a mental
illness or disease.
``(C) Claim for benefit; denial.--The terms `claim
for benefits' and `denial of a claim for benefits'
shall have the meaning provided such terms under
section 102(e) of the Patients' Bill of Rights Act of
2005.
``(D) Managed care entity.--
``(i) In general.--The term `managed care
entity' means, in connection with a group
health plan and subject to clause (ii), any
entity that is involved in determining the
manner in which or the extent to which items or
services (or reimbursement therefor) are to be
provided as benefits under the plan.
``(ii) Treatment of treating physicians,
other treating health care professionals, and
treating hospitals.--Such term does not include
a treating physician or other treating health
care professional (as defined in section
502(n)(6)(B)(i)) of the participant or
beneficiary and also does not include a
treating hospital insofar as it is acting
solely in the capacity of providing treatment
or care to the participant or beneficiary.
Nothing in the preceding sentence shall be
construed to preempt vicarious liability of any
plan, plan sponsor, health insurance issuer, or
managed care entity.
``(3) Exclusion of employers and other plan sponsors.--
``(A) Causes of action against employers and plan
sponsors precluded.--Subject to subparagraph (B),
paragraph (1) does not apply with respect to--
``(i) any cause of action against an
employer or other plan sponsor maintaining the
plan (or against an employee of such an
employer or sponsor acting within the scope of
employment), or
``(ii) a right of recovery, indemnity, or
contribution by a person against an employer or
other plan sponsor (or such an employee) for
damages assessed against the person pursuant to
a cause of action to which paragraph (1)
applies.
``(B) Certain causes of action permitted.--
Notwithstanding subparagraph (A), paragraph (1) applies
with respect to any cause of action that is brought by
a participant or beneficiary under a group health plan
(or the estate of such a participant or beneficiary) to
recover damages resulting from personal injury or for
wrongful death against any employer or other plan
sponsor maintaining the plan (or against an employee of
such an employer or sponsor acting within the scope of
employment) if such cause of action arises by reason of
a medically reviewable decision, to the extent that
there was direct participation by the employer or other
plan sponsor (or employee) in the decision.
``(C) Direct participation.--
``(i) Direct participation in decisions.--
For purposes of subparagraph (B), the term
`direct participation' means, in connection
with a decision described in subparagraph (B),
the actual making of such decision or the
actual exercise of control in making such
decision or in the conduct constituting the
failure.
``(ii) Rules of construction.--For purposes
of clause (i), the employer or plan sponsor (or
employee) shall not be construed to be engaged
in direct participation because of any form of
decisionmaking or other conduct that is merely
collateral or precedent to the decision
described in subparagraph (B) on a particular
claim for benefits of a particular participant
or beneficiary, including (but not limited
to)--
``(I) any participation by the
employer or other plan sponsor (or
employee) in the selection of the group
health plan or health insurance
coverage involved or the third party
administrator or other agent;
``(II) any engagement by the
employer or other plan sponsor (or
employee) in any cost-benefit analysis
undertaken in connection with the
selection of, or continued maintenance
of, the plan or coverage involved;
``(III) any participation by the
employer or other plan sponsor (or
employee) in the process of creating,
continuing, modifying, or terminating
the plan or any benefit under the plan,
if such process was not substantially
focused solely on the particular
situation of the participant or
beneficiary referred to in paragraph
(1)(A); and
``(IV) any participation by the
employer or other plan sponsor (or
employee) in the design of any benefit
under the plan, including the amount of
copayment and limits connected with
such benefit.
``(iv) Irrelevance of certain collateral
efforts made by employer or plan sponsor.--For
purposes of this subparagraph, an employer or
plan sponsor shall not be treated as engaged in
direct participation in a decision with respect
to any claim for benefits or denial thereof in
the case of any particular participant or
beneficiary solely by reason of--
``(I) any efforts that may have
been made by the employer or plan
sponsor to advocate for authorization
of coverage for that or any other
participant or beneficiary (or any
group of participants or
beneficiaries), or
``(II) any provision that may have
been made by the employer or plan
sponsor for benefits which are not
covered under the terms and conditions
of the plan for that or any other
participant or beneficiary (or any
group of participants or
beneficiaries).
``(4) Requirement of exhaustion.--
``(A) In general.--Except as provided in
subparagraph (D), paragraph (1) shall not apply in
connection with any action in connection with any
denial of a claim for benefits of any individual until
all administrative processes under sections 102, 103,
and 104 of the Patients' Bill of Rights Act of 2005 (if
applicable) have been exhausted.
``(B) Late manifestation of injury.--
``(i) In general.--A participant or
beneficiary shall not be precluded from
pursuing a review under section 104 of the
Patients' Bill of Rights Act of 2005 regarding
an injury that such participant or beneficiary
has experienced if the external review entity
first determines that the injury of such
participant or beneficiary is a late
manifestation of an earlier injury.
``(ii) Definition.--In this subparagraph,
the term `late manifestation of an earlier
injury' means an injury sustained by the
participant or beneficiary which was not known,
and should not have been known, by such
participant or beneficiary by the latest date
that the requirements of subparagraph (A)
should have been met regarding the claim for
benefits which was denied.
``(C) Exception for needed care.--A participant or
beneficiary may seek relief exclusively in Federal
court under subsection 502(a)(1)(B) prior to the
exhaustion of administrative remedies under sections
102, 103, or 104 of the Patients' Bill of Rights Act of
2005 (as required under subparagraph (A)) if it is
demonstrated to the court that the exhaustion of such
remedies would cause irreparable harm to the health of
the participant or beneficiary. Notwithstanding the
awarding of relief under subsection 502(a)(1)(B)
pursuant to this subparagraph, no relief shall be
available as a result of, or arising under, paragraph
(1)(A) unless the requirements of subparagraph (A) are
met.
``(D) Failure to review.--
``(i) In general.--If the external review
entity fails to make a determination within the
time required under section 104(e)(1)(A)(i) of
the Patients' Bill of Rights Act of 2005,
subparagraph (A) shall not apply with respect
to the action after 10 additional days after
the date on which such time period has expired
and the filing of such action shall not affect
the duty of the independent medical reviewer
(or reviewers) to make a determination pursuant
to such section 104(e)(1)(A)(i).
``(ii) Expedited determination.--If the
external review entity fails to make a
determination within the time required under
section 104(e)(1)(A)(ii) of the Patients' Bill
of Rights Act of 2005, subparagraph (A) shall
not apply with respect to the action and the
filing of such an action shall not affect the
duty of the independent medical reviewer (or
reviewers) to make a determination pursuant to
such section 104(e)(1)(A)(ii).
``(E) Receipt of benefits during appeals process.--
Receipt by the participant or beneficiary of the
benefits involved in the claim for benefits during the
pendency of any administrative processes referred to in
subparagraph (A) or the pendency of any action with
respect to which, under this paragraph, subparagraph
(A) does not apply--
``(i) shall not preclude continuation of
all such administrative processes to their
conclusion if so moved by any party, and
``(ii) shall not preclude any liability
under subsection (a)(1)(C) and this subsection
in connection with such claim.
``(F) Admissible.--Any determination made by a
reviewer in an administrative proceeding under section
104 of the Patients' Bill of Rights Act of 2005 shall
be admissible in any Federal or State court proceeding
and shall be presented to the trier of fact.
``(5) Tolling provision.--The statute of limitations for
any cause of action arising under section 502(n) relating to a
denial of a claim for benefits that is the subject of an action
brought in State court shall be tolled until such time as the
State court makes a final disposition, including all appeals,
of whether such claim should properly be within the
jurisdiction of the State court. The tolling period shall be
determined by the applicable Federal or State law, whichever
period is greater.
``(6) Exclusion of directed recordkeepers.--
``(A) In general.--Subject to subparagraph (C),
paragraph (1) shall not apply with respect to any
action against a directed recordkeeper in connection
with a group health plan.
``(B) Directed recordkeeper.--For purposes of this
paragraph, the term `directed recordkeeper' means, in
connection with a group health plan, a person engaged
in directed recordkeeping activities pursuant to the
specific instructions of the plan or the employer or
other plan sponsor, including the distribution of
enrollment information and distribution of disclosure
materials under this Act or title I of the Patients'
Bill of Rights Act of 2005 and whose duties do not
include making decisions on claims for benefits.
``(C) Limitation.--Subparagraph (A) does not apply
in connection with any directed recordkeeper to the
extent that the directed recordkeeper fails to follow
the specific instruction of the plan or the employer or
other plan sponsor.
``(7) Construction.--Nothing in this subsection shall be
construed as--
``(A) saving from preemption a cause of action
under State law for the failure to provide a benefit
for an item or service which is specifically excluded
under the group health plan involved, except to the
extent that--
``(i) the application or interpretation of
the exclusion involves a determination
described in section 104(d)(2) of the Patients'
Bill of Rights Act of 2005, or
``(ii) the provision of the benefit for the
item or service is required under Federal law
or under applicable State law consistent with
subsection (b)(2)(B);
``(B) preempting a State law which requires an
affidavit or certificate of merit in a civil action;
``(C) affecting a cause of action or remedy under
State law in connection with the provision or
arrangement of excepted benefits (as defined in section
733(c)), other than those described in section
733(c)(2)(A); or
``(D) affecting a cause of action under State law
other than a cause of action described in paragraph
(1)(A).
``(8) Purchase of insurance to cover liability.--Nothing in
section 410 shall be construed to preclude the purchase by a
group health plan of insurance to cover any liability or losses
arising under a cause of action described in paragraph (1)(A).
``(9) Relief from liability for employer or other plan
sponsor by means of designated decisionmaker.--
``(A) In general.--Paragraph (1) shall not apply
with respect to any cause of action described in
paragraph (1)(A) under State law insofar as such cause
of action provides for liability with respect to a
participant or beneficiary of an employer or plan
sponsor (or an employee of such employer or sponsor
acting within the scope of employment), if with respect
to the employer or plan sponsor there is (or is deemed
under subparagraph (B) to be) a designated
decisionmaker that meets the requirements of section
502(o)(1) with respect to such participant or
beneficiary. Such paragraph (1) shall apply with
respect to any cause of action described in paragraph
(1)(A) under State law against the designated
decisionmaker of such employer or other plan sponsor
with respect to the participant or beneficiary.
``(B) Automatic designation.--A health insurance
issuer shall be deemed to be a designated decisionmaker
for purposes of subparagraph (A) with respect to the
participants and beneficiaries of an employer or plan
sponsor, whether or not the employer or plan sponsor
makes such a designation, and shall be deemed to have
assumed unconditionally all liability of the employer
or plan sponsor under such designation in accordance
with subsection (o), unless the employer or plan
sponsor affirmatively enters into a contract to prevent
the service of the designated decisionmaker.
``(C) Treatment of certain trust funds.--For
purposes of this paragraph, the terms `employer' and
`plan sponsor', in connection with the assumption by a
designated decisionmaker of the liability of employer
or other plan sponsor pursuant to this paragraph, shall
be construed to include a trust fund maintained
pursuant to section 302 of the Labor Management
Relations Act, 1947 (29 U.S.C. 186) or the Railway
Labor Act (45 U.S.C. 151 et seq.).
``(10) Previously provided services.--
``(A) In general.--Except as provided in this
paragraph, paragraph (1) shall not apply with respect
to a cause of action where the denial involved relates
to an item or service that has already been fully
provided to the participant or beneficiary under the
plan or coverage and the claim relates solely to the
subsequent denial of payment for the provision of such
item or service.
``(B) Exception.--Nothing in subparagraph (A) shall
be construed to--
``(i) exclude a cause of action from
exemption under paragraph (1) where the
nonpayment involved results in the participant
or beneficiary being unable to receive further
items or services that are directly related to
the item or service involved in the denial
referred to in subparagraph (A) or that are
part of a continuing treatment or series of
procedures;
``(ii) exclude a cause of action from
exemption under paragraph (1) relating to
quality of care; or
``(iii) limit liability that otherwise
would arise from the provision of the item or
services or the performance of a medical
procedure.
``(11) Exemption from personal liability for individual
members of boards of directors, joint boards of trustees,
etc.--Any individual who is--
``(A) a member of a board of directors of an
employer or plan sponsor; or
``(B) a member of an association, committee,
employee organization, joint board of trustees, or
other similar group of representatives of the entities
that are the plan sponsor of plan maintained by two or
more employers and one or more employee organizations;
shall not be personally liable, by reason of the exemption of a
cause of action from preemption under this subsection, for
conduct that is within the scope of employment or of plan-
related duties of the individuals unless the individual acts in
a fraudulent manner for personal enrichment.
``(12) Choice of law.--A cause of action exempted from
preemption under paragraph (1) shall be governed by the law
(including choice of law rules) of the State in which the
plaintiff resides.
``(13) Limitation on attorneys' fees.--
``(A) In general.--Notwithstanding any other
provision of law, or any arrangement, agreement, or
contract regarding an attorney's fee, the amount of an
attorney's contingency fee allowable for a cause of
action exemption from preemption under paragraph (1)
shall not exceed \1/3\ of the total amount of the
plaintiff's recovery (not including the reimbursement
of actual out-of-pocket expenses of the attorney).
``(B) Determination by court.--The last court in
which the action was pending upon the final
disposition, including all appeals, of the action may
review the attorney's fee to ensure that the fee is a
reasonable one.
``(C) No preemption of state law.--Subparagraph (A)
shall not apply with respect to a cause of action that
is brought in a State that has a law or framework of
laws with respect to the amount of an attorney's
contingency fee that may be incurred for the
representation of a participant or beneficiary (or the
estate of such participant or beneficiary) who brings
such a cause of action.
``(e) Rules of Construction Relating to Health Care.--Nothing in
this title shall be construed as--
``(1) affecting any State law relating to the practice of
medicine or the provision of, or the failure to provide,
medical care, or affecting any action (whether the liability is
direct or vicarious) based upon such a State law,
``(2) superseding any State law permitted under section
152(b)(1)(A) of the Patients' Bill of Rights Act of 2005, or
``(3) affecting any applicable State law with respect to
limitations on monetary damages.
``(f) No Right of Action for Recovery, Indemnity, or Contribution
by Issuers Against Treating Health Care Professionals and Treating
Hospitals.--In the case of any care provided, or any treatment decision
made, by the treating health care professional or the treating hospital
of a participant or beneficiary under a group health plan which
consists of medical care provided under such plan, any cause of action
under State law against the treating health care professional or the
treating hospital by the plan or a health insurance issuer providing
health insurance coverage in connection with the plan for recovery,
indemnity, or contribution in connection with such care (or any
medically reviewable decision made in connection with such care) or
such treatment decision is superseded.''.
(c) Effective Date.--The amendments made by this section shall
apply to acts and omissions (from which a cause of action arises)
occurring on or after the applicable effective date under section 601.
SEC. 403. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
(a) In General.--Subpart C of part 7 of subtitle B of title I of
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1191 et
seq.) is amended by adding at the end the following new section:
``SEC. 735. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
``(a) Agreement With States.--A State may enter into an agreement
with the Secretary for the delegation to the State of some or all of
the Secretary's authority under this title to enforce the requirements
applicable under title I of the Patients' Bill of Rights Act of 2005
with respect to health insurance coverage offered by a health insurance
issuer and with respect to a group health plan that is a non-Federal
governmental plan.
``(b) Delegations.--Any department, agency, or instrumentality of a
State to which authority is delegated pursuant to an agreement entered
into under this section may, if authorized under State law and to the
extent consistent with such agreement, exercise the powers of the
Secretary under this title which relate to such authority.''.
(b) Clerical Amendment.--The table of contents of such Act is
amended by inserting after the item relating to section 734 the
following new item:
``Sec. 735. Cooperation between Federal and State authorities''.
TITLE V--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986
Subtitle A--Application of Patient Protection Provisions
SEC. 501. APPLICATION TO GROUP HEALTH PLANS UNDER THE INTERNAL REVENUE
CODE OF 1986.
Subchapter B of chapter 100 of the Internal Revenue Code of 1986 is
amended--
(1) in the table of sections, by inserting after the item
relating to section 9812 the following new item:
``Sec. 9813. Standard relating to patients' bill of rights'';
and
(2) by inserting after section 9812 the following:
``SEC. 9813. STANDARD RELATING TO PATIENTS' BILL OF RIGHTS.
``A group health plan shall comply with the requirements of title I
of the Patients' Bill of Rights Act of 2005 (as in effect as of the
date of the enactment of such Act), and such requirements shall be
deemed to be incorporated into this section.''.
SEC. 502. CONFORMING ENFORCEMENT FOR WOMEN'S HEALTH AND CANCER RIGHTS.
Subchapter B of chapter 100 of the Internal Revenue Code of 1986,
as amended by section 501, is further amended--
(1) in the table of sections, by inserting after the item
relating to section 9813 the following new item:
``Sec. 9814. Standard relating to women's health and cancer
rights''; and
(2) by inserting after section 9813 the following:
``SEC. 9814. STANDARD RELATING TO WOMEN'S HEALTH AND CANCER RIGHTS.
``The provisions of section 713 of the Employee Retirement Income
Security Act of 1974 (as in effect as of the date of the enactment of
this section) shall apply to group health plans as if included in this
subchapter.''.
Subtitle B--Health Care Coverage Access Tax Incentives
SEC. 511. CREDIT FOR HEALTH INSURANCE EXPENSES OF SMALL BUSINESSES.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to business-related
credits) is amended by adding at the end the following:
``SEC. 45J. SMALL BUSINESS HEALTH INSURANCE EXPENSES.
``(a) General Rule.--For purposes of section 38, in the case of a
small employer, the health insurance credit determined under this
section for the taxable year is an amount equal to the applicable
percentage of the expenses paid by the taxpayer during the taxable year
for health insurance coverage for such year provided under a new health
plan for employees of such employer.
``(b) Applicable Percentage.--For purposes of subsection (a), the
applicable percentage is--
``(1) in the case of insurance purchased as a member of a
qualified health benefit purchasing coalition (as defined in
section 9841), 30 percent, and
``(2) in the case of insurance not described in paragraph
(1), 20 percent.
``(c) Limitations.--
``(1) Per employee dollar limitation.--The amount of
expenses taken into account under subsection (a) with respect
to any employee for any taxable year shall not exceed--
``(A) $2,000 in the case of self-only coverage, and
``(B) $5,000 in the case of family coverage.
In the case of an employee who is covered by a new health plan
of the employer for only a portion of such taxable year, the
limitation under the preceding sentence shall be an amount
which bears the same ratio to such limitation (determined
without regard to this sentence) as such portion bears to the
entire taxable year.
``(2) Period of coverage.--Expenses may be taken into
account under subsection (a) only with respect to coverage for
the 4-year period beginning on the date the employer
establishes a new health plan.
``(d) Definitions.--For purposes of this section--
``(1) Health insurance coverage.--The term `health
insurance coverage' has the meaning given such term by section
9832(b)(1).
``(2) New health plan.--
``(A) In general.--The term `new health plan' means
any arrangement of the employer which provides health
insurance coverage to employees if--
``(i) such employer (and any predecessor
employer) did not establish or maintain such
arrangement (or any similar arrangement) at any
time during the 2 taxable years ending prior to
the taxable year in which the credit under this
section is first allowed, and
``(ii) such arrangement provides health
insurance coverage to at least 70 percent of
the qualified employees of such employer.
``(B) Qualified employee.--
``(i) In general.--The term `qualified
employee' means any employee of an employer if
the annual rate of such employee's compensation
(as defined in section 414(s)) exceeds $10,000.
``(ii) Treatment of certain employees.--The
term `employee' shall include a leased employee
within the meaning of section 414(n).
``(3) Small employer.--The term `small employer' has the
meaning given to such term by section 4980D(d)(2); except that
only qualified employees shall be taken into account.
``(e) Special Rules.--
``(1) Certain rules made applicable.--For purposes of this
section, rules similar to the rules of section 52 shall apply.
``(2) Amounts paid under salary reduction arrangements.--No
amount paid or incurred pursuant to a salary reduction
arrangement shall be taken into account under subsection (a).
``(f) Termination.--This section shall not apply to expenses paid
or incurred by an employer with respect to any arrangement established
on or after January 1, 2014.''.
(b) Credit to Be Part of General Business Credit.--Section 38(b) of
such Code (relating to current year business credit) is amended by
striking ``plus'' at the end of paragraph (18), by striking the period
at the end of paragraph (19) and inserting ``, plus'', and by adding at
the end the following:
``(20) in the case of a small employer (as defined in
section 45J(d)(3)), the health insurance credit determined
under section 45J(a).''.
(c) Denial of Double Benefit.--Section 280C of such Code is amended
by adding at the end the following new subsection:
``(e) Credit for Small Business Health Insurance Expenses.--
``(1) In general.--No deduction shall be allowed for that
portion of the expenses (otherwise allowable as a deduction)
taken into account in determining the credit under section 45J
for the taxable year which is equal to the amount of the credit
determined for such taxable year under section 45J(a).
``(2) Controlled groups.--Persons treated as a single
employer under subsection (a) or (b) of section 52 shall be
treated as 1 person for purposes of this section.''.
(d) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of such Code is amended by adding
at the end the following:
``Sec. 45J. Small business health insurance expenses''.
(e) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred in taxable years beginning after
December 31, 2006, for arrangements established after the date of the
enactment of this Act.
SEC. 512. CERTAIN GRANTS BY PRIVATE FOUNDATIONS TO QUALIFIED HEALTH
BENEFIT PURCHASING COALITIONS.
(a) In General.--Section 4942 of the Internal Revenue Code of 1986
(relating to taxes on failure to distribute income) is amended by
adding at the end the following:
``(k) Certain Qualified Health Benefit Purchasing Coalition
Distributions.--
``(1) In general.--For purposes of subsection (g), sections
170, 501, 507, 509, and 2522, and this chapter, a qualified
health benefit purchasing coalition distribution by a private
foundation shall be considered to be a distribution for a
charitable purpose.
``(2) Qualified health benefit purchasing coalition
distribution.--For purposes of paragraph (1)--
``(A) In general.--The term `qualified health
benefit purchasing coalition distribution' means any
amount paid or incurred by a private foundation to or
on behalf of a qualified health benefit purchasing
coalition (as defined in section 9841) for purposes of
payment or reimbursement of amounts paid or incurred in
connection with the establishment and maintenance of
such coalition.
``(B) Exclusions.--Such term shall not include any
amount used by a qualified health benefit purchasing
coalition (as so defined)--
``(i) for the purchase of real property,
``(ii) as payment to, or for the benefit
of, members (or employees or affiliates of such
members) of such coalition, or
``(iii) for any expense paid or incurred
more than 48 months after the date of
establishment of such coalition.
``(3) Termination.--This subsection shall not apply--
``(A) to qualified health benefit purchasing
coalition distributions paid or incurred after December
31, 2013, and
``(B) with respect to start-up costs of a coalition
which are paid or incurred after December 31, 2014.''.
(b) Qualified Health Benefit Purchasing Coalition.--
(1) In general.--Chapter 100 of such Code (relating to
group health plan requirements) is amended by adding at the end
the following new subchapter:
``Subchapter D--Qualified Health Benefit Purchasing Coalition
``Sec. 9841. Qualified health benefit purchasing coalition
``SEC. 9841. QUALIFIED HEALTH BENEFIT PURCHASING COALITION.
``(a) In General.--A qualified health benefit purchasing coalition
is a private not-for-profit corporation which--
``(1) sells health insurance through State licensed health
insurance issuers in the State in which the employers to which
such coalition is providing insurance are located, and
``(2) establishes to the Secretary, under State
certification procedures or other procedures as the Secretary
may provide by regulation, that such coalition meets the
requirements of this section.
``(b) Board of Directors.--
``(1) In general.--Each purchasing coalition under this
section shall be governed by a Board of Directors.
``(2) Election.--The Secretary shall establish procedures
governing election of such Board.
``(3) Membership.--The Board of Directors shall--
``(A) be composed of representatives of the members
of the coalition, in equal number, including small
employers and employee representatives of such
employers, but
``(B) not include other interested parties, such as
service providers, health insurers, or insurance agents
or brokers which may have a conflict of interest with
the purposes of the coalition.
``(c) Membership of Coalition.--
``(1) In general.--A purchasing coalition shall accept all
small employers residing within the area served by the
coalition as members if such employers request such membership.
``(2) Other members.--The coalition, at the discretion of
its Board of Directors, may be open to individuals and large
employers.
``(3) Voting.--Members of a purchasing coalition shall have
voting rights consistent with the rules established by the
State.
``(d) Duties of Purchasing Coalitions.--Each purchasing coalition
shall--
``(1) enter into agreements with small employers (and, at
the discretion of its Board, with individuals and other
employers) to provide health insurance benefits to employees
and retirees of such employers,
``(2) where feasible, enter into agreements with 3 or more
unaffiliated, qualified licensed health plans, to offer
benefits to members,
``(3) offer to members at least 1 open enrollment period of
at least 30 days per calendar year,
``(4) serve a significant geographical area and market to
all eligible members in that area, and
``(5) carry out other functions provided for under this
section.
``(e) Limitation on Activities.--A purchasing coalition shall not--
``(1) perform any activity (including certification or
enforcement) relating to compliance or licensing of health
plans,
``(2) assume insurance or financial risk in relation to any
health plan, or
``(3) perform other activities identified by the State as
being inconsistent with the performance of its duties under
this section.
``(f) Additional Requirements for Purchasing Coalitions.--As
provided by the Secretary in regulations, a purchasing coalition shall
be subject to requirements similar to the requirements of a group
health plan under this chapter.
``(g) Relation to Other Laws.--
``(1) Preemption of state fictitious group laws.--
Requirements (commonly referred to as fictitious group laws)
relating to grouping and similar requirements for health
insurance coverage are preempted to the extent such
requirements impede the establishment and operation of
qualified health benefit purchasing coalitions.
``(2) Allowing savings to be passed through.--Any State law
that prohibits health insurance issuers from reducing premiums
on health insurance coverage sold through a qualified health
benefit purchasing coalition to reflect administrative savings
is preempted. This paragraph shall not be construed to preempt
State laws that impose restrictions on premiums based on health
status, claims history, industry, age, gender, or other
underwriting factors.
``(3) No waiver of hipaa requirements.--Nothing in this
section shall be construed to change the obligation of health
insurance issuers to comply with the requirements of title
XXVII of the Public Health Service Act with respect to health
insurance coverage offered to small employers in the small
group market through a qualified health benefit purchasing
coalition.
``(h) Definition of Small Employer.--For purposes of this section--
``(1) In general.--The term `small employer' means, with
respect to any calendar year, any employer if such employer
employed an average of at least 2 and not more than 50
qualified employees on business days during either of the 2
preceding calendar years. For purposes of the preceding
sentence, a preceding calendar year may be taken into account
only if the employer was in existence throughout such year.
``(2) Employers not in existence in preceding year.--In the
case of an employer which was not in existence throughout the
1st preceding calendar year, the determination under paragraph
(1) shall be based on the average number of qualified employees
that it is reasonably expected such employer will employ on
business days in the current calendar year.''.
(2) Conforming amendment.--The table of subchapters for
chapter 100 of such Code is amended by adding at the end the
following item:
``subchapter d--qualified health benefit purchasing coalition''.
(c) Effective Date.--The amendment made by subsection (a) shall
apply to taxable years beginning after December 31, 2006.
SEC. 513. STATE GRANT PROGRAM FOR MARKET INNOVATION.
(a) In General.--The Secretary of Health and Human Services (in
this section referred to as the ``Secretary'') shall establish a
program (in this section referred to as the ``program'') to award
demonstration grants under this section to States to allow States to
demonstrate the effectiveness of innovative ways to increase access to
health insurance through market reforms and other innovative means.
Such innovative means may include (and are not limited to) any of the
following:
(1) Alternative group purchasing or pooling arrangements,
such as purchasing cooperatives for small businesses,
reinsurance pools, or high risk pools.
(2) Individual or small group market reforms.
(3) Consumer education and outreach.
(4) Subsidies to individuals, employers, or both, in
obtaining health insurance.
(b) Scope; Duration.--The program shall be limited to not more than
10 States and to a total period of 5 years, beginning on the date the
first demonstration grant is made.
(c) Conditions for Demonstration Grants.--
(1) In general.--The Secretary may not provide for a
demonstration grant to a State under the program unless the
Secretary finds that under the proposed demonstration grant--
(A) the State will provide for demonstrated
increase of access for some portion of the existing
uninsured population through a market innovation (other
than merely through a financial expansion of a program
initiated before the date of the enactment of this
Act);
(B) the State will comply with applicable Federal
laws;
(C) the State will not discriminate among
participants on the basis of any health status-related
factor (as defined in section 2791(d)(9) of the Public
Health Service Act), except to the extent a State
wishes to focus on populations that otherwise would not
obtain health insurance because of such factors; and
(D) the State will provide for such evaluation, in
coordination with the evaluation required under
subsection (d), as the Secretary may specify.
(2) Application.--The Secretary shall not provide a
demonstration grant under the program to a State unless--
(A) the State submits to the Secretary such an
application, in such a form and manner, as the
Secretary specifies;
(B) the application includes information regarding
how the demonstration grant will address issues such as
governance, targeted population, expected cost, and the
continuation after the completion of the demonstration
grant period; and
(C) the Secretary determines that the demonstration
grant will be used consistent with this section.
(3) Focus.--A demonstration grant proposal under section
need not cover all uninsured individuals in a State or all
health care benefits with respect to such individuals.
(d) Evaluation.--The Secretary shall enter into a contract with an
appropriate entity outside the Department of Health and Human Services
to conduct an overall evaluation of the program at the end of the
program period. Such evaluation shall include an analysis of
improvements in access, costs, quality of care, or choice of coverage,
under different demonstration grants.
(e) Option to Provide for Initial Planning Grants.--Notwithstanding
the previous provisions of this section, under the program the
Secretary may provide for a portion of the amounts appropriated under
subsection (f) (not to exceed $5,000,000) to be made available to any
State for initial planning grants to permit States to develop
demonstration grant proposals under the previous provisions of this
section.
(f) Authorization of Appropriations.--There are authorized to be
appropriated $100,000,000 for each fiscal year to carry out this
section. Amounts appropriated under this subsection shall remain
available until expended.
(g) State Defined.--For purposes of this section, the term
``State'' has the meaning given such term for purposes of title XIX of
the Social Security Act.
SEC. 514. GRANT PROGRAM TO FACILITATE HEALTH BENEFITS INFORMATION FOR
SMALL EMPLOYERS.
(a) In General.--The Small Business Administration shall award
grants to 1 or more States, local governments, and non-profit
organizations for the purposes of--
(1) demonstrating new and effective ways to provide
information about the benefits of health insurance to small
employers, including tax benefits, increased productivity of
employees, and decreased turnover of employees,
(2) making employers aware of their current rights in the
marketplace under State and Federal health insurance reforms,
and
(3) making employers aware of the tax treatment of
insurance premiums.
(b) Authorization.--There is authorized to be appropriated
$10,000,000 for each of the first 5 fiscal years beginning after the
date of the enactment of this Act for grants under subsection (a).
SEC. 515. STATE GRANT PROGRAM FOR MARKET INNOVATION.
(a) In General.--The Secretary of Health and Human Services (in
this section referred to as the ``Secretary'') shall establish a
program (in this section referred to as the ``program'') to award
demonstration grants under this section to States to allow States to
demonstrate the effectiveness of innovative ways to increase access to
health insurance through market reforms and other innovative means.
Such innovative means may include (and are not limited to) any of the
following:
(1) Alternative group purchasing or pooling arrangements,
such as purchasing cooperatives for small businesses,
reinsurance pools, or high risk pools.
(2) Individual or small group market reforms.
(3) Consumer education and outreach.
(4) Subsidies to individuals, employers, or both, in
obtaining health insurance.
(b) Scope; Duration.--The program shall be limited to not more than
10 States and to a total period of 5 years, beginning on the date the
first demonstration grant is made.
(c) Conditions for Demonstration Grants.--
(1) In general.--The Secretary may not provide for a
demonstration grant to a State under the program unless the
Secretary finds that under the proposed demonstration grant--
(A) the State will provide for demonstrated
increase of access for some portion of the existing
uninsured population through a market innovation (other
than merely through a financial expansion of a program
initiated before the date of the enactment of this
Act);
(B) the State will comply with applicable Federal
laws;
(C) the State will not discriminate among
participants on the basis of any health status-related
factor (as defined in section 2791(d)(9) of the Public
Health Service Act), except to the extent a State
wishes to focus on populations that otherwise would not
obtain health insurance because of such factors; and
(D) the State will provide for such evaluation, in
coordination with the evaluation required under
subsection (d), as the Secretary may specify.
(2) Application.--The Secretary shall not provide a
demonstration grant under the program to a State unless--
(A) the State submits to the Secretary such an
application, in such a form and manner, as the
Secretary specifies;
(B) the application includes information regarding
how the demonstration grant will address issues such as
governance, targeted population, expected cost, and the
continuation after the completion of the demonstration
grant period; and
(C) the Secretary determines that the demonstration
grant will be used consistent with this section.
(3) Focus.--A demonstration grant proposal under section
need not cover all uninsured individuals in a State or all
health care benefits with respect to such individuals.
(d) Evaluation.--The Secretary shall enter into a contract with an
appropriate entity outside the Department of Health and Human Services
to conduct an overall evaluation of the program at the end of the
program period. Such evaluation shall include an analysis of
improvements in access, costs, quality of care, or choice of coverage,
under different demonstration grants.
(e) Option to Provide for Initial Planning Grants.--Notwithstanding
the previous provisions of this section, under the program the
Secretary may provide for a portion of the amounts appropriated under
subsection (f) (not to exceed $5,000,000) to be made available to any
State for initial planning grants to permit States to develop
demonstration grant proposals under the previous provisions of this
section.
(f) Authorization of Appropriations.--There are authorized to be
appropriated $100,000,000 for each fiscal year to carry out this
section. Amounts appropriated under this subsection shall remain
available until expended.
(g) State Defined.--For purposes of this section, the term
``State'' has the meaning given such term for purposes of title XIX of
the Social Security Act.
TITLE VI--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION
SEC. 601. EFFECTIVE DATES.
(a) Group Health Coverage.--
(1) In general.--Subject to paragraph (2) and subsection
(d), the amendments made by sections 201(a), 401, 501, and 502
(and title I insofar as it relates to such sections) shall
apply with respect to group health plans, and health insurance
coverage offered in connection with group health plans, for
plan years beginning on or after October 1, 2006 (in this
section referred to as the ``general effective date'').
(2) Treatment of collective bargaining agreements.--In the
case of a group health plan maintained pursuant to one or more
collective bargaining agreements between employee
representatives and one or more employers ratified before the
date of the enactment of this Act, the amendments made by
sections 201(a), 401, 501, and 502 (and title I insofar as it
relates to such sections) shall not apply to plan years
beginning before the later of--
(A) the date on which the last collective
bargaining agreements relating to the plan terminates
(excluding any extension thereof agreed to after the
date of the enactment of this Act); or
(B) the general effective date;
but shall apply not later than 1 year after the general
effective date. For purposes of subparagraph (A), any plan
amendment made pursuant to a collective bargaining agreement
relating to the plan which amends the plan solely to conform to
any requirement added by this Act shall not be treated as a
termination of such collective bargaining agreement.
(b) Individual Health Insurance Coverage.--Subject to subsection
(d), the amendments made by section 202 shall apply with respect to
individual health insurance coverage offered, sold, issued, renewed, in
effect, or operated in the individual market on or after the general
effective date.
(c) Treatment of Religious Nonmedical Providers.--
(1) In general.--Nothing in this Act (or the amendments
made thereby) shall be construed to--
(A) restrict or limit the right of group health
plans, and of health insurance issuers offering health
insurance coverage, to include as providers religious
nonmedical providers;
(B) require such plans or issuers to--
(i) utilize medically based eligibility
standards or criteria in deciding provider
status of religious nonmedical providers;
(ii) use medical professionals or criteria
to decide patient access to religious
nonmedical providers;
(iii) utilize medical professionals or
criteria in making decisions in internal or
external appeals regarding coverage for care by
religious nonmedical providers; or
(iv) compel a participant or beneficiary to
undergo a medical examination or test as a
condition of receiving health insurance
coverage for treatment by a religious
nonmedical provider; or
(C) require such plans or issuers to exclude
religious nonmedical providers because they do not
provide medical or other required data, if such data is
inconsistent with the religious nonmedical treatment or
nursing care provided by the provider.
(2) Religious nonmedical provider.--For purposes of this
subsection, the term ``religious nonmedical provider'' means a
provider who provides no medical care but who provides only
religious nonmedical treatment or religious nonmedical nursing
care.
(d) Transition for Notice Requirement.--The disclosure of
information required under section 121 of this Act shall first be
provided pursuant to--
(1) subsection (a) with respect to a group health plan that
is maintained as of the general effective date, not later than
30 days before the beginning of the first plan year to which
title I applies in connection with the plan under such
subsection; or
(2) subsection (b) with respect to an individual health
insurance coverage that is in effect as of the general
effective date, not later than 30 days before the first date as
of which title I applies to the coverage under such subsection.
SEC. 602. COORDINATION IN IMPLEMENTATION.
The Secretary of Labor and the Secretary of Health and Human
Services shall ensure, through the execution of an interagency
memorandum of understanding among such Secretaries, that--
(1) regulations, rulings, and interpretations issued by
such Secretaries relating to the same matter over which such
Secretaries have responsibility under the provisions of this
Act (and the amendments made thereby) are administered so as to
have the same effect at all times; and
(2) coordination of policies relating to enforcing the same
requirements through such Secretaries in order to have a
coordinated enforcement strategy that avoids duplication of
enforcement efforts and assigns priorities in enforcement.
SEC. 603. SEVERABILITY.
If any provision of this Act, an amendment made by this Act, or the
application of such provision or amendment to any person or
circumstance is held to be unconstitutional, the remainder of this Act,
the amendments made by this Act, and the application of the provisions
of such to any person or circumstance shall not be affected thereby.
TITLE VII--MISCELLANEOUS PROVISIONS
SEC. 701. NO IMPACT ON SOCIAL SECURITY TRUST FUND.
(a) In General.--Nothing in this Act (or an amendment made by this
Act) shall be construed to alter or amend the Social Security Act (or
any regulation promulgated under that Act).
(b) Transfers.--
(1) Estimate of secretary.--The Secretary of the Treasury
shall annually estimate the impact that the enactment of this
Act has on the income and balances of the trust funds
established under section 201 of the Social Security Act (42
U.S.C. 401).
(2) Transfer of funds.--If, under paragraph (1), the
Secretary of the Treasury estimates that the enactment of this
Act has a negative impact on the income and balances of the
trust funds established under section 201 of the Social
Security Act (42 U.S.C. 401), the Secretary shall transfer, not
less frequently than quarterly, from the general revenues of
the Federal Government an amount sufficient so as to ensure
that the income and balances of such trust funds are not
reduced as a result of the enactment of such Act.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S5075)
Read twice and referred to the Committee on Finance. (text of measure as introduced: CR S5075-5099)
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