[Pages H6297-H6395]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

PATIENT PROTECTION ACT OF 1998

Mr. GOSS. Mr. Speaker, by direction of the Committee on Rules, I call
up House Resolution 509 and ask for its immediate consideration.
The Clerk read the resolution, as follows:

H. Res. 509

Resolved, That upon the adoption of this resolution it
shall be in order to consider in the House the bill (H.R.
4250) to provide new patient protections under group health
plans. The bill shall be considered as read for amendment.
The amendments printed in the report of the Committee on
Rules accompanying this resolution shall be considered as
adopted. The previous question shall be considered as ordered
on the bill, as amended, and on any further amendment thereto
to final passage without intervening motion except: (1) one
hour of debate on the bill, as amended, equally divided and
controlled by Representative Hastert of Illinois and a Member
opposed to the bill; (2) the further amendment printed in the
Congressional Record and numbered 2 pursuant to clause 6 of
rule XXIII, which shall be in order without intervention of
any point of order or demand for division of the question,
shall be considered as read, and shall be separately
debatable for one hour equally divided and controlled by the
proponent and an opponent; and (3) one motion to recommit
with or without instructions.

The SPEAKER pro tempore (Mr. LaHood). The gentleman from Florida (Mr.
Goss) is recognized for 1 hour.
Mr. GOSS. Mr. Speaker, I am going to depart from normal custom and
yield the first minute of this to the distinguished gentleman from New
York (Mr. Lazio) for a matter of colleague comity.
(Mr. LAZIO of New York asked and was given permission to speak out of
order.)

Honoring the Honorable Rob Portman

Mr. LAZIO of New York. I want to thank the gentleman from Florida
(Mr. Goss) and the gentleman from New York (Mr. Solomon) for their
courtesy.
Mr. Speaker, I rise to honor my pal and colleague, the gentleman from
Ohio, Mr. Rob Portman. He is one of the most accomplished people in
this Congress. He stood up for America's taxpayers and was the driving
force behind the landmark IRS reform bill signed into law this week. He
authored the National Underground Railroad Act signed into law this
week. By preserving underground railroad sites, America celebrates the
journey of slaves from bondage to freedom.
The gentleman from Ohio is the congressional leader in the war
against drugs. His Drug-Free Communities Act, signed into law, will
give us peace of mind when our children are away from home. His pro-
business mandates legislation is the law of this House and his pro-
environment tropical rain forest legislation should be signed into law
next week.
In an era when bipartisanship is essential for legislative success,
Rob Portman is the even-headed leader we need. He is balanced and
principled, substantive, competent, intelligent. He is a man of
integrity, of modesty and of great character.
The gentleman form Ohio, Mr. Rob Portman, gets the job done for
families in Cincinnati, in Ohio, and throughout America.

Announcement By The Speaker Pro Tempore

The SPEAKER pro tempore. The Chair would like to announce that the
rules do not allow Members to wear badges when they are addressing the

[[Page H6298]]

House. The Chair will enforce this rule throughout the debate today.
Mr. GOSS. Mr. Speaker, for purposes of debate only, I yield the
customary 30 minutes to the gentleman from Texas (Mr. Frost), pending
which I yield myself such time as I may consume. During consideration
of this resolution, all time yielded is for the purpose of debate only.
Mr. Speaker, this is a structured rule that allows timely
consideration of this very, very important legislation on health care.
In yesterday's Rules meeting, which actually went on for quite a while,
the minority requested that the Dingell substitute be made in order and
we indeed have obliged them in this rule. It provides for 1 hour of
debate on the Patient Protection Act to be equally divided between the
gentleman from Illinois (Mr. Hastert) and an opponent, and 1 hour of
debate on the Dingell substitute. These are two very different
approaches to providing better health care for more Americans and I am
sure that we will have quite a vigorous debate on the merits of each
today. Finally, the rule provides for one motion to recommit with or
without instructions. In effect, giving the minority two bites at the
apple. I certainly feel this is a fair rule.
Mr. Speaker, today we will move to restore true patient power. The
Patient Protection Act is the only bill that restores commonsense
patient protections to Americans while also extending affordable
coverage to the 41 million Americans who currently lack it and cannot
get health care coverage. One clear difference between the two
approaches is the fact that the Kennedy-Dingell Patients' Bill of
Rights makes no effort to secure affordable health insurance for the
40-plus million Americans who have none currently. In fact, when asked
what the Kennedy-Dingell bill does for uninsured Americans, the
minority leader in the other body reportedly summed it up in two words,
and I quote, ``Not much.'' Instead of turning our backs on the
uninsured, our bill attacks their problem head-on. We know that over 75
percent of uninsured Americans are in a family where the primary
caregiver works for a small business. This is especially true in
southwest Florida, which I represent, where mom and pop shops cannot
afford to provide their employees with health insurance. The Patient
Protection Act allows small businesses to pool their resources and the
achieve economies of scale needed to offer quality, affordable health
insurance to their employees. If it is good enough for the Microsofts
and the IBMs and the GMs of the world, should it not be good enough for
the little guys, too? We take care of that.
As with any major proposal, there comes a certain level of
misinformation and this effort is no exception. Many of my friends on
the other side of the aisle have confused a patient's bill of rights
with a trial lawyer's right to bill. Under our bill, patients would
still have the right to sue their HMO for malpractice and that includes
punitive damages. I wonder how many times I am going to be saying that
in the next few months. Under our bill, patients would still have the
right to sue their HMO for malpractice, and that includes punitive
damages. I think we are going to be hearing some debate on that subject
today. If the HMO runs the wrong tests on you or they happen to cut off
the wrong foot, you will have recourse through the courts, of course.
That is essential and that is protected. But as we studied the problem
and talked to people, the folks who were being denied care in what we
call coverage disputes, we thought we could do better than settling
for, or encouraging even more litigation. I do not know many people who
have gotten much good medical attention in a courtroom. We came to the
conclusion that we have an innovative solution that assures patients
get the care they need, up front, when they need it, at a place they
need it, from a doctor, from a real medical person. Our expedited
internal and external appeals process means that if your HMO denies
your experimental treatment, or your treatment, you will be able to
have a doctor, independent of the HMO, review that decision. Of course
if you are unsatisfied at the end of that process, you can take the
offending HMO to court. However, unlike the current law, the judge will
have the flexibility to serve a fine up to $250,000 against the HMO
plan. This is not available under current law and it is a healthy and
reasonable constraint on HMO abuse. I know it has already got their
attention.
We have provided commonsense patient protections in this package.
Women will have direct access to their OB-GYN. Kids will get to see a
pediatrician without any red tape or having to get permission from a
government official. And, most importantly, doctors will have no
restrictions on the recommendations they give their patients. No gag
rule. These are positive steps to improve the doctor-patient
relationship, not a retreat into more nonsensical and, I would say,
very expensive bureaucracy that other approaches take.
Mr. Speaker, as a member of Chairman Hastert's working group, I can
assure you that we have worked hard and I think we have come up with a
pretty good package that provides real protections without returning us
to the days of double-digit inflation. I encourage my friends on both
sides of the aisle to ignore the demagogues and focus on the pro-
patient, pro-small business, pro-family provisions in our health care
bill. I believe they will find it is worth reading.
Mr. Speaker, I reserve the balance of my time.
Mr. FROST. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, there is no doubt that the American public wants managed
care reform. Today we have the opportunity to respond. At long last
after months and months of denying that a problem exists, the
Republican majority has agreed to let the House vote on a bill that
seeks to provide a response to the concerns of millions of Americans.
While what we have before us today is two bills, one written behind
closed doors by the Republican leadership and supported by the
insurance industry, there really is only one bill which meets the
critical test of addressing the concerns of our constituents. That bill
is a bipartisan proposal supported by doctors, nurses and consumers.
Mr. Speaker, there are two bills before us today, but if we listen
carefully to what our constituents have been saying, there is little
doubt how we should vote. Only the bipartisan bill sponsored by the
gentleman from Iowa (Mr. Ganske) and the gentleman from Michigan (Mr.
Dingell) really offers working families what they have been asking for.
The bipartisan Ganske-Dingell Patients' Bill of Rights assures working
families access to necessary medical care and will return health care
decision-making to patients and their doctors. The bipartisan bill will
give patients real remedies for real problems. The Ganske-Dingell
Patients' Bill of Rights will reform a system that is badly in need of
repair.
My Republican colleagues will say today that the bipartisan bill is
nothing more than big government. They will say the bipartisan bill is
nothing more than a lawyers full employment act. Well, if that is the
case, Mr. Speaker, why then is the Ganske-Dingell substitute supported
by the American Medical Association, an organization not normally known
to support big government or trial lawyers? Why then is it supported by
the American Nurses Association, an organization representing those
health care givers closest to the patient? Why then, Mr. Speaker, is it
supported by consumer groups and opposed by insurance companies? The
arguments my Republican colleagues will make against the Ganske-Dingell
bill are just plain bogus and no one should be fooled. Ganske-Dingell
offers real reform, not just election year posturing.
That we are even able to consider and debate Ganske-Dingell today is
testimony to the power of the call of the American people. For far too
long, my Republican colleagues have denied that there is a problem, but
the voices of working families who have been demanding that the
Congress respond to their real concerns has been heard.

{time} 0915

In their efforts to deny the House the opportunity to respond to
those concerns, the Republican leadership had us guessing until 12:30
a.m. this morning whether they were even going to give the bipartisan
substitute a place at the table. I suspect that only after it became
clear that the rule might not pass without the Ganske-Dingell

[[Page H6299]]

amendment made in order that the Republican leadership relented and
agreed to make the substitute in order.
Mr. Speaker, every Member in this House needs to recognize that the
bipartisan substitute offers American working families something more
than election year rhetoric. Ganske-Dingell is a good bill and deserves
the support of every Member of this body. To do less is to do
disservice to our constituents. I urge Members to do the right thing
and to support Ganske-Dingell.
Mr. Speaker, I reserve the balance of my time.
Mr. GOSS. Mr. Speaker, I yield as much time as he may consume to the
distinguished gentleman from Glens Falls, New York (Mr. Solomon),
chairman of the Committee on Rules.
Mr. SOLOMON. Mr. Speaker, I was not going to speak this morning. We
spoke enough yesterday and last night into the wee hours. But I just
want to make sure that all the Members on both sides of the aisle know,
as the gentleman from Florida (Mr. Goss) has just outlined, that this
is a negotiated fair rule that was approved by the Democrat minority.
The Dingell substitute is made in order with ample time for debate so
that this House has its choice, and that is the way that it should be.
I just want to point out that we are going to be somewhat repetitive
here, because what is going to be said now in this next hour on the
rule could have not been wasted if we had had unanimous consent.
The gentleman from Michigan (Mr. Dingell) last night agreed to
unanimous consent to bring this bill on the floor without taking this
extra hour of time on the rule. That means that Members could have gone
back home. It is difficult in these last 3 or 4 weeks now before we
recess for the August break, and taking up the rule today is going to
add another hour and a half. It is too bad that the Democratic minority
objected to us offering a unanimous consent to bring this bill on the
floor, and I just wanted Members to know that.
But I hope that they will come over and vote for the rule, vote for
the bill, and we will at least will have made some great progress in
patients' rights.
Mr. FROST. Mr. Speaker, I yield myself 30 seconds.
Mr. Speaker, the gentleman from New York was bemoaning the fact that
we could not bring this measure up under unanimous consent but, rather,
that we would have an hour's debate on the rule. This may be the most
important piece of legislation we will consider this year. Certainly it
is reasonable to have an hour debate on the rule on this matter.
The other side was so anxious to bring this up quickly early this
morning and out of the line of fire without public attention. It is
clearly appropriate to have an hour's debate on the rule.
Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr.
Green).
(Mr. GREEN asked and was given permission to revise and extend his
remarks.)
Mr. GREEN. Mr. Speaker, I thank my colleague and friend, the
gentleman from Texas, and a Member of the Committee on Rules for
allowing me to speak this morning.
I rise, not in opposition to the rule, but in opposition to the
process where we have gotten to today, Mr. Speaker. Managed care reform
is not about politics; it is about people.
We have a responsibility to guarantee the American people top quality
health care. We have a responsibility to protect our children from
negligent medical decisions made by insurance companies.
The Republican proposal that we will be debating today is simply
profit over people. The only people in our country who are guaranteed
immunity from their decisions are foreign diplomats and HMO officials.
We cannot really have a Patients' Bill of Rights without access to
specialists, a timely internal and external appeals process, point of
service options, choice for our patients, accountability of that
decision matter, and open communication between the patient and a
provider; in other words, no gag rule.
Can we honestly say that the system will protect patients without an
enforcement mechanism, without an accountability? There is no
responsibility.
The Republican bill that will be voted on today never enjoyed a
public hearing. It was drafted behind closed doors. In fact, I serve on
the committee that would have been helping draft this bill, and we did
have hearings over the last few months, but this bill never had a
public hearing.
We did not see it until late last night. Do my colleagues know why?
Because, one, it does not end gag rules. It does not define severe pain
as a reason a constituent of mine can go to the emergency room. It also
does not actually provide for the point of service option that we want,
the choice for that patient. That is easily bypassed by the HMO
decision makers.
The Republican bill also will decide what medically necessary is. My
concern is we are not giving the patient and that physician or that
provider the decision making that the Democratic bill provides; and
that is why, later on today, we hopefully will pass the Dingell-Ganske
bill.
Mr. Speaker, I include the following for the Record:

Issues of Concern in the Hastert Task Force Bill

Does not end gag rules
While the bill claims to end gag rules, the statutory
language creates a loophole that guts the protection. Under
the Balanced Budget Act, Medicare and Medicaid plans cannot
``prohibit or otherwise restrict'' medical communications.
The GOP bill only refers to prohibitions. So a plan could
``allow'' medical communications, but only after the doctor
first complies with certain restrictions (such as calling the
plan first and delivering the advice in pig latin). The
deletion of the words ``or restrict'' render this protection
hollow. This also creates the possibility for lawsuits over
whether something is a restriction or a prohibition.
Does not define/include ``severe pain'' as a reason to get
``emergency medical care
The access to emergency care language in Medicare and
Medicaid contains a specific definition of what a prudent
layperson would think required immediate treatment: ``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--(1) placing the
health of the individual (or, with respect to a pregnant
woman, the health of the woman or her unborn child) in
serious jeopardy, (2) serious impairment to bodily functions,
or (3) serious dysfunction of any bodily organ or part.''
By contrast, the GOP bill does not include ``severe pain''
as a condition that health plans must cover in the emergency
room. The deletion is significant. For example, the American
Heart Association advises that anyone experiencing crushing
chest pain should go to the ER immediately, as that is a
warning sign of a possible heart attack.
Under H.R. 4250, a health plan can refuse to pay the ER
bills of a man who went to the emergency room with crushing
chest pain but whose EKG came out negative. That might be
only a temporary result; he might have a heart attack when
the plan gives him a bill for the ER services!
Allows the plan to decide what is ``medically necessary''
At its heart, the debate over HMO reform is really about
ensuring that health care decisions are made by doctors and
patients, not by HMO business executives. H.R. 4250, however,
does not fulfill that promise. Under the disclosure section,
plans must inform participants of whether care may be
excluded because ``of a failure to meet the plan's
requirements for medical appropriateness. . . .'' In other
words, it is not the doctor and patient who decide what is
medically necessary; it is the plan which retains that
capability.
During Commerce Committee testimony two years ago, Dr.
Linda Penno, a former HMO medical reviewer, described this as
a plan's `smart-bomb' capability. By retaining the power to
define what is and what is not medically necessary, the plan
is able to take control of health care decisionmaking.
This is also relevant to the external appeals provisions of
the Hastert Task Force Bill. The review is limited to whether
the plan followed its own definition of medical necessity or
whether or not a treatment is experimental.
Point of service provision is easily by-passed
The most powerful argument in the health care debate is the
right to choose your own doctor. The GOP bill attempts to
respond to this by including a point of service provision for
closed panel HMOs (allowing patients to see providers outside
the network). H.R. 4250, however, contains loopholes that
effectively gut the provision. Employers would not have to
offer employees point of service coverage if they could prove
that this will cause premiums to rise just 1%--even if all of
the added costs would be borne by employees who chose this
option! And this ``proof'' could be prospective--meaning a
company would not have to offer a single employee a POS
option to determine its actual effect on premiums.

[[Page H6300]]

I am concerned that it will be easy for employers to
``prove'' that premiums will increase 1%. For example, one
study by opponents of this legislation suggested that managed
care reform legislation would increase premiums between 3 and
90%. While CBO's very low estimate of 4% should put those
wild allegations to bed, they show how easy it is to
prospectively make a doom and gloom forecast with a straight
face. Combine that with the fact that insurance premiums are
expected to take a big jump this year, and it is not hard to
see how health plans will be able to use the 1% threshold to
avoid offering their employees a choice of health care
providers.

Mr. GOSS. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Iowa (Mr. Ganske).
Mr. GANSKE. Mr. Speaker, I want to thank the Committee on Rules for
bringing a fair rule to the floor. I intend to support it. I encourage
all my colleagues to support the rule.
Mr. Speaker, think about how far we have come in the last 6 months.
Six months ago, we would have never had this debate on the abuses in
managed care. Today we are going to have that debate.
Let me briefly outline some of the arguments you will hear today so
you can evaluate the competing proposals. Here is a sample of key
protections which are not included in the Hastert task force bill, but
are included in the substitute plan that I will offer:
The Ganske-Dingell substitute provides patients with access to
clinical trials. The Hastert bill does not.
The Ganske-Dingell substitute allows doctors to override drug
formularies when medically necessary. The Hastert bill does not.
The Ganske substitute provides for ongoing access to specialists for
chronic conditions. The Hastert bill does not.
The Ganske substitute prevents plans from giving doctors financial
incentives to deny care. The Hastert bill does not.
The Ganske substitute has hospital stay protection for mastectomy
patients. The Hastert bill does not.
The Ganske substitute provides choice for doctors within the plan.
The Hastert bill does not.
The Ganske substitute has a provision for guaranteeing continuity of
care when providers leave the network. The Hastert bill does not.
The Ganske substitute requires plans to collect quality data or to
maintain quality improvement programs. The Hastert plan does not.
There are other significant provisions in the Hastert bill that are
of significant concern. The Hastert bill allows a plan to decide what
is medically necessary. The Hastert bill requires enrollees to spend
their own money to secure an independent review.
Finally, I would draw your attention to the HealthMart and MEWA,
Multiply Employee Working Association, provisions which could make it
more difficult for States to fund high-risk pools and other programs to
help keep health insurance affordable. I am glad to support the rule. I
look forward to the debate today.
Mr. FROST. Mr. Speaker, I yield 2 minutes to the gentleman from
Michigan (Mr. Stupak).
Mr. STUPAK. Mr. Speaker, I thank the gentleman for yielding to me. I
am going to oppose this bill today and I am going to oppose the rule
here today, because we are going to have 2 hours, basically, to debate
this bill.
I think it shows the insensitivity of this rule, insensitivity to
basic rights that every American demands, and insensitivity to a basic
understanding to health care in this Nation.
We as parents, we all know the world stops when a child falls ill. As
sons and daughters, we want the best for our parents when they need
health care. As husbands and wives and brothers and sisters, when a
family member is stricken, we insist that nothing comes between that
patient and their health care. We want the best possible treatment.
Unfortunately, the Hastert bill does not provide it.
That is what health insurance is supposed to be about. We pay for it,
we have it, and we want it when we need it. The doctors, the nurses,
the hospitals, the emergency room, the medicine, we want whatever it
takes to get our child, our parents back healthy again. That is how it
used to be.
But in the last years, millions of Americans have moved into managed
care plans, and something got in the way. Priorities were shifted from
patients to profits. Emergency room crises were compromised by
boardroom considerations. Professionals in white lab coats start taking
orders, not from doctors, but insurance bureaucrats. The delivery of
top-notch health care became less important; and the bottom line,
profit.
When we take a look at the bill today, we will see that the
Democratic bill, the Ganske-Dingell bill is the only one that will get
the job done for us when we pay for health care and we demand quality
care.
The Democratic bill is designed to provide medical coverage. Medical
professions will be back in control of medical decisions. Emergency
care in an emergency, no questions asked, underneath the Democratic
plan. Expedited appeals process to approve the care we deserve before
it is too late. Access to a specialist when you need it.
I hope we will defeat this rule and put some time into the Democratic
plan.
Mr. GOSS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I would note to the gentleman who just spoke that we
have tried very hard to accommodate all the schedules. It is a busy
time of year. But surely our plan is more sensitive for the debate of
this important issue than the discharge petition that they have
provided for.
Mr. Speaker, I am very pleased to yield such time as he may consume
to the distinguished gentleman from Illinois (Mr. Hastert), the leader
of the Speaker's task force on health care.
Mr. HASTERT. Mr. Speaker, today is an important day for American
families. Today we will take a step forward to strengthen the Nation's
health care system. Today we will debate and vote upon the House
Republican-sponsored Patient Protection Act.
Our legislation is the only proposal on the table that truly protects
patients and guarantees choices without the heavy hand of big
government. Specifically, our bill guarantees patients have increased
access to affordable health care they need when they need it most by
holding insurance companies accountable.
How? Our proposal guarantees the unprecedented expedited review
process internally and externally. We want patients to receive the care
they need first rather than be thrown into a long, drawn-out legal
process controlled by lawyers after harm or death has occurred.
Patients should be treated in hospital rooms, not courtrooms.
Besides true accountability, our plan has another major advantage
over other proposals in this Congress. The Patient Protection Act is
the only bill which will help cover the 42 million uninsured working
Americans.
We create new initiatives to guarantee more access to affordable
health care choices. Association Health Care Plans, HealthMarts,
Community Health Organizations, and Expanded Medical Savings Account
help employees and employers work together to provide the coverage that
best meet their need.
As a matter of fact, just this week at a news conference, the Senate
minority leader Tom Daschle was asked, ``What does the Democrat plan do
for the uninsured?'' His response, ``Not much.'' At least he was
truthful.
I hope my colleagues on the other side of the aisle today are just as
forthright and resist the temptation to distort the facts about what is
in the House Republican plan. We truly believe that high quality health
care depends upon the patient-doctor relationship.
Personally, I believe that doctors owe their patients the benefit of
their education, the benefit of their experience, and the benefit of
their good judgment. Medical decisions should be decided by doctors,
not by insurance company bureaucrats.
We prevent health plans from gagging doctors for explaining the full
range of treatment options available no matter what the cost, no matter
if the other options are covered by the plan or not. We also ensure
patients have ready access to emergency room care and prohibit their
health plan from arbitrarily refusing to pay for it. We guarantee that
women and children have direct access to their doctors without having
first going to the insurance company gatekeeper.

[[Page H6301]]

Our proposal will also empower patients and doctors through
information. It creates new access to plan coverage information while
also protecting individual patient records from abuse through new
confidentiality requirements.

{time} 0930

Access to affordable health care is a fundamental patient protection.
Without affordability, you cannot have accessibility, nor, for that
matter, health care coverage at all. As you can see, we are protecting
patients and guaranteeing choices, without the heavy hand of big
government.
Mr. Speaker, we must have a comprehensive approach to meeting
America's health care needs. Our Patient Protection Act is the only
proposal before Congress that increases accessibility, affordability
and accountability in our health care system. I urge my colleagues to
support this rule so we can deliver the health care reform that
Americans need.
Mr. FROST. Mr. Speaker, I yield three minutes to the gentleman from
New Jersey (Mr. Pallone).
Mr. PALLONE. Mr. Speaker, I do want to first thank the gentleman from
Michigan (Mr. Dingell) and the gentleman from Iowa (Mr. Ganske) and the
members of the Democratic Health Care Task Force and all those who
worked very hard to make sure that this substitute came up today. The
discharge petition effort, which I think has over 190 Members, and
other efforts to appear before the Committee on Rules finally brought
fruit, I think, and made it possible for us to bring the substitute up
today, and that hard work, I believe, paid off.
In my view, there is nothing more important in the managed care
debate than giving patients the right to hold their HMO accountable
when they are denied the care they need. Any legislation that fails to
give patients that renders the protections within it absolutely
meaningless. The Patient's Bill of Rights includes an enforcement
mechanism which ensures patients will finally get that right. Our bill
repeals the ERISA exemption, the 1974 law which shields HMOs from being
sued if they deny people needed care.
The other bill we are considering today, the Republican bill, does
nothing to hold HMOs accountable for their actions. If not only leaves
ERISA essentially intact, it actually exacerbates the problem. Its
external appeals process only applies to people whose insurance comes
under ERISA. Individuals in the private insurance market are left
without any external recourse when they are denied care. What is even
worse is that those who are fortunate enough to be covered by ERISA are
subject to the HMO's definition of ``medical necessity.''
The Republican bill allows HMOs, and not doctors and patients, to
define ``medical necessity.'' This provision, of course, flies in the
face of the whole idea of managed care debate, that medical necessity
should be the determinant of whether or not a patient needs care and
not cost considerations. It all but guarantees that insurance company
bureaucrats will continue to make medical decisions and people will
continue to be denied care because of it.
I also want to dispel a myth that my Republican colleagues have been
working overtime to spread. The Patients' Bill of Rights does not
create any new Federal legislation. Repealing the ERISA exemption would
simply allow patients to go back to their states, where individuals
would normally bring suit. In other words, the Patients' Bill of Rights
does not create a new Federal remedy. Its approach is essentially
states' rights by repealing a Federal preemption.
Another piece of propaganda the Republicans have been actively
spreading is the charge that the Patients' Bill of Rights provides for
employers to be sued for medical malpractice. This is patently false.
In fact, the Patients' Bill of Rights specifically excludes employers
from liability. Any employer can only be held liable if they intervene
in a medical decision that leads to injury or death.
Mr. Speaker, President Clinton recently said that ``a right without a
remedy is not a right,'' referring to HMOs. If you want good patient
protections, and, just as importantly, enforcement of those
protections, vote ``yes'' on the Patients' Bill of Rights and vote
``no'' on the Republican bill.
Mr. GOSS. Mr. Speaker, I yield two minutes to the distinguished
gentleman from Kentucky (Mr. Bunning).
(Mr. BUNNING asked and was given permission to revise and extend his
remarks.)
Mr. BUNNING. Mr. Speaker, I rise in strong support of the rule and
the Patient Protection Act. This bill is a well-crafted piece of
legislation which addresses many of the problems facing our Nation's
rapidly changing health care system.
What the bill does makes it worth supporting. It strengthens health
care plan accountability by providing a system of reviews and appeals,
to make sure that Americans who have health insurance get the care they
need when they need it; it guarantees patients' choice by ensuring a
point of service option, so that patients have the freedom to see the
provider of their choice; it expands the availability and affordability
of health insurance for millions of Americans through the creation of
HealthMarts and Association Health Plans, by creating Community Health
Center networks, and by expanding Medical Savings Accounts; it
guarantees the right of patients to emergency room service; it
guarantees the right of women to have direct access to their OB-GYN; it
guarantees parents the right to direct access to pediatricians for
their children.
These are much-needed improvements, and they are the one big reason
to support the Patient Protection Act, the things it does.
But there is another reason to support the Patient Protection Act,
and that is what it does not do. It does not load down the health care
system with a new layer of bureaucracy; it does not guarantee an
explosion of unnecessary costs and costly litigation, it puts people
into care, and not into courtrooms; and it would not increase the cost
of health care dramatically, like the Patients' Bill of Rights would
do.
Mr. Speaker, it is a very good piece of legislation because of what
it does, and even because of what it does not do.
I urge my colleagues to support the Patient Protection Act.
Mr. FROST. Mr. Speaker, I yield two minutes to the gentlewoman from
the Virgin Islands (Ms. Christian-Green).
Ms. CHRISTIAN-GREEN. Mr. Speaker, I thank my colleague for yielding
me time.
Mr. Speaker, I rise in support of the Ganske-Dingell bill. As a
physician who has practiced medicine for more than 20 years, I know
well many of the troubling aspects of the industry, particularly as
they affect minorities. That is why I rise today to support the Ganske-
Dingell bill and to bring to this body's attention and to the attention
of the American people an issue which might not be discussed today, the
discrimination of African-American physicians and patients by managed
care plans.
Because minority physicians often serve poorer, sicker and are often
solo practitioners and not a part of a group that makes a tidy profit
each year, we do not make attractive candidates for inclusion into
managed care plans.
Similarly, because minority patients are often uninsured and receive
medical assistance from programs such as Medicare and Medicaid, they
are also not attractive sources of revenue to such plans as well. As we
seek to reform the managed care industry, we must not forget the
concerns of minorities in this effort and their struggle to have their
health care needs addressed.
My friends in the majority must stop playing politics with the lives
of the American public and pass the Patients' Bill of Rights. The
people who put us here and depend on us have asked us for and deserve a
better health care delivery system. The Ganske-Dingell bill does that.
I urge its passage. Let us put the ``care'' back in health care.
Mr. FROST. Mr. Speaker, I yield three minutes to the gentleman from
Texas (Mr. Doggett).
Mr. DOGGETT. Mr. Speaker, before coming to this Congress, I worked
each day in a much different place, in a courtroom, as a judge on the
highest court in Texas. I was called a justice, as were my colleagues,
and asked to do justice. And yet, time after time, I found my hands and
those of my colleagues tied by a Federal law.
We saw victims of injustice, who had suffered not only some grievous
loss in

[[Page H6302]]

terms of an illness or an injury, but the same families who suffered
abuse at the hands of insurance companies, and, because of a law that
was passed in this National capital, we were powerless to do anything
about it.
Recently the State of Texas became the first state to pass a new law
to try to hold these managed care companies accountable for what they
were doing. And, wouldn't you know it, the same insurance companies
that used to come into my court went into another court to try to block
this new state accountability law.
Today that same group of health care companies finds willing allies
over here from the Republican leadership to help them continue to do
the very same thing. They are folks who would deny help to the infirm.
What is happening here is much like a firefighter, who sometimes builds
a small fire in order to stop a much larger fire. There is a fire of
outrage burning across this country, as one family after another
suffers abuse and limitation of care at the hands of managed care
companies.
So the Republican leadership has come forward today in a very
contrived fashion. They tried to provide the least amount of reform
possible and still call it ``patients rights,'' while doing essentially
nothing to untie the hands of judges all across this country to provide
a remedy.
Mr. Speaker, they say that what they are about is providing help to
patients and not getting lawyers in the process. But, you know, that is
false under their whole procedure. They keep lawyers involved in the
process. They keep them involved only for the insurance company, not
for the victim of the insurance company's abuse. They say that it is
okay to have the lawyers that write the loopholes, that counsel the
insurance companies to interfere with some clerk, who never had any
health care experience, in the best recommendations of a physician or
other health care provider to help that physician's patient get well.
But Republicans would deny any enforcement, any accountability, for
that insurance company.
They say they are opposed to getting juries involved in this process,
and that is also false. They simply leave the only jury as not a jury
of one's peers, but an insurance company, that acts as judge, jury and,
in too many cases, executioner when it comes to providing health care.
We would remedy that through the Dingell proposal, not through some
election year sop.
Mr. FROST. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Connecticut (Ms. DeLauro).
Ms. DeLAURO. Mr. Speaker, I rise in support of the Ganske-Dingell
bill and truly relish this debate. I truly wish we had more time for
it.
Today we are going to vote on a Republican sham HMO reform bill which
actually leaves patients with less rights than they have under current
law.
Let me give you an example. The GOP bill will repeal state laws that
keep HMOs from giving out your private medical records. Under this
Republican proposal, your employer could call for your medical records
and your HMO could release your personal medical records without your
permission.
But the worst thing about this political charade is that the
Republican bill does not address the one problem that millions of
Americans have asked us to fix, that doctors and patients should make
medical decisions, not insurance company bean counters.
Under the GOP bill, HMOs will continue to define what is medical
necessity and accountants will continue to decide what medical care
Americans ought to receive. And if some HMO bureaucrat with no medical
training makes a mistake that injures or kills you or a member of your
family, you have no legal recourse. The GOP bill says, too bad, and
tough luck.
This is a sham bill, and that is why the American Medical Association
and dozens of other medical groups oppose it, and why the HMO companies
support it. It has no protections and no enforcement mechanism. That is
why the President has said he will veto it.
Let us pass real reform for the American people in this country. That
is what they want, that is what they need. Pass the Democratic
Patients' Bill of Rights. It is the way that we need to address the
serious issue of getting back the decisionmaking between doctors and
patients, and out of the hands of the HMOs.
Mr. GOSS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, regrettably, the last speaker has been victimized by
misinformation in the paper, in the Washington Post this morning, as
have other Members. When we get to the debate we will explain that much
of what was presented was incorrect.
Mr. Speaker, I yield 3 minutes to the distinguished gentleman from
Missouri (Mr. Talent), a member of the special task force.

{time} 0945

Mr. TALENT. Mr. Speaker, I thank the gentleman for yielding me this
time.
I am very pleased to rise in strong support of the Patient Protection
Act because it is the only bill on the House floor today that will
provide health care coverage to millions of people, hard-working
Americans who currently do not have it. It is the only bill that will
ensure that Americans who have health care coverage get the coverage
their physician recommends when they need it, before they get sick, and
it is the only bill that does what it does without big government and
big bureaucracy.
First, access to the uninsured. Mr. Speaker, there are 42 million
Americans today who do not have health care coverage. Most of them work
for small employers who, because of the high administrative costs and
the low buying power with small pools, cannot afford to provide them
health insurance. If they worked for IBM, they would have access to a
variety of different options.
So what our bill does is allows those small employers to pool
together and get the buying power of a pool. It will cover millions of
people with good, private sector health insurance and provide many more
choices to millions of those who currently only have one choice or two.
What does the Dingell bill do? What does it do for the uninsured?
Well, according to a cosponsor from the other body, not much. In fact,
the ``not-much'' plan is worse than not much, because according to the
CBO, it will drive costs up to the point that 1.6 million people who
now have health insurance will be thrown off the health insurance
rolls.
Our bill also ensures that people will get the care they need when
they need it, and does it without big government. It provides swift,
certain, low-cost access for somebody whose physician has recommended
care whose plan has turned it down to get that decision reversed. First
internal review has to be before a physician, not a health care
professional, not a nurse. That is a difference from the Dingell bill.
Second, automatic appeal has a right to an external review before
physicians. The Dingell bill does not have that. We get people in the
treatment rooms, not waste billions of dollars that should be spent on
health care in the courtrooms.
Mr. Speaker, all of us who have dealt with this issue have dealt with
the stories about people who have needed coverage and have had it
denied by their managed care plans. Those are not just horror stories,
they are horrible stories. Tales of human misery, of pain, of loss of
babies, loss of limbs; that should not happen. Under our bill and only
under our bill those stories would not have happened and will not
happen in the future.
That is what this debate today is about, that is what this bill is
about. It should not be about politics, it should not be about an issue
for November; it should be about helping the people to get the care
that they need when their physician recommends it. That is why I rise
in strong support of the Patient Protection Act.
Mr. FROST. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Texas, (Ms. Eddie Bernice Johnson).
Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Speaker, it is ironic that I
stand here and know so well that every taxpaying American has paid for
much of the research that persons now are denied the result of.
I wish this was not such a partisan area, because we are dealing with
the most basic need and right of the American people, and that is
health care. No insurance company has the right to only insure young,
healthy people.

[[Page H6303]]

I have heard all kinds of rhetoric about the bureaucracy. The
bureaucracy rests with the insurance companies who are doing everything
they can to deny care so that health care premiums can be used as cash
cows. That is most unfortunate. Can we imagine someone who goes to an
emergency room, very ill, very confused and frightened, and then be
told they have to wait to get permission to take care of them. That is
where we are today.
I do not understand, frankly, how we can become so committed to an
industry, the insurance industry, that we forget that we are here to
protect people.
Mr. Speaker, I rise against this rule because I do not want it to
continue to gag physicians who have been educated and trained to take
care of patients. I do not want to support a system that only makes
money for the insurance companies. It has been never intended that
health care services be cash cows for insurance companies.
This is a terrible rule. I hope we all understand that the people are
crying out for help. They do not mean help the insurance companies.
They want help themselves.
We owe it to the American people to offer them this protection. We
have failed to do it with this Republican plan, and I rise against this
rule and ask everyone to vote against it until we can produce a decent
plan.
Mr. GOSS. Mr. Speaker, I yield myself such time as I may consume to
say to the gentlewoman that I hope she will be relieved to find when
she reads our bill that we have, in fact, removed the gag order.
Mr. Speaker, I yield 1 minute to the distinguished gentleman from
Texas (Mr. Paul).
Mr. PAUL. Mr. Speaker, I thank the gentleman for yielding me this
time.
I rise in support of the rule. Under the circumstances, the rule is
very fair. It offers an opportunity for our side to vote for the
Patient Protection Act as well as a vote for the opposition. I think
that is quite fair, so I strongly support the rule.
I would like to call to the attention of my colleagues one particular
part of our bill that I think is very important and addresses a problem
I see as being very serious.
In 1996, the Kennedy-Kassebaum bill allowed for a national identifier
and a national data bank to control all our medical records at a
national level. This is very dangerous. In a bill that is called the
Patient Protection Act, obviously the best thing we can do is protect
patient privacy. If we do not, we interfere with the doctor-patient
relationship, and this is a disaster.
This whole concept of a national identifier--the administration is
already working to establish this--is dangerous and we must do whatever
is possible to stop it.
I compliment the authors of this bill to prohibit this national
medical data bank.
Mr. FROST. Mr. Speaker, I would inquire about the time remaining.
The SPEAKER pro tempore (Mr. LaHood). The gentleman from Texas has 11
minutes remaining and the gentleman from Florida has 10 minutes
remaining.
Mr. FROST. Mr. Speaker, I yield 2 minutes to the gentleman from Ohio
(Mr. Traficant).
Mr. TRAFICANT. Mr. Speaker, I support the rule; I also support the
Democrat substitute, and if it fails, I will support the Republican
bill. Both bills are better than the current system, and the need for
reform is greater than Democrat and Republican posturing.
Doctors should make decisions on our health care, not businessmen.
Patients should be able to choose the doctor they want. Insurance
companies and business managers without medical degrees should not be
delivering our health care system.
Mr. Speaker, I say to my colleagues, this current system is not
managed care; this system in America is managed cost. Dollars are all
they see, not pain, not disease, not people, not children, not cancer,
not cures; they see dollars.
The Congress of the United States is appropriately making necessary
changes today, and these business people have to understand that the
American people want a doctor, not an accountant, when they have a gall
bladder problem, I say to my colleagues. And hospitals should not be
throwing them out because of dollar concerns; it should be predicated
on sound medical practice.
It is a shame when Congress has to intervene, but America has gone
from the Hippocratic oath to hypocrisy in a managed cost health care
system.
I will support whatever survives; it is better than the animal that
still lives.
Mr. GOSS. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Kentucky (Mrs. Northup).
Mrs. NORTHUP. Mr. Speaker, I am glad to be a part of this debate. In
my previous life I was part of the Kentucky General Assembly, and while
they were altruistic legislators that created the disaster that we had
in Kentucky, the fact is that that is exactly what they created, a
terrible disaster.
We had what would be proposed today by the Democrats in the term of
health care reform, and what it created were enormously escalating
prices, prices that escalated so fast that we tried to intervene by
capping the prices of our insurance premiums. What did that do? It
chased 45 out of 47 of the insurance companies that were selling
insurance in Kentucky right out of the State.
So what did our consumers in Kentucky get left with? They got left
with higher prices for insurance, they got left with higher copayments,
and they got left with fewer choices.
I am so proud to be here today, to be part of an effort to give the
American people what they really want. What do they want? They want
essential medical services. They want them to be affordable, both the
insurance and the copayments, and they want more choices. We are taking
a giant step in that direction today.
What we are doing is helping make sure that medical money stays in
medicine. The American people resent the fact that they pay for their
insurance, that their employer contributes to their insurance, and they
make copayments, and a tremendous amount of that money gets diverted to
lawyers, to court costs, to liability costs and to administrative
costs.
We need to make sure that all the money we spend in medicine,
understanding that there is a finite amount of money that gets spent on
good health delivery, for patients when they need it.
We need to make sure that we do not create a bill that has so many
mandates in it that we begin to say to the American people, you are
going to pay more and more because we know what you need and want, not
you. I thank the task force for creating this opportunity.
Mr. FROST. Mr. Speaker, I yield 2 minutes to the gentleman from
Maryland (Mr. Cardin).
Mr. CARDIN. Mr. Speaker, I thank my friend from Texas for yielding me
this time.
Mr. Speaker, this is one of the most important issues that we are
going to deal with in this Congress, how we provide patients protection
in the health care system of this country. I am outraged, and I hope my
colleagues are outraged, by the process that we are using in
considering this legislation.
There have been no hearings on the Republican bill. It did not go
through any of the committees of jurisdiction for the purpose of markup
or to try to get the drafting done correctly, and no wonder that this
bill is drafted so poorly. My Republican colleagues did not get it
right. It is not going to do what they are advertising.
Let me just give one example. H.R. 815, which I introduced many, many
months ago, deals with access to emergency care. We have 240 cosponsors
of that legislation that adopts the prudent layperson standard so that
an HMO has to reimburse a patient who should go to an emergency room.
We passed it last year for Medicare and Medicaid, and yet the
Republican bill does not get it right. It does not include pain. So if
one has severe pain and reasonably should go to an emergency room,
one's HMO can deny coverage. That is wrong. Even the HMOs acknowledge
that pain is a reason to go to an emergency room. But my Republican
colleagues did not put it in their bill and they did not allow a
correction to be made. That is wrong.
Let me give another example. My Republican colleagues brag about an
external appeal process, that they are giving the patients the right to
take an

[[Page H6304]]

appeal, but what they are not saying is they did not get that right.
The decision is not binding on the HMO. It is not independent. The HMO
gets to select the people that serve on the panel. My Republican
colleagues did not get it right.
There is legislation that has been filed that deals with external
appeal, but my Republican colleagues did not bother taking it through
the committees so that we could have that debate.
I urge my colleagues to adopt the bipartisan bill, which is our only
chance today to provide meaningful patient protection.
Mr. GOSS. Mr. Speaker, I thank the distinguished gentleman from
Maryland (Mr. Cardin), my friend, who is indeed my close friend. I did
not get it exactly right in describing our bill as the debate will
show, but that is why we have the debate.
Mr. Speaker, I yield 2 minutes to the gentleman from Ohio (Mr.
Boehner).
(Mr. BOEHNER asked and was given permission to revise and extend his
remarks.)

{time} 1000

Mr. BOEHNER. Mr. Speaker, in just 3 years this Congress has delivered
the first balanced budget in a generation, the first tax cuts from
Washington in 16 years, and real reforms that are improving the lives
of many who are on welfare today as they are able to move from welfare
to work.
Today we are going to move in a bipartisan fashion to continue to add
to our record of success and an opportunity to help the American
people.
As I travel around my district, I have had many conversations with my
constituents who are concerned about access to good-quality health
care. As much as they want access, they are also concerned about making
sure that it is affordable.
As I look at the two pieces of legislation that we are going to
debate today, it is clear to me that the bill brought to us by the task
force, headed by the gentleman from Illinois (Mr. Dennis Hastert), is a
bill that does that. It empowers consumers, not lawyers. It makes sure
that health care continues to be affordable and accessible for all
Americans.
I think, in the end, that is what people want. They do not want to go
to court. They want to be able to go to the doctor. They want to be
able to get the treatments they need. And I think the empowerment that
we see in our piece of legislation is exactly that.
The other bill that we will be debating, the proposal by the
gentleman from Michigan, in fact creates an awful lot of big
government, an awful lot of access to lawsuits and to lawyers and to
courts, driving up the cost of health care. My greatest concern about
the proposal from the gentleman from Michigan is that, by opening up
employers to the lawsuit abuse that could occur, many employers in
America are going to say we are not going to be providing health care
coverage to our employees anymore.
I know myself, as a small employer, I would not continue to offer
health care to my employees if I am subject to being sued by doctors,
who may be on solid ground, maybe not. I am going to give them a
voucher and let them go fight for their own.
I do not think that is what the American people want. They want
reasonable access, reasonable cost to good-quality care.
Mr. FROST. Mr. Speaker, I yield 2 minutes to the gentlewoman from
North Carolina (Mrs. Clayton).
(Mrs. CLAYTON asked and was given permission to revise and extend her
remarks.)
Mrs. CLAYTON. Mr. Speaker, I thank the gentleman for yielding me this
time.
When a child has a disease that can be cured, should the decision of
whether to provide needed treatment be made by a doctor and the child's
parents or by bureaucrats who are counting dollars and cents?
When a wife or mother has had a mastectomy and the procedure has not
yet worn off, should she be forced to leave the hospital because of a
rigid routine for saving dollars rather than saving lives?
When a husband and a father is unable to get prior approval from the
insurance who he is paying for an emergency, should he be required to
pay that medical bill himself?
When a grandfather is stricken with a life-threatening stroke, should
the person transporting him be required to pass a hospital that is
closest to him to go to one that is further away because a narrow-
thinking person is more interested in saving dollars than, again, in
saving lives?
H.R. 3605, which is the Patients' Bill of Rights, the Democrat
substitute, indeed speaks to a number of basic rights that all of these
patients that I just described should have and not have to suffer. The
Republican bill, H.R. 4250, does not.
Many of the patient rights that we are talking about indeed does mean
that a patient should have a right to sue. A patient should have a
right to indeed hold us accountable for our liabilities and our rights.
The patient should have a right to choose their doctor. A patient
should have a right to choose other professionals that they desire.
H.R. 3605 does provide open communication. Although those on the
other side say the gag clause is in there, I cannot find it. So I urge
my colleagues to support the Patients' Bill of Rights, the Democratic
substitute.
Mr. GOSS. Mr. Speaker, I yield 1 minute to the gentleman from Florida
(Mr. Weldon), my colleague.
Mr. WELDON of Florida. Mr. Speaker, I thank the gentleman for
yielding me this time.
As a physician who still practices medicine, I rise in strong support
of this rule. I have worked in managed-care settings and I have worked
in fee-for-service settings. The important issue here is can we, in
Washington, pass legislation that will help restore the doctor-patient
relationship and, importantly, help restore quality health care within
managed-care networks?
Now, my good friends on the Democrat side of the aisle have their
bill; we have our bill. We are going to have a very interesting debate
here this morning. I think the important issue, which speaks of how
much better our Republican bill is, is the fact our bill is the bill
that is not going to drive up costs, where the Democrat bill will; and,
importantly, our bill is going to enable people who are uninsured to
have access to health care and help them to more easily afford health
care.
I would encourage all my colleagues to support this rule. Listen to
the debate during general debate and the debate on the amendments and,
in the end, I believe our bill is going to pass. Our bill is the better
bill for restoring quality, for restoring the doctor-patient
relationship, for reducing cost and giving the uninsured better access
to health care.
Mr. FROST. Mr. Speaker, I yield 2 minutes to the gentleman from Texas
(Mr. Turner).
(Mr. TURNER asked and was given permission to revise and extend his
remarks.)
Mr. TURNER. Mr. Speaker, it has been suggested that the Republican
bill is better, a better protection for patients. I submit to my
colleagues that the Republican bill is worse protection for patients
than exists in current law in most of our States.
I come from Texas. The Texas legislature passed patient protection
legislation in 1977, fully intending that all HMOs be covered by the
protections of State law.
The Republicans submit a bill today that would control patient
protections at the Federal level. It would set out a set of rules that
are far inferior to those in the Democratic alternative.
On the Republican bill, if the HMO denied coverage, the only remedy
would be to go, if an individual is in a self-insured plan, to Federal
Court. And when that individual gets there, they will not have a
remedy.
In 1971, Phyllis Cannon was diagnosed with leukemia. She appealed to
her HMO for a bone marrow transplant. The HMO refused. For over 40 days
the HMO refused coverage. About a month after that, she died.
The court ruled that, under ERISA, she had no recovery. Under the
Republican bill today, she would be entitled, her estate, to $20,000, a
small price for a life, the denial of treatment. Under the Republican
bill, the penalty is $500 a day. A much cheaper alternative for an HMO
than providing the treatment that should have been provided to Phyllis
Cannon.
I submit to my colleagues that every Member of this House needs to
look at

[[Page H6305]]

what their State has done to protect patients, because a vote for the
Republican bill is rolling back the protections that most of our States
have already provided for patients under the law. In every place in
this country, protecting patients enrolled in HMOs has been a
bipartisan effort. Only in Washington is patient protection partisan.
Mr. GOSS. Mr. Speaker, may I ask for an accounting of the times
again?
The SPEAKER pro tempore (Mr. LaHood). The gentleman from Florida (Mr.
Goss) has 6 minutes remaining and the gentleman from Texas (Mr. Frost)
has 3 minutes remaining.
Mr. GOSS. Mr. Speaker, I yield 3 minutes to the gentlewoman from Ohio
(Ms. Pryce), who is also a member of the task force as well as a member
of leadership.
Ms. PRYCE of Ohio. Mr. Speaker, I thank my friend for yielding me
this time, and I rise in strong support of this rule. And as a member
of the working group on health care quality, I first want to thank our
chairman, the gentleman from Illinois (Mr. Denny Hastert), for his
patience and expertise and many hours of hard work that got us here
today.
Mr. Speaker, the Patient Protection Act is the only managed care
reform bill that goes beyond patient protection to address the issues
of access and affordability of health care. Not only does this bill ban
gag rules, provide emergency room access, and guaranty a choice of
provider, it increases the number of people with insurance. It does
that by helping small employers purchase affordable health benefits for
their employees.
Now, it is nice to talk about quality. We all want the best health
care we can get. But A-plus care does not help if we cannot afford to
buy it. The Democrat proposal would price many, many people out of the
market. We all know that more requirements, regulations, and government
is not going to make insurance any cheaper. Rest assured, more
government largess is just what we will get with the Democrat health
bill.
Now, liability has become the rallying cry for the opponents of the
Patient Protection Act. And the health care working group discussed
this issue at length and came to some very rational conclusions. As a
former judge, I think the solution we provide meets every legitimate
goal of liability reform. The bottom line is that Americans pay a
pretty sum for their health insurance and they expect it to cover the
health care that they need when they need it. That is the crux of this
debate.
Patients do not want bureaucrats denying their access to care; and
when a claim is denied, patients want a quick remedy that relies on the
opinion of a medical professional. But my Democratic colleagues would
tell these dissatisfied patients that they must hire a lawyer and they
send them off to court.
Mr. Speaker, what the Democrats fail to understand is that patients
do not want a lawyer, a court date and expensive litigation. They want
a doctor, a diagnosis, and treatment their doctor tells them that they
need.
The Republican bill will get them that care by guaranteeing patient
access to expedited review by independent medical experts. The
Republican plan keeps patients out of court and in the health care
system, and it requires the health plans to provide the coverage that
they are promised.
The expedited appeals process in the Patient Protection Act gives
patients the leverage they need to quickly get the care they deserve
without going to court and waiting through years and years of
litigation. I urge my colleagues to support patients, not lawyers'
paychecks, and vote for this rule and the Republican Patient Protection
Act.
Mr. FROST. Mr. Speaker, I yield 1 minute to the gentlewoman from
Texas (Ms. Jackson-Lee).
(Ms. JACKSON-LEE asked and was given permission to revise and extend
her remarks.)
Ms. JACKSON-LEE of Texas. Mr. Speaker, this is the real face of
health care in America: A young boy who had a difficult birth and
developed cerebral palsy. And at age 14 months the bureaucrats from the
HMOs, the ones who are there just to ensure that those who need care do
not get care, denied this young boy speech therapy and other kinds of
therapies that he needed to have a better life.
Americans know the real deal. They understand what it means as they
travel around this summer on vacation and something tragic happens and
they go to an emergency room away from their State and that emergency
room, because the HMO says they cannot come in, sends them away. They
understand when a little one falls from a tree playing in the back yard
and has pain; and the emergency room, because of the HMO, says no
because all they have is pain as evidence of their injury and the HMO
says pain is not enough.
I would say to my colleagues, Mr. Speaker, the real Bill of Rights is
that of the Democrats, and that is what we need to support today. It is
bipartisan, it is for real, it will the right health care coverage and
the American people know the real thing.
Mr. FROST. Mr. Speaker, I yield the balance of my time to the
gentleman from Maryland (Mr. Hoyer).
(Mr. HOYER asked and was given permission to revise and extend his
remarks.)
Mr. HOYER. Mr. Speaker, the gentlewoman from Ohio (Ms. Pryce) said
what the Democrats know. Let me tell my colleagues what the Democrats
know. When people commit wrongs, they do not want to be held
accountable, and the Republicans are making sure that is true.
I rise today in opposition to H.R. 4250, the bill that my friends on
the other side of the aisle claim reforms managed care. The previous
speaker, the chairman of their conference, said what the Republican
Congress had brought as it pertains to a balanced budget. We will argue
that some other time. The fact is, this Congress has not brought hardly
anything to the American public.

{time} 1015

It is the do-nothing Congress.
This bill is on the floor today because a discharge petition was
signed by the gentleman from Iowa (Mr. Ganske) and the gentleman from
Michigan (Mr. Dingell) and about 190 others of us, and says, we want a
health care reform bill on this floor. That is the reason it is here
and the only reason we are here today.
I rise in strong support of the substitute offered by the gentleman
from Iowa (Mr. Ganske), a Republican and a doctor, and the gentleman
from Michigan (Mr. Dingell), the former Chairman of the Committee on
Commerce, now Ranking Member, and the next Chairman of the Committee on
Commerce.
The Republicans have chosen to support H.R. 4250, the so-called
``Patient Protection Act.'' They bring this bill to the floor today
with no hearings, no mark-ups, and no CBO estimate. In other words,
they were so panicked by the discharge petition, that they brought it
to the floor without the regular process.
Mr. Speaker, the American public wants access to health care. The
American public wants decisions made by their doctors and by
themselves, not by, as all of us have said, insurance companies. They
are right. But the American public will not be fooled as to which
alternative gives them protection, as to which bill gives them access,
and as to which bill allows them to hold accountable those who undercut
their health care protection.
My colleagues, I ask you to support the Democratic substitute, the
Republican substitute, supported by Members on the other side of the
aisle, the Ganske-Dingell substitute, supported by Members on the other
side of the aisle, which does in fact do what everybody says they want
to do.
Mr. GOSS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, this debate has been on the rule. Very clearly, we have
not heard much concern about the rule, with some question about
sensitivity by one speaker. But I do believe we have got a better
process here than a discharge petition. And I think we will have a
fair, longer, more extensive, complete, and deliberative debate at a
result of this rule. And I do urge that everybody support it. I
honestly do not think it is controversial in any way.
What we are doing today is responding to the call of all American
people for improvements in our health care system but particularly for
those who have no health care insurance. We are

[[Page H6306]]

not responding to the interests of any special groups or any special
parties. And there are plenty of those who are asking for special
attention. I think we have responded to America, to the people of
America, who need health care.
We are doing this in the same spirit that we resolved the job lock
and portability problems, the preexisting condition problems. We are
doing this in same way that made the trust fund whole in Medicare. We
are addressing the problems in our country in health care and we are
doing it responsibly.
There has been a lot said and there will be a lot more said, and
there clearly is much misinformation. I even read some misinformation
in the Washington Post this morning, which has obviously misled some of
the speakers who have addressed this during this rule.
It is very clear that we have made a good bill, and it is very clear
that not everybody understands it yet. It is also very clear that the
Patient Protection Act does not have any big brother in it. There is no
big brother in our bill. In fact, we put a halt to the big brother ID
system that has been recently discussed and that so many Americans find
extremely distasteful and an invasion of their privacy.
I think that many portions of the legislation that we have, as
virtually everybody knows that is tuned into this, have already been
through appropriate committees and they have been I think well put
together and much debated.
I think the critical point probably is that what we have done in this
bill is cut into the 42 million Americans, that big pool of people who
do not have health care insurance, and given them the opportunity to
get it.
The bill on the other side, the Dingell-Kennedy bill, adds, according
to CBO, to the pool of Americans who will not have health care
insurance. That is simply unacceptable. Accessibility to health care
insurance is critical.
I want to close on a note that many will recognize. My wife and I
experienced something this year that every parent dreads, a seriously
sick youngster coming in and asking for health care and the plan that
that child was under could not perform. I personally got involved with
why and what went wrong.
So when I speak to my colleagues to say that I think we have a fix in
the patient protection care, I speak to them as a parent, not as a
legislator. I assure my colleagues, I would not be supporting this
legislation if I did not think my sick youngster would be better off
under this plan.
I urge support of this rule.
Mr. Speaker, I yield back the balance of my time, and I move the
previous question on the resolution.
The previous question was ordered.
The SPEAKER pro tempore (Mr. LaHood). The question is on the
resolution.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. FROST. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
The vote was taken by electronic device, and there were--yeas 279,
nays 143, not voting 12, as follows:

[Roll No. 335]

YEAS--279

Aderholt
Archer
Armey
Bachus
Baesler
Baker
Ballenger
Barr
Barrett (NE)
Bartlett
Barton
Bass
Bateman
Bereuter
Bilbray
Bilirakis
Bliley
Blumenauer
Blunt
Boehlert
Boehner
Bonilla
Bono
Boswell
Boyd
Brady (TX)
Bryant
Bunning
Burr
Burton
Buyer
Callahan
Calvert
Camp
Campbell
Canady
Cannon
Capps
Chabot
Chambliss
Christensen
Clayton
Clement
Coble
Coburn
Collins
Combest
Cook
Cooksey
Cox
Cramer
Crane
Crapo
Cubin
Cummings
Cunningham
Danner
Davis (VA)
Deal
DeGette
Delahunt
DeLay
Diaz-Balart
Dickey
Dingell
Doyle
Dreier
Duncan
Dunn
Ehlers
Ehrlich
Emerson
English
Ensign
Etheridge
Everett
Ewing
Fawell
Foley
Fossella
Fowler
Fox
Franks (NJ)
Frelinghuysen
Frost
Gallegly
Ganske
Gekas
Gibbons
Gilchrest
Gillmor
Gilman
Goode
Goodlatte
Goodling
Gordon
Goss
Graham
Granger
Greenwood
Gutknecht
Hall (TX)
Hamilton
Hansen
Hastert
Hastings (WA)
Hayworth
Hefley
Hefner
Hill
Hilleary
Hobson
Hoekstra
Holden
Hooley
Horn
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Inglis
Jackson-Lee (TX)
Jenkins
Johnson (CT)
Johnson, Sam
Jones
Kanjorski
Kasich
Kelly
Kennedy (MA)
Kennelly
Kildee
Kilpatrick
Kim
Kind (WI)
King (NY)
Kingston
Klug
Knollenberg
Kolbe
LaHood
Largent
Latham
LaTourette
Lazio
Leach
Lewis (CA)
Lewis (KY)
Linder
Lipinski
Livingston
LoBiondo
Lofgren
Lucas
Manton
Manzullo
Mascara
McCarthy (MO)
McCarthy (NY)
McCollum
McCrery
McDade
McHugh
McInnis
McIntosh
McIntyre
McKeon
Metcalf
Mica
Millender-McDonald
Miller (FL)
Mollohan
Moran (KS)
Moran (VA)
Morella
Murtha
Myrick
Nethercutt
Neumann
Ney
Northup
Norwood
Nussle
Obey
Ortiz
Oxley
Packard
Pallone
Pappas
Parker
Pascrell
Pastor
Paul
Paxon
Pease
Peterson (PA)
Petri
Pickering
Pitts
Pombo
Porter
Portman
Pryce (OH)
Quinn
Radanovich
Rahall
Ramstad
Redmond
Regula
Riggs
Riley
Rivers
Roemer
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Rothman
Roukema
Royce
Ryun
Salmon
Sanford
Sawyer
Saxton
Scarborough
Schaefer, Dan
Schaffer, Bob
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherman
Shimkus
Shuster
Skeen
Skelton
Smith (MI)
Smith (NJ)
Smith (OR)
Smith (TX)
Smith, Adam
Smith, Linda
Snowbarger
Snyder
Solomon
Souder
Spence
Stearns
Stump
Sununu
Talent
Tauzin
Taylor (MS)
Taylor (NC)
Thomas
Thornberry
Thune
Tiahrt
Traficant
Upton
Walsh
Wamp
Watkins
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
Wexler
Weygand
White
Whitfield
Wicker
Wilson
Wise
Wolf

NAYS--143

Abercrombie
Ackerman
Allen
Andrews
Baldacci
Barcia
Barrett (WI)
Becerra
Bentsen
Berman
Berry
Bishop
Blagojevich
Bonior
Borski
Boucher
Brady (PA)
Brown (CA)
Brown (FL)
Brown (OH)
Cardin
Carson
Castle
Clay
Clyburn
Condit
Conyers
Costello
Coyne
Davis (FL)
Davis (IL)
DeFazio
DeLauro
Deutsch
Dicks
Dixon
Doggett
Dooley
Edwards
Engel
Eshoo
Evans
Farr
Fattah
Fazio
Filner
Forbes
Frank (MA)
Furse
Gejdenson
Gephardt
Green
Hall (OH)
Harman
Hastings (FL)
Hilliard
Hinchey
Hinojosa
Hoyer
Istook
Jackson (IL)
John
Johnson (WI)
Johnson, E.B.
Kaptur
Kennedy (RI)
Kleczka
Klink
Kucinich
LaFalce
Lampson
Lantos
Lee
Levin
Lewis (GA)
Lowey
Luther
Maloney (CT)
Maloney (NY)
Martinez
Matsui
McDermott
McGovern
McHale
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Miller (CA)
Minge
Mink
Moakley
Nadler
Neal
Oberstar
Olver
Owens
Payne
Pelosi
Peterson (MN)
Pickett
Pomeroy
Poshard
Price (NC)
Rangel
Reyes
Rodriguez
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sandlin
Schumer
Scott
Serrano
Sisisky
Skaggs
Slaughter
Spratt
Stabenow
Stark
Stenholm
Stokes
Strickland
Stupak
Tanner
Tauscher
Thompson
Thurman
Tierney
Towns
Turner
Velazquez
Vento
Visclosky
Waters
Watt (NC)
Waxman
Woolsey
Wynn

NOT VOTING--12

Chenoweth
Doolittle
Ford
Gonzalez
Gutierrez
Herger
Jefferson
Markey
Torres
Yates
Young (AK)
Young (FL)

{time} 1040

Mr. RANGEL and Mr. MENENDEZ changed their vote from ``yea'' to
``nay.''
Ms. LOFGREN, Mrs. McCARTHY of New York, Mr. BILIRAKIS and Mr. CRAMER
changed their vote from ``nay'' to ``yea.''
So the resolution was agreed to.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
Mr. HASTERT. Mr. Speaker, pursuant to House Resolution 509, I call up
the bill (H.R. 4250) to provide new patient protections under group
health plans, and ask for its immediate consideration in the House.
The Clerk read the title of the bill.
The SPEAKER pro tempore (Mr. Kolbe). The bill is considered read for
amendment.
The text of H.R. 4250 is as follows:

[[Page H6307]]

H.R. 4250

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

(a) Short Title.--The Act may be cited as the ``Patient
Protection Act of 1998''.
(b) Table of Contents.--The table of contents is as
follows:

Sec. 1. Short title and table of contents.

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

Subtitle A--Patient Protections.

Sec. 1001. Patient access to unrestricted medical advice, emergency
medical care, obstetric and gynecological care, and
pediatric care.
Sec. 1002. Effective date and related rules.

Subtitle B--Patient Access to Information

Sec. 1101. Patient access to information regarding plan coverage,
managed care procedures, health care providers, and
quality of medical care.
Sec. 1102. Effective date.

Subtitle C--New Procedures and Access to Courts for Grievances Arising
under Group Health Plans

Sec. 1201. Special rules for group health plans.
Sec. 1202. Effective date.

Subtitle D--Affordable Health Coverage for Employees of Small
Businesses

Sec. 1301. Short title of subtitle.
Sec. 1302. Rules governing association health plans.

``Part 8--Rules Governing Association Health Plans

``Sec. 801. Association health plans.
``Sec. 802. Certification of association health plans.
``Sec. 803. Requirements relating to sponsors and boards of trustees.
``Sec. 804. Participation and coverage requirements.
``Sec. 805. Other requirements relating to plan documents, contribution
rates, and benefit options.
``Sec. 806. Maintenance of reserves and provisions for solvency for
plans providing health benefits in addition to health
insurance coverage.
``Sec. 807. Requirements for application and related requirements.
``Sec. 808. Notice requirements for voluntary termination.
``Sec. 809. Corrective actions and mandatory termination.
``Sec. 810. Trusteeship by the secretary of insolvent association
health plans providing health benefits in addition to
health insurance coverage.
``Sec. 811. State assessment authority.
``Sec. 812. Special rules for church plans.
``Sec. 813. Definitions and rules of construction.
Sec. 1303. Clarification of treatment of single employer arrangements.
Sec. 1304. Clarification of treatment of certain collectively bargained
arrangements.
Sec. 1305. Enforcement provisions relating to association health plans.
Sec. 1306. Cooperation between Federal and State authorities.
Sec. 1307. Effective date and transitional and other rules.

TITLE II--AMENDMENTS TO PUBLIC HEALTH SERVICE ACT

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

Sec. 2001. Patient access to unrestricted medical advice, emergency
medical care, obstetric and gynecological care, pediatric
care.
Sec. 2002. Requiring health maintenance organizations to offer option
of point-of-service coverage.

Subtitle B--Patient Access to Information

Sec. 2101. Patient access to information regarding plan coverage,
managed care procedures, health care providers, and
quality of medical care.
Sec. 2102. Reporting on fraud and abuse enforcement activities.
Sec. 2103. Effective date.

Subtitle C--HealthMarts

Sec. 2201. Short title of subtitle.
Sec. 2202. Expansion of consumer choice through HealthMarts.

``TITLE XXVIII--HEALTHMARTS

``Sec. 2801. Definition of HealthMart.
``Sec. 2802. Application of certain laws and requirements.
``Sec. 2803. Administration.
``Sec. 2804. Definitions.

Subtitle D--Community Health Organizations

Sec. 2301. Promotion of provision of insurance by community health
organizations.

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

Subtitle A--Patient Protections

Sec. 3001. Patient access to unrestricted medical advice, emergency
medical care, obstetric and gynecological care, pediatric
care.
Sec. 3002. Effective date and related rules.

Subtitle B--Patient Access to Information

Sec. 3101. Patient access to information regarding plan coverage,
managed care procedures, health care providers, and
quality of medical care.
Sec. 3102. Reporting on fraud and abuse enforcement activities.
Sec. 3103. Effective date.

Subtitle C--Medical Savings Accounts

Sec. 3201. Expansion of availability of medical savings accounts.
Sec. 3202. Exception from insurance limitation in case of medical
savings accounts.

TITLE IV--HEALTH CARE LAWSUIT REFORM

Subtitle A--General Provisions

Sec. 4001. Federal reform of health care liability actions.
Sec. 4002. Definitions.
Sec. 4003. Effective date.

Subtitle B--Uniform Standards for Health Care Liability Actions

Sec. 4011. Statute of limitations.
Sec. 4012. Calculation and payment of damages.
Sec. 4013. Alternative dispute resolution.

TITLE V--CONFIDENTIALITY OF HEALTH INFORMATION

Sec. 5001. Confidentiality of protected health information.

``Part D--Confidentiality of Protected Health Information

``Sec. 1181. Inspection and copying of protected health information.
``Sec. 1182. Supplementation of protected health information.
``Sec. 1183. Notice of confidentiality practices.
``Sec. 1184. Establishment of safeguards.
``Sec. 1185. Availability of protected health information for purposes
of health care operations.
``Sec. 1186. Relationship to other laws.
``Sec. 1187. Civil penalties.
``Sec. 1188. Definitions.
Sec. 5002. Study and report on effect of State law on health-related
research.
Sec. 5003. Study and report on State law on protected health
information.
Sec. 5004. Protection for certain information developed to reduce
mortality or morbidity or for improving patient care and
safety.

TITLE VI--MEDICAL SAVINGS ACCOUNTS FOR FEDERAL EMPLOYEES

Sec. 6001. Medical savings accounts for Federal employees.
Sec. 6002. Effective date.
TITLE I--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974
Subtitle A--Patient Protections

SEC. 1001. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE,
EMERGENCY MEDICAL CARE, OBSTETRIC AND
GYNECOLOGICAL CARE, AND PEDIATRIC CARE.

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

``SEC. 713. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE,
EMERGENCY MEDICAL CARE, OBSTETRIC AND
GYNECOLOGICAL CARE, PEDIATRIC CARE.

[[Page H6308]]

``(b) Patient Access to Emergency Medical Care.--
``(1) In general.--To the extent that the group health plan
(or health insurance issuer offering health insurance
coverage in connection with the plan) provides for any
benefits consisting of emergency medical care (as defined in
section 503(b)(9)(I)), except for items or services
specifically excluded--
``(A) the plan or issuer shall provide benefits, without
requiring preauthorization, for appropriate emergency medical
screening examinations (within the capability of the
emergency facility, including ancillary services routinely
available to the emergency facility) to the extent that a
prudent layperson, who possesses an average knowledge of
health and medicine, would determine such examinations to be
necessary in order to determine whether emergency medical
care (as so defined) is required, and
``(B) the plan or issuer shall provide benefits for
additional emergency medical services following an emergency
medical screening examination (if determined necessary under
subparagraph (A)) to the extent that a prudent emergency
medical professional would determine such additional
emergency services to be necessary to avoid the consequences
described in section 503(b)(9)(I).
``(2) Uniform cost-sharing required.--Nothing in this
subsection shall be construed as preventing a group health
plan or issuer from imposing any form of cost-sharing
applicable to any participant or beneficiary (including
coinsurance, copayments, deductibles, and any other charges)
in relation to benefits described in paragraph (1), if such
form of cost-sharing is uniformly applied under such plan,
with respect to similarly situated participants and
beneficiaries, to all benefits consisting of emergency
medical care (as defined in section 503(b)(9)(I)) provided to
such similarly situated participants and beneficiaries under
the plan.
``(c) Patient Access to Obstetric and Gynecological Care.
``(1) In general.--In any case in which a group health plan
(or a health insurance issuer offering health insurance
coverage in connection with the plan)--
``(A) provides benefits under the terms of the plan
consisting of--
``(i) routine gynecological care (such as preventive
women's health examinations), or
``(ii) routine obstetric care (such as routine pregnancy-
related services),
provided by a participating physician who specializes in such
care (or provides benefits consisting of payment for such
care), and
``(B) the plan requires or provides for designation by a
participant or beneficiary of a participating primary care
provider,

``Sec. 713. Patient access to unrestricted medical advice, emergency
medical care, obstetric and gynecological care, and
pediatric care.''.

SEC. 1002. EFFECTIVE DATE AND RELATED RULES.

(a) In General.--The amendments made by this subtitle shall
apply with respect to plan years beginning on or after
January 1 of the second calendar year following the date of
the enactment of this Act, except that the Secretary of Labor
may issue regulations before such date under such amendments.
The Secretary shall first issue regulations necessary to
carry out the amendments made by this section before the
effective date thereof.
(b) Limitation on Enforcement Actions.--No enforcement
action shall be taken, pursuant to the amendments made by
this subtitle, against a group health plan or health
insurance issuer with respect to a violation of a requirement
imposed by such amendments before the date of issuance of
regulations issued in connection with such requirement, if
the plan or issuer has sought to comply in good faith with
such requirement.
(c) Special Rule for Collective Bargaining Agreements.--In
the case of a group health plan maintained pursuant to one or
more collective bargaining agreements between employee
representatives and one or more employers ratified before the
date of the enactment of this Act, the provisions of
subsections (b), (c), and (d) of section 713 of the Employee
Retirement Income Security Act of 1974 (as added by this
subtitle) shall not apply with respect to plan years
beginning before the later of--
(1) the date on which the last of the collective bargaining
agreements relating to the plan terminates (determined
without regard to any extension thereof agreed to after the
date of the enactment of this Act), or
(2) January 1, 2001.

For purposes of this subsection, any plan amendment made
pursuant to a collective bargaining agreement relating to the
plan which amends the plan solely to conform to any
requirement added by this subtitle shall not be treated as a
termination of such collective bargaining agreement.
(d) Assuring Coordination.--The Secretary of Labor, the
Secretary of the Treasury, 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 two
or more such Secretaries have responsibility under the
provisions of this subtitle, section 2101, and subtitle A of
title III (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.
(e) 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 in connection with group health plans, 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 from decisions
denying or limiting 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 data otherwise required, 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.
Subtitle B--Patient Access to Information

SEC. 1101. PATIENT ACCESS TO INFORMATION REGARDING PLAN
COVERAGE, MANAGED CARE PROCEDURES, HEALTH CARE
PROVIDERS, AND QUALITY OF MEDICAL CARE.

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

``disclosure by group health plans

[[Page H6309]]

``(2) Health insurance issuers.--Each health insurance
issuer offering health insurance coverage in connection with
a group health plan shall provide the administrator on a
timely basis with the information necessary to enable the
administrator to comply with the requirements of paragraph
(1). To the extent that any such issuer provides on a timely
basis to plan participants and beneficiaries information
otherwise required under this part to be included in the
summary plan description, the requirements of sections
101(a)(1) and 104(b) shall be deemed satisfied in the case of
such plan with respect to such information.
``(b) Plan Benefits.--The information required under
subsection (a) includes the following:
``(1) Covered items and services.--
``(A) Categorization of included benefits.--A description
of covered benefits, categorized by--
``(i) types of items and services (including any special
disease management program), and
``(ii) types of health care professionals providing such
items and services.
``(B) Emergency medical care.--A description of the extent
to which the plan covers emergency medical care (including
the extent to which the plan provides for access to urgent
care centers), and any definitions provided under the plan
for the relevant plan terminology referring to such care.
``(C) Preventative services.--A description of the extent
to which the plan provides benefits for preventative
services.
``(D) Drug formularies.--A description of the extent to
which covered benefits are determined by the use or
application of a drug formulary and a summary of the process
for determining what is included in such formulary.
``(E) COBRA continuation coverage.--A description of the
benefits available under the plan pursuant to part 6.
``(2) Limitations, exclusions, and restrictions on covered
benefits.--
``(A) Categorization of excluded benefits.--A description
of benefits specifically excluded from coverage, categorized
by types of items and services.
``(B) Utilization review and preauthorization
requirements.--Whether coverage for medical care is limited
or excluded on the basis of utilization review or
preauthorization requirements.
``(C) Lifetime, annual, or other period limitations.--A
description of the circumstances under which, and the extent
to which, coverage is subject to lifetime, annual, or other
period limitations, categorized by types of benefits.
``(D) Custodial care.--A description of the circumstances
under which, and the extent to which, the coverage of
benefits for custodial care is limited or excluded, and a
statement of the definition used by the plan for custodial
care.
``(E) Experimental treatments.--Whether coverage for any
medical care is limited or excluded because it constitutes
experimental treatment or technology, and any definitions
provided under the plan for the relevant plan terminology
referring to such limited or excluded care.
``(F) Medical appropriateness or necessity.--Whether
coverage for medical care may be limited or excluded by
reason of a failure to meet the plan's requirements for
medical appropriateness or necessity, and any definitions
provided under the plan for the relevant plan terminology
referring to such limited or excluded care.
``(G) Second or subsequent opinions.--A description of the
circumstances under which, and the extent to which, coverage
for second or subsequent opinions is limited or excluded.
``(H) Specialty care.--A description of the circumstances
under which, and the extent to which, coverage of benefits
for specialty care is conditioned on referral from a primary
care provider.
``(I) Continuity of care.--A description of the
circumstances under which, and the extent to which, coverage
of items and services provided by any health care
professional is limited or excluded by reason of the
departure by the professional from any defined set of
providers.
``(J) Restrictions on coverage of emergency services.--A
description of the circumstances under which, and the extent
to which, the plan, in covering emergency medical care
furnished to a participant or beneficiary of the plan imposes
any financial responsibility described in subsection (c) on
participants or beneficiaries or limits or conditions
benefits for such care subject to any other term or condition
of such plan.
``(c) Participant's Financial Responsibilities.--The
information required under subsection (a) includes an
explanation of--
``(1) a participant's financial responsibility for payment
of premiums, coinsurance, copayments, deductibles, and any
other charges, and
``(2) the circumstances under which, and the extent to
which, the participant's financial responsibility described
in paragraph (1) may vary, including any distinctions based
on whether a health care provider from whom covered benefits
are obtained is included in a defined set of providers.
``(d) Dispute Resolution Procedures.--The information
required under subsection (a) includes a description of the
processes adopted by the plan pursuant to section 503(b),
including--
``(1) descriptions thereof relating specifically to--
``(A) coverage decisions,
``(B) internal review of coverage decisions, and
``(C) any external review of coverage decisions, and
``(2) the procedures and time frames applicable to each
step of the processes referred to in subparagraphs (A), (B),
and (C) of paragraph (1).
``(e) Information Available on Request.--
``(1) Access to plan benefit information in electronic
form.--
``(A) In general.--In addition to the information required
to be provided under section 104(b)(4), a group health plan
(and a health insurance issuer offering health insurance
coverage in connection with a group health plan) shall, upon
written request (made not more frequently than annually),
make available to participants and beneficiaries, in a
generally recognized electronic format, the following
information:
``(i) the latest summary plan description, including the
latest summary of material modifications; and
``(ii) the actual plan provisions setting forth the
benefits available under the plan

[[Page H6310]]

health care professional treating a participant or
beneficiary under a group health plan shall provide to the
participant or beneficiary, on request, a description of his
or her professional qualifications (including board
certification status, licensing status, and accreditation
status, if any), privileges, and experience and a general
description by category (including salary, fee-for-service,
capitation, and such other categories as may be specified in
regulations of the Secretary) of the applicable method by
which such professional is compensated in connection with the
provision of such medical care.
``(D) Information required from health care facilities on
request.--Any health care facility from which a participant
or beneficiary has sought treatment under a group health plan
shall provide to the participant or beneficiary, on request,
a description of the facility's corporate form or other
organizational form and all forms of licensing and
accreditation status (if any) assigned to the facility by
standard-setting organizations.
``(f) Access to Information Relevant to the Coverage
Options under which the Participant or Beneficiary is
Eligible to Enroll.--In addition to information otherwise
required to be made available under this section, a group
health plan (and a health insurance issuer offering health
insurance coverage in connection with a group health plan)
shall, upon written request (made not more frequently than
annually), make available to a participant in connection with
a period of enrollment the summary plan description for any
coverage option under the plan under which the participant is
eligible to enroll and any information described in clauses
(i), (ii), (iii), (vi), (vii), and (viii) of subsection
(e)(2)(B).
``(g) Advance Notice of Changes in Drug Formularies.--Not
later than 30 days before the effective of date of any
exclusion of a specific drug or biological from any drug
formulary under the plan that is used in the treatment of a
chronic illness or disease, the plan shall take such actions
as are necessary to reasonably ensure that plan participants
are informed of such exclusion. The requirements of this
subsection may be satisfied--
``(1) by inclusion of information in publications broadly
distributed by plan sponsors, employers, or employee
organizations,
``(2) by electronic means of communication (including the
Internet or proprietary computer networks in a format which
is readily accessible to participants),
``(3) by timely informing participants who, under an
ongoing program maintained under the plan, have submitted
their names for such notification, or
``(4) by any other reasonable means of timely informing
plan participants.
``(h) Definitions.--For purposes of this section--
``(1) Group health plan.--The term `group health plan' has
the meaning provided such term under section 503(b)(6).
``(2) Medical care.--The term `medical care' has the
meaning provided such term under section 733(a)(2).
``(3) Health insurance coverage.--The term `health
insurance coverage' has the meaning provided such term under
section 733(b)(1).
``(4) Health insurance issuer.--The term `health insurance
issuer' has the meaning provided such term under section
733(b)(2).''.
(b) Conforming Amendments.--
(1) Section 102(b) of such Act (29 U.S.C. 1022(b)) is
amended--
(A) by striking ``section 733(a)(1)'' each place it appears
and inserting ``section 503(b)(6)''; and
(B) by inserting before the period at the end the
following: ``; and, in the case of a group health plan (as
defined in section 111(h)(1)), the information required to be
included under section 111(a)''.
(2) The table of contents in section 1 of such Act is
amended by striking the item relating to section 111 and
inserting the following new items:

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

SEC. 1102. EFFECTIVE DATE AND RELATED RULES.

(a) In General.--The amendments made by this subtitle shall
apply with respect to plan years beginning on or after
January 1 of the second calendar year following the date of
the enactment of this Act. The Secretary shall first issue
all regulations necessary to carry out the amendments made by
this subtitle before such date.
(b) Limitation on Enforcement Actions.--No enforcement
action shall be taken, pursuant to the amendments made by
this subtitle, against a group health plan or health
insurance issuer with respect to a violation of a requirement
imposed by such amendments before the date of issuance of
final regulations issued in connection with such requirement,
if the plan or issuer has sought to comply in good faith with
such requirement.
(c) Assuring Coordination.--The Secretary of Labor, the
Secretary of Health and Human Services, and the Secretary of
the Treasury shall ensure, through the execution of an
interagency memorandum of understanding among such
Secretaries, that--
(1) regulations, rulings, and interpretations issued by
such Secretaries relating to the same matter over which two
or more such Secretaries have responsibility under the
provisions of this subtitle, subtitle B of title II, and
subtitle B of title III (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.
Subtitle C--New Procedures and Access to Courts for Grievances Arising
Under Group Health Plans

SEC. 1201. SPECIAL RULES FOR GROUP HEALTH PLANS.

(a) In General.--Section 503 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1133) is amended--
(1) by inserting ``(a) In General.--'' after ``Sec. 503.'';
(2) by inserting ``(other than a group health plan)'' after
``employee benefit plan''; and
(3) by adding at the end the following new subsection:
``(b) Special Rules for Group Health Plans.--
``(1) Coverage determinations.--Every group health plan
shall--
``(A) provide adequate notice in writing in accordance with
this subsection to any participant or beneficiary of any
adverse coverage decision with respect to benefits of such
participant or beneficiary under the plan, setting forth the
specific reasons for such coverage decision and any rights of
review provided under the plan, written in a manner
calculated to be understood by the participant,
``(B) provide such notice in writing also to any treating
medical care provider of such participant or beneficiary, if
such provider has claimed reimbursement for any item or
service involved in such coverage decision, or if a claim
submitted by the provider initiated the proceedings leading
to such decision,
``(C) afford a reasonable opportunity to any participant or
beneficiary who is in receipt of the notice of such adverse
coverage decision, and who files a written request for review
of the initial coverage decision within 180 days after
receipt of the notice of the initial decision, for a full and
fair de novo review of the decision by an appropriate named
fiduciary who did not make the initial decision, and
``(D) meet the additional requirements of this subsection.
``(2) Time limits for making initial coverage decisions for
benefits and completing internal appeals.--
``(A) Time limits for deciding requests for benefit
payments, requests for advance determination of coverage, and
requests for required determination of medical necessity.--
Except as provided in subparagraph (B)--
``(i) Initial decisions.--If a request for benefit
payments, a request for advance determination of coverage, or
a request for required determination of medical necessity is
submitted to a group health plan in such reasonable form as
may be required under the plan, the plan shall issue in
writing an initial coverage decision on the request before
the end of the initial decision period under paragraph (9)(J)
following the filing completion date. Failure to issue a
coverage decision on such a request before the end of the
period required under this clause shall be treated as an
adverse coverage decision for purposes of internal review
under clause (ii).
``(ii) Internal reviews of initial denials.--Upon the
written request of a participant or beneficiary for review of
an initial adverse coverage decision under clause (i), a
review by an appropriate named fiduciary (subject to
paragraph (3)) of the initial coverage decision shall be
completed, including issuance by the plan of a written
decision affirming, reversing, or modifying the initial
coverage decision, setting forth the grounds for such
decision, before the end of the internal review period
following the review filing date. Such decision shall be
treated as the final decision of the plan, subject to any
applicable reconsideration under paragraph (4). Failure to
issue before the end of such period such a written decision
requested under this clause shall be treated as a final
decision affirming the initial coverage decision, subject to
any applicable reconsideration under paragraph (4).
``(B) Time limits for making coverage decisions relating to
urgent and emergency medical care and for completing internal
appeals.--
``(i) Initial decisions.--A group health plan shall issue
in writing an initial coverage decision on any request for
expedited advance determination of coverage or for expedited
required determination of medical necessity submitted, in
such reasonable form as may be required under the plan--

``(I) before the end of the urgent decision period under
paragraph (9)(L), in cases involving urgent medical care but
not involving emergency medical care, or
``(II) before the end of the emergency decision period
under paragraph (9)(M), in cases involving emergency medical
care,

following the filing completion date. Failure to approve or
deny such a request before the end of the applicable decision
period shall be treated as a denial of the request for
purposes of internal review under clause (ii).
``(ii) Internal reviews of initial denials.--Upon the
written request of a participant or beneficiary for review of
an initial adverse coverage decision under clause (i), a
review by an appropriate named fiduciary (subject to
paragraph (3)) of the initial coverage decision shall be
completed, including

[[Page H6311]]

issuance by the plan of a written decision affirming,
reversing, or modifying the initial converge decision,
setting forth the grounds for the decision--

following the review filing date. Such decision shall be
treated as the final decision of the plan, subject to any
applicable reconsideration under paragraph (4). Failure to
issue before the end of the applicable decision period such a
written decision requested under this clause shall be treated
as a final decision affirming the initial coverage decision,
subject to any applicable reconsideration under paragraph
(4).
``(3) Physicians must review initial coverage decisions
involving medical appropriateness or necessity or
experimental treatment.--If an initial coverage decision
under paragraph (2)(A)(i) or (2)(B)(i) is based on a
determination that provision of a particular item or service
is excluded from coverage under the terms of the plan because
the provision of such item or service does not meet the
plan's requirements for medical appropriateness or necessity
or would constitute experimental treatment or technology, the
review under paragraph (2)(A)(ii) or (2)(B)(ii), to the
extent that it relates to medical appropriateness or
necessity or to experimental treatment or technology, shall
be conducted by a physician who is selected to serve as an
appropriate named fiduciary under the plan and who did not
make the initial denial.
``(4) Elective external review by independent medical
expert and reconsideration of initial review decision.--
``(A) In general.--The requirements of subparagraphs (B),
(C) and (D) shall apply--
``(i) in the case of any failure to timely issue a coverage
decision upon internal review which is deemed to be an
adverse coverage decision under paragraph (2)(A)(ii) or
(2)(B)(ii) (thereby failing to constitute a coverage decision
for which specific reasons have been set forth as required
under paragraph (1)(A)), and
``(ii) in the case of any adverse coverage decision which
is not reversed upon a review conducted pursuant to paragraph
(1)(C) (including any review pursuant to paragraph (2)(A)(ii)
or (2)(B)(ii)), if such coverage decision is based on a
determination that provision of a particular item or service
is excluded from coverage under the terms of the plan because
the provision of such item or service--

``(I) does not meet the plan's requirements for medical
appropriateness or necessity, or
``(II) would constitute experimental treatment or
technology.

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

with each such dollar amount subject to compounded annual
adjustments in the same manner and to the same extent as
apply under section 215(i) of the Social Security Act, except
that, for any calendar year, such amount as so adjusted shall
be deemed, solely for such calendar year, to be equal to such
amount rounded to the nearest $10. No such payment may be
required in the case of any participant or beneficiary whose
enrollment under the plan is paid for, in whole or in part,
under a State plan under title XIX or XXI of the Social
Security Act. Any such advance payment shall be subject to
reimbursement if the recommendation of the independent
medical expert or experts under subparagraph (C)(iii) is to
reverse or modify the coverage decision.
``(C) Reconsideration of initial review decision.--In any
case in which a participant or beneficiary who has received
an adverse decision of the plan upon initial review of the
coverage decision and who has not commenced review of the
initial coverage decision under section 502 makes a request
in writing, within 30 days after the date of such review
decision, for reconsideration of such review decision, the
terms of the plan shall provide for a procedure for such
reconsideration under which--
``(i) one or more independent medical experts will be
selected in accordance with subparagraph (E) to review the
coverage decision described in subparagraph (A) to determine
whether such decision was in accordance with the terms of the
plan and this title,
``(ii) the record for review (including a specification of
the terms of the plan and other criteria serving as the basis
for the initial review decision) will be presented to such
expert or experts and maintained in a manner which will
ensure confidentiality of such record,
``(iii) such expert or experts will report in writing to
the plan their recommendation, based on the determination
made under clause (i), as to whether such coverage decision
should be affirmed, modified, or reversed, setting forth the
grounds (including the clinical basis) for the
recommendation, and
``(iv) a physician who did not make the initial review
decision will reconsider the initial review decision to
determine whether such decision was in accordance with the
terms of the plan and this title and will issue a written
decision affirming, modifying, or reversing the initial
review decision, taking into account any recommendations
reported to the plan pursuant to clause (iii), and setting
forth the grounds for the decision.
``(D) Time limits for reconsideration.--Any review under
this paragraph shall be completed before the end of the
reconsideration period (as defined in paragraph (9)(O))
following the review filing date in connection with such
review. The decision under this paragraph affirming,
reversing, or modifying the initial review decision of the
plan shall be the final decision of the plan. Failure to
issue a written decision before the end of the
reconsideration period in any reconsideration requested under
this paragraph shall be treated as a final decision affirming
the initial review decision of the plan.
``(E) Independent medical experts.--
``(i) In general.--For purposes of this paragraph, the term
`independent medical expert' means, in connection with any
coverage decision by a group health plan, a professional--

``(I) who is a physician or, if appropriate, another
medical professional,
``(II) who has appropriate credentials and has attained
recognized expertise in the applicable medical field,
``(III) who was not involved in the initial decision or any
earlier review thereof, and
``(IV) who is selected in accordance with clause (ii) and
meets the requirements of clause (iii).

``(ii) Selection of medical experts.--An independent
medical expert is selected in accordance with this clause
if--

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

and the method of selection is devised to reasonably ensure
that the expert selected meets the independence requirements
of clause (iii).
``(iii) Independence requirements.--An independent medical
expert or another entity described in clause (ii) meets the
independence requirements of this clause if--

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

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

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

[[Page H6312]]

from coverage.--An adverse coverage decision based on a
determination that an item or service is excluded from
coverage under the terms of the plan shall not be subject to
review under this paragraph, unless such determination is
found in such decision to be based solely on the fact that
the item or service--
``(i) does not meet the plan's requirements for medical
appropriateness or necessity, or
``(ii) would constitute experimental treatment or
technology (as defined under the plan).
``(5) Permitted alternatives to required internal review.--
``(A) In general.--A group health plan shall not be treated
as failing to meet the requirements under paragraphs
(2)(A)(ii) and (2)(B)(ii) relating to review of initial
coverage decisions for benefits, if--
``(i) in lieu of the procedures relating to review under
paragraphs (2)(A)(ii) and (2)(B)(ii) and in accordance with
such regulations (if any) as may be prescribed by the
Secretary--

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

``(ii) the time limits not exceeding the time limits
otherwise applicable under paragraphs (2)(A)(ii) and
(2)(B)(ii) are incorporated in such alternative dispute
resolution procedure,
``(iii) any applicable requirement for review by a
physician under paragraph (3), unless waived by the
participant or beneficiary (in a manner consistent with such
regulations as the Secretary may prescribe to ensure
equitable procedures), is incorporated in such alternative
dispute resolution procedure, and
``(iv) the plan meets the additional requirements of
subparagraph (B).

In any case in which a procedure described in subclause (I)
or (II) of clause (i) is utilized and an alternative dispute
resolution procedure is voluntarily elected by the aggrieved
participant or beneficiary, the plan may require or allow (in
a manner consistent with such regulations as the Secretary
may prescribe to ensure equitable procedures) the aggrieved
participant or beneficiary to waive review of the coverage
decision under paragraph (3), to waive further review of the
coverage decision under paragraph (4) or section 502, and to
elect an alternative means of external review (other than
review under paragraph (4)).
``(B) Additional requirements.--The requirements of this
subparagraph are met if the means of resolution of dispute
allow for adequate presentation by the aggrieved participant
or beneficiary of scientific and medical evidence supporting
the position of such participant or beneficiary.
``(6) Permitted alternatives to required external review.--
A group health plan shall not be treated as failing to meet
the requirements of this subsection in connection with review
of coverage decisions under paragraph (4) if the aggrieved
participant or beneficiary elects to utilize a procedure in
connection with such review which is made generally available
under the plan (in a manner consistent with such regulations
as the Secretary may prescribe to ensure equitable
procedures) under which--
``(A) the plan agrees in advance of the recommendations of
the independent medical expert or experts under paragraph
(4)(C)(iii) to render a final decision in accordance with
such recommendations, and
``(B) the participant or beneficiary waives in advance any
right to review of the final decision under section 502.
``(7) Special rule for access to specialty care.-- In the
case of a request for advance determination of coverage
consisting of a request by a physician for a determination of
coverage of the services of a specialist with respect to any
condition, if coverage of the services of such specialist for
such condition is otherwise provided under the plan, the
initial coverage decision referred to in subparagraph (A)(i)
or (B)(i) of paragraph (2) shall be issued within the
specialty decision period. For purposes of this paragraph,
the term `specialist' means, with respect to a condition, a
physician who has a high level of expertise through
appropriate training and experience (including, in the case
of a child, appropriate pediatric expertise) to treat the
condition.
``(8) Group health plan defined.--For purposes of this
section--
``(A) In general.--The term `group health plan' shall have
the meaning provided in section 733(a).
``(B) Treatment of partnerships.--The provisions of
paragraphs (1), (2), and (3) of section 732(d) shall apply.
``(9) Other definitions.--For purposes of this subsection--
``(A) Request for benefit payments.--The term `request for
benefit payments' means a request, for payment of benefits by
a group health plan for medical care, which is made by or on
behalf of a participant or beneficiary after such medical
care has been provided.
``(B) Required determination of medical necessity.--The
term `required determination of medical necessity' means a
determination required under a group health plan solely that
proposed medical care meets, under the facts and
circumstances at the time of the determination, the plan's
requirements for medical appropriateness or necessity (which
may be subject to exceptions under the plan for fraud or
misrepresentation), irrespective of whether the proposed
medical care otherwise meets other terms and conditions of
coverage, but only if such determination does not constitute
an advance determination of coverage (as defined in
subparagraph (C)).
``(C) Advance determination of coverage.--The term `advance
determination of coverage' means a determination under a
group health plan that proposed medical care meets, under the
facts and circumstances at the time of the determination, the
plan's terms and conditions of coverage (which may be subject
to exceptions under the plan for fraud or misrepresentation).
``(D) Request for advance determination of coverage.--The
term `request for advance determination of coverage' means a
request for an advance determination of coverage of medical
care which is made by or on behalf of a participant or
beneficiary before such medical care is provided.
``(E) Request for expedited advance determination of
coverage.--The term `request for expedited advance
determination of coverage' means a request for advance
determination of coverage, in any case in which the proposed
medical care constitutes urgent medical care or emergency
medical care.
``(F) Request for required determination of medical
necessity.--The term `request for required determination of
medical necessity' means a request for a required
determination of medical necessity for medical care which is
made by or on behalf of a participant or beneficiary before
the medical care is provided.
``(G) Request for expedited required determination of
medical necessity.--The term `request for expedited required
determination of medical necessity' means a request for
required determination of medical necessity in any case in
which the proposed medical care constitutes urgent medical
care or emergency medical care.
``(H) Urgent medical care.--The term `urgent medical care'
means medical care in any case in which an appropriate
physician has certified in writing (or as otherwise provided
in regulations of the Secretary) that failure to provide the
participant or beneficiary with such medical care within 45
days can reasonably be expected to result in either--
``(i) the imminent death of the participant or beneficiary,
or
``(ii) the immediate, serious, and irreversible
deterioration of the health of the participant or beneficiary
which will significantly increase the likelihood of death of,
or irreparable harm to, the participant or beneficiary.
``(I) Emergency medical care.--The term `emergency medical
care' means medical care in any case in which an appropriate
physician has certified in writing (or as otherwise provided
in regulations of the Secretary)--
``(i) that failure to immediately provide the care to the
participant or beneficiary could reasonably be expected to
result in--

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

[[Page H6313]]

such other reasonable form as may be specified by the plan)
to make an initial coverage decision.
``(Q) Review filing date.--The term `review filing date'
means, in connection with a group health plan, the date as of
which the appropriate named fiduciary (or the independent
medical expert or experts in the case of a review under
paragraph (4)) is in receipt of all information reasonably
required (in writing or in such other reasonable form as may
be specified by the plan) to make a decision to affirm,
modify, or reverse a coverage decision.
``(R) Medical care.--The term `medical care' has the
meaning provided such term by section 733(a)(2).
``(S) Health insurance coverage.--The term `health
insurance coverage' has the meaning provided such term by
section 733(b)(1).
``(T) Health insurance issuer.--The term `health insurance
issuer' has the meaning provided such term by section
733(b)(2).
``(U) Written or in writing.--
``(i) In general.--A request or decision shall be deemed to
be `written' or `in writing' if such request or decision is
presented in a generally recognized printable or electronic
format. The Secretary may by regulation provide for
presentation of information otherwise required to be in
written form in such other forms as may be appropriate under
the circumstances.
``(ii) Medical appropriateness or experimental treatment
determinations.--For purposes of this subparagraph, in the
case of a request for advance determination of coverage, a
request for expedited advance determination of coverage, a
request for required determination of medical necessity, or a
request for expedited required determination of medical
necessity, if the decision on such request is conveyed to the
provider of medical care or to the participant or beneficiary
by means of telephonic or other electronic communications,
such decision shall be treated as a written decision.''.
(b) Civil Penalties.--
(1) In general.--Section 502(c) of such Act (29 U.S.C.
1132(c)) is amended by redesignating paragraphs (6) and (7)
as paragraphs (7) and (8), respectively, and by inserting
after paragraph (5) the following new paragraph:
``(6)(A)(i) In any case in which--
``(I) a benefit under a group health plan (as defined in
section 503(b)(8)) is not timely provided to a participant or
beneficiary pursuant to a final decision of the plan which
was not in accordance with the terms of the plan or this
title, and
``(II) such final decision of the plan is contrary to a
recommendation described in section 503(b)(4)(C)(iii),

any person acting in the capacity of a fiduciary of such plan
so as to cause such failure may, in the court's discretion,
be liable to the aggrieved participant or beneficiary for a
civil penalty.
``(ii) Such civil penalty shall be in the amount of up to
$250 a day from the date on which the recommendation was made
to the plan until the date the failure to provide benefits is
corrected, up to a total amount not to exceed $100,000.
``(B) In any action commenced under subsection (a) by a
participant or beneficiary with respect to a group health
plan (as defined in section 503(b)(8)) in which the plaintiff
alleges that a person, in the capacity of a fiduciary and in
violation of the terms of the plan or this title, has taken
an action resulting in an adverse coverage decision in
violation of the terms of the plan, or has failed to take an
action for which such person is responsible under the plan
and which is necessary under the plan for a favorable
coverage decision, upon finding in favor of the plaintiff, if
such action was commenced after a final decision of the plan
upon review which included a review under section 503(b)(4)
or such action was commenced under subsection (b)(4) of this
section, the court shall cause to be served on the defendant
an order requiring the defendant--
``(i) to cease and desist from the alleged action or
failure to act, and
``(ii) to pay to the plaintiff a reasonable attorney's fee
and other reasonable costs relating to the prosecution of the
action on the charges on which the plaintiff prevails.

The remedies provided under this subparagraph shall be in
addition to remedies otherwise provided under this section.
``(C)(i) The Secretary may assess a civil penalty against a
person acting in the capacity of a fidicuary of one or more
group health plans (as defined in section 503(b)(8)) for--
``(I) any pattern or practice of repeated adverse coverage
decisions in violation of the terms of the plan or plans or
this title, or
``(II) any pattern or practice of repeated violations of
the requirements of section 503 with respect to such plan or
plans.

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

SEC. 1202. EFFECTIVE DATE.

(a) In General.--The amendments made by this subtitle shall
apply with respect to grievances arising in plan years
beginning on or after January 1 of the second calendar year
following the date of the enactment of this Act. The
Secretary shall first issue all regulations necessary to
carry out the amendments made by this subtitle before such
date.
(b) Limitation on Enforcement Actions.--No enforcement
action shall be taken, pursuant to the amendments made by
this subtitle, against a group health plan or health
insurance issuer with respect to a violation of a requirement
imposed by such amendments before the date of issuance of
final regulations issued in connection with such requirement,
if the plan or issuer has sought to comply in good faith with
such requirement.
(c) Collective Bargaining Agreements.--Any plan amendment
made pursuant to a collective bargaining agreement relating
to the plan which amends the plan solely to conform to any
requirement added by this subtitle shall not be treated as a
termination of such collective bargaining agreement.
Subtitle D--Affordable Health Coverage for Employees of Small
Businesses

SEC. 1301. SHORT TITLE OF SUBTITLE.

This subtitle may be cited as the ``Small Business
Affordable Health Coverage Act of 1998''.

SEC. 1302. RULES GOVERNING ASSOCIATION HEALTH PLANS.

(a) In General.--Subtitle B of title I of the Employee
Retirement Income Security Act of 1974 is amended by adding
after part 7 the following new part:

``Part 8--Rules Governing Association Health Plans

``SEC. 801. ASSOCIATION HEALTH PLANS.

[[Page H6314]]

periodic meetings on at least an annual basis, as a trade
association, an industry association (including a rural
electric cooperative association or a rural telephone
cooperative association), a professional association, or a
chamber of commerce (or similar business association,
including a corporation or similar organization that operates
on a cooperative basis (within the meaning of section 1381 of
the Internal Revenue Code of 1986)), for substantial purposes
other than that of obtaining or providing medical care,
``(2) is established as a permanent entity which receives
the active support of its members and collects from its
members on a periodic basis dues or payments necessary to
maintain eligibility for membership in the sponsor, and
``(3) does not condition membership, such dues or payments,
or coverage under the plan on the basis of health status-
related factors with respect to the employees of its members
(or affiliated members), or the dependents of such employees,
and does not condition such dues or payments on the basis of
group health plan participation.

Any sponsor consisting of an association of entities which
meet the requirements of paragraphs (1) and (2) shall be
deemed to be a sponsor described in this subsection.

``SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH PLANS.

``(a) In General.--The applicable authority shall prescribe
by regulation a procedure under which, subject to subsection
(b), the applicable authority shall certify association
health plans which apply for certification as meeting the
requirements of this part.
``(b) Standards.--Under the procedure prescribed pursuant
to subsection (a), the applicable authority shall certify an
association health plan as meeting the requirements of this
part only if the applicable authority is satisfied that--
``(1) such certification--
``(A) is administratively feasible,
``(B) is not adverse to the interests of the individuals
covered under the plan, and
``(C) is protective of the rights and benefits of the
individuals covered under the plan, and
``(2) the applicable requirements of this part are met (or,
upon the date on which the plan is to commence operations,
will be met) with respect to the plan.
``(c) Requirements Applicable to Certified Plans.--An
association health plan with respect to which certification
under this part is in effect shall meet the applicable
requirements of this part, effective on the date of
certification (or, if later, on the date on which the plan is
to commence operations).
``(d) Requirements for Continued Certification.--The
applicable authority may provide by regulation for continued
certification of association health plans under this part,
including requirements relating to commencement of new
benefit options by plans which do not consist of health
insurance coverage.
``(e) Class Certification for Fully Insured Plans.--The
applicable authority shall establish a class certification
procedure for association health plans under which all
benefits consist of health insurance coverage. Under such
procedure, the applicable authority shall provide for the
granting of certification under this part to the plans in
each class of such association health plans upon appropriate
filing under such procedure in connection with plans in such
class and payment of the prescribed fee under section 807(a).

``SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF
TRUSTEES.

``(a) Sponsor.--The requirements of this subsection are met
with respect to an association health plan if--
``(1) the sponsor (together with its immediate predecessor,
if any) has met (or is deemed under this part to have met)
for a continuous period of not less than 3 years ending with
the date of the application for certification under this
part, the requirements of paragraphs (1) and (2) of section
801(b), and
``(2) the sponsor meets (or is deemed under this part to
meet) the requirements of section 801(b)(3).
``(b) Board of Trustees.--The requirements of this
subsection are met with respect to an association health plan
if the following requirements are met:
``(1) Fiscal control.--The plan is operated, pursuant to a
trust agreement, by a board of trustees which has complete
fiscal control over the plan and which is responsible for all
operations of the plan.
``(2) Rules of operation and financial controls.--The board
of trustees has in effect rules of operation and financial
controls, based on a 3-year plan of operation, adequate to
carry out the terms of the plan and to meet all requirements
of this title applicable to the plan.
``(3) Rules governing relationship to participating
employers and to contractors.--
``(A) In general.--Except as provided in subparagraph (B),
the members of the board of trustees are individuals selected
from individuals who are the owners, officers, directors, or
employees of the participating employers or who are partners
in the participating employers and actively participate in
the business.
``(B) Limitation.--
``(i) General rule.--Except as provided in clauses (ii) and
(iii), no such member is an owner, officer, director, or
employee of, or partner in, a contract administrator or other
service provider to the plan.
``(ii) Limited exception for providers of services solely
on behalf of the sponsor.--Officers or employees of a sponsor
which is a service provider (other than a contract
administrator) to the plan may be members of the board if
they constitute not more than 25 percent of the membership of
the board and they do not provide services to the plan other
than on behalf of the sponsor.
``(iii) Treatment of providers of medical care.--In the
case of a sponsor which is an association whose membership
consists primarily of providers of medical care, clause (i)
shall not apply in the case of any service provider described
in subparagraph (A) who is a provider of medical care under
the plan.
``(C) Sole authority.--The board has sole authority to
approve applications for participation in the plan and to
contract with a service provider to administer the day-to-day
affairs of the plan.
``(c) Treatment of Franchise Networks.--In the case of a
group health plan which is established and maintained by a
franchiser for a franchise network consisting of its
franchisees--
``(1) the requirements of subsection (a) and section
801(a)(1) shall be deemed met if such requirements would
otherwise be met if the franchiser were deemed to be the
sponsor referred to in section 801(b), such network were
deemed to be an association described in section 801(b), and
each franchisee were deemed to be a member (of the
association and the sponsor) referred to in section 801(b),
and
``(2) the requirements of section 804(a)(1) shall be deemed
met.
``(d) Certain Collectively Bargained Plans.--
``(1) In general.--In the case of a group health plan
described in paragraph (2)--
``(A) the requirements of subsection (a) and section
801(a)(1) shall be deemed met,
``(B) the joint board of trustees shall be deemed a board
of trustees with respect to which the requirements of
subsection (b) are met, and
``(C) the requirements of section 804 shall be deemed met.
``(2) Requirements.--A group health plan is described in
this paragraph if--
``(A) the plan is a multiemployer plan, or
``(B) the plan is in existence on April 1, 1997, and would
be described in section 3(40)(A)(i) but solely for the
failure to meet the requirements of section 3(40)(C)(ii).

``SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.

``(a) Covered Employers and Individuals.--The requirements
of this subsection are met with respect to an association
health plan if, under the terms of the plan--
``(1) all participating employers must be members or
affiliated members of the sponsor, except that, in the case
of a sponsor which is a professional association or other
individual-based association, if at least one of the
officers, directors, or employees of an employer, or at least
one of the individuals who are partners in an employer and
who actively participates in the business, is a member or
affiliated member of the sponsor, participating employers may
also include such employer, and
``(2) all individuals commencing coverage under the plan
after certification under this part must be--
``(A) active or retired owners (including self-employed
individuals), officers, directors, or employees of, or
partners in, participating employers, or
``(B) the beneficiaries of individuals described in
subparagraph (A).
``(b) Coverage of Previously Uninsured Employees.--
``(1) In general.--Subject to paragraph (2), the
requirements of this subsection are met with respect to an
association health plan if, under the terms of the plan, no
affiliated member of the sponsor may be offered coverage
under the plan as a participating employer, unless--
``(A) the affiliated member was an affiliated member on the
date of certification under this part, or
``(B) during the 12-month period preceding the date of the
offering of such coverage, the affiliated member has not
maintained or contributed to a group health plan with respect
to any of its employees who would otherwise be eligible to
participate in such association health plan.
``(2) Limitation.--The requirements of this subsection
shall apply only in the case of plans which were in existence
on the date of the enactment of the Small Business Affordable
Health Coverage Act of 1998.
``(c) Individual Market Unaffected.--The requirements of
this subsection are met with respect to an association health
plan if, under the terms of the plan, no participating
employer may provide health insurance coverage in the
individual market for any employee not covered under the plan
which is similar to the coverage contemporaneously provided
to employees of the employer under the plan, if such
exclusion of the employee from coverage under the plan is
based on a health status-related factor with respect to the
employee and such employee would, but for such exclusion on
such basis, be eligible for coverage under the plan.
``(d) Prohibition of Discrimination Against Employers and
Employees Eligible to Participate.--The requirements of this
subsection are met with respect to an association health plan
if--
``(1) under the terms of the plan, no employer meeting the
preceding requirements of this section is excluded as a
participating

[[Page H6315]]

employer, unless participation or contribution requirements
of the type referred to in section 2711 of the Public Health
Service Act are not met with respect to the excluded
employer,
``(2) the applicable requirements of sections 701, 702, and
703 are met with respect to the plan, and
``(3) applicable benefit options under the plan are
actively marketed to all eligible participating employers.

``SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS,
CONTRIBUTION RATES, AND BENEFIT OPTIONS.

subject to the requirements of section 702(b) relating to
contribution rates.
``(3) Floor for number of covered individuals with respect
to certain plans.--If any benefit option under the plan does
not consist of health insurance coverage, the plan has as of
the beginning of the plan year not fewer than 1,000
participants and beneficiaries.
``(4) Marketing requirements.--
``(A) In general.--If a benefit option which consists of
health insurance coverage is offered under the plan, State-
licensed insurance agents shall be used to distribute to
small employers coverage which does not consist of health
insurance coverage in a manner comparable to the manner in
which such agents are used to distribute health insurance
coverage.
``(B) State-licensed insurance agents.--For purposes of
subparagraph (A), the term `State-licensed insurance agents'
means one or more agents who are licensed in a State and are
subject to the laws of such State relating to licensure,
qualification, testing, examination, and continuing education
of persons authorized to offer, sell, or solicit health
insurance coverage in such State.
``(5) Regulatory requirements.--Such other requirements as
the applicable authority may prescribe by regulation as
necessary to carry out the purposes of this part.
``(b) Ability of Association Health Plans to Design Benefit
Options.--Nothing in this part or any provision of State law
(as defined in section 514(c)(1)) shall be construed to
preclude an association health plan, or a health insurance
issuer offering health insurance coverage in connection with
an association health plan, from exercising its sole
discretion in selecting the specific items and services
consisting of medical care to be included as benefits under
such plan or coverage, except (subject to section 514) in the
case of any law to the extent that it (1) prohibits an
exclusion of a specific disease from such coverage, or (2) is
not preempted under section 731(a)(1) with respect to matters
governed by section 711 or 712.

``SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS FOR
SOLVENCY FOR PLANS PROVIDING HEALTH BENEFITS IN
ADDITION TO HEALTH INSURANCE COVERAGE.

and
``(B) establishes and maintains aggregate and specific
excess/stop loss insurance and solvency indemnification, with
respect to such additional benefit options for which risk of
loss has not yet been transferred, as follows:
``(i) The plan shall secure aggregate excess/stop loss
insurance for the plan with an attachment point which is not
greater than 125 percent of expected gross annual claims. The
applicable authority may by regulation provide for upward
adjustments in the amount of such percentage in specified
circumstances in which the plan specifically provides for and
maintains reserves in excess of the amounts required under
subparagraph (A).
``(ii) The plan shall secure specific excess/stop loss
insurance for the plan with an attachment point which is at
least equal to an amount recommended by the plan's qualified
actuary (but not more than $200,000). The applicable
authority may by regulation provide for adjustments in the
amount of such insurance in specified circumstances in which
the plan specifically provides for and maintains reserves in
excess of the amounts required under subparagraph (A).
``(iii) The plan shall secure indemnification insurance for
any claims which the plan is unable to satisfy by reason of a
plan termination.

Any regulations prescribed by the applicable authority
pursuant to clause (i) or (ii) of subparagraph (B) may allow
for such adjustments in the required levels of excess/stop
loss insurance as the qualified actuary may recommend, taking
into account the specific circumstances of the plan.
``(b) Minimum Surplus in Addition to Claims Reserves.--The
requirements of this subsection are met if the plan
establishes and maintains surplus in an amount at least equal
to $2,000,000, reduced in accordance with a scale, prescribed
in regulations of the applicable authority to an amount not
less than $500,000, based on the level of aggregate and
specific excess/stop loss insurance provided with respect to
such plan.
``(c) Additional Requirements.--In the case of any
association health plan described in subsection (a)(2), the
applicable authority may provide such additional requirements
relating to reserves and excess/stop loss insurance as the
applicable authority considers appropriate. Such requirements
may be provided, by regulation or otherwise, with respect to
any such plan or any class of such plans.
``(d) Adjustments for Excess/Stop Loss Insurance.--The
applicable authority may provide for adjustments to the
levels of reserves otherwise required under subsections (a)
and (b) with respect to any plan or class of plans to take
into account excess/stop loss insurance provided with respect
to such plan or plans.
``(e) Alternative Means of Compliance.--The applicable
authority may permit an association health plan described in
subsection (a)(2) to substitute, for all or part of the
requirements of this section (except subsection
(a)(2)(B)(iii)), such security, guarantee, hold-harmless
arrangement, or other financial arrangement as the applicable
authority determines to be adequate to enable the plan to
fully meet all its financial obligations on a timely basis
and is otherwise no less protective of the interests of
participants and beneficiaries than the requirements for
which it is substituted. The applicable authority may take
into account, for purposes of this subsection, evidence
provided by the plan or sponsor which demonstrates an
assumption of liability with respect to the plan. Such
evidence may be in the form of a contract of indemnification,
lien, bonding, insurance, letter of credit, recourse under
applicable terms of the plan in the form of assessments of
participating employers, security, or other financial
arrangement.
``(f) Measures to Ensure Continued Payment of Benefits by
Certain Plans in Distress.--
``(1) Payments by certain plans to association health plan
fund.--
``(A) In general.--In the case of an association health
plan described in subsection (a)(2), the requirements of this
subsection are met if the plan makes payments into the
Association Health Plan Fund under this subparagraph when
they are due. Such payments shall consist of annual payments
in the amount of $5,000, and, in addition to such annual
payments, such supplemental payments as the Secretary may
determine to be necessary under paragraph (2). Payments under
this paragraph are payable to the Fund at the time determined
by the Secretary. Initial payments are due in advance of
certification under this part. Payments shall continue to
accrue until a plan's assets are distributed pursuant to a
termination procedure.
``(B) Penalties for failure to make payments.--If any
payment is not made by a plan when it is due, a late payment
charge of not more than 100 percent of the payment which was
not timely paid shall be payable by the plan to the Fund.
``(C) Continued duty of the secretary.--The Secretary shall
not cease to carry out the provisions of paragraph (2) on
account of the failure of a plan to pay any payment when due.
``(2) Payments by secretary to continue excess stop/loss
insurance coverage and indemnification insurance coverage for
certain plans.--In any case in which the applicable authority
determines that there is,

[[Page H6316]]

or that there is reason to believe that there will be, (A) a
failure to take necessary corrective actions under section
809(a) with respect to an association health plan described
in subsection (a)(2), or (B) a termination of such a plan
under section 809(b) or 810(b)(8) (and, if the applicable
authority is not the Secretary, certifies such determination
to the Secretary), the Secretary shall determine the amounts
necessary to make payments to an insurer (designated by the
Secretary) to maintain in force excess/stop loss insurance
coverage or indemnification insurance coverage for such plan,
if the Secretary determines that there is a reasonable
expectation that, without such payments, claims would not be
satisfied by reason of termination of such coverage. The
Secretary shall, to the extent provided in advance in
appropriation Acts, pay such amounts so determined to the
insurer designated by the Secretary.
``(3) Association health plan fund.--
``(A) In general.--There is established on the books of the
Treasury a fund to be known as the `Association Health Plan
Fund'. The Fund shall be available for making payments
pursuant to paragraph (2). The Fund shall be credited with
payments received pursuant to paragraph (1)(A), penalties
received pursuant to paragraph (1)(B), and earnings on
investments of amounts of the Fund under subparagraph (B).
``(B) Investment.--Whenever the Secretary determines that
the moneys of the fund are in excess of current needs, the
Secretary may request the investment of such amounts as the
Secretary determines advisable by the Secretary of the
Treasury in obligations issued or guaranteed by the United
States.
``(g) Excess/Stop Loss Insurance.--For purposes of this
section--
``(1) Aggregate excess/stop loss insurance.--The term
`aggregate excess/stop loss insurance' means, in connection
with an association health plan, a contract--
``(A) under which an insurer (meeting such minimum
standards as may be prescribed in regulations of the
applicable authority) provides for payment to the plan with
respect to aggregate claims under the plan in excess of an
amount or amounts specified in such contract,
``(B) which is guaranteed renewable, and
``(C) which allows for payment of premiums by any third
party on behalf of the insured plan.
``(2) Specific excess/stop loss insurance.--The term
`specific excess/stop loss insurance' means , in connection
with an association health plan, a contract--
``(A) under which an insurer (meeting such minimum
standards as may be prescribed in regulations of the
applicable authority) provides for payment to the plan with
respect to claims under the plan in connection with a covered
individual in excess of an amount or amounts specified in
such contract in connection with such covered individual,
``(B) which is guaranteed renewable, and
``(C) which allows for payment of premiums by any third
party on behalf of the insured plan.
``(h) Indemnification Insurance.--For purposes of this
section, the term `indemnification insurance' means, in
connection with an association health plan, a contract--
``(1) under which an insurer (meeting such minimum
standards as may be prescribed in regulations of the
applicable authority) provides for payment to the plan with
respect to claims under the plan which the plan is unable to
satisfy by reason of a termination pursuant to section 809(b)
(relating to mandatory termination),
``(2) which is guaranteed renewable and noncancellable for
any reason (except as may be provided in regulations of the
applicable authority), and
``(3) which allows for payment of premiums by any third
party on behalf of the insured plan.
``(i) Reserves.--For purposes of this section, the term
`reserves' means, in connection with an association health
plan, plan assets which meet the fiduciary standards under
part 4 and such additional requirements regarding liquidity
as may be prescribed in regulations of the applicable
authority.
``(j) Regulations Prescribed under Negotiated Rulemaking.--
The regulations under this section shall be prescribed under
negotiated rulemaking in accordance with subchapter III of
chapter 5 of title 5, United States Code, except that, in
establishing the negotiated rulemaking committee for purposes
of such rulemaking, the applicable authority shall include
among persons invited to membership on the committee at least
one of each of the following:
``(1) a representative of the National Association of
Insurance Commissioners,
``(2) a representative of the American Academy of
Actuaries,
``(3) a representative of the State governments, or their
interests,
``(4) a representative of existing self-insured
arrangements, or their interests,
``(5) a representative of associations of the type referred
to in section 801(b)(1), or their interests, and
``(6) a representative of multiemployer plans that are
group health plans, or their interests.

``SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED
REQUIREMENTS.

``(a) Filing Fee.--Under the procedure prescribed pursuant
to section 802(a), an association health plan shall pay to
the applicable authority at the time of filing an application
for certification under this part a filing fee in the amount
of $5,000, which shall be available in the case of the
Secretary, to the extent provided in appropriation Acts, for
the sole purpose of administering the certification
procedures applicable with respect to association health
plans.
``(b) Information To Be Included in Application for
Certification.--An application for certification under this
part meets the requirements of this section only if it
includes, in a manner and form prescribed in regulations of
the applicable authority, at least the following information:
``(1) Identifying information.--The names and addresses
of--
``(A) the sponsor, and
``(B) the members of the board of trustees of the plan.
``(2) States in which plan intends to do business.--The
States in which participants and beneficiaries under the plan
are to be located and the number of them expected to be
located in each such State.
``(3) Bonding requirements.--Evidence provided by the board
of trustees that the bonding requirements of section 412 will
be met as of the date of the application or (if later)
commencement of operations.
``(4) Plan documents.--A copy of the documents governing
the plan (including any bylaws and trust agreements), the
summary plan description, and other material describing the
benefits that will be provided to participants and
beneficiaries under the plan.
``(5) Agreements with service providers.--A copy of any
agreements between the plan and contract administrators and
other service providers.
``(6) Funding report.--In the case of association health
plans providing benefits options in addition to health
insurance coverage, a report setting forth information with
respect to such additional benefit options determined as of a
date within the 120-day period ending with the date of the
application, including the following:
``(A) Reserves.--A statement, certified by the board of
trustees of the plan, and a statement of actuarial opinion,
signed by a qualified actuary, that all applicable
requirements of section 806 are or will be met in accordance
with regulations which the applicable authority shall
prescribe.
``(B) Adequacy of contribution rates.--A statement of
actuarial opinion, signed by a qualified actuary, which sets
forth a description of the extent to which contribution rates
are adequate to provide for the payment of all obligations
and the maintenance of required reserves under the plan for
the 12-month period beginning with such date within such 120-
day period, taking into account the expected coverage and
experience of the plan. If the contribution rates are not
fully adequate, the statement of actuarial opinion shall
indicate the extent to which the rates are inadequate and the
changes needed to ensure adequacy.
``(C) Current and projected value of assets and
liabilities.--A statement of actuarial opinion signed by a
qualified actuary, which sets forth the current value of the
assets and liabilities accumulated under the plan and a
projection of the assets, liabilities, income, and expenses
of the plan for the 12-month period referred to in
subparagraph (B). The income statement shall identify
separately the plan's administrative expenses and claims.
``(D) Costs of coverage to be charged and other expenses.--
A statement of the costs of coverage to be charged, including
an itemization of amounts for administration, reserves, and
other expenses associated with the operation of the plan.
``(E) Other information.--Any other information which may
be prescribed in regulations of the applicable authority as
necessary to carry out the purposes of this part.
``(c) Filing Notice of Certification With States.--A
certification granted under this part to an association
health plan shall not be effective unless written notice of
such certification is filed with the applicable State
authority of each State in which at least 25 percent of the
participants and beneficiaries under the plan are located.
For purposes of this subsection, an individual shall be
considered to be located in the State in which a known
address of such individual is located or in which such
individual is employed.
``(d) Notice of Material Changes.--In the case of any
association health plan certified under this part,
descriptions of material changes in any information which was
required to be submitted with the application for the
certification under this part shall be filed in such form and
manner as shall be prescribed in regulations of the
applicable authority. The applicable authority may require by
regulation prior notice of material changes with respect to
specified matters which might serve as the basis for
suspension or revocation of the certification.
``(e) Reporting Requirements for Certain Association Health
Plans.--An association health plan certified under this part
which provides benefit options in addition to health
insurance coverage for such plan year shall meet the
requirements of section 103 by filing an annual report under
such section which shall include information described in
subsection (b)(6) with respect to the plan year and,
notwithstanding section 104(a)(1)(A), shall be filed with the
applicable authority not later than 90 days after the close
of the plan year (or on such later date as may be prescribed
by the applicable authority).
``(f) Engagement of Qualified Actuary.--The board of
trustees of each association

[[Page H6317]]

health plan which provides benefits options in addition to
health insurance coverage and which is applying for
certification under this part or is certified under this part
shall engage, on behalf of all participants and
beneficiaries, a qualified actuary who shall be responsible
for the preparation of the materials comprising information
necessary to be submitted by a qualified actuary under this
part. The qualified actuary shall utilize such assumptions
and techniques as are necessary to enable such actuary to
form an opinion as to whether the contents of the matters
reported under this part--
``(1) are in the aggregate reasonably related to the
experience of the plan and to reasonable expectations, and
``(2) represent such actuary's best estimate of anticipated
experience under the plan.
The opinion by the qualified actuary shall be made with
respect to, and shall be made a part of, the annual report.

``SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.

``Except as provided in section 809(b), an association
health plan which is or has been certified under this part
may terminate (upon or at any time after cessation of
accruals in benefit liabilities) only if the board of
trustees--
``(1) not less than 60 days before the proposed termination
date, provides to the participants and beneficiaries a
written notice of intent to terminate stating that such
termination is intended and the proposed termination date,
``(2) develops a plan for winding up the affairs of the
plan in connection with such termination in a manner which
will result in timely payment of all benefits for which the
plan is obligated, and
``(3) submits such plan in writing to the applicable
authority.

Actions required under this section shall be taken in such
form and manner as may be prescribed in regulations of the
applicable authority.

``SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMINATION.

``(a) Actions To Avoid Depletion of Reserves.--An
association health plan which is certified under this part
and which provides benefits other than health insurance
coverage shall continue to meet the requirements of section
806, irrespective of whether such certification continues in
effect. The board of trustees of such plan shall determine
quarterly whether the requirements of section 806 are met. In
any case in which the board determines that there is reason
to believe that there is or will be a failure to meet such
requirements, or the applicable authority makes such a
determination and so notifies the board, the board shall
immediately notify the qualified actuary engaged by the plan,
and such actuary shall, not later than the end of the next
following month, make such recommendations to the board for
corrective action as the actuary determines necessary to
ensure compliance with section 806. Not later than 30 days
after receiving from the actuary recommendations for
corrective actions, the board shall notify the applicable
authority (in such form and manner as the applicable
authority may prescribe by regulation) of such
recommendations of the actuary for corrective action,
together with a description of the actions (if any) that the
board has taken or plans to take in response to such
recommendations. The board shall thereafter report to the
applicable authority, in such form and frequency as the
applicable authority may specify to the board, regarding
corrective action taken by the board until the requirements
of section 806 are met.
``(b) Mandatory Termination.--In any case in which--
``(1) the applicable authority has been notified under
subsection (a) of a failure of an association health plan
which is or has been certified under this part and is
described in section 806(a)(2) to meet the requirements of
section 806 and has not been notified by the board of
trustees of the plan that corrective action has restored
compliance with such requirements, and
``(2) the applicable authority determines that there is a
reasonable expectation that the plan will continue to fail to
meet the requirements of section 806,

the board of trustees of the plan shall, at the direction of
the applicable authority, terminate the plan and, in the
course of the termination, take such actions as the
applicable authority may require, including satisfying any
claims referred to in section 806(a)(2)(B)(iii) and
recovering for the plan any liability under subsection
(a)(2)(B)(iii) or (e) of section 806, as necessary to ensure
that the affairs of the plan will be, to the maximum extent
possible, wound up in a manner which will result in timely
provision of all benefits for which the plan is obligated.

``SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOLVENT
ASSOCIATION HEALTH PLANS PROVIDING HEALTH
BENEFITS IN ADDITION TO HEALTH INSURANCE
COVERAGE.

``(a) Appointment of Secretary as Trustee for Insolvent
Plans.--Whenever the Secretary determines that an association
health plan which is or has been certified under this part
and which is described in section 806(a)(2) will be unable to
provide benefits when due or is otherwise in a financially
hazardous condition as defined in regulations of such
Secretary, the Secretary shall, upon notice to the plan,
apply to the appropriate United States district court for
appointment of the Secretary as trustee to administer the
plan for the duration of the insolvency. The plan may appear
as a party and other interested persons may intervene in the
proceedings at the discretion of the court. The court shall
appoint such Secretary trustee if the court determines that
the trusteeship is necessary to protect the interests of the
participants and beneficiaries or providers of medical care
or to avoid any unreasonable deterioration of the financial
condition of the plan. The trusteeship of such Secretary
shall continue until the conditions described in the first
sentence of this subsection are remedied or the plan is
terminated.
``(b) Powers as Trustee.--The Secretary, upon appointment
as trustee under subsection (a), shall have the power--
``(1) to do any act authorized by the plan, this title, or
other applicable provisions of law to be done by the plan
administrator or any trustee of the plan,
``(2) to require the transfer of all (or any part) of the
assets and records of the plan to the Secretary as trustee,
``(3) to invest any assets of the plan which the Secretary
holds in accordance with the provisions of the plan,
regulations of the Secretary, and applicable provisions of
law,
``(4) to require the sponsor, the plan administrator, any
participating employer, and any employee organization
representing plan participants to furnish any information
with respect to the plan which the Secretary as trustee may
reasonably need in order to administer the plan,
``(5) to collect for the plan any amounts due the plan and
to recover reasonable expenses of the trusteeship,
``(6) to commence, prosecute, or defend on behalf of the
plan any suit or proceeding involving the plan,
``(7) to issue, publish, or file such notices, statements,
and reports as may be required under regulations of the
Secretary or by any order of the court,
``(8) to terminate the plan (or provide for its termination
accordance with section 809(b)) and liquidate the plan
assets, to restore the plan to the responsibility of the
sponsor, or to continue the trusteeship,
``(9) to provide for the enrollment of plan participants
and beneficiaries under appropriate coverage options, and
``(10) to do such other acts as may be necessary to comply
with this title or any order of the court and to protect the
interests of plan participants and beneficiaries and
providers of medical care.
``(c) Notice of Appointment.--As soon as practicable after
the Secretary's appointment as trustee, the Secretary shall
give notice of such appointment to--
``(1) the sponsor and plan administrator,
``(2) each participant,
``(3) each participating employer, and
``(4) if applicable, each employee organization which, for
purposes of collective bargaining, represents plan
participants.
``(d) Additional Duties.--Except to the extent inconsistent
with the provisions of this title, or as may be otherwise
ordered by the court, the Secretary, upon appointment as
trustee under this section, shall be subject to the same
duties as those of a trustee under section 704 of title 11,
United States Code, and shall have the duties of a fiduciary
for purposes of this title.
``(e) Other Proceedings.--An application by the Secretary
under this subsection may be filed notwithstanding the
pendency in the same or any other court of any bankruptcy,
mortgage foreclosure, or equity receivership proceeding, or
any proceeding to reorganize, conserve, or liquidate such
plan or its property, or any proceeding to enforce a lien
against property of the plan.
``(f) Jurisdiction of Court.--
``(1) In general.--Upon the filing of an application for
the appointment as trustee or the issuance of a decree under
this section, the court to which the application is made
shall have exclusive jurisdiction of the plan involved and
its property wherever located with the powers, to the extent
consistent with the purposes of this section, of a court of
the United States having jurisdiction over cases under
chapter 11 of title 11, United States Code. Pending an
adjudication under this section such court shall stay, and
upon appointment by it of the Secretary as trustee, such
court shall continue the stay of, any pending mortgage
foreclosure, equity receivership, or other proceeding to
reorganize, conserve, or liquidate the plan, the sponsor, or
property of such plan or sponsor, and any other suit against
any receiver, conservator, or trustee of the plan, the
sponsor, or property of the plan or sponsor. Pending such
adjudication and upon the appointment by it of the Secretary
as trustee, the court may stay any proceeding to enforce a
lien against property of the plan or the sponsor or any other
suit against the plan or the sponsor.
``(2) Venue.--An action under this section may be brought
in the judicial district where the sponsor or the plan
administrator resides or does business or where any asset of
the plan is situated. A district court in which such action
is brought may issue process with respect to such action in
any other judicial district.
``(g) Personnel.--In accordance with regulations of the
Secretary, the Secretary shall appoint, retain, and
compensate accountants, actuaries, and other professional
service personnel as may be necessary in connection with the
Secretary's service as trustee under this section.

``SEC. 811. STATE ASSESSMENT AUTHORITY.

[[Page H6318]]

date of the enactment of the Small Business Affordable Health
Coverage Act of 1998.
``(b) Contribution Tax.--For purposes of this section, the
term `contribution tax' imposed by a State on an association
health plan means any tax imposed by such State if--
``(1) such tax is computed by applying a rate to the amount
of premiums or contributions, with respect to individuals
covered under the plan who are residents of such State, which
are received by the plan from participating employers located
in such State or from such individuals,
``(2) the rate of such tax does not exceed the rate of any
tax imposed by such State on premiums or contributions
received by insurers or health maintenance organizations for
health insurance coverage offered in such State in connection
with a group health plan,
``(3) such tax is otherwise nondiscriminatory, and
``(4) the amount of any such tax assessed on the plan is
reduced by the amount of any tax or assessment otherwise
imposed by the State on premiums, contributions, or both
received by insurers or health maintenance organizations for
health insurance coverage, aggregate excess/stop loss
insurance (as defined in section 806(g)(1)), specific excess/
stop loss insurance (as defined in section 806(g)(2)), other
insurance related to the provision of medical care under the
plan, or any combination thereof provided by such insurers or
health maintenance organizations in such State in connection
with such plan.

``SEC. 812. SPECIAL RULES FOR CHURCH PLANS.

The requirements of this paragraph shall not be treated as
not satisfied solely because the plan assets are commingled
with other church assets, to the extent that such plan assets
are separately accounted for.
``(2) Claims procedure.--In accordance with regulations of
the Secretary, every church plan to which this section
applies shall--
``(A) provide adequate notice in writing to any participant
or beneficiary whose claim for benefits under the plan has
been denied, setting forth the specific reasons for such
denial, written in a manner calculated to be understood by
the participant;
``(B) afford a reasonable opportunity to any participant
whose claim for benefits has been denied for a full and fair
review by the appropriate fiduciary of the decision denying
the claim; and
``(C) provide a written statement to each participant
describing the procedures established pursuant to this
paragraph.
``(3) Annual statements.--In accordance with regulations of
the Secretary, every church plan to which this section
applies shall file with the Secretary an annual statement--
``(A) stating the names and addresses of the plan and of
the church, convention, or association maintaining the plan
(and its principal place of business);
``(B) certifying that it is a church plan to which this
section applies and that it complies with the requirements of
paragraphs (1) and (2);
``(C) identifying the States in which participants and
beneficiaries under the plan are or likely will be located
during the 1-year period covered by the statement; and
``(D) containing a copy of a statement of actuarial opinion
signed by a qualified actuary that the plan maintains
capital, reserves, insurance, other financial arrangements,
or any combination thereof adequate to enable the plan to
fully meet all of its financial obligations on a timely
basis.
``(4) Disclosure.--At the time that the annual statement is
filed by a church plan with the Secretary pursuant to
paragraph (3), a copy of such statement shall be made
available by the Secretary to the State insurance
commissioner (or similar official) of any State. The name of
each church plan and sponsoring organization filing an annual
statement in compliance with paragraph (3) shall be published
annually in the Federal Register.
``(c) Enforcement.--The Secretary may enforce the
provisions of this section in a manner consistent with
section 502, to the extent applicable with respect to actions
under section 502(a)(5), and with section 3(33)(D), except
that, other than for the purpose of seeking a temporary
restraining order, a civil action may be brought with respect
to the plan's failure to meet any requirement of this section
only if the plan fails to correct its failure within the
correction period described in section 3(33)(D). The other
provisions of part 5 (except sections 501(a), 503, 512, 514,
and 515) shall apply with respect to the enforcement and
administration of this section.
``(d) Definitions and Other Rules.--For purposes of this
section--
``(1) In general.--Except as otherwise provided in this
section, any term used in this section which is defined in
any provision of this title shall have the definition
provided such term by such provision.
``(2) Seminary students.--Seminary students who are
enrolled in an institution of higher learning described in
section 3(33)(C)(iv) and who are treated as participants
under the terms of a church plan to which this section
applies shall be deemed to be employees as defined in section
3(6) if the number of such students constitutes an
insignificant portion of the total number of individuals who
are treated as participants under the terms of the plan.

``SEC. 813. DEFINITIONS AND RULES OF CONSTRUCTION.

[[Page H6319]]

section 807(a) (in the second instance), section 807(b),
section 807(d), section 807(e) (in the second instance),
section 808 (in the matter after paragraph (3)), and section
809(a) (in the third instance), such term means, in
connection with an association health plan, the Secretary.
``(6) Health status-related factor.--The term `health
status-related factor' has the meaning provided in section
733(d)(2).
``(7) Individual market.--
``(A) In general.--The term `individual market' means the
market for health insurance coverage offered to individuals
other than in connection with a group health plan.
``(B) Treatment of very small groups.--
``(i) In general.--Subject to clause (ii), such term
includes coverage offered in connection with a group health
plan that has fewer than 2 participants as current employees
or participants described in section 732(d)(3) on the first
day of the plan year.
``(ii) State exception.--Clause (i) shall not apply in the
case of health insurance coverage offered in a State if such
State regulates the coverage described in such clause in the
same manner and to the same extent as coverage in the small
group market (as defined in section 2791(e)(5) of the Public
Health Service Act) is regulated by such State.
``(8) Participating employer.--The term `participating
employer' means, in connection with an association health
plan, any employer, if any individual who is an employee of
such employer, a partner in such employer, or a self-employed
individual who is such employer (or any dependent, as defined
under the terms of the plan, of such individual) is or was
covered under such plan in connection with the status of such
individual as such an employee, partner, or self-employed
individual in relation to the plan.
``(9) Applicable state authority.--The term `applicable
State authority' means, with respect to a health insurance
issuer in a State, the State insurance commissioner or
official or officials designated by the State to enforce the
requirements of title XXVII of the Public Health Service Act
for the State involved with respect to such issuer.
``(10) Qualified actuary.--The term `qualified actuary'
means an individual who is a member of the American Academy
of Actuaries or meets such reasonable standards and
qualifications as the Secretary may provide by regulation.
``(11) Affiliated member.--The term `affiliated member'
means, in connection with a sponsor, a person eligible to be
a member of the sponsor or, in the case of a sponsor with
member associations, a person who is a member, or is eligible
to be a member, of a member association.
``(12) Large employer.--The term `large employer' means, in
connection with a group health plan with respect to a plan
year, an employer who employed an average of at least 51
employees on business days during the preceding calendar year
and who employs at least 2 employees on the first day of the
plan year.
``(13) Small employer.--The term `small employer' means, in
connection with a group health plan with respect to a plan
year, an employer who is not a large employer.
``(b) Rules of Construction.--
``(1) Employers and employees.--For purposes of determining
whether a plan, fund, or program is an employee welfare
benefit plan which is an association health plan, and for
purposes of applying this title in connection with such plan,
fund, or program so determined to be such an employee welfare
benefit plan--
``(A) in the case of a partnership, the term `employer' (as
defined in section (3)(5)) includes the partnership in
relation to the partners, and the term `employee' (as defined
in section (3)(6)) includes any partner in relation to the
partnership, and
``(B) in the case of a self-employed individual, the term
`employer' (as defined in section 3(5)) and the term
`employee' (as defined in section 3(6)) shall include such
individual.
``(2) Plans, funds, and programs treated as employee
welfare benefit plans.--In the case of any plan, fund, or
program which was established or is maintained for the
purpose of providing medical care (through the purchase of
insurance or otherwise) for employees (or their dependents)
covered thereunder and which demonstrates to the Secretary
that all requirements for certification under this part would
be met with respect to such plan, fund, or program if such
plan, fund, or program were a group health plan, such plan,
fund, or program shall be treated for purposes of this title
as an employee welfare benefit plan on and after the date of
such demonstration.''.
(b) Conforming Amendments to Preemption Rules.--
(1) Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)) is
amended by adding at the end the following new subparagraph:
``(E) The preceding subparagraphs of this paragraph do not
apply with respect to any State law in the case of an
association health plan which is certified under part 8.''.
(2) Section 514 of such Act (29 U.S.C. 1144) is amended--
(A) in subsection (b)(4), by striking ``Subsection (a)''
and inserting ``Subsections (a) and (d)'';
(B) in subsection (b)(5), by striking ``subsection (a)'' in
subparagraph (A) and inserting ``subsection (a) of this
section and subsections (a)(2)(B) and (b) of section 805'',
and by striking ``subsection (a)'' in subparagraph (B) and
inserting ``subsection (a) of this section or subsection
(a)(2)(B) or (b) of section 805'';
(C) by redesignating subsection (d) as subsection (e); and
(D) by inserting after subsection (c) the following new
subsection:
``(d)(1) Except as provided in subsection (b)(4), the
provisions of this title shall supersede any and all State
laws insofar as they may now or hereafter preclude, or have
the effect of precluding, a health insurance issuer from
offering health insurance coverage in connection with an
association health plan which is certified under part 8.
``(2) Except as provided in paragraphs (4) and (5) of
subsection (b) of this section--
``(A) In any case in which health insurance coverage of any
policy type is offered under an association health plan
certified under part 8 to a participating employer operating
in such State, the provisions of this title shall supersede
any and all laws of such State insofar as they may preclude a
health insurance issuer from offering health insurance
coverage of the same policy type to other employers operating
in the State which are eligible for coverage under such
association health plan, whether or not such other employers
are participating employers in such plan.
``(B) In any case in which health insurance coverage of any
policy type is offered under an association health plan in a
State and the filing, with the applicable State authority, of
the policy form in connection with such policy type is
approved by such State authority, the provisions of this
title shall supersede any and all laws of any other State in
which health insurance coverage of such type is offered,
insofar as they may preclude, upon the filing in the same
form and manner of such policy form with the applicable State
authority in such other State, the approval of the filing in
such other State.
``(3) For additional provisions relating to association
health plans, see subsections (a)(2)(B) and (b) of section
805.
``(4) For purposes of this subsection, the term
`association health plan' has the meaning provided in section
801(a), and the terms `health insurance coverage',
`participating employer', and `health insurance issuer' have
the meanings provided such terms in section 811,
respectively.''.
(3) Section 514(b)(6)(A) of such Act (29 U.S.C.
1144(b)(6)(A)) is amended--
(A) in clause (i)(II), by striking ``and'' at the end;
(B) in clause (ii), by inserting ``and which does not
provide medical care (within the meaning of section
733(a)(2)),'' after ``arrangement,'', and by striking
``title.'' and inserting ``title, and''; and
(C) by adding at the end the following new clause:
``(iii) subject to subparagraph (E), in the case of any
other employee welfare benefit plan which is a multiple
employer welfare arrangement and which provides medical care
(within the meaning of section 733(a)(2)), any law of any
State which regulates insurance may apply.''.
(4) Section 514(e) of such Act (as redesignated by
paragraph (2)(C)) is amended--
(A) by striking ``Nothing'' and inserting ``(1) Except as
provided in paragraph (2), nothing''; and
(B) by adding at the end the following new paragraph:
``(2) Nothing in any other provision of law enacted on or
after the date of the enactment of the Patient Protection Act
of 1998 shall be construed to alter, amend, modify,
invalidate, impair, or supersede any provision of this title,
except by specific cross-reference to the affected
section.''.
(c) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C.
102(16)(B)) is amended by adding at the end the following new
sentence: ``Such term also includes a person serving as the
sponsor of an association health plan under part 8.''.
(d) Disclosure of Solvency Protections Related to Self-
Insured and Fully Insured Options Under Association Health
Plans.--Section 102(b) of such Act (29 U.S.C. 102(b)) is
amended by adding at the end the following: ``An association
health plan shall include in its summary plan description, in
connection with each benefit option, a description of the
form of solvency or guarantee fund protection secured
pursuant to this Act or applicable State law, if any.''.
(e) Savings Clause.--Section 731(c) of such Act is amended
by inserting ``or part 8'' after ``this part''.
(f) Clerical Amendment.--The table of contents in section 1
of the Employee Retirement Income Security Act of 1974 is
amended by inserting after the item relating to section 734
the following new items:

``Part 8--Rules Governing Association Health Plans

[[Page H6320]]

``Sec. 809. Corrective actions and mandatory termination.
``Sec. 810. Trusteeship by the Secretary of insolvent association
health plans providing health benefits in addition to
health insurance coverage.
``Sec. 811. State assessment authority.
``Sec. 812. Special rules for church plans.
``Sec. 813. Definitions and rules of construction.''.

SEC. 1303. CLARIFICATION OF TREATMENT OF SINGLE EMPLOYER
ARRANGEMENTS.

Section 3(40)(B) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1002(40)(B)) is amended--
(1) in clause (i), by inserting ``for any plan year of any
such plan, or any fiscal year of any such other
arrangement;'' after ``single employer'', and by inserting
``during such year or at any time during the preceding 1-year
period'' after ``control group'';
(2) in clause (iii)--
(A) by striking ``common control shall not be based on an
interest of less than 25 percent'' and inserting ``an
interest of greater than 25 percent may not be required as
the minimum interest necessary for common control''; and
(B) by striking ``similar to'' and inserting ``consistent
and coextensive with'';
(3) by redesignating clauses (iv) and (v) as clauses (v)
and (vi), respectively; and
(4) by inserting after clause (iii) the following new
clause:
``(iv) in determining, after the application of clause (i),
whether benefits are provided to employees of two or more
employers, the arrangement shall be treated as having only 1
participating employer if, after the application of clause
(i), the number of individuals who are employees and former
employees of any one participating employer and who are
covered under the arrangement is greater than 75 percent of
the aggregate number of all individuals who are employees or
former employees of participating employers and who are
covered under the arrangement,''.

SEC. 1304. CLARIFICATION OF TREATMENT OF CERTAIN COLLECTIVELY
BARGAINED ARRANGEMENTS.

except to the extent that the services used by the plan,
arrangement, organization, or other entity consist solely of
preparation of documents necessary for compliance with the
reporting and disclosure requirements of part 1 or
administrative, investment, or consulting services unrelated
to solicitation or enrollment of covered individuals.
``(ii) As of the end of the preceding plan year, the number
of covered individuals under the plan or other arrangement
who are identified to the plan or arrangement and who are
neither--
``(I) employed within a bargaining unit covered by any of
the collective bargaining agreements with a participating
employer (nor covered on the basis of an individual's
employment in such a bargaining unit); nor
``(II) present employees (or former employees who were
covered while employed) of the sponsoring employee
organization, of an employer who is or was a party to any of
the collective bargaining agreements, or of the plan or other
arrangement or a related plan or arrangement (nor covered on
the basis of such present or former employment);

does not exceed 15 percent of the total number of individuals
who are covered under the plan or arrangement and who are
present or former employees who are or were covered under the
plan or arrangement pursuant to a collective bargaining
agreement with a participating employer. The requirements of
the preceding provisions of this clause shall be treated as
satisfied if, as of the end of the preceding plan year, such
covered individuals are comprised solely of individuals who
were covered individuals under the plan or other arrangement
as of the date of the enactment of the Small Business
Affordable Health Coverage Act of 1998 and, as of the end of
the preceding plan year, the number of such covered
individuals does not exceed 25 percent of the total number of
present and former employees enrolled under the plan or other
arrangement.
``(iii) The employee organization or other entity
sponsoring the plan or other arrangement certifies to the
Secretary each year, in a form and manner which shall be
prescribed in regulations of the Secretary that the plan or
other arrangement meets the requirements of clauses (i) and
(ii).
``(D) For purposes of subparagraph (A)(i)(II), a plan or
arrangement shall be treated as established or maintained in
accordance with this subparagraph only if--
``(i) all of the benefits provided under the plan or
arrangement consist of health insurance coverage; or
``(ii)(I) the plan or arrangement is a multiemployer plan;
and
``(II) the requirements of clause (B) of the proviso to
clause (5) of section 302(c) of the Labor Management
Relations Act, 1947 (29 U.S.C. 186(c)) are met with respect
to such plan or other arrangement.
``(E) For purposes of subparagraph (A)(i)(II), a plan or
arrangement shall be treated as established or maintained in
accordance with this subparagraph only if--
``(i) the plan or arrangement is in effect as of the date
of the enactment of the Small Business Affordable Health
Coverage Act of 1998, or
``(ii) the employee organization or other entity sponsoring
the plan or arrangement--
``(I) has been in existence for at least 3 years or is
affiliated with another employee organization which has been
in existence for at least 3 years, or
``(II) demonstrates to the satisfaction of the Secretary
that the requirements of subparagraphs (C) and (D) are met
with respect to the plan or other arrangement.''.
(c) Conforming Amendments to Definitions of Participant and
Beneficiary.--Section 3(7) of such Act (29 U.S.C. 1002(7)) is
amended by adding at the end the following new sentence:
``Such term includes an individual who is a covered
individual described in paragraph (40)(C)(ii).''.

SEC. 1305. ENFORCEMENT PROVISIONS RELATING TO ASSOCIATION
HEALTH PLANS.

(a) Criminal Penalties for Certain Willful
Misrepresentations.--Section 501 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1131) is amended--
(1) by inserting ``(a)'' after ``Sec. 501.''; and
(2) by adding at the end the following new subsection:
``(b) Any person who, either willfully or with willful
blindness, falsely represents, to any employee, any
employee's beneficiary, any employer, the Secretary, or any
State, a plan or other arrangement established or maintained
for the purpose of offering or providing any benefit
described in section 3(1) to employees or their beneficiaries
as--
``(1) being an association health plan which has been
certified under part 8;
``(2) having been established or maintained under or
pursuant to one or more collective bargaining agreements
which are reached pursuant to collective bargaining described
in section 8(d) of the National Labor Relations Act (29
U.S.C. 158(d)) or paragraph Fourth of section 2 of the
Railway Labor Act (45 U.S.C. 152, paragraph Fourth) or which
are reached pursuant to labor-management negotiations under
similar provisions of State public employee relations laws;
or
``(3) being a plan or arrangement with respect to which the
requirements of subparagraph (C), (D), or (E) of section
3(40) are met;

shall, upon conviction, be imprisoned not more than five
years, be fined under title 18, United States Code, or
both.''.
(b) Cease Activities Orders.--Section 502 of such Act (29
U.S.C. 1132) is amended by adding at the end the following
new subsection:
``(n)(1) Subject to paragraph (2), upon application by the
Secretary showing the operation, promotion, or marketing of
an association health plan (or similar arrangement providing
benefits consisting of medical care (as defined in section
733(a)(2))) that--
``(A) is not certified under part 8, is subject under
section 514(b)(6) to the insurance laws of any State in which
the plan or arrangement offers or provides benefits, and is
not licensed, registered, or otherwise approved under the
insurance laws of such State; or
``(B) is an association health plan certified under part 8
and is not operating in accordance with the requirements
under part 8 for such certification,

[[Page H6321]]

``(3) The court may grant such additional equitable relief,
including any relief available under this title, as it deems
necessary to protect the interests of the public and of
persons having claims for benefits against the plan.''.
(c) Responsibility for Claims Procedure.--Section 503 of
such Act (29 U.S.C. 1133) (as amended by title I) is amended
by adding at the end the following new subsection:
``(c) Association Health Plans.--The terms of each
association health plan which is or has been certified under
part 8 shall require the board of trustees or the named
fiduciary (as applicable) to ensure that the requirements of
this section are met in connection with claims filed under
the plan.''.

SEC. 1306. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

Section 506 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1136) is amended by adding at the end the
following new subsection:
``(c) Responsibility of States With Respect to Association
Health Plans.--
``(1) Agreements with states.--A State may enter into an
agreement with the Secretary for delegation to the State of
some or all of--
``(A) the Secretary's authority under sections 502 and 504
to enforce the requirements for certification under part 8,
``(B) the Secretary's authority to certify association
health plans under part 8 in accordance with regulations of
the Secretary applicable to certification under part 8, or
``(C) any combination of the Secretary's authority
authorized to be delegated under subparagraphs (A) and (B).
``(2) Delegations.--Any department, agency, or
instrumentality of a State to which authority is delegated
pursuant to an agreement entered into under this paragraph
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.
``(3) Recognition of primary domicile state.--In entering
into any agreement with a State under subparagraph (A), the
Secretary shall ensure that, as a result of such agreement
and all other agreements entered into under subparagraph (A),
only one State will be recognized, with respect to any
particular association health plan, as the State to which all
authority has been delegated pursuant to such agreements in
connection with such plan. In carrying out this paragraph,
the Secretary shall take into account the places of residence
of the participants and beneficiaries under the plan and the
State in which the trust is maintained.''.

SEC. 1307. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.

(a) Effective Date.--The amendments made by sections 1302,
1305, and 1306 shall take effect on January 1, 2000. The
amendments made by sections 1303 and 1304 shall take effect
on the date of the enactment of this Act. The Secretary of
Labor shall first issue all regulations necessary to carry
out the amendments made by this Act before January 1, 2000.
(b) Exception.--Section 801(a)(2) of the Employee
Retirement Income Security Act of 1974 (added by section
1302) does not apply in connection with an association health
plan (certified under part 8 of subtitle B of title I of such
Act) existing on April 1, 1997, if no benefits provided
thereunder as of the date of the enactment of this Act
consist of health insurance coverage (as defined in section
733(b)(1) of such Act).
(c) Treatment of Certain Existing Health Benefits
Programs.--
(1) In general.--In any case in which, as of the date of
the enactment of this Act, an arrangement is maintained in a
State for the purpose of providing benefits consisting of
medical care for the employees and beneficiaries of its
participating employers, at least 200 participating employers
make contributions to such arrangement, such arrangement has
been in existence for at least 10 years, and such arrangement
is licensed under the laws of one or more States to provide
such benefits to its participating employers, upon the filing
with the applicable authority (as defined in section
813(a)(5) of the Employee Retirement Income Security Act of
1974 (as amended by this Act)) by the arrangement of an
application for certification of the arrangement under part 8
of subtitle B of title I of such Act--
(A) such arrangement shall be deemed to be a group health
plan for purposes of title I of such Act,
(B) the requirements of sections 801(a)(1) and 803(a)(1) of
the Employee Retirement Income Security Act of 1974 shall be
deemed met with respect to such arrangement,
(C) the requirements of section 803(b) of such Act shall be
deemed met, if the arrangement is operated by a board of
directors which--
(i) is elected by the participating employers, with each
employer having one vote, and
(ii) has complete fiscal control over the arrangement and
which is responsible for all operations of the arrangement,
(D) the requirements of section 804(a) of such Act shall be
deemed met with respect to such arrangement,
(E) the arrangement may be certified by any applicable
authority with respect to its operations in any State only if
it operates in such State on the date of certification.

The provisions of this subsection shall cease to apply with
respect to any such arrangement at such time after the date
of the enactment of this Act as the applicable requirements
of this subsection are not met with respect to such
arrangement.
(2) Definitions.--For purposes of this subsection, the
terms ``group health plan,'' ``medical care,'' and
``participating employer'' shall have the meanings provided
in section 813 of the Employee Retirement Income Security Act
of 1974, except that the reference in paragraph (7) of such
section to an ``association health plan'' shall be deemed a
reference to an arrangement referred to in this subsection.
(d) Pilot Program for Self-Insured Association Health
Plans.--
(1) In general.--During the pilot program period,
association health plans which offer benefit options which do
not consist of health insurance coverage may be certified
under part 8 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 only if such plans
consist of the following:
(A) plans which offered such coverage on the date of the
enactment of this Act,
(B) plans under which the sponsor does not restrict
membership to one or more trades and businesses or industries
and whose eligible participating employers represent a broad
cross-section of trades and businesses or industries, or
(C) plans whose eligible participating employers represent
one or more trades or businesses, or one or more industries,
which have been indicated as having average or above-average
health insurance risk or health claims experience by reason
of State rate filings, denials of coverage, proposed premium
rate levels, and other means demonstrated by such plans in
accordance with regulations which the Secretary shall
prescribe, including (but not limited to) the following:
agriculture; automobile dealerships; barbering and
cosmetology; child care; construction; dance, theatrical, and
orchestra productions; disinfecting and pest control; eating
and drinking establishments; fishing; hospitals; labor
organizations; logging; manufacturing (metals); mining;
medical and dental practices; medical laboratories; sanitary
services; transportation (local and freight); and
warehousing.
(2) Pilot program period.--For purposes of this subsection,
the term ``pilot program period'' means the 5-year period
beginning on January 1, 1999.
TITLE II--AMENDMENTS TO PUBLIC HEALTH SERVICE ACT
Subtitle A--Patient Protections and Point of Service Coverage
Requirements

SEC. 2001. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE,
EMERGENCY MEDICAL CARE, OBSTETRIC AND
GYNECOLOGICAL CARE, PEDIATRIC CARE.

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

``SEC. 2706. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE,
EMERGENCY MEDICAL CARE, OBSTETRIC AND
GYNECOLOGICAL CARE, PEDIATRIC CARE.

[[Page H6322]]

appropriate emergency medical screening examinations (within
the capability of the emergency facility, including ancillary
services routinely available to the emergency facility) to
the extent that a prudent layperson, who possesses an average
knowledge of health and medicine, would determine such
examinations to be necessary in order to determine whether
emergency medical care (as so defined) is required, and
``(B) the plan or issuer shall provide benefits for
additional emergency medical services following an emergency
medical screening examination (if determined necessary under
subparagraph (A)) to the extent that a prudent emergency
medical professional would determine such additional
emergency services to be necessary to avoid the consequences
described in section 503(b)(9)(I) of such Act.
``(2) Uniform cost-sharing required.--Nothing in this
subsection shall be construed as preventing a group health
plan or issuer from imposing any form of cost-sharing
applicable to any participant or beneficiary (including
coinsurance, copayments, deductibles, and any other charges)
in relation to benefits described in paragraph (1), if such
form of cost-sharing is uniformly applied under such plan,
with respect to similarly situated participants and
beneficiaries, to all benefits consisting of emergency
medical care (as defined in section 503(b)(9)(I) of the
Employee Retirement Income Security Act of 1974) provided to
such similarly situated participants and beneficiaries under
the plan.
``(c) Patient Access to Obstetric and Gynecological Care.
``(1) In general.--In any case in which a group health plan
(or a health insurance issuer offering health insurance
coverage in connection with the plan)--
``(A) provides benefits under the terms of the plan
consisting of--
``(i) routine gynecological care (such as preventive
women's health examinations), or
``(ii) routine obstetric care (such as routine pregnancy-
related services),

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

if the primary care provider designated by such a participant
or beneficiary is not such a physician, then the plan (or
issuer) shall meet the requirements of paragraph (2).
``(2) Requirements.--A group health plan (or a health
insurance issuer offering health insurance coverage in
connection with the plan) meets the requirements of this
paragraph, in connection with benefits described in paragraph
(1) consisting of care described in clause (i) or (ii) of
paragraph (1)(A) (or consisting of payment therefor), if the
plan (or issuer)--
``(A) does not require authorization or a referral by the
primary care provider in order to obtain such benefits, and
``(B) treats the ordering of other routine care of the same
type, by the participating physician providing the care
described in clause (i) or (ii) of paragraph (1)(A), as the
authorization of the primary care provider with respect to
such care.
``(3) Construction.--Nothing in paragraph (2)(B) shall
waive any requirements of coverage relating to medical
necessity or appropriateness with respect to coverage of
gynecological or obstetric care so ordered.
``(d) Patient Access to Pediatric Care.--
``(1) In general.--In any case in which a group health plan
(or a health insurance issuer offering health insurance
coverage in connection with the plan) provides benefits
consisting of routine pediatric care provided by a
participating physician who specializes in pediatrics (or
consisting of payment for such care) and the plan requires or
provides for designation by a participant or beneficiary of a
participating primary care provider, the plan (or issuer)
shall provide that such a participating physician may be
designated, if available, by a parent or guardian of any
beneficiary under the plan is who under 18 years of age, as
the primary care provider with respect to any such benefits.
``(2) Construction.--Nothing in paragraph (1) shall waive
any requirements of coverage relating to medical necessity or
appropriateness with respect to coverage of pediatric care.
``(e) Treatment of Multiple Coverage Options.--In the case
of a plan providing benefits under two or more coverage
options, the requirements of subsections (c) and (d) shall
apply separately with respect to each coverage option.''.
(c) Effective date and related rules.--
(1) In general.--The amendments made by this section shall
apply with respect to plan years beginning on or after
January 1 of the second calendar year following the date of
the enactment of this Act, except that the Secretary of
Health and Human Services may issue regulations before such
date under such amendments. The Secretary shall first issue
all regulations necessary to carry out the amendments made by
this section before the effective date thereof.
(2) Limitation on enforcement actions.--No enforcement
action shall be taken, pursuant to the amendments made by
this section, against a group health plan or health insurance
issuer with respect to a violation of a requirement imposed
by such amendments before the date of issuance of regulations
issued in connection with such requirement, if the plan or
issuer has sought to comply in good faith with such
requirement.
(3) Special rule for collective bargaining agreements.--In
the case of a group health plan maintained pursuant to one or
more collective bargaining agreements between employee
representatives and one or more employers ratified before the
date of the enactment of this Act, the amendments made by
this section shall not apply with respect to plan years
beginning before the later of--
(1) the date on which the last of the collective bargaining
agreements relating to the plan terminates (determined
without regard to any extension thereof agreed to after the
date of the enactment of this Act), or
(2) January 1, 2001.

For purposes of this paragraph, any plan amendments made
pursuant to a collective bargaining agreement relating to the
plan which amends the plan solely to conform to any
requirement added by this section shall not be treated as a
termination of such collective bargaining agreement.

SEC. 2002. REQUIRING HEALTH MAINTENANCE ORGANIZATIONS TO
OFFER OPTION OF POINT-OF-SERVICE COVERAGE.

(a) In General.--Title XXVII of the Public Health Service
Act is amended by inserting after section 2713 the following
new section:

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

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

the issuer shall make available to the plan sponsor in
connection with such a plan a coverage option which provides
for coverage of such services which are furnished through
such class (or classes) of health care professionals
regardless of whether or not the professionals are members of
such panel.
``(b) Requirement to Offer Supplemental Coverage to
Participants in Certain Cases.--Except as provided in
subsection (c), if a health insurance issuer makes available
a coverage option under and described in subsection (a) to a
plan sponsor of a group health plan and the sponsor declines
to contract for such coverage option, then the issuer shall
make available in the individual insurance market to each
participant in the group health plan optional separate
supplemental health insurance coverage in the individual
health insurance market which consists of services identical
to those provided under such coverage provided through the
closed panel under the group health plan but are furnished
exclusively by health care professionals who are not members
of such a closed panel.
``(c) Exceptions.--
``(1) Offering of non-panel option.--Subsections (a) and
(b) shall not apply with respect to a group health plan if
the plan offers a coverage option that provides coverage for
services that may be furnished by a class or classes of
health care professionals who are not in a closed panel. This
paragraph shall be applied separately to distinguishable
groups of employees under the plan.
``(2) Availability of coverage through healthmart.--
Subsections (a) and (b) shall not apply to a group health
plan if the health insurance coverage under the plan is made
available through a HealthMart (as defined in section 2801)
and if any health insurance coverage made available through
the HealthMart provides for coverage of the services of any
class of health care professionals other than through a
closed panel of professionals.
``(3) Relicensure exemption.--Subsections (a) and (b) shall
not apply to a health maintenance organization in a State in
any case in which--
``(A) the organization demonstrates to the applicable
authority that the organization has made a good faith effort
to obtain (but has failed to obtain) a contract between the
organization and any other health insurance issuer providing
for the coverage option or supplemental coverage described in
subsection (a) or (b), as the case may be, within the
applicable service area of the organization, and
``(B) the State requires the organization to receive or
qualify for a separate license, as an indemnity insurer or
otherwise, in order to offer such coverage option or
supplemental coverage, respectively.

[[Page H6323]]

class or classes involved. The applicable authority may
require that the organization demonstrate such an increase no
more frequently that once every two years. This paragraph
shall be applied on an average per enrollee or similar basis.
``(5) Collective bargaining agreements.--Subsections (a)
and (b) shall not apply in connection with a group health
plan if the plan is established or maintained pursuant to one
or more collective bargaining agreements.
``(d) Definitions.--For purposes of this section:
``(1) Coverage through closed panel.--Health insurance
coverage for a class of health care professionals shall be
treated as provided through a closed panel of such
professionals only if such coverage consists of coverage of
items or services consisting of professionals services which
are reimbursed for or provided only within a limited network
of such professionals.
``(2) Health care professional.--The term `health care
professional' has the meaning given such term in section
2706(a)(2).''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to coverage offered on or after January 1 of the
second calendar year following the date of the enactment of
this Act.
Subtitle B--Patient Access to Information

SEC. 2101. PATIENT ACCESS TO INFORMATION REGARDING PLAN
COVERAGE, MANAGED CARE PROCEDURES, HEALTH CARE
PROVIDERS, AND QUALITY OF MEDICAL CARE.

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

``SEC. 2707. PATIENT ACCESS TO INFORMATION REGARDING PLAN
COVERAGE, MANAGED CARE PROCEDURES, HEALTH CARE
PROVIDERS, AND QUALITY OF MEDICAL CARE.

``(a) Disclosure Requirement.--Each health insurance issuer
offering health insurance coverage in connection with a group
health plan shall provide the administrator of such plan on a
timely basis with the information necessary to enable the
administrator to include in the summary plan description of
the plan required under section 102 of the Employee
Retirement Income Security Act of 1974 (or each summary plan
description in any case in which different summary plan
descriptions are appropriate under part 1 of subtitle B of
title I of such Act for different options of coverage) the
information required under subsections (b), (c), (d), and
(e)(2)(A). To the extent that any such issuer provides such
information on a timely basis to plan participants and
beneficiaries, the requirements of this subsection shall be
deemed satisfied in the case of such plan with respect to
such information.
``(b) Plan Benefits.--The information required under
subsection (a) includes the following:
``(1) Covered items and services.--
``(A) Categorization of included benefits.--A description
of covered benefits, categorized by--
``(i) types of items and services (including any special
disease management program), and
``(ii) types of health care professionals providing such
items and services.
``(B) Emergency medical care.--A description of the extent
to which the coverage includes emergency medical care
(including the extent to which the coverage provides for
access to urgent care centers), and any definitions provided
under in connection with such coverage for the relevant
coverage terminology referring to such care.
``(C) Preventative services.--A description of the extent
to which the coverage includes benefits for preventative
services.
``(D) Drug formularies.--A description of the extent to
which covered benefits are determined by the use or
application of a drug formulary and a summary of the process
for determining what is included in such formulary.
``(E) COBRA continuation coverage.--A description of the
benefits available under the coverage provided pursuant to
part 6 of subtitle B of title I of the Employee Retirement
Income Security Act of 1974.
``(2) Limitations, exclusions, and restrictions on covered
benefits.--
``(A) Categorization of excluded benefits.--A description
of benefits specifically excluded from coverage, categorized
by types of items and services.
``(B) Utilization review and preauthorization
requirements.--Whether coverage for medical care is limited
or excluded on the basis of utilization review or
preauthorization requirements.
``(C) Lifetime, annual, or other period limitations.--A
description of the circumstances under which, and the extent
to which, coverage is subject to lifetime, annual, or other
period limitations, categorized by types of benefits.
``(D) Custodial care.--A description of the circumstances
under which, and the extent to which, the coverage of
benefits for custodial care is limited or excluded, and a
statement of the definition used in connection with such
coverage for custodial care.
``(E) Experimental treatments.--Whether coverage for any
medical care is limited or excluded because it constitutes
experimental treatment or technology, and any definitions
provided in connection with such coverage for the relevant
plan terminology referring to such limited or excluded care.
``(F) Medical appropriateness or necessity.--Whether
coverage for medical care may be limited or excluded by
reason of a failure to meet the plan's requirements for
medical appropriateness or necessity, and any definitions
provided in connection with such coverage for the relevant
coverage terminology referring to such limited or excluded
care.
``(G) Second or subsequent opinions.--A description of the
circumstances under which, and the extent to which, coverage
for second or subsequent opinions is limited or excluded.
``(H) Specialty care.--A description of the circumstances
under which, and the extent to which, coverage of benefits
for specialty care is conditioned on referral from a primary
care provider.
``(I) Continuity of care.--A description of the
circumstances under which, and the extent to which, coverage
of items and services provided by any health care
professional is limited or excluded by reason of the
departure by the professional from any defined set of
providers.
``(J) Restrictions on coverage of emergency services.--A
description of the circumstances under which, and the extent
to which, the coverage, in including emergency medical care
furnished to a participant or beneficiary of the plan imposes
any financial responsibility described in subsection (c) on
participants or beneficiaries or limits or conditions
benefits for such care subject to any other term or condition
of such coverage.
``(c) Participant's Financial Responsibilities.--The
information required under subsection (a) includes an
explanation of--
``(1) a participant's financial responsibility for payment
of premiums, coinsurance, copayments, deductibles, and any
other charges, and
``(2) the circumstances under which, and the extent to
which, the participant's financial responsibility described
in paragraph (1) may vary, including any distinctions based
on whether a health care provider from whom covered benefits
are obtained is included in a defined set of providers.
``(d) Dispute Resolution Procedures.--The information
required under subsection (a) includes a description of the
processes adopted in connection with such coverage pursuant
to section 503(b) of the Employee Retirement Income Security
Act of 1974, including--
``(1) descriptions thereof relating specifically to--
``(A) coverage decisions,
``(B) internal review of coverage decisions, and
``(C) any external review of coverage decisions, and
``(2) the procedures and time frames applicable to each
step of the processes referred to in subparagraphs (A), (B),
and (C) of paragraph (1).
``(e) Information Available on Request.--
``(1) Access to plan benefit information in electronic
form.--
``(A) In general.--A group health plan (and a health
insurance issuer offering health insurance coverage in
connection with a group health plan) shall, upon written
request (made not more frequently than annually), make
available to participants and beneficiaries, in a generally
recognized electronic format, the following information:
``(i) the latest summary plan description, including the
latest summary of material modifications, and
``(ii) the actual plan provisions setting forth the
benefits available under the plan,

[[Page H6324]]

programs for persons with disabilities, indicating whether
these programs are voluntary or mandatory and whether a
significant benefit differential results from participation
in such programs.
``(iii) Inclusion of drugs and biologicals in
formularies.--A statement of whether a specific drug or
biological is included in a formulary used to determine
benefits under the plan and a description of the procedures
for considering requests for any patient-specific waivers.
``(iv) Procedures for determining exclusions based on
medical necessity or experimental treatments.--Upon receipt
by the participant or beneficiary of any notification of an
adverse coverage decision based on a determination relating
to medical necessity or an experimental treatment or
technology, a description of the procedures and medically-
based criteria used in such decision.
``(v) Preauthorization and utilization review procedures.--
Upon receipt by the participant or beneficiary of any
notification of an adverse coverage decision, a description
of the basis on which any preauthorization requirement or any
utilization review requirement has resulted in such decision.
``(vi) Accreditation status of health insurance issuers and
service providers.--A description of the accreditation and
licencing status (if any) of each health insurance issuer
offering health insurance coverage in connection with the
plan and of any utilization review organization utilized by
the issuer or the plan, together with the name and address of
the accrediting or licencing authority.
``(vii) Measures of enrollee satisfaction.--The latest
information (if any) maintained by the plan, or by any health
insurance issuer offering health insurance coverage in
connection with the plan, relating to enrollee satisfaction.
``(viii) Quality performance measures.--The latest
information (if any) maintained by the plan, or by any health
insurance issuer offering health insurance coverage in
connection with the plan, relating to quality of performance
of the delivery of medical care with respect to coverage
options offered under the plan and of health care
professionals and facilities providing medical care under the
plan.
``(C) Information required from health care professionals
on request.--Any health care professional treating a
participant or beneficiary under a group health plan shall
provide to the participant or beneficiary, on request, a
description of his or her professional qualifications
(including board certification status, licensing status, and
accreditation status, if any), privileges, and experience and
a general description by category (including salary, fee-for-
service, capitation, and such other categories as may be
specified in regulations of the Secretary) of the applicable
method by which such professional is compensated in
connection with the provision of such medical care.
``(D) Information required from health care facilities on
request.--Any health care facility from which a participant
or beneficiary has sought treatment under a group health plan
shall provide to the participant or beneficiary, on request,
a description of the facility's corporate form or other
organizational form and all forms of licensing and
accreditation status (if any) assigned to the facility by
standard-setting organizations.
``(f) Access to Information Relevant to the Coverage
Options under which the Participant or Beneficiary is
Eligible to Enroll.--In addition to information otherwise
required to be made available under this section, a group
health plan (and a health insurance issuer offering health
insurance coverage in connection with a group health plan)
shall, upon written request (made not more frequently than
annually), make available to a participant in connection with
a period of enrollment the summary plan description for any
coverage option under the plan under which the participant is
eligible to enroll and any information described in clauses
(i), (ii), (iii), (vi), (vii), and (viii) of subsection
(e)(2)(B).
``(g) Advance Notice of Changes in Drug Formularies.--Not
later than 30 days before the effective of date of any
exclusion of a specific drug or biological from any drug
formulary under the plan that is used in the treatment of a
chronic illness or disease, the plan shall take such actions
as are necessary to reasonably ensure that plan participants
are informed of such exclusion. The requirements of this
subsection may be satisfied--
``(1) by inclusion of information in publications broadly
distributed by plan sponsors, employers, or employee
organizations,
``(2) by electronic means of communication (including the
Internet or proprietary computer networks in a format which
is readily accessible to participants),
``(3) by timely informing participants who, under an
ongoing program maintained under the plan, have submitted
their names for such notification, or
``(4) by any other reasonable means of timely informing
plan participants.''.

SEC. 2102. REPORTING ON FRAUD AND ABUSE ENFORCEMENT
ACTIVITIES.

The General Accounting Office shall--
(1) monitor--
(A) the compliance of the Department of Justice and all
United States Attorneys-with the guideline entitled
``Guidance on the Use of the False Claims Act in Civil Health
Care Matters'' issued by the Department on June 3, 1998,
including any revisions to such guideline, and
(B) the compliance of the Office of the Inspector General
of the Department of Health and Human Services with the
protocols and guidelines entitled ``National Project
Protocols--Best Practice Guidelines'' issued by the Inspector
General on June 3, 1998, including any revisions to such
protocols and guidelines, and
(2) submit a report on such compliance to the Committee on
Commerce of the House of Representatives not later than
February 1, 1999, and every year thereafter for a period of
four years ending February 1, 2002.

SEC. 2103. EFFECTIVE DATE.

SEC. 2201. SHORT TITLE OF SUBTITLE.

This subtitle may be cited as the ``Health Care Consumer
Empowerment Act of 1998''.

SEC. 2202. EXPANSION OF CONSUMER CHOICE THROUGH HEALTHMARTS.

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

``TITLE XXVIII--HEALTHMARTS

``SEC. 2801. DEFINITION OF HEALTHMART.

``(a) In General.--For purposes of this title, the term
`HealthMart' means a legal entity that meets the following
requirements:
``(1) Organization.--The HealthMart is a nonprofit
organization operated under the direction of a board of
directors which is composed of representatives of not fewer
than 2 and in equal numbers from each of the following:
``(A) Small employers.
``(B) Employees of small employers.
``(C) Health care providers, which may be physicians, other
health care professionals, health care facilities, or any
combination thereof.
``(D) Entities, such as insurance companies, health
maintenance organizations, and licensed provider-sponsored
organizations, that underwrite or administer health benefits
coverage.
``(2) Offering health benefits coverage.--
``(A) In general.--The HealthMart, in conjunction with
those health insurance issuers that offer health benefits
coverage through the HealthMart, makes available health
benefits coverage in the manner described in subsection (b)
to all small employers and eligible employees in the manner
described in subsection (c)(2) at rates (including employer's
and employee's share) that are established by the health
insurance issuer on a policy or product specific basis and
that may vary only as permissible under State law. A
HealthMart is deemed to be a group health plan for purposes
of applying section 702 of the Employee Retirement Income
Security Act of 1974, section 2702 of this Act, and section
9802(b) of the Internal Revenue Code of 1986 (which limit
variation among similarly situated individuals of required
premiums for health benefits coverage on the basis of health
status-related factors).
``(B) Nondiscrimination in coverage offered.--
``(i) In general.--Subject to clause (ii), the HealthMart
may not offer health benefits coverage to an eligible
employee in a geographic area (as specified under paragraph
(3)(A)) unless the same coverage is offered to all such
employees in the same geographic area. Section 2711(a)(1)(B)
of this Act limits denial of enrollment of certain eligible
individuals under health benefits coverage in the small group
market.
``(ii) Construction.--Nothing in this title shall be
construed as requiring or permitting a health insurance
issuer to provide coverage outside the service area of the
issuer, as approved under State law.
``(C) No financial underwriting.--The HealthMart provides
health benefits coverage only through contracts with health
insurance issuers and does not assume insurance risk with
respect to such coverage.
(D) Minimum coverage.--By the end of the first year of its
operation and thereafter, the HealthMart maintains not fewer
than 10 purchasers and 100 members.
``(3) Geographic areas.--
``(A) Specification of geographic areas.--The HealthMart
shall specify the geographic area (or areas) in which it
makes available health benefits coverage offered by health
insurance issuers to small employers. Such an area shall
encompass at least one entire county or equivalent area.
``(B) Multistate areas.--In the case of a HealthMart that
serves more than one State, such geographic areas may be
areas that include portions of two or more contiguous States.
``(C) Multiple healthmarts permitted in single geographic
area.--Nothing in this

[[Page H6325]]

title shall be construed as preventing the establishment and
operation of more than one HealthMart in a geographic area or
as limiting the number of HealthMarts that may operate in any
area.
``(4) Provision of administrative services to purchasers.--
``(A) In general.--The HealthMart provides administrative
services for purchasers. Such services may include
accounting, billing, enrollment information, and employee
coverage status reports.
``(B) Construction.--Nothing in this subsection shall be
construed as preventing a HealthMart from serving as an
administrative service organization to any entity.
``(5) Dissemination of information.--The HealthMart
collects and disseminates (or arranges for the collection and
dissemination of) consumer-oriented information on the scope,
cost, and enrollee satisfaction of all coverage options
offered through the HealthMart to its members and eligible
individuals. Such information shall be defined by the
HealthMart and shall be in a manner appropriate to the type
of coverage offered. To the extent practicable, such
information shall include information on provider
performance, locations and hours of operation of providers,
outcomes, and similar matters. Nothing in this section shall
be construed as preventing the dissemination of such
information or other information by the HealthMart or by
health insurance issuers through electronic or other means.
``(6) Filing information.--The HealthMart--
``(A) files with the applicable Federal authority
information that demonstrates the HealthMart's compliance
with the applicable requirements of this title; or
``(B) in accordance with rules established under section
2803(a), files with a State such information as the State may
require to demonstrate such compliance.
``(b) Health Benefits Coverage Requirements.--
``(1) Compliance with consumer protection requirements.--
Any health benefits coverage offered through a HealthMart
shall--
``(A) be underwritten by a health insurance issuer that--
``(i) is licensed (or otherwise regulated) under State law
(or is a community health organization that is offering
health insurance coverage pursuant to section 330B(a)),
``(ii) meets all applicable State standards relating to
consumer protection, subject to section 2802(b), and
``(iii) offers the coverage under a contract with the
HealthMart;
``(B) subject to paragraph (2), be approved or otherwise
permitted to be offered under State law; and
``(C) provide full portability of creditable coverage for
individuals who remain members of the same HealthMart
notwithstanding that they change the employer through which
they are members in accordance with the provisions of the
parts 6 and 7 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 and titles XXII and
XXVII of this Act, so long as both employers are purchasers
in the HealthMart.
``(2) Alternative process for approval of health benefits
coverage in case of discrimination or delay.--
``(A) In general.--The requirement of paragraph (1)(B)
shall not apply to a policy or product of health benefits
coverage offered in a State if the health insurance issuer
seeking to offer such policy or product files an application
to waive such requirement with the applicable Federal
authority, and the authority determines, based on the
application and other evidence presented to the authority,
that--
``(i) either (or both) of the grounds described in
subparagraph (B) for approval of the application has been
met; and
``(ii) the coverage meets the applicable State standards
(other than those that have been preempted under section
2802).
``(B) Grounds.--The grounds described in this subparagraph
with respect to a policy or product of health benefits
coverage are as follows:
``(i) Failure to act on policy, product, or rate
application on a timely basis.--The State has failed to
complete action on the policy or product (or rates for the
policy or product) within 90 days of the date of the State's
receipt of a substantially complete application. No period
before the date of the enactment of this section shall be
included in determining such 90-day period.
``(ii) Denial of application based on discriminatory
treatment.--The State has denied such an application and--

``(I) the standards or review process imposed by the State
as a condition of approval of the policy or product imposes
either any material requirements, procedures, or standards to
such policy or product that are not generally applicable to
other policies and products offered or any requirements that
are preempted under section 2802; or
``(II) the State requires the issuer, as a condition of
approval of the policy or product, to offer any policy or
product other than such policy or product.

``(C) Enforcement.--In the case of a waiver granted under
subparagraph (A) to an issuer with respect to a State, the
Secretary may enter into an agreement with the State under
which the State agrees to provide for monitoring and
enforcement activities with respect to compliance of such an
issuer and its health insurance coverage with the applicable
State standards described in subparagraph (A)(ii). Such
monitoring and enforcement shall be conducted by the State in
the same manner as the State enforces such standards with
respect to other health insurance issuers and plans, without
discrimination based on the type of issuer to which the
standards apply. Such an agreement shall specify or establish
mechanisms by which compliance activities are undertaken,
while not lengthening the time required to review and process
applications for waivers under subparagraph (A).
``(3) Examples of types of coverage.--The health benefits
coverage made available through a HealthMart may include, but
is not limited to, any of the following if it meets the other
applicable requirements of this title:
``(A) Coverage through a health maintenance organization.
``(B) Coverage in connection with a preferred provider
organization.
``(C) Coverage in connection with a licensed provider-
sponsored organization.
``(D) Indemnity coverage through an insurance company.
``(E) Coverage offered in connection with a contribution
into a medical savings account or flexible spending account.
``(F) Coverage that includes a point-of-service option.
``(G) Coverage offered by a community health organization
(as defined in section 330B(e)).
``(H) Any combination of such types of coverage.
``(4) Wellness bonuses for health promotion.--Nothing in
this title shall be construed as precluding a health
insurance issuer offering health benefits coverage through a
HealthMart from establishing premium discounts or rebates for
members or from modifying otherwise applicable copayments or
deductibles in return for adherence to programs of health
promotion and disease prevention so long as such programs are
agreed to in advance by the HealthMart and comply with all
other provisions of this title and do not discriminate among
similarly situated members.
``(c) Purchasers; Members; Health Insurance Issuers.--
``(1) Purchasers.--
``(A) In general.--Subject to the provisions of this title,
a HealthMart shall permit any small employer to contract with
the HealthMart for the purchase of health benefits coverage
for its employees and dependents of those employees and may
not vary conditions of eligibility (including premium rates
and membership fees) of a small employer to be a purchaser.
``(B) Role of associations, brokers, and licensed health
insurance agents.--Nothing in this section shall be construed
as preventing an association, broker, licensed health
insurance agent, or other entity from assisting or
representing a HealthMart or small employers from entering
into appropriate arrangements to carry out this title.
``(C) Period of contract.--The HealthMart may not require a
contract under subparagraph (A) between a HealthMart and a
purchaser to be effective for a period of longer than 12
months. The previous sentence shall not be construed as
preventing such a contract from being extended for additional
12-month periods or preventing the purchaser from voluntarily
electing a contract period of longer than 12 months.
``(D) Exclusive nature of contract.--Such a contract shall
provide that the purchaser agrees not to obtain or sponsor
health benefits coverage, on behalf of any eligible employees
(and their dependents), other than through the HealthMart.
The previous sentence shall not apply to an eligible
individual who resides in an area for which no coverage is
offered by any health insurance issuer through the
HealthMart.
``(2) Members.--
``(A) In general.--Under rules established to carry out
this title, with respect to a small employer that has a
purchaser contract with a HealthMart, individuals who are
employees of the employer may enroll for health benefits
coverage (including coverage for dependents of such enrolling
employees) offered by a health insurance issuer through the
HealthMart.
``(B) Nondiscrimination in enrollment.--A HealthMart may
not deny enrollment as a member to an individual who is an
employee (or dependent of such an employee) eligible to be so
enrolled based on health status-related factors, except as
may be permitted consistent with section 2742(b).
``(C) Annual open enrollment period.--In the case of
members enrolled in health benefits coverage offered by a
health insurance issuer through a HealthMart, subject to
subparagraph (D), the HealthMart shall provide for an annual
open enrollment period of 30 days during which such members
may change the coverage option in which the members are
enrolled.
``(D) Rules of eligibility.--Nothing in this paragraph
shall preclude a HealthMart from establishing rules of
employee eligibility for enrollment and reenrollment of
members during the annual open enrollment period under
subparagraph (C). Such rules shall be applied consistently to
all purchasers and members within the HealthMart and shall
not be based in any manner on health status-related factors
and may not conflict with sections 2701 and 2702 of this Act.
``(3) Health insurance issuers.--
``(A) Premium collection.--The contract between a
HealthMart and a health insurance issuer shall provide, with
respect to a

[[Page H6326]]

member enrolled with health benefits coverage offered by the
issuer through the HealthMart, for the payment of the
premiums collected by the HealthMart (or the issuer) for such
coverage (less a pre-determined administrative charge
negotiated by the HealthMart and the issuer) to the issuer.
``(B) Scope of service area.--Nothing in this title shall
be construed as requiring the service area of a health
insurance issuer with respect to health insurance coverage to
cover the entire geographic area served by a HealthMart.
``(C) Availability of coverage options.--A HealthMart shall
enter into contracts with one or more health insurance
issuers in a manner that assures that at least 2 health
insurance coverage options are made available in the
geographic area specified under subsection (a)(3)(A).
``(d) Prevention of Conflicts of Interest.--
``(1) For boards of directors.--A member of a board of
directors of a HealthMart may not serve as an employee or
paid consultant to the HealthMart, but may receive reasonable
reimbursement for travel expenses for purposes of attending
meetings of the board or committees thereof.
``(2) For boards of directors or employees.--An individual
is not eligible to serve in a paid or unpaid capacity on the
board of directors of a HealthMart or as an employee of the
HealthMart, if the individual is employed by, represents in
any capacity, owns, or controls any ownership interest in a
organization from whom the HealthMart receives contributions,
grants, or other funds not connected with a contract for
coverage through the HealthMart.
``(3) Employment and employee representatives.--
``(A) In general.--An individual who is serving on a board
of directors of a HealthMart as a representative described in
subparagraph (A) or (B) of section 2801(a)(1) shall not be
employed by or affiliated with a health insurance issuer or
be licensed as or employed by or affiliated with a health
care provider.
``(B) Construction.--For purposes of subparagraph (A), the
term ``affiliated'' does not include membership in a health
benefits plan or the obtaining of health benefits coverage
offered by a health insurance issuer.
``(e) Construction.--
``(1) Network of affiliated healthmarts.--Nothing in this
section shall be construed as preventing one or more
HealthMarts serving different areas (whether or not
contiguous) from providing for some or all of the following
(through a single administrative organization or otherwise):
``(A) Coordinating the offering of the same or similar
health benefits coverage in different areas served by the
different HealthMarts.
``(B) Providing for crediting of deductibles and other
cost-sharing for individuals who are provided health benefits
coverage through the HealthMarts (or affiliated HealthMarts)
after--
``(i) a change of employers through which the coverage is
provided, or
``(ii) a change in place of employment to an area not
served by the previous HealthMart.
``(2) Permitting healthmarts to adjust distributions among
issuers to reflect relative risk of enrollees.--Nothing in
this section shall be construed as precluding a HealthMart
from providing for adjustments in amounts distributed among
the health insurance issuers offering health benefits
coverage through the HealthMart based on factors such as the
relative health care risk of members enrolled under the
coverage offered by the different issuers.
``(3) Application of uniform minimum participation and
contribution rules.--Nothing in this section shall be
construed as precluding a HealthMart from establishing
minimum participation and contribution rules (described in
section 2711(e)(1)) for small employers that apply to become
purchasers in the HealthMart, so long as such rules are
applied uniformly for all health insurance issuers.

``SEC. 2802. APPLICATION OF CERTAIN LAWS AND REQUIREMENTS.

``(a) Authority of States.--Nothing in this section shall
be construed as preempting State laws relating to the
following:
``(1) The regulation of underwriters of health coverage,
including licensure and solvency requirements.
``(2) The application of premium taxes and required
payments for guaranty funds or for contributions to high-risk
pools.
``(3) The application of fair marketing requirements and
other consumer protections (other than those specifically
relating to an item described in subsection (b)).
``(4) The application of requirements relating to the
adjustment of rates for health insurance coverage.
``(b) Treatment of Benefit and Grouping Requirements.--
State laws insofar as they relate to any of the following are
superseded and shall not apply to health benefits coverage
made available through a HealthMart:
``(1) Benefit requirements for health benefits coverage
offered through a HealthMart, including (but not limited to)
requirements relating to coverage of specific providers,
specific services or conditions, or the amount, duration, or
scope of benefits, but not including requirements to the
extent required to implement title XXVII or other Federal law
and to the extent the requirement prohibits an exclusion of a
specific disease from such coverage.
``(2) Requirements (commonly referred to as fictitious
group laws) relating to grouping and similar requirements for
such coverage to the extent such requirements impede the
establishment and operation of HealthMarts pursuant to this
title.
``(3) Any other requirements (including limitations on
compensation arrangements) that, directly or indirectly,
preclude (or have the effect of precluding) the offering of
such coverage through a HealthMart, if the HealthMart meets
the requirements of this title.

Any State law or regulation relating to the composition or
organization of a HealthMart is preempted to the extent the
law or regulation is inconsistent with the provisions of this
title.
``(c) Application of ERISA Fiduciary and Disclosure
Requirements.--The board of directors of a HealthMart is
deemed to be a plan administrator of an employee welfare
benefit plan which is a group health plan for purposes of
applying parts 1 and 4 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 and those
provisions of part 5 of such subtitle which are applicable to
enforcement of such parts 1 and 4, and the HealthMart shall
be treated as such a plan and the enrollees shall be treated
as participants and beneficiaries for purposes of applying
such provisions pursuant to this subsection.
``(d) Application of ERISA Renewability Protection.--A
HealthMart is deemed to be group health plan that is a
multiple employer welfare arrangement for purposes of
applying section 703 of the Employee Retirement Income
Security Act of 1974.
``(e) Application of Rules for Network Plans and Financial
Capacity.--The provisions of subsections (c) and (d) of
section 2711 apply to health benefits coverage offered by a
health insurance issuer through a HealthMart.
``(f) Construction Relating to Offering Requirement.--
Nothing in section 2711(a) of this Act or 703 of the Employee
Retirement Income Security Act of 1974 shall be construed as
permitting the offering outside the HealthMart of health
benefits coverage that is only made available through a
HealthMart under this section because of the application of
subsection (b).
``(g) Application to Guaranteed Renewability Requirements
in Case of Discontinuation of an Issuer.--For purposes of
applying section 2712 in the case of health insurance
coverage offered by a health insurance issuer through a
HealthMart, if the contract between the HealthMart and the
issuer is terminated and the HealthMart continues to make
available any health insurance coverage after the date of
such termination, the following rules apply:
``(1) Renewability.--The HealthMart shall fulfill the
obligation under such section of the issuer renewing and
continuing in force coverage by offering purchasers (and
members and their dependents) all available health benefits
coverage that would otherwise be available to similarly-
situated purchasers and members from the remaining
participating health insurance issuers in the same manner as
would be required of issuers under section 2712(c).
``(2) Application of association rules.--The HealthMart
shall be considered an association for purposes of applying
section 2712(e).
``(h) Construction in Relation to Certain Other Laws.--
Nothing in this title shall be construed as modifying or
affecting the applicability to HealthMarts or health benefits
coverage offered by a health insurance issuer through a
HealthMart of parts 6 and 7 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 or titles
XXII and XXVII of this Act.

``SEC. 2803. ADMINISTRATION.

``(a) In General.--The applicable Federal authority shall
administer this title through the division established under
subsection (b) and is authorized to issue such regulations as
may be required to carry out this title. Such regulations
shall be subject to Congressional review under the provisions
of chapter 8 of title 5, United States Code. The applicable
Federal authority shall incorporate the process of `deemed
file and use' with respect to the information filed under
section 2801(a)(6)(A) and shall determine whether information
filed by a HealthMart demonstrates compliance with the
applicable requirements of this title. Such authority shall
exercise its authority under this title in a manner that
fosters and promotes the development of HealthMarts in order
to improve access to health care coverage and services.
``(b) Administration Through Health Care Marketplace
Division.--
``(1) In general.--The applicable Federal authority shall
carry out its duties under this title through a separate
Health Care Marketplace Division, the sole duty of which
(including the staff of which) shall be to administer this
title.
``(2) Additional duties.--In addition to other
responsibilities provided under this title, such Division is
responsible for--
``(A) oversight of the operations of HealthMarts under this
title; and
``(B) the periodic submittal to Congress of reports on the
performance of HealthMarts under this title under subsection
(c).
``(c) Periodic Reports.--The applicable Federal authority
shall submit to Congress a report every 30 months, during the
10-year period beginning on the effective date of the

[[Page H6327]]

rules promulgated by the applicable Federal authority to
carry out this title, on the effectiveness of this title in
promoting coverage of uninsured individuals. Such authority
may provide for the production of such reports through one or
more contracts with appropriate private entities.

``SEC. 2804. DEFINITIONS.

``For purposes of this title:
``(1) Applicable Federal authority.--The term `applicable
Federal authority' means the Secretary of Health and Human
Services.
``(2) Eligible employee or individual.--The term `eligible'
means, with respect to an employee or other individual and a
HealthMart, an employee or individual who is eligible under
section 2801(c)(2) to enroll or be enrolled in health
benefits coverage offered through the HealthMart.
``(3) Employer; employee; dependent.--Except as the
applicable Federal authority may otherwise provide, the terms
`employer', `employee', and `dependent', as applied to health
insurance coverage offered by a health insurance issuer
licensed (or otherwise regulated) in a State, shall have the
meanings applied to such terms with respect to such coverage
under the laws of the State relating to such coverage and
such an issuer.
``(4) Health benefits coverage.--The term `health benefits
coverage' has the meaning given the term group health
insurance coverage in section 2791(b)(4).
``(5) Health insurance issuer.--The term `health insurance
issuer' has the meaning given such term in section 2791(b)(2)
and includes a community health organization that is offering
coverage pursuant to section 330B(a).
``(6) Health status-related factor.--The term `health
status-related factor' has the meaning given such term in
section 2791(d)(9).
``(7) HealthMart.--The term `HealthMart' is defined in
section 2801(a).
``(8) Member.--The term `member`` means, with respect to a
HealthMart, an individual enrolled for health benefits
coverage through the HealthMart under section 2801(c)(2).
``(9) Purchaser.--The term `purchaser' means, with respect
to a HealthMart, a small employer that has contracted under
section 2801(c)(1)(A) with the HealthMart for the purchase of
health benefits coverage.
``(10) Small employer.--The term `small employer' has the
meaning given such term for purposes of title XXVII.''.
Subtitle D--Community Health Organizations

SEC. 2301. PROMOTION OF PROVISION OF INSURANCE BY COMMUNITY
HEALTH ORGANIZATIONS.

(a) Waiver of State Licensure Requirement for Community
Health Organizations in Certain Cases.--Subpart I of part D
of title III of the Public Health Service Act is amended by
adding at the end the following new section:

``waiver of state licensure requirement for community health
organizations in certain cases

``Sec. 330B. (a) Waiver Authorized.--
``(1) In general.--A community health organization may
offer health insurance coverage in a State notwithstanding
that it is not licensed in such a State to offer such
coverage if--
``(A) the organization files an application for waiver of
the licensure requirement with the Secretary of Health and
Human Services (in this section referred to as the
`Secretary') by not later than November 1, 2003, and
``(B) the Secretary determines, based on the application
and other evidence presented to the Secretary, that any of
the grounds for approval of the application described in
subparagraph (A), (B), or (C) of paragraph (2) has been met.
``(2) Grounds for approval of waiver.--
``(A) Failure to act on licensure application on a timely
basis.--The ground for approval of such a waiver application
described in this subparagraph is that the State has failed
to complete action on a licensing application of the
organization within 90 days of the date of the State's
receipt of a substantially complete application. No period
before the date of the enactment of this section shall be
included in determining such 90-day period.
``(B) Denial of application based on discriminatory
treatment.--The ground for approval of such a waiver
application described in this subparagraph is that the State
has denied such a licensing application and the standards or
review process imposed by the State as a condition of
approval of the license or as the basis for such denial by
the State imposes any material requirements, procedures, or
standards (other than solvency requirements) to such
organizations that are not generally applicable to other
entities engaged in a substantially similar business.
``(C) Denial of application based on application of
solvency requirements.--With respect to waiver applications
filed on or after the date of publication of solvency
standards established by the Secretary under subsection (d),
the ground for approval of such a waiver application
described in this subparagraph is that the State has denied
such a licensing application based (in whole or in part) on
the organization's failure to meet applicable State solvency
requirements and such requirements are not the same as the
solvency standards established by the Secretary. For purposes
of this subparagraph, the term solvency requirements means
requirements relating to solvency and other matters covered
under the standards established by the Secretary under
subsection (d).
``(3) Treatment of waiver.--In the case of a waiver granted
under this subsection for a community health organization
with respect to a State--
``(A) Limitation to state.--The waiver shall be effective
only with respect to that State and does not apply to any
other State.
``(B) Limitation to 36-month period.--The waiver shall be
effective only for a 36-month period but may be renewed for
up to 36 additional months if the Secretary determines that
such an extension is appropriate.
``(C) Conditioned on compliance with consumer protection
and quality standards.--The continuation of the waiver is
conditioned upon the organization's compliance with the
requirements described in paragraph (5).
``(D) Preemption of state law.--Any provisions of law of
that State which relate to the licensing of the organization
and which prohibit the organization from providing health
insurance coverage shall be superseded.
``(4) Prompt action on application.--The Secretary shall
grant or deny such a waiver application within 60 days after
the date the Secretary determines that a substantially
complete waiver application has been filed. Nothing in this
section shall be construed as preventing an organization
which has had such a waiver application denied from
submitting a subsequent waiver application.
``(5) Application and enforcement of state consumer
protection and quality standards.--A waiver granted under
this subsection to an organization with respect to licensing
under State law is conditioned upon the organization's
compliance with all consumer protection and quality standards
insofar as such standards--
``(A) would apply in the State to the community health
organization if it were licensed as an entity offering health
insurance coverage under State law; and
``(B) are generally applicable to other risk-bearing
managed care organizations and plans in the State.
``(6) Report.--By not later than December 31, 2002, the
Secretary shall submit to the Committee on Commerce of the
House of Representatives and the Committee on Labor and Human
Resources of the Senate a report regarding whether the waiver
process under this subsection should be continued after
December 31, 2003.
``(b) Assumption of Full Financial Risk.--To qualify for a
waiver under subsection (a), the community health
organization shall assume full financial risk on a
prospective basis for the provision of covered health care
services, except that the organization--
``(1) may obtain insurance or make other arrangements for
the cost of providing to any enrolled member such services
the aggregate value of which exceeds such aggregate level as
the Secretary specifies from time to time;
``(2) may obtain insurance or make other arrangements for
the cost of such services provided to its enrolled members
other than through the organization because medical necessity
required their provision before they could be secured through
the organization;
``(3) may obtain insurance or make other arrangements for
not more than 90 percent of the amount by which its costs for
any of its fiscal years exceed 105 percent of its income for
such fiscal year; and
``(4) may make arrangements with physicians or other health
care professionals, health care institutions, or any
combination of such individuals or institutions to assume all
or part of the financial risk on a prospective basis for the
provision of health services by the physicians or other
health professionals or through the institutions.
``(c) Certification of Provision against Risk of Insolvency
for Unlicensed CHOs.--
``(1) In general.--Each community health organization that
is not licensed by a State and for which a waiver application
has been approved under subsection (a)(1), shall meet
standards established by the Secretary under subsection (d)
relating to the financial solvency and capital adequacy of
the organization.
``(2) Certification process for solvency standards for
chos.--The Secretary shall establish a process for the
receipt and approval of applications of a community health
organization described in paragraph (1) for certification
(and periodic recertification) of the organization as meeting
such solvency standards. Under such process, the Secretary
shall act upon such a certification application not later
than 60 days after the date the application has been
received.
``(d) Establishment of Solvency Standards for Community
Health Organizations.--
``(1) In general.--The Secretary shall establish, on an
expedited basis and by rule pursuant to section 553 of title
5, United States Code and through the Health Resources and
Services Administration, standards described in subsection
(c)(1) (relating to financial solvency and capital adequacy)
that entities must meet to obtain a waiver under subsection
(a)(2)(C). In establishing such standards, the Secretary
shall consult with interested organizations, including the
National Association of Insurance Commissioners, the Academy
of Actuaries, and organizations representing Federally
qualified health centers.

[[Page H6328]]

``(2) Factors to consider for solvency standards.--In
establishing solvency standards for community health
organizations under paragraph (1), the Secretary shall take
into account--
``(A) the delivery system assets of such an organization
and ability of such an organization to provide services to
enrollees;
``(B) alternative means of protecting against insolvency,
including reinsurance, unrestricted surplus, letters of
credit, guarantees, organizational insurance coverage,
partnerships with other licensed entities, and valuation
attributable to the ability of such an organization to meet
its service obligations through direct delivery of care; and
``(C) any standards developed by the National Association
of Insurance Commissioners specifically for risk-based health
care delivery organizations.
``(3) Enrollee protection against insolvency.--Such
standards shall include provisions to prevent enrollees from
being held liable to any person or entity for the
organization's debts in the event of the organization's
insolvency.
``(4) Deadline.--Such standards shall be promulgated in a
manner so they are first effective by not later than April 1,
1999.
``(e) Definitions.--In this section:
``(1) Community health organization.--The term `community
health organization ' means an organization that is a
Federally-qualified health center or is controlled by one or
more Federally-qualified health centers.
``(2) Federally-qualified health center.--The term
`Federally-qualified health center' has the meaning given
such term in section 1905(l)(2)(B) of the Social Security
Act.
``(3) Health insurance coverage.--The term `health
insurance coverage' has the meaning given such term in
section 2791(b)(1).
``(4) Control.--The term `control' means the possession,
whether direct or indirect, of the power to direct or cause
the direction of the management and policies of the
organization through membership, board representation, or an
ownership interest equal to or greater than 50.1 percent.''.
TITLE III--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986
Subtitle A--Patient Protections

SEC. 3001. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE,
EMERGENCY MEDICAL CARE, OBSTETRIC AND
GYNECOLOGICAL CARE, PEDIATRIC CARE.

(a) In General.--Subchapter B of chapter 100 of the
Internal Revenue Code of 1986 (relating to other
requirements) is amended by adding at the end the following
new section:

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

``(a) Patient Access to Unrestricted Medical Advice.--
``(1) In general.--In the case of any health care
professional acting within the lawful scope of practice in
the course of carrying out a contractual employment
arrangement or other direct contractual arrangement between
such professional and a group health plan, the plan with
which such contractual employment arrangement or other direct
contractual arrangement is maintained by the professional may
not impose on such professional under such arrangement any
prohibition with respect to advice, provided to a participant
or beneficiary under the plan who is a patient, about the
health status of the participant or beneficiary or the
medical care or treatment for the condition or disease of the
participant or beneficiary, regardless of whether benefits
for such care or treatment are provided under the plan.
``(2) Health care professional defined.--For purposes of
this subsection, the term `health care professional' means a
physician (as defined in section 1861(r) of the Social
Security Act) or other health care professional if coverage
for the professional's services is provided under the group
health plan for the services of the professional. Such term
includes a podiatrist, optometrist, chiropractor,
psychologist, dentist, physician assistant, physical or
occupational therapist and therapy assistant, speech-language
pathologist, audiologist, registered or licensed practical
nurse (including nurse practitioner, clinical nurse
specialist, certified registered nurse anesthetist, and
certified nurse-midwife), licensed certified social worker,
registered respiratory therapist, and certified respiratory
therapy technician.
``(b) Patient Access to Emergency Medical Care.--
``(1) In general.--To the extent that the group health plan
provides for any benefits consisting of emergency medical
care (as defined in section 503(b)(9)(I) of the Employee
Retirement Income Security Act of 1974), except for items or
services specifically excluded--
``(A) the plan shall provide benefits, without requiring
preauthorization, for appropriate emergency medical screening
examinations (within the capability of the emergency
facility, including ancillary services routinely available to
the emergency facility) to the extent that a prudent
layperson, who possesses an average knowledge of health and
medicine, would determine such examinations to be necessary
in order to determine whether emergency medical care (as so
defined) is required, and
``(B) the plan shall provide benefits for additional
emergency medical services following an emergency medical
screening examination (if determined necessary under
subparagraph (A)) to the extent that a prudent emergency
medical professional would determine such additional
emergency services to be necessary to avoid the consequences
described in clause (i) of section 503(b)(9)(I) of such Act.
``(2) Uniform cost-sharing required.--Nothing in this
subsection shall be construed as preventing a group health
plan from imposing any form of cost-sharing applicable to any
participant or beneficiary (including coinsurance,
copayments, deductibles, and any other charges) in relation
to benefits described in paragraph (1), if such form of cost-
sharing is uniformly applied under such plan, with respect to
similarly situated participants and beneficiaries, to all
benefits consisting of emergency medical care (as defined in
section 503(b)(9)(I) of the Employee Retirement Income
Security Act of 1974) provided to such similarly situated
participants and beneficiaries under the plan.
``(c) Patient Access to Obstetric and Gynecological Care.
``(1) In general.--In any case in which a group health
plan--
``(A) provides benefits under the terms of the plan
consisting of--
``(i) routine gynecological care (such as preventive
women's health examinations), or
``(ii) routine obstetric care (such as routine pregnancy-
related services),

if the primary care provider designated by such a participant
or beneficiary is not such a physician, then the plan shall
meet the requirements of paragraph (2).
``(2) Requirements.--A group health plan meets the
requirements of this paragraph, in connection with benefits
described in paragraph (1) consisting of care described in
clause (i) or (ii) of paragraph (1)(A) (or consisting of
payment therefor), if the plan--
``(A) does not require authorization or a referral by the
primary care provider in order to obtain such benefits, and
``(B) treats the ordering of other routine care of the same
type, by the participating physician providing the care
described in clause (i) or (ii) of paragraph (1)(A), as the
authorization of the primary care provider with respect to
such care.
``(3) Construction.--Nothing in paragraph (2)(B) shall
waive any requirements of coverage relating to medical
necessity or appropriateness with respect to coverage of
gynecological or obstetric care so ordered.
``(d) Patient Access to Pediatric Care.--
``(1) In general.--In any case in which a group health plan
(or a health insurance issuer offering health insurance
coverage in connection with the plan) provides benefits
consisting of routine pediatric care provided by a
participating physician who specializes in pediatrics (or
consisting of payment for such care) and the plan requires or
provides for designation by a participant or beneficiary of a
participating primary care provider, the plan (or issuer)
shall provide that such a participating physician may be
designated, if available, by a parent or guardian of any
beneficiary under the plan is who under 18 years of age, as
the primary care provider with respect to any such benefits.
``(2) Construction.--Nothing in paragraph (1) shall waive
any requirements of coverage relating to medical necessity or
appropriateness with respect to coverage of pediatric care.
``(e) Treatment of Multiple Coverage Options.--In the case
of a plan providing benefits under two or more coverage
options, the requirements of subsections (c) and (d) shall
apply separately with respect to each coverage option.''.
(b) Clerical Amendment.--The table of sections of such
subchapter of such chapter is amended by adding at the end
the following new item:

``Sec. 9813. Patient access to unrestricted medical advice, emergency
medical care, obstetric and gynecological care, pediatric
care.''

SEC. 3002. EFFECTIVE DATE AND RELATED RULES.

(a) In General.--The amendments made by this subtitle shall
apply with respect to plan years beginning on or after
January 1 of the second calendar year following the date of
the enactment of this Act, except that the Secretary of the
Treasury may issue regulations before such date under such
amendments. The Secretary shall first issue regulations
necessary to carry out the amendments made by this section
before the effective date thereof.
(b) Limitation on Penalty for Certain Failures.--No penalty
shall be imposed on any failure to comply with any
requirement imposed by the amendments made by section 3101 to
the extent such failure occurs before the date of issuance of
regulations issued in connection with such requirement if the
plan has sought to comply in good faith with such
requirement.
(c) Special Rule for Collective Bargaining Agreements.--In
the case of a group health plan maintained pursuant to one or
more collective bargaining agreements between employee
representatives and one or more employers ratified before the
date of the enactment of this Act, the provisions of
subsections (b), (c), and (d) of section 9813 of

[[Page H6329]]

the Internal Revenue Code of 1986 (as added by this subtitle)
shall not apply with respect to plan years beginning before
the later of--
(1) the date on which the last of the collective bargaining
agreements relating to the plan terminates (determined
without regard to any extension thereof agreed to after the
date of the enactment of this Act), or
(2) January 1, 2001.

SEC. 3101. PATIENT ACCESS TO INFORMATION REGARDING PLAN
COVERAGE, MANAGED CARE PROCEDURES, HEALTH CARE
PROVIDERS, AND QUALITY OF MEDICAL CARE.

(a) In General.--Subchapter B of chapter 100 of the
Internal Revenue Code of 1986 (relating to other
requirements) is amended by adding at the end the following
new section:

``SEC. 9814. DISCLOSURE BY GROUP HEALTH PLANS.

``(a) Disclosure Requirement.--The administrator of each
group health plan shall take such actions as are necessary to
ensure that the summary plan description of the plan required
under section 102 of Employee Retirement Income Security Act
of 1974 (or each summary plan description in any case in
which different summary plan descriptions are appropriate
under part 1 of subtitle B of title I of such Act for
different options of coverage) contains the information
required under subsections (b), (c), (d), and (e)(2)(A). To
the extent that any health insurance issuer offering health
insurance coverage in connection with such plan provides such
information on a timely basis to plan participants and
beneficiaries, the requirements of this subsection shall be
deemed satisfied in the case of such plan with respect to
such information.
``(b) Plan Benefits.--The information required under
subsection (a) includes the following:
``(1) Covered items and services.--
``(A) Categorization of included benefits.--A description
of covered benefits, categorized by--
``(i) types of items and services (including any special
disease management program), and
``(ii) types of health care professionals providing such
items and services.
``(B) Emergency medical care.--A description of the extent
to which the plan covers emergency medical care (including
the extent to which the plan provides for access to urgent
care centers), and any definitions provided under the plan
for the relevant plan terminology referring to such care.
``(C) Preventative services.--A description of the extent
to which the plan provides benefits for preventative
services.
``(D) Drug formularies.--A description of the extent to
which covered benefits are determined by the use or
application of a drug formulary and a summary of the process
for determining what is included in such formulary.
``(E) COBRA continuation coverage.--A description of the
requirements under section 4980B.
``(2) Limitations, exclusions, and restrictions on covered
benefits.--
``(A) Categorization of excluded benefits.--A description
of benefits specifically excluded from coverage, categorized
by types of items and services.
``(B) Utilization review and preauthorization
requirements.--Whether coverage for medical care is limited
or excluded on the basis of utilization review or
preauthorization requirements.
``(C) Lifetime, annual, or other period limitations.--A
description of the circumstances under which, and the extent
to which, coverage is subject to lifetime, annual, or other
period limitations, categorized by types of benefits.
``(D) Custodial care.--A description of the circumstances
under which, and the extent to which, the coverage of
benefits for custodial care is limited or excluded, and a
statement of the definition used by the plan for custodial
care.
``(E) Experimental treatments.--Whether coverage for any
medical care is limited or excluded because it constitutes
experimental treatment or technology, and any definitions
provided under the plan for the relevant plan terminology
referring to such limited or excluded care.
``(F) Medical appropriateness or necessity.--Whether
coverage for medical care may be limited or excluded by
reason of a failure to meet the plan's requirements for
medical appropriateness or necessity, and any definitions
provided under the plan for the relevant plan terminology
referring to such limited or excluded care.
``(G) Second or subsequent opinions.--A description of the
circumstances under which, and the extent to which, coverage
for second or subsequent opinions is limited or excluded.
``(H) Specialty care.--A description of the circumstances
under which, and the extent to which, coverage of benefits
for specialty care is conditioned on referral from a primary
care provider.
``(I) Continuity of care.--A description of the
circumstances under which, and the extent to which, coverage
of items and services provided by any health care
professional is limited or excluded by reason of the
departure by the professional from any defined set of
providers.
``(J) Restrictions on coverage of emergency services.--A
description of the circumstances under which, and the extent
to which, the plan, in covering emergency medical care
furnished to a participant or beneficiary of the plan imposes
any financial responsibility described in subsection (c) on
participants or beneficiaries or limits or conditions
benefits for such care subject to any other term or condition
of such plan.
``(c) Participant's Financial Responsibilities.--The
information required under subsection (a) includes an
explanation of--
``(1) a participant's financial responsibility for payment
of premiums, coinsurance, copayments, deductibles, and any
other charges, and
``(2) the circumstances under which, and the extent to
which, the participant's financial responsibility described
in paragraph (1) may vary, including any distinctions based
on whether a health care provider from whom covered benefits
are obtained is included in a defined set of providers.
``(d) Dispute Resolution Procedures.--The information
required under subsection (a) includes a description of the
processes adopted by the plan pursuant to section 503(b) of
Employee Retirement Income Security Act of 1974, including--
``(1) descriptions thereof relating specifically to--
``(A) coverage decisions,
``(B) internal review of coverage decisions, and
``(C) any external review of coverage decisions, and
``(2) the procedures and time frames applicable to each
step of the processes referred to in subparagraphs (A), (B),
and (C) of paragraph (1).
``(e) Information Available on Request.--
``(1) Access to plan benefit information in electronic
form.--
``(A) In general.--A group health plan shall, upon written
request (made not more frequently than annually), make
available to participants and beneficiaries, in a generally
recognized electronic format, the following information:
``(i) the latest summary plan description, including the
latest summary of material modifications; and
``(ii) the actual plan provisions setting forth the
benefits available under the plan

[[Page H6330]]

preauthorization requirement or any utilization review
requirement has resulted in such decision.
``(vi) Accreditation status of health insurance issuers and
service providers.--A description of the accreditation and
licencing status (if any) of each health insurance issuer
offering health insurance coverage in connection with the
plan and of any utilization review organization utilized by
the issuer or the plan, together with the name and address of
the accrediting or licencing authority.
``(vii) Measures of enrollee satisfaction.--The latest
information (if any) maintained by the plan, or by any health
insurance issuer offering health insurance coverage in
connection with the plan, relating to enrollee satisfaction.
``(viii) Quality performance measures.--The latest
information (if any) maintained by the plan, or by any health
insurance issuer offering health insurance coverage in
connection with the plan, relating to quality of performance
of the delivery of medical care with respect to coverage
options offered under the plan and of health care
professionals and facilities providing medical care under the
plan.
``(C) Information required from health care professionals
on request.--Any health care professional treating a
participant or beneficiary under a group health plan shall
provide to the participant or beneficiary, on request, a
description of his or her professional qualifications
(including board certification status, licensing status, and
accreditation status, if any), privileges, and experience and
a general description by category (including salary, fee-for-
service, capitation, and such other categories as may be
specified in regulations of the Secretary) of the applicable
method by which such professional is compensated in
connection with the provision of such medical care.
``(D) Information required from health care facilities on
request.--Any health care facility from which a participant
or beneficiary has sought treatment under a group health plan
shall provide to the participant or beneficiary, on request,
a description of the facility's corporate form or other
organizational form and all forms of licensing and
accreditation status (if any) assigned to the facility by
standard-setting organizations.
``(f) Access to Information Relevant to the Coverage
Options under which the Participant or Beneficiary is
Eligible to Enroll.--In addition to information otherwise
required to be made available under this section, a group
health plan shall, upon written request (made not more
frequently than annually), make available to a participant in
connection with a period of enrollment the summary plan
description for any coverage option under the plan under
which the participant is eligible to enroll and any
information described in clauses (i), (ii), (iii), (vi),
(vii), and (viii) of subsection (e)(2)(B).
``(g) Advance Notice of Changes in Drug Formularies.--Not
later than 30 days before the effective of date of any
exclusion of a specific drug or biological from any drug
formulary under the plan that is used in the treatment of a
chronic illness or disease, the plan shall take such actions
as are necessary to reasonably ensure that plan participants
are informed of such exclusion. The requirements of this
subsection may be satisfied--
``(1) by inclusion of information in publications broadly
distributed by plan sponsors, employers, or employee
organizations,
``(2) by electronic means of communication (including the
Internet or proprietary computer networks in a format which
is readily accessible to participants),
``(3) by timely informing participants who, under an
ongoing program maintained under the plan, have submitted
their names for such notification, or
``(4) by any other reasonable means of timely informing
plan participants.''.
(b) Clerical Amendment.--The table of sections of such
subchapter of such chapter is amended by adding at the end
the following new item:

``Sec. 9814. Disclosure by group health plans.''

SEC. 3102. REPORTING ON FRAUD AND ABUSE ENFORCEMENT
ACTIVITIES.

The General Accounting Office shall--
(1) monitor--
(A) the compliance of the Department of Justice and all
United States Attorneys-with the guideline entitled
``Guidance on the Use of the False Claims Act in Civil Health
Care Matters'' issued by the Department on June 3, 1998,
including any revisions to that guideline, and
(B) the compliance of the Office of the Inspector General
of the Department of Health and Human Services with the
protocols and guidelines entitled ``National Project
Protocols--Best Practice Guidelines'' issued by the Inspector
General on June 3, 1998, including any revisions to such
protocols and guidelines, and
(2) submit a report on such compliance to the Committee on
the Judiciary and the Committee on Ways and Means of the
House of Representatives and the Committee on the Judiciary
and the Committee on Finance of the Senate not later than
February 1, 1999, and every year thereafter for a period of
four years ending February 1, 2002.

SEC. 3103. EFFECTIVE DATE.

SEC. 3201. EXPANSION OF AVAILABILITY OF MEDICAL SAVINGS
ACCOUNTS.

(a) Repeal of Limitations on Number of Medical Savings
Accounts.--
(1) In general.--Subsections (i) and (j) of section 220 of
the Internal Revenue Code of 1986 are hereby repealed.
(2) Conforming amendment.--Paragraph (1) of section 220(c)
of such Code is amended by striking subparagraph (D).
(b) All Employers May Offer Medical Savings Accounts.--
(1) In general.--Subclause (I) of section 220(c)(1)(A)(iii)
of such Code (defining eligible individual) is amended by
striking ``and such employer is a small employer''.
(2) Conforming amendments.--
(A) Paragraph (1) of section 220(c) of such Code is amended
by striking subparagraph (C).
(B) Subsection (c) of section 220 of such Code is amended
by striking paragraph (4) and by redesignating paragraph (5)
as paragraph (4).
(c) Increase in Amount of Deduction Allowed for
Contributions to Medical Savings Accounts.--
(1) In general.--Paragraph (2) of section 220(b) of such
Code is amended to read as follows:
``(2) Monthly limitation.--The monthly limitation for any
month is the amount equal to \1/12\ of the annual deductible
(as of the first day of such month) of the taxpayer's
coverage under the high deductible health plan.''
(2) Conforming amendment.--Clause (ii) of section
220(d)(1)(A) of such Code is amended by striking ``75 percent
of''.
(d) Both Employers and Employees May Contribute to Medical
Savings Accounts.--Paragraph (5) of section 220(b) of such
Code is amended to read as follows:
``(5) Coordination with exclusion for employer
contributions.--The limitation which would (but for this
paragraph) apply under this subsection to the taxpayer for
any taxable year shall be reduced (but not below zero) by the
amount which would (but for section 106(b)) be includible in
the taxpayer's gross income for such taxable year.''
(e) Reduction of Permitted Deductibles Under High
Deductible Health Plans.--
(1) In general.--Subparagraph (A) of section 220(c)(2) of
such Code (defining high deductible health plan) is amended--
(A) by striking ``$1,500'' and inserting ``$1,000'', and
(B) by striking ``$3,000'' and inserting ``$2,000''.
(2) Conforming amendment.--Subsection (g) of section 220 of
such Code is amended--
(A) by striking ``1998'' and inserting ``1999'', and
(B) by striking ``1997'' and inserting ``1998''.
(f) Medical Savings Accounts May Be Offered Under Cafeteria
Plans.--Subsection (f) of section 125 of such Code is amended
by striking ``106(b),''.
(g) Individuals Receiving Immediate Federal Annuities
Eligible for Medical Savings Accounts.--Paragraph (1) of
section 220(c) of such Code (defining eligible individual),
as amended by subsections (a) and (b), is amended by adding
at the end the following new subparagraph:
``(C) Special rules for individuals receiving immediate
federal annuities.--
``(i) In general.--Subparagraph (A)(iii) and subsection
(b)(4) shall not apply for any month to an individual--

``(I) who, as of the 1st day of such month, is enrolled in
a high deductible health plan under chapter 89 of title 5,
United States Code, and
``(II) who is entitled to receive for such month any amount
by reason of being an annuitant (as defined in section
8901(3) of such title 5).

``(ii) Special rule for spouse of annuitant.--In the case
of the spouse of an individual described in clause (i) who is
not also described in clause (i), subsection (b)(4) shall not
apply to such spouse if such individual and spouse have
family coverage under the same plan described in clause
(i)(I).''
(h) Effective Date.--The amendments made by this section
shall apply to taxable years ending after the date of the
enactment of this Act.

SEC. 3202. EXCEPTION FROM INSURANCE LIMITATION IN CASE OF
MEDICAL SAVINGS ACCOUNTS.

(a) In General.--Section 220(d)(2)(B) of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new clause:
``(iii) Insurance offered by community health centers.--

[[Page H6331]]

in section 330(b)(1)(A) of such Act) provided on a capitated
basis.
``(II) Income limitation.--Subclause (I) shall only apply
to expenses for coverage of an individual who, in the taxable
year involved, has income that is less than 200 percent of
the income official poverty line (as defined by the Office of
Management and Budget, and revised annually in accordance
with section 673(2) of the Omnibus Budget Reconciliation Act
of 1981) applicable to a family of the size involved.
``(III) Limitation on number of contracts.--For a taxable
year ending in a calendar year, subclause (I) shall apply
only to expenses for coverage for the first 15,000
individuals enrolled in insurance described in such subclause
in the year.''.

(b) Reports on Enrollment.--Section 330(j)(3) of the Public
Health Service Act (42 U.S.C. 254c(j)(3)) is amended--
(1) by striking ``and'' at the end of subparagraph (K),
(2) by striking the period at the end of subparagraph (L)
and inserting ``; and'', and
(3) by inserting after subparagraph (L) the following new
subparagraph:
``(M) if the center offers insurance coverage to an
individual with a medical savings account under subclause (I)
of section 220(d)(2)(B)(iii), the center shall provide such
reports in such time and manner as may be required by the
Secretary and the Secretary of the Treasury in order to carry
out subclause (III) of such section.''.
TITLE IV--HEALTH CARE LAWSUIT REFORM
Subtitle A--General Provisions

SEC. 4001. FEDERAL REFORM OF HEALTH CARE LIABILITY ACTIONS.

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

SEC. 4002. DEFINITIONS.

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

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

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

(18) Punitive damages.--The term ``punitive damages'' means
damages awarded against any person not to compensate for
actual injury suffered, but to punish or deter

[[Page H6332]]

such person or others from engaging in similar behavior in
the future.
(19) State.--The term ``State'' means each of the several
States, the District of Columbia, Puerto Rico, the Virgin
Islands, Guam, American Samoa, the Northern Mariana Islands,
and any other territory or possession of the United States.

SEC. 4003. EFFECTIVE DATE.

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

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

SEC. 4011. STATUTE OF LIMITATIONS.

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

SEC. 4012. CALCULATION AND PAYMENT OF DAMAGES.

(a) Treatment of Non-Economic Damages.--
(1) Limitation on non-economic damages.--The total amount
of non-economic damages that may be awarded to a claimant for
losses resulting from the injury which is the subject of a
health care liability action may not exceed $250,000,
regardless of the number of parties against whom the action
is brought or the number of actions brought with respect to
the injury. The limitation under this paragraph shall not
apply to an action for damages based solely on intentional
denial of medical treatment necessary to preserve a patient's
life that the patient is otherwise qualified to receive,
against the wishes of a patient, or if the patient is
incompetent, against the wishes of the patient's guardian, on
the basis of the patient's present or predicated age,
disability, degree of medical dependency, or quality of life.
(2) Limit.--If, after the date of the enactment of this
Act, a State enacts a law which prescribes the amount of non-
economic damages which may be awarded in a health care
liability action which is different from the amount
prescribed by section 4012(a)(1), the State amount shall
apply in lieu of the amount prescribed by such section. If,
after the date of the enactment of this Act, a State enacts a
law which limits the amount of recovery in a health care
liability action without delineating between economic and
non-economic damages, the State amount shall apply in lieu of
the amount prescribed by such section.
(3) Joint and several liability.--In any health care
liability action brought in State or Federal court, a
defendant shall be liable only for the amount of non-economic
damages attributable to such defendant in direct proportion
to such defendant's share of fault or responsibility for the
claimant's actual damages, as determined by the trier of
fact. In all such cases, the liability of a defendant for
non-economic damages shall be several and not joint and a
separate judgment shall be rendered against each defendant
for the amount allocated to such defendant.
(b) Treatment of Punitive Damages.--
(1) General rule.--Punitive damages may, to the extent
permitted by applicable State law, be awarded in any health
care liability action for harm in any Federal or State court
against a defendant if the claimant establishes by clear and
convincing evidence that the harm suffered was the result of
conduct--
(A) specifically intended to cause harm, or
(B) conduct manifesting a conscious, flagrant indifference
to the rights or safety of others.
(2) Applicability.--This subsection shall apply to any
health care liability action brought in any Federal or State
court on any theory where punitive damages are sought. This
subsection does not create a cause of action for punitive
damages. This subsection does not preempt or supersede any
State or Federal law to the extent that such law would
further limit the award of punitive damages.
(3) Bifurcation.--At the request of any party, the trier of
fact shall consider in a separate proceeding whether punitive
damages are to be awarded and the amount of such award. If a
separate proceeding is requested, evidence relevant only to
the claim of punitive damages, as determined by applicable
State law, shall be inadmissible in any proceeding to
determine whether actual damages are to be awarded.
(4) Drugs and devices.--
(A) In general.--
(i) Punitive damages.--Punitive damages shall not be
awarded against a manufacturer or product seller of a drug or
medical device which caused the claimant's harm where--

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

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

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

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

SEC. 4013. ALTERNATIVE DISPUTE RESOLUTION.

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

SEC. 5001. CONFIDENTIALITY OF PROTECTED HEALTH INFORMATION.

(a) In General.--Title XI of the Social Security Act (42
U.S.C. 1301 et seq.) is amended by adding at the end the
following:

``Part D--Confidentiality of Protected Health Information

``inspection and copying of protected health information

[[Page H6333]]

was created as part of the requesting individual's
participation in a clinical trial monitored by an
institutional review board established to review health
research with respect to potential risks to human subjects
pursuant to Federal regulations adopted under section 1802(b)
of the Public Health Service Act (42 U.S.C. 300v-1(b)) and
the notice (informally referred to as the `Common Rule')
promulgated in the Federal Register at 56 Fed. Reg. 28003), a
request under subsection (a) shall be granted only to the
extent and in a manner consistent with such regulations.
``(d) Other Exceptions.--Unless ordered by a court of
competent jurisdiction, a person to whom a request under
subsection (a) is made is not required to grant the request,
if--
``(1) the person determines that the disclosure of the
information could reasonably be expected to endanger the life
or physical safety of, or cause substantial harm to, any
individual; or
``(2) the information is compiled principally--
``(A) in anticipation of a civil, criminal, or
administrative action or proceeding; or
``(B) for use in such action or proceeding.
``(e) Denial of Request for Inspection or Copying.--If a
person to whom a request under subsection (a) is made denies
a request for inspection or copying pursuant to this section,
the person shall inform the individual making the request, in
writing, of--
``(1) the reasons for the denial of the request;
``(2) the availability of procedures for further review of
the denial; and
``(3) the individual's right to file with the person a
concise statement setting forth the request.
``(f) Statement Regarding Request.--If an individual has
filed with a person a statement under subsection (e)(3) with
respect to protected health information, the person, in any
subsequent disclosure of the information--
``(1) shall include a notation concerning the individual's
statement; and
``(2) may include a concise statement of the reasons for
denying the request for inspection or copying.
``(g) Procedures.--A person providing access to protected
health information for inspection or copying under this
section may set forth appropriate procedures to be followed
for such inspection or copying and may require an individual
to pay reasonable costs associated with such inspection or
copying.
``(h) Inspection and Copying of Segregable Portion.--A
person to whom a request under subsection (a) is made shall
permit the inspection and copying of any reasonably
segregable portion of a record after deletion of any portion
that the person is not required to disclose under this
section.
``(i) Deadline.--A person described in subsection (a) shall
comply with or deny, in accordance with this section, a
request for inspection or copying of protected health
information under this section not later than 30 days after
the date on which the person receives the request.
``(j) Rules Governing Agents.--An agent of a person
described in subsection (a) shall not be required to provide
for the inspection and copying of protected health
information, except where--
``(1) the protected health information is retained by the
agent; and
``(2) the agent has been asked by the person to fulfill the
requirements of this section.

``supplementation of protected health information

``Sec. 1182. (a) In General.--Subject to subsection (b),
not later than 45 days after the date on which a person who
is a health care provider, health plan, employer, health or
life insurer, or educational institution receives, from an
individual who is a subject of protected health information
that is maintained by the person, a request in writing to
amend the information by adding a concise written supplement
to it, the person--
``(1) shall make the amendment requested;
``(2) shall inform the individual of the amendment that has
been made; and
``(3) shall make reasonable efforts to inform any person
who is identified by the individual, who is not an officer,
employer, or agent of the person receiving the request, and
to whom the unamended portion of the information was
disclosed during the preceding year, by sending a notice to
the person's last known address that an amendment, consisting
of the addition of a supplement, has been made to the
protected health information of the individual.
``(b) Refusal to Amend.--If a person described in
subsection (a) refuses to make an amendment requested by an
individual under such subsection, the person shall inform the
individual, in writing, of--
``(1) the reasons for the refusal to make the amendment;
``(2) any procedures for further review of the refusal; and
``(3) the individual's right to file with the person a
concise statement setting forth the requested amendment and
the individual's reasons for disagreeing with the refusal.
``(c) Statement of Disagreement.--If an individual has
filed a statement of disagreement with a person under
subsection (b)(3), the person, in any subsequent disclosure
of the disputed portion of the information--
``(1) shall include a notation that such individual has
filed a statement of disagreement; and
``(2) may include a concise statement of the reasons for
not making the requested amendment.
``(d) Rules Governing Agents.--The agent of a person
described in subsection (a) shall not be required to make
amendments to individually identifiable health information,
except where--
``(1) the information is retained by the agent; and
``(2) the agent has been asked by such person to fulfill
the requirements of this section.
``(e) Duplicative Requests for Amendments.--If a person
described in subsection (a) receives a duplicative request
for an amendment of information as provided for in such
subsection and a statement of disagreement with respect to
the request has been filed pursuant to subsection (c), the
person shall inform the individual of such filing and shall
not be required to carry out the procedures under this
section.
``(f) Rule of Construction.--This section shall not be
construed--
``(1) to permit an individual to modify statements in his
or her record that document the factual observations of
another individual or state the results of diagnostic tests;
or
``(2) to permit an individual to amend his or her record as
to the type, duration, or quality of treatment the individual
believes he or she should have been provided.

``notice of confidentiality practices

``Sec. 1183. (a) Preparation of Written Notice.--A person
who is a health care provider, health plan, health oversight
agency, public health authority, employer, health or life
insurer, health researcher, or educational institution shall
post or provide, in writing and in a clear and conspicuous
manner, notice of the person's protected health information
confidentiality practices. The notice shall include--
``(1) a description of an individual's rights with respect
to protected health information;
``(2) the intended uses and disclosures of protected health
information;
``(3) the procedures established by the person for the
exercise of an individual's rights with respect to protected
health information; and
``(4) the procedures established by the person for
obtaining copies of the notice.
``(b) Model Notice.--The Secretary, after notice and
opportunity for public comment, and based on the advice of
the National Committee on Vital and Health Statistics
established under section 306(k) of the Public Health Service
Act (42 U.S.C. 242k(k)), shall develop and disseminate, not
later than 6 months after the date of the enactment of the
Patient Protection Act of 1998, model notices of
confidentiality practices, for use under this section. Use of
a model notice developed by the Secretary shall serve as a
complete defense in any civil action to an allegation that a
violation of this section has occurred.

``establishment of safeguards

``Sec. 1184. (a) In General.--A person who is a health care
provider, health plan, health oversight agency, public health
authority, employer, health or life insurer, health
researcher, or educational institution shall establish,
maintain, and enforce reasonable and appropriate
administrative, technical, and physical safeguards to protect
the confidentiality, security, accuracy, and integrity of
protected health information created, received, obtained,
maintained, used, transmitted, or disposed of by the person.
``(b) Factors To Be Considered.--A person subject to
subsection (a) shall consider the following factors in
establishing safeguards under such subsection:
``(1) The need for protected health information.
``(2) The categories of personnel who will have access to
protected health information.
``(3) The feasibility of limiting access to individual
identifiers.
``(4) The appropriateness of the policy or procedure to the
person, and to the medium in which protected health
information is stored and transmitted.
``(5) The value of audit trails in computerized records.
``(c) Relationship to Part C Requirement.--Any safeguard
established under this section shall be consistent with the
requirement in section 1173(d)(2).
``(d) Conversion to Nonidentifiable Health Information.--A
person subject to subsection (a) shall, to the extent
practicable and consistent with the purpose for which
protected health information is maintained, convert such
information into nonidentifiable health information.

``availability of protected health information for purposes of health
care operations

``Sec. 1185. Disclosure.--Any person who maintains
protected health information may disclose the information to
a health care provider or a health plan for the purpose of
permitting the provider or plan to conduct health care
operations.
``(b) Use.--A health care provider or a health plan that
maintains protected health information may use it for the
purposes described in subsection (a).

``relationship to other laws

[[Page H6334]]

``(B) relates to authorization for the use or disclosure
of--
``(i) protected health information for health care
operations; or
``(ii) nonidentifiable health information; or
``(C) relates to any of the following:
``(i) Inspection or copying of protected health information
by a person who is a subject of the information.
``(ii) Amendment of protected health information by a
person who is a subject of the information.
``(iii) Notice of confidentiality practices with respect to
protected health information.
``(iv) Establishment of safeguards for protected health
information.
``(2) Exceptions.--Nothing in this part shall be construed
to preempt or modify a provision of State law to the extent
that such provision relates to protected health information
and--
``(A) the confidentiality of the records maintained by a
licensed mental health professional;
``(B) the provision of health care to a minor, or the
disclosure of information about a minor to a parent or
guardian of the minor;
``(C) condition-specific limitations on disclosure;
``(D) the use or disclosure of information for use in
legally authorized--
``(i) disease or injury reporting;
``(ii) public health surveillance, investigation, or
intervention;
``(iii) vital statistics reporting, such as reporting of
birth or death information;
``(iv) reporting of abuse or neglect information;
``(v) reporting of information concerning a communicable
disease status; or
``(vi) reporting concerning the safety or effectiveness of
a biological product regulated under section 351 of the
Public Health Service Act (42 U.S.C. 262) or a drug or device
regulated under the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 301 et seq.);
``(E) the disclosure to a person by a health care provider
of information about an individual, in any case in which the
provider has determined--
``(i) in the provider's reasonable medical judgment, that
the individual is unconscious, incompetent, or otherwise
incapable of deciding whether to authorize disclosure of the
protected health information; and
``(ii) in the provider's reasonable judgment, that the
person is a spouse, relative, guardian, or close friend of
the individual's; or
``(F) the use of information by, or the disclosure of
information to, a person holding a valid and applicable power
of attorney that includes the authority to make health care
decisions on behalf of an individual who is a subject of the
information.
``(3) Privileges.--Nothing in this part shall be construed
to preempt or modify a provision of State law to the extent
that such provision relates to a privilege of a witness or
other person in a court of that State.
``(b) Federal Law.--Nothing in this part shall be construed
to preempt, modify, or repeal a provision of any other
Federal law relating to protected health information or
relating to an individual's access to protected health
information or health care services. Nothing in this part
shall be construed to preempt, modify, or repeal a provision
of Federal law to the extent that such provision relates to a
privilege of a witness or other person in a court of the
United States.

``civil penalties

``Sec. 1187. (a) Violation.--A person who the Secretary
determines has substantially and materially failed to comply
with this part shall be subject, in addition to any other
penalties that may be prescribed by law--
``(1) in a case in which the violation relates to section
1181 or 1182, to a civil penalty of not more than $500 for
each such violation but not to exceed $5,000 in the aggregate
for all violations of an identical requirement or prohibition
during a calendar year;
``(2) in the case in which the violation relates to section
1183 or 1184, to a civil penalty of not more than $10,000 for
each such violation, but not to exceed $50,000 in the
aggregate for all violations of an identical requirement or
prohibition during a calendar year; or
``(3) in a case in which the Secretary finds that such
violations have occurred with such frequency as to constitute
a general business practice, to a civil penalty of not more
than $100,000.
``(b) Procedures for Imposition of Penalties.--Section
1128A, other than subsections (a) and (b) and the second
sentence of subsection (f) of that section, shall apply to
the imposition of a civil or monetary penalty under this
section in the same manner as such provisions apply with
respect to the imposition of a penalty under section 1128A.

``definitions

``Sec. 1188. As used in this part:
``(1) Agent.--The term `agent' means a person, including a
contractor, who represents and acts for another under the
contract or relation of agency, or whose function is to bring
about, modify, affect, accept performance of, or terminate
contractual obligations between the principal and a third
person.
``(2) Condition-specific limitations on disclosure.--The
term `condition-specific limitations on disclosure' means
State laws that prohibit the disclosure of protected health
information relating to a health condition or disease that
has been identified by the Secretary as posing a public
health threat.
``(3) Disclose.--The term `disclose' means to release,
transfer, provide access to, or otherwise divulge protected
health information to any person other than an individual who
is the subject of such information.
``(4) Educational institution.--The term `educational
institution' means an institution or place accredited or
licensed for purposes of providing for instruction or
education, including an elementary school, secondary school,
or institution of higher learning, a college, or an
assemblage of colleges united under one corporate
organization or government.
``(5) Employer.--The term `employer' has the meaning given
such term under section 3(5) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002(5)), except that
such term shall include only employers of two or more
employees.
``(6) Health care.--The term `health care' means--
``(A) preventive, diagnostic, therapeutic, rehabilitative,
maintenance, or palliative care, including appropriate
assistance with disease or symptom management and
maintenance, counseling, service, or procedure--
``(i) with respect to the physical or mental condition of
an individual; or
``(ii) affecting the structure or function of the human
body or any part of the human body, including the banking of
blood, sperm, organs, or any other tissue; or
``(B) any sale or dispensing, pursuant to a prescription or
medical order, of a drug, device, equipment, or other health
care-related item to an individual, or for the use of an
individual.
``(7) Health care operations.--The term `health care
operations' means services, provided directly by or on behalf
of a health plan or health care provider or by its agent, for
any of the following purposes:
``(A) Coordinating health care, including health care
management of the individual through risk assessment, case
management, and disease management.
``(B) Conducting quality assessment and improvement
activities, including outcomes evaluation, clinical guideline
development and improvement, and health promotion.
``(C) Carrying out utilization review activities, including
precertification and preauthorization of services, and health
plan rating activities, including underwriting and experience
rating.
``(D) Conducting or arranging for auditing services.
``(8) Health care provider.--The term `health care
provider' means a person, who with respect to a specific item
of protected health information, receives, creates, uses,
maintains, or discloses the information while acting in whole
or in part in the capacity of--
``(A) a person who is licensed, certified, registered, or
otherwise authorized by Federal or State law to provide an
item or service that constitutes health care in the ordinary
course of business, or practice of a profession;
``(B) a Federal, State, or employer-sponsored or any other
privately-sponsored program that directly provides items or
services that constitute health care to beneficiaries; or
``(C) an officer or employee of a person described in
subparagraph (A) or (B).
``(9) Health or life insurer.--The term `health or life
insurer' means a health insurance issuer, as defined in
section 9832(b)(2) of the Internal Revenue Code of 1986, or a
life insurance company, as defined in section 816 of such
Code.
``(10) Health plan.--The term `health plan' means any
health insurance plan, including any hospital or medical
service plan, dental or other health service plan, health
maintenance organization plan, plan offered by a provider-
sponsored organization (as defined in section 1855(d)), or
other program providing or arranging for the provision of
health benefits.
``(11) Health researcher.--The term `health researcher'
means a person (or an officer, employee, or agent of a
person) who is engaged in systematic investigation, including
research development, testing, data analysis, and evaluation,
designed to develop or contribute to generalizable knowledge
relating to basic biomedical processes, health, health care,
health care delivery, or health care cost.
``(12) Nonidentifiable health information.--The term
`nonidentifiable health information' means protected health
information from which personal identifiers that reveal the
identity of the individual who is the subject of such
information or provide a direct means of identifying the
individual (such as name, address, and social security
number) have been removed, encrypted, or replaced with a
code, such that the identity of the individual is not evident
without (in the case of encrypted or coded information) use
of a key.
``(13) Originating provider.--The term `originating
provider', when used with respect to protected health
information, means the health care provider who takes an
action that initiates the treatment episode to which that
information relates, such as prescribing a drug, ordering a
diagnostic test, or admitting an individual to a health care
facility. A hospital or nursing facility is the originating
provider with respect to protected health information created
or received as part of inpatient or outpatient treatment
provided in the hospital or facility.

[[Page H6335]]

``(14) Payment activities.--The term `payment activities'
means--
``(A) activities undertaken--
``(i) by, or on behalf of, a health plan to determine its
responsibility for coverage under the plan; or
``(ii) by a health care provider to obtain payment for
items or services provided to an individual, provided under a
health plan, or provided based on a determination by the
health plan of responsibility for coverage under the plan;
and
``(B) includes the following activities, when performed in
a manner consistent with subparagraph (A):
``(i) Billing, claims management, medical data processing,
other administrative services, and actual payment.
``(ii) Determinations of coverage or adjudication of health
benefit or subrogation claims.
``(iii) Review of health care services with respect to
coverage under a health plan or justification of charges.
``(15) Person.--The term `person' means--
``(A) a natural person;
``(B) a government or governmental subdivision, agency, or
authority;
``(C) a company, corporation, estate, firm, trust,
partnership, association, joint venture, society, or joint
stock company; or
``(D) any other legal entity.
``(16) Protected health information.--The term `protected
health information', when used with respect to an individual
who is a subject of information means any information
(including genetic information) that identifies the
individual, whether oral or recorded in any form or medium,
and that--
``(A) is created or received by a health care provider,
health plan, health oversight agency, public health
authority, employer, health or life insurer, or educational
institution;
``(B) relates to the past, present, or future physical or
mental health or condition of an individual (including
individual cells and their components);
``(C) is derived from--
``(i) the provision of health care to an individual; or
``(ii) payment for the provision of health care to an
individual; and
``(D) is not nonidentifiable health information.
``(17) State.--The term `State' includes the District of
Columbia, Puerto Rico, the Virgin Islands, Guam, American
Samoa, and the Northern Mariana Islands.
``(18) Treatment.--The term `treatment' means the provision
of health care by a health care provider.
``(19) Writing.--The term `writing' means writing either in
a paper-based, computer-based, or electronic form, including
electronic signatures.''.
(b) Enforcement of Provisions Through Conditions on
Participation.--
(1) Participating physicians and suppliers.--Section
1842(h) of the Social Security Act (42 U.S.C. 1395u(h)) is
amended by adding at the end the following:
``(9) The Secretary may refuse to enter into an agreement
with a physician or supplier under this subsection, or may
terminate or refuse to renew such agreement, in the event
that such physician or supplier has been found to have
violated a provision of part D of title XI.''.
(2) Medicare+choice organizations.--Section 1852(h) of the
Social Security Act (42 U.S.C. 1395w-22(h)) is amended--
(A) in the matter preceding paragraph (1), by striking
``procedures--'' and inserting ``procedures, consistent with
sections 1181 through 1185--''; and
(B) in paragraph (1), by striking ``privacy of any
individually identifiable enrollee information;'' and
inserting ``confidentiality of protected health information
concerning enrollees;''.
(3) Medicare providers.--Section 1866(a)(1) of the Social
Security Act (42 U.S.C. 1395cc(a)(1)) is amended--
(A) by inserting a semicolon at the end of subparagraph
(R);
(B) by striking the period at the end of subparagraph (S)
and inserting ``; and''; and
(C) by inserting immediately after subparagraph (S) the
following new subparagraph:
``(T) to comply with sections 1181 through 1184.''.
(4) Health maintenance organizations with risk-sharing
contracts.--Section 1876(k)(4) of the Social Security Act (42
U.S.C. 1395mm(k)(4)) of the Social Security Act is amended by
adding at the end the following:
``(E) The confidentiality and accuracy procedure
requirements under section 1852(h).''.
(c) Conforming Amendments.--
(1) Title heading.--Title XI of the Social Security Act (42
U.S.C. 1301 et seq.) is amended by striking the title heading
and inserting the following:

``TITLE XI--GENERAL PROVISIONS, PEER REVIEW, ADMINISTRATIVE
SIMPLIFICATION, AND CONFIDENTIALITY OF PROTECTED HEALTH INFORMATION''.

(2) National committee on vital and health statistics.--
Section 306(k)(5) of the Public Health Service Act (42 U.S.C.
242(k)(5)) is amended--
(A) in subparagraphs (A)(viii) and (D), by striking ``part
C'' and inserting ``parts C and D'';
(B) in subparagraph (C), by striking ``and'' at the end;
(C) in subparagraph (D), by striking the period at the end
and inserting ``; and''; and
(D) by adding at the end the following:
``(E) shall study the issues relating to section 1184 of
the Social Security Act (as added by the Patient Protection
Act of 1998), and, not later than 1 year after the date of
the enactment of the Patient Protection Act of 1998, shall
report to the Congress on such section.''.
(d) Effective Date.--The amendments made by this section
shall take effect on the date that is 1 year after the date
of the enactment of this Act, except that subsection (c)(2),
and section 1183(b) of the Social Security Act (as added by
subsection (a)), shall take effect on the date of the
enactment of this Act.

SEC. 5002. STUDY AND REPORT ON EFFECT OF STATE LAW ON HEALTH-
RELATED RESEARCH.

Not later than one year after the date of the enactment of
this Act, the Comptroller General of the United States shall
prepare and submit to the Congress a report containing the
results of a study on the effect of State laws on health-
related research subject to review by an institutional review
board or institutional review committee with respect to the
protection of human subjects.

SEC. 5003. STUDY AND REPORT ON STATE LAW ON PROTECTED HEALTH
INFORMATION.

(a) In General.--Not later than 9 months after the date of
the enactment of this Act, the Comptroller General of the
United States shall prepare and submit to the Congress a
report containing the results of a study--
(1) compiling State laws on the confidentiality of
protected health information (as defined in section 1188 of
the Social Security Act, as added by section 5001 of this
Act); and
(2) analyzing the effect of such laws on the provision of
health care and securing payment for such care.
(b) Modification of Deadline.--Section 264(c)(1) of the
Health Insurance Portability and Accountability Act of 1996
(Public Law 104-191; 110 Stat. 2033) is amended by striking
``36 months after the date of the enactment of this Act,''
and inserting ``6 months after the date on which the
Comptroller General of the United States submits to the
Congress a report under section 5003(a) of the Patient
Protection Act of 1998,''.

SEC. 5004. PROTECTION FOR CERTAIN INFORMATION DEVELOPED TO
REDUCE MORTALITY OR MORBIDITY OR FOR IMPROVING
PATIENT CARE AND SAFETY.

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

SEC. 6001. MEDICAL SAVINGS ACCOUNTS FOR FEDERAL EMPLOYEES.

(a) Medical Savings Accounts.--
(1) Contributions.--Title 5, United States Code, is amended
by redesignating section 8906a as section 8906c and by
inserting after section 8906 the following:

[[Page H6336]]

``Sec. 8906a. Government contributions to medical savings
accounts

``(a) An employee or annuitant enrolled in a high
deductible health plan is entitled, in addition to the
Government contribution under section 8906(b) toward the
subscription charge for such plan, to have a Government
contribution made, in accordance with succeeding provisions
of this section, to a medical savings account of such
employee or annuitant.
``(b)(1) The biweekly Government contribution under this
section shall, in the case of any such employee or annuitant,
be equal to the amount by which--
``(A) the biweekly equivalent of the maximum Government
contribution for the contract year involved (as defined by
paragraph (2)), exceeds (if at all)
``(B) the amount of the biweekly Government contribution
payable on such employee's or annuitant's behalf under
section 8906(b) for the period involved.
``(2) For purposes of this section, the term `maximum
Government contribution' means, with respect to a contract
year, the maximum Government contribution that could be made
for health benefits for an employee or annuitant for such
contract year, as determined under section 8906(b)
(disregarding paragraph (2) thereof)).
``(3) Notwithstanding any other provision of this section,
no contribution under this section shall be payable to any
medical savings account of an employee or annuitant for any
period--
``(A) if, as of the first day of the month before the month
in which such period commences, such employee or annuitant
(or the spouse of such employee or annuitant, if coverage is
for self and family) is entitled to benefits under part A of
title XVIII of the Social Security Act;
``(B) to the extent that such contribution, when added to
previous contributions made under this section for that same
year with respect to such employee or annuitant, would cause
the total to exceed--
``(i) the highest annual limit deductible permitted under
clause (i) or (ii) of section 220(c)(2)(A) of the Internal
Revenue Code of 1986, as appropriate (determined taking into
account any changes in coverage that may occur), for the
calendar year in which such period commences; or
``(ii) such lower amount (relative to the limitation that
would otherwise apply under clause (i)) as the employee or
annuitant may specify in accordance with regulations of the
Office, including an election not to receive contributions
under this section for a year or the remainder of a year; or
``(C) for which any information (or documentation) under
subsection (d) that is needed in order to make such
contribution has not been timely submitted.
``(4) Notwithstanding any other provision of this section,
no contribution under this section shall be payable to any
medical savings account of an employee for any period in a
contract year unless that employee was enrolled in a health
benefits plan under this chapter as an employee for not less
than--
``(A) the 1 year of service immediately before the start of
such contract year, or
``(B) the full period or periods of service between the
last day of the first period, as prescribed by regulations of
the Office of Personnel Management, in which he is eligible
to enroll in the plan and the day before the start of such
contract year,
whichever is shorter.

``(5) The Office shall provide for the conversion of
biweekly rates of contributions specified by paragraph (1) to
rates for employees and annuitants whose pay or annuity is
provided on other than a biweekly basis, and for this purpose
may provide for the adjustment of the converted rate to the
nearest cent.
``(c) A Government contribution under this section--
``(1) shall be made at the same time that, and the same
frequency with which, Government contributions under section
8906(b) are made for the benefit of the employee or annuitant
involved; and
``(2) shall be payable from the same appropriation, fund,
account, or other source as would any Government
contributions under section 8906(b) with respect to the
employee or annuitant involved.
``(d) The Office shall by regulation prescribe the time,
form, and manner in which an employee or annuitant shall
submit any information (and supporting documentation)
necessary to identify any medical savings account to which
contributions under this section are requested to be made.
``(e) Nothing in this section shall be considered to
entitle an employee or annuitant to any Government
contribution under this section with respect to any period
for which such employee or annuitant is ineligible for a
Government contribution under section 8906(b).

``Sec. 8906b. Individual contributions to medical savings
accounts

``(a) Upon the written request of an employee or annuitant
enrolled in a high deductible health plan, there shall be
withheld from the pay or annuity of such employee or
annuitant and contributed to the medical savings account
identified by such employee or annuitant in accordance with
applicable regulations under subsection (c) such amount as
the employee or annuitant may specify.
``(b) Notwithstanding subsection (a), no withholding under
this section may be made from the pay or annuity of an
employee or annuitant for any period--
``(1) if, or to the extent that, a Government contribution
for such period under section 8906a would not be allowable by
reason of subparagraph (A) or (B)(i) of subsection (b)(3)
thereof;
``(2) for which any information (or documentation) that is
needed in order to make such contribution has not been timely
submitted; or
``(3) if the employee or annuitant submits a request for
termination of withholdings, beginning on or after the
effective date of the request and before the end of the year.
``(c) The Office of Personnel Management shall prescribe
any regulations necessary to carry out this section,
including provisions relating to the time, form, and manner
in which any request for withholdings under this section may
be made, changed, or terminated.''.
(2) Rules of construction.--Nothing in this section or in
any amendment made by this section shall be considered--
(A) to permit or require that any contributions to a
medical savings account (whether by the Government or through
withholdings from pay or annuity) be paid into the Employees
Health Benefits Fund; or
(B) to affect any authority under section 1005(f) of title
39, United States Code, to vary, add to, or substitute for
any provision of chapter 89 of title 5, United States Code,
as amended by this section.
(3) Conforming amendments.--
(A) The table of sections at the beginning of chapter 89 of
title 5, United States Code, is amended by striking the item
relating to section 8906a and inserting the following:

``8906a. Government contributions to medical savings accounts.
``8906b. Individual contributions to medical savings accounts.
``8906c. Temporary employees.''.

(B) Section 8913(b)(4) of title 5, United States Code, is
amended by striking ``8906a(a)'' and inserting ``8906c(a)''.
(b) Informational Requirements.--Section 8907 of title 5,
United States Code, is amended by adding at the end the
following:
``(c) In addition to any information otherwise required
under this section, the Office shall make available to all
employees and annuitants eligible to enroll in a high
deductible health plan, information relating to--
``(1) the conditions under which Government contributions
under section 8906a shall be made to a medical savings
account;
``(2) the amount of any Government contributions under
section 8906a to which an employee or annuitant may be
entitled (or how such amount may be ascertained);
``(3) the conditions under which contributions to a medical
savings account may be made under section 8906b through
withholdings from pay or annuity; and
``(4) any other matter the Office considers appropriate in
connection with medical savings accounts.''.
(c) High Deductible Health Plan and Medical Savings Account
Defined.--Section 8901 of title 5, United States Code, is
amended--
(1) in paragraph (10) by striking ``and'' after the
semicolon;
(2) in paragraph (11) by striking the period and inserting
a semicolon; and
(3) by adding at the end the following:
``(12) the term `high deductible health plan' means a plan
described by section 8903(5) or section 8903a(d); and
``(13) the term `medical savings account' has the meaning
given such term by section 220(d) of the Internal Revenue
Code of 1986.''.
(d) Authority To Contract for High Deductible Health
Plans.--Section 8902 of title 5, United States Code, is
amended by adding at the end the following:
``(p)(1) The Office shall contract under this chapter for a
high deductible health plan with any qualified carrier that
offers such a plan and, as of the date of enactment of the
Federal Employees Health Care Freedom of Choice Act, offers a
health benefits plan under this chapter.
``(2) The Office may contract under this chapter for a high
deductible health plan with any qualified carrier that offers
such a plan, but does not, as of the date of enactment of the
Federal Employees Health Care Freedom of Choice Act, offer a
health benefits plan under this chapter.''.
(e) Description of High Deductible Health Plans and
Benefits To Be Provided Thereunder.--
(1) In general.--Section 8903 of title 5, United States
Code, is amended by adding at the end the following:
``(5) High deductible health plans.--(A) One or more plans
described by paragraph (1), (2), (3), or (4), which--
``(i) are high deductible health plans (as defined by
section 220(c)(2) of the Internal Revenue Code of 1986); and
``(ii) provide benefits of the types referred to by section
8904(a)(5).
``(B) Nothing in this section shall be considered--
``(i) to prevent a carrier from simultaneously offering a
plan described by subparagraph (A) and a plan described by
paragraph (1) or (2); or
``(ii) to require that a high deductible health plan offer
two levels of benefits.''.
(2) Types of benefits.--Section 8904(a) of title 5, United
States Code, is amended by inserting after paragraph (4) the
following:
``(5) High deductible health plans.--Benefits of the types
named under paragraph (1) or (2) of this subsection or
both.''.
(3) Conforming amendments.--

[[Page H6337]]

(A) Section 8903a of title 5, United States Code, is
amended by redesignating subsection (d) as subsection (e) and
by inserting after subsection (c) the following:
``(d) The plans under this section may include one or more
plans, otherwise allowable under this section, that satisfy
the requirements of clauses (i) and (ii) of section
8903(5)(A).''.
(B) Section 8909(d) of title 5, United States Code, is
amended by striking ``8903a(d)'' and inserting ``8903a(e)''.
(4) References.--Section 8903 of title 5, United States
Code, is amended by adding after paragraph (5) (as added by
paragraph (1) of this subsection) as a flush left sentence,
the following:

``The Office shall prescribe regulations in accordance with
which the requirements of section 8902(c), 8902(n), 8909(e),
and any other provision of this chapter that applies with
respect to a plan described by paragraph (1), (2), (3), or
(4) of this section shall apply with respect to the
corresponding plan under paragraph (5) of this section.
Similar regulations shall be prescribed with respect to any
plan under section 8903a(d).''.

SEC. 6002. EFFECTIVE DATE.

The amendments made by this title shall apply with respect
to contract years beginning on or after January 1, 2000. The
Office of Personnel Management shall take appropriate
measures to ensure that coverage under a high deductible
health plan under chapter 89 of title 5, United States Code
(as amended by this section) shall be available as of the
beginning of the first contract year described in the
preceding sentence.

The SPEAKER pro tempore. Pursuant to House Resolution 509, the
amendments printed in House Report 105-643 are adopted.
The text of H.R. 4250, as amended pursuant to House Resolution 509,
is as follows:

H.R. 4250

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

(a) Short Title.--The Act may be cited as the ``Patient
Protection Act of 1998''.
(b) Table of Contents.--The table of contents is as
follows:

Sec. 1. Short title and table of contents.

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

Subtitle A--Patient Protections.

Sec. 1001. Patient access to unrestricted medical advice, emergency
medical care, obstetric and gynecological care, and
pediatric care.
Sec. 1002. Effective date and related rules.

Subtitle B--Patient Access to Information

Sec. 1101. Patient access to information regarding plan coverage,
managed care procedures, health care providers, and
quality of medical care.
Sec. 1102. Effective date.

Subtitle C--New Procedures and Access to Courts for Grievances Arising
under Group Health Plans

Sec. 1201. Special rules for group health plans.
Sec. 1202. Effective date.

Subtitle D--Affordable Health Coverage for Employees of Small
Businesses

Sec. 1301. Short title of subtitle.
Sec. 1302. Rules governing association health plans.

``Part 8--Rules Governing Association Health Plans

TITLE II--AMENDMENTS TO PUBLIC HEALTH SERVICE ACT

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

Subtitle B--Patient Access to Information

Sec. 2101. Patient access to information regarding plan coverage,
managed care procedures, health care providers, and
quality of medical care.
Sec. 2102. Effective date.

Subtitle C--HealthMarts

Sec. 2201. Short title of subtitle.
Sec. 2202. Expansion of consumer choice through HealthMarts.

``TITLE XXVIII--HEALTHMARTS

``Sec. 2801. Definition of HealthMart.
``Sec. 2802. Application of certain laws and requirements.
``Sec. 2803. Administration.
``Sec. 2804. Definitions.

Subtitle D--Community Health Organizations

Sec. 2301. Promotion of provision of insurance by community health
organizations.

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

Subtitle A--Patient Protections

Sec. 3001. Patient access to unrestricted medical advice, emergency
medical care, obstetric and gynecological care, pediatric
care.
Sec. 3002. Effective date and related rules.

Subtitle B--Patient Access to Information

Sec. 3101. Patient access to information regarding plan coverage,
managed care procedures, health care providers, and
quality of medical care.
Sec. 3102. Effective date.

Subtitle C--Medical Savings Accounts

Sec. 3201. Expansion of availability of medical savings accounts.
Sec. 3202. Exception from insurance limitation in case of medical
savings accounts.
Sec. 3203. Sense of the House of Representatives.

Subtitle D--Revenue Offsets

Sec. 3301. Clarification of definition of specified liability loss.
Sec. 3302. Property subject to a liability treated in same manner as
assumption of liability.
Sec. 3303. Limitation on required accrual of amounts received for
performance of certain personal services.
Sec. 3304. Returns relating to cancellations of indebtedness by
organizations lending money.
Sec. 3305. Clarifications and expansion of mathematical error
assessment procedures.
Sec. 3306. Inclusion of rotavirus gastroenteritis as a taxable vaccine.

TITLE IV--HEALTH CARE LAWSUIT REFORM

Subtitle A--General Provisions

Sec. 4001. Federal reform of health care liability actions.
Sec. 4002. Definitions.
Sec. 4003. Effective date.

Subtitle B--Uniform Standards for Health Care Liability Actions

Sec. 4011. Statute of limitations.
Sec. 4012. Calculation and payment of damages.
Sec. 4013. Alternative dispute resolution.
Sec. 4014. Reporting on fraud and abuse enforcement activities.

TITLE V--CONFIDENTIALITY OF HEALTH INFORMATION

Sec. 5001. Confidentiality of protected health information.

``Part D--Confidentiality of Protected Health Information

[[Page H6338]]

TITLE I--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974
Subtitle A--Patient Protections

SEC. 1001. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE,
EMERGENCY MEDICAL CARE, OBSTETRIC AND
GYNECOLOGICAL CARE, AND PEDIATRIC CARE.

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

``SEC. 713. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE,
EMERGENCY MEDICAL CARE, OBSTETRIC AND
GYNECOLOGICAL CARE, PEDIATRIC CARE.

``(a) Patient Access to Unrestricted Medical Advice.--
``(1) In general.--In the case of any health care
professional acting within the lawful scope of practice in
the course of carrying out a contractual employment
arrangement or other direct contractual arrangement between
such professional and a group health plan or a health
insurance issuer offering health insurance coverage in
connection with a group health plan, the plan or issuer with
which such contractual employment arrangement or other direct
contractual arrangement is maintained by the professional may
not impose on such professional under such arrangement any
prohibition or restriction with respect to advice, provided
to a participant or beneficiary under the plan who is a
patient, about the health status of the participant or
beneficiary or the medical care or treatment for the
condition or disease of the participant or beneficiary,
regardless of whether benefits for such care or treatment are
provided under the plan or health insurance coverage offered
in connection with the plan.
``(2) Health care professional defined.--For purposes of
this subsection, the term `health care professional' means a
physician (as defined in section 1861(r) of the Social
Security Act) or other health care professional if coverage
for the professional's services is provided under the group
health plan for the services of the professional. Such term
includes a podiatrist, optometrist, chiropractor,
psychologist, dentist, physician assistant, physical or
occupational therapist and therapy assistant, speech-language
pathologist, audiologist, registered or licensed practical
nurse (including nurse practitioner, clinical nurse
specialist, certified registered nurse anesthetist, and
certified nurse-midwife), licensed certified social worker,
registered respiratory therapist, and certified respiratory
therapy technician.
``(b) Patient Access to Emergency Medical Care.--
``(1) In general.--To the extent that the group health plan
(or health insurance issuer offering health insurance
coverage in connection with the plan) provides for any
benefits consisting of emergency medical care (as defined in
section 503(b)(9)(I)), except for items or services
specifically excluded--
``(A) the plan or issuer shall provide benefits, without
requiring preauthorization and without regard to otherwise
applicable network limitations, for appropriate emergency
medical screening examinations (within the capability of the
emergency facility, including ancillary services routinely
available to the emergency facility) to the extent that a
prudent layperson, who possesses an average knowledge of
health and medicine, would determine such examinations to be
necessary in order to determine whether emergency medical
care (as so defined) is required, and
``(B) the plan or issuer shall provide benefits for
additional emergency medical services following an emergency
medical screening examination (if determined necessary under
subparagraph (A)) to the extent that a prudent emergency
medical professional would determine such additional
emergency services to be necessary to avoid the consequences
described in section 503(b)(9)(I).
``(2) Uniform cost-sharing required.--Nothing in this
subsection shall be construed as preventing a group health
plan or issuer from imposing any form of cost-sharing
applicable to any participant or beneficiary (including
coinsurance, copayments, deductibles, and any other charges)
in relation to benefits described in paragraph (1), if such
form of cost-sharing is uniformly applied under such plan,
with respect to similarly situated participants and
beneficiaries, to all benefits consisting of emergency
medical care (as defined in section 503(b)(9)(I)) provided to
such similarly situated participants and beneficiaries under
the plan.
``(c) Patient Access to Obstetric and Gynecological Care.
``(1) In general.--In any case in which a group health plan
(or a health insurance issuer offering health insurance
coverage in connection with the plan)--
``(A) provides benefits under the terms of the plan
consisting of--
``(i) routine gynecological care (such as preventive
women's health examinations), or
``(ii) routine obstetric care (such as routine pregnancy-
related services),
provided by a participating physician who specializes in such
care (or provides benefits consisting of payment for such
care), and
``(B) the plan requires or provides for designation by a
participant or beneficiary of a participating primary care
provider,

``Sec. 713. Patient access to unrestricted medical advice, emergency
medical care, obstetric and gynecological care, and
pediatric care.''.

SEC. 1002. EFFECTIVE DATE AND RELATED RULES.

[[Page H6339]]

(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 in connection with group health plans, 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 from decisions
denying or limiting 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 data otherwise required, 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.
Subtitle B--Patient Access to Information

SEC. 1101. PATIENT ACCESS TO INFORMATION REGARDING PLAN
COVERAGE, MANAGED CARE PROCEDURES, HEALTH CARE
PROVIDERS, AND QUALITY OF MEDICAL CARE.

``disclosure by group health plans

``Sec. 111. (a) Disclosure Requirement.--
``(1) Group health plans.--The administrator of each group
health plan shall take such actions as are necessary to
ensure that the summary plan description of the plan required
under section 102 (or each summary plan description in any
case in which different summary plan descriptions are
appropriate under part 1 for different options of coverage)
contains, among any information otherwise required under this
part, the information required under subsections (b), (c),
(d), and (e)(2)(A).
``(2) Health insurance issuers.--Each health insurance
issuer offering health insurance coverage in connection with
a group health plan shall provide the administrator on a
timely basis with the information necessary to enable the
administrator to comply with the requirements of paragraph
(1). To the extent that any such issuer provides on a timely
basis to plan participants and beneficiaries information
otherwise required under this part to be included in the
summary plan description, the requirements of sections
101(a)(1) and 104(b) shall be deemed satisfied in the case of
such plan with respect to such information.
``(b) Plan Benefits.--The information required under
subsection (a) includes the following:
``(1) Covered items and services.--
``(A) Categorization of included benefits.--A description
of covered benefits, categorized by--
``(i) types of items and services (including any special
disease management program), and
``(ii) types of health care professionals providing such
items and services.
``(B) Emergency medical care.--A description of the extent
to which the plan covers emergency medical care (including
the extent to which the plan provides for access to urgent
care centers), and any definitions provided under the plan
for the relevant plan terminology referring to such care.
``(C) Preventative services.--A description of the extent
to which the plan provides benefits for preventative
services.
``(D) Drug formularies.--A description of the extent to
which covered benefits are determined by the use or
application of a drug formulary and a summary of the process
for determining what is included in such formulary.
``(E) COBRA continuation coverage.--A description of the
benefits available under the plan pursuant to part 6.
``(2) Limitations, exclusions, and restrictions on covered
benefits.--
``(A) Categorization of excluded benefits.--A description
of benefits specifically excluded from coverage, categorized
by types of items and services.
``(B) Utilization review and preauthorization
requirements.--Whether coverage for medical care is limited
or excluded on the basis of utilization review or
preauthorization requirements.
``(C) Lifetime, annual, or other period limitations.--A
description of the circumstances under which, and the extent
to which, coverage is subject to lifetime, annual, or other
period limitations, categorized by types of benefits.
``(D) Custodial care.--A description of the circumstances
under which, and the extent to which, the coverage of
benefits for custodial care is limited or excluded, and a
statement of the definition used by the plan for custodial
care.
``(E) Experimental treatments.--Whether coverage for any
medical care is limited or excluded because it constitutes
experimental treatment or technology, and any definitions
provided under the plan for the relevant plan terminology
referring to such limited or excluded care.
``(F) Medical appropriateness or necessity.--Whether
coverage for medical care may be limited or excluded by
reason of a failure to meet the plan's requirements for
medical appropriateness or necessity, and any definitions
provided under the plan for the relevant plan terminology
referring to such limited or excluded care.
``(G) Second or subsequent opinions.--A description of the
circumstances under which, and the extent to which, coverage
for second or subsequent opinions is limited or excluded.
``(H) Specialty care.--A description of the circumstances
under which, and the extent to which, coverage of benefits
for specialty care is conditioned on referral from a primary
care provider.
``(I) Continuity of care.--A description of the
circumstances under which, and the extent to which, coverage
of items and services provided by any health care
professional is limited or excluded by reason of the
departure by the professional from any defined set of
providers.
``(J) Restrictions on coverage of emergency services.--A
description of the circumstances under which, and the extent
to which, the plan, in covering emergency medical care
furnished to a participant or beneficiary of the plan imposes
any financial responsibility described in subsection (c) on
participants or beneficiaries or limits or conditions
benefits for such care subject to any other term or condition
of such plan.
``(c) Participant's Financial Responsibilities.--The
information required under subsection (a) includes an
explanation of--
``(1) a participant's financial responsibility for payment
of premiums, coinsurance, copayments, deductibles, and any
other charges, and
``(2) the circumstances under which, and the extent to
which, the participant's financial responsibility described
in paragraph (1) may vary, including any distinctions based
on whether a health care provider from whom covered benefits
are obtained is included in a defined set of providers.
``(d) Dispute Resolution Procedures.--The information
required under subsection (a) includes a description of the
processes adopted by the plan pursuant to section 503(b),
including--
``(1) descriptions thereof relating specifically to--
``(A) coverage decisions,
``(B) internal review of coverage decisions, and
``(C) any external review of coverage decisions, and
``(2) the procedures and time frames applicable to each
step of the processes referred to in subparagraphs (A), (B),
and (C) of paragraph (1).
``(e) Information Available on Request.--
``(1) Access to plan benefit information in electronic
form.--
``(A) In general.--In addition to the information required
to be provided under section 104(b)(4), a group health plan
(and a health insurance issuer offering health insurance
coverage in connection with a group health plan) shall, upon
written request (made not more frequently than annually),
make available to participants and beneficiaries, in a
generally recognized electronic format, the following
information:
``(i) the latest summary plan description, including the
latest summary of material modifications; and
``(ii) the actual plan provisions setting forth the
benefits available under the plan

[[Page H6340]]

issuer), a detailed list of the names of such providers and
their geographic location, set forth separately with respect
to primary care providers and with respect to specialists.
``(ii) Care management information.--A description of the
circumstances under which, and the extent to which, the plan
has special disease management programs or programs for
persons with disabilities, indicating whether these programs
are voluntary or mandatory and whether a significant benefit
differential results from participation in such programs.
``(iii) Inclusion of drugs and biologicals in
formularies.--A statement of whether a specific drug or
biological is included in a formulary used to determine
benefits under the plan and a description of the procedures
for considering requests for any patient-specific waivers.
``(iv) Procedures for determining exclusions based on
medical necessity or experimental treatments.--Upon receipt
by the participant or beneficiary of any notification of an
adverse coverage decision based on a determination relating
to medical necessity or an experimental treatment or
technology, a description of the procedures and medically-
based criteria used in such decision.
``(v) Preauthorization and utilization review procedures.--
Upon receipt by the participant or beneficiary of any
notification of an adverse coverage decision, a description
of the basis on which any preauthorization requirement or any
utilization review requirement has resulted in such decision.
``(vi) Accreditation status of health insurance issuers and
service providers.--A description of the accreditation and
licencing status (if any) of each health insurance issuer
offering health insurance coverage in connection with the
plan and of any utilization review organization utilized by
the issuer or the plan, together with the name and address of
the accrediting or licencing authority.
``(vii) Measures of enrollee satisfaction.--The latest
information (if any) maintained by the plan, or by any health
insurance issuer offering health insurance coverage in
connection with the plan, relating to enrollee satisfaction.
``(viii) Quality performance measures.--The latest
information (if any) maintained by the plan, or by any health
insurance issuer offering health insurance coverage in
connection with the plan, relating to quality of performance
of the delivery of medical care with respect to coverage
options offered under the plan and of health care
professionals and facilities providing medical care under the
plan.
``(ix) Information relating to external reviews.--The
number of external reviews under section 503(b)(4) that have
been completed during the prior plan year and the number of
such reviews in which the recommendation reported under
section 503(b)(4)(C)(iii) includes a recommendation for
modification or reversal of an internal review decision under
the plan.
``(C) Information required from health care professionals
on request.--Any health care professional treating a
participant or beneficiary under a group health plan shall
provide to the participant or beneficiary, on request, a
description of his or her professional qualifications
(including board certification status, licensing status, and
accreditation status, if any), privileges, and experience and
a general description by category (including salary, fee-for-
service, capitation, and such other categories as may be
specified in regulations of the Secretary) of the applicable
method by which such professional is compensated in
connection with the provision of such medical care.
``(D) Information required from health care facilities on
request.--Any health care facility from which a participant
or beneficiary has sought treatment under a group health plan
shall provide to the participant or beneficiary, on request,
a description of the facility's corporate form or other
organizational form and all forms of licensing and
accreditation status (if any) assigned to the facility by
standard-setting organizations.
``(f) Access to Information Relevant to the Coverage
Options under which the Participant or Beneficiary is
Eligible to Enroll.--In addition to information otherwise
required to be made available under this section, a group
health plan (and a health insurance issuer offering health
insurance coverage in connection with a group health plan)
shall, upon written request (made not more frequently than
annually), make available to a participant (and an employee
who, under the terms of the plan, is eligible for coverage,
but not enrolled) in connection with a period of enrollment
the summary plan description for any coverage option under
the plan under which the participant is eligible to enroll
and any information described in clauses (i), (ii), (iii),
(vi), (vii), and (viii) of subsection (e)(2)(B).
``(g) Advance Notice of Changes in Drug Formularies.--Not
later than 30 days before the effective of date of any
exclusion of a specific drug or biological from any drug
formulary under the plan that is used in the treatment of a
chronic illness or disease, the plan shall take such actions
as are necessary to reasonably ensure that plan participants
are informed of such exclusion. The requirements of this
subsection may be satisfied--
``(1) by inclusion of information in publications broadly
distributed by plan sponsors, employers, or employee
organizations,
``(2) by electronic means of communication (including the
Internet or proprietary computer networks in a format which
is readily accessible to participants),
``(3) by timely informing participants who, under an
ongoing program maintained under the plan, have submitted
their names for such notification, or
``(4) by any other reasonable means of timely informing
plan participants.
``(h) Definitions.--For purposes of this section--
``(1) Group health plan.--The term `group health plan' has
the meaning provided such term under section 503(b)(6).
``(2) Medical care.--The term `medical care' has the
meaning provided such term under section 733(a)(2).
``(3) Health insurance coverage.--The term `health
insurance coverage' has the meaning provided such term under
section 733(b)(1).
``(4) Health insurance issuer.--The term `health insurance
issuer' has the meaning provided such term under section
733(b)(2).''.
(b) Conforming Amendments.--
(1) Section 102(b) of such Act (29 U.S.C. 1022(b)) is
amended--
(A) by striking ``section 733(a)(1)'' each place it appears
and inserting ``section 503(b)(6)''; and
(B) by inserting before the period at the end the
following: ``; and, in the case of a group health plan (as
defined in section 111(h)(1)), the information required to be
included under section 111(a)''.
(2) The table of contents in section 1 of such Act is
amended by striking the item relating to section 111 and
inserting the following new items:

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

SEC. 1102. EFFECTIVE DATE AND RELATED RULES.

(a) In General.--The amendments made by this subtitle shall
apply with respect to plan years beginning on or after
January 1 of the second calendar year following the date of
the enactment of this Act. The Secretary shall first issue
all regulations necessary to carry out the amendments made by
this subtitle before such date.
(b) Limitation on Enforcement Actions.--No enforcement
action shall be taken, pursuant to the amendments made by
this subtitle, against a group health plan or health
insurance issuer with respect to a violation of a requirement
imposed by such amendments before the date of issuance of
final regulations issued in connection with such requirement,
if the plan or issuer has sought to comply in good faith with
such requirement.
(c) Assuring Coordination.--The Secretary of Labor, the
Secretary of Health and Human Services, and the Secretary of
the Treasury shall ensure, through the execution of an
interagency memorandum of understanding among such
Secretaries, that--
(1) regulations, rulings, and interpretations issued by
such Secretaries relating to the same matter over which two
or more such Secretaries have responsibility under the
provisions of this subtitle, subtitle B of title II, and
subtitle B of title III (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.
Subtitle C--New Procedures and Access to Courts for Grievances Arising
Under Group Health Plans

SEC. 1201. SPECIAL RULES FOR GROUP HEALTH PLANS.

[[Page H6341]]

fiduciary who did not make the initial decision, and
``(D) meet the additional requirements of this subsection.
``(2) Time limits for making initial coverage decisions for
benefits and completing internal appeals.--
``(A) Time limits for deciding requests for benefit
payments, requests for advance determination of coverage, and
requests for required determination of medical necessity.--
Except as provided in subparagraph (B)--
``(i) Initial decisions.--If a request for benefit
payments, a request for advance determination of coverage, or
a request for required determination of medical necessity is
submitted to a group health plan in such reasonable form as
may be required under the plan, the plan shall issue in
writing an initial coverage decision on the request before
the end of the initial decision period under paragraph (9)(J)
following the filing completion date. Failure to issue a
coverage decision on such a request before the end of the
period required under this clause shall be treated as an
adverse coverage decision for purposes of internal review
under clause (ii).
``(ii) Internal reviews of initial denials.--Upon the
written request of a participant or beneficiary for review of
an initial adverse coverage decision under clause (i), a
review by an appropriate named fiduciary (subject to
paragraph (3)) of the initial coverage decision shall be
completed, including issuance by the plan of a written
decision affirming, reversing, or modifying the initial
coverage decision, setting forth the grounds for such
decision, before the end of the internal review period
following the review filing date. Such decision shall be
treated as the final decision of the plan, subject to any
applicable reconsideration under paragraph (4). Failure to
issue before the end of such period such a written decision
requested under this clause shall be treated as a final
decision affirming the initial coverage decision, subject to
any applicable reconsideration under paragraph (4).
``(B) Time limits for making coverage decisions relating to
urgent and emergency medical care and for completing internal
appeals.--
``(i) Initial decisions.--A group health plan shall issue
in writing an initial coverage decision on any request for
expedited advance determination of coverage or for expedited
required determination of medical necessity submitted, in
such reasonable form as may be required under the plan--

``(I) does not meet the plan's requirements for medical
appropriateness or necessity, or
``(II) would constitute experimental treatment or
technology.

``(ii) Selection of medical experts.--An independent
medical expert is selected in accordance with this clause
if--

[[Page H6342]]

connection with the plan, and the aggrieved participant or
beneficiary under the plan, and the identities of the plan,
the issuer, and the aggrieved participant or beneficiary are
not disclosed to the expert,
``(II) the expert is selected, by an appropriately
credentialed panel of physicians meeting the requirements of
clause (iii) established by a fully accredited teaching
hospital meeting such requirements,
``(III) the expert is selected by an organization described
in section 1152(1)(A) of the Social Security Act which meets
the requirements of clause (iii),
``(IV) the expert is selected by an external review
organization which meets the requirements of clause (iii) and
is accredited by a private standard-setting organization
meeting such requirements and recognized as such by the
Secretary, or
``(V) the expert is selected, by an intermediary or
otherwise, in a manner that is, under regulations issued
pursuant to negotiated rulemaking, sufficient to ensure the
expert's independence,

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

``(v) Affiliated.--For purposes of clause (iii)(I), the
term `affiliated' means, in connection with any entity,
having a familial, financial, or professional relationship
with, or interest in, such entity.
``(F) Inapplicability with respect to items and services
specifically excluded from coverage.--An adverse coverage
decision based on a determination that an item or service is
excluded from coverage under the terms of the plan shall not
be subject to review under this paragraph, unless such
determination is found in such decision to be based solely on
the fact that the item or service--
``(i) does not meet the plan's requirements for medical
appropriateness or necessity, or
``(ii) would constitute experimental treatment or
technology (as defined under the plan).
``(5) Permitted alternatives to required internal review.--
``(A) In general.--A group health plan shall not be treated
as failing to meet the requirements under paragraphs
(2)(A)(ii) and (2)(B)(ii) relating to review of initial
coverage decisions for benefits, if--
``(i) in lieu of the procedures relating to review under
paragraphs (2)(A)(ii) and (2)(B)(ii) and in accordance with
such regulations (if any) as may be prescribed by the
Secretary--

[[Page H6343]]

``(H) Urgent medical care.--The term `urgent medical care'
means medical care in any case in which an appropriate
physician has certified in writing (or as otherwise provided
in regulations of the Secretary) that failure to provide the
participant or beneficiary with such medical care within 45
days can reasonably be expected to result in either--
``(i) the imminent death of the participant or beneficiary,
or
``(ii) the immediate, serious, and irreversible
deterioration of the health of the participant or beneficiary
which will significantly increase the likelihood of death of,
or irreparable harm to, the participant or beneficiary.
``(I) Emergency medical care.--The term `emergency medical
care' means medical care in any case in which an appropriate
physician has certified in writing (or as otherwise provided
in regulations of the Secretary)--
``(i) that failure to immediately provide the care to the
participant or beneficiary could reasonably be expected to
result in--

or
``(ii) that immediate provision of the care is necessary
because the participant or beneficiary has made or is at
serious risk of making an attempt to harm himself or herself
or another individual.
``(J) Initial decision period.--The term `initial decision
period' means a period of 30 days, or such longer period as
may be prescribed in regulations of the Secretary.
``(K) Internal review period.--The term `internal review
period' means a period of 30 days, or such longer period as
may be prescribed in regulations of the Secretary.
``(L) Urgent decision period.--The term `urgent decision
period' means a period of 10 days, or such longer period as
may be prescribed in regulations of the Secretary.
``(M) Emergency decision period.--The term `emergency
decision period' means a period of 72 hours, or such longer
period as may be prescribed in regulations of the Secretary.
``(N) Specialty decision period.--The term `specialty
decision period' means a period of 72 hours, or such longer
period as may be prescribed in regulations of the Secretary.
``(O) Reconsideration period.--The term `reconsideration
period' means a period of 25 days, or such longer period as
may be prescribed in regulations of the Secretary, except
that--
``(i) in the case of a decision involving urgent medical
care, such term means the urgent decision period, and
``(ii) in the case of a decision involving emergency
medical care, such term means the emergency decision period.
``(P) Filing completion date.--The term `filing completion
date' means, in connection with a group health plan, the date
as of which the plan is in receipt of all information
reasonably required (in writing or in such other reasonable
form as may be specified by the plan) to make an initial
coverage decision.
``(Q) Review filing date.--The term `review filing date'
means, in connection with a group health plan, the date as of
which the appropriate named fiduciary (or the independent
medical expert or experts in the case of a review under
paragraph (4)) is in receipt of all information reasonably
required (in writing or in such other reasonable form as may
be specified by the plan) to make a decision to affirm,
modify, or reverse a coverage decision.
``(R) Medical care.--The term `medical care' has the
meaning provided such term by section 733(a)(2).
``(S) Health insurance coverage.--The term `health
insurance coverage' has the meaning provided such term by
section 733(b)(1).
``(T) Health insurance issuer.--The term `health insurance
issuer' has the meaning provided such term by section
733(b)(2).
``(U) Written or in writing.--
``(i) In general.--A request or decision shall be deemed to
be `written' or `in writing' if such request or decision is
presented in a generally recognized printable or electronic
format. The Secretary may by regulation provide for
presentation of information otherwise required to be in
written form in such other forms as may be appropriate under
the circumstances.
``(ii) Medical appropriateness or experimental treatment
determinations.--For purposes of this subparagraph, in the
case of a request for advance determination of coverage, a
request for expedited advance determination of coverage, a
request for required determination of medical necessity, or a
request for expedited required determination of medical
necessity, if the decision on such request is conveyed to the
provider of medical care or to the participant or beneficiary
by means of telephonic or other electronic communications,
such decision shall be treated as a written decision.''.
(b) Civil Penalties.--
(1) In general.--Section 502(c) of such Act (29 U.S.C.
1132(c)) is amended by redesignating paragraphs (6) and (7)
as paragraphs (7) and (8), respectively, and by inserting
after paragraph (5) the following new paragraph:
``(6)(A)(i) In any case in which--
``(I) a benefit under a group health plan (as defined in
section 503(b)(8)) is not timely provided to a participant or
beneficiary pursuant to a final decision of the plan which
was not in accordance with the terms of the plan or this
title, and
``(II) such final decision of the plan is contrary to a
recommendation described in section 503(b)(4)(C)(iii),

any person acting in the capacity of a fiduciary of such plan
so as to cause such failure may, in the court's discretion,
be liable to the aggrieved participant or beneficiary for a
civil penalty.
``(ii) Such civil penalty shall be in the amount of up to
$500 a day (or up to $1,000 a day in case of a bad faith
failure) from the date on which the recommendation was made
to the plan until the date the failure to provide benefits is
corrected, up to a total amount not to exceed $250,000.
``(B) In any action commenced under subsection (a) by a
participant or beneficiary with respect to a group health
plan (as defined in section 503(b)(8)) in which the plaintiff
alleges that a person, in the capacity of a fiduciary and in
violation of the terms of the plan or this title, has taken
an action resulting in an adverse coverage decision in
violation of the terms of the plan, or has failed to take an
action for which such person is responsible under the plan
and which is necessary under the plan for a favorable
coverage decision, upon finding in favor of the plaintiff, if
such action was commenced after a final decision of the plan
upon review which included a review under section 503(b)(4)
or such action was commenced under subsection (b)(4) of this
section, the court shall cause to be served on the defendant
an order requiring the defendant--
``(i) to cease and desist from the alleged action or
failure to act, and
``(ii) to pay to the plaintiff a reasonable attorney's fee
and other reasonable costs relating to the prosecution of the
action on the charges on which the plaintiff prevails.

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

[[Page H6344]]

under subsection (c)(6), under subsection (a)(1)(B), and
under subsection (b)(4)''; and
(2) in the last sentence, by striking ``of actions under
paragraphs (1)(B) and (7) of subsection (a) of this section''
and inserting ``of actions under paragraph (1)(A) of
subsection (a) for relief under subsection (c)(6) and of
actions under paragraphs (1)(B) and (7) of subsection (a) and
paragraph (4) of subsection (b)''.

SEC. 1202. EFFECTIVE DATE.

SEC. 1301. SHORT TITLE OF SUBTITLE.

This subtitle may be cited as the ``Small Business
Affordable Health Coverage Act of 1998''.

SEC. 1302. RULES GOVERNING ASSOCIATION HEALTH PLANS.

(a) In General.--Subtitle B of title I of the Employee
Retirement Income Security Act of 1974 is amended by adding
after part 7 the following new part:

``Part 8--Rules Governing Association Health Plans

``SEC. 801. ASSOCIATION HEALTH PLANS.

``(a) In General.--For purposes of this part, the term
`association health plan' means a group health plan--
``(1) whose sponsor is (or is deemed under this part to be)
described in subsection (b), and
``(2) under which at least one option of health insurance
coverage offered by a health insurance issuer (which may
include, among other options, managed care options, point of
service options, and preferred provider options) is provided
to participants and beneficiaries, unless, for any plan year,
such coverage remains unavailable to the plan despite good
faith efforts exercised by the plan to secure such coverage.
``(b) Sponsorship.--The sponsor of a group health plan is
described in this subsection if such sponsor--
``(1) is organized and maintained in good faith, with a
constitution and bylaws specifically stating its purpose and
providing for periodic meetings on at least an annual basis,
as a trade association, an industry association (including a
rural electric cooperative association or a rural telephone
cooperative association), a professional association, or a
chamber of commerce (or similar business association,
including a corporation or similar organization that operates
on a cooperative basis (within the meaning of section 1381 of
the Internal Revenue Code of 1986)), for substantial purposes
other than that of obtaining or providing medical care,
``(2) is established as a permanent entity which receives
the active support of its members and collects from its
members on a periodic basis dues or payments necessary to
maintain eligibility for membership in the sponsor, and
``(3) does not condition membership, such dues or payments,
or coverage under the plan on the basis of health status-
related factors with respect to the employees of its members
(or affiliated members), or the dependents of such employees,
and does not condition such dues or payments on the basis of
group health plan participation.
Any sponsor consisting of an association of entities which
meet the requirements of paragraphs (1) and (2) shall be
deemed to be a sponsor described in this subsection.

``SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH PLANS.

``SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF
TRUSTEES.

[[Page H6345]]

3(40)(A)(i) but solely for the failure to meet the
requirements of section 3(40)(C)(ii).

``SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.

``SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS,
CONTRIBUTION RATES, AND BENEFIT OPTIONS.

``(a) In General.--The requirements of this section are met
with respect to an association health plan if the following
requirements are met:
``(1) Contents of governing instruments.--The instruments
governing the plan include a written instrument, meeting the
requirements of an instrument required under section
402(a)(1), which--
``(A) provides that the board of trustees serves as the
named fiduciary required for plans under section 402(a)(1)
and serves in the capacity of a plan administrator (referred
to in section 3(16)(A)),
``(B) provides that the sponsor of the plan is to serve as
plan sponsor (referred to in section 3(16)(B)), and
``(C) incorporates the requirements of section 806.
``(2) Contribution rates must be nondiscriminatory.--
``(A) The contribution rates for any participating small
employer do not vary on the basis of the claims experience of
such employer and do not vary on the basis of the type of
business or industry in which such employer is engaged.
``(B) Nothing in this title or any other provision of law
shall be construed to preclude an association health plan, or
a health insurance issuer offering health insurance coverage
in connection with an association health plan, from
``(i) setting contribution rates based on the claims
experience of the plan, or
``(ii) varying contribution rates for small employers in a
State to the extent that such rates could vary using the same
methodology employed in such State for regulating premium
rates in the small group market,
subject to the requirements of section 702(b) relating to
contribution rates.
``(3) Floor for number of covered individuals with respect
to certain plans.--If any benefit option under the plan does
not consist of health insurance coverage, the plan has as of
the beginning of the plan year not fewer than 1,000
participants and beneficiaries.
``(4) Marketing requirements.--
``(A) In general.--If a benefit option which consists of
health insurance coverage is offered under the plan, State-
licensed insurance agents shall be used to distribute to
small employers coverage which does not consist of health
insurance coverage in a manner comparable to the manner in
which such agents are used to distribute health insurance
coverage.
``(B) State-licensed insurance agents.--For purposes of
subparagraph (A), the term `State-licensed insurance agents'
means one or more agents who are licensed in a State and are
subject to the laws of such State relating to licensure,
qualification, testing, examination, and continuing education
of persons authorized to offer, sell, or solicit health
insurance coverage in such State.
``(5) Regulatory requirements.--Such other requirements as
the applicable authority may prescribe by regulation as
necessary to carry out the purposes of this part.
``(b) Ability of Association Health Plans to Design Benefit
Options.--Nothing in this part or any provision of State law
(as defined in section 514(c)(1)) shall be construed to
preclude an association health plan, or a health insurance
issuer offering health insurance coverage in connection with
an association health plan, from exercising its sole
discretion in selecting the specific items and services
consisting of medical care to be included as benefits under
such plan or coverage, except (subject to section 514) in the
case of any law to the extent that it (1) prohibits an
exclusion of a specific disease from such coverage, or (2) is
not preempted under section 731(a)(1) with respect to matters
governed by section 711 or 712.

``SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS FOR
SOLVENCY FOR PLANS PROVIDING HEALTH BENEFITS IN
ADDITION TO HEALTH INSURANCE COVERAGE.

``(a) In General.--The requirements of this section are met
with respect to an association health plan if--
``(1) the benefits under the plan consist solely of health
insurance coverage, or
``(2) if the plan provides any additional benefit options
which do not consist of health insurance coverage, the plan--
``(A) establishes and maintains reserves with respect to
such additional benefit options, in amounts recommended by
the qualified actuary, consisting of--
``(i) a reserve sufficient for unearned contributions,
``(ii) a reserve sufficient for benefit liabilities which
have been incurred, which have not been satisfied, and for
which risk of loss has not yet been transferred, and for
expected administrative costs with respect to such benefit
liabilities,
``(iii) a reserve sufficient for any other obligations of
the plan, and
``(iv) a reserve sufficient for a margin of error and other
fluctuations, taking into account the specific circumstances
of the plan,
and
``(B) establishes and maintains aggregate and specific
excess/stop loss insurance and solvency indemnification, with
respect to such additional benefit options for which risk of
loss has not yet been transferred, as follows:
``(i) The plan shall secure aggregate excess/stop loss
insurance for the plan with an attachment point which is not
greater than 125 percent of expected gross annual claims. The
applicable authority may by regulation provide for upward
adjustments in the amount of such percentage in specified
circumstances in which the plan specifically provides for and
maintains reserves in excess of the amounts required under
subparagraph (A).
``(ii) The plan shall secure specific excess/stop loss
insurance for the plan with an attachment point which is at
least equal to an amount recommended by the plan's qualified
actuary (but not more than $200,000). The applicable
authority may by regulation provide for adjustments in the
amount of such insurance in specified circumstances in which
the plan specifically provides for and maintains reserves in
excess of the amounts required under subparagraph (A).
``(iii) The plan shall secure indemnification insurance for
any claims which the plan is unable to satisfy by reason of a
plan termination.
Any regulations prescribed by the applicable authority
pursuant to clause (i) or (ii) of subparagraph (B) may allow
for such adjustments in the required levels of excess/stop
loss insurance as the qualified actuary may recommend, taking
into account the specific circumstances of the plan.
``(b) Minimum Surplus in Addition to Claims Reserves.--The
requirements of this subsection are met if the plan
establishes and maintains surplus in an amount at least equal
to $2,000,000, reduced in accordance with a scale, prescribed
in regulations of the applicable authority to an amount not
less than $500,000, based on the level of aggregate and
specific excess/stop loss insurance provided with respect to
such plan.
``(c) Additional Requirements.--In the case of any
association health plan described in subsection (a)(2), the
applicable authority may provide such additional requirements

[[Page H6346]]

relating to reserves and excess/stop loss insurance as the
applicable authority considers appropriate. Such requirements
may be provided, by regulation or otherwise, with respect to
any such plan or any class of such plans.
``(d) Adjustments for Excess/Stop Loss Insurance.--The
applicable authority may provide for adjustments to the
levels of reserves otherwise required under subsections (a)
and (b) with respect to any plan or class of plans to take
into account excess/stop loss insurance provided with respect
to such plan or plans.
``(e) Alternative Means of Compliance.--The applicable
authority may permit an association health plan described in
subsection (a)(2) to substitute, for all or part of the
requirements of this section (except subsection
(a)(2)(B)(iii)), such security, guarantee, hold-harmless
arrangement, or other financial arrangement as the applicable
authority determines to be adequate to enable the plan to
fully meet all its financial obligations on a timely basis
and is otherwise no less protective of the interests of
participants and beneficiaries than the requirements for
which it is substituted. The applicable authority may take
into account, for purposes of this subsection, evidence
provided by the plan or sponsor which demonstrates an
assumption of liability with respect to the plan. Such
evidence may be in the form of a contract of indemnification,
lien, bonding, insurance, letter of credit, recourse under
applicable terms of the plan in the form of assessments of
participating employers, security, or other financial
arrangement.
``(f) Measures to Ensure Continued Payment of Benefits by
Certain Plans in Distress.--
``(1) Payments by certain plans to association health plan
fund.--
``(A) In general.--In the case of an association health
plan described in subsection (a)(2), the requirements of this
subsection are met if the plan makes payments into the
Association Health Plan Fund under this subparagraph when
they are due. Such payments shall consist of annual payments
in the amount of $5,000, and, in addition to such annual
payments, such supplemental payments as the Secretary may
determine to be necessary under paragraph (2). Payments under
this paragraph are payable to the Fund at the time determined
by the Secretary. Initial payments are due in advance of
certification under this part. Payments shall continue to
accrue until a plan's assets are distributed pursuant to a
termination procedure.
``(B) Penalties for failure to make payments.--If any
payment is not made by a plan when it is due, a late payment
charge of not more than 100 percent of the payment which was
not timely paid shall be payable by the plan to the Fund.
``(C) Continued duty of the secretary.--The Secretary shall
not cease to carry out the provisions of paragraph (2) on
account of the failure of a plan to pay any payment when due.
``(2) Payments by secretary to continue excess stop/loss
insurance coverage and indemnification insurance coverage for
certain plans.--In any case in which the applicable authority
determines that there is, or that there is reason to believe
that there will be, (A) a failure to take necessary
corrective actions under section 809(a) with respect to an
association health plan described in subsection (a)(2), or
(B) a termination of such a plan under section 809(b) or
810(b)(8) (and, if the applicable authority is not the
Secretary, certifies such determination to the Secretary),
the Secretary shall determine the amounts necessary to make
payments to an insurer (designated by the Secretary) to
maintain in force excess/stop loss insurance coverage or
indemnification insurance coverage for such plan, if the
Secretary determines that there is a reasonable expectation
that, without such payments, claims would not be satisfied by
reason of termination of such coverage. The Secretary shall,
to the extent provided in advance in appropriation Acts, pay
such amounts so determined to the insurer designated by the
Secretary.
``(3) Association health plan fund.--
``(A) In general.--There is established on the books of the
Treasury a fund to be known as the `Association Health Plan
Fund'. The Fund shall be available for making payments
pursuant to paragraph (2). The Fund shall be credited with
payments received pursuant to paragraph (1)(A), penalties
received pursuant to paragraph (1)(B), and earnings on
investments of amounts of the Fund under subparagraph (B).
``(B) Investment.--Whenever the Secretary determines that
the moneys of the fund are in excess of current needs, the
Secretary may request the investment of such amounts as the
Secretary determines advisable by the Secretary of the
Treasury in obligations issued or guaranteed by the United
States.
``(g) Excess/Stop Loss Insurance.--For purposes of this
section--
``(1) Aggregate excess/stop loss insurance.--The term
`aggregate excess/stop loss insurance' means, in connection
with an association health plan, a contract--
``(A) under which an insurer (meeting such minimum
standards as may be prescribed in regulations of the
applicable authority) provides for payment to the plan with
respect to aggregate claims under the plan in excess of an
amount or amounts specified in such contract,
``(B) which is guaranteed renewable, and
``(C) which allows for payment of premiums by any third
party on behalf of the insured plan.
``(2) Specific excess/stop loss insurance.--The term
`specific excess/stop loss insurance' means , in connection
with an association health plan, a contract--
``(A) under which an insurer (meeting such minimum
standards as may be prescribed in regulations of the
applicable authority) provides for payment to the plan with
respect to claims under the plan in connection with a covered
individual in excess of an amount or amounts specified in
such contract in connection with such covered individual,
``(B) which is guaranteed renewable, and
``(C) which allows for payment of premiums by any third
party on behalf of the insured plan.
``(h) Indemnification Insurance.--For purposes of this
section, the term `indemnification insurance' means, in
connection with an association health plan, a contract--
``(1) under which an insurer (meeting such minimum
standards as may be prescribed in regulations of the
applicable authority) provides for payment to the plan with
respect to claims under the plan which the plan is unable to
satisfy by reason of a termination pursuant to section 809(b)
(relating to mandatory termination),
``(2) which is guaranteed renewable and noncancellable for
any reason (except as may be provided in regulations of the
applicable authority), and
``(3) which allows for payment of premiums by any third
party on behalf of the insured plan.
``(i) Reserves.--For purposes of this section, the term
`reserves' means, in connection with an association health
plan, plan assets which meet the fiduciary standards under
part 4 and such additional requirements regarding liquidity
as may be prescribed in regulations of the applicable
authority.
``(j) Regulations Prescribed under Negotiated Rulemaking.--
The regulations under this section shall be prescribed under
negotiated rulemaking in accordance with subchapter III of
chapter 5 of title 5, United States Code, except that, in
establishing the negotiated rulemaking committee for purposes
of such rulemaking, the applicable authority shall include
among persons invited to membership on the committee at least
one of each of the following:
``(1) a representative of the National Association of
Insurance Commissioners,
``(2) a representative of the American Academy of
Actuaries,
``(3) a representative of the State governments, or their
interests,
``(4) a representative of existing self-insured
arrangements, or their interests,
``(5) a representative of associations of the type referred
to in section 801(b)(1), or their interests, and
``(6) a representative of multiemployer plans that are
group health plans, or their interests.

``SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED
REQUIREMENTS.

[[Page H6347]]

``(B) Adequacy of contribution rates.--A statement of
actuarial opinion, signed by a qualified actuary, which sets
forth a description of the extent to which contribution rates
are adequate to provide for the payment of all obligations
and the maintenance of required reserves under the plan for
the 12-month period beginning with such date within such 120-
day period, taking into account the expected coverage and
experience of the plan. If the contribution rates are not
fully adequate, the statement of actuarial opinion shall
indicate the extent to which the rates are inadequate and the
changes needed to ensure adequacy.
``(C) Current and projected value of assets and
liabilities.--A statement of actuarial opinion signed by a
qualified actuary, which sets forth the current value of the
assets and liabilities accumulated under the plan and a
projection of the assets, liabilities, income, and expenses
of the plan for the 12-month period referred to in
subparagraph (B). The income statement shall identify
separately the plan's administrative expenses and claims.
``(D) Costs of coverage to be charged and other expenses.--
A statement of the costs of coverage to be charged, including
an itemization of amounts for administration, reserves, and
other expenses associated with the operation of the plan.
``(E) Other information.--Any other information which may
be prescribed in regulations of the applicable authority as
necessary to carry out the purposes of this part.
``(c) Filing Notice of Certification With States.--A
certification granted under this part to an association
health plan shall not be effective unless written notice of
such certification is filed with the applicable State
authority of each State in which at least 25 percent of the
participants and beneficiaries under the plan are located.
For purposes of this subsection, an individual shall be
considered to be located in the State in which a known
address of such individual is located or in which such
individual is employed.
``(d) Notice of Material Changes.--In the case of any
association health plan certified under this part,
descriptions of material changes in any information which was
required to be submitted with the application for the
certification under this part shall be filed in such form and
manner as shall be prescribed in regulations of the
applicable authority. The applicable authority may require by
regulation prior notice of material changes with respect to
specified matters which might serve as the basis for
suspension or revocation of the certification.
``(e) Reporting Requirements for Certain Association Health
Plans.--An association health plan certified under this part
which provides benefit options in addition to health
insurance coverage for such plan year shall meet the
requirements of section 103 by filing an annual report under
such section which shall include information described in
subsection (b)(6) with respect to the plan year and,
notwithstanding section 104(a)(1)(A), shall be filed with the
applicable authority not later than 90 days after the close
of the plan year (or on such later date as may be prescribed
by the applicable authority).
``(f) Engagement of Qualified Actuary.--The board of
trustees of each association health plan which provides
benefits options in addition to health insurance coverage and
which is applying for certification under this part or is
certified under this part shall engage, on behalf of all
participants and beneficiaries, a qualified actuary who shall
be responsible for the preparation of the materials
comprising information necessary to be submitted by a
qualified actuary under this part. The qualified actuary
shall utilize such assumptions and techniques as are
necessary to enable such actuary to form an opinion as to
whether the contents of the matters reported under this
part--
``(1) are in the aggregate reasonably related to the
experience of the plan and to reasonable expectations, and
``(2) represent such actuary's best estimate of anticipated
experience under the plan.
The opinion by the qualified actuary shall be made with
respect to, and shall be made a part of, the annual report.

``SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.

``SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMINATION.

``SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOLVENT
ASSOCIATION HEALTH PLANS PROVIDING HEALTH
BENEFITS IN ADDITION TO HEALTH INSURANCE
COVERAGE.

[[Page H6348]]

of the court and to protect the interests of plan
participants and beneficiaries and providers of medical care.
``(c) Notice of Appointment.--As soon as practicable after
the Secretary's appointment as trustee, the Secretary shall
give notice of such appointment to--
``(1) the sponsor and plan administrator,
``(2) each participant,
``(3) each participating employer, and
``(4) if applicable, each employee organization which, for
purposes of collective bargaining, represents plan
participants.
``(d) Additional Duties.--Except to the extent inconsistent
with the provisions of this title, or as may be otherwise
ordered by the court, the Secretary, upon appointment as
trustee under this section, shall be subject to the same
duties as those of a trustee under section 704 of title 11,
United States Code, and shall have the duties of a fiduciary
for purposes of this title.
``(e) Other Proceedings.--An application by the Secretary
under this subsection may be filed notwithstanding the
pendency in the same or any other court of any bankruptcy,
mortgage foreclosure, or equity receivership proceeding, or
any proceeding to reorganize, conserve, or liquidate such
plan or its property, or any proceeding to enforce a lien
against property of the plan.
``(f) Jurisdiction of Court.--
``(1) In general.--Upon the filing of an application for
the appointment as trustee or the issuance of a decree under
this section, the court to which the application is made
shall have exclusive jurisdiction of the plan involved and
its property wherever located with the powers, to the extent
consistent with the purposes of this section, of a court of
the United States having jurisdiction over cases under
chapter 11 of title 11, United States Code. Pending an
adjudication under this section such court shall stay, and
upon appointment by it of the Secretary as trustee, such
court shall continue the stay of, any pending mortgage
foreclosure, equity receivership, or other proceeding to
reorganize, conserve, or liquidate the plan, the sponsor, or
property of such plan or sponsor, and any other suit against
any receiver, conservator, or trustee of the plan, the
sponsor, or property of the plan or sponsor. Pending such
adjudication and upon the appointment by it of the Secretary
as trustee, the court may stay any proceeding to enforce a
lien against property of the plan or the sponsor or any other
suit against the plan or the sponsor.
``(2) Venue.--An action under this section may be brought
in the judicial district where the sponsor or the plan
administrator resides or does business or where any asset of
the plan is situated. A district court in which such action
is brought may issue process with respect to such action in
any other judicial district.
``(g) Personnel.--In accordance with regulations of the
Secretary, the Secretary shall appoint, retain, and
compensate accountants, actuaries, and other professional
service personnel as may be necessary in connection with the
Secretary's service as trustee under this section.

``SEC. 811. STATE ASSESSMENT AUTHORITY.

``(a) In General.--Notwithstanding section 514, a State may
impose by law a contribution tax on an association health
plan described in section 806(a)(2), if the plan commenced
operations in such State after the date of the enactment of
the Small Business Affordable Health Coverage Act of 1998.
``(b) Contribution Tax.--For purposes of this section, the
term `contribution tax' imposed by a State on an association
health plan means any tax imposed by such State if--
``(1) such tax is computed by applying a rate to the amount
of premiums or contributions, with respect to individuals
covered under the plan who are residents of such State, which
are received by the plan from participating employers located
in such State or from such individuals,
``(2) the rate of such tax does not exceed the rate of any
tax imposed by such State on premiums or contributions
received by insurers or health maintenance organizations for
health insurance coverage offered in such State in connection
with a group health plan,
``(3) such tax is otherwise nondiscriminatory, and
``(4) the amount of any such tax assessed on the plan is
reduced by the amount of any tax or assessment otherwise
imposed by the State on premiums, contributions, or both
received by insurers or health maintenance organizations for
health insurance coverage, aggregate excess/stop loss
insurance (as defined in section 806(g)(1)), specific excess/
stop loss insurance (as defined in section 806(g)(2)), other
insurance related to the provision of medical care under the
plan, or any combination thereof provided by such insurers or
health maintenance organizations in such State in connection
with such plan.

``SEC. 812. SPECIAL RULES FOR CHURCH PLANS.

``(a) Election for Church Plans.--Notwithstanding section
4(b)(2), if a church, a convention or association of
churches, or an organization described in section 3(33)(C)(i)
maintains a church plan which is a group health plan (as
defined in section 733(a)(1)), and such church, convention,
association, or organization makes an election with respect
to such plan under this subsection (in such form and manner
as the Secretary may by regulation prescribe), then the
provisions of this section shall apply to such plan, with
respect to benefits provided under such plan consisting of
medical care, as if section 4(b)(2) did not contain an
exclusion for church plans. Nothing in this subsection shall
be construed to render any other section of this title
applicable to church plans, except to the extent that such
other section is incorporated by reference in this section.
``(b) Effect of Election.--
``(1) Preemption of state insurance laws regulating covered
church plans.--Subject to paragraphs (2) and (3), this
section shall supersede any and all State laws which regulate
insurance insofar as they may now or hereafter regulate
church plans to which this section applies or trusts
established under such church plans.
``(2) General state insurance regulation unaffected.--
``(A) In general.--Except as provided in subparagraph (B)
and paragraph (3), nothing in this section shall be construed
to exempt or relieve any person from any provision of State
law which regulates insurance.
``(B) Church plans not to be deemed insurance companies or
insurers.--Neither a church plan to which this section
applies, nor any trust established under such a church plan,
shall be deemed to be an insurance company or other insurer
or to be engaged in the business of insurance for purposes of
any State law purporting to regulate insurance companies or
insurance contracts.
``(3) Preemption of certain state laws relating to premium
rate regulation and benefit mandates.--The provisions of
subsections (a)(2)(B) and (b) of section 805 shall apply with
respect to a church plan to which this section applies in the
same manner and to the same extent as such provisions apply
with respect to association health plans.
``(4) Definitions.--For purposes of this subsection--
``(A) 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.
``(B) State.--The term `State' includes a State, any
political subdivision thereof, or any agency or
instrumentality of either, which purports to regulate,
directly or indirectly, the terms and conditions of church
plans covered by this section.
``(c) Requirements for Covered Church Plans.--
``(1) Fiduciary rules and exclusive purpose.--A fiduciary
shall discharge his duties with respect to a church plan to
which this section applies--
``(A) for the exclusive purpose of:
``(i) providing benefits to participants and their
beneficiaries; and
``(ii) defraying reasonable expenses of administering the
plan;
``(B) with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent man acting
in a like capacity and familiar with such matters would use
in the conduct of an enterprise of a like character and with
like aims; and
``(C) in accordance with the documents and instruments
governing the plan.
The requirements of this paragraph shall not be treated as
not satisfied solely because the plan assets are commingled
with other church assets, to the extent that such plan assets
are separately accounted for.
``(2) Claims procedure.--In accordance with regulations of
the Secretary, every church plan to which this section
applies shall--
``(A) provide adequate notice in writing to any participant
or beneficiary whose claim for benefits under the plan has
been denied, setting forth the specific reasons for such
denial, written in a manner calculated to be understood by
the participant;
``(B) afford a reasonable opportunity to any participant
whose claim for benefits has been denied for a full and fair
review by the appropriate fiduciary of the decision denying
the claim; and
``(C) provide a written statement to each participant
describing the procedures established pursuant to this
paragraph.
``(3) Annual statements.--In accordance with regulations of
the Secretary, every church plan to which this section
applies shall file with the Secretary an annual statement--
``(A) stating the names and addresses of the plan and of
the church, convention, or association maintaining the plan
(and its principal place of business);
``(B) certifying that it is a church plan to which this
section applies and that it complies with the requirements of
paragraphs (1) and (2);
``(C) identifying the States in which participants and
beneficiaries under the plan are or likely will be located
during the 1-year period covered by the statement; and
``(D) containing a copy of a statement of actuarial opinion
signed by a qualified actuary that the plan maintains
capital, reserves, insurance, other financial arrangements,
or any combination thereof adequate to enable the plan to
fully meet all of its financial obligations on a timely
basis.
``(4) Disclosure.--At the time that the annual statement is
filed by a church plan with the Secretary pursuant to
paragraph (3), a copy of such statement shall be made
available by the Secretary to the State insurance
commissioner (or similar official) of any State. The name of
each church plan and sponsoring organization filing an annual
statement in compliance with paragraph (3) shall be published
annually in the Federal Register.

[[Page H6349]]

``(c) Enforcement.--The Secretary may enforce the
provisions of this section in a manner consistent with
section 502, to the extent applicable with respect to actions
under section 502(a)(5), and with section 3(33)(D), except
that, other than for the purpose of seeking a temporary
restraining order, a civil action may be brought with respect
to the plan's failure to meet any requirement of this section
only if the plan fails to correct its failure within the
correction period described in section 3(33)(D). The other
provisions of part 5 (except sections 501(a), 503, 512, 514,
and 515) shall apply with respect to the enforcement and
administration of this section.
``(d) Definitions and Other Rules.--For purposes of this
section--
``(1) In general.--Except as otherwise provided in this
section, any term used in this section which is defined in
any provision of this title shall have the definition
provided such term by such provision.
``(2) Seminary students.--Seminary students who are
enrolled in an institution of higher learning described in
section 3(33)(C)(iv) and who are treated as participants
under the terms of a church plan to which this section
applies shall be deemed to be employees as defined in section
3(6) if the number of such students constitutes an
insignificant portion of the total number of individuals who
are treated as participants under the terms of the plan.

``SEC. 813. DEFINITIONS AND RULES OF CONSTRUCTION.

``(a) Definitions.--For purposes of this part--
``(1) Group health plan.--The term `group health plan' has
the meaning provided in section 733(a)(1) (after applying
subsection (b) of this section).
``(2) Medical care.--The term `medical care' has the
meaning provided in section 733(a)(2).
``(3) Health insurance coverage.--The term `health
insurance coverage' has the meaning provided in section
733(b)(1).
``(4) Health insurance issuer.--The term `health insurance
issuer' has the meaning provided in section 733(b)(2).
``(5) Applicable authority.--
``(A) In general.--Except as provided in subparagraph (B),
the term `applicable authority' means, in connection with an
association health plan--
``(i) the State recognized pursuant to subsection (c) of
section 506 as the State to which authority has been
delegated in connection with such plan, or
``(ii) if there if no State referred to in clause (i), the
Secretary.
``(B) Exceptions.--
``(i) Joint authorities.--Where such term appears in
section 808(3), section 807(e) (in the first instance),
section 809(a) (in the second instance), section 809(a) (in
the fourth instance), and section 809(b)(1), such term means,
in connection with an association health plan, the Secretary
and the State referred to in subparagraph (A)(i) (if any) in
connection with such plan.
``(ii) Regulatory authorities.--Where such term appears in
section 802(a) (in the first instance), section 802(d),
section 802(e), section 803(d), section 805(a)(5), section
806(a)(2), section 806(b), section 806(c), section 806(d),
paragraphs (1)(A) and (2)(A) of section 806(g), section
806(h), section 806(i), section 807(a) (in the second
instance), section 807(b), section 807(d), section 807(e) (in
the second instance), section 808 (in the matter after
paragraph (3)), and section 809(a) (in the third instance),
such term means, in connection with an association health
plan, the Secretary.
``(6) Health status-related factor.--The term `health
status-related factor' has the meaning provided in section
733(d)(2).
``(7) Individual market.--
``(A) In general.--The term `individual market' means the
market for health insurance coverage offered to individuals
other than in connection with a group health plan.
``(B) Treatment of very small groups.--
``(i) In general.--Subject to clause (ii), such term
includes coverage offered in connection with a group health
plan that has fewer than 2 participants as current employees
or participants described in section 732(d)(3) on the first
day of the plan year.
``(ii) State exception.--Clause (i) shall not apply in the
case of health insurance coverage offered in a State if such
State regulates the coverage described in such clause in the
same manner and to the same extent as coverage in the small
group market (as defined in section 2791(e)(5) of the Public
Health Service Act) is regulated by such State.
``(8) Participating employer.--The term `participating
employer' means, in connection with an association health
plan, any employer, if any individual who is an employee of
such employer, a partner in such employer, or a self-employed
individual who is such employer (or any dependent, as defined
under the terms of the plan, of such individual) is or was
covered under such plan in connection with the status of such
individual as such an employee, partner, or self-employed
individual in relation to the plan.
``(9) Applicable state authority.--The term `applicable
State authority' means, with respect to a health insurance
issuer in a State, the State insurance commissioner or
official or officials designated by the State to enforce the
requirements of title XXVII of the Public Health Service Act
for the State involved with respect to such issuer.
``(10) Qualified actuary.--The term `qualified actuary'
means an individual who is a member of the American Academy
of Actuaries or meets such reasonable standards and
qualifications as the Secretary may provide by regulation.
``(11) Affiliated member.--The term `affiliated member'
means, in connection with a sponsor, a person eligible to be
a member of the sponsor or, in the case of a sponsor with
member associations, a person who is a member, or is eligible
to be a member, of a member association.
``(12) Large employer.--The term `large employer' means, in
connection with a group health plan with respect to a plan
year, an employer who employed an average of at least 51
employees on business days during the preceding calendar year
and who employs at least 2 employees on the first day of the
plan year.
``(13) Small employer.--The term `small employer' means, in
connection with a group health plan with respect to a plan
year, an employer who is not a large employer.
``(b) Rules of Construction.--
``(1) Employers and employees.--For purposes of determining
whether a plan, fund, or program is an employee welfare
benefit plan which is an association health plan, and for
purposes of applying this title in connection with such plan,
fund, or program so determined to be such an employee welfare
benefit plan--
``(A) in the case of a partnership, the term `employer' (as
defined in section (3)(5)) includes the partnership in
relation to the partners, and the term `employee' (as defined
in section (3)(6)) includes any partner in relation to the
partnership, and
``(B) in the case of a self-employed individual, the term
`employer' (as defined in section 3(5)) and the term
`employee' (as defined in section 3(6)) shall include such
individual.
``(2) Plans, funds, and programs treated as employee
welfare benefit plans.--In the case of any plan, fund, or
program which was established or is maintained for the
purpose of providing medical care (through the purchase of
insurance or otherwise) for employees (or their dependents)
covered thereunder and which demonstrates to the Secretary
that all requirements for certification under this part would
be met with respect to such plan, fund, or program if such
plan, fund, or program were a group health plan, such plan,
fund, or program shall be treated for purposes of this title
as an employee welfare benefit plan on and after the date of
such demonstration.''.
(b) Conforming Amendments to Preemption Rules.--
(1) Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)) is
amended by adding at the end the following new subparagraph:
``(E) The preceding subparagraphs of this paragraph do not
apply with respect to any State law in the case of an
association health plan which is certified under part 8.''.
(2) Section 514 of such Act (29 U.S.C. 1144) is amended--
(A) in subsection (b)(4), by striking ``Subsection (a)''
and inserting ``Subsections (a) and (d)'';
(B) in subsection (b)(5), by striking ``subsection (a)'' in
subparagraph (A) and inserting ``subsection (a) of this
section and subsections (a)(2)(B) and (b) of section 805'',
and by striking ``subsection (a)'' in subparagraph (B) and
inserting ``subsection (a) of this section or subsection
(a)(2)(B) or (b) of section 805'';
(C) by redesignating subsection (d) as subsection (e); and
(D) by inserting after subsection (c) the following new
subsection:
``(d)(1) Except as provided in subsection (b)(4), the
provisions of this title shall supersede any and all State
laws insofar as they may now or hereafter preclude, or have
the effect of precluding, a health insurance issuer from
offering health insurance coverage in connection with an
association health plan which is certified under part 8.
``(2) Except as provided in paragraphs (4) and (5) of
subsection (b) of this section--
``(A) In any case in which health insurance coverage of any
policy type is offered under an association health plan
certified under part 8 to a participating employer operating
in such State, the provisions of this title shall supersede
any and all laws of such State insofar as they may preclude a
health insurance issuer from offering health insurance
coverage of the same policy type to other employers operating
in the State which are eligible for coverage under such
association health plan, whether or not such other employers
are participating employers in such plan.
``(B) In any case in which health insurance coverage of any
policy type is offered under an association health plan in a
State and the filing, with the applicable State authority, of
the policy form in connection with such policy type is
approved by such State authority, the provisions of this
title shall supersede any and all laws of any other State in
which health insurance coverage of such type is offered,
insofar as they may preclude, upon the filing in the same
form and manner of such policy form with the applicable State
authority in such other State, the approval of the filing in
such other State.
``(3) For additional provisions relating to association
health plans, see subsections (a)(2)(B) and (b) of section
805.
``(4) For purposes of this subsection, the term
`association health plan' has the meaning provided in section
801(a), and the terms

[[Page H6350]]

`health insurance coverage', `participating employer', and
`health insurance issuer' have the meanings provided such
terms in section 811, respectively.''.
(3) Section 514(b)(6)(A) of such Act (29 U.S.C.
1144(b)(6)(A)) is amended--
(A) in clause (i)(II), by striking ``and'' at the end;
(B) in clause (ii), by inserting ``and which does not
provide medical care (within the meaning of section
733(a)(2)),'' after ``arrangement,'', and by striking
``title.'' and inserting ``title, and''; and
(C) by adding at the end the following new clause:
``(iii) subject to subparagraph (E), in the case of any
other employee welfare benefit plan which is a multiple
employer welfare arrangement and which provides medical care
(within the meaning of section 733(a)(2)), any law of any
State which regulates insurance may apply.''.
(4) Section 514(e) of such Act (as redesignated by
paragraph (2)(C)) is amended--
(A) by striking ``Nothing'' and inserting ``(1) Except as
provided in paragraph (2), nothing''; and
(B) by adding at the end the following new paragraph:
``(2) Nothing in any other provision of law enacted on or
after the date of the enactment of the Patient Protection Act
of 1998 shall be construed to alter, amend, modify,
invalidate, impair, or supersede any provision of this title,
except by specific cross-reference to the affected
section.''.
(c) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C.
102(16)(B)) is amended by adding at the end the following new
sentence: ``Such term also includes a person serving as the
sponsor of an association health plan under part 8.''.
(d) Disclosure of Solvency Protections Related to Self-
Insured and Fully Insured Options Under Association Health
Plans.--Section 102(b) of such Act (29 U.S.C. 102(b)) is
amended by adding at the end the following: ``An association
health plan shall include in its summary plan description, in
connection with each benefit option, a description of the
form of solvency or guarantee fund protection secured
pursuant to this Act or applicable State law, if any.''.
(e) Savings Clause.--Section 731(c) of such Act is amended
by inserting ``or part 8'' after ``this part''.
(f) Clerical Amendment.--The table of contents in section 1
of the Employee Retirement Income Security Act of 1974 is
amended by inserting after the item relating to section 734
the following new items:

``Part 8--Rules Governing Association Health Plans

``Sec. 801. Association health plans.
``Sec. 802. Certification of association health plans.
``Sec. 803. Requirements relating to sponsors and boards of trustees.
``Sec. 804. Participation and coverage requirements.
``Sec. 805. Other requirements relating to plan documents, contribution
rates, and benefit options.
``Sec. 806. Maintenance of reserves and provisions for solvency for
plans providing health benefits in addition to health
insurance coverage.
``Sec. 807. Requirements for application and related requirements.
``Sec. 808. Notice requirements for voluntary termination.
``Sec. 809. Corrective actions and mandatory termination.
``Sec. 810. Trusteeship by the Secretary of insolvent association
health plans providing health benefits in addition to
health insurance coverage.
``Sec. 811. State assessment authority.
``Sec. 812. Special rules for church plans.
``Sec. 813. Definitions and rules of construction.''.

SEC. 1303. CLARIFICATION OF TREATMENT OF SINGLE EMPLOYER
ARRANGEMENTS.

SEC. 1304. CLARIFICATION OF TREATMENT OF CERTAIN COLLECTIVELY
BARGAINED ARRANGEMENTS.

(a) In General.--Section 3(40)(A)(i) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1002(40)(A)(i)) is amended to read as follows:
``(i)(I) under or pursuant to one or more collective
bargaining agreements which are reached pursuant to
collective bargaining described in section 8(d) of the
National Labor Relations Act (29 U.S.C. 158(d)) or paragraph
Fourth of section 2 of the Railway Labor Act (45 U.S.C. 152,
paragraph Fourth) or which are reached pursuant to labor-
management negotiations under similar provisions of State
public employee relations laws, and (II) in accordance with
subparagraphs (C), (D), and (E),''.
(b) Limitations.--Section 3(40) of such Act (29 U.S.C.
1002(40)) is amended by adding at the end the following new
subparagraphs:
``(C) For purposes of subparagraph (A)(i)(II), a plan or
other arrangement shall be treated as established or
maintained in accordance with this subparagraph only if the
following requirements are met:
``(i) The plan or other arrangement, and the employee
organization or any other entity sponsoring the plan or other
arrangement, do not--
``(I) utilize the services of any licensed insurance agent
or broker for soliciting or enrolling employers or
individuals as participating employers or covered individuals
under the plan or other arrangement; or
``(II) pay a commission or any other type of compensation
to a person, other than a full time employee of the employee
organization (or a member of the organization to the extent
provided in regulations of the Secretary), that is related
either to the volume or number of employers or individuals
solicited or enrolled as participating employers or covered
individuals under the plan or other arrangement, or to the
dollar amount or size of the contributions made by
participating employers or covered individuals to the plan or
other arrangement;
except to the extent that the services used by the plan,
arrangement, organization, or other entity consist solely of
preparation of documents necessary for compliance with the
reporting and disclosure requirements of part 1 or
administrative, investment, or consulting services unrelated
to solicitation or enrollment of covered individuals.
``(ii) As of the end of the preceding plan year, the number
of covered individuals under the plan or other arrangement
who are identified to the plan or arrangement and who are
neither--
``(I) employed within a bargaining unit covered by any of
the collective bargaining agreements with a participating
employer (nor covered on the basis of an individual's
employment in such a bargaining unit); nor
``(II) present employees (or former employees who were
covered while employed) of the sponsoring employee
organization, of an employer who is or was a party to any of
the collective bargaining agreements, or of the plan or other
arrangement or a related plan or arrangement (nor covered
on the basis of such present or former employment);

[[Page H6351]]

(c) Conforming Amendments to Definitions of Participant and
Beneficiary.--Section 3(7) of such Act (29 U.S.C. 1002(7)) is
amended by adding at the end the following new sentence:
``Such term includes an individual who is a covered
individual described in paragraph (40)(C)(ii).''.

SEC. 1305. ENFORCEMENT PROVISIONS RELATING TO ASSOCIATION
HEALTH PLANS.

a district court of the United States shall enter an order
requiring that the plan or arrangement cease activities.
``(2) Paragraph (1) shall not apply in the case of an
association health plan or other arrangement if the plan or
arrangement shows that--
``(A) all benefits under it referred to in paragraph (1)
consist of health insurance coverage; and
``(B) with respect to each State in which the plan or
arrangement offers or provides benefits, the plan or
arrangement is operating in accordance with applicable State
laws that are not superseded under section 514.
``(3) The court may grant such additional equitable relief,
including any relief available under this title, as it deems
necessary to protect the interests of the public and of
persons having claims for benefits against the plan.''.
(c) Responsibility for Claims Procedure.--Section 503 of
such Act (29 U.S.C. 1133) (as amended by title I) is amended
by adding at the end the following new subsection:
``(c) Association Health Plans.--The terms of each
association health plan which is or has been certified under
part 8 shall require the board of trustees or the named
fiduciary (as applicable) to ensure that the requirements of
this section are met in connection with claims filed under
the plan.''.

SEC. 1306. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

SEC. 1307. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.

(a) Effective Date.--The amendments made by sections 1302,
1305, and 1306 shall take effect on January 1, 2000. The
amendments made by sections 1303 and 1304 shall take effect
on the date of the enactment of this Act. The Secretary of
Labor shall first issue all regulations necessary to carry
out the amendments made by this subtitle before January 1,
2000.
(b) Exception.--Section 801(a)(2) of the Employee
Retirement Income Security Act of 1974 (added by section
1302) does not apply in connection with an association health
plan (certified under part 8 of subtitle B of title I of such
Act) existing on April 1, 1997, if no benefits provided
thereunder as of the date of the enactment of this Act
consist of health insurance coverage (as defined in section
733(b)(1) of such Act).
(c) Treatment of Certain Existing Health Benefits
Programs.--
(1) In general.--In any case in which, as of the date of
the enactment of this Act, an arrangement is maintained in a
State for the purpose of providing benefits consisting of
medical care for the employees and beneficiaries of its
participating employers, at least 200 participating employers
make contributions to such arrangement, such arrangement has
been in existence for at least 10 years, and such arrangement
is licensed under the laws of one or more States to provide
such benefits to its participating employers, upon the filing
with the applicable authority (as defined in section
813(a)(5) of the Employee Retirement Income Security Act of
1974 (as amended by this Act)) by the arrangement of an
application for certification of the arrangement under part 8
of subtitle B of title I of such Act--
(A) such arrangement shall be deemed to be a group health
plan for purposes of title I of such Act,
(B) the requirements of sections 801(a)(1) and 803(a)(1) of
the Employee Retirement Income Security Act of 1974 shall be
deemed met with respect to such arrangement,
(C) the requirements of section 803(b) of such Act shall be
deemed met, if the arrangement is operated by a board of
directors which--
(i) is elected by the participating employers, with each
employer having one vote, and
(ii) has complete fiscal control over the arrangement and
which is responsible for all operations of the arrangement,
(D) the requirements of section 804(a) of such Act shall be
deemed met with respect to such arrangement,
(E) the arrangement may be certified by any applicable
authority with respect to its operations in any State only if
it operates in such State on the date of certification.

[[Page H6352]]

(2) Pilot program period.--For purposes of this subsection,
the term ``pilot program period'' means the 5-year period
beginning on January 1, 1999.
TITLE II--AMENDMENTS TO PUBLIC HEALTH SERVICE ACT
Subtitle A--Patient Protections and Point of Service Coverage
Requirements

SEC. 2001. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE,
EMERGENCY MEDICAL CARE, OBSTETRIC AND
GYNECOLOGICAL CARE, PEDIATRIC CARE.

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

``SEC. 2706. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE,
EMERGENCY MEDICAL CARE, OBSTETRIC AND
GYNECOLOGICAL CARE, PEDIATRIC CARE.

``(a) Patient Access to Unrestricted Medical Advice.--
``(1) In general.--In the case of any health care
professional acting within the lawful scope of practice in
the course of carrying out a contractual employment
arrangement or other direct contractual arrangement between
such professional and a group health plan or a health
insurance issuer offering health insurance coverage in
connection with a group health plan, the plan or issuer with
which such contractual employment arrangement or other direct
contractual arrangement is maintained by the professional may
not impose on such professional under such arrangement any
prohibition or restriction with respect to advice, provided
to a participant or beneficiary under the plan who is a
patient, about the health status of the participant or
beneficiary or the medical care or treatment for the
condition or disease of the participant or beneficiary,
regardless of whether benefits for such care or treatment are
provided under the plan or health insurance coverage offered
in connection with the plan.
``(2) Health care professional defined.--For purposes of
this subsection, the term `health care professional' means a
physician (as defined in section 1861(r) of the Social
Security Act) or other health care professional if coverage
for the professional's services is provided under the group
health plan for the services of the professional. Such term
includes a podiatrist, optometrist, chiropractor,
psychologist, dentist, physician assistant, physical or
occupational therapist and therapy assistant, speech-language
pathologist, audiologist, registered or licensed practical
nurse (including nurse practitioner, clinical nurse
specialist, certified registered nurse anesthetist, and
certified nurse-midwife), licensed certified social worker,
registered respiratory therapist, and certified respiratory
therapy technician.
``(b) Patient Access to Emergency Medical Care.--
``(1) In general.--To the extent that the group health plan
(or health insurance issuer offering health insurance
coverage in connection with the plan) provides for any
benefits consisting of emergency medical care (as defined in
section 503(b)(9)(I) of the Employee Retirement Income
Security Act of 1974), except for items or services
specifically excluded--
``(A) the plan or issuer shall provide benefits, and
without regard to otherwise applicable network limitations,
without requiring preauthorization and without regard to
otherwise applicable network limitations, for appropriate
emergency medical screening examinations (within the
capability of the emergency facility, including ancillary
services routinely available to the emergency facility) to
the extent that a prudent layperson, who possesses an average
knowledge of health and medicine, would determine such
examinations to be necessary in order to determine whether
emergency medical care (as so defined) is required, and
``(B) the plan or issuer shall provide benefits for
additional emergency medical services following an emergency
medical screening examination (if determined necessary under
subparagraph (A)) to the extent that a prudent emergency
medical professional would determine such additional
emergency services to be necessary to avoid the consequences
described in section 503(b)(9)(I) of such Act.
``(2) Uniform cost-sharing required.--Nothing in this
subsection shall be construed as preventing a group health
plan or issuer from imposing any form of cost-sharing
applicable to any participant or beneficiary (including
coinsurance, copayments, deductibles, and any other charges)
in relation to benefits described in paragraph (1), if such
form of cost-sharing is uniformly applied under such plan,
with respect to similarly situated participants and
beneficiaries, to all benefits consisting of emergency
medical care (as defined in section 503(b)(9)(I) of the
Employee Retirement Income Security Act of 1974) provided to
such similarly situated participants and beneficiaries under
the plan.
``(c) Patient Access to Obstetric and Gynecological Care.
``(1) In general.--In any case in which a group health plan
(or a health insurance issuer offering health insurance
coverage in connection with the plan)--
``(A) provides benefits under the terms of the plan
consisting of--
``(i) routine gynecological care (such as preventive
women's health examinations), or
``(ii) routine obstetric care (such as routine pregnancy-
related services),
provided by a participating physician who specializes in such
care (or provides benefits consisting of payment for such
care), and
``(B) the plan requires or provides for designation by a
participant or beneficiary of a participating primary care
provider,

SEC. 2002. REQUIRING HEALTH MAINTENANCE ORGANIZATIONS TO
OFFER OPTION OF POINT-OF-SERVICE COVERAGE.

(a) In General.--Title XXVII of the Public Health Service
Act is amended by inserting after section 2713 the following
new section:

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

[[Page H6353]]

coverage option which provides for coverage of such services
which are furnished through such class (or classes) of health
care professionals regardless of whether or not the
professionals are members of such panel.
``(b) Requirement to Offer Supplemental Coverage to
Participants in Certain Cases.--Except as provided in
subsection (c), if a health insurance issuer makes available
a coverage option under and described in subsection (a) to a
plan sponsor of a group health plan and the sponsor declines
to contract for such coverage option, then the issuer shall
make available in the individual insurance market to each
participant in the group health plan optional separate
supplemental health insurance coverage in the individual
health insurance market which consists of services identical
to those provided under such coverage provided through the
closed panel under the group health plan but are furnished
exclusively by health care professionals who are not members
of such a closed panel.
``(c) Exceptions.--
``(1) Offering of non-panel option.--Subsections (a) and
(b) shall not apply with respect to a group health plan if
the plan offers a coverage option that provides coverage for
services that may be furnished by a class or classes of
health care professionals who are not in a closed panel. This
paragraph shall be applied separately to distinguishable
groups of employees under the plan.
``(2) Availability of coverage through healthmart.--
Subsections (a) and (b) shall not apply to a group health
plan if the health insurance coverage under the plan is made
available through a HealthMart (as defined in section 2801)
and if any health insurance coverage made available through
the HealthMart provides for coverage of the services of any
class of health care professionals other than through a
closed panel of professionals.
``(3) Relicensure exemption.--Subsections (a) and (b) shall
not apply to a health maintenance organization in a State in
any case in which--
``(A) the organization demonstrates to the applicable
authority that the organization has made a good faith effort
to obtain (but has failed to obtain) a contract between the
organization and any other health insurance issuer providing
for the coverage option or supplemental coverage described in
subsection (a) or (b), as the case may be, within the
applicable service area of the organization, and
``(B) the State requires the organization to receive or
qualify for a separate license, as an indemnity insurer or
otherwise, in order to offer such coverage option or
supplemental coverage, respectively.

The applicable authority may require that the organization
demonstrate that it meets the requirements of the previous
sentence no more frequently that once every two years.
``(4) Increased costs.--Subsections (a) and (b) shall not
apply to a health maintenance organization if the
organization demonstrates to the applicable authority, in
accordance with generally accepted actuarial practice, that,
on either a prospective or retroactive basis, the premium for
the coverage option or supplemental coverage required to be
made available under such respective subsection exceeds by
more than 1 percent the premium for the coverage consisting
of services which are furnished through a closed panel of
health care professionals in the class or classes involved.
The applicable authority may require that the organization
demonstrate such an increase no more frequently that once
every two years. This paragraph shall be applied on an
average per enrollee or similar basis.
``(5) Collective bargaining agreements.--Subsections (a)
and (b) shall not apply in connection with a group health
plan if the plan is established or maintained pursuant to one
or more collective bargaining agreements.
``(d) Definitions.--For purposes of this section:
``(1) Coverage through closed panel.--Health insurance
coverage for a class of health care professionals shall be
treated as provided through a closed panel of such
professionals only if such coverage consists of coverage of
items or services consisting of professionals services which
are reimbursed for or provided only within a limited network
of such professionals.
``(2) Health care professional.--The term `health care
professional' has the meaning given such term in section
2706(a)(2).''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to coverage offered on or after January 1 of the
second calendar year following the date of the enactment of
this Act.
Subtitle B--Patient Access to Information

SEC. 2101. PATIENT ACCESS TO INFORMATION REGARDING PLAN
COVERAGE, MANAGED CARE PROCEDURES, HEALTH CARE
PROVIDERS, AND QUALITY OF MEDICAL CARE.

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

``SEC. 2707. PATIENT ACCESS TO INFORMATION REGARDING PLAN
COVERAGE, MANAGED CARE PROCEDURES, HEALTH CARE
PROVIDERS, AND QUALITY OF MEDICAL CARE.

[[Page H6354]]

``(d) Dispute Resolution Procedures.--The information
required under subsection (a) includes a description of the
processes adopted in connection with such coverage pursuant
to section 503(b) of the Employee Retirement Income Security
Act of 1974, including--
``(1) descriptions thereof relating specifically to--
``(A) coverage decisions,
``(B) internal review of coverage decisions, and
``(C) any external review of coverage decisions, and
``(2) the procedures and time frames applicable to each
step of the processes referred to in subparagraphs (A), (B),
and (C) of paragraph (1).
``(e) Information Available on Request.--
``(1) Access to plan benefit information in electronic
form.--
``(A) In general.--A group health plan (and a health
insurance issuer offering health insurance coverage in
connection with a group health plan) shall, upon written
request (made not more frequently than annually), make
available to participants and beneficiaries, in a generally
recognized electronic format, the following information:
``(i) the latest summary plan description, including the
latest summary of material modifications, and
``(ii) the actual plan provisions setting forth the
benefits available under the plan,

to the extent such information relates to the coverage
options under the plan available to the participant or
beneficiary. A reasonable charge may be made to cover the
cost of providing such information in such generally
recognized electronic format. The Secretary may by regulation
prescribe a maximum amount which will constitute a reasonable
charge under the preceding sentence.
``(B) Alternative access.--The requirements of this
paragraph may be met by making such information generally
available (rather than upon request) on the Internet or on a
proprietary computer network in a format which is readily
accessible to participants and beneficiaries.
``(2) Additional information to be provided on request.--
``(A) Inclusion in summary plan description of summary of
additional information.--The information required under
subsection (a) includes a summary description of the types of
information required by this subsection to be made available
to participants and beneficiaries on request.
``(B) Information required from plans and issuers on
request.--In addition to information required to be included
in summary plan descriptions under this subsection, a group
health plan (and a health insurance issuer offering health
insurance coverage in connection with a group health plan)
shall provide the following information to a participant or
beneficiary on request:
``(i) Network characteristics.--If the plan (or issuer)
utilizes a defined set of providers under contract with the
plan (or issuer), a detailed list of the names of such
providers and their geographic location, set forth separately
with respect to primary care providers and with respect to
specialists.
``(ii) Care management information.--A description of the
circumstances under which, and the extent to which, the plan
has special disease management programs or programs for
persons with disabilities, indicating whether these programs
are voluntary or mandatory and whether a significant benefit
differential results from participation in such programs.
``(iii) Inclusion of drugs and biologicals in
formularies.--A statement of whether a specific drug or
biological is included in a formulary used to determine
benefits under the plan and a description of the procedures
for considering requests for any patient-specific waivers.
``(iv) Procedures for determining exclusions based on
medical necessity or experimental treatments.--Upon receipt
by the participant or beneficiary of any notification of an
adverse coverage decision based on a determination relating
to medical necessity or an experimental treatment or
technology, a description of the procedures and medically-
based criteria used in such decision.
``(v) Preauthorization and utilization review procedures.--
Upon receipt by the participant or beneficiary of any
notification of an adverse coverage decision, a description
of the basis on which any preauthorization requirement or any
utilization review requirement has resulted in such decision.
``(vi) Accreditation status of health insurance issuers and
service providers.--A description of the accreditation and
licencing status (if any) of each health insurance issuer
offering health insurance coverage in connection with the
plan and of any utilization review organization utilized by
the issuer or the plan, together with the name and address of
the accrediting or licencing authority.
``(vii) Measures of enrollee satisfaction.--The latest
information (if any) maintained by the plan, or by any health
insurance issuer offering health insurance coverage in
connection with the plan, relating to enrollee satisfaction.
``(viii) Quality performance measures.--The latest
information (if any) maintained by the plan, or by any health
insurance issuer offering health insurance coverage in
connection with the plan, relating to quality of performance
of the delivery of medical care with respect to coverage
options offered under the plan and of health care
professionals and facilities providing medical care under the
plan.
``(ix) Information relating to external reviews.--The
number of external reviews under section 503(b)(4) of the
Employee Retirement Income Security Act of 1974 that have
been completed during the prior plan year and the number of
such reviews in which the recommendation reported under
section 503(b)(4)(C)(iii) of such Act includes a
recommendation for modification or reversal of an internal
review decision under the plan.
``(C) Information required from health care professionals
on request.--Any health care professional treating a
participant or beneficiary under a group health plan shall
provide to the participant or beneficiary, on request, a
description of his or her professional qualifications
(including board certification status, licensing status, and
accreditation status, if any), privileges, and experience and
a general description by category (including salary, fee-for-
service, capitation, and such other categories as may be
specified in regulations of the Secretary) of the applicable
method by which such professional is compensated in
connection with the provision of such medical care.
``(D) Information required from health care facilities on
request.--Any health care facility from which a participant
or beneficiary has sought treatment under a group health plan
shall provide to the participant or beneficiary, on request,
a description of the facility's corporate form or other
organizational form and all forms of licensing and
accreditation status (if any) assigned to the facility by
standard-setting organizations.
``(f) Access to Information Relevant to the Coverage
Options under which the Participant or Beneficiary is
Eligible to Enroll.--In addition to information otherwise
required to be made available under this section, a group
health plan (and a health insurance issuer offering health
insurance coverage in connection with a group health plan)
shall, upon written request (made not more frequently than
annually), make available to a participant and an employee
who, under the terms of the plan, is eligible for coverage
but not enrolled in connection with a period of enrollment
the summary plan description for any coverage option under
the plan under which the participant is eligible to enroll
and any information described in clauses (i), (ii), (iii),
(vi), (vii), and (viii) of subsection (e)(2)(B).
``(g) Advance Notice of Changes in Drug Formularies.--Not
later than 30 days before the effective of date of any
exclusion of a specific drug or biological from any drug
formulary under the plan that is used in the treatment of a
chronic illness or disease, the plan shall take such actions
as are necessary to reasonably ensure that plan participants
are informed of such exclusion. The requirements of this
subsection may be satisfied--
``(1) by inclusion of information in publications broadly
distributed by plan sponsors, employers, or employee
organizations,
``(2) by electronic means of communication (including the
Internet or proprietary computer networks in a format which
is readily accessible to participants),
``(3) by timely informing participants who, under an
ongoing program maintained under the plan, have submitted
their names for such notification, or
``(4) by any other reasonable means of timely informing
plan participants.''.

SEC. 2102. EFFECTIVE DATE.

SEC. 2201. SHORT TITLE OF SUBTITLE.

This subtitle may be cited as the ``Health Care Consumer
Empowerment Act of 1998''.

SEC. 2202. EXPANSION OF CONSUMER CHOICE THROUGH HEALTHMARTS.

(a) In General.--The Public Health Service Act is amended
by adding at the end the following new title:

``TITLE XXVIII--HEALTHMARTS

``SEC. 2801. DEFINITION OF HEALTHMART.

[[Page H6355]]

``(D) Entities, such as insurance companies, health
maintenance organizations, and licensed provider-sponsored
organizations, that underwrite or administer health benefits
coverage.
``(2) Offering health benefits coverage.--
``(A) In general.--The HealthMart, in conjunction with
those health insurance issuers that offer health benefits
coverage through the HealthMart, makes available health
benefits coverage in the manner described in subsection (b)
to all small employers and eligible employees in the manner
described in subsection (c)(2) at rates (including employer's
and employee's share) that are established by the health
insurance issuer on a policy or product specific basis and
that may vary only as permissible under State law. A
HealthMart is deemed to be a group health plan for purposes
of applying section 702 of the Employee Retirement Income
Security Act of 1974, section 2702 of this Act, and section
9802(b) of the Internal Revenue Code of 1986 (which limit
variation among similarly situated individuals of required
premiums for health benefits coverage on the basis of health
status-related factors).
``(B) Nondiscrimination in coverage offered.--
``(i) In general.--Subject to clause (ii), the HealthMart
may not offer health benefits coverage to an eligible
employee in a geographic area (as specified under paragraph
(3)(A)) unless the same coverage is offered to all such
employees in the same geographic area. Section 2711(a)(1)(B)
of this Act limits denial of enrollment of certain eligible
individuals under health benefits coverage in the small group
market.
``(ii) Construction.--Nothing in this title shall be
construed as requiring or permitting a health insurance
issuer to provide coverage outside the service area of the
issuer, as approved under State law.
``(C) No financial underwriting.--The HealthMart provides
health benefits coverage only through contracts with health
insurance issuers and does not assume insurance risk with
respect to such coverage.
``(D) Minimum coverage.--By the end of the first year of
its operation and thereafter, the HealthMart maintains not
fewer than 10 purchasers and 100 members.
``(3) Geographic areas.--
``(A) Specification of geographic areas.--The HealthMart
shall specify the geographic area (or areas) in which it
makes available health benefits coverage offered by health
insurance issuers to small employers. Such an area shall
encompass at least one entire county or equivalent area.
``(B) Multistate areas.--In the case of a HealthMart that
serves more than one State, such geographic areas may be
areas that include portions of two or more contiguous States.
``(C) Multiple healthmarts permitted in single geographic
area.--Nothing in this title shall be construed as preventing
the establishment and operation of more than one HealthMart
in a geographic area or as limiting the number of HealthMarts
that may operate in any area.
``(4) Provision of administrative services to purchasers.--
``(A) In general.--The HealthMart provides administrative
services for purchasers. Such services may include
accounting, billing, enrollment information, and employee
coverage status reports.
``(B) Construction.--Nothing in this subsection shall be
construed as preventing a HealthMart from serving as an
administrative service organization to any entity.
``(5) Dissemination of information.--The HealthMart
collects and disseminates (or arranges for the collection and
dissemination of) consumer-oriented information on the scope,
cost, and enrollee satisfaction of all coverage options
offered through the HealthMart to its members and eligible
individuals. Such information shall be defined by the
HealthMart and shall be in a manner appropriate to the type
of coverage offered. To the extent practicable, such
information shall include information on provider
performance, locations and hours of operation of providers,
outcomes, and similar matters. Nothing in this section shall
be construed as preventing the dissemination of such
information or other information by the HealthMart or by
health insurance issuers through electronic or other means.
``(6) Filing information.--The HealthMart--
``(A) files with the applicable Federal authority
information that demonstrates the HealthMart's compliance
with the applicable requirements of this title; or
``(B) in accordance with rules established under section
2803(a), files with a State such information as the State may
require to demonstrate such compliance.
``(b) Health Benefits Coverage Requirements.--
``(1) Compliance with consumer protection requirements.--
Any health benefits coverage offered through a HealthMart
shall--
``(A) be underwritten by a health insurance issuer that--
``(i) is licensed (or otherwise regulated) under State law
(or is a community health organization that is offering
health insurance coverage pursuant to section 330B(a)),
``(ii) meets all applicable State standards relating to
consumer protection, subject to section 2802(b), and
``(iii) offers the coverage under a contract with the
HealthMart;
``(B) subject to paragraph (2), be approved or otherwise
permitted to be offered under State law; and
``(C) provide full portability of creditable coverage for
individuals who remain members of the same HealthMart
notwithstanding that they change the employer through which
they are members in accordance with the provisions of the
parts 6 and 7 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 and titles XXII and
XXVII of this Act, so long as both employers are purchasers
in the HealthMart.
``(2) Alternative process for approval of health benefits
coverage in case of discrimination or delay.--
``(A) In general.--The requirement of paragraph (1)(B)
shall not apply to a policy or product of health benefits
coverage offered in a State if the health insurance issuer
seeking to offer such policy or product files an application
to waive such requirement with the applicable Federal
authority, and the authority determines, based on the
application and other evidence presented to the authority,
that--
``(i) either (or both) of the grounds described in
subparagraph (B) for approval of the application has been
met; and
``(ii) the coverage meets the applicable State standards
(other than those that have been preempted under section
2802).
``(B) Grounds.--The grounds described in this subparagraph
with respect to a policy or product of health benefits
coverage are as follows:
``(i) Failure to act on policy, product, or rate
application on a timely basis.--The State has failed to
complete action on the policy or product (or rates for the
policy or product) within 90 days of the date of the State's
receipt of a substantially complete application. No period
before the date of the enactment of this section shall be
included in determining such 90-day period.
``(ii) Denial of application based on discriminatory
treatment.--The State has denied such an application and--

[[Page H6356]]

``(B) Role of associations, brokers, and licensed health
insurance agents.--Nothing in this section shall be construed
as preventing an association, broker, licensed health
insurance agent, or other entity from assisting or
representing a HealthMart or small employers from entering
into appropriate arrangements to carry out this title.
``(C) Period of contract.--The HealthMart may not require a
contract under subparagraph (A) between a HealthMart and a
purchaser to be effective for a period of longer than 12
months. The previous sentence shall not be construed as
preventing such a contract from being extended for additional
12-month periods or preventing the purchaser from voluntarily
electing a contract period of longer than 12 months.
``(D) Exclusive nature of contract.--Such a contract shall
provide that the purchaser agrees not to obtain or sponsor
health benefits coverage, on behalf of any eligible employees
(and their dependents), other than through the HealthMart.
The previous sentence shall not apply to an eligible
individual who resides in an area for which no coverage is
offered by any health insurance issuer through the
HealthMart.
``(2) Members.--
``(A) In general.--Under rules established to carry out
this title, with respect to a small employer that has a
purchaser contract with a HealthMart, individuals who are
employees of the employer may enroll for health benefits
coverage (including coverage for dependents of such enrolling
employees) offered by a health insurance issuer through the
HealthMart.
``(B) Nondiscrimination in enrollment.--A HealthMart may
not deny enrollment as a member to an individual who is an
employee (or dependent of such an employee) eligible to be so
enrolled based on health status-related factors, except as
may be permitted consistent with section 2742(b).
``(C) Annual open enrollment period.--In the case of
members enrolled in health benefits coverage offered by a
health insurance issuer through a HealthMart, subject to
subparagraph (D), the HealthMart shall provide for an annual
open enrollment period of 30 days during which such members
may change the coverage option in which the members are
enrolled.
``(D) Rules of eligibility.--Nothing in this paragraph
shall preclude a HealthMart from establishing rules of
employee eligibility for enrollment and reenrollment of
members during the annual open enrollment period under
subparagraph (C). Such rules shall be applied consistently to
all purchasers and members within the HealthMart and shall
not be based in any manner on health status-related factors
and may not conflict with sections 2701 and 2702 of this Act.
``(3) Health insurance issuers.--
``(A) Premium collection.--The contract between a
HealthMart and a health insurance issuer shall provide, with
respect to a member enrolled with health benefits coverage
offered by the issuer through the HealthMart, for the payment
of the premiums collected by the HealthMart (or the issuer)
for such coverage (less a pre-determined administrative
charge negotiated by the HealthMart and the issuer) to the
issuer.
``(B) Scope of service area.--Nothing in this title shall
be construed as requiring the service area of a health
insurance issuer with respect to health insurance coverage to
cover the entire geographic area served by a HealthMart.
``(C) Availability of coverage options.--A HealthMart shall
enter into contracts with one or more health insurance
issuers in a manner that assures that at least 2 health
insurance coverage options are made available in the
geographic area specified under subsection (a)(3)(A).
``(d) Prevention of Conflicts of Interest.--
``(1) For boards of directors.--A member of a board of
directors of a HealthMart may not serve as an employee or
paid consultant to the HealthMart, but may receive reasonable
reimbursement for travel expenses for purposes of attending
meetings of the board or committees thereof.
``(2) For boards of directors or employees.--An individual
is not eligible to serve in a paid or unpaid capacity on the
board of directors of a HealthMart or as an employee of the
HealthMart, if the individual is employed by, represents in
any capacity, owns, or controls any ownership interest in a
organization from whom the HealthMart receives contributions,
grants, or other funds not connected with a contract for
coverage through the HealthMart.
``(3) Employment and employee representatives.--
``(A) In general.--An individual who is serving on a board
of directors of a HealthMart as a representative described in
subparagraph (A) or (B) of section 2801(a)(1) shall not be
employed by or affiliated with a health insurance issuer or
be licensed as or employed by or affiliated with a health
care provider.
``(B) Construction.--For purposes of subparagraph (A), the
term ``affiliated'' does not include membership in a health
benefits plan or the obtaining of health benefits coverage
offered by a health insurance issuer.
``(e) Construction.--
``(1) Network of affiliated healthmarts.--Nothing in this
section shall be construed as preventing one or more
HealthMarts serving different areas (whether or not
contiguous) from providing for some or all of the following
(through a single administrative organization or otherwise):
``(A) Coordinating the offering of the same or similar
health benefits coverage in different areas served by the
different HealthMarts.
``(B) Providing for crediting of deductibles and other
cost-sharing for individuals who are provided health benefits
coverage through the HealthMarts (or affiliated HealthMarts)
after--
``(i) a change of employers through which the coverage is
provided, or
``(ii) a change in place of employment to an area not
served by the previous HealthMart.
``(2) Permitting healthmarts to adjust distributions among
issuers to reflect relative risk of enrollees.--Nothing in
this section shall be construed as precluding a HealthMart
from providing for adjustments in amounts distributed among
the health insurance issuers offering health benefits
coverage through the HealthMart based on factors such as the
relative health care risk of members enrolled under the
coverage offered by the different issuers.
``(3) Application of uniform minimum participation and
contribution rules.--Nothing in this section shall be
construed as precluding a HealthMart from establishing
minimum participation and contribution rules (described in
section 2711(e)(1)) for small employers that apply to become
purchasers in the HealthMart, so long as such rules are
applied uniformly for all health insurance issuers.

``SEC. 2802. APPLICATION OF CERTAIN LAWS AND REQUIREMENTS.

[[Page H6357]]

applying section 2712 in the case of health insurance
coverage offered by a health insurance issuer through a
HealthMart, if the contract between the HealthMart and the
issuer is terminated and the HealthMart continues to make
available any health insurance coverage after the date of
such termination, the following rules apply:
``(1) Renewability.--The HealthMart shall fulfill the
obligation under such section of the issuer renewing and
continuing in force coverage by offering purchasers (and
members and their dependents) all available health benefits
coverage that would otherwise be available to similarly-
situated purchasers and members from the remaining
participating health insurance issuers in the same manner as
would be required of issuers under section 2712(c).
``(2) Application of association rules.--The HealthMart
shall be considered an association for purposes of applying
section 2712(e).
``(h) Construction in Relation to Certain Other Laws.--
Nothing in this title shall be construed as modifying or
affecting the applicability to HealthMarts or health benefits
coverage offered by a health insurance issuer through a
HealthMart of parts 6 and 7 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 or titles
XXII and XXVII of this Act.

``SEC. 2803. ADMINISTRATION.

``SEC. 2804. DEFINITIONS.

SEC. 2301. PROMOTION OF PROVISION OF INSURANCE BY COMMUNITY
HEALTH ORGANIZATIONS.

``waiver of state licensure requirement for community health
organizations in certain cases

[[Page H6358]]

Committee on Commerce of the House of Representatives and the
Committee on Labor and Human Resources of the Senate a report
regarding whether the waiver process under this subsection
should be continued after December 31, 2003.
``(b) Assumption of Full Financial Risk.--To qualify for a
waiver under subsection (a), the community health
organization shall assume full financial risk on a
prospective basis for the provision of covered health care
services, except that the organization--
``(1) may obtain insurance or make other arrangements for
the cost of providing to any enrolled member such services
the aggregate value of which exceeds such aggregate level as
the Secretary specifies from time to time;
``(2) may obtain insurance or make other arrangements for
the cost of such services provided to its enrolled members
other than through the organization because medical necessity
required their provision before they could be secured through
the organization;
``(3) may obtain insurance or make other arrangements for
not more than 90 percent of the amount by which its costs for
any of its fiscal years exceed 105 percent of its income for
such fiscal year; and
``(4) may make arrangements with physicians or other health
care professionals, health care institutions, or any
combination of such individuals or institutions to assume all
or part of the financial risk on a prospective basis for the
provision of health services by the physicians or other
health professionals or through the institutions.
``(c) Certification of Provision against Risk of Insolvency
for Unlicensed CHOs.--
``(1) In general.--Each community health organization that
is not licensed by a State and for which a waiver application
has been approved under subsection (a)(1), shall meet
standards established by the Secretary under subsection (d)
relating to the financial solvency and capital adequacy of
the organization.
``(2) Certification process for solvency standards for
chos.--The Secretary shall establish a process for the
receipt and approval of applications of a community health
organization described in paragraph (1) for certification
(and periodic recertification) of the organization as meeting
such solvency standards. Under such process, the Secretary
shall act upon such a certification application not later
than 60 days after the date the application has been
received.
``(d) Establishment of Solvency Standards for Community
Health Organizations.--
``(1) In general.--The Secretary shall establish, on an
expedited basis and by rule pursuant to section 553 of title
5, United States Code and through the Health Resources and
Services Administration, standards described in subsection
(c)(1) (relating to financial solvency and capital adequacy)
that entities must meet to obtain a waiver under subsection
(a)(2)(C). In establishing such standards, the Secretary
shall consult with interested organizations, including the
National Association of Insurance Commissioners, the Academy
of Actuaries, and organizations representing Federally
qualified health centers.
``(2) Factors to consider for solvency standards.--In
establishing solvency standards for community health
organizations under paragraph (1), the Secretary shall take
into account--
``(A) the delivery system assets of such an organization
and ability of such an organization to provide services to
enrollees;
``(B) alternative means of protecting against insolvency,
including reinsurance, unrestricted surplus, letters of
credit, guarantees, organizational insurance coverage,
partnerships with other licensed entities, and valuation
attributable to the ability of such an organization to meet
its service obligations through direct delivery of care; and
``(C) any standards developed by the National Association
of Insurance Commissioners specifically for risk-based health
care delivery organizations.
``(3) Enrollee protection against insolvency.--Such
standards shall include provisions to prevent enrollees from
being held liable to any person or entity for the
organization's debts in the event of the organization's
insolvency.
``(4) Deadline.--Such standards shall be promulgated in a
manner so they are first effective by not later than April 1,
1999.
``(e) Definitions.--In this section:
``(1) Community health organization.--The term `community
health organization ' means an organization that is a
Federally-qualified health center or is controlled by one or
more Federally-qualified health centers.
``(2) Federally-qualified health center.--The term
`Federally-qualified health center' has the meaning given
such term in section 1905(l)(2)(B) of the Social Security
Act.
``(3) Health insurance coverage.--The term `health
insurance coverage' has the meaning given such term in
section 2791(b)(1).
``(4) Control.--The term `control' means the possession,
whether direct or indirect, of the power to direct or cause
the direction of the management and policies of the
organization through membership, board representation, or an
ownership interest equal to or greater than 50.1 percent.''.
TITLE III--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986
Subtitle A--Patient Protections

SEC. 3001. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE,
EMERGENCY MEDICAL CARE, OBSTETRIC AND
GYNECOLOGICAL CARE, PEDIATRIC CARE.

(a) In General.--Subchapter B of chapter 100 of the
Internal Revenue Code of 1986 (relating to other
requirements) is amended by adding at the end the following
new section:

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

``(a) Patient Access to Unrestricted Medical Advice.--
``(1) In general.--In the case of any health care
professional acting within the lawful scope of practice in
the course of carrying out a contractual employment
arrangement or other direct contractual arrangement between
such professional and a group health plan, the plan with
which such contractual employment arrangement or other direct
contractual arrangement is maintained by the professional may
not impose on such professional under such arrangement any
prohibition or restriction with respect to advice, provided
to a participant or beneficiary under the plan who is a
patient, about the health status of the participant or
beneficiary or the medical care or treatment for the
condition or disease of the participant or beneficiary,
regardless of whether benefits for such care or treatment are
provided under the plan.
``(2) Health care professional defined.--For purposes of
this subsection, the term `health care professional' means a
physician (as defined in section 1861(r) of the Social
Security Act) or other health care professional if coverage
for the professional's services is provided under the group
health plan for the services of the professional. Such term
includes a podiatrist, optometrist, chiropractor,
psychologist, dentist, physician assistant, physical or
occupational therapist and therapy assistant, speech-language
pathologist, audiologist, registered or licensed practical
nurse (including nurse practitioner, clinical nurse
specialist, certified registered nurse anesthetist, and
certified nurse-midwife), licensed certified social worker,
registered respiratory therapist, and certified respiratory
therapy technician.
``(b) Patient Access to Emergency Medical Care.--
``(1) In general.--To the extent that the group health plan
provides for any benefits consisting of emergency medical
care (as defined in section 503(b)(9)(I) of the Employee
Retirement Income Security Act of 1974), except for items or
services specifically excluded--
``(A) the plan shall provide benefits, without requiring
preauthorization and without regard to otherwise applicable
network limitations, for appropriate emergency medical
screening examinations (within the capability of the
emergency facility, including ancillary services routinely
available to the emergency facility) to the extent that a
prudent layperson, who possesses an average knowledge of
health and medicine, would determine such examinations to be
necessary in order to determine whether emergency medical
care (as so defined) is required, and
``(B) the plan shall provide benefits for additional
emergency medical services following an emergency medical
screening examination (if determined necessary under
subparagraph (A)) to the extent that a prudent emergency
medical professional would determine such additional
emergency services to be necessary to avoid the consequences
described in clause (i) of section 503(b)(9)(I) of such Act.
``(2) Uniform cost-sharing required.--Nothing in this
subsection shall be construed as preventing a group health
plan from imposing any form of cost-sharing applicable to any
participant or beneficiary (including coinsurance,
copayments, deductibles, and any other charges) in relation
to benefits described in paragraph (1), if such form of cost-
sharing is uniformly applied under such plan, with respect to
similarly situated participants and beneficiaries, to all
benefits consisting of emergency medical care (as defined in
section 503(b)(9)(I) of the Employee Retirement Income
Security Act of 1974) provided to such similarly situated
participants and beneficiaries under the plan.
``(c) Patient Access to Obstetric and Gynecological Care.
``(1) In general.--In any case in which a group health
plan--
``(A) provides benefits under the terms of the plan
consisting of--
``(i) routine gynecological care (such as preventive
women's health examinations), or
``(ii) routine obstetric care (such as routine pregnancy-
related services),
provided by a participating physician who specializes in such
care (or provides benefits consisting of payment for such
care), and
``(B) the plan requires or provides for designation by a
participant or beneficiary of a participating primary care
provider,

[[Page H6359]]

``(A) does not require authorization or a referral by the
primary care provider in order to obtain such benefits, and
``(B) treats the ordering of other routine care of the same
type, by the participating physician providing the care
described in clause (i) or (ii) of paragraph (1)(A), as the
authorization of the primary care provider with respect to
such care.
``(3) Construction.--Nothing in paragraph (2)(B) shall
waive any requirements of coverage relating to medical
necessity or appropriateness with respect to coverage of
gynecological or obstetric care so ordered.
``(d) Patient Access to Pediatric Care.--
``(1) In general.--In any case in which a group health plan
(or a health insurance issuer offering health insurance
coverage in connection with the plan) provides benefits
consisting of routine pediatric care provided by a
participating physician who specializes in pediatrics (or
consisting of payment for such care) and the plan requires or
provides for designation by a participant or beneficiary of a
participating primary care provider, the plan (or issuer)
shall provide that such a participating physician may be
designated, if available, by a parent or guardian of any
beneficiary under the plan is who under 18 years of age, as
the primary care provider with respect to any such benefits.
``(2) Construction.--Nothing in paragraph (1) shall waive
any requirements of coverage relating to medical necessity or
appropriateness with respect to coverage of pediatric care.
``(e) Treatment of Multiple Coverage Options.--In the case
of a plan providing benefits under two or more coverage
options, the requirements of subsections (c) and (d) shall
apply separately with respect to each coverage option.''.
(b) Clerical Amendment.--The table of sections of such
subchapter of such chapter is amended by adding at the end
the following new item:

``Sec. 9813. Patient access to unrestricted medical advice, emergency
medical care, obstetric and gynecological care, pediatric
care.''

SEC. 3002. EFFECTIVE DATE AND RELATED RULES.

(a) In General.--The amendments made by this subtitle shall
apply with respect to plan years beginning on or after
January 1 of the second calendar year following the date of
the enactment of this Act, except that the Secretary of the
Treasury may issue regulations before such date under such
amendments. The Secretary shall first issue regulations
necessary to carry out the amendments made by this section
before the effective date thereof.
(b) Limitation on Penalty for Certain Failures.--No penalty
shall be imposed on any failure to comply with any
requirement imposed by the amendments made by section 3101 to
the extent such failure occurs before the date of issuance of
regulations issued in connection with such requirement if the
plan has sought to comply in good faith with such
requirement.
(c) Special Rule for Collective Bargaining Agreements.--In
the case of a group health plan maintained pursuant to one or
more collective bargaining agreements between employee
representatives and one or more employers ratified before the
date of the enactment of this Act, the provisions of
subsections (b), (c), and (d) of section 9813 of the Internal
Revenue Code of 1986 (as added by this subtitle) shall not
apply with respect to plan years beginning before the later
of--
(1) the date on which the last of the collective bargaining
agreements relating to the plan terminates (determined
without regard to any extension thereof agreed to after the
date of the enactment of this Act), or

(2) January 1, 2001.
For purposes of this subsection, any plan amendment made
pursuant to a collective bargaining agreement relating to the
plan which amends the plan solely to conform to any
requirement added by this subtitle shall not be treated as a
termination of such collective bargaining agreement.
Subtitle B--Patient Access to Information

SEC. 3101. PATIENT ACCESS TO INFORMATION REGARDING PLAN
COVERAGE, MANAGED CARE PROCEDURES, HEALTH CARE
PROVIDERS, AND QUALITY OF MEDICAL CARE.

(a) In General.--Subchapter B of chapter 100 of the
Internal Revenue Code of 1986 (relating to other
requirements) is amended by adding at the end the following
new section:

``SEC. 9814. DISCLOSURE BY GROUP HEALTH PLANS.

``(a) Disclosure Requirement.--The administrator of each
group health plan shall take such actions as are necessary to
ensure that the summary plan description of the plan required
under section 102 of Employee Retirement Income Security Act
of 1974 (or each summary plan description in any case in
which different summary plan descriptions are appropriate
under part 1 of subtitle B of title I of such Act for
different options of coverage) contains the information
required under subsections (b), (c), (d), and (e)(2)(A). To
the extent that any health insurance issuer offering health
insurance coverage in connection with such plan provides such
information on a timely basis to plan participants and
beneficiaries, the requirements of this subsection shall be
deemed satisfied in the case of such plan with respect to
such information.
``(b) Plan Benefits.--The information required under
subsection (a) includes the following:
``(1) Covered items and services.--
``(A) Categorization of included benefits.--A description
of covered benefits, categorized by--
``(i) types of items and services (including any special
disease management program), and
``(ii) types of health care professionals providing such
items and services.
``(B) Emergency medical care.--A description of the extent
to which the plan covers emergency medical care (including
the extent to which the plan provides for access to urgent
care centers), and any definitions provided under the plan
for the relevant plan terminology referring to such care.
``(C) Preventative services.--A description of the extent
to which the plan provides benefits for preventative
services.
``(D) Drug formularies.--A description of the extent to
which covered benefits are determined by the use or
application of a drug formulary and a summary of the process
for determining what is included in such formulary.
``(E) COBRA continuation coverage.--A description of the
requirements under section 4980B.
``(2) Limitations, exclusions, and restrictions on covered
benefits.--
``(A) Categorization of excluded benefits.--A description
of benefits specifically excluded from coverage, categorized
by types of items and services.
``(B) Utilization review and preauthorization
requirements.--Whether coverage for medical care is limited
or excluded on the basis of utilization review or
preauthorization requirements.
``(C) Lifetime, annual, or other period limitations.--A
description of the circumstances under which, and the extent
to which, coverage is subject to lifetime, annual, or other
period limitations, categorized by types of benefits.
``(D) Custodial care.--A description of the circumstances
under which, and the extent to which, the coverage of
benefits for custodial care is limited or excluded, and a
statement of the definition used by the plan for custodial
care.
``(E) Experimental treatments.--Whether coverage for any
medical care is limited or excluded because it constitutes
experimental treatment or technology, and any definitions
provided under the plan for the relevant plan terminology
referring to such limited or excluded care.
``(F) Medical appropriateness or necessity.--Whether
coverage for medical care may be limited or excluded by
reason of a failure to meet the plan's requirements for
medical appropriateness or necessity, and any definitions
provided under the plan for the relevant plan terminology
referring to such limited or excluded care.
``(G) Second or subsequent opinions.--A description of the
circumstances under which, and the extent to which, coverage
for second or subsequent opinions is limited or excluded.
``(H) Specialty care.--A description of the circumstances
under which, and the extent to which, coverage of benefits
for specialty care is conditioned on referral from a primary
care provider.
``(I) Continuity of care.--A description of the
circumstances under which, and the extent to which, coverage
of items and services provided by any health care
professional is limited or excluded by reason of the
departure by the professional from any defined set of
providers.
``(J) Restrictions on coverage of emergency services.--A
description of the circumstances under which, and the extent
to which, the plan, in covering emergency medical care
furnished to a participant or beneficiary of the plan imposes
any financial responsibility described in subsection (c) on
participants or beneficiaries or limits or conditions
benefits for such care subject to any other term or condition
of such plan
``(c) Participant's Financial Responsibilities.--The
information required under subsection (a) includes an
explanation of--
``(1) a participant's financial responsibility for payment
of premiums, coinsurance, copayments, deductibles, and any
other charges, and
``(2) the circumstances under which, and the extent to
which, the participant's financial responsibility described
in paragraph (1) may vary, including any distinctions based
on whether a health care provider from whom covered benefits
are obtained is included in a defined set of providers.
``(d) Dispute Resolution Procedures.--The information
required under subsection (a) includes a description of the
processes adopted by the plan pursuant to section 503(b) of
Employee Retirement Income Security Act of 1974, including--
``(1) descriptions thereof relating specifically to--
``(A) coverage decisions,
``(B) internal review of coverage decisions, and
``(C) any external review of coverage decisions, and
``(2) the procedures and time frames applicable to each
step of the processes referred to in subparagraphs (A), (B),
and (C) of paragraph (1).
``(e) Information Available on Request.--
``(1) Access to plan benefit information in electronic
form.--
``(A) In general.--A group health plan shall, upon written
request (made not more frequently than annually), make
available to

[[Page H6360]]

participants and beneficiaries, in a generally recognized
electronic format, the following information:
``(i) the latest summary plan description, including the
latest summary of material modifications; and
``(ii) the actual plan provisions setting forth the
benefits available under the plan

to the extent such information relates to the coverage
options under the plan available to the participant or
beneficiary. A reasonable charge may be made to cover the
cost of providing such information in such generally
recognized electronic format. The Secretary may by regulation
prescribe a maximum amount which will constitute a reasonable
charge under the preceding sentence.
``(B) Alternative access.--The requirements of this
paragraph may be met by making such information generally
available (rather than upon request) on the Internet or on a
proprietary computer network in a format which is readily
accessible to participants and beneficiaries.
``(2) Additional information to be provided on request.--
``(A) Inclusion in summary plan description of summary of
additional information.--The information required under
subsection (a) includes a summary description of the types of
information required by this subsection to be made available
to participants and beneficiaries on request.
``(B) Information required from plans on request.--In
addition to information required to be included in summary
plan descriptions under this subsection, a group health plan
shall provide the following information to a participant or
beneficiary on request:
``(i) Network characteristics.--If the plan (or a health
insurance issuer offering health insurance coverage in
connection with the plan) utilizes a defined set of providers
under contract with the plan (or issuer), a detailed list of
the names of such providers and their geographic location,
set forth separately with respect to primary care providers
and with respect to specialists.
``(ii) Care management information.--A description of the
circumstances under which, and the extent to which, the plan
has special disease management programs or programs for
persons with disabilities, indicating whether these programs
are voluntary or mandatory and whether a significant benefit
differential results from participation in such programs.
``(iii) Inclusion of drugs and biologicals in
formularies.--A statement of whether a specific drug or
biological is included in a formulary used to determine
benefits under the plan and a description of the procedures
for considering requests for any patient-specific waivers.
``(iv) Procedures for determining exclusions based on
medical necessity or experimental treatments.--Upon receipt
by the participant or beneficiary of any notification of an
adverse coverage decision based on a determination relating
to medical necessity or an experimental treatment or
technology, a description of the procedures and medically-
based criteria used in such decision.
``(v) Preauthorization and utilization review procedures.--
Upon receipt by the participant or beneficiary of any
notification of an adverse coverage decision, a description
of the basis on which any preauthorization requirement or any
utilization review requirement has resulted in such decision.
``(vi) Accreditation status of health insurance issuers and
service providers.--A description of the accreditation and
licencing status (if any) of each health insurance issuer
offering health insurance coverage in connection with the
plan and of any utilization review organization utilized by
the issuer or the plan, together with the name and address of
the accrediting or licencing authority.
``(vii) Measures of enrollee satisfaction.--The latest
information (if any) maintained by the plan, or by any health
insurance issuer offering health insurance coverage in
connection with the plan, relating to enrollee satisfaction.
``(viii) Quality performance measures.--The latest
information (if any) maintained by the plan, or by any health
insurance issuer offering health insurance coverage in
connection with the plan, relating to quality of performance
of the delivery of medical care with respect to coverage
options offered under the plan and of health care
professionals and facilities providing medical care under the
plan.
``(ix) Information relating to external reviews.--The
number of external reviews under section 503(b)(4) of the
Employee Retirement Income Security Act of 1974 that have
been completed during the prior plan year and the number of
such reviews in which the recommendation reported under
section 503(b)(4)(C)(iii) of such Act includes a
recommendation for modification or reversal of an internal
review decision under the plan.
``(C) Information required from health care professionals
on request.--Any health care professional treating a
participant or beneficiary under a group health plan shall
provide to the participant or beneficiary, on request, a
description of his or her professional qualifications
(including board certification status, licensing status, and
accreditation status, if any), privileges, and experience and
a general description by category (including salary, fee-for-
service, capitation, and such other categories as may be
specified in regulations of the Secretary) of the applicable
method by which such professional is compensated in
connection with the provision of such medical care.
``(D) Information required from health care facilities on
request.--Any health care facility from which a participant
or beneficiary has sought treatment under a group health plan
shall provide to the participant or beneficiary, on request,
a description of the facility's corporate form or other
organizational form and all forms of licensing and
accreditation status (if any) assigned to the facility by
standard-setting organizations.
``(f) Access to Information Relevant to the Coverage
Options under which the Participant or Beneficiary is
Eligible to Enroll.--In addition to information otherwise
required to be made available under this section, a group
health plan shall, upon written request (made not more
frequently than annually), make available to a participant
(and an employee who, under the terms of the plan, is
eligible for coverage but not enrolled) in connection with a
period of enrollment the summary plan description for any
coverage option under the plan under which the participant is
eligible to enroll and any information described in clauses
(i), (ii), (iii), (vi), (vii), and (viii) of subsection
(e)(2)(B).
``(g) Advance Notice of Changes in Drug Formularies.--Not
later than 30 days before the effective of date of any
exclusion of a specific drug or biological from any drug
formulary under the plan that is used in the treatment of a
chronic illness or disease, the plan shall take such actions
as are necessary to reasonably ensure that plan participants
are informed of such exclusion. The requirements of this
subsection may be satisfied--
``(1) by inclusion of information in publications broadly
distributed by plan sponsors, employers, or employee
organizations,
``(2) by electronic means of communication (including the
Internet or proprietary computer networks in a format which
is readily accessible to participants),
``(3) by timely informing participants who, under an
ongoing program maintained under the plan, have submitted
their names for such notification, or
``(4) by any other reasonable means of timely informing
plan participants.''.
(b) Clerical Amendment.--The table of sections of such
subchapter of such chapter is amended by adding at the end
the following new item:

``Sec. 9814. Disclosure by group health plans.''

SEC. 3102. EFFECTIVE DATE.

SEC. 3201. EXPANSION OF AVAILABILITY OF MEDICAL SAVINGS
ACCOUNTS.

[[Page H6361]]

under this subsection to the taxpayer for any taxable year
shall be reduced (but not below zero) by the amount which
would (but for section 106(b)) be includible in the
taxpayer's gross income for such taxable year.''
(e) Reduction of Permitted Deductibles Under High
Deductible Health Plans.--
(1) In general.--Subparagraph (A) of section 220(c)(2) of
such Code (defining high deductible health plan) is amended--
(A) by striking ``$1,500'' and inserting ``$1,000'', and
(B) by striking ``$3,000'' and inserting ``$2,000''.
(2) Conforming amendment.--Subsection (g) of section 220 of
such Code is amended--
(A) by striking ``1998'' and inserting ``1999'', and
(B) by striking ``1997'' and inserting ``1998''.
(f) Medical Savings Accounts May Be Offered Under Cafeteria
Plans.--Subsection (f) of section 125 of such Code is amended
by striking ``106(b),''.
(g) Individuals Receiving Immediate Federal Annuities
Eligible for Medical Savings Accounts.--Paragraph (1) of
section 220(c) of such Code (defining eligible individual),
as amended by subsections (a) and (b), is amended by adding
at the end the following new subparagraph:
``(C) Special rules for individuals receiving immediate
federal annuities.--
``(i) In general.--Subparagraph (A)(iii) and subsection
(b)(4) shall not apply for any month to an individual--

SEC. 3202. EXCEPTION FROM INSURANCE LIMITATION IN CASE OF
MEDICAL SAVINGS ACCOUNTS.

(a) In General.--Section 220(d)(2)(B) of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new clause:
``(iii) Insurance offered by community health centers.--

``(I) In general.--Subject to clauses (II) and (III),
clause (i) shall not apply to any expense for coverage under
insurance offered by a health center (as defined in section
330(a)(1) of the Public Health Service Act) if the coverage
consists solely of coverage for required primary health
benefits (as defined in section 330(b)(1)(A) of such Act)
provided on a capitated basis.
``(II) Income limitation.--Subclause (I) shall only apply
to expenses for coverage of an individual who, in the taxable
year involved, has income that is less than 200 percent of
the income official poverty line (as defined by the Office of
Management and Budget, and revised annually in accordance
with section 673(2) of the Omnibus Budget Reconciliation Act
of 1981) applicable to a family of the size involved.
``(III) Limitation on number of contracts.--For a taxable
year ending in a calendar year, subclause (I) shall apply
only to expenses for coverage for the first 15,000
individuals enrolled in insurance described in such subclause
in the year.''.

SEC. 3203. SENSE OF THE HOUSE OF REPRESENTATIVES.

It is the sense of the House of Representatives that
patients are best served when they are empowered to make
informed choices about their own health care. The same is
true regarding an individual's choice of health insurance. A
system that gives people the power to choose the coverage
that best meets their needs, combined with insurance market
reforms, offers great promise of increased choices and
greater access to health insurance for Americans.

Subtitle D--Revenue Offsets

SEC. 3301. CLARIFICATION OF DEFINITION OF SPECIFIED LIABILITY
LOSS.

(a) In General.--Subparagraph (B) of section 172(f)(1) of
the Internal Revenue Code of 1986 (defining specified
liability loss) is amended to read as follows:
``(B)(i) Any amount allowable as a deduction under this
chapter (other than section 468(a)(1) or 468A(a)) which is in
satisfaction of a liability under a Federal or State law
requiring--
``(I) the reclamation of land,
``(II) the decommissioning of a nuclear power plant (or any
unit thereof),
``(III) the dismantlement of a drilling platform,
``(IV) the remediation of environmental contamination, or
``(V) a payment under any workers compensation act (within
the meaning of section 461(h)(2)(C)(i)).
``(ii) A liability shall be taken into account under this
subparagraph only if--
``(I) the act (or failure to act) giving rise to such
liability occurs at least 3 years before the beginning of the
taxable year, and
``(II) the taxpayer used an accrual method of accounting
throughout the period or periods during which such act (or
failure to act) occurred.''
(b) Effective Date.--The amendment made by this section
shall apply to net operating losses arising in taxable years
ending after the date of the enactment of this Act.

SEC. 3302. PROPERTY SUBJECT TO A LIABILITY TREATED IN SAME
MANNER AS ASSUMPTION OF LIABILITY.

(a) Repeal of Property Subject to a Liability Test.--
(1) Section 357.--Section 357(a) of the Internal Revenue
Code of 1986 (relating to assumption of liability) is amended
by striking ``, or acquires from the taxpayer property
subject to a liability'' in paragraph (2).
(2) Section 358.--Section 358(d)(1) of such Code (relating
to assumption of liability) is amended by striking ``or
acquired from the taxpayer property subject to a liability''.
(3) Section 368.--
(A) Section 368(a)(1)(C) of such Code is amended by
striking ``, or the fact that property acquired is subject to
a liability,''.
(B) The last sentence of section 368(a)(2)(B) of such Code
is amended by striking ``, and the amount of any liability to
which any property acquired from the acquiring corporation is
subject,''.
(b) Clarification of Assumption of Liability.--
(1) In general.--Section 357 of such Code is amended by
adding at the end the following new subsections:
``(d) Determination of Amount of Liability Assumed.--
``(1) In general.--For purposes of this section, section
358(d), section 362(d), section 368(a)(1)(C), and section
368(a)(2)(B), except as provided in regulations--
``(A) a recourse liability (or portion thereof) shall be
treated as having been assumed if, as determined on the basis
of all facts and circumstances, the transferee has agreed to,
and is expected to, satisfy such liability (or portion),
whether or not the transferor has been relieved of such
liability, and
``(B) a nonrecourse liability shall be treated as having
been assumed by the transferee of any asset subject to such
liability.
``(2) Regulations.--The Secretary shall prescribe such
regulations as may be necessary to carry out the purposes of
this subsection and section 362(d). The Secretary may also
prescribe regulations which provide that the manner in which
a liability is treated as assumed under this subsection is
applied, where appropriate, elsewhere in this title.''
(2) Limitation on basis increase attributable to assumption
of liability.--Section 362 of such Code is amended by adding
at the end the following new subsection:
``(d) Limitation on Basis Increase Attributable to
Assumption of Liability.--
``(1) In general.--In no event shall the basis of any
property be increased under subsection (a) or (b) above fair
market value (determined without regard to section 7701(g))
by reason of any gain recognized to the transferor as a
result of the assumption of a liability.
``(2) Treatment of gain not subject to tax.--Except as
provided in regulations, if--
``(A) gain is recognized to the transferor as a result of
an assumption of a nonrecourse liability by a transferee
which is also secured by assets not transferred to such
transferee, and
``(B) no person is subject to tax under this title on such
gain,

then, for purposes of determining basis under subsections (a)
and (b), the amount of gain recognized by the transferor as a
result of the assumption of the liability shall be determined
as if the liability assumed by the transferee equaled such
transferee's ratable portion of such liability determined on
the basis of the relative fair market values (determined
without regard to section 7701(g)) of all of the assets
subject to such liability.''
(c) Application to Provisions Other Than Subchapter C.--
(1) Section 584.--Section 584(h)(3) of such Code is
amended--
(A) by striking ``, and the fact that any property
transferred by the common trust fund is subject to a
liability,'' in subparagraph (A),
(B) by striking clause (ii) of subparagraph (B) and
inserting:
``(ii) Assumed liabilities.--For purposes of clause (i),
the term `assumed liabilities' means any liability of the
common trust fund assumed by any regulated investment company
in connection with the transfer referred to in paragraph
(1)(A).
``(C) Assumption.--For purposes of this paragraph, in
determining the amount of any liability assumed, the rules of
section 357(d) shall apply.''.
(2) Section 1031.--The last sentence of section 1031(d) of
such Code is amended--

[[Page H6362]]

(A) by striking ``assumed a liability of the taxpayer or
acquired from the taxpayer property subject to a liability''
and inserting ``assumed (as determined under section 357(d))
a liability of the taxpayer'', and
(B) by striking ``or acquisition (in the amount of the
liability)''.
(d) Conforming Amendments.--
(1) Section 351(h)(1) of such Code is amended by striking
``, or acquires property subject to a liability,''.
(2) Section 357 of such Code is amended by striking ``or
acquisition'' each place it appears in subsection (a) or (b).
(3) Section 357(b)(1) of such Code is amended by striking
``or acquired''.
(4) Section 357(c)(1) of such Code is amended by striking
``, plus the amount of the liabilities to which the property
is subject,''.
(5) Section 357(c)(3) of such Code is amended by striking
``or to which the property transferred is subject''.
(6) Section 358(d)(1) of such Code is amended by striking
``or acquisition (in the amount of the liability)''.
(e) Effective Date.--The amendments made by this section
shall apply to transfers after the date of the enactment of
this Act.

SEC. 3303. LIMITATION ON REQUIRED ACCRUAL OF AMOUNTS RECEIVED
FOR PERFORMANCE OF CERTAIN PERSONAL SERVICES.

(a) In General.--Paragraph (5) of section 448(d) of the
Internal Revenue Code of 1986 (relating to special rule for
services) is amended by inserting ``in fields referred to in
paragraph (2)(A)'' after ``services by such person''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to taxable years beginning after December 31,
1998.
(c) Coordination With Section 481.--In the case of any
taxpayer required by this section to change its method of
accounting for any taxable year--
(1) such change shall be treated as initiated by the
taxpayer,
(2) such change shall be treated as made with the consent
of the Secretary of the Treasury, and
(3) the period for taking into account the adjustments
under section 481 by reason of such change shall be 3 years.

SEC. 3304. RETURNS RELATING TO CANCELLATIONS OF INDEBTEDNESS
BY ORGANIZATIONS LENDING MONEY.

(a) In General.--Paragraph (2) of section 6050P(c) of the
Internal Revenue Code of 1986 (relating to definitions and
special rules) is amended by striking ``and'' at the end of
subparagraph (B), by striking the period at the end of
subparagraph (C) and inserting ``, and'', and by inserting
after subparagraph (C) the following new subparagraph:
``(D) any organization a significant trade or business of
which is the lending of money.''
(b) Effective Date.--The amendment made by subsection (a)
shall apply to discharges of indebtedness after December 31,
1998.

SEC. 3305. CLARIFICATION AND EXPANSION OF MATHEMATICAL ERROR
ASSESSMENT PROCEDURES.

(a) TIN Deemed Incorrect if Information on Return Differs
With Agency Records.--Section 6213(g)(2) of the Internal
Revenue Code of 1986 (defining mathematical or clerical
error) is amended by adding at the end the following flush
sentence:

``A taxpayer shall be treated as having omitted a correct TIN
for purposes of the preceding sentence if information
provided by the taxpayer on the return with respect to the
individual whose TIN was provided differs from the
information the Secretary obtains from the person issuing the
TIN.''.
(b) Expansion of Mathematical Error Procedures to Cases
Where TIN Establishes Individual Not Eligible for Tax
Credit.--Section 6213(g)(2) of such Code is amended by
striking ``and'' at the end of subparagraph (J), by striking
the period at the end of the subparagraph (K) and inserting
``, and'', and by adding at the end the following new
subparagraph:
``(L) the inclusion on a return of a TIN required to be
included on the return under section 21, 24, or 32 if--
``(i) such TIN is of an individual whose age affects the
amount of the credit under such section, and
``(ii) the computation of the credit on the return reflects
the treatment of such individual as being of an age different
from the individual's age based on such TIN.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending after the date of the
enactment of this Act.

SEC. 3306. INCLUSION OF ROTAVIRUS GASTROENTERITIS AS A
TAXABLE VACCINE.

(a) In General.--Section 4132(1) of the Internal Revenue
Code of 1986 (defining taxable vaccine) is amended by adding
at the end the following new subparagraph:
``(K) Any vaccine against rotavirus gastroenteritis.''.
(b) Effective Date.--
(1) Sales.--The amendment made by this section shall apply
to sales after the date of the enactment of this Act.
(2) Deliveries.--For purposes of paragraph (1), in the case
of sales on or before the date of the enactment of this Act
for which delivery is made after such date, the delivery date
shall be considered the sale date.
TITLE IV--HEALTH CARE LAWSUIT REFORM
Subtitle A--General Provisions

SEC. 4001. FEDERAL REFORM OF HEALTH CARE LIABILITY ACTIONS.

SEC. 4002. DEFINITIONS.

[[Page H6363]]

(D) a Medicare+Choice plan (offered under part C of title
XVIII of the Social Security Act),

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

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

SEC. 4003. EFFECTIVE DATE.

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

SEC. 4011. STATUTE OF LIMITATIONS.

SEC. 4012. CALCULATION AND PAYMENT OF DAMAGES.

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

[[Page H6364]]

for future economic and non-economic loss exceeds $50,000, a
person shall not be required to pay such damages in a single,
lump-sum payment, but shall be permitted to make such
payments periodically based on when the damages are likely to
occur, as such payments are determined by the court.
(2) Finality of judgment.--The judgment of the court
awarding periodic payments under this subsection may not, in
the absence of fraud, be reopened at any time to contest,
amend, or modify the schedule or amount of the payments.
(3) Lump-sum settlements.--This subsection shall not be
construed to preclude a settlement providing for a single,
lump-sum payment.
(d) Treatment of Collateral Source Payments.--
(1) Introduction into evidence.--In any health care
liability action, any defendant may introduce evidence of
collateral source payments. If any defendant elects to
introduce such evidence, the claimant may introduce evidence
of any amount paid or contributed or reasonably likely to be
paid or contributed in the future by or on behalf of the
claimant to secure the right to such collateral source
payments.
(2) No subrogation.--No provider of collateral source
payments shall recover any amount against the claimant or
receive any lien or credit against the claimant's recovery or
be equitably or legally subrogated to the right of the
claimant in a health care liability action.
(3) Application to settlements.--This subsection shall
apply to an action that is settled as well as an action that
is resolved by a fact finder.

SEC. 4013. ALTERNATIVE DISPUTE RESOLUTION.

SEC. 4014. REPORTING ON FRAUD AND ABUSE ENFORCEMENT
ACTIVITIES.

The General Accounting Office shall--
(1) monitor--
(A) the compliance of the Department of Justice and all
United States Attorneys with the guideline entitled
``Guidance on the Use of the False Claims Act in Civil Health
Care Matters'' issued by the Department on June 3, 1998,
including any revisions to that guideline, and
(B) the compliance of the Office of the Inspector General
of the Department of Health and Human Services with the
protocols and guidelines entitled ``National Project
Protocols--Best Practice Guidelines'' issued by the Inspector
General on June 3, 1998, including any revisions to such
protocols and guidelines, and
(2) submit a report on such compliance to the Committee on
Commerce, the Committee on the Judiciary, and the Committee
on Ways and Means of the House of Representatives and the
Committee on the Judiciary and the Committee on Finance of
the Senate not later than February 1, 1999, and every year
thereafter for a period of four years ending February 1,
2002.
TITLE V--CONFIDENTIALITY OF HEALTH INFORMATION

SEC. 5001. CONFIDENTIALITY OF PROTECTED HEALTH INFORMATION.

(a) In General.--Title XI of the Social Security Act (42
U.S.C. 1301 et seq.) is amended by adding at the end the
following:

``Part D--Confidentiality of Protected Health Information

``inspection and copying of protected health information

``Sec. 1181. (a) In General.--Subject to the succeeding
provisions of this section, upon the request of an individual
who is the subject of protected health information, a person
who is a health care provider, health plan, employer, health
or life insurer, or educational institution shall make
available to the individual (or, in the discretion of the
person, to a health care provider designated by the
individual), for inspection and copying, protected health
information concerning the individual that the person
maintains, including records created under section 1182.
``(b) Access Through Originating Provider.--Protected
health information that is created by an originating
provider, and subsequently received by another health care
provider or a health plan as part of treatment or payment
activities, shall be made available for inspection and
copying as provided in this section through the originating
provider, rather than the receiving health care provider or
health plan, unless the originating provider does not
maintain the information.
``(c) Investigational Information.--With respect to
protected health information that was created as part of the
requesting individual's participation in a clinical trial
monitored by an institutional review board established to
review health research with respect to potential risks to
human subjects pursuant to Federal regulations adopted under
section 1802(b) of the Public Health Service Act (42 U.S.C.
300v-1(b)) and the notice (informally referred to as the
`Common Rule') promulgated in the Federal Register at 56 Fed.
Reg. 28003), a request under subsection (a) shall be granted
only to the extent and in a manner consistent with such
regulations.
``(d) Other Exceptions.--Unless ordered by a court of
competent jurisdiction, a person to whom a request under
subsection (a) is made is not required to grant the request,
if--
``(1) the person determines that the disclosure of the
information could reasonably be expected to endanger the life
or physical safety of, or cause substantial harm to, any
individual; or
``(2) the information is compiled principally--
``(A) in anticipation of a civil, criminal, or
administrative action or proceeding; or
``(B) for use in such action or proceeding.
``(e) Denial of Request for Inspection or Copying.--If a
person to whom a request under subsection (a) is made denies
a request for inspection or copying pursuant to this section,
the person shall inform the individual making the request, in
writing, of--
``(1) the reasons for the denial of the request;
``(2) the availability of procedures for further review of
the denial; and
``(3) the individual's right to file with the person a
concise statement setting forth the request.
``(f) Statement Regarding Request.--If an individual has
filed with a person a statement under subsection (e)(3) with
respect to protected health information, the person, in any
subsequent disclosure of the information--
``(1) shall include a notation concerning the individual's
statement; and
``(2) may include a concise statement of the reasons for
denying the request for inspection or copying.
``(g) Procedures.--A person providing access to protected
health information for inspection or copying under this
section may set forth appropriate procedures to be followed
for such inspection or copying and may require an individual
to pay reasonable costs associated with such inspection or
copying.
``(h) Inspection and Copying of Segregable Portion.--A
person to whom a request under subsection (a) is made shall
permit the inspection and copying of any reasonably
segregable portion of a record after deletion of any portion
that the person is not required to disclose under this
section.
``(i) Deadline.--A person described in subsection (a) shall
comply with or deny, in accordance with this section, a
request for inspection or copying of protected health
information under this section not later than 30 days after
the date on which the person receives the request.
``(j) Rules Governing Agents.--An agent of a person
described in subsection (a) shall not be required to provide
for the inspection and copying of protected health
information, except where--
``(1) the protected health information is retained by the
agent; and
``(2) the agent has been asked by the person to fulfill the
requirements of this section.

``supplementation of protected health information

[[Page H6365]]

``(e) Duplicative Requests for Amendments.--If a person
described in subsection (a) receives a duplicative request
for an amendment of information as provided for in such
subsection and a statement of disagreement with respect to
the request has been filed pursuant to subsection (c), the
person shall inform the individual of such filing and shall
not be required to carry out the procedures under this
section.
``(f) Rule of Construction.--This section shall not be
construed--
``(1) to permit an individual to modify statements in his
or her record that document the factual observations of
another individual or state the results of diagnostic tests;
or
``(2) to permit an individual to amend his or her record as
to the type, duration, or quality of treatment the individual
believes he or she should have been provided.

``notice of confidentiality practices

``establishment of safeguards

``availability of protected health information for purposes of health
care operations

``Sec. 1185. (a) Disclosure.--Any person who maintains
protected health information may disclose the information to
a health care provider or a health plan for the purpose of
permitting the provider or plan to conduct health care
operations.
``(b) Use.--A health care provider or a health plan that
maintains protected health information may use it for the
purposes described in subsection (a).
``(c) Limitation on Sale or Barter.--Notwithstanding
subsection (b), no health care provider or health plan may,
as part of conducting health care operations, sell or barter
protected health information.

``relationship to other laws

``Sec. 1186. (a) State Law.--
``(1) In general.--Except as provided in paragraphs (2) and
(3), the provisions of this part shall preempt a provision of
State law to the extent that such provision--
``(A) otherwise would be preempted as inconsistent with
this part under article VI of the Constitution of the United
States;
``(B) relates to authorization for the use or disclosure
of--
``(i) protected health information for health care
operations; or
``(ii) nonidentifiable health information; or
``(C) relates to any of the following:
``(i) Inspection or copying of protected health information
by a person who is a subject of the information.
``(ii) Amendment of protected health information by a
person who is a subject of the information.
``(iii) Notice of confidentiality practices with respect to
protected health information.
``(iv) Establishment of safeguards for protected health
information.
``(2) Exceptions.--Nothing in this part shall be construed
to preempt or modify a provision of State law to the extent
that such provision relates to protected health information
and--
``(A) the confidentiality of the records maintained by a
licensed mental health professional;
``(B) the provision of health care to a minor, or the
disclosure of information about a minor to a parent or
guardian of the minor;
``(C) condition-specific limitations on disclosure;
``(D) the use or disclosure of information for use in
legally authorized--
``(i) disease or injury reporting;
``(ii) public health surveillance, investigation, or
intervention;
``(iii) vital statistics reporting, such as reporting of
birth or death information;
``(iv) reporting of abuse or neglect information;
``(v) reporting of information concerning a communicable
disease status; or
``(vi) reporting concerning the safety or effectiveness of
a biological product regulated under section 351 of the
Public Health Service Act (42 U.S.C. 262) or a drug or device
regulated under the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 301 et seq.);
``(E) the disclosure to a person by a health care provider
of information about an individual, in any case in which the
provider has determined--
``(i) in the provider's reasonable medical judgment, that
the individual is unconscious, incompetent, or otherwise
incapable of deciding whether to authorize disclosure of the
protected health information; and
``(ii) in the provider's reasonable judgment, that the
person is a spouse, relative, guardian, or close friend of
the individual's; or
``(F) the use of information by, or the disclosure of
information to, a person holding a valid and applicable power
of attorney that includes the authority to make health care
decisions on behalf of an individual who is a subject of the
information.
``(3) Privileges.--Nothing in this part shall be construed
to preempt or modify a provision of State law to the extent
that such provision relates to a privilege of a witness or
other person in a court of that State.
``(b) Federal Law.--Nothing in this part shall be construed
to preempt, modify, or repeal a provision of any other
Federal law relating to protected health information or
relating to an individual's access to protected health
information or health care services. Nothing in this part
shall be construed to preempt, modify, or repeal a provision
of Federal law to the extent that such provision relates to a
privilege of a witness or other person in a court of the
United States.

``civil penalties

``definitions

[[Page H6366]]

``(4) Educational institution.--The term `educational
institution' means an institution or place accredited or
licensed for purposes of providing for instruction or
education, including an elementary school, secondary school,
or institution of higher learning, a college, or an
assemblage of colleges united under one corporate
organization or government.
``(5) Employer.--The term `employer' has the meaning given
such term under section 3(5) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002(5)), except that
such term shall include only employers of two or more
employees.
``(6) Health care.--The term `health care' means--
``(A) preventive, diagnostic, therapeutic, rehabilitative,
maintenance, or palliative care, including appropriate
assistance with disease or symptom management and
maintenance, counseling, service, or procedure--
``(i) with respect to the physical or mental condition of
an individual; or
``(ii) affecting the structure or function of the human
body or any part of the human body, including the banking of
blood, sperm, organs, or any other tissue; or
``(B) any sale or dispensing, pursuant to a prescription or
medical order, of a drug, device, equipment, or other health
care-related item to an individual, or for the use of an
individual.
``(7) Health care operations.--The term `health care
operations' means services, provided directly by or on behalf
of a health plan or health care provider or by its agent, for
any of the following purposes:
``(A) Coordinating health care, including health care
management of the individual through risk assessment, case
management, and disease management.
``(B) Conducting quality assessment and improvement
activities, including outcomes evaluation, clinical guideline
development and improvement, and health promotion.
``(C) Carrying out utilization review activities, including
precertification and preauthorization of services, and health
plan rating activities, including underwriting and experience
rating.
``(D) Conducting or arranging for auditing services.
``(8) Health care provider.--The term `health care
provider' means a person, who with respect to a specific item
of protected health information, receives, creates, uses,
maintains, or discloses the information while acting in whole
or in part in the capacity of--
``(A) a person who is licensed, certified, registered, or
otherwise authorized by Federal or State law to provide an
item or service that constitutes health care in the ordinary
course of business, or practice of a profession;
``(B) a Federal, State, or employer-sponsored or any other
privately-sponsored program that directly provides items or
services that constitute health care to beneficiaries; or
``(C) an officer or employee of a person described in
subparagraph (A) or (B).
``(9) Health or life insurer.--The term `health or life
insurer' means a health insurance issuer, as defined in
section 9832(b)(2) of the Internal Revenue Code of 1986, or a
life insurance company, as defined in section 816 of such
Code.
``(10) Health plan.--The term `health plan' means any
health insurance plan, including any hospital or medical
service plan, dental or other health service plan, health
maintenance organization plan, plan offered by a provider-
sponsored organization (as defined in section 1855(d)), or
other program providing or arranging for the provision of
health benefits.
``(11) Health researcher.--The term `health researcher'
means a person (or an officer, employee, or agent of a
person) who is engaged in systematic investigation, including
research development, testing, data analysis, and evaluation,
designed to develop or contribute to generalizable knowledge
relating to basic biomedical processes, health, health care,
health care delivery, or health care cost.
``(12) Nonidentifiable health information.--The term
`nonidentifiable health information' means protected health
information from which personal identifiers that reveal the
identity of the individual who is the subject of such
information or provide a direct means of identifying the
individual (such as name, address, and social security
number) have been removed, encrypted, or replaced with a
code, such that the identity of the individual is not evident
without (in the case of encrypted or coded information) use
of a key.
``(13) Originating provider.--The term `originating
provider', when used with respect to protected health
information, means the health care provider who takes an
action that initiates the treatment episode to which that
information relates, such as prescribing a drug, ordering a
diagnostic test, or admitting an individual to a health care
facility. A hospital or nursing facility is the originating
provider with respect to protected health information created
or received as part of inpatient or outpatient treatment
provided in the hospital or facility.
``(14) Payment activities.--The term `payment activities'
means--
``(A) activities undertaken--
``(i) by, or on behalf of, a health plan to determine its
responsibility for coverage under the plan; or
``(ii) by a health care provider to obtain payment for
items or services provided to an individual, provided under a
health plan, or provided based on a determination by the
health plan of responsibility for coverage under the plan;
and
``(B) includes the following activities, when performed in
a manner consistent with subparagraph (A):
``(i) Billing, claims management, medical data processing,
other administrative services, and actual payment.
``(ii) Determinations of coverage or adjudication of health
benefit or subrogation claims.
``(iii) Review of health care services with respect to
coverage under a health plan or justification of charges.
``(15) Person.--The term `person' means--
``(A) a natural person;
``(B) a government or governmental subdivision, agency, or
authority;
``(C) a company, corporation, estate, firm, trust,
partnership, association, joint venture, society, or joint
stock company; or
``(D) any other legal entity.
``(16) Protected health information.--The term `protected
health information', when used with respect to an individual
who is a subject of information means any information
(including genetic information) that identifies the
individual, whether oral or recorded in any form or medium,
and that--
``(A) is created or received by a health care provider,
health plan, health oversight agency, public health
authority, employer, health or life insurer, or educational
institution;
``(B) relates to the past, present, or future physical or
mental health or condition of an individual (including
individual cells and their components);
``(C) is derived from--
``(i) the provision of health care to an individual; or
``(ii) payment for the provision of health care to an
individual; and
``(D) is not nonidentifiable health information.
``(17) State.--The term `State' includes the District of
Columbia, Puerto Rico, the Virgin Islands, Guam, American
Samoa, and the Northern Mariana Islands.
``(18) Treatment.--The term `treatment' means the provision
of health care by a health care provider.
``(19) Writing.--The term `writing' means writing either in
a paper-based, computer-based, or electronic form, including
electronic signatures.''.
(b) Enforcement of Provisions Through Conditions on
Participation.--
(1) Participating physicians and suppliers.--Section
1842(h) of the Social Security Act (42 U.S.C. 1395u(h)) is
amended by adding at the end the following:
``(9) The Secretary may refuse to enter into an agreement
with a physician or supplier under this subsection, or may
terminate or refuse to renew such agreement, in the event
that such physician or supplier has been found to have
violated a provision of part D of title XI.''.
(2) Medicare+choice organizations.--Section 1852(h) of the
Social Security Act (42 U.S.C. 1395w-22(h)) is amended--
(A) in the matter preceding paragraph (1), by striking
``procedures--'' and inserting ``procedures, consistent with
sections 1181 through 1185--''; and
(B) in paragraph (1), by striking ``privacy of any
individually identifiable enrollee information;'' and
inserting ``confidentiality of protected health information
concerning enrollees;''.
(3) Medicare providers.--Section 1866(a)(1) of the Social
Security Act (42 U.S.C. 1395cc(a)(1)) is amended--
(A) by inserting a semicolon at the end of subparagraph
(R);
(B) by striking the period at the end of subparagraph (S)
and inserting ``; and''; and
(C) by inserting immediately after subparagraph (S) the
following new subparagraph:
``(T) to comply with sections 1181 through 1184.''.
(4) Health maintenance organizations with risk-sharing
contracts.--Section 1876(k)(4) of the Social Security Act (42
U.S.C. 1395mm(k)(4)) of the Social Security Act is amended by
adding at the end the following:
``(E) The confidentiality and accuracy procedure
requirements under section 1852(h).''.
(c) Conforming Amendments.--
(1) Title heading.--Title XI of the Social Security Act (42
U.S.C. 1301 et seq.) is amended by striking the title heading
and inserting the following:
``TITLE XI--GENERAL PROVISIONS, PEER REVIEW, ADMINISTRATIVE
SIMPLIFICATION, AND CONFIDENTIALITY OF PROTECTED HEALTH INFORMATION''.
(2) National committee on vital and health statistics.--
Section 306(k)(5) of the Public Health Service Act (42 U.S.C.
242(k)(5)) is amended--
(A) in subparagraphs (A)(viii) and (D), by striking ``part
C'' and inserting ``parts C and D'';
(B) in subparagraph (C), by striking ``and'' at the end;
(C) in subparagraph (D), by striking the period at the end
and inserting ``; and''; and
(D) by adding at the end the following:
``(E) shall study the issues relating to section 1184 of
the Social Security Act (as added by the Patient Protection
Act of 1998), and, not later than 1 year after the date of
the enactment of the Patient Protection Act of

[[Page H6367]]

1998, shall report to the Congress on such section.''.
(d) Effective Date.--The amendments made by this section
shall take effect on the date that is 1 year after the date
of the enactment of this Act, except that subsection (c)(2),
and section 1183(b) of the Social Security Act (as added by
subsection (a)), shall take effect on the date of the
enactment of this Act.

SEC. 5002. STUDY AND REPORT ON EFFECT OF STATE LAW ON HEALTH-
RELATED RESEARCH.

SEC. 5003. STUDY AND REPORT ON STATE LAW ON PROTECTED HEALTH
INFORMATION.

SEC. 5004. PROTECTION FOR CERTAIN INFORMATION DEVELOPED TO
REDUCE MORTALITY OR MORBIDITY OR FOR IMPROVING
PATIENT CARE AND SAFETY.

SEC. 5005. EFFECTIVE DATE FOR STANDARDS GOVERNING UNIQUE
HEALTH IDENTIFIERS FOR INDIVIDUALS.

Section 1174 of the Social Security Act (42 U.S.C. 1320d-3)
is amended by adding at the end the following:
``(c) Unique Health Identifiers.--Notwithstanding
subsections (a) and (b), the Secretary may not promulgate or
adopt a final standard under section 1173(b) providing for a
unique health identifier for an individual (except in an
individual's capacity as an employer or a health care
provider), until legislation is enacted specifically
approving the standard or containing provisions consistent
with the standard.''.

The SPEAKER pro tempore. After 1 hour of debate on the bill, as
amended, it shall be in order to consider the further amendment printed
in the Congressional Record numbered 2, which shall be considered read
and debatable for 1 hour, equally divided and controlled by the
proponent and an opponent.
The gentleman from Illinois (Mr. Hastert) and the gentleman from
Michigan (Mr. Dingell) each will control 30 minutes of debate on the
bill.
The Chair recognizes the gentleman from Illinois (Mr. Hastert).

{time} 1045

Mr. HASTERT. Mr. Speaker, I yield 3 minutes to the gentleman from
Pennsylvania (Mr. Goodling), the distinguished chairman of the
Committee on Education and the Workforce.
(Mr. GOODLING asked and was given permission to revise and extend his
remarks.)
Mr. GOODLING. Mr. Speaker, I rise today in support of H.R. 4250, the
Patient Protection Act. This is truly a historic occasion which rivals
the passage of ERISA in 1974. Thanks to ERISA, 150 million Americans
are covered by employer-sponsored health care plans. Thanks to the
gentleman from Illinois (Mr. Fawell), most of the 4 million uninsured
will have quality affordable health coverage available to them when we
pass this legislation.
Increasingly, the American people tell us that they need common sense
elements in health insurance reform, and that is what is in the Patient
Protection Act, including basic protections such as guaranteed access
to emergency medical care, doctors being able to speak freely with
patients about their health care options without being gagged and
ensuring that a patient can quickly obtain the benefits promised by
their health care.
The Patient Protection Act will also provide health care
accessibility to patients by requiring that patients have full access
to plan information such as what benefits are covered, the
participant's financial responsibility, and a complete description of
the claims procedure and appeals process. Women and families with small
children will be ensured direct access to key specialists such as OB/
GYNs and pediatricians.
As I see it, however, our plan differs from other proposals in two
key ways. First, we make sure that patients get the care they deserve
in a timely manner before harm can occur. We get them into hospital
rooms, not into courtrooms.
We take serious, comprehensive steps to expand availability and
affordability of health insurance to American working families who have
no health insurance. No other plan does this.
I have held a lot of town meetings in my district over the years, and
not once has a constituent said to me, ``I would really like to be able
to sue my health plan.'' What they have said to me over and over again
is ``When are you going to do something about the high costs of health
insurance?'' Today, I am happy to say we are doing something about it.
Simply put, the Patient Protection Act will increase access to
affordable health insurance for millions of Americans. It is amazing to
me that all the other proposals ignore the 42 million uninsured
Americans.
The gentleman from Illinois (Mr. Fawell) has pushed this through our
committee on two occasions to make sure that we do something about the
uninsured. The problem of the uninsured, both children and adults, is
the problem of small business lacking access to affordable health
coverage.
Over 80 percent of the 82 million uninsured Americans live in
families where someone is working, someone is employed usually by a
small employer, or they are self-employed.
To address the affordability problem of the uninsured, the
Association Health Plan proposals in the Patient Protection Act would
give franchise networks, bona fide trades, business and professional
associations, and organizations such as the Chamber of Commerce, and
the National Federation of Independent Business the ability to form
large group health plans within and across State lines.
Again, the best patient protection is access to affordable health
care.
I would like to take a minute to go into a little more detail about
some of the claims procedure provisions in the Patient Protection Act
as they pertain to ERISA.

[[Page H6368]]

The provisions relating to internal review and external review claims
procedures and remedies are contained in Subtitle C of Title I and will
hold plans accountable and insure patients get the care they deserve in
a timely manner.
The current claims procedures that apply to employee benefit plans
under federal law are contained in ERISA Title I section 503. The
exclusive remedies that apply to such plans are contained in Part 5 of
that Act. With minor exception as provided in regulations, the
procedures under 503 do not distinguish between group health plans
(i.e. employee benefit plans providing medical care) and other plans,
including pension plans and other employee welfare benefit plans. In
general, plans may take up to 90 days to inform claimants of initial
decisions and up to 60 days to inform them of decisions upon internal
appeal. Generally, upon satisfaction of administrative remedies,
claimants may proceed, pursuant to Part 5, to enforce their rights
under the plan and the ERISA law in court. In general, remedies
relating to adverse coverage decisions are limited to the payment of
benefits as found to be provided under the terms of the plan and to
such reasonable attorney's fees as may be provided in the discretion of
the court. Certain other civil remedies may also apply.
Under Subtitle C of Title I the ERISA claims procedures are
modernized to take into account the rules as they apply to the many
diverse kinds of group health plans in today's evolving health care
delivery system. Section 503 of ERISA is amended to require group
health plans to provide written--and understandable--notice to a
participant of any negative coverage decision on requested benefits
under the plan within 30 days of the request. If the request is for
urgent medical care, the plan must provide the notice within 10 days;
for emergencies, the requirement is 72 hours. If the request is for a
referral to a physician specialist, the coverage decision must be
within 72 hours. This notice also must be sent to the participant's
medical provider if the provider initiated the claim or seeks
reimbursement from the plan. The participant must be informed in the
notice that he or she may file a written request for review (i.e.
internal appeal to an appropriate named fiduciary under the plan) of
the coverage decision within 180 days after the notice is received.
Internal reviews of coverage request denials involving medical
necessity and experimental treatment or technology must be conducted by
a physician who did not make the initial decision. The same time frames
apply to internal review as to the initial coverage decision.
If the internal appeal results in a coverage denial, the participant
may make a request within 30 days for an external review, which must be
conducted by one or more independent medical experts (in general, a
physician with expertise in the matters involved) selected in
accordance with procedures that must be specified under the plan. The
procedures of selection required under the plan allow for independent
intermediaries to select the reviewing medical experts so as to ensure
they meet the strict independence rules preventing conflict of
interest. The external review must be completed within 25 days of the
request. If the final decision under the plan by a physician, who did
not make the earlier decision, is an adverse coverage decision, then
the participant has recourse to the courts. Alternative dispute
resolution procedures would be permitted, however they would have to
conform to the requirements for physician review of medical necessity
and with the external review procedures.
The remedies under section 502 of ERISA are improved to include civil
penalties for fiduciaries who do not provide benefits in accordance
with the recommendation of the external review medical expert. If after
external review, a participant is denied coverage, a civil court may
impose a penalty of up to $500 a day ($1,000 in the case of bad faith
violations) starting on the date on which the recommendation was made.
The total penalty may be up to $250,000. Also, fiduciaries in an
expedited court action or who took or failed to take action that
resulted in a denial of coverage after an external review would be
liable in such court actions to pay attorney fees and other reasonable
costs to the plaintiff--i.e., the patient. In the case of a pattern or
practice of violation, the Secretary of Labor may, in a court
proceeding, impose a penalty of up to $100,000. In cases in which a
physician certifies to a court that the time needed to carry out
administrative remedies and procedures for review of coverage denials
would run the risk of causing irreparable harm to the health of the
participant, the provisions under section 502 allows such participants
to take civil action to obtain an injunction or other equitable relief.
This claims process will ensure patients get the care they deserve in
a timely manner. It is one of many reasons the Patient Protection Act
should be passed by Congress and signed into law.
Mr. DINGELL. Mr. Speaker, I yield myself 2 minutes.
Mr. Speaker, we face a clear choice today between two different
approaches. The first, the Patients' Bill of Rights was written last
year and revised in March. The other piece of legislation, the
Republican leadership bill, was still being written after midnight last
night.
The Patients' Bill of Rights has been scored by the CBO at a cost of
$2 per month per patient, and we provided revenue offsets to ensure
fiscal responsibility.
The leadership's bill was never even seen by the CBO and has not been
read by the Members. Only minutes ago did we get a final score from
CBO. Since it does nothing, it costs nothing. I think my colleagues
should note, a bill that does nothing costs nothing.
The Patients' Bill of Rights guarantees real patient rights. It puts
health back into the Health Maintenance Organization. The Republican
leadership bill has the word HMO. In that bill, HMO stands for hide my
opposition.
If our primary concern is health care for the American people, the
choice is clear. The Patients' Bill of Rights puts medical decisions,
especially the question of medical necessity into the hands of doctors
and takes them away from insurance company bureaucrats who now are
hurting the American public.
The Patients' Bill of Rights guarantees that we can see a medical
specialist when we need one. The Patients' Bill of Rights says that, if
you are a pregnant woman or cancer patient, you will continue to be
able to see your doctor when you need continuity of care.
The Patients' Bill of Rights guarantees that we will be able to get
the prescriptions that we need. The Patients' Bill of Rights holds
health plans accountable when they have denied health care and when
their decision kills or injures somebody.
The Patients' Bill of Rights protects the confidentiality of our
medical records, and the Republican bill does not. The Republican bill
even has one interesting thing. It goes so far as to repeal existing
consumer protection laws that help patients. I want my colleagues to
hear that.
Last of all, I want my colleagues to look at the roster of supporters
of the Patients' Bill of Rights: AMA, all the health care specialists,
the nurses, and all of the consumers and aging organizations. The
American people want the Patients' Bill of Rights. If we want to serve
them, we will vote for the Patients' Bill of Rights today.
I want to particularly single out my good friend and colleague, Dr.
Ganske for his leadership and courage on this issue. He is a man of
integrity and stands up for what he believes in. He deserves great
credit.
I also want to commend the work of the staff in the development of
the Patients Bill of Rights.
Among our staff Bridgett Taylor, Amy Droskoski, and Bernadette
Fernandez have worked tirelessly on the bill for many months.
Mr. HASTERT. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from Virginia (Mr. Bliley), chairman of the Committee on
Commerce.
(Mr. BLILEY asked and was given permission to revise and extend his
remarks.)
Mr. BLILEY. Mr. Speaker, when it comes to health care, patients and
their doctors should be in the driver's seat. Right now, they are mere
passengers. Fortunately, the Patient Protection Act of 1998 puts
patients back at the wheel where they belong.
Our bill gives Americans the care they need when they need it. It
protects patients without expanding big government, and it promises
patients greater choice and the ability to stick with a favorite
doctor.
The Patient Protection Act addresses a major flaw in our health care
system, the lack of a real marketplace where patients can shop for the
lowest cost and highest quality care.
Even Ron Pollack of Families U.S.A., a staunch supporter of President
Clinton's efforts to nationalize health care agrees this is needed. He
recently said, and I quote, ``There is no true marketplace today to
drive health care quality.'' He is right. Think about it.
When we buy a new car, we do not go to a bank, credit union, or GMAC
first. We choose the car we want; then we arrange the financing. In
other words,

[[Page H6369]]

we, not the lender, choose what car to buy. We, not our employer,
choose the financing.
Why can health care not work the same way? Why do health care choices
have to be dictated by the terms of health insurance than by consumers'
needs and preferences. Why must employers choose the health coverage
that finances so many Americans' care?
HealthMarts answer these important questions in a way that puts
patients first. HealthMarts are private, voluntary, and competitive
health insurance supermarkets. They transfer choice within the
employer-based health insurance market from small employers to
employees.
HealthMarts give consumers the freedom to choose health coverage from
a broad menu of options. Here is how they work: A small business joins
a HealthMart because it offers lower cost coverage, makes more options
available to employees, and does the administrative work.
Employees choose from among the HealthMart's coverage options. Each
can choose a different plan and still benefit from group rates. Sound
familiar? It should. It is the type of choice today that is available
only to Members of Congress, our staffs, and other Federal employees.
This type of consumer choice is essential to the quality of health
care coverage and services. After all, if all Americans had the freedom
to choose their coverage, they would be able to get the highest quality
care that best meets their needs. HealthMarts will achieve that
critical objective.
The bottom line is this: By making quality as important in the
selection of health coverage as cost, HealthMarts will move the Nation
toward a true health care marketplace.
This new idea gives patients more choice and better quality health
care. It puts them back in the driver's seat. It is yet another reason
why the Patient Protection Act deserves our strong support.
Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Iowa (Mr. Ganske) and note that he has been instrumental
in bringing us to where we are today. I salute him for it and thank him
on behalf of my colleagues.
Mr. GANSKE. Mr. Speaker, I rise in opposition to H.R. 4250 and in
support of the Ganske-Dingell substitute. There is going to be a lot of
debate today about the legal situation. I have been for legal reform. I
have stood in this well arguing for medical malpractice reform. I voted
for securities litigation reform, product liability reform.
I, as a physician, would never want Congress to pass a law that says
physicians should be immune from their malpractice. Yet, that is a
situation that we have with ERISA.
The problem with H.R. 4250 is it does not remove ERISA preemption for
State causes of action. The Ganske-Dingell bill says that Federal law
may not preempt State law, but we have a provision in there that
protects the employer.
If the employer is not making the decision, if the HMO is making the
decision, the employer is not subject to liability. That is a very
important distinction. It is fair.
But let me just ask my colleagues something, it is very clear that
HMOs have committed malpractice that has resulted in loss of life and
limb. ERISA, through the interpretation of the courts, has extended
that legal exemption to health plans. However, we have never had our
personal fingerprints on that legal immunity and the problems with it.
If we vote for the GOP bill, we are going to be codifying, giving
HMOs legal immunity. Would we do that for tobacco companies? I think
not. Would we do that for companies that are making life and death
decisions? I hope not.
Mr. HASTERT. Mr. Speaker, I yield 1 minute to the gentleman from
California (Mr. Cunningham).
Mr. CUNNINGHAM. Mr. Speaker, I have no doubt that Members on both
sides of the aisle want to focus on health care, but I personally feel
that, in an election year, political pandering on both sides is not a
benefit for the American public.
I look at the Democratic ``Bill of Fights'' that is going to drive up
health care cost by letting trial lawyers take over. California is a
leader in HMOs, but I also see good, bad, and ugly in the HMOs in
California. We are losing good doctors in California because of HMOs
and managed health care.

{time} 1100

But yet there are still some good ones, and we need to attend to
that.
Whether the lawyers drive up costs or CEO's from HMOs rip off the
system and drive up health care, both are bad, and that is why I say
that neither one of these bills are good for the American consumer, and
we need to help.
The gentleman from California (Mr. Fazio) brought over a list of
things that are preempted in state law. I do not want that. But, at the
same time, I looked into it, and the unions right now are under ERISA.
Your supporters are exempt under state law, the unions and large
companies. We wanted the small businesses to be able to band together
and have the same benefits for low health care costs.
Mr. DINGELL. Mr. Speaker, I yield such time as he may consume to the
distinguished gentleman from California (Mr. Stark).
(Mr. STARK asked and was given permission to revise and extend his
remarks.)
Mr. STARK. Mr. Speaker, I ask unanimous consent that my infirmity not
be taken as support for the Republican bill, which is a cynical sham
and should be defeated. I wish to announce my support for the Dingell
bill.
Mr. Speaker, today's vote on managed care reform is a complete sham.
It wasn't long ago when the Republican leadership called on their
friends in the health insurance industry ``get off your butts and get
off your wallets'' to defeat real reform.
Today, they are here to put another nail in the coffin of real
reform.
Their answer to managed care reform is the same as their answer to
campaign finance reform and tobacco legislation: Make it look like they
are doing something, but then work to kill it with the addition of
divisive provisions.
H.R. 4250 flunks the fundamental test of real reform--it doesn't hold
health plans accountable for their medical decision making. This bill
precludes an injured patient or their family from suing a managed care
plan that maims or kills them.
Under the Republican bill, health plans could continue to get away
with cases like that of Mrs. Florence Corcoran, who lost her baby
because of her health plan's refusal to follow her doctors' advice.
Today, if a doctor commits malpractice on a patient, the patient has
the right to sue that doctor. If a hospital maims a patient, they are
liable for their action. If a defective car causes a person's death,
the care manufacturer is liable.
Why should we let managed care plans off the hook? What makes them
worthy of legal immunity that we don't grant doctors and hospitals--or
any other profession or industry?
In addition, the Gingrich managed care bill before us today includes
a number of ``poison pills'' that Congress has rejected numerous times
in the past.
Among the poison pills are:
Expansions of medical savings accounts to help the healthy and
wealthy at a cost of billions to American taxpayers;
MEWA and HealthMart provisions that would destroy small group market
reforms in the states, increase adverse selection and weaken state
enforcement authority.
But the cherry on top of this sundae for the managed care industry is
the permission this bill gives health plans to withhold even more
access to care than they can under current law. This bill gives HMOs
the right to define--each plan for itself--what the medically necessary
care is that it will provide to its enrollees. Today, medically
necessary care is defined by doctors and other medical experts as the
best that science and human ability can deliver. But this bill says
plans can decide what their version of medically necessary care is, and
how much of it they will give you. It lets bureaucrats, not doctors,
determine your health care.
Even those managed care reforms where there has been widespread
agreement--such as access to emergency care--are botched in the
Gingrich bill.
This bill does not provide the protections to the private sector that
are enjoyed by Medicare and Medicaid beneficiaries today.
An emergency physician who testified earlier this week, Dr. Charlotte
Yeh, got it right when she said that she thought the Republicans had
performed some ``unnecessary surgery on the prudent lay person standard
to the point where it is hardly recognizable as the consumer protection
we envisioned.''
The Gingrich bill destroys medical record confidentiality. It would
trample on Fourth Amendment rights by giving health plans and

[[Page H6370]]

health providers the right to disclose your medical record to any
entity--without your permission. Your medical record, with your name
and full history, could wind up in the hands of a drug company's
marketing department . . . a credit card company . . . a consultant
working on a political campaign . . . a divorce lawyer . . . a
newspaper.
The public deserves better from Congress than this shoddy piece of
work.
This bill also allows plans to charge people up to $100 to get
external appeals--and doesn't allow patients or doctors to present any
evidence at that external appeal review. Talk about a sham!
This Republican bill is worse than doing nothing. If Members of
Congress took the Hippocratic oath to do no harm, they would not be
able to vote for this bill. Vote to defeat H.R. 4250.
I support the Ganske-Dingell substitute. It is a real bill, with real
protections.
The Republican bill is a sham. It provides none of the major consumer
protections that patients need.
The Republican bill actually does harm. It overrides hundreds and
hundreds of State consumer protection laws, leaving people with less
protection than they now have. It will drive up the cost of health
insurance for most people. It makes your most private medical records
available to every Tom, Dick, and Harry salesman. It spends billions on
a new tax break for the wealthiest and healthiest in our society. It
takes away your right for compensation for pain and suffering because
of medical malpractice.
These harmful features are poison pills, designed to cause
controversy and confusion in the Senate and to prevent a bill from
passing. The Republican bill is another testament to the need for
campaign finance reform: it is a bill designed to make their PAC
contributors happy.
The Democratic substitute bill, on the other hand, is a real patient
protection bill endorsed by the doctors, by the nurses, and all the
consumer groups.
It will require that health plans provide you care that is based on
the consensus of the latest, best quality of care. The Republican bill,
on the other hand, lets each profit-making HMO define what they believe
is adequate medical care: they will provide care based on what their
accountants tell them--not their doctors.
The choice could not be clearer. We can pass the Republican sham bill
today--or we can pass a real bill--the Democratic substitute.
Mr. DINGELL. Mr. Speaker, I yield two minutes to the gentleman from
Missouri (Mr. Clay) the ranking member on the Committee on Education
and the Workforce.
Mr. CLAY. Mr. Speaker, I rise to oppose H.R. 4250. This bill is
nothing more than a cynical propaganda effort promoted by the
Republican leadership to convince the public that they are doing
something about the abuse of HMOs. This bill is loaded with special
interest provisions that do far more harm than good to consumers of
health care.
The Republican bill includes a provision to establish Association
Health Plans that would enable small businesses and self-employed
individuals to band together and purchase health insurance coverage.
The chairman of our Committee on Education and the Workforce has stated
that the committee has approved this provision and so no one should be
concerned about it. The fact is, the bill was reported over Democrat's
vehement objections, because it is clear that the arrangements will do
more harm than good.
The National Governors Association and the National Conference of
State Legislators join with the National Association of Insurance
Commissioners in stating that Association Health Plans would undermine
positive state regulatory reforms already in place, would destroy
important consumer protections, and would contribute to the collapse of
small group health insurance in many states.
According to CBO, Association Health Plans would increase the risk of
health plan failure and would disrupt the insurance market, because
Federal regulatory standards would probably be less strict than the
state standards that apply under current law. Association Health Plans
would present state regulations covering such vital matters as
sovereignty, mandated care and the policing of fraud and abuse.
Mr. Speaker, I urge my colleagues to reject H.R. 4250 and instead
support H.R. 3605, the bipartisan Patients' Bill of Rights act.
Mr. HASTERT. Mr. Speaker, I yield three minutes to the distinguished
gentleman from Texas (Mr. Archer), the Chairman of the Committee on
Ways and Means.
Mr. ARCHER. Mr. Speaker, I thank the gentleman for yielding me time.
Mr. Speaker, two principles have forever guided our Nation,
individual freedom and liberty. As a democratic Nation whose strength
derives from its people, we have achieved high degrees of each,
unsurpassed by any nation in all history. It is no wonder that people
around the globe want to come here and be called Americans. We are the
envy of the world. Now, as we consider a plan to protect and strengthen
a free people who worry about the health care needs of themselves and
their families, we must do so with our guiding principles in mind.
Our Nation's health care system is the best in the world. Americans
do not travel abroad to get health care, but visitors come here from
all over the world, to the Mayo Clinic, to Mount Sinai, and, yes, to my
own City of Houston to the Texas Medical Center Memorial, because we
are the best.
The reason our health care system is the best is because it is based
on capitalism, on choice and on individualism. That is why the one
aspect of the bill before us today that gives me great pride is the
expansion and the unfettered opportunity for Americans to choose
medical savings accounts, free and unencumbered.
The source of America's frustrations with HMOs is the lack of control
which both patients and doctors feel. There is always a third party
making a decision. Patients want to be able to pick up the phone and
get a quick appointment to see their doctor. Patients want to see the
doctor of their choice for all their health needs.
Doctors want to take more time to be with their patients. Doctors
want to treat their patients as they see fit, without interference from
a third-party payer or an insurance company, and that is why we need
medical savings accounts. With MSAs, patients, not insurance companies,
control their choices. There are no gatekeepers, there are no
middlemen, and there are no third-party payers, except in the case of a
catastrophic event.
MSAs let patients and employers deposit money tax-free into accounts
that patients control. Like an IRA for retirement needs, MSAs are IRAs
for health care needs. When people control their own money, the general
use of capitalism will come into play. It has in all things American;
it will in health care too.
Our Nation's greatness is based on freedom and liberty. So, too, is
our future. While I originally introduced this bill with a Democrat
Congressman, Andy Jacobs, six years ago, I realize even more today that
MSAs are and should be the future of health care.
I urge support of the bill.
Mr. DINGELL. Mr. Speaker, I yield two minutes to the distinguished
gentleman from Texas (Mr. Hall).
Mr. HALL of Texas. Mr. Speaker, I would start by saying that my
speech will probably fall on some closed minds, because many already
have your minds made up. Many of you have decided or pledged to take a
particular vote, or taken an oath to do it, or been whipped by either
the Democrat or Republican Whip.
I speak though to those who do not have their feet set in concrete
today, I think those that really and truly want the facts about this
situation.
I did not speak on the rule. As a matter of fact, I voted for the
rule. I think it is about as fair a rule as a majority will give a
minority, so I had no problem with the rule. The rule was not good, but
I think the worst is yet to come, and let me talk about a little of it.
It does not please me, by the way, to oppose the likes of the U.S.
Chamber and the NFIB. I have had 100 percent with them for years and
years, but I differ with them on this because I think they are wrong.
I think that ERISA is what this is all about. ERISA is what all these
meetings have been about. ERISA is what the insurance companies can
hide behind to escape liability, and it is not right, it is not fair,
it is not just, and it should have been changed.
All the conferences that have been had over on this side, all the
committee meetings, way into the night, last night, late, late, late,
war gaming amendments, it is how can we compromise ERISA? That is what
the

[[Page H6371]]

whole thrust has been, how can we keep ERISA on the table for insurance
companies to hide behind when they err, when they guess wrong?
I tell you, H.R. 4250 preempts states patient protections too. I
think we need to know that. This bill will remove stronger patient
protection bills in over 40 states. I think the facts are out on the
sheet that show how your various states are affected.
Tonight we are going to finish this. We are going to go home, we are
going to issue press releases carefully worded, but the hard cold fact
is you are offending people when you leave ERISA in place as a hiding
place for those that ought to be liable.
Mr. Speaker, as I close, I urge Members to vote against 4250.
Mr. DINGELL. Mr. Speaker, I yield two minutes to the distinguished
gentlewoman from New Jersey (Mrs. Roukema).
(Mrs. ROUKEMA asked and was given permission to revise and extend her
remarks.)
Mrs. ROUKEMA. Mr. Speaker, I must tell my colleagues that I rise in
reluctant opposition to this bill, and I am constrained to ask, not
facetiously, is this as good as it gets? I am sorry, that is a
facetious reference to the movie that we all say identified the
backlash out there, and that backlash has promoted our party, both
parties, to seek a solution. But I do not believe that this bill is as
good as it should get.
I wanted to say that I recognize that there are a lot of benefits to
the Republican task force bill, but we have to go beyond that.
Let me point out the issues that are of continuing concern to me. I
do not believe we have the patients' access to clinical trials that
they need. I do not believe there is expanded access to specialists in
a meaningful way, and that is very important to me. I think that the
external appeals process, as I read it, and, of course, we only got it
really this morning, but as I read it, the appeals process is not even
binding. This concerns me, because a right without enforcement is no
right at all, as far as I can tell.
I do also want to get to the point of the ERISA question, the health
plans. I want to particularly reference the fact that I believe that
the gentleman from Iowa (Mr. Ganske) in his analysis was absolutely
correct, and I agree with him. I am concerned that this ERISA
preemption as it is supplied to the Association Health Plans and the
HealthMarts would be an expanded loophole to legitimate care,
particularly for the small business community employees, and I am
deeply concerned about that.
These potential loopholes would greatly diminish the quality of care
and the medical protections in states such as New Jersey. This is a
prime problem. We can have these association pools, we can do these
small business pools, without expanding the ERISA preemption.
So I must reluctantly again say, bottom line, the question is whether
or not patients will have better access to health care, and health care
through the doctors and the professional health care providers, not
bureaucrats.

introduction

I rise in reluctant opposition to the bill placed before the House
today. And I am constrained to ask: Is this ``As good as it get?'' This
is my own reference and its not facetious to the motion picture that
made graphically clear to policymakers the backlash I long ago
predicted against HMOs. This building backlash was the reason I
introduced my own bill H.R. 1222, ``The Quality Health Care and
Consumer Protection Act'' in 1996 to focus the debate.
Today I say that this bill is clear movement in the right direction.
But it is not ``as good as it should get.''
We need to put health care decisions back in the hands of doctors and
other health care professionals, and take them away from the managed
care companies who are practicing ``bottom line'' medicine and
``rationing'' healthcare.
It is for this reason that I introduced legislation to ensure that
managed-care networks provide high-quality, efficient care, not just
low-case care that boosts profits. But at the same time my bill guards
against unjustified health care costs.

concerns with today's hurried process

But today I must decide between one of two proposals. Before I
discuss the proposals I do want to raise a concern wit the process.
The state of our nation's health care is an issue that should be
debated through Committee discussions, through hearings, and through
floor debate, instead of a limited up or down vote.

benefits of the republican task force bill

The bill we have before us today is not altogether bad. There
certainly are areas that could use significant improvement; however,
the base bill does include information disclosure, internal and
external appeals and grievances, a ban on gag clauses, and access to
OB/GYNs and pediatricians. These are all moving in the right direction.
However, we are not yet there! Again, this is not ``As Good As It
Should Get!''

problems with the republican task force bill

This bill does not include a provision to provide patients access to
clinical trials, expanded access to specialists, and physician
involvement in the development of drug formularies.
This bill also has an external appeals process that is not even
binding. This concerns me, because it is a right without enforcement.
And a right with no enforcement is no right at all!
In addition I am concerned this legislation does not have a provision
relating to provider incentive language to ensure that physicians and
pharmacists are consulted in the development of drug formularies when
medically necessary.

association health plans and healthmarts

I am also deeply concerned about expanding the ERISA pre-emption to
even more businesses than those already able to escape State laws.
We must carefully weigh the benefits of allowing associations the
protections of being covered by national laws with the benefits of
allowing state laws to determine consumer protection. Association
Health Plans and Healthmarts would both allow more people to escape the
coverage of state laws. These are potential loopholes that would
diminish necessary medical protections in states such as New Jersey.
Businesses have long argued that ERISA is necessary for companies
that operate in more than one state because it avoids the onerous
burden of complying with 50 different sets of regulations and offering
50 different sets of rules and coverage for their employees. This is a
valid argument.
However, in today's market, this has led to loopholes where employers
are able to avoid the protections fought for, and placed at the state
level. I agree with Dr. Ganske's analysis of how inadequate this
provision is.

right to sue

I must also address the right to sue. While I understand the merits
to this important right, I am also very concerned that this right would
add tremendous costs and affect the quality of health care--doctors and
HMOs and hospitals would be practicing defensive medicine--namely
executing procedures and conducting tests merely to protect themselves
against lawsuits. This concerns me, because this could lead to a
reduction in the number of people able to afford health care.

conclusion

The bottom line is whether patients will have better access to health
care and whether doctors and health care professionals will be put back
in charge instead of insurance company bureaucrats. We need to return
the power over medical decisions to those with the medical training and
expertise--the doctors and the nurses. This will restore the quality of
care that has been our American tradition and leave the field of
``bottom line medicine'' practiced by bureaucrats and so-called
``gatekeepers.''
Mr. HASTERT. Mr. Speaker, I yield myself 15 seconds.
Mr. Speaker, I would like to just remind the gentlewoman from New
Jersey that the people that we are bringing under the umbrella of new
health care do not have health care today, part of the 40 million
people who work for a living, who are out there that do not have health
care. We are trying to expand and bring those people under the umbrella
of health care.
Mr. Speaker, I yield two minutes to my colleague, the gentleman from
Illinois (Mr. Fawell), the distinguished chairman of the Subcommittee
on Employer-Employee Relations, and certainly someone who has worked on
this issue of bringing people under the umbrella of health care for a
long time.
(Mr. FAWELL asked and was given permission to revise and extend his
remarks.)
Mr. FAWELL. Mr. Speaker, I thank the gentleman for yielding me this
time.
Mr. Speaker, right now there can be no patient's bill of rights for
43 million people, because they have no access to affordable health
care, and we can change that in this legislation with Association
Health Plans.
What do Association Health Plans do? By allowing small businesses to

[[Page H6372]]

band together under multiple employer health plans, Association Health
Plans simply allow the little guys, the small businesses, the self-
employed, to have precisely what large employers have had for many
years. Thus, small businesses can gain the economies of size, so they
can do what, self-insure, and thereby they have the clout to bargain
and to discount the price of health care in dealing with health care
providers and in dealing with insurance companies.

{time} 1115

Who are these association health plans? They are long-standing and
respected, not-for-profit, professional business and trade and church
associations which, like the large employers, they are not in the
business of insurance, but that they will, like large employers, assume
the responsibility of sponsoring self-insured and fully-insured plans
for the members of their associations.
Examples of these associations, yes, include the National Chamber of
Commerce and the NFIB, the National Restaurant Association, but also
include the Agricultural Field Workers Association, who cannot get
health insurance in the market. National Church Associations, National
Farm Bureau, the Boys and Girls Clubs of America with 700 units, and
they cannot get regular indemnity policies.
Why are the association health plans important? Because most of the
43 million people who do not have health insurance in America,
including most of the uninsured children, are people who live in
families with the breadwinners employed by small business or are self-
employed. They have to simply go into the individual and small business
market, and my colleagues know what happens when one goes into that
individual and small business market. The insurance companies and the
HMOs do not want to give up and have new competition.
Mr. DINGELL. Mr. Speaker, I yield such time as he may consume to the
gentleman from Minnesota (Mr. Oberstar).
(Mr. OBERSTAR asked and was given permission to revise and extend his
remarks.)
Mr. OBERSTAR. Mr. Speaker, I rise in opposition to the bill before us
and in support of the Dingell substitute.
Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the gentleman from New
York (Mr. Forbes), my distinguished friend.
(Mr. FORBES asked and was given permission to revise and extend his
remarks.)
Mr. FORBES. Mr. Speaker, I thank the gentleman for yielding me this
time.
For an increasing number of years now Americans across this country
have made it clear that they are dissatisfied with the manner in which
some health maintenance organizations oversee the delivery of their
health care services. In fact, just a few years ago the ``hue and cry''
got so loud that on this floor, this very floor, a bipartisan majority
of Democrats and Republicans saw fit to pass legislation that corrected
the practice of some insurance providers that forced women out of the
hospital barely 24 hours after they gave birth.
Yes, the House and Senate together, along with the President, decided
that it was wrong and we must mandate, yes, mandate a minimum hospital
stay for women who give birth.
Well, unfortunately, that is not the sole example of some of the
problems with the HMOs and that is why we are here today.
Unfortunately, the Republican initiative, which I would have loved to
have supported, does not adequately meet the needs that most Americans
are calling for.
The Patients' Bill of Rights, in fact, is the best alternative to
restoring common sense in the HMO equation. Only the Patients' Bill of
Rights allows patients access to key clinical trials, those
experimental, innovative and emergency processes that are the last
resort for the severely ill. The Patients' Bill of Rights gives access
to important drug therapies that a doctor may believe are important to
restoring one's health and cost thousands of dollars and would
otherwise mean literally life or death for the patient.
A gross omission in the Republican bill, I am afraid, is something
even worse than the early release after giving birth, and that is the
so-called omission of preventing drive-by mastectomies, the practice
that too many HMOs use to force a woman who has undergone a mastectomy
out of the hospital before she is physically able to resume normal
activities.
Absent, too, and I believe it should be her right, that every woman
who has undergone a mastectomy have the right to access to
reconstructive surgery and not have it deemed cosmetic by an uncaring
HMO.
Finally, the Patients' Bill of Rights is the only one that ends the
special protections for HMOs under ERISA. HMOs should not be exempt
from lawsuits if bad decisions lead to injury or death.
Mr. Speaker, I urge adoption of the Patients' Bill of Rights by the
gentleman from Michigan (Mr. Dingell) and the gentleman from Iowa (Mr.
Ganske).
Mr. HASTERT. Mr. Speaker, I yield 1\1/2\ minutes to the distinguished
gentleman from Louisiana (Mr. McCrery).
(Mr. McCRERY asked and was given permission to revise and extend his
remarks.)
Mr. McCRERY. Mr. Speaker, if one believes in the free market, if one
believes in the power of individual choice, if one believes our private
health care system is, in most respects, the best in the world and is
worth preserving, then listen up.
I am going to tell my colleagues about the best part of the Patient
Protection Act. It is the part of this bill that really empowers
patients. It gives them the ability to choose their own doctors and
hospitals. It gives them the economic power to deal effectively with
the costs of their health care. It gives individuals the power to take
advantage of preventive health care, if they choose. It even offers
people the prospect of a sizable nest egg in their later years which
they could use for long-term care expenses or retirement.
Mr. Speaker, this Patient Protection Act will finally make medical
savings accounts available to everyone, and it removes the burdensome
regulations that have prevented many individuals and small businesses
from obtaining MSAs. This bill allows both small and large employers to
make deductible contributions to an employee's MSA. It allows both
employers and employees to make tax-favored contributions to a medical
savings account.
Mr. Speaker, if we really want people to be able to take control of
their health care choices, if we really want to make the doctor-patient
relationship what it used to be and what it should be, if we really
want to create a market with forces that can control health care costs,
then we must be for the expansion of this valuable, free market tool:
medical savings accounts. That alone should make my colleagues vote for
this bill.
Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Arkansas (Mr. Berry).
Mr. BERRY. Mr. Speaker, I rise in opposition to H.R. 4250 and in
support of the Dingell-Ganske bill. The Republican bill is bad for
small business, bad for America, and it is shameful. It is a fiscally-
irresponsible sham that does nothing to address the real concerns of
employers, employees and real people.
This legislation creates a new Federal Commission of Insurance at the
Department of Labor, a Department that my Republican colleagues tried
to do away with just 2 years ago. It authorizes the hiring of hundreds,
perhaps thousands, of new employees at a new Federal Commission of
Insurance.
What will this new Federal Commission do? Absolutely nothing. Because
its powers are so limited by the Republican bill that its ability to
remedy health plan wrongdoing is almost nil.
How much will this new Republican Federal Insurance Commission cost?
No one knows, because we still have not seen a CBO score.
Let us see. A multimillion dollar new Federal bureaucracy, thousands
of new employees with nothing to enforce, all at the American
taxpayers' expense, release of medical records. Your competitors in
business, your opponents in politics will have access to your medical
records. Protection of insurance company profits, abuse of patients, no
access to emergency care or specialists. My Republican colleagues
should be ashamed.
Have my colleagues read this bill? My colleagues will be shocked. I
urge

[[Page H6373]]

my colleagues to vote down this irresponsible proposal. Vote for the
Dingell-Ganske substitute. This Republican proposal is a useless drain
on our Treasury and a threat to our balanced budget.
Mr. HASTERT. Mr. Speaker, I yield 1 minute to the gentleman from Ohio
(Mr. Chabot).
Mr. CHABOT. Mr. Speaker, I rise in support of the Patient Protection
Act. There have been numerous managed care reform proposals offered in
Congress this year, and many share similar consumer protections.
The Patient Protection Act guarantees that patients can choose their
own doctor, gain access to emergency care, communicate openly with
health care providers, and independently appeal decisions made by
managed care companies.
This bill also contains a number of pro-consumer provisions that the
other proposals do not. This legislation increases patient access to
affordable care by expanding health care coverage options for workers
and their families, many who have no health care coverage at all now.
American families know that the most important patient protection is
access to affordable care. Families should not be forced to choose
between expensive health care coverage and putting food on the kitchen
table.
This legislation will protect consumers from abuses in the managed
care industry, while increasing access and affordability. That is why I
support the Patient Protection Act.
Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the gentleman from
Washington (Mr. McDermott).
(Mr. McDERMOTT asked and was given permission to revise and extend
his remarks.)
Mr. McDERMOTT. Mr. Speaker, as the public listens to this debate, I
am sure they will wind up confused, so I want to give 10 reasons why my
colleagues should vote against the Hastert proposal and for the Ganske-
Dingell bill. I borrowed these from the gentleman from Iowa (Mr.
Ganske) who is a Republican and a doctor. I am a Democrat and a doctor,
and we agree.
He says, the substitute provides, that means the Democratic
substitute, patients with access to clinical trials. The Hastert bill
does not.
The substitute allows doctors to override drug formularies when
medically necessary. The Hastert does not.
The substitute provides for ongoing access to specialists for chronic
conditions. The Hastert bill does not.
The Ganske-Dingell substitute prevents plans from giving doctors
financial incentives to deny care. The Hastert bill does not.
The substitute has hospital-stay protection for mastectomy patients.
The Hastert bill does not.
The substitute provides choice of doctors within the plan. The
Hastert bill does not.
The substitute has a provision guaranteeing continuity of care when
providers leave the network. The Hastert bill does not.
The Ganske-Dingell plan requires plans to collect quality data and
maintain a quality improvement program. The Hastert bill does not.
In addition, the Hastert bill allows the plan to decide what is
medically necessary. If one has chest pain and one feels like one
should go to an emergency room, one cannot decide whether that is
medically necessary, one's plan will tell you if it was medically
necessary. Maybe after you get to the hospital, they will say, well, it
is just indigestion, so it is not medically necessary to go to an
emergency room.
There are more reasons than I can get in in 10 minutes. This cynical
process requires a ``no'' vote on Hastert and a ``yes'' vote on Ganske-
Dingell.
Mr. HASTERT. Mr. Speaker, I yield myself 30 seconds.
I appreciate the gentleman from Washington, who is a doctor and
certainly sees things from a different perspective, but I have to tell
my colleagues he named 10 mandates that our bill does not have, 10
mandates. And he also talked about the Federal Government, the HCFA
agency starting to lay out what one's health plan should do and what it
should not do.
The gentleman from Washington has certainly been an advocate of big
health care, government takeover of health care, and that is exactly
what this plan is not, and I want the people in this country to know
that. We think the decision on what one owes health care should be
between the patient and the doctor, and that is exactly what this bill
does.
Mr. Speaker, I yield 3 minutes and 15 seconds to the gentlewoman from
Texas (Ms. Granger) for the purpose of a colloquy.
Ms. GRANGER. Mr. Speaker, I rise today in support of H.R. 4250, and I
thank the gentleman from Illinois (Mr. Hastert) and all of the members
of the working group for their ability to listen and their desire to
lead.
It has often been said that there is a time in the life of every
problem when it is large enough to see and yet small enough to solve.
The issue of health care reform is one we can see and solve, and our
bill does that.
The Republican goal is to provide quality health care and peace of
mind for every American. The Republican plan gives peace of mind when
the nearest emergency room can mean the fastest care in the case of a
heart attack. Our plan gives peace of mind for mothers because there is
no barrier for care by a pediatrician. Our plan gives peace of mind for
women because they can go directly to an OB-GYN for their health care.
And our plan gives peace of mind for small businesses because they will
have choices for their health plans through health marts and
association health plans.

{time} 1130

Overall, our bill gives HMOs accountability to their patients, not
their profits. Our bill says that doctors, not bureaucrats, will be
authorized to make medical decisions.
Our bill is the only bill that would provide affordable health care
to millions of uninsured Americans. Even Senator Daschle agrees with us
on that.
In short, our bill, the Patient Protection Act, will ensure that all
Americans have access they deserve to the health care they need at a
price they can afford.
Mr. Speaker, at this time I would like to engage the gentleman from
Illinois (Chairman Fawell) in a colloquy. Among the most important
protections that this legislation affords to patients is the right to
internal and external review of decisions made by HMOs. Those reviews
will be made by qualified independent doctors.
My home State of Texas has a law that allows HMOs to be liable in
court. There is some uncertainty as to whether or not and the extent to
which this Texas law is preempted by the ERISA law. In fact, this is a
question that is before the courts.
Mr. Speaker, I would like to engage in a colloquy with the gentleman
from Illinois regarding the possible effects of this new legislation's
internal and external review procedures on whether the ERISA law
preempts the State statute.
As one of the authors of this legislation, the principal author of
the internal and external review procedures, and one of the leading
experts on ERISA, are these new procedures intended in any way to
indicate congressional intent about whether the Texas State law is
preempted by ERISA?
Mr. FAWELL. Mr. Speaker, if the gentlewoman from Texas (Ms. Granger)
would yield, no, they are not. The more explicit internal and external
review provisions under this new legislation do not and are not
intended to expand or contract existing ERISA law.
Therefore, these new procedures do not and are not intended to affect
whether or the extent to which ERISA does or does not preempt any
particular State statute. These new procedures do not indicate
congressional intent either way about whether Texas law is preempted by
ERISA.
Ms. GRANGER. Mr. Chairman, reclaiming my time, are the legislation's
more explicit internal and external review procedures intended to in
any way affect the outcome of any matters pending in court examining
the extent or scope of ERISA preemption of State laws?
Mr. FAWELL. Again, no, they are not. The legislation's more explicit
internal and external review procedures under ERISA are not intended to
expand or contract existing provisions of law. Therefore, it is not
intended to have any impact on pending litigation examining the
possible scope of ERISA preemption. Accordingly, this new legislation
is not intended to and should not affect the outcome of the Texas
legislation either way.

[[Page H6374]]

Ms. GRANGER. Mr. Speaker, I thank the gentleman from Illinois for
this clarification.
Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the distinguished
gentlewoman from the Virgin Islands (Ms. Christian-Green), a physician
of family medicine who has good advice for my colleagues.
(Ms. CHRISTIAN-GREEN asked and was given permission to revise and
extend her remarks.)
Ms. CHRISTIAN-GREEN. Mr. Speaker, I rise to speak against H.R. 4250
and for the Patients' Bill of Rights. As has been pointed out over and
over again by physicians and patients alike, what H.R. 4250, if passed,
does is codify or write into law the very practices which time and time
again have denied needed and appropriate medical care to us and our
families.
On the issue of access to emergency care, the Ganske-Dingell bill
assures that if patients reasonably think that they have an emergency
illness, they can go to an emergency room and receive care that their
plan will pay for. In the Republican bill, severe pain could not be
used as a reason to access emergency care. That means if someone thinks
they are having a heart attack, where often the only symptom is pain,
they have to go to a phone and answer a laundry list of questions from
some paper pusher maybe millions of miles away, before they can go to
the hospital. And if it is not a typical pain, as often happens, that
care would be denied.
If we pass H.R. 4250, severe pain, the most common symptom of a
severe or serious medical condition, would not be a standard that a
reasonable person could apply in going to an emergency room. Emergency
care is just one more instance of where H.R. 4250 does not measure up
to the demands of the American people.
The Ganske-Dingell bill is true managed care reform. It puts
decisions back in the hands of the patient and their doctors and allows
access to needed medical care. I urge its passage. Vote against H.R.
4250.
Mr. HASTERT. Mr. Speaker, what is the remaining time for both?
The SPEAKER pro tempore (Mr. Kolbe). The gentleman from Illinois (Mr.
Hastert) has 11\1/2\ minutes remaining, and the gentleman from Michigan
(Mr. Dingell) has 12\1/2\ minutes remaining.
Mr. HASTERT. Mr. Speaker, I reserve the balance of my time.
Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Ohio (Mr. Brown).
Mr. BROWN of Ohio. Mr. Speaker, I thank the gentleman from Michigan
(Mr. Dingell) for yielding me this time and for his outstanding
leadership on this issue.
Mr. Speaker, a mother of a 6-month-old child who was having trouble
breathing called her HMO at 3:30 a.m. An HMO bureaucrat told the mother
to go to the plan's network hospital 42 miles from her home. On the way
to the hospital, the baby suffered cardiac arrest and later had both
arms and legs amputated.
For the past 2 years, Democrats in Congress have been fighting to
pass the Patients' Bill of Rights that could have protected this mother
and child.
Last week, I met with a number of area residents in a restaurant in
North Ridgeville who told story after story about coverage denied for
emergency care and bureaucratic refusals of doctor-ordered tests to
detect breast cancer.
But rather than protecting patients, the Republican leadership in
Washington has introduced a proposal that protects millionaire
insurance company executives.
A friend has diabetes or breast cancer. The Patients' Bill of Rights
would guarantee access to a specialist. The insurance company
Republican bill does not.
A grandfather experiences chest pains that may be a warning sign of a
heart attack. The Patients' Bill of Rights would ensure he gets
immediate attention at the nearest emergency room by requiring his HMO
to cover this care. The insurance company Republican bill does not.
A child has been denied access to a pediatric specialist for asthma.
The Patients' Bill of Rights would allow a parent to have access to an
independent patient's appeal process. The insurance company Republican
bill does not.
Under present law, the only people in America who enjoy complete
immunity from lawsuits are HMOs and foreign diplomats. The Patients'
Bill of Rights holds HMOs accountable in State court if they make a
medical decision that harms the patient. The insurance company
Republican bill does not.
Our bill provides real patient protections at a mere $2 per patient
per month, according to the Republican-appointed Congressional Budget
Office. Our bill is supported by the Cancer Society and the National
Breast Cancer Coalition.
Mr. Chairman, I urge my colleagues to defeat the Republican insurance
company bill. Pass the Patients' Bill of Rights.
Mr. HASTERT. Mr. Speaker, I yield 45 seconds to the gentleman from
California (Mr. McKeon)
Mr. McKEON. Mr. Speaker, I rise in support of this historic
legislation that addresses the problem of the rising number of
Americans who cannot afford health insurance. For the first time, we
will be able to extend health care options to the 42 million people in
our country who remain uninsured, while the Democratic substitute
ignores the problem.
We know that most people without health insurance have one thing in
common: They cannot afford health care. They are either self-employed
or they work in small businesses that cannot afford to pay for health
benefits. This bill solves this problem.
The Patient Protection Act creates association health plans to combat
high costs of health care in our country. This new and unique solution
allows small businesses and those that are self-employed to join
together under the umbrella of trade and professional organizations to
buy health insurance for themselves and their employees. Consequently,
small businesses will have access to the same kind of health care
options that big corporations currently enjoy.
Mr. Speaker, I urge my colleagues to support this bill.
Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from New Jersey (Mr. Pallone), the chairman of our task force
on this matter.
Mr. PALLONE. Mr. Speaker, I just wanted to mention, the Republicans
keep talking about the number of uninsured in this country. I would
point out that 4 years ago, when President Clinton tried to put forward
a health care plan that would insure all Americans, they fought it
vigorously. The fact that we have more Americans now without health
insurance is their fault, because they would not allow the Clinton plan
to come forward. So now the numbers of uninsured continue to grow.
Mr. Speaker, I just want to explain why the Democrats' bill is a
vastly superior bill in terms of ensuring and expanding patients'
access to physicians.
For example, the Patients' Bill of Rights ensures access to
specialists. The Republican bill does not. Under the Democratic bill,
if a patient has cancer, they could go directly to an oncologist. If
their child has a specific problem, they could bring their child to
whatever type of specialist their child might need. But under the
Republican plan that child would still have to go to their primary
physician for a referral, and there is no guarantee that they would get
to see a specialist if they need one.
The differences between the two bills are more pronounced when it
comes to seeing specialists outside of one's HMO. The Patients' Bill of
Rights ensures that patients will be able to go outside their network,
at no cost to them, if they need to see a specialist that their HMO
does not have. Under the Republican bill, they are out of luck.
Another difference between the access each bill would provide is
standing referrals. If a patient is fortunate enough to have an HMO
that has the type of specialist they need when they get sick, under the
Republican plan they still have to jump through hoops. The Republican
plan does not allow patients who need care over a long period of time
by a specialist to have standing referrals.
The Patients' Bill of Rights does not require patients to go back
time and again to renew referrals. If a patient needs to see a
specialist over a long period of time, they are guaranteed the right to
see that doctor.

[[Page H6375]]

The Patients' Bill of Rights would also allow patients to designate
that specialist as their primary care physician. Women could choose
their OB/GYN as their primary physician. The Republican bill does not
allow patients to designate their specialist as their primary care
physician, nor their OB/GYN.
Another major difference is with the continuity of care issue. The
Republican bill does not allow patients to continue to have the same
doctor.
Mr. HASTERT. Mr. Speaker, I yield 2 minutes to the gentleman from
Florida (Mr. Bilirakis), the chairman of the Subcommittee on Health and
Environment of the Committee on Commerce.
Mr. BILIRAKIS. Mr. Speaker, I rise in favor of H.R. 4250. I am proud
of this bill. Whereas the Democratic bill focuses on patient
protections, our bill focuses on basically the same patient protections
and additionally places great emphasis on expanding health coverage and
access for the insured and the uninsured, but both are accomplished
without imposing burdensome government mandates.
Guaranteeing access to quality health care must always be a top
priority. What good, in fact, are patient protections if access is not
there? We do this through the creation of Health Marts and by
broadening the role of the community health centers, so that for those
who live in medically underserved areas it will be simpler to receive
critical services.
The proposal creates community health organizations, which are
basically managed care plans controlled by community health centers. It
encourages more competition to lower prices for health consumers.
Community health centers will have more money because they will have
more private-paying patients using their facilities. As a result, these
health centers will be able to provide care to even more uninsured
people.
Of course, the bill before us includes important new patient
protections. For months, people across the country have told Congress
that they want to choose their own doctors. We listened to our
constituents, and I am proud to say that through our bill, patients
will now be guaranteed their choice of medical providers, contrary to
what some others on the other side have said, and be better able to
understand their health care policies.
Mr. Speaker, is it a surprise in fact to anyone that the other party
is attacking a Republican bill? I think not. But we have been able, I
think, to accomplish and to do what they did not even attempt during
their many years of control of the United States House of
Representatives.
Mr. Speaker, I say to my colleagues: Help us pass a bill which will
help people now.
Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Texas (Mr. Turner).
Mr. TURNER. Mr. Speaker, Democrats initiated the effort in this
Congress to protect patients and their doctors from interference by
insurance company bureaucrats. The Dingell-Ganske bill provides these
protections and eliminates the complete exemption from accountability
that many HMOs enjoy today under the Federal ERISA law.
The Republican bill, on the other hand, in an effort to preserve the
insurance companies' shield of protection from accountability for their
mistakes, creates a Federal bureaucracy in the Department of Labor and
a complex appeals process diagramed here on this chart to my right.
Look at this. An endless maze of bureaucratic nightmare created by the
Republican bill.
In September of 1991, Phyllis Cannon was diagnosed with leukemia. On
August 10 of 1992, her doctor sought approval from her HMO for a bone
marrow treatment. Forty-three days later, her doctor pleaded for
authorization and it was repeatedly denied.

{time} 1145

By the time the HMO finally agreed, it was too late for the treatment
and Phyllis Cannon died.
Could she have gone through this maze under the Republican bill and
done any better? I think not. And if she had made it through the maze
under the Republican bill, after her death she would have been entitled
to only $500 a day; under the Republican bill, a total recovery for her
family of only $20,000.
Is this what we call protecting patients? I think not. Vote against
the Republican bill, vote for the Ganske-Dingell bill and prevent this
kind of endless bureaucratic interference with medical decisions from
happening to the patients of this country.
Mr. HASTERT. Mr. Speaker, I yield 45 seconds to the gentleman from
Oregon (Mr. Smith).
Mr. SMITH of Oregon. Mr. Speaker, H.R. 4250 moves us in the right
direction. One of the ways it does this is by allowing community health
centers to establish community health organizations. These would be
health plans sponsored by health centers and the doctors themselves to
give people the extra choice in their health care.
I used to serve on one of these boards and I recently visited these
facilities in Michigan. Patients get first-class treatment and these
centers do a great job, and this bill will increase the chance that
these small hospitals can survive by allowing them to have the
community health organizations. These provisions are going to help
create the competition needed to make more regulation from Washington,
D.C. unnecessary.
Support this bill.
Mr. HASTERT. Mr. Speaker, what is the remaining time?
The SPEAKER pro tempore (Mr. Kolbe). The gentleman from Illinois (Mr.
Hastert) has 8 minutes remaining and the gentleman from Michigan (Mr.
Dingell) has 6\1/2\ minutes remaining.
Mr. HASTERT. Mr. Speaker, I yield 2 minutes to the gentlewoman from
New York (Mrs. Kelly).
Mrs. KELLY. Mr. Speaker, we have included some special provisions in
the Patient Protection Act that recognize the distinctive health care
needs of patients, especially women and children. Medically, women are
not just small men. Their bodies are different and their needs are
different. And children are not little adults. They need specific and
sometimes immediate care.
This bill provides women with direct access to their OB-GYN without
preauthorization or referral by a primary care physician. It also lets
parents get to a pediatrician directly.
As a former florist, I also know how costly it is to provide coverage
to employees, and I know how frightening it is to an employee not to be
sure that their health care will be there when they need it. And
although the cost continues to skyrocket, my colleagues on the other
side of the aisle continue to turn their backs on small businesses and
the burden that these employers face.
The Patient Protection Act is the only proposal that addresses the
growing health insurance crisis among the small business community, and
the fact is the fastest growing segment of small business owners are
businesswomen. These women-owned businesses are the businesses that we
use every day: The woman who does our taxes, who cuts our hair, who
runs the local day care center.
We have 8 million women-owned businesses that employ 18.5 million
people, one out of every four U.S. workers, yet only 48 percent of the
women-owned businesses with less than 25 employees can afford to offer
health care insurance. We confront that problem by providing affordable
health insurance to small businesses so they can provide peace of mind
and security for their workers and their families.
I encourage each and every one of my colleagues to vote for this
bill.
Mr. DINGELL. Mr. Speaker, I yield such time as he may consume to the
distinguished gentleman from Florida (Mr. Deutsch).
(Mr. DEUTSCH asked and was given permission to revise and extend his
remarks.)
Mr. DEUTSCH. Mr. Speaker, I rise against the proposed bill by the
majority, which does not address any of the major needs the people of
America are asking for in this proposal.
Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Pennsylvania (Mr. Klink).
Mr. KLINK. Mr. Speaker, I thank the gentleman for yielding me this
time and for his leadership on this issue.
Mr. Speaker, I am a pro-life Democrat, and that means, quite often,
that the Democrats get mad at me because I am pro life, and the pro-
life people get mad at me because I am a Democrat. But I can handle
that.
I say that because whether someone gets to remain in a hospital when
they need to, whether they get the drugs that their doctor wants,
whether they

[[Page H6376]]

can see that specialist that can save their life, to me, is a life or
death matter.
I have a lot of problems today standing on the floor of the House and
sitting on the floor of the House listening to this debate after we
went through this partial-birth abortion debate yesterday. Because to
me, this is life and death. And if National Right to Life does not
score this vote today, something is wrong. If the Catholic Church does
not score this, something is wrong.
We cannot be pro life at conception and then abandon people once they
are born, when their life is on the line, when they are fighting to get
medical care that they need to live, and that is exactly what this
debate is all about.
Let us compare the two bills. The Democratic Patients' Bill of Rights
leaves medical decisions in the hands of doctors and parents. The
Republican bill leaves the decision still in the hands of insurance
companies.
The Dingell-Ganske bill of rights gives everyone the right to see a
specialist. The Republican bill does not.
The Patients' Bill of Rights gives everyone the right to a real
external appeals process. The Republican insurance company bill allows
the insurance companies to make individuals pay for their appeal. So
first an individual pays their premium, then they are denied coverage,
then they pay the insurance company for an appeal.
The Patients' Bill of Rights that I am supporting gives everyone the
right to hold their insurers accountable. If they are denied something
and someone dies, if they lose a limb, then the decision-maker must be
responsible for that decision. The Republican bill, the Insurance
Company Protection Act, does not hold the decision-makers in the
insurance companies accountable.
That is the difference between these bills. It is ridiculous. The
American public wants us to change it. The Republicans are here today
refusing to do that. I say we must vote today to protect life. We must
vote for the Ganske-Dingell bill. We must vote also pro choice. Give
patients and their doctors the choice, not the insurance companies.
Support Ganske-Dingell.
Mr. HASTERT. Mr. Speaker, I yield 2 minutes to the gentleman from
South Carolina (Mr. Graham).
Mr. GRAHAM. Mr. Speaker, I thank the gentleman for yielding me this
time, and very quickly let me tell my colleagues my experience and what
I bring to the debate, I believe.
Unlike most Republicans, I was a trial lawyer. I made my living
trying to enforce the rights of people, and at one time I had the
largest medical malpractice verdict in the State of South Carolina. And
I can tell my colleagues, my client would rather have had good health
care than the money.
I know what I am talking about. I have sued doctors who are medically
negligent, and it takes years and it is no fun. The goal that I have
today is to get people the treatment they need.
Let us talk about the lady who died of cancer. My mother died of
cancer. Under this bill that I am supporting here, this is what would
happen. An individual does not have to wait 43 days and get told no.
The first thing that is a difference today is when a doctor calls up
and says the patient needs cancer treatment, they are talking to a
doctor, not a nurse. In their bill it can be a nurse. It does not have
to be a doctor. So it is doctor-to-doctor. We require that now. No more
clerks. The clerks are taken out of the mix and we replace it with a
medical doctor.
I have lived in the real world, and sometimes doctors have an
allegiance to the company and not to what is good for medicine. Under
our bill, if it is an emergency situation, we take that case and send
it to a panel of independent doctors who have no idea who the company
is that is involved, has no idea the doctor who is treating the
patient. They are just looking at the facts. Under our bill they have
to give a decision in 6 days of whether or not the treatment is
medically necessary. That lady will get the treatment.
If the patient is awarded at the independent review process, if there
is a finding for the patient, our bill has a $500 per-day penalty that
kicks in. An individual can go to court right after that, get attorney
fees, get the full benefit plus $500 a day. And if the judge finds out
the decision was made in bad faith to provide care, it is $1,000 a day,
up to $250,000. This happens up front. And give me that any time,
rather than a 4-year lawsuit.
If the HMO doctor says no, an individual can go get a lawyer, like
myself, and go to court within 24 hours and get a temporary restraining
order ordering the treatment be paid, by a judge in State or Federal
court, and I can get my attorney fees. The lady does not die.
The penalties in this bill are to force people to make the right
decision, not awards 4 years later. I will tell my colleagues about the
$500 claim in the next part of this debate and how our bill is better.
Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the gentlewoman from
California (Ms. Eshoo).
Ms. ESHOO. Mr. Speaker, I rise in strong opposition to 4250, and let
me tell the American people why. Privacy, privacy, privacy. Under the
Republican bill our medical records are not safe. Any hospital, HMO or
pharmacy that keeps our medical records can disclose them without our
consent.
Imagine suffering from depression, paying for prescriptions out of
our own pocket to keep our condition private. Under the Republican
plan, a pharmacy could disclose the use of these prescriptions to an
employer. Imagine a health care bureaucrat reviewing someone's family's
medical history without their knowledge. Even more frightening is the
very real threat that our medical history could then be used against us
to deny us employment or when we apply for a mortgage.
Anyone obtaining our medical records could distribute them to a
divorce lawyer, to a newspaper or a political campaign. A business
could investigate its employees to find out who has potential health
problems. They could review our family's medical records to find out if
any of our children were sick and how seriously they were, and the
insurance company could then raise our premiums.
Wake up, America. Under the Republican plan the patient does not have
to give their consent or be informed about the transfer of their
medical records. This is an outrage of the highest order. This plan
does not protect patients, it destroys the privacy that exists between
doctors and patients. It should be called the Puncture of Privacy Act,
and the American people should reject it and the Members of the House
of Representatives should, too.
Vote for the Dingell-Ganske bill and reject H.R. 4250 on the grounds
of privacy; if nothing else, on the grounds of privacy.
Mr. DINGELL. Mr. Speaker, I yield 1\1/2\ minutes to the distinguished
gentleman from California (Mr. Fazio).
Mr. FAZIO of California. Mr. Speaker, I rise in opposition to the
last-minute Republican sham before us today. This is not the first time
Republicans have buckled to pressure from their insurance industry
contributors. It is not the first time under Speaker Gingrich
Republicans have tried to pull one over on the American people by
crafting something that sounds good in a 30-second campaign ad but does
nothing fundamental to fix the problem. This is perhaps, however, the
most cruel farce the Republicans have brought to this body since they
took control.
For those on the other side of the aisle, who have already written
the press releases and started patting themselves on the back and
scheduled the air time for those 30-second spots, I ask them to look
inside their souls and admit that what they have brought forth today
will not end families' tragedies and needless human suffering.
If we pass this bill today, those managed care plans that do not
operate as honorably as others will still go on putting profits over
patients. Only now the blood will be on our hands. Under this bill, a
health plan could still unhook a critically ill patient from the
intensive care monitors and transfer the patient to an in-plan
hospital. A health insurance bureaucrat could still withhold life-
saving cancer treatment until it is too late and face no responsibility
for that human life.

{time} 1200

In my home State of California, State laws protecting patients who
need prenatal care, well-child care, mammography screening, cervical
cancer screening, diabetic supplies, and

[[Page H6377]]

nine other benefits would be overridden by this law, preempted.
This bill is a sham. Support the Dingell-Ganske bill, which doctors
and patients support.
The SPEAKER pro tempore (Mr. Kolbe). The gentleman from Michigan (Mr.
Dingell) has 1 minute remaining.
Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished
gentleman from Massachusetts (Mr. Olver).
Mr. OLVER. Mr. Speaker, I thank the gentleman for yielding.
What this people's House is doing today is the most cynical action I
have seen them take in 7 years in Congress.
H.R. 4250, the so-called Patient Protection Act, is based on
deception and a big lie. The only thing protected is the insurance
industry. The best protection we could provide Americans would be to
return decisions about their care to them and their doctors.
Instead, this bill drives the wedge between them and their doctor.
The people of Massachusetts will be hurt by H.R. 4250 because it
overrides patient protections already provided by State law. The
mammography and cervical cancer screening for women, blood lead
screening for children, bone marrow transplants for victims of
leukemia, home health care for the aged, and a good many more are
endangered under the Republican bill.
My constituents and the people of Massachusetts would be better off
with no bill rather that 4250, the insurance industry protection act.
But Massachusetts has a large insurance industry, and they will be
happy with this Republican bill.
Support the Ganske-Dingell bill.
The SPEAKER pro tempore. The gentleman from Illinois (Mr. Hastert)
has 4 minutes remaining.
Mr. HASTERT. Mr. Speaker, I yield 4 minutes to the gentleman from
California (Mr. Thomas), the distinguished chairman of the Subcommittee
on Health of the Committee on Ways and Means.
(Mr. THOMAS asked and was given permission to revise and extend his
remarks.)
Mr. THOMAS. Mr. Speaker, some of this debate has literally taken my
breath away. If anyone listening to this debate wonders how in the
world Republicans could get away with treating Americans the way we do,
listening to the Democrats, I ask them to just look at the calendar.
This is the pre-election warm-up.
Remember Medicare? Pre-election, Republicans were going to destroy
Medicare. Well, the American people did not listen to them. We were
returned as the majority. And as chairman of the Subcommittee on
Health, we prepared a Medicare reform package that was passed in my
subcommittee 11-0, no Democrats dissenting. Prior to the election, it
would destroy Medicare. After the election, post-politics, everything
is okay.
Today we are debating patient protections. Here we go again. It is
pre-election time. Have things changed out there in America? Of course
they have. In 1988, health care inflation was 18\1/2\ percent. Today it
is less than 5 percent. Why? To a very good extent, just 5 years ago,
in 1993, about a majority of Americans, about half, got their health
care from managed care. Today, if they get it from their employer, it
is about 85 percent.
So health care markets have changed. Have there been distortions?
Yes, there have been distortions. Do there need to be corrections? Of
course there need to be corrections. But when we unite egos and
politics, we get some pretty ugly offspring.
There have been Members who have taken the well and virtually every
word they spoke about the Republican plan is absolutely, totally false.
This headline that says ``the bill would allow sale of patient data''
in today's Washington Post is totally, absolutely false.
If my colleagues will turn to the bill, on page 260, the language is
clear. If we read on, it says, ``Limitation on Sale or Barter.
Notwithstanding subsection (c) which is a limit which guarantees that
State law is not overridden,'' it says, ``no health care provider or
health plan may as part of conducting health care operations sell or
barter protected health information,'' period.
What was said to be contained in the Republican bill is absolutely,
totally false. What we heard from my colleagues was that they want
``medical necessity'' defined in law. Who defines ``medical necessity''
in law? Bureaucrats, Health Care Financing Administration. We get
specific items, medical necessity. That is cookbook medicine.
Who do we have define ``medical necessity,'' for example, in an
emergency room? Quote, page 144: ``A prudent emergency medical
professional.'' It is the medical professional there looking at the
patient and their problem that determines what needs to be done, not
some book drawn up by bureaucrats that lists what is and what is not
medically necessary.
It has been said that it does not say ``pain.'' What this bill says
is that ``a prudent lay person who possesses an average knowledge of
health and medicine would determine such examinations to be
necessary.'' Not itemized; across the board.
I heard my colleague the gentlewoman from North Carolina (Mrs.
Clayton) say she cannot find the gag rule. I will tell her page 141,
section 2706, says, ``patient access to unrestricted medical advice.''
So please understand, it is a pre-election season. But let me tell my
colleagues something else. The Congressional Budget Office has laid out
the numbers on the plan. Their plan increases premiums. Our plan
reduces premiums.
Under the Republican plan, CBO, ``lower medical malpractice costs
would reduce Federal direct spending for Medicare and Medicaid by $1.5
billion over 10 years.''
We have heard them say ours is a sham and it drives prices up. It is
simply not true. CBO says their plan will drive premiums up. CBO says
our plan will drop premiums. Correct the marketplace and Federal costs.
Vote ``yes'' on 4250.
Mr. DREIER. Mr. Speaker, I rise in support of H.R. 4520, the Patient
Protection Act, because it upholds a patient's most fundamental right--
the right to choose his/her own health care. As much as I believe that
health insurance bureaucrats should not be able to decide what is best
for patients, the federal government also should not be issuing onerous
mandates and regulations that micromanage the care that patients
receive. Instead, we should provide consumers with additional choices
that may not be available from their employer-provided health care
plan.
Many employees are frustrated because they are forced by their
employer to join a health plan that does not offer the level of
benefits or protections that they want. This occurs because the federal
tax code prevents employees from making important decisions about their
health care. Under a quirk in the federal tax code, employers receive a
tax subsidy for providing health care to their employees, and since
employers pay for the health care, there is an incentive to purchase a
plan based on costs, not on level of benefits. To give employees the
option to choose coverage with a higher level of benefits, the solution
then is not to add another layer of mandates, but to alter the system
so that employees can choose the health plan that is best for them.
To accomplish this goal, H.R. 4520 creates a system similar to the
Federal Employees Health Benefits program known as HealthMarts which
are private non-profit organizations that offer a variety of health
benefits to small businesses and the self-insured. Employers pay a set
fee to the HealthMart, and it provides a variety of health insurance
options, including health maintenance organizations, paid provider
organizations, and fee-for-service plans, to employees. With a
HealthMart, the employee, not the employer, has the flexibility to
choose the type of plan based on the level of benefits, protections and
costs. HealthMarts eliminate the possibility that employees feel
dissatisfied with the health coverage and empowers them to choose the
best provider that meets their needs.
Unlike the Democrat substitute, H.R. 4520 actually addresses the 41
million Americans lacking access to affordable health insurance.
Regrettably, many of these Americans are in families in which one
member works in a job that does not provide health care coverage.
Because they lack the purchasing power of large businesses, many small
businesses often find the cost of providing coverage too prohibitive.
H.R. 4520 gives small businesses and the self-insured the ability to
bank together to obtain more affordable health care coverage. These
Association Health Plans allow employers to join together through a
trade association or their local Chamber of Commerce to broaden their
risk pool and give them the same purchasing power as large
corporations.
Mr. Speaker, H.R. 4520 provides an effective means to protect
patients by offering them more choices. The Patient Protection Act
restores accountability to health plans without raising premiums on the
most vulnerable. It

[[Page H6378]]

will also reduce the number of uninsured through innovative reforms and
the creation of health care ``supermarkets'' so that the average
American can have more available choices. I would like to commend my
colleagues who served on the Working Group on Health Care Quality for
their tremendous efforts in bringing forth this responsible
legislation, and I urge support of this measure.
Mr. KOLBE. Mr. Speaker, I rise today in support of H.R. 4250, the
Patient Protection Act. This bill lays an excellent foundation and
contains many important pro-patient provisions. This bill adapts for
the changing health care market without the unintended consequences of
increased costs, increased bureaucracies and an explosion of lawsuits.
This bill expands access to health care for millions of Americans,
makes health care more affordable for working families and small
businesses, and holds health insurance companies accountable for their
decisions about your care.
First, the Patient Protection Act allows individual's access to the
best type of health care based on their and their families' needs.
Women would have direct access, without having to go through a
gatekeeper, to an ob/gyn as their primary care physician. It would also
allow families to utilize a pediatrician for the health care of their
children without the interference of an insurance gatekeeper.
The Patient Protection Act also makes it easier for individuals to
learn more about what their health care plan covers and discuss options
with our doctors to determine the best form of treatment. This bill
requires health plans to cover emergency room care for conditions which
a prudent layperson would view as requiring emergency treatment.
Second, the Patient Protection Act will make health more affordable
for individuals. Most people without health insurance can not afford to
pay for health benefits. They usually work in small businesses or are
self-employed, but cannot afford to purchase health care insurance.
This bill will make it affordable for small business owners to provide
their employees with health insurance coverage.
Through the creation HealthMarts, and Community Health Centers
Organizations, Association Health Plans, and Medical Savings Accounts,
small business will have the same access to health insurance as large
business, therefore creating a more affordable health insurance market
for workers. Workers that currently are caught between being too poor
for Medicaid, but not cannot afford health insurance.
And third, the Patient Protection Act makes health plans accountable
for the health care services that are provided. Through the creation of
an expedited review process--both internally and externally--
individuals will be able to receive the care they need first, rather
than being thrown into a long, drawn-out legal process controlled by
trial lawyers, with no resolution until long after they've been harmed
or killed. This is the only bill that truly relies on getting patients
treated first in hospital rooms, rather than in the courtroom.
Mr. Speaker, I am pleased to vote in support H.R. 4250, the Patient
Protection Act, and urge my colleagues to join us in protecting
patients and guaranteeing choices without the heavy-hand of big
government and provide patients, especially the 42 million un-insured,
with access to affordable health care, when they need it, where they
need it, and with whom they need it.
Mr. MICA. Mr. Speaker, the question before us is whether we want to
pay more and get less or correct some of the problems we have
experienced with managed care.
It is true that the law and regulations have not kept up with changes
in health care delivery.
It is also true that increasing costs are depriving millions of
Americans affordable health care.
Unfortunately the Democrat plan will do three things we know will
drive up costs. Their solution is more regulation, more bureaucracy,
and more litigation.
In hearings I conducted on the President's fancy titled ``Patients'
Bill of Rights'' for Federal employees, every administration official
testified that his similar Executive Order would impose more paperwork
at high cost without any benefit in coverage.
The Democrat plan proposes over 300 new mandates, thousands of new
federal bureaucrats, and 59 new federal regulations.
The CBO estimates the Democrat plan will increase costs 4 percent.
Add to that cost of living and they escalate health care premiums 7
percent per year.
The Democrat plan increases lawsuits which also increase health care
costs. So what do you get? More costly regulation. More costly
bureaucracy. More costly litigation.
I submit that's not what the patient, consumer or doctor ordered.
Mr. HILL. Mr. Speaker, recent polls show a growing desire on the part
of Americans to address some concerns facing our health care system,
including the number of uninsured working adults and dependents, the
increased costs being passed to employees, and the lack of choice in
health plans.
While Americans enjoy the best quality health care in the world, our
system for delivering care often frustrates patients, providers and
employers. Moreover, people are concerned that their health plan may
not deliver the care they need when they are sick.
Today, we are addressing what the people want and deserve--a patients
bill of rights. They do not want a trial lawyers right to work. H.R.
4250, the Patient Protection Act, which I am a cosponsor, will move
ahead what I call the three A's--Accessibility, Affordability and
Accountability.
The Patient Protection Act promotes accessibility by requiring basic
protections to ensure high-quality health care coverage, promotes
affordability by creating more choices and access to affordable health
care coverage for all Americans, particularly the over 100,000
Montanans that are uninsured, and ensures accountability by holding
insurance companies accountable so patients are guaranteed to receive
high-quality care.
We achieve this by expanding the eligibility for medical savings
accounts, allowing for the creation of new `health marts' and
permitting small employers to pool their risks with others, which will
make health care become more affordable as well as more available.
The vast majority of the uninsured have one thing in common, they are
either self-employed, work, or have a family member who works in a
small business that cannot afford to pay for health benefits.
Furthermore, for those small businesses that are able to offer their
employees coverage, often they can only afford to offer one coverage
option. In Montana, I constantly hear concerns with the affordability
of health care. The Congressional Budget Office estimates that premiums
would increase and the number of uninsured Americans will actually
increase by 1.4 million if H.R. 3605 became law.
The question is who are we trying to help--patients, employees. We
should look at who is opposed to H.R. 3605:
NFIB, Small Business Survival Committee, US Chamber, National
Association of Wholesalers-Distributors, National Restaurant
Association, the Coalition for Patient Choice, Citizens for a Sound
Economy, NAM, National Retail Association among others.
Who supports the H.R. 3605--Trial Lawyers.
We address the very real concern patients in managed care plans have
that their health plan won't provide the benefits they are entitled to
if they get sick. We should do this by empowering patients, not trial
lawyers. I want patients to get the care they are entitled to when they
need it, not allow their heirs to sue for some large settlement after
they die. The other proposal that I touched on earlier seen to
concentrate on courtrooms over hospital rooms and would only increase
health care costs by taking money away from care and putting it into
the pockets of attorneys.
The Patient Protection Act will build upon what's good about our
private health care system--without big government or more bureaucracy.
It will make health insurance more accessible, affordable and
accountable, while giving patients more choices.
Mr. HOBSON. Mr. Speaker, I rise today in strong support of the House
Republican Health Care Proposal, the Patient Protection Act. I believe
this bill strikes a good balance between protecting patient rights
without the heavy hand of big government. I am excited about many of
the large protections in this bill, like giving patients a better and
quicker appeal process when the HMO denies their claim, lifting any gag
orders on physicians to ensure that patients are better informed, and
providing greater access to specialists for women and children. I
believe this bill addresses the frustrating problems that upset so many
people about their HMOs.
As many of you know, Representative Tom Sawyer and I wrote the
Administrative Simplification language in the Health Insurance
Portability and Accountability Act--Kassebaum-Kennedy. Administrative
Simplification will reduce paper work, speed the processing and payment
of medical transactions, and let physicians spend less time on paper
work so they can do what they do best: treat patients. In putting
together this legislation some estimated that Medicare could save $60-
90 billion per year if individual patients' financial records were kept
from getting confused. Because of the confusion over individual
Medicare financial records, the U.S. Department of Health and Human
Services (HHS) which runs the Medicare program, often pays claims for
beneficiaries that have outside supplemental insurance. After paying
the claim, Medicare's only recourse to get its money back is to sue the
insurance company, which it seldom does. The most obvious solution to
this problem is a unique identifier for health care beneficiaries.
In these days of increased government scrutiny and tight federal
budgets there are tremendous pressures on HHS to recover

[[Page H6379]]

these funds. Quite frankly, with these pressures on HHS I was afraid
that they would rush to get in place a one-size fits all solution that
might compromise patient privacy. To ensure that the system was not run
by the bureaucrats at HHS and to guarantee public input, Congress
instructed the National Committee on Vital and Health Statistics, an
independent research organization, to hold hearings to gather
information from private and public sector organizations to develop
recommendations on establishing a way to keep individual patients'
financial records from getting confused with one another.
After the hearings, the Committee will write a report that will be
published in the Federal Register. Moreover, an amendment I introduced
to the Patient Protection Act will guarantee that Congress reviews and
approves any suggestions made by the Secretary of HHS on individual
health care identifiers before they are implemented. This provides a
built-in guarantee that Congress and the public will have a chance to
comment on, participate in the development of, and ultimately approve
any unique health care identifier before it goes into effect. Once
again, this process insures public input and oversight to prevent
another ``Big-Brother'' bureaucratic solution.
However, Administrative Simplification is not complete without the
Confidentiality Standards proposed in the Patient Protection Act.
Section 264 of Kassebaum-Kennedy states that if Congress does not pass
legislation concerning the confidentiality of patient records within 3
years after the act goes into effect, then the Secretary of HHS will
adopt her own final regulations. As a result, Congress is on a very
tight time frame to propose and pass confidentiality legislation.
The Medical Record Confidentiality provisions in the Patient
Protection Act provide the necessary safeguards required in Kassebaum-
Kennedy. It allows patients access to their medical records in order to
view, copy, and amend by addition; requires providers, plans and
employers to develop safeguards to protect confidentiality of medical
information; requires providers, plans and employers to disclose their
confidentiality policies to patients, enrollees and employers;
encourages health researchers to use non-identifiable information by
preempting state laws in this defined area; allows providers and plans
to use information within their network for certain defined purposes,
including outcomes evaluation, health promotion, and utilization
review.
The Medical Record Confidentiality provisions in the Patient
Protection Act guarantee accurate records and prevent unlawful use of
one's medical records.
Mr. FAZIO of California. Mr. Speaker, I rise in opposition to this
last minute Republican sham before us today. Mr. Speaker, this is not
the first time the Republicans have buckled to pressure from their
insurance industry contributors.
It is not the first time under Speaker Gingrich, Republicans have
tried to pull one over on the American people by crafting something
that sounds good in a 30-second campaign ad, but does nothing--
fundamental--to fix the problem.
But this is perhaps the most cruel farce the Republicans have brought
to this body since they took control.
For those on the other side of the aisle who have already written the
press releases patting yourselves on the back--and scheduled the air
time for those 30-second spots--I say look inside your souls and admit
that what you have brought forth today will not end families' tragedies
and needless human suffering.
My colleagues, if you pass this bill today, those managed care plans
that do not operate as honorably as others will still go on putting
profits over patients. Only now, the blood will be on your hands.
Under this bill, a health plan could still unhook a critically ill
patient from the intensive care monitors and transfer the patient to an
``in-plan'' hospital.
A health insurance bureaucrat could still withhold life-saving cancer
treatment until it is too late--and face no responsibility for that
human life.
In my home state of California, state laws protecting patients who
need prenatal care, well child care, mammography screening, cervical
cancer screening, and diabetic supplies and 9 other benefits--
overriden--prempted by Fed law would be moot.
Put this bill to the test before you vote: Does it provide adequate
access to medical specialists? No; Emergency services for severe chest
pain? No; Proper care for women who have mastectomies? No; Patient
recourse when needed care is denied? No.
Right down the line, the Republican bill is a failure and a cruel
hoax.
If you pass this bill today, you will go on hearing the stories from
your constituents who were denied care they paid for in their health
plans.
If you fail to join Dr. Ganske and Congressman Dingell--you will
guarantee that life or death decisions are made by health insurance
bureaucrats, not doctors. Instead, you will be complicit in people's
pain.
You are playing with people's lives here today. Don't choose a
placebo over a real cure.
Vote NO on this last minute farce we have before us today. Support
Dingell-Ganske which is supported by doctors and patients.
Mr. OXLEY. Mr. Speaker, I rise today in strong support of the Patient
Protection Act. Since Republicans took control of Congress in 1995 we
have worked diligently to pass health care reform legislation that
gives Americans greater choices, makes health care more affordable, and
improves the quality of the health care they receive. I believe this
legislation adds to the long list of legislative accomplishments that
Republicans have achieved in this arena.
Allow me to expand on some of these accomplishments. First, through
passage of comprehensive Food and Drug Administration reform, the
Republican Congress helped expedite the development and delivery of new
healthcare technology. As a result of these reforms, which streamlined
the FDA bureaucracy and cut government red tape, we will help save the
lives of millions of Americans over the coming years.
Second, while many initially criticized our efforts at passing much
needed Medicare reform, we succeeded in passing a bipartisan reform
package designed to save this critical program until 2007 while
establishing a bipartisan panel to consider options that will ensure
Medicare's long-term financial health. This responsible package of
reforms also included provisions to give Medicare beneficiaries greater
choice, crack down on fraud and abuse, and grant beneficiaries new
preventative health benefits. For the 34 million seniors that rely on
Medicare for their health care needs I was pleased to support this
valuable legislation.
Finally, any discussion of major health care accomplishments would
not be complete without highlighting the 1996 Health Care Portability
and Accountability Act. This legislation was a common-sense, market
based solution to one of America's most difficult health care
problems--namely the portability of health insurance. By guaranteeing
that people can go from one employer to another without facing pre-
existing condition restrictions or being denied coverage by a new
employer's insurance plan this legislation ended the problem of job-
lock by allowing workers to switch jobs without the fear of losing
their insurance coverage.
Today, in our continuing efforts to strengthen the health care
American's receive, we will consider legislation that address many of
the concerns patients all over our country have with the health care
marketplace. This legislation focuses on making health care more
affordable for working families and small businesses, while holding
insurance companies accountable for their decisions, and expanding
access to health care for millions of Americans. I commend Congressman
Hastert for his fine work with the House Republican Working Group on
Health Care Quality in bringing this legislation to the House floor. I
am pleased with the outcome of the working group that I feel builds on
and strengthens our previous accomplishments.
While many have advocated reforms that would significantly increase
both costs and expand government bureaucracies, I support the
Republican Task Force legislation because it protects patients and
expands access to health care without damaging the free market health
care system we enjoy today. Mr. Speaker I urge my fellow colleagues to
support this much needed legislation that ensures that the health
insurance Americans receive is accessible, affordable, and accountable
without crippling the free market's ability to hold down health care
prices.
Mr. GILMAN. Mr. Speaker, I rise today in support of H.R. 4250, the
Patient Protection Act. As managed care has continued to grow as the
major system of health care delivery in this country, we are
increasingly aware of incidents where patients have suffered serious
injury or even death because an HMO or other managed care plans denied
a treatment that was necessary to protect the patient. An emphasis on
cost control over the quality of care has prevented health care
professionals from acting in the best interest of the patient. While
looking for ways to control the cost of health care, we must also
ensure that people have access to quality health care services when the
need it.
The legislation before us today attempts to make significant changes
in the managed care industry. H.R. 4250 guarantees access to emergency
room care by applying a ``prudent layperson'' standard of what
constitutes an emergency, additionally, this bill will allow women
direct access to their ob/gyn and children to their pediatrician. This
access will prevent patients from having to be referred to these type
of specialists by their primary provider.
This bill would also provide for an independent appeal process. If a
patient is unhappy

[[Page H6380]]

with the initial decision, he or she can ask for an independent
internal review within 30 days of the decision. If that decision is
unsatisfactory, they can appeal for an independent external review by
an independent contracted physician. If after these two appeals, they
are still unhappy, the patient can take the HMO to court and sue for
damages up to $250,000.

The Patient Protection Act would require all insurance providers to
provide detailed information to their customers including patients'
responsibilities, the number of appeals made and granted as well as
other plan information. This provision is intended to arm the consumer
with all of the necessary information up front so that future appeals
and litigation become unnecessary.
Although this bill provides a great number of HMO reform provisions,
there are still a few items which need to be addressed and amended
during the House-Senate conference. I urge the conferees to consider
changes to this legislation which will provide greater patient
protection and strengthen HMO liability.
Accordingly, I am pleased to support H.R. 4250, the Patient
Protection Act.
Mr. UPTON. Mr. Speaker, I rise to express my strong support for the
Patient Protection Act. Before I review the reasons that I support this
legislation and will work hard for its enactment, I want to take this
opportunity to single out two of my colleagues without whom this bill
which will do so much to ensure quality of care would not be before us
today. First, I want to thank Charlie Norwood, who saw early-on the
need for strong patient protections. He introduced the Patient Access
to Responsible Care Act and used this legislation as a vehicle to
educate all of us to the need for reforms. Second, I want to express my
deep regard for the leadership, patience, and effort that Denny Hastert
has shown in the development of the Patient Protection Act, the
legislation we are considering today. He had a Herculean task, and he
did it with skill and grace.
I am proud to be counted as a cosponsor of the Patient Protection
Act. This legislation will ensure that our nation's health care system
is patient-centered, no profit-centered and that no one, no insurance
clerk or green eyeshade worrying about a fat profit, stands between the
patient and the physician when potentially life and death health care
decisions are being made.
There are some who continue to argue that patient protection
legislation is not needed--that the market will work over time to
ensure patients have access to care when they need it and receive high
quality care. That has not been my experience at all. Rarely a day goes
by that I don't hear or read in my constituent mail of serious problems
that individuals or their families are having with their managed care
plans. Just yesterday, for example, I received a report of a Michigan
woman who was experiencing severe pain from an ovarian cyst. She went
to the nearest hospital, but her managed care plan would not cover her
care at that facility. Instead, a plan clerk directed her to another,
more distant facility. Unfortunately, that facility was affected by a
massive power outage in the Detroit area and could not see her
promptly. She requested permission to return to the first hospital, but
was denied. By the time she was finally treated, she had a massive
internal infection from the ruptured cyst. Her doctor said she was
lucky to be alive.
We need to stop this rising drum-beat of stories of patients being
denied appropriate care by their health plans, and the Patient
Protection Act will do this. Had the Patient Protection Act been in
place, for example, this woman could have sought and received care at
the nearest emergency room rather than having to seek prior
authorization and go to another, more distant facility.
Perhaps the single most important patient protection in this
legislation is the right it will give patients to a timely review of
plan determinations with which they disagree. Patients may seek an
internal and then an independent external review, both of which must be
conducted by physicians who are trained in the provision of the
treatment under review. The patient may then go to court to enforce the
ruling of the external review organization that a service should be
provided or covered. If the court upholds the finding of the
independent expert external reviewer, which is highly likely, the plan
is subject to fines of $500 per day up to a total of $250,000.
I think the internal/external review appeal process in this
legislation is actually more likely to hold plans' feet to the fire for
their decisions and ensure appropriate access to care than would be the
case if patients could simply go to court and sue their plans or
employers. While the penalties leveled in state torts might be greater
in some cases, such cases can drag on for years and the outcome is
never certain for individuals. And the uncertain, uncapped liability
exposure to which employers could be subject under the state court suit
option could lead to employers terminating plans and add significantly
to the number of individuals and families with no health care coverage.
In closing, I strongly urge my colleagues to join me in voting today
for the Patient Protection Act. It ensures that our Nation's health
care system is patient-centered, not profit-centered. It ensures that
medical decisions are made by patients and their physicians with the
well-being of the patient being the first consideration.
Mr. GEJDENSON. Mr. Speaker, for the past few months, my democratic
colleagues and I have demanded that Republicans bring HMO reform to the
floor. And now, what do we get. Barely 2 hours to debate a bill that
was introduced just last week and has had no hearings, no mark-up, no
public discussion of any kind.
The Republican bill will do little to fix the problems with the HMO
system. The Republican bill does not allow direct access to specialty
care. If you have heart disease, you must still go through a primary
care doctor before seeing a cardiologist. If you have cancer, you must
go through your primary care physician before you can see an
oncologist. The Patient's Bill of Rights, which I support, guarantees
patients access to specialists without going through a gatekeeper.
The Republican bill will not require HMOs to pay for emergency room
visits if a patient has severe pain, but does not have a serious
medical problem. Parents who take a child to the emergency room when
they complain about pains will not know if their insurance company will
cover the visit. This bill expects parents to be doctors and penalizes
them for taking prudent steps. The Republican bill will not prohibit
gag orders on doctors in group practice. It will not prevent plans from
arbitrarily limiting medically-necessary services. It will not allow
patients to sue HMOs for decisions that adversely affect them.
The Patient's Bill of Rights will fully address all of these
problems. Access to medically needed care, including access to
emergency rooms and specialists, is a fundamental element of the
Patient's Bill of Rights. This bill will ban all gag rules on
physicians. This bill will end the current practice of HMO's offering
financial incentives to withhold necessary care. This bill will
guarantee timely internal appeals, as well as an independent external
appeals when plans deny care. Finally, the Patient's Bill of Rights
holds plans legally accountable for decisions that lead to serious
injury or death. People need real ways to hold HMOs responsible. In too
many instances, courts are the only advocate that patients have in
their battles with multi-billion dollar companies.
It is time for true HMO reform. We all know people who have been
injured by HMOs. Just this week, a woman from my district got in touch
with me and relayed what is probably an all too common occurance:
This Monday, she had a hysterectomy. On Tuesday, 24 hours later, her
HMO wanted her out of the hospital even though she was feverish and had
medical staples holding her abdomen together. Her doctor demanded that
her HMO allow her to stay in the hospital at least one more day. Her
HMO relented because of her fever but after the fever broke on
Wednesday, she was forced out. She was sent home, still weak and groggy
and not even close to recovery. How is she supposed to get well? This
is not what she paid for when she paid her premium.
Republicans claim that their bill will stop this type of abuse, but
it won't. Their bill has no guarantee that doctors, not HMOs will
determine what amount of time is needed to recover from major surgery.
The Patient's Bill of Rights will make sure that doctors and patients,
not HMO plan administrators, decide when it's time to go home.
Under the Republican bill, what can patients and their families do
when they are denied care? Other than jump through some hoops--not
much! First, patients will have to prove during the internal appeal
that their care is medically necessary. In the Republican bill, the
definition of medically necessary is determined by the health plan--not
by decades of medical experience, not by doctors there in the
examination room with the patient. Then, if the internal appeals
process doesn't work, the Republican bill will force patients to pay to
have an independent review of their claim.
This is outrageous for two reasons. First, charging a fee is designed
to discourage people from using this recourse. Second, HMOs will only
be held accountable for failing to follow the provisions of their plan.
As a result, as long as the HMO follows its own rules, patients
receiving nothing from the external appeals provision even if their
health is compromised.
In the Patient's Bill of Rights, the definition of medically
necessary is uniform for all--a definition drafted by doctors, not
HMOs. The Patient's Bill of Rights not only has internal and external
appeals--both free of charge--but also sets up an Ombudsman program to
assist consumers in understanding their health insurance options and
filing appeals and grievances with their HMOs.

[[Page H6381]]

The Republicans also seem to think that it's a good thing that their
bill will deny patients access to the court system when their care is
denied. Somehow, Republicans believe that the health insurance
industry, which makes $952 billion a year, needs protection from
lawsuits. When one of your family members dies because an HMO denies
access to care, the Republican bill gives you nowhere to turn. No other
industry enjoys such a powerful, congressionally-mandated shield from
liability for their actions. It's time to remove that protection for
health plans and focus on granting more protections for patients.
If the bill in and of itself isn't bad enough, the proponents of this
sham have added totally unrelated provisions which further threaten the
quality of health care for all Americans. Once again, Republicans are
threatening Medicare by expanding so-called Medical Savings Accounts.
Remember these? They will allow healthy senior citizens to pull out of
Medicare leaving it with only the poorest, sickest older Americans.
This is bad medical policy and even worse fiscal policy. Other
provisions preempt state laws and jeopardize patient privacy.
We must create a better system for everyone who gives or receives
health care in this country. The Republican plan will do nothing to
help our Nation's patients. For real reform, we must pass the Patient's
Bill of Rights.
Mr. NUSSLE. Mr. Speaker, I rise today in support of the Patient
Protection Act. I support this bill because it establishes Association
Health Plans and Health Marts as new ways to provide health insurance
to workers, many of whom work for small businesses which cannot
currently afford to provide health insurance to their employees.
Individuals who work for small businesses are the people most likely to
be without health insurance. I also applaud the increased care options
this bill provides for individuals dissatisfied with the choice of
doctors provided by their health plan.
The national debate on health care has been focused almost
exclusively on the care provided by HMOs. Providing appeals processes
and other recourses for patients in HMOs are important and appropriate
steps for Congress to take in order to ensure quality care. However, in
all the talk over giving recourse and options to individuals with HMO
coverage, both bills have overlooked the fact that the Patient
Protection Act and the Kennedy-Dingell bill primarily address the fears
and complaints of Americans who are fortunate enough to have real
access to health care and a menu of health care options.
For many Iowans, access to health care doesn't mean the ability to
see a specialist on demand. There are few specialists in Grundy Center,
Iowa. People in Iowa's Second District have to load a family member
into the car and drive miles and miles to the nearest doctor, clinic or
emergency room. A patient bill of rights means little or nothing to
people whose only choice of a hospital or clinic is 40 or 50 miles
away. And miles mean minutes, which are crucial in the event of an
emergency. Improving access to health care in Iowa means recruiting
more doctors so that people will have shorter drives, and maybe a
choice of where to go.
I am disappointed that neither proposal the House is considering
today contains any initiatives to address the shortage of doctors in
rural America. Twenty-five percent of the American population lives in
rural areas. By the federal government's own count, almost 2,500
counties in our nation lack adequate medical care. Last year, Congress
acted to make this shortage worse by creating a program to pay
hospitals to train fewer doctors. What we need in Iowa are more
doctors. The resources being spent to reduce the number of physicians
would be better spent providing incentives to encourage doctors to
locate in areas with inadequate access to health care.
The Patient Protection Act provides valuable protections and new
health care options to many individuals, and I support those goals.
However, I hope that today's vote on the Patient Protection Act is the
beginning of the debate on improving access to health care and not the
end. This debate is essential for people in Iowa's Second District and
one in which I intend to participate vigorously.
Thank you, Mr. Speaker.
Mr. CRANE. Mr. Speaker, today, this House has an opportunity to
improve the health care system for millions of Americans. Like
everyone, I want a health care system that is more accessible, more
affordable and more accountable. With that goal in mind, I will cast my
vote for H.R. 4250, the Patient Protection Act.
It is not a perfect piece of legislation and while there are
provisions I think could be improved, there are also other provisions I
have long supported. I am particularly pleased with the expansion of
medical savings accounts, the creation of association health plans,
medical malpractice reform and improving the patient appeals process
without increasing the involvement of trial lawyers. In response to the
concerns we have heard from our constituents, the bill prohibits gag
rules, allows women direct access to gynecological and obstetrical care
and allow parents to choose a pediatrician as their child's primary
care provider without having to get a referral from a health plan.
This legislation will not only improve health care for the currently
insured, we expect it to also make insurance more affordable to the 41
million uninsured Americans, including the 1.3 million uninsured in my
state of Illinois.
As a member of the Ways and Means Health Subcommittee, I have taken
an active interest in the many innovative ideas in health care. The
Patient Protection Act represents the only choice for those of us who
do not want a heavy-handed, big-government takover of our health care
system. The American people overwhelmingly rejected that proposal and
made it clear they want quick access to the best medical care in the
world at an affordable price. The Patient Protection Act moves us in
that direction and I would urge my colleagues to vote in support of it.
Ms. BROWN of Florida. Mr. Speaker, I represent the 3rd District of
Florida. And, senior citizens in my district which ranges from
Jacksonville to Orlando have suffered at the hands of HMO providers
day-after-day. They are urged to sign up for health coverage plans, and
these HMOs only give them cheap gifts and inadequate health coverage.
Because I have hosted numerous town hall meetings on health care for
senior citizens, I have been able to hear their stories and provide
assistance when their insurance providers have failed to deliver. An
81-year-old man, who after his HMO was sold had to replace his regular
hypertension drug with a lower-cost one. Within days his blood pressure
skyrocketed. He switched to an HMO that covered his drug, but then the
new plan changed its coverage too. Unable to pay for the drug, he went
on TV as a cry for help and a local physician with compassion gave him
the medication for free. Health care is such a crucial part of our
lives, I believe every effort should be made to protect senior citizens
and the working poor. It is our responsibility to protect and pass
legislation that will protect the rights of our constituents. More
importantly, we are charged with ensuring that our nation has access to
quality health care at an affordable cost. There is nothing more heart
wrenching, than talking with someone who desperately needs medical care
and their insurance company will not cover the life-saving medical
treatment or reimburse patients for much needed medicine. In another
case, a baby girl was diagnosed with a hole in her heart. Chances were
good that she would need surgery to fix the defect if it did not close
on its own. Her mother switched HMOs for better coverage; however, the
new insurance company would not cover the procedure because her
daughter's heart defect was a pre-existing condition. The HMO had a 2
year limit on pre-existing conditions and would not pay for the little
girl's operation. Thanks to a special state program in Florida the
little girl was able to receive care. We need to hold HMOs accountable
for their actions and how they treat people. That is why, I urge my
colleagues to oppose the Patient Protection Act (H.R. 4250) and support
the Patient Bill of Rights (H.R. 3605). H.R. 3605 is the right choice,
it puts patients before profits and medical decisions are given back to
doctors and nurses. This bill also holds HMOs responsible for decisions
when they withhold or limit care to patients.
The challenges of quality health care will require our nation to
overcome the barriers of ever-increasing medical cost and recognize the
needs of our nation. In a society where technology is progressing at
the speed of light, why is it so difficult for us to make the right
decision for the American people?
We need to treat quality health care as a right versus a luxury for a
privileged few.
Mrs. MINK of Hawaii. Mr. Speaker, I rise in opposition to H.R. 4250,
the Patient Protection Act of 1998, because it falls short of
addressing America's true health care issues. The essence of the health
care debate is threefold: access to health care; patient protections;
and patient rights. The Democratic substitute, the Patients' Bill of
Rights, would address all three of these issues. This bill, the so
called Patient Protection Act, does not.
First, Americans, despite being insured, are tired of having to fight
every step of the way for care they are entitled to. Americans want
access to care. The Patient Protection Act would not alleviate many of
the existing barriers to care identified as priorities. For example:
The Patient Protection Act would not provide direct access to
specialists. It does not guarantee women direct access to their OBGYN
nor would it provide parents direct access to pediatricians for their
children.
The Patient Protection Act would not insure a patient can continue to
see the same doctor through a course of a treatment or a pregnancy if
that doctor leaves the network.
The Patient Protection Act would not insure that a patient can get
the prescription drug chosen by the physician, not the HMO.

[[Page H6382]]

The Patient Protection Act would not allow patients with ongoing
conditions to have standing referrals to specialists.
The Patient Protection Act would not ensure that patients are allowed
to see an outside specialist at no additional cost when specialists in
their plan are unable to meet their needs.
The Patients Bill of Rights will provide all of these.
Second, patients should have the right to hold managed care
administrators accountable for their decisions when it influences the
care that is provided.
The Patient Protection Act does not hold managed care plans
accountable when decisions to deny or delay care results in injury or
death. It does not provide patients the right to sue HMOs when they are
denied needed health care nor does it provide a true external
independent appeals process. In fact, the Patient Protection Act
reduces accountability by placing an arbitrary cap on medical
malpractice awards.
In addition, the Patient Protection Act does not ensure that doctors
and nurses can report quality problems without retaliation from HMO's,
Insurance companies and hospitals. The Patient Protection Act would not
prevent health care professionals from being financially rewarded for
limiting a patient's care. Patients deserve care from health care
professionals who are not rewarded for providing less care.
The Patients' Bill of Rights would provide these protections and true
accountability.
Finally, patients deserve basic health care protections. After
preaching a mantra of returning power to the states since taking
control of Congress four years ago, Republicans take a hypocritical u-
turn and pre-empt carefully constructed state health care protections.
The Patients' Protection Act will allow ``Healthmarts'' to pick and
choose the services covered under the plan, ignoring state mandated
minimum benefit requirements. It would also eliminate state regulations
enacted to insure solvency and protect against fraud and abuse.
The Patients' Bill of Rights would not pre-empt state mandated care
nor would it eliminate solvency and fraud and abuse protections.
In closing, Americans deserve health care from qualified physicians
who are not influenced by health care plan administrators. Americans
deserve the right to take their health plans to court if they are
denied care. America wants real managed care reform. The Patient
Protection Act is not real managed care reform. This is a facade and a
sham designed to provide political cover for Republican leadership who
have argued that managed care reform is not necessary.
Do not judge a bill by its title. The Republican Patient Protection
Act is a facade. It's meager ``protections'' do not address the real
issues we are faced with. The Patients' Bill of Rights on the other
hand is a comprehensive and revolutionary bill providing substantive
reform.
America understands the difficulties involved with obtaining health
care. The Patients' Bill of Rights provides solutions. The Patient
Protection Act creates more problems.
Mr. TURNER. Mr. Speaker, it has been suggested that the Republican
bill provides better protection for patients. I submit to my colleagues
that the Republican bill provides fewer protections for patients than
exist in current law in most of our States.
I come from Texas. The Texas Legislature passed patient protection
legislation in 1997, fully intending that all HMOs be covered by the
protections of State law.
The Republicans submit a bill today that would control patient
protections at the Federal level. It would set forth a series of rules
that are far inferior to those in the Democratic alternative.
Under the Republic proposal, if the HMO denied coverage, the only
remedy, if an individual was enrolled in a self-insured plan, would be
to go to Federal Court. And once the individual gets there, he or she
would have no genuine recourse.
In 1991, Phyllis Cannon was diagnosed with leukemia. She appealed to
her HMO for a bone narrow transplant. The HMO refused. For over 40 days
the HMO refused coverage. Due to a denial of medical treatment, about a
month after that Ms. Cannon died.
The court ruled that under ERISA, she had no recovery. Under the
Republican bill today, her estate would be entitled to $20,000--a small
price for a life. Under the Republican bill, the penalty would be $500
per day. This represents a much cheaper alternative for an HMO than
providing the treatment that should have been provided to Phyllis
Cannon.
I submit to my colleagues that all Members of this House needs to
look at what their State has done to protect patients because a vote
for the Republican bill amounts to rolling back the protections that
most of our State have already provided for patients under the law. In
every place in this country, protecting patients enrolled in HMOs has
been a bipartisan effort. Only in Washington is patient protection
partisan.

Amendment in the Nature of a Substitute Offered by Mr. Dingell

Mr. DINGELL. Mr. Speaker, I offer an amendment in the nature of a
substitute.
The SPEAKER pro tempore. The Clerk will designate the amendment.
The text of the amendment is as follows:

Amendment No. 2 in the Nature of a Substitute Offered by
Mr. Dingell:
Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Patients'
Bill of Rights Act of 1998''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents.

TITLE I--HEALTH INSURANCE BILL OF RIGHTS

Subtitle A--Access to Care

Sec. 101. Access to emergency care.
Sec. 102. Offering of choice of coverage options under group health
plans.
Sec. 103. Choice of providers.
Sec. 104. Access to specialty care.
Sec. 105. Continuity of care.
Sec. 106. Coverage for individuals participating in approved clinical
trials.
Sec. 107. Access to needed prescription drugs.
Sec. 108. Adequacy of provider network.
Sec. 109. Nondiscrimination in delivery of services.

Subtitle B--Quality Assurance

Sec. 111. Internal quality assurance program.
Sec. 112. Collection of standardized data.
Sec. 113. Process for selection of providers.
Sec. 114. Drug utilization program.
Sec. 115. Standards for utilization review activities.
Sec. 116. Health Care Quality Advisory Board.

Subtitle C--Patient Information

Sec. 121. Patient information.
Sec. 122. Protection of patient confidentiality.
Sec. 123. Health insurance ombudsmen.

Subtitle D--Grievance and Appeals Procedures

Sec. 131. Establishment of grievance process.
Sec. 132. Internal appeals of adverse determinations.
Sec. 133. External appeals of adverse determinations.

Subtitle E--Protecting the Doctor-Patient Relationship

Sec. 141. Prohibition of interference with certain medical
communications.
Sec. 142. Prohibition against transfer of indemnification or improper
incentive arrangements.
Sec. 143. Additional rules regarding participation of health care
professionals.
Sec. 144. Protection for patient advocacy.

Subtitle F--Promoting Good Medical Practice

Sec. 151. Promoting good medical practice.
Sec. 152. Standards relating to benefits for certain breast cancer
treatment.
Sec. 153. Standards relating to benefits for reconstructive breast
surgery.

Subtitle G--Definitions

Sec. 191. Definitions.
Sec. 192. Preemption; State flexibility; construction.
Sec. 193. Regulations.

TITLE II--APPLICATION OF PATIENT PROTECTION STANDARDS TO GROUP HEALTH
PLANS AND HEALTH INSURANCE COVERAGE UNDER PUBLIC HEALTH SERVICE ACT

Sec. 201. Application to group health plans and group health insurance
coverage.
Sec. 202. Application to individual health insurance coverage.

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

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

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

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

TITLE V--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

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

TITLE VI--REVENUE PROVISIONS

Sec. 601. Estate tax technical correction.
Sec. 602. Treatment of certain deductible liquidating distributions of
regulated investment companies and real estate investment
trusts.

[[Page H6383]]

TITLE I--HEALTH INSURANCE BILL OF RIGHTS

Subtitle A--Access to Care

SEC. 101. ACCESS TO EMERGENCY CARE.

(a) Coverage of Emergency Services.--
(1) In general.--If a group health plan, or health
insurance coverage offered by a health insurance issuer,
provides any benefits with respect to emergency services (as
defined in paragraph (2)(B)), the plan or issuer shall cover
emergency services furnished under the plan or coverage--
(A) without the need for any prior authorization
determination;
(B) whether or not the health care provider furnishing such
services is a participating provider with respect to such
services;
(C) in a manner so that, if such services are provided to a
participant, beneficiary, or enrollee by a nonparticipating
health care provider--
(i) 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, and
(ii) the plan or issuer pays an amount that is not less
than the amount paid to a participating health care provider
for the same services; and
(D) without regard to any other term or condition of such
coverage (other than exclusion or coordination of benefits,
or an affiliation or waiting period, permitted under section
2701 of the Public Health Service Act, section 701 of the
Employee Retirement Income Security Act of 1974, or section
9801 of the Internal Revenue Code of 1986, and other than
applicable cost-sharing).
(2) Definitions.--In this section:
(A) Emergency medical condition based on prudent layperson
standard.--The term ``emergency medical condition'' means a
medical condition manifesting itself by acute symptoms of
sufficient severity (including severe pain) such that a
prudent layperson, who possesses an average knowledge of
health and medicine, could reasonably expect the absence of
immediate medical attention to result in a condition
described in clause (i), (ii), or (iii) of section
1867(e)(1)(A) of the Social Security Act.
(B) Emergency services.--The term ``emergency services''
means--
(i) a medical screening examination (as required under
section 1867 of the Social Security Act) that is within the
capability of the emergency department of a hospital,
including ancillary services routinely available to the
emergency department to evaluate an emergency medical
condition (as defined in subparagraph (A)), and
(ii) within the capabilities of the staff and facilities
available at the hospital, such further medical examination
and treatment as are required under section 1867 of such Act
to stabilize the patient.
(b) Reimbursement for Maintenance Care and Post-
Stabilization Care.--In the case of services (other than
emergency services) for which benefits are available under a
group health plan, or under health insurance coverage offered
by a health insurance issuer, the plan or issuer shall
provide for reimbursement with respect to such services
provided to a participant, beneficiary, or enrollee other
than through a participating health care provider in a manner
consistent with subsection (a)(1)(C) if the services are
maintenance care or post-stabilization care covered under the
guidelines established under section 1852(d)(2) of the Social
Security Act (relating to promoting efficient and timely
coordination of appropriate maintenance and post-
stabilization care of an enrollee after an enrollee has been
determined to be stable), or, in the absence of guidelines
under such section, such guidelines as the Secretary shall
establish to carry out this subsection.

SEC. 102. OFFERING OF CHOICE OF COVERAGE OPTIONS UNDER GROUP
HEALTH PLANS.

(a) Requirement.--
(1) Offering of point-of-service coverage option.--Except
as provided in paragraph (2), if a group health plan (or
health insurance coverage offered by a health insurance
issuer in connection with a group health plan) provides
benefits only through participating health care providers,
the plan or issuer shall offer the participant the option to
purchase point-of-service coverage (as defined in subsection
(b)) for all such benefits for which coverage is otherwise so
limited. Such option shall be made available to the
participant at the time of enrollment under the plan or
coverage and at such other times as the plan or issuer offers
the participant a choice of coverage options.
(2) Exception.--Paragraph (1) shall not apply with respect
to a participant in a group health plan if the plan offers
the participant--
(A) a choice of health insurance coverage through more than
one health insurance issuer; or
(B) two or more coverage options that differ significantly
with respect to the use of participating health care
providers or the networks of such providers that are used.
(b) Point-of-Service Coverage Defined.--In this section,
the term ``point-of-service coverage'' means, with respect to
benefits covered under a group health plan or health
insurance issuer, coverage of such benefits when provided by
a nonparticipating health care provider. Such coverage need
not include coverage of providers that the plan or issuer
excludes because of fraud, quality, or similar reasons.
(c) Construction.--Nothing in this section shall be
construed--
(1) as requiring coverage for benefits for a particular
type of health care provider;
(2) as requiring an employer to pay any costs as a result
of this section or to make equal contributions with respect
to different health coverage options; or
(3) as preventing a group health plan or health insurance
issuer from imposing higher premiums or cost-sharing on a
participant for the exercise of a point-of-service coverage
option.
(d) No Requirement for Guaranteed Availability.--If a
health insurance issuer offers health insurance coverage that
includes point-of-service coverage with respect to an
employer solely in order to meet the requirement of
subsection (a), nothing in section 2711(a)(1)(A) of the
Public Health Service Act shall be construed as requiring the
offering of such coverage with respect to another employer.

SEC. 103. CHOICE OF PROVIDERS.

(a) Primary Care.--A group health plan, and a health
insurance issuer that offers health insurance coverage, shall
permit each participant, beneficiary, and enrollee to receive
primary care from any participating primary care provider who
is available to accept such individual.
(b) Specialists.--
(1) In general.--Subject to paragraph (2), a group health
plan and a health insurance issuer that offers health
insurance coverage shall permit each participant,
beneficiary, or enrollee to receive medically necessary or
appropriate specialty care, pursuant to appropriate referral
procedures, from any qualified participating health care
provider 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 providers with respect to such care.

SEC. 104. ACCESS TO SPECIALTY CARE.

(a) Obstetrical and Gynecological Care.--
(1) In general.--If a group health plan, or a health
insurance issuer in connection with the provision of health
insurance coverage, requires or provides for a participant,
beneficiary, or enrollee to designate a participating primary
care provider--
(A) the plan or issuer shall permit such an individual who
is a female to designate a participating physician who
specializes in obstetrics and gynecology as the individual's
primary care provider; and
(B) if such an individual has not designated such a
provider as a primary care provider, the plan or issuer--
(i) may not require authorization or a referral by the
individual's primary care provider or otherwise for coverage
of routine gynecological care (such as preventive women's
health examinations) and pregnancy-related services provided
by a participating health care professional who specializes
in obstetrics and gynecology to the extent such care is
otherwise covered, and
(ii) may treat the ordering of other gynecological care by
such a participating physician as the authorization of the
primary care provider with respect to such care under the
plan or coverage.
(2) Construction.--Nothing in paragraph (1)(B)(ii) shall
waive any requirements of coverage relating to medical
necessity or appropriateness with respect to coverage of
gynecological care so ordered.
(b) Specialty Care.--
(1) Specialty care for covered services.--
(A) In general.--If--
(i) an individual is a participant or beneficiary under a
group health plan or an enrollee who is covered under health
insurance coverage offered by a health insurance issuer,
(ii) the individual has a condition or disease of
sufficient seriousness and complexity to require treatment by
a specialist, and
(iii) benefits for such treatment are provided under the
plan or coverage,
the plan or issuer shall make or provide for a referral to a
specialist who is available and accessible to provide the
treatment for such condition or disease.
(B) Specialist defined.--For purposes of this subsection,
the term ``specialist'' means, with respect to a condition, a
health care practitioner, facility, or center (such as a
center of excellence) 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.
(C) Care under referral.--A group health plan or health
insurance issuer may require that the care provided to an
individual pursuant to such referral under subparagraph (A)
be--
(i) pursuant to a treatment plan, only if the treatment
plan is developed by the specialist and approved by the plan
or issuer, in consultation with the designated primary care
provider or specialist and the individual (or the
individual's designee), and
(ii) in accordance with applicable quality assurance and
utilization review standards of the plan or issuer.

Nothing in this subsection shall be construed as preventing
such a treatment plan for an individual from requiring a
specialist to provide the primary care provider with regular
updates on the specialty care provided, as well as all
necessary medical information.

[[Page H6384]]

(D) Referrals to participating providers.--A group health
plan or health insurance issuer is not required under
subparagraph (A) to provide for a referral to a specialist
that is not a participating provider, unless the plan or
issuer does not have an appropriate specialist that is
available and accessible to treat the individual's condition
and that is a participating provider with respect to such
treatment.
(E) Treatment of nonparticipating providers.--If a plan or
issuer refers an individual to a nonparticipating specialist
pursuant to subparagraph (A), services provided pursuant to
the approved treatment plan (if any) shall be provided at no
additional cost to the individual beyond what the individual
would otherwise pay for services received by such a
specialist that is a participating provider.
(2) Specialists as primary care providers.--
(A) In general.--A group health plan, or a health insurance
issuer, in connection with the provision of health insurance
coverage, shall have a procedure by which an individual who
is a participant, beneficiary, or enrollee and who has an
ongoing special condition (as defined in subparagraph (C))
may receive a referral to a specialist for such condition who
shall be responsible for and capable of providing and
coordinating the individual's primary and specialty care. If
such an individual's care would most appropriately be
coordinated by such a specialist, such plan or issuer shall
refer the individual to such specialist.
(B) Treatment as primary care provider.--Such specialist
shall be permitted to treat the individual without a referral
from the individual's primary care provider and may authorize
such referrals, procedures, tests, and other medical services
as the individual's primary care provider would otherwise be
permitted to provide or authorize, subject to the terms of
the treatment plan (referred to in paragraph (1)(C)(i)).
(C) Ongoing special condition defined.--In this paragraph,
the term ``special condition'' means a condition or disease
that--
(i) is life-threatening, degenerative, or disabling, and
(ii) requires specialized medical care over a prolonged
period of time.
(D) Terms of referral.--The provisions of subparagraphs (C)
through (E) of paragraph (1) apply with respect to referrals
under subparagraph (A) of this paragraph in the same manner
as they apply to referrals under paragraph (1)(A).
(3) Standing referrals.--
(A) In general.--A group health plan, and a health
insurance issuer in connection with the provision of health
insurance coverage, shall have a procedure by which an
individual who is a participant, beneficiary, or enrollee and
who has a condition that requires ongoing care from a
specialist may receive a standing referral to such specialist
for treatment of such condition. If the plan or issuer, or if
the primary care provider in consultation with the medical
director of the plan or issuer and the specialist (if any),
determines that such a standing referral is appropriate, the
plan or issuer shall make such a referral to such a
specialist.
(B) Terms of referral.--The provisions of subparagraphs (C)
through (E) of paragraph (1) apply with respect to referrals
under subparagraph (A) of this paragraph in the same manner
as they apply to referrals under paragraph (1)(A).

SEC. 105. CONTINUITY OF CARE.

(a) In General.--
(1) Termination of provider.--If a contract between a group
health plan, or a health insurance issuer in connection with
the provision of health insurance coverage, and a health care
provider is terminated (as defined in paragraph (3)), or
benefits or coverage provided by a health care provider are
terminated because of a change in the terms of provider
participation in a group health plan, and an individual who
is a participant, beneficiary, or enrollee in the plan or
coverage is undergoing a course of treatment from the
provider at the time of such termination, the plan or issuer
shall--
(A) notify the individual on a timely basis of such
termination, and
(B) subject to subsection (c), permit the individual to
continue or be covered with respect to the course of
treatment with the provider during a transitional period
(provided under subsection (b)).
(2) Treatment of termination of contract with health
insurance issuer.--If a contract for the provision of health
insurance coverage between a group health plan and a health
insurance issuer is terminated and, as a result of such
termination, coverage of services of a health care provider
is terminated with respect to an individual, the provisions
of paragraph (1) (and the succeeding provisions of this
section) shall apply under the plan in the same manner as if
there had been a contract between the plan and the provider
that had been terminated, but only with respect to benefits
that are covered under the plan after the contract
termination.
(3) Termination.--In this section, the term ``terminated''
includes, with respect to a contract, the expiration or
nonrenewal of the contract, but does not include a
termination of the contract by the plan or issuer for failure
to meet applicable quality standards or for fraud.
(b) Transitional Period.--
(1) In general.--Except as provided in paragraphs (2)
through (4), the transitional period under this subsection
shall extend for at least 90 days from the date of the notice
described in subsection (a)(1)(A) of the provider's
termination.
(2) Institutional care.--The transitional period under this
subsection for institutional or inpatient care from a
provider shall extend until the discharge or termination of
the period of institutionalization and also shall include
institutional care provided within a reasonable time of the
date of termination of the provider status if the care was
scheduled before the date of the announcement of the
termination of the provider status under subsection (a)(1)(A)
or if the individual on such date was on an established
waiting list or otherwise scheduled to have such care.
(3) Pregnancy.--If--
(A) a participant, beneficiary, or enrollee has entered the
second trimester of pregnancy at the time of a provider's
termination of participation, and
(B) the provider was treating the pregnancy before date of
the termination,

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

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

SEC. 106. 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--

[[Page H6385]]

(A) the referring physician is a participating health care
professional and has concluded that the individual's
participation in such trial would be appropriate based upon
the individual meeting the conditions described in paragraph
(1); or
(B) the participant, beneficiary, or enrollee provides
medical and scientific information establishing that the
individual's participation in such trial would be appropriate
based upon the individual meeting the conditions described in
paragraph (1).
(c) Payment.--
(1) In general.--Under this section a group health plan or
health insurance issuer shall provide for payment for routine
patient costs described in subsection (a)(2) but is not
required to pay for costs of items and services that are
reasonably expected (as determined by the Secretary) to be
paid for by the sponsors of an approved clinical trial.
(2) Payment rate.--In the case of covered items and
services provided by--
(A) a participating provider, the payment rate shall be at
the agreed upon rate, or
(B) a nonparticipating provider, the payment rate shall be
at the rate the plan or issuer would normally pay for
comparable services under subparagraph (A).
(d) Approved Clinical Trial Defined.--
(1) In general.--In this section, the term ``approved
clinical trial'' means a clinical research study or clinical
investigation approved and funded (which may include funding
through in-kind contributions) by one or more of the
following:
(A) The National Institutes of Health.
(B) A cooperative group or center of the National
Institutes of Health.
(C) Either of the following if the conditions described in
paragraph (2) are met:
(i) The Department of Veterans Affairs.
(ii) The Department of Defense.
(2) Conditions for departments.--The conditions described
in this paragraph, for a study or investigation conducted by
a Department, are that the study or investigation has been
reviewed and approved through a system of peer review that
the Secretary determines--
(A) to be comparable to the system of peer review of
studies and investigations used by the National Institutes of
Health, and
(B) assures unbiased review of the highest scientific
standards by qualified individuals who have no interest in
the outcome of the review.
(e) Construction.--Nothing in this section shall be
construed to limit a plan's or issuer's coverage with respect
to clinical trials.

SEC. 107. ACCESS TO NEEDED PRESCRIPTION DRUGS.

(a) In General.--If a group health plan, or health
insurance issuer that offers health insurance coverage,
provides benefits with respect to prescription drugs but the
coverage limits such benefits to drugs included in a
formulary, the plan or issuer shall--
(1) ensure participation of participating physicians and
pharmacists in the development of the formulary;
(2) disclose to providers and, disclose upon request under
section 121(c)(6) to participants, beneficiaries, and
enrollees, the nature of the formulary restrictions; and
(3) consistent with the standards for a utilization review
program under section 115, provide for exceptions from the
formulary limitation when a non-formulary alternative is
medically indicated.
(b) Coverage of Approved Drugs and Medical Devices.--
(1) In general.--A group health plan (or 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. 108. ADEQUACY OF PROVIDER NETWORK.

(a) In General.--Each group health plan, and each health
insurance issuer offering health insurance coverage, that
provides benefits, in whole or in part, through participating
health care providers shall have (in relation to the
coverage) a sufficient number, distribution, and variety of
qualified participating health care providers to ensure that
all covered health care services, including specialty
services, will be available and accessible in a timely manner
to all participants, beneficiaries, and enrollees under the
plan or coverage.
(b) Treatment of Certain Providers.--The qualified health
care providers under subsection (a) may include Federally
qualified health centers, rural health clinics, migrant
health centers, and other essential community providers
located in the service area of the plan or issuer and shall
include such providers if necessary to meet the standards
established to carry out such subsection.

SEC. 109. NONDISCRIMINATION IN DELIVERY OF SERVICES.

(a) Application to Delivery of Services.--Subject to
subsection (b), a group health plan, and health insurance
issuer in relation to health insurance coverage, may not
discriminate against a participant, beneficiary, or enrollee
in the delivery of health care services consistent with the
benefits covered under the plan or coverage or as required by
law based on race, color, ethnicity, national origin,
religion, sex, age, mental or physical disability, sexual
orientation, genetic information, or source of payment.
(b) Construction.--Nothing in subsection (a) shall be
construed as relating to the eligibility to be covered, or
the offering (or guaranteeing the offer) of coverage, under a
plan or health insurance coverage, the application of any
pre-existing condition exclusion consistent with applicable
law, or premiums charged under such plan or coverage.

Subtitle B--Quality Assurance

SEC. 111. INTERNAL QUALITY ASSURANCE PROGRAM.

(a) Requirement.--A group health plan, and a health
insurance issuer that offers health insurance coverage, shall
establish and maintain an ongoing, internal quality assurance
and continuous quality improvement program that meets the
requirements of subsection (b).
(b) Program Requirements.--The requirements of this
subsection for a quality improvement program of a plan or
issuer are as follows:
(1) Administration.--The plan or issuer has a separate
identifiable unit with responsibility for administration of
the program.
(2) Written plan.--The plan or issuer has a written plan
for the program that is updated annually and that specifies
at least the following:
(A) The activities to be conducted.
(B) The organizational structure.
(C) The duties of the medical director.
(D) Criteria and procedures for the assessment of quality.
(3) Systematic review.--The program provides for systematic
review of the type of health services provided, consistency
of services provided with good medical practice, and patient
outcomes.
(4) Quality criteria.--The program--
(A) uses criteria that are based on performance and patient
outcomes where feasible and appropriate;
(B) includes criteria 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;
(C) includes methods for informing covered individuals of
the benefit of preventive care and what specific benefits
with respect to preventive care are covered under the plan or
coverage; and
(D) makes available to the public a description of the
criteria used under subparagraph (A).
(5) System for reporting.--The program has procedures for
reporting of possible quality concerns by providers and
enrollees and for remedial actions to correct quality
problems, including written procedures for responding to
concerns and taking appropriate corrective action.
(6) Data analysis.--The program provides, using data that
include the data collected under section 112, for an analysis
of the plan's or issuer's performance on quality measures.
(7) Drug utilization review.--The program provides for a
drug utilization review program in accordance with section
114.
(c) Deeming.--For purposes of subsection (a), the
requirements of--
(1) subsection (b) (other than paragraph (5)) are deemed to
be met with respect to a health insurance issuer that is a
qualified health maintenance organization (as defined in
section 1310(c) of the Public Health Service Act); or
(2) subsection (b) are deemed to be met with respect to a
health insurance issuer that is accredited by a national
accreditation organization that the Secretary certifies as
applying, as a condition of certification, standards at least
as stringent as those required for a quality improvement
program under subsection (b).
(d) Variation Permitted.--The Secretary may provide for
variations in the application of the requirements of this
section to group health plans and health insurance issuers
based upon differences in the delivery system among such
plans and issuers as the Secretary deems appropriate.

SEC. 112. COLLECTION OF STANDARDIZED DATA.

(a) In General.--A group health plan and a health insurance
issuer that offers health insurance coverage shall collect
uniform quality data that include a minimum uniform data set
described in subsection (b).
(b) Minimum Uniform Data Set.--The Secretary shall specify
(and may from time to time update) the data required to be
included

[[Page H6386]]

in the minimum uniform data set under subsection (a) and the
standard format for such data. Such data shall include at
least--
(1) aggregate utilization data;
(2) data on the demographic characteristics of
participants, beneficiaries, and enrollees;
(3) data on disease-specific and age-specific mortality
rates and (to the extent feasible) morbidity rates of such
individuals;
(4) data on satisfaction of such individuals, including
data on voluntary disenrollment and grievances; and
(5) data on quality indicators and health outcomes,
including, to the extent feasible and appropriate, data on
pediatric cases and on a gender-specific basis.
(c) Availability.--A summary of the data collected under
subsection (a) shall be disclosed under section 121(b)(9).
The Secretary shall be provided access to all the data so
collected.
(d) Variation Permitted.--The Secretary may provide for
variations in the application of the requirements of this
section to group health plans and health insurance issuers
based upon differences in the delivery system among such
plans and issuers as the Secretary deems appropriate.

SEC. 113. PROCESS FOR SELECTION OF PROVIDERS.

(a) In General.--A group health plan and a health insurance
issuer that offers health insurance coverage shall, if it
provides benefits through participating health care
professionals, have a written process for the selection of
participating health care professionals, including minimum
professional requirements.
(b) Verification of Background.--Such process shall include
verification of a health care provider's license and a
history of suspension or revocation.
(c) Restriction.--Such process shall not use a high-risk
patient base or location of a provider in an area with
residents with poorer health status as a basis for excluding
providers from participation.
(d) Nondiscrimination Based on Licensure.--
(1) In general.--Such process 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.
(2) Construction.--Paragraph (1) shall not be construed--
(A) as requiring the coverage under a plan or coverage of
particular benefits or services or to prohibit a plan or
issuer from including providers only to the extent necessary
to meet the needs of the plan's or issuer's participants,
beneficiaries, or enrollees or from establishing any measure
designed to maintain quality and control costs consistent
with the responsibilities of the plan or issuer; or
(B) to override any State licensure or scope-of-practice
law.
(e) General Nondiscrimination.--
(1) In general.--Subject to paragraph (2), such process
shall not discriminate with respect to selection of a health
care professional to be a participating health care provider,
or with respect to the terms and conditions of such
participation, based on the professional's race, color,
religion, sex, national origin, age, sexual orientation, or
disability (consistent with the Americans with Disabilities
Act of 1990).
(2) Rules.--The appropriate Secretary may establish such
definitions, rules, and exceptions as may be appropriate to
carry out paragraph (1), taking into account comparable
definitions, rules, and exceptions in effect under
employment-based nondiscrimination laws and regulations that
relate to each of the particular bases for discrimination
described in such paragraph.

SEC. 114. DRUG UTILIZATION PROGRAM.

A group health plan, and a health insurance issuer that
provides health insurance coverage, that includes benefits
for prescription drugs shall establish and maintain, as part
of its internal quality assurance and continuous quality
improvement program under section 111, a drug utilization
program which--
(1) encourages appropriate use of prescription drugs by
participants, beneficiaries, and enrollees and providers, and
(2) takes appropriate action to reduce the incidence of
improper drug use and adverse drug reactions and
interactions.

SEC. 115. STANDARDS FOR UTILIZATION REVIEW ACTIVITIES.

(a) Compliance With Requirements.--
(1) In general.--A group health plan, and a health
insurance issuer that provides health insurance coverage,
shall conduct utilization review activities in connection
with the provision of benefits under such plan or coverage
only in accordance with a utilization review program that
meets the requirements of this section.
(2) Use of outside agents.--Nothing in this section shall
be construed as preventing a group health plan or health
insurance issuer from arranging through a contract or
otherwise for persons or entities to conduct utilization
review activities on behalf of the plan or issuer, so long as
such activities are conducted in accordance with a
utilization review program that meets the requirements of
this section.
(3) Utilization review defined.--For purposes of this
section, the terms ``utilization review'' and ``utilization
review activities'' mean procedures used to monitor or
evaluate the 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 pursuant to the program
with the input of appropriate physicians. Such criteria shall
include written clinical review criteria described in section
111(b)(4)(B).
(B) Continuing use of standards in retrospective review.--
If a health care service has been specifically pre-authorized
or approved for an enrollee under such a program, the program
shall not, pursuant to retrospective review, revise or modify
the specific standards, criteria, or procedures used for the
utilization review for procedures, treatment, and services
delivered to the enrollee during the same course of
treatment.
(c) 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.
In this subsection, the term ``health care professional''
means a physician or other health care practitioner licensed,
accredited, or certified to perform specified health services
consistent with State law.
(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, to the extent required, who
have received appropriate training in the conduct of such
activities under the program.
(B) Peer review of sample of adverse clinical
determinations.--Such a program shall provide that clinical
peers (as defined in section 191(c)(2)) shall evaluate the
clinical appropriateness of at least a sample of adverse
clinical determinations.
(C) 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--
(i) provides incentives, direct or indirect, for such
persons to make inappropriate review decisions, or
(ii) is based, directly or indirectly, on the quantity or
type of adverse determinations rendered.
(D) Prohibition of conflicts.--Such a program shall not
permit a health care professional who provides 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 are reasonably accessible by
toll-free telephone during normal business hours to discuss
patient care and allow response to telephone requests, and
that appropriate provision is made to receive and respond
promptly to calls received during other hours.
(4) Limits on frequency.--Such a program shall not provide
for the performance of utilization review activities with
respect to a class of services furnished to an individual
more frequently than is reasonably required to assess whether
the services under review are medically necessary or
appropriate.
(5) Limitation on information requests.--Under such a
program, information shall be required to be provided by
health care providers only to the extent it is necessary to
perform the utilization review activity involved.
(6) Review of preliminary utilization review decision.--
Under such program a participant, beneficiary, or enrollee or
any provider acting on behalf of such an individual with the
individual's consent, who is dissatisfied with a preliminary
utilization review decision has the opportunity to discuss
the decision with, and have such decision reviewed by, the
medical director of the plan or issuer involved (or the
director's designee) who has the authority to reverse the
decision.
(d) Deadline for Determinations.--
(1) Prior authorization services.--Except as provided in
paragraph (2), in the case of a utilization review activity
involving the prior authorization of health care items and
services for an individual, the utilization review program
shall make a determination concerning such authorization, and
provide notice of the determination to the individual or the
individual's designee and the individual's health care
provider by telephone and in printed form, as soon as
possible in accordance with the medical exigencies of the
cases, and in no event later than 3 business days after the
date of receipt of information that is reasonably necessary
to make such determination.
(2) Continued care.--In the case of a utilization review
activity involving authorization for continued or extended
health care services for an individual, or additional
services for an individual undergoing a course of continued
treatment prescribed by a health care provider, the
utilization review program shall make a determination
concerning such

[[Page H6387]]

authorization, and provide notice of the determination to the
individual or the individual's designee and the individual's
health care provider by telephone and in printed form, as
soon as possible in accordance with the medical exigencies of
the cases, and in no event later than 1 business day after
the date of receipt of information that is reasonably
necessary to make such determination. Such notice shall
include, with respect to continued or extended health care
services, the number of extended services approved, the new
total of approved services, the date of onset of services,
and the next review date, if any.
(3) Previously provided services.--In the case of a
utilization review activity involving retrospective review of
health care services previously provided for an individual,
the utilization review program shall make a determination
concerning such services, and provide notice of the
determination to the individual or the individual's designee
and the individual's health care provider by telephone and in
printed form, within 30 days of the date of receipt of
information that is reasonably necessary to make such
determination.
(4) Reference to special rules for emergency services,
maintenance care, and post-stabilization care.--For waiver of
prior authorization requirements in certain cases involving
emergency services and maintenance care and post-
stabilization care, see subsections (a)(1) and (b) of section
101, respectively.
(e) Notice of Adverse Determinations.--
(1) In general.--Notice of an adverse determination under a
utilization review program shall be provided in printed form
and shall include--
(A) the reasons for the determination (including the
clinical rationale);
(B) instructions on how to initiate an appeal under section
132; and
(C) notice of the availability, upon request of the
individual (or the individual's designee) of the clinical
review criteria relied upon to make such determination.
(2) Specification of any additional information.--Such a
notice shall also specify what (if any) additional necessary
information must be provided to, or obtained by, the person
making the determination in order to make a decision on such
an appeal.

SEC. 116. HEALTH CARE QUALITY ADVISORY BOARD.

(a) Establishment.--The President shall establish an
advisory board to provide information to Congress and the
administration on issues relating to quality monitoring and
improvement in the health care provided under group health
plans and health insurance coverage.
(b) Number and Appointment.--The advisory board shall be
composed of the Secretary of Health and Human Services (or
the Secretary's designee), the Secretary of Labor (or the
Secretary's designee), and 20 additional members appointed by
the President, in consultation with the Majority and Minority
Leaders of the Senate and House of Representatives. The
members so appointed shall include individuals with expertise
in--
(1) consumer needs;
(2) education and training of health professionals;
(3) health care services;
(4) health plan management;
(5) health care accreditation, quality assurance,
improvement, measurement, and oversight;
(6) medical practice, including practicing physicians;
(7) prevention and public health; and
(8) public and private group purchasing for small and large
employers or groups.
(c) Duties.--The advisory board shall--
(1) identify, update, and disseminate measures of health
care quality for group health plans and health insurance
issuers, including network and non-network plans;
(2) advise the Secretary on the development and maintenance
of the minimum data set in section 112(b); and
(3) advise the Secretary on standardized formats for
information on group health plans and health insurance
coverage.
The measures identified under paragraph (1) may be used on a
voluntary basis by such plans and issuers. In carrying out
paragraph (1), the advisory board shall consult and cooperate
with national health care standard setting bodies which
define quality indicators, the Agency for Health Care Policy
and Research, the Institute of Medicine, and other public and
private entities that have expertise in health care quality.
(d) Report.--The advisory board shall provide an annual
report to Congress and the President on the quality of the
health care in the United States and national and regional
trends in health care quality. Such report shall include a
description of determinants of health care quality and
measurements of practice and quality variability within the
United States.
(e) Secretarial Consultation.--In serving on the advisory
board, the Secretaries of Health and Human Services and Labor
(or their designees) shall consult with the Secretaries
responsible for other Federal health insurance and health
care programs.
(f) Vacancies.--Any vacancy on the board shall be filled in
such manner as the original appointment. Members of the board
shall serve without compensation but shall be reimbursed for
travel, subsistence, and other necessary expenses incurred by
them in the performance of their duties. Administrative
support, scientific support, and technical assistance for the
advisory board shall be provided by the Secretary of Health
and Human Services.
(g) Continuation.--Section 14(a)(2)(B) of the Federal
Advisory Committee Act (5 U.S.C. App.; relating to the
termination of advisory committees) shall not apply to the
advisory board.

Subtitle C--Patient Information

SEC. 121. PATIENT INFORMATION.

(a) Disclosure Requirement.--
(1) Group health plans.--A group health plan shall--
(A) provide to participants and beneficiaries at the time
of initial coverage under the plan (or the effective date of
this section, in the case of individuals who are participants
or beneficiaries as of such date), and at least annually
thereafter, the information described in subsection (b) in
printed form;
(B) provide to participants and beneficiaries, within a
reasonable period (as specified by the appropriate Secretary)
before or after the date of significant changes in the
information described in subsection (b), information in
printed form on such significant changes; and
(C) upon request, make available to participants and
beneficiaries, the applicable authority, and prospective
participants and beneficiaries, the information described in
subsection (b) or (c) in printed form.
(2) Health insurance issuers.--A health insurance issuer in
connection with the provision of health insurance coverage
shall--
(A) provide to individuals enrolled under such coverage at
the time of enrollment, and at least annually thereafter, the
information described in subsection (b) in printed form;
(B) provide to enrollees, within a reasonable period (as
specified by the appropriate Secretary) before or after the
date of significant changes in the information described in
subsection (b), information in printed form on such
significant changes; and
(C) upon request, make available to the applicable
authority, to individuals who are prospective enrollees, and
to the public the information described in subsection (b) or
(c) in printed form.
(b) Information Provided.--The information described in
this subsection with respect to a group health plan or health
insurance coverage offered by a health insurance issuer
includes the following:
(1) Service area.--The service area of the plan or issuer.
(2) Benefits.--Benefits offered under the plan or coverage,
including--
(A) covered benefits, including benefit limits and coverage
exclusions;
(B) cost sharing, such as deductibles, coinsurance, and
copayment amounts, including any liability for balance
billing, any maximum limitations on out of pocket expenses,
and the maximum out of pocket costs for services that are
provided by non participating providers or that are furnished
without meeting the applicable utilization review
requirements;
(C) the extent to which benefits may be obtained from
nonparticipating providers;
(D) the extent to which a participant, beneficiary, or
enrollee may select from among participating providers and
the types of providers participating in the plan or issuer
network;
(E) process for determining experimental coverage; and
(F) use of a prescription drug formulary.
(3) Access.--A description of the following:
(A) The number, mix, and distribution of providers under
the plan or coverage.
(B) Out-of-network coverage (if any) provided by the plan
or coverage.
(C) Any point-of-service option (including any supplemental
premium or cost-sharing for such option).
(D) The procedures for participants, beneficiaries, and
enrollees to select, access, and change participating primary
and specialty providers.
(E) The rights and procedures for obtaining referrals
(including standing referrals) to participating and
nonparticipating providers.
(F) The name, address, and telephone number of
participating health care providers and an indication of
whether each such provider is available to accept new
patients.
(G) Any limitations imposed on the selection of qualifying
participating health care providers, including any
limitations imposed under section 103(b)(2).
(H) How the plan or issuer addresses the needs of
participants, beneficiaries, and enrollees and others who do
not speak English or who have other special communications
needs in accessing providers under the plan or coverage,
including the provision of information described in this
subsection and subsection (c) to such individuals and
including the provision of information in a language other
than English if 5 percent of the number of participants,
beneficiaries, and enrollees communicate in that language
instead of English.
(4) Out-of-area coverage.--Out-of-area coverage provided by
the plan or issuer.
(5) Emergency coverage.--Coverage of emergency services,
including--
(A) the appropriate use of emergency services, including
use of the 911 telephone system or its local equivalent in
emergency situations and an explanation of what constitutes
an emergency situation;
(B) the process and procedures of the plan or issuer for
obtaining emergency services; and
(C) the locations of (i) emergency departments, and (ii)
other settings, in which plan physicians and hospitals
provide emergency services and post-stabilization care.

[[Page H6388]]

(6) Percentage of premiums used for benefits (loss-
ratios).--In the case of health insurance coverage only (and
not with respect to group health plans that do not provide
coverage through health insurance coverage), a description of
the overall loss-ratio for the coverage (as defined in
accordance with rules established or recognized by the
Secretary of Health and Human Services).
(7) Prior authorization rules.--Rules regarding prior
authorization or other review requirements that could result
in noncoverage or nonpayment.
(8) Grievance and appeals procedures.--All appeal or
grievance rights and procedures under the plan or coverage,
including the method for filing grievances and the time
frames and circumstances for acting on grievances and
appeals, who is the applicable authority with respect to the
plan or issuer, and the availability of assistance through an
ombudsman to individuals in relation to group health plans
and health insurance coverage.
(9) Quality assurance.--A summary description of the data
on quality collected under section 112(a), including a
summary description of the data on satisfaction of
participants, beneficiaries, and enrollees (including data on
individual voluntary disenrollment and grievances and
appeals) described in section 112(b)(4).
(10) Summary of provider financial incentives.--A summary
description of the information on the types of financial
payment incentives (described in section 1852(j)(4) of the
Social Security Act) provided by the plan or issuer under the
coverage.
(11) Information on issuer.--Notice of appropriate mailing
addresses and telephone numbers to be used by participants,
beneficiaries, and enrollees in seeking information or
authorization for treatment.
(12) Availability of information on request.--Notice that
the information described in subsection (c) is available upon
request.
(c) Information Made Available Upon Request.--The
information described in this subsection is the following:
(1) Utilization review activities.--A description of
procedures used and requirements (including circumstances,
time frames, and appeal rights) under any utilization review
program under section 115, including under any drug formulary
program under section 107.
(2) Grievance and appeals information.--Information on the
number of grievances and appeals and on the disposition in
the aggregate of such matters.
(3) Method of physician compensation.--An overall summary
description as to the method of compensation of participating
physicians, including information on the types of financial
payment incentives (described in section 1852(j)(4) of the
Social Security Act) provided by the plan or issuer under the
coverage.
(4) Specific information on credentials of participating
providers.--In the case of each participating provider, a
description of the credentials of the provider.
(5) Confidentiality policies and procedures.--A description
of the policies and procedures established to carry out
section 122.
(6) Formulary restrictions.--A description of the nature of
any drug formula restrictions.
(7) Participating provider list.--A list of current
participating health care providers.
(d) Form of Disclosure.--
(1) Uniformity.--Information required to be disclosed under
this section shall be provided in accordance with uniform,
national reporting standards specified by the Secretary,
after consultation with applicable State authorities, so that
prospective enrollees may compare the attributes of different
issuers and coverage offered within an area.
(2) Information into handbook.--Nothing in this section
shall be construed as preventing a group health plan or
health insurance issuer from making the information under
subsections (b) and (c) available to participants,
beneficiaries, and enrollees through an enrollee handbook or
similar publication.
(3) Updating participating provider information.--The
information on participating health care providers described
in subsection (b)(3)(C) shall be updated within such
reasonable period as determined appropriate by the Secretary.
Nothing in this section shall prevent an issuer from changing
or updating other information made available under this
section.
(e) Construction.--Nothing in this section shall be
construed as requiring public disclosure of individual
contracts or financial arrangements between a group health
plan or health insurance issuer and any provider.

SEC. 122. PROTECTION OF PATIENT CONFIDENTIALITY.

Insofar as a group health plan, or a health insurance
issuer that offers health insurance coverage, maintains
medical records or other health information regarding
participants, beneficiaries, and enrollees, the plan or
issuer shall establish procedures--
(1) to safeguard the privacy of any individually
identifiable enrollee information;
(2) to maintain such records and information in a manner
that is accurate and timely, and
(3) to assure timely access of such individuals to such
records and information.

SEC. 123. HEALTH INSURANCE OMBUDSMEN.

(a) In General.--Each State that obtains a grant under
subsection (c) shall provide for creation and operation of a
Health Insurance Ombudsman through a contract with a not-for-
profit organization that operates independent of group health
plans and health insurance issuers. Such Ombudsman shall be
responsible for at least the following:
(1) To assist consumers in the State in choosing among
health insurance coverage or among coverage options offered
within group health plans.
(2) To provide counseling and assistance to enrollees
dissatisfied with their treatment by health insurance issuers
and group health plans in regard to such coverage or plans
and with respect to grievances and appeals regarding
determinations under such coverage or plans.
(b) Federal Role.--In the case of any State that does not
provide for such an Ombudsman under subsection (a), the
Secretary shall provide for the creation and operation of a
Health Insurance Ombudsman through a contract with a not-for-
profit organization that operates independent of group health
plans and health insurance issuers and that is responsible
for carrying out with respect to that State the functions
otherwise provided under subsection (a) by a Health Insurance
Ombudsman.
(c) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary of Health and Human
Services such amounts as may be necessary to provide for
grants to States for contracts for Health Insurance Ombudsmen
under subsection (a) or contracts for such Ombudsmen under
subsection (b).
(d) Construction.--Nothing in this section shall be
construed to prevent the use of other forms of enrollee
assistance.

Subtitle D--Grievance and Appeals Procedures

SEC. 131. ESTABLISHMENT OF GRIEVANCE PROCESS.

(a) Establishment of Grievance System.--
(1) In general.--A group health plan, and a health
insurance issuer in connection with the provision of health
insurance coverage, shall establish and maintain a system to
provide for the presentation and resolution of oral and
written grievances brought by individuals who are
participants, beneficiaries, or enrollees, or health care
providers or other individuals acting on behalf of an
individual and with the individual's consent, regarding any
aspect of the plan's or issuer's services.
(2) Scope.--The system shall include grievances regarding
access to and availability of services, quality of care,
choice and accessibility of providers, network adequacy, and
compliance with the requirements of this title.
(b) Grievance System.--Such system shall include the
following components with respect to individuals who are
participants, beneficiaries, or enrollees:
(1) Written notification to all such individuals and
providers of the telephone numbers and business addresses of
the plan or issuer personnel responsible for resolution of
grievances and appeals.
(2) A system to record and document, over a period of at
least 3 previous years, all grievances and appeals made and
their status.
(3) A process providing for timely processing and
resolution of grievances.
(4) Procedures for follow-up action, including the methods
to inform the person making the grievance of the resolution
of the grievance.
(5) Notification to the continuous quality improvement
program under section 111(a) of all grievances and appeals
relating to quality of care.

SEC. 132. INTERNAL APPEALS OF ADVERSE DETERMINATIONS.

(a) Right of Appeal.--
(1) In general.--A participant or beneficiary in a group
health plan, and an enrollee in health insurance coverage
offered by a health insurance issuer, and any provider or
other person acting on behalf of such an individual with the
individual's consent, may appeal any appealable decision (as
defined in paragraph (2)) under the procedures described in
this section and (to the extent applicable) section 133. Such
individuals and providers shall be provided with a written
explanation of the appeal process and the determination upon
the conclusion of the appeals process and as provided in
section 121(b)(8).
(2) Appealable decision defined.--In this section, the term
``appealable decision'' means any of the following:
(A) Denial, reduction, or termination of, or failure to
provide or make payment (in whole or in part) for, a benefit,
including a failure to cover an item or service for which
benefits are otherwise provided because it is determined to
be experimental or investigational or not medically necessary
or appropriate.
(B) Failure to provide coverage of emergency services or
reimbursement of maintenance care or post-stabilization care
under section 101.
(C) Failure to provide a choice of provider under section
103.
(D) Failure to provide qualified health care providers
under section 103.
(E) Failure to provide access to specialty and other care
under section 104.
(F) Failure to provide continuation of care under section
105.
(G) Failure to provide coverage of routine patient costs in
connection with an approval clinical trial under section 106.
(H) Failure to provide access to needed drugs under section
107(a)(3) or 107(b).

[[Page H6389]]

(I) Discrimination in delivery of services in violation of
section 109.
(J) An adverse determination under a utilization review
program under section 115.
(K) The imposition of a limitation that is prohibited under
section 151.
(b) Internal Appeal Process.--
(1) In general.--Each group health plan and health
insurance issuer shall establish and maintain an internal
appeal process under which any participant, beneficiary,
enrollee, or provider acting on behalf of such an individual
with the individual's consent, who is dissatisfied with any
appealable decision has the opportunity to appeal the
decision through an internal appeal process. The appeal may
be communicated orally.
(2) Conduct of review.--
(A) In general.--The process shall include a review of the
decision by a physician or other health care professional (or
professionals) who has been selected by the plan or issuer
and who has not been involved in the appealable decision at
issue in the appeal.
(B) Availability and participation of clinical peers.--The
individuals conducting such review shall include one or more
clinical peers (as defined in section 191(c)(2)) who have not
been involved in the appealable decision at issue in the
appeal.
(3) Deadline.--
(A) In general.--Subject to subsection (c), the plan or
issuer shall conclude each appeal as soon as possible after
the time of the receipt of the appeal in accordance with
medical exigencies of the case involved, but in no event
later than--
(i) 72 hours after the time of receipt of an expedited
appeal, and
(ii) except as provided in subparagraph (B), 30 business
days after such time (or, if the participant, beneficiary, or
enrollee supplies additional information that was not
available to the plan or issuer at the time of the receipt of
the appeal, after the date of supplying such additional
information) in the case of all other appeals.
(B) Extension.--In the case of an appeal that does not
relate to a decision regarding an expedited appeal and that
does not involve medical exigencies, if a group health plan
or health insurance issuer is unable to conclude the appeal
within the time period provided under subparagraph (A)(ii)
due to circumstances beyond the control of the plan or
issuer, the deadline shall be extended for up to an
additional 10 business days if the plan or issuer provides,
on or before 10 days before the deadline otherwise
applicable, written notice to the participant, beneficiary,
or enrollee and the provider involved of the extension and
the reasons for the extension.
(4) Notice.--If a plan or issuer denies an appeal, the plan
or issuer shall provide the participant, beneficiary, or
enrollee and provider involved with notice in printed form of
the denial and the reasons therefore, together with a notice
in printed form of rights to any further appeal.
(c) Expedited Review Process.--
(1) In general.--A group health plan, and a health
insurance issuer, shall establish procedures in writing for
the expedited consideration of appeals under subsection (b)
in situations in which the application of the normal
timeframe for making a determination could seriously
jeopardize the life or health of the participant,
beneficiary, or enrollee or such an individual's ability to
regain maximum function.
(2) Process.--Under such procedures--
(A) the request for expedited appeal may be submitted
orally or in writing by an individual or provider who is
otherwise entitled to request the appeal;
(B) all necessary information, including the plan's or
issuer's decision, shall be transmitted between the plan or
issuer and the requester by telephone, facsimile, or other
similarly expeditious available method; and
(C) the plan or issuer shall expedite the appeal if the
request for an expedited appeal is submitted under
subparagraph (A) by a physician and the request indicates
that the situation described in paragraph (1) exists.
(d) Direct Use of Further Appeals.--In the event that the
plan or issuer fails to comply with any of the deadlines for
completion of appeals under this section or in the event that
the plan or issuer for any reason expressly waives its rights
to an internal review of an appeal under subsection (b), the
participant, beneficiary, or enrollee involved and the
provider involved shall be relieved of any obligation to
complete the appeal involved and may, at such an individual's
or provider's option, proceed directly to seek further appeal
through any applicable external appeals process.

SEC. 133. EXTERNAL APPEALS OF ADVERSE DETERMINATIONS.

(a) Right to External Appeal.--
(1) In general.--A group health plan, and a health
insurance issuer offering group health insurance coverage,
shall provide for an external appeals process that meets the
requirements of this section in the case of an externally
appealable decision described in paragraph (2). The
appropriate Secretary shall establish standards to carry out
such requirements.
(2) Externally appealable decision defined.--For purposes
of this section, the term ``externally appealable decision''
means an appealable decision (as defined in section
132(a)(2)) if--
(A) the amount involved exceeds a significant threshold; or
(B) the patient's life or health is jeopardized as a
consequence of the decision.
Such term does not include a denial of coverage for services
that are specifically listed in plan or coverage documents as
excluded from coverage.
(3) Exhaustion of internal appeals process.--A plan or
issuer may condition the use of an external appeal process in
the case of an externally appealable decision upon completion
of the internal review process provided under section 132,
but only if the decision is made in a timely basis consistent
with the deadlines provided under this subtitle.
(b) General Elements of External Appeals Process.--
(1) Contract with qualified external appeal entity.--
(A) Contract requirement.--Subject to subparagraph (B), the
external appeal process under this section of a plan or
issuer shall be conducted under a contract between the plan
or issuer and one or more qualified external appeal entities
(as defined in subsection (c)).
(B) Restrictions on qualified external appeal entity.--
(i) By state for health insurance issuers.--With respect to
health insurance issuers 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 such a manner as to assure
an unbiased determination.
(ii) By federal government for group health plans.--With
respect to group health plans, the appropriate Secretary may
exercise the same authority as a State may exercise with
respect to health insurance issuers under clause (i). Such
authority may include requiring the use of the qualified
external appeal entity designated or selected under such
clause.
(iii) Limitation on plan or issuer selection.--If an
applicable authority permits more than one entity to qualify
as a qualified external appeal entity with respect to a group
health plan or health insurance issuer and the plan or issuer
may select among such qualified entities, the applicable
authority--

(I) shall assure that the selection process will not create
any incentives for external appeal entities to make a
decision in a biased manner, and
(II) shall implement procedures for auditing a sample of
decisions by such entities to assure that no such decisions
are made in a biased manner.

(C) Other terms and conditions.--The terms and conditions
of a contract under this paragraph shall be consistent with
the standards the appropriate Secretary shall establish to
assure there is no real or apparent conflict of interest in
the conduct of external appeal activities. Such contract
shall provide that the direct costs of the process (not
including costs of representation of a participant,
beneficiary, or enrollee) shall be paid by the plan or
issuer, and not by the participant, beneficiary, or enrollee.
(2) Elements of process.--An external appeal process shall
be conducted consistent with standards established by the
appropriate Secretary that include at least the following:
(A) Fair process; de novo determination.--The process shall
provide for a fair, de novo determination.
(B) Determination concerning externally appealable
decisions.--A qualified external appeal entity shall
determine whether a decision is an externally appealable
decision and related decisions, including--
(i) whether such a decision involves an expedited appeal;
(ii) the appropriate deadlines for internal review process
required due to medical exigencies in a case; and
(iii) whether such a process has been completed.
(C) Opportunity to submit evidence, have representation,
and make oral presentation.--Each party to an externally
appealable decision--
(i) may submit and review evidence related to the issues in
dispute,
(ii) may use the assistance or representation of one or
more individuals (any of whom may be an attorney), and
(iii) may make an oral presentation.
(D) Provision of information.--The plan or issuer involved
shall provide timely access to all its records relating to
the matter of the externally appealable decision and to all
provisions of the plan or health insurance coverage
(including any coverage manual) relating to the matter.
(E) Timely decisions.--A determination by the external
appeal entity on the decision shall--
(i) be made orally or in writing and, if it is made orally,
shall be supplied to the parties in writing as soon as
possible;
(ii) be binding on the plan or issuer;
(iii) be made in accordance with the medical exigencies of
the case involved, but in no event later than 60 days (or 72
hours in the case of an expedited appeal) from the date of
completion of the filing of notice of external appeal of the
decision;
(iv) state, in layperson's language, the basis for the
determination, including, if relevant, any basis in the terms
or conditions of the plan or coverage; and
(v) inform the participant, beneficiary, or enrollee of the
individual's rights to seek further review by the courts (or
other process) of the external appeal determination.
(c) Qualifications of External Appeal Entities.--

[[Page H6390]]

(1) In general.--For purposes of this section, the term
``qualified external appeal entity'' means, in relation to a
plan or issuer, an entity (which may be a governmental
entity) that is certified under paragraph (2) as meeting the
following requirements:
(A) There is no real or apparent conflict of interest that
would impede the entity conducting external appeal activities
independent of the plan or issuer.
(B) The entity conducts external appeal activities through
clinical peers.
(C) The entity has sufficient medical, legal, and other
expertise and sufficient staffing to conduct external appeal
activities for the plan or issuer on a timely basis
consistent with subsection (b)(3)(E).
(D) The entity meets such other requirements as the
appropriate Secretary may impose.
(2) Certification of external appeal entities.--
(A) In general.--In order to be treated as a qualified
external appeal entity with respect to--
(i) a group health plan, the entity must be certified (and,
in accordance with subparagraph (B), periodically
recertified) as meeting the requirements of paragraph (1) by
the Secretary of Labor (or under a process recognized or
approved by the Secretary of Labor); or
(ii) a health insurance issuer operating in a State, the
entity must be certified (and, in accordance with
subparagraph (B), periodically recertified) as meeting such
requirements by the applicable State authority (or, if the
States has not established an adequate certification and
recertification process, by the Secretary of Health and Human
Services, or under a process recognized or approved by such
Secretary).
(B) Recertification process.--The appropriate Secretary
shall develop standards for the recertification of external
appeal entities. Such standards shall include a specification
of--
(i) the information required to be submitted as a condition
of recertification on the entity's performance of external
appeal activities, which information shall include the number
of cases reviewed, a summary of the disposition of those
cases, the length of time in making determinations on those
cases, and such information as may be necessary to assure the
independence of the entity from the plans or issuers for
which external appeal activities are being conducted; and
(ii) the periodicity which recertification will be
required.
(d) Continuing Legal Rights of Enrollees.--Nothing in this
title shall be construed as removing any legal rights of
participants, beneficiaries, enrollees, and others under
State or Federal law, including the right to file judicial
actions to enforce rights.

Subtitle E--Protecting the Doctor-Patient Relationship

SEC. 141. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL
COMMUNICATIONS.

(a) Prohibition.--
(1) 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 restrict the provider from engaging in
medical communications with the provider's patient.
(2) Nullification.--Any contract provision or agreement
described in paragraph (1) shall be null and void.
(b) Rules of Construction.--Nothing in this section shall
be construed--
(1) to prohibit the enforcement, as part of a contract or
agreement to which a health care provider is a party, of any
mutually agreed upon terms and conditions, including terms
and conditions requiring a health care provider to
participate in, and cooperate with, all programs, policies,
and procedures developed or operated by a group health plan
or health insurance issuer to assure, review, or improve the
quality and effective utilization of health care services (if
such utilization is according to guidelines or protocols that
are based on clinical or scientific evidence and the
professional judgment of the provider) but only if the
guidelines or protocols under such utilization do not
prohibit or restrict medical communications between providers
and their patients; or
(2) to permit a health care provider to misrepresent the
scope of benefits covered under the group health plan or
health insurance coverage or to otherwise require a group
health plan health insurance issuer to reimburse providers
for benefits not covered under the plan or coverage.
(c) Medical Communication Defined.--In this section:
(1) In general.--The term ``medical communication'' means
any communication made by a health care provider with a
patient of the health care provider (or the guardian or legal
representative of such patient) with respect to--
(A) the patient's health status, medical care, or treatment
options;
(B) any utilization review requirements that may affect
treatment options for the patient; or
(C) any financial incentives that may affect the treatment
of the patient.
(2) Misrepresentation.--The term ``medical communication''
does not include a communication by a health care provider
with a patient of the health care provider (or the guardian
or legal representative of such patient) if the communication
involves a knowing or willful misrepresentation by such
provider.

SEC. 142. PROHIBITION AGAINST TRANSFER OF INDEMNIFICATION OR
IMPROPER INCENTIVE ARRANGEMENTS.

(a) Prohibition of Transfer of Indemnification.--
(1) In general.--No contract or agreement between a group
health plan or health insurance issuer (or any agent acting
on behalf of such a plan or issuer) and a health care
provider shall contain any provision purporting to transfer
to the health care provider by indemnification or otherwise
any liability relating to activities, actions, or omissions
of the plan, issuer, or agent (as opposed to the provider).
(2) Nullification.--Any contract or agreement provision
described in paragraph (1) shall be null and void.
(b) Prohibition of Improper Physician Incentive Plans.--
(1) In general.--A group health plan and a health insurance
issuer offering health insurance coverage may not operate any
physician incentive plan (as defined in subparagraph (B) of
section 1876(i)(8) of the Social Security Act) unless the
requirements described in subparagraph (A) of such section
are met with respect to such a plan.
(2) Application.--For purposes of carrying out paragraph
(1), any reference in section 1876(i)(8) of the Social
Security Act to the Secretary, an eligible organization, or
an individual enrolled with the organization shall be treated
as a reference to the applicable authority, a group health
plan or health insurance issuer, respectively, and a
participant, beneficiary, or enrollee with the plan or
organization, respectively.

SEC. 143. ADDITIONAL RULES REGARDING PARTICIPATION OF HEALTH
CARE PROFESSIONALS.

(a) Procedures.--Insofar as a group health plan, or health
insurance issuer that offers health insurance coverage,
provides benefits through participating health care
professionals, the plan or issuer shall establish reasonable
procedures relating to the participation (under an agreement
between a professional and the plan or issuer) of such
professionals under the plan or coverage. Such procedures
shall include--
(1) providing notice of the rules regarding participation;
(2) providing written notice of participation decisions
that are adverse to professionals; and
(3) providing a process within the plan or issuer for
appealing such adverse decisions, including the presentation
of information and views of the professional regarding such
decision.
(b) Consultation in Medical Policies.--A group health plan,
and health insurance issuer that offers health insurance
coverage, shall consult with participating physicians (if
any) regarding the plan's or issuer's medical policy,
quality, and medical management procedures.

SEC. 144. PROTECTION FOR PATIENT ADVOCACY.

(a) Protection for Use of Utilization Review and Grievance
Process.--A group health plan, and a health insurance issuer
with respect to the provision of health insurance coverage,
may not retaliate against a participant, beneficiary,
enrollee, or health care provider based on the participant's,
beneficiary's, enrollee's or provider's use of, or
participation in, a utilization review process or a grievance
process of the plan or issuer (including an internal or
external review or appeal process) under this title.
(b) Protection for Quality Advocacy by Health Care
Professionals.--
(1) In general.--A group health plan or health insurance
issuer may not retaliate or discriminate against a protected
health care professional because the professional in good
faith--
(A) discloses information relating to the care, services,
or conditions affecting one or more participants,
beneficiaries, or enrollees of the plan or issuer to an
appropriate public regulatory agency, an appropriate private
accreditation body, or appropriate management personnel of
the plan or issuer; or
(B) initiates, cooperates, or otherwise participates in an
investigation or proceeding by such an agency with respect to
such care, services, or conditions.

If an institutional health care provider is a participating
provider with such a plan or issuer or otherwise receives
payments for benefits provided by such a plan or issuer, the
provisions of the previous sentence shall apply to the
provider in relation to care, services, or conditions
affecting one or more patients within an institutional health
care provider in the same manner as they apply to the plan or
issuer in relation to care, services, or conditions provided
to one or more participants, beneficiaries, or enrollees; and
for purposes of applying this sentence, any reference to a
plan or issuer is deemed a reference to the institutional
health care provider.
(2) Good faith action.--For purposes of paragraph (1), a
protected health care professional is considered to be acting
in good faith with respect to disclosure of information or
participation if, with respect to the information disclosed
as part of the action--
(A) the disclosure is made on the basis of personal
knowledge and is consistent with that degree of learning and
skill ordinarily possessed by health care professionals with

[[Page H6391]]

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 or 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 F--Promoting Good Medical Practice

SEC. 151. PROMOTING GOOD MEDICAL PRACTICE.

(a) Prohibiting Arbitrary Limitations or Conditions for the
Provision of Services.--
(1) In general.--A group health plan, and a health
insurance issuer in connection with the provision of health
insurance coverage, may not arbitrarily interfere with or
alter the decision of the treating physician regarding the
manner or setting in which particular services are delivered
if the services are medically necessary or appropriate for
treatment or diagnosis to the extent that such treatment or
diagnosis is otherwise a covered benefit.
(2) Construction.--Paragraph (1) shall not be construed as
prohibiting a plan or issuer from limiting the delivery of
services to one or more health care providers within a
network of such providers.
(3) Manner or setting defined.--In paragraph (1), the term
``manner or setting'' means the location of treatment, such
as whether treatment is provided on an inpatient or
outpatient basis, and the duration of treatment, such as the
number of days in a hospital, Such term does not include the
coverage of a particular service or treatment.
(b) No Change in Coverage.--Subsection (a) shall not be
construed as requiring coverage of particular services the
coverage of which is otherwise not covered under the terms of
the plan or coverage or from conducting utilization review
activities consistent with this subsection.
(c) Medical Necessity or Appropriateness Defined.--In
subsection (a), the term ``medically necessary or
appropriate'' means, with respect to a service or benefit, a
service or benefit which is consistent with generally
accepted principles of professional medical practice.

SEC. 152. STANDARDS RELATING TO BENEFITS FOR CERTAIN BREAST
CANCER TREATMENT.

(a) Requirements for Minimum Hospital Stay Following
Mastectomy or Lymph Node Dissection.--
(1) In general.--A group health plan, and a health
insurance issuer offering group health insurance coverage,
may not--
(A) except as provided in paragraph (2)--
(i) restrict benefits for any hospital length of stay in
connection with a mastectomy for the treatment of breast
cancer to less than 48 hours, or
(ii) restrict benefits for any hospital length of stay in
connection with a lymph node dissection for the treatment of
breast cancer to less than 24 hours, or
(B) require that a provider obtain authorization from the
plan or the issuer for prescribing any length of stay
required under subparagraph (A) (without regard to paragraph
(2)).
(2) Exception.--Paragraph (1)(A) shall not apply in
connection with any group health plan or health insurance
issuer in any case in which the decision to discharge the
woman involved prior to the expiration of the minimum length
of stay otherwise required under paragraph (1)(A) is made by
the attending provider in consultation with the woman or in a
case involving a partial mastectomy without lymph node
dissection.
(b) Prohibitions.--A group health plan, and a health
insurance issuer offering group health insurance coverage in
connection with a group health plan, may not--
(1) deny to a woman eligibility, or continued eligibility,
to enroll or to renew coverage under the terms of the plan,
solely for the purpose of avoiding the requirements of this
section;
(2) provide monetary payments or rebates to women to
encourage such women to accept less than the minimum
protections available under this section;
(3) penalize or otherwise reduce or limit the reimbursement
of an attending provider because such provider provided care
to an individual participant or beneficiary in accordance
with this section;
(4) provide incentives (monetary or otherwise) to an
attending provider to induce such provider to provide care to
an individual participant or beneficiary in a manner
inconsistent with this section; or
(5) subject to subsection (c)(3), restrict benefits for any
portion of a period within a hospital length of stay required
under subsection (a) in a manner which is less favorable than
the benefits provided for any preceding portion of such stay.
(c) Rules of Construction.--
(1) Nothing in this section shall be construed to require a
woman who is a participant or beneficiary--
(A) to undergo a mastectomy or lymph node dissection in a
hospital; or
(B) to stay in the hospital for a fixed period of time
following a mastectomy or lymph node dissection.
(2) This section shall not apply with respect to any group
health plan, or any group health insurance coverage offered
by a health insurance issuer, which does not provide benefits
for hospital lengths of stay in connection with a mastectomy
or lymph node dissection for the treatment of breast cancer.
(3) Nothing in this section shall be construed as
preventing a group health plan or issuer from imposing
deductibles, coinsurance, or other cost-sharing in relation
to benefits for hospital lengths of stay in connection with a
mastectomy or lymph node dissection for the treatment of
breast cancer under the plan (or under health insurance
coverage offered in connection with a group health plan),
except that such coinsurance or other cost-sharing for any
portion of a period within a hospital length of stay required
under subsection (a) may not be greater than such coinsurance
or cost-sharing for any preceding portion of such stay.
(d) Level and Type of Reimbursements.--Nothing in this
section shall be construed to prevent a group health plan or
a health insurance issuer offering group health insurance
coverage from negotiating the level and type of reimbursement
with a provider for care provided in accordance with this
section.
(e) Exception for Health Insurance Coverage in Certain
States.--
(1) In general.--The requirements of this section shall not
apply with respect to health insurance coverage if there is a
State law (as defined in section 2723(d)(1) of the Public
Health Service Act) for a State that regulates such coverage
that is described in any of the following subparagraphs:
(A) Such State law requires such coverage to provide for at
least a 48-hour hospital

[[Page H6392]]

length of stay following a mastectomy performed for treatment
of breast cancer and at least a 24-hour hospital length of
stay following a lymph node dissection for treatment of
breast cancer.
(B) Such State law requires, in connection with such
coverage for surgical treatment of breast cancer, that the
hospital length of stay for such care is left to the decision
of (or required to be made by) the attending provider in
consultation with the woman involved.
(2) Construction.--Section 2723(a)(1) of the Public Health
Service Act and section 731(a)(1) of the Employee Retirement
Income Security Act of 1974 shall not be construed as
superseding a State law described in paragraph (1).

SEC. 153. STANDARDS RELATING TO BENEFITS FOR RECONSTRUCTIVE
BREAST SURGERY.

(a) Requirements for Reconstructive Breast Surgery.--
(1) In general.--A group health plan, and a health
insurance issuer offering group health insurance coverage,
that provides coverage for breast surgery in connection with
a mastectomy shall provide coverage for reconstructive breast
surgery resulting from the mastectomy. Such coverage shall
include coverage for all stages of reconstructive breast
surgery performed on a nondiseased breast to establish
symmetry with the diseased when reconstruction on the
diseased breast is performed and coverage of prostheses and
complications of mastectomy including lymphedema.
(2) Reconstructive breast surgery defined.--In this
section, the term ``reconstructive breast surgery'' means
surgery performed as a result of a mastectomy to reestablish
symmetry between two breasts, and includes augmentation
mammoplasty, reduction mammoplasty, and mastopexy.
(3) Mastectomy defined.--In this section, the term
``mastectomy'' means the surgical removal of all or part of a
breast.
(b) Prohibitions.--
(1) Denial of coverage based on cosmetic surgery.--A group
health plan, and a health insurance issuer offering group
health insurance coverage in connection with a group health
plan, may not deny coverage described in subsection (a)(1) on
the basis that the coverage is for cosmetic surgery.
(2) Application of similar prohibitions.--Paragraphs (2)
through (5) of section 152 shall apply under this section in
the same manner as they apply with respect to section 152.
(c) Rules of Construction.--
(1) Nothing in this section shall be construed to require a
woman who is a participant or beneficiary to undergo
reconstructive breast surgery.
(2) This section shall not apply with respect to any group
health plan, or any group health insurance coverage offered
by a health insurance issuer, which does not provide benefits
for mastectomies.
(3) Nothing in this section shall be construed as
preventing a group health plan or issuer from imposing
deductibles, coinsurance, or other cost-sharing in relation
to benefits for reconstructive breast surgery under the plan
(or under health insurance coverage offered in connection
with a group health plan), except that such coinsurance or
other cost-sharing for any portion may not be greater than
such coinsurance or cost-sharing that is otherwise applicable
with respect to benefits for mastectomies.
(e) Level and Type of Reimbursements.--Nothing in this
section shall be construed to prevent a group health plan or
a health insurance issuer offering group health insurance
coverage from negotiating the level and type of reimbursement
with a provider for care provided in accordance with this
section.
(f) Exception for Health Insurance Coverage in Certain
States.--
(1) In general.--The requirements of this section shall not
apply with respect to health insurance coverage if there is a
State law (as defined in section 2723(d)(1) of the Public
Health Service Act) for a State that regulates such coverage
and that requires coverage of at least the coverage of
reconstructive breast surgery otherwise required under this
section.
(2) Construction.--Section 2723(a)(1) of the Public Health
Service Act and section 731(a)(1) of the Employee Retirement
Income Security Act of 1974 shall not be construed as
superseding a State law described in paragraph (1).

Subtitle G--Definitions

SEC. 191. DEFINITIONS.

(a) Incorporation of General Definitions.--The provisions
of section 2971 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
Secretary of the Treasury 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, the Secretary of
Labor in relation to carrying out this title under section
713 of the Employee Retirement Income Security Act of 1974,
and the Secretary of the Treasury in relation to carrying out
this title under chapter 100 and section 4980D of the
Internal Revenue Code of 1986.
(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) Clinical peer.--The term ``clinical peer'' means, with
respect to a review or appeal, a physician (allopathic or
osteopathic) or other health care professional who holds a
non-restricted license in a State and who is appropriately
credentialed in the same or similar specialty as typically
manages the medical condition, procedure, or treatment under
review or appeal and includes a pediatric specialist where
appropriate; except that only a physician may be a clinical
peer with respect to the review or appeal of treatment
rendered by a physician.
(3) Health care provider.--The term ``health care
provider'' includes a physician or other health care
professional, as well as an institutional provider of health
care services.
(4) 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.
(5) Participating.--The term ``participating'' mean, 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.

SEC. 192. 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
except to the extent that such standard or requirement
prevents the application of a requirement of this title.
(2) Continued preemption with respect to group health
plans.--Nothing in this title shall be construed to affect or
modify the provisions of section 514 of the Employee
Retirement Income Security Act of 1974 with respect to group
health plans.
(b) Rules of Construction.--Except as provided in sections
152 and 153, nothing in this title shall be construed as
requiring a group health plan or health insurance coverage to
provide specific benefits under the terms of such plan or
coverage.
(c) 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
Northern Mariana Islands, any political subdivisions of a
State or such Islands, or any agency or instrumentality of
either.

SEC. 193. 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.

TITLE II--APPLICATION OF PATIENT PROTECTION STANDARDS TO GROUP HEALTH
PLANS AND HEALTH INSURANCE COVERAGE UNDER 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. 2706. PATIENT PROTECTION STANDARDS.

``(a) In General.--Each group health plan shall comply with
patient protection requirements under title I of the
Patients' Bill of Rights Act of 1998, and each health
insurance issuer shall comply with patient protection
requirements under such title with respect to group health
insurance coverage it offers, and such requirements shall be
deemed to be incorporated into this subsection.
``(b) Notice.--A group health plan shall comply with the
notice requirement under section 711(d) of the Employee
Retirement Income Security Act of 1974 with respect to

[[Page H6393]]

the requirements referred to in subsection (a) and a health
insurance issuer shall comply with such notice requirement as
if such section applied to such issuer and such issuer were a
group health plan.''.
(b) Conforming Amendment.--Section 2721(b)(2)(A) of such
Act (42 U.S.C. 300gg-21(b)(2)(A)) is amended by inserting
``(other than section 2706)'' 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 2751 the following new
section:

``SEC. 2752. PATIENT PROTECTION STANDARDS.

``(a) In General.--Each health insurance issuer shall
comply with patient protection requirements under title I of
the Patients' Bill of Rights Act of 1998 with respect to
individual health insurance coverage it offers, and such
requirements shall be deemed to be incorporated into this
subsection.
``(b) Notice.--A health insurance issuer under this part
shall comply with the notice requirement under section 711(d)
of the Employee Retirement Income Security Act of 1974 with
respect to the requirements of such title as if such section
applied to such issuer and such issuer were a group health
plan.''.

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

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

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

``SEC. 713. 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 1998 (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 1998 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 101 (relating to access to emergency care).
``(B) Section 102(a)(1) (relating to offering option to
purchase point-of-service coverage), but only insofar as the
plan is meeting such requirement through an agreement with
the issuer to offer the option to purchase point-of-service
coverage under such section.
``(C) Section 103 (relating to choice of providers).
``(D) Section 104 (relating to access to specialty care).
``(E) Section 105(a)(1) (relating to continuity in case of
termination of provider contract) and section 105(a)(2)
(relating to continuity in case of termination of issuer
contract), but only insofar as a replacement issuer assumes
the obligation for continuity of care.
``(F) Section 106 (relating to coverage for individuals
participating in approved clinical trials.)
``(G) Section 107 (relating to access to needed
prescription drugs).
``(H) Section 108 (relating to adequacy of provider
network).
``(I) Subtitle B (relating to quality assurance).
``(J) Section 143 (relating to additional rules regarding
participation of health care professionals).
``(K) Section 152 (relating to standards relating to
benefits for certain breast cancer treatment).
``(L) Section 153 (relating to standards relating to
benefits for reconstructive breast surgery).
``(2) Information.--With respect to information required to
be provided or made available under section 121, in the case
of a group health plan that provides benefits in the form of
health insurance coverage through a health insurance issuer,
the Secretary shall determine the circumstances under which
the plan is not required to provide or make available the
information (and is not liable for the issuer's failure to
provide or make available the information), if the issuer is
obligated to provide and make available (or provides and
makes available) such information.
``(3) Grievance and internal appeals.--With respect to the
grievance system and internal appeals process required to be
established under sections 131 and 132, 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 system and
process (and is not liable for the issuer's failure to
provide for such system and process), if the issuer is
obligated to provide for (and provides for) such system and
process.
``(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 133, the plan shall be treated as meeting the
requirement of such section and is not liable for the
entity's failure to meet any requirements under such section.
``(5) Application to prohibitions.--Pursuant to rules of
the Secretary, if a health insurance issuer offers health
insurance coverage in connection with a group health plan and
takes an action in violation of any of the following
sections, the group health plan shall not be liable for such
violation unless the plan caused such violation:
``(A) Section 109 (relating to nondiscrimination in
delivery of services).
``(B) Section 141 (relating to prohibition of interference
with certain medical communications).
``(C) Section 142 (relating to prohibition against transfer
of indemnification or improper incentive arrangements).
``(D) Section 144 (relating to prohibition on retaliation).
``(E) Section 151 (relating to promoting good medical
practice).
``(6) Construction.--Nothing in this subsection shall be
construed to affect or modify the responsibilities of the
fiduciaries of a group health plan under part 4 of subtitle
B.
``(7) Application to certain prohibitions against
retaliation.--With respect to compliance with the
requirements of section 144(b)(1) of the Patients' Bill of
Rights Act of 1998, 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 144(b)(1) of
the Patients' Bill of Rights Act of 1998 may file with the
Secretary a complaint within 180 days of the date of the
alleged retaliation or discrimination.
``(2) Investigation.--The Secretary shall investigate such
complaints and shall determine if a violation of such section
has occurred and, if so, shall issue an order to ensure that
the protected health care professional does not suffer any
loss of position, pay, or benefits in relation to the plan,
issuer, or provider involved, as a result of the violation
found by the Secretary.
``(d) Conforming Regulations.--The Secretary may issue
regulations to coordinate the requirements on group health
plans under this section with the requirements imposed under
the other provisions of this title.''.
(b) Satisfaction of ERISA Claims Procedure Requirement.--
Section 503 of such Act (29 U.S.C. 1133) is amended by
inserting ``(a)'' after ``Sec. 503.'' and by adding at the
end the following new subsection:
``(b) In the case of a group health plan (as defined in
section 733) compliance with the requirements of subtitle D
(and section 115) of title I of the Patients' Bill of Rights
Act of 1998 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 713''.
(2) The table of contents in section 1 of such Act is
amended by inserting after the item relating to section 712
the following new item:

``Sec. 713. 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 144(b))'' after
``part 7''.

SEC. 302. ERISA PREEMPTION NOT TO APPLY TO CERTAIN ACTIONS
INVOLVING HEALTH INSURANCE POLICYHOLDERS.

(a) In General.--Section 514 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1144) is amended by
adding at the end the following subsection:
``(e) Preemption Not To Apply to Certain Actions Arising
Out of Provision of Health Benefits.--
``(1) In general.--Except as provided in this subsection,
nothing in this title shall be construed to invalidate,
impair, or supersede any cause of action brought by a plan
participant or beneficiary (or the estate of a plan
participant or beneficiary) under State law to recover
damages resulting from personal injury or for wrongful death
against any person--
``(A) in connection with the provision of insurance,
administrative services, or medical services by such person
to or for a group health plan (as defined in section 733), or
``(B) that arises out of the arrangement by such person for
the provision of such insurance, administrative services, or
medical services by other persons.

For purposes of this subsection, the term `personal injury'
means a physical injury and includes an injury arising out of
the treatment (or failure to treat) a mental illness or
disease.
``(2) Exception for employers and other plan sponsors.--

[[Page H6394]]

``(A) In general.--Subject to subparagraph (B), paragraph
(1) does not authorize--
``(i) any cause of action against an employer or other plan
sponsor maintaining the group health plan (or against an
employee of such an employer or sponsor acting within the
scope of employment), or
``(ii) a right of recovery or indemnity by a person against
an employer or other plan sponsor (or such an employee) for
damages assessed against the person pursuant to a cause of
action under paragraph (1).
``(B) Special rule.--Subparagraph (A) shall not preclude
any cause of action described in paragraph (1) against an
employer or other plan sponsor (or against an employee of
such an employer or sponsor acting within the scope of
employment) if--
``(i) such action is based on the employer's or other plan
sponsor's (or employee's) exercise of discretionary authority
to make a decision on a claim for benefits covered under the
plan or health insurance coverage in the case at issue; and
``(ii) the exercise by such employer or other plan sponsor
(or employee) of such authority resulted in personal injury
or wrongful death.
``(3) Construction.--Nothing in this subsection shall be
construed as permitting a cause of action under State law for
the failure to provide an item or service which is not
covered under the group health plan involved.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to acts and omissions occurring on or after the
date of the enactment of this Act from which a cause of
action arises.

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

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

Subchapter B of chapter 100 of the Internal Revenue Code of
1986 (as amended by section 1531(a) of the Taxpayer Relief
Act of 1997) is amended--
(1) in the table of sections, by inserting after the item
relating to section 9812 the following new item:

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

(2) by inserting after section 9812 the following:

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

``A group health plan shall comply with the requirements of
title I of the Patients' Bill of Rights Act of 1998 (as in
effect as of the date of the enactment of such Act), and such
requirements shall be deemed to be incorporated into this
section.''.

TITLE V--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

SEC. 501. EFFECTIVE DATES.

(a) Group Health Coverage.--
(1) In general.--Subject to paragraph (2), the amendments
made by sections 201(a), 301, and 401 (and title I insofar as
it relates to such sections) shall apply with respect to
group health plans, and health insurance coverage offered in
connection with group health plans, for plan years beginning
on or after October 1, 1999 (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 1 or more
collective bargaining agreements between employee
representatives and 1 or more employers ratified before the
date of enactment of this Act, the amendments made by
sections 201(a), 301, and 401 (and title I insofar as it
relates to such sections) shall not apply to plan years
beginning before the later of--
(A) the date on which the last collective bargaining
agreements relating to the plan terminates (determined
without regard to any extension thereof agreed to after the
date of enactment of this Act), or
(B) the general effective date.

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

SEC. 502. COORDINATION IN IMPLEMENTATION.

Section 104(1) of Health Insurance Portability and
Accountability Act of 1996 is amended by striking ``this
subtitle (and the amendments made by this subtitle and
section 401)'' and inserting ``the provisions of part 7 of
subtitle B of title I of the Employee Retirement Income
Security Act of 1974, the provisions of parts A and C of
title XXVII of the Public Health Service Act, chapter 100 of
the Internal Revenue Code of 1986, and title I of the
Patients' Bill of Rights Act of 1998''.

TITLE VI--REVENUE PROVISIONS

SEC. 601. ESTATE TAX TECHNICAL CORRECTION.

(a) In General.--Paragraph (2) of section 2001(c) of the
Internal Revenue Code of 1986 is amended by striking
``$10,000,000'' and all that follows and inserting
``$10,000,000. The amount of the increase under the preceding
sentence shall not exceed the sum of the applicable credit
amount under section 2010(c) (determined without regard to
section 2057(a)(3)) and $359,200.''
(b) Effective Date.--The amendment made by subsection (a)
shall take effect as if included in the amendments made by
section 501 of the Taxpayer Relief Act of 1997.

SEC. 602. TREATMENT OF CERTAIN DEDUCTIBLE LIQUIDATING
DISTRIBUTIONS OF REGULATED INVESTMENT COMPANIES
AND REAL ESTATE INVESTMENT TRUSTS.

(a) In General.--Section 332 of the Internal Revenue Code
of 1986 (relating to complete liquidations of subsidiaries)
is amended by adding at the end the following new subsection:
``(c) Deductible Liquidating Distributions of Regulated
Investment Companies and Real Estate Investment Trusts.--If a
corporation receives a distribution from a regulated
investment company or a real estate investment trust which is
considered under subsection (b) as being in complete
liquidation of such company or trust, then, notwithstanding
any other provision of this chapter, such corporation shall
recognize and treat as a dividend from such company or trust
an amount equal to the deduction for dividends paid allowable
to such company or trust by reason of such distribution.''.
(b) Conforming Amendments.--
(1) The material preceding paragraph (1) of section 332(b)
of such Code is amended by striking ``subsection (a)'' and
inserting ``this section''.
(2) Paragraph (1) of section 334(b) of such Code is amended
by striking ``section 332(a)'' and inserting ``section 332''.
(c) Effective Date.--The amendments made by this section
shall apply to distributions after May 21, 1998.

The SPEAKER pro tempore. Pursuant to House Resolution 509, the
gentleman from Michigan (Mr. Dingell) and the gentleman from Illinois
(Mr. Hastert) each will control 30 minutes.
The Chair recognizes the gentleman from Michigan (Mr. Dingell).
Mr. DINGELL. Mr. Speaker, I yield 3 minutes to the gentleman from
Iowa (Mr. Ganske), my distinguished friend, for purposes of offering
the amendment.
Mr. GANSKE. Mr. Speaker, I rise in support of the Ganske-Dingell
substitute. This substitute is supported by Consumers Union, other
consumer groups, about 170 health groups, both consumer groups and
provider groups. It is supported by the AARP, it is supported by the
AMA, the Nurses Association, and by the AFL-CIO. It has broad,
widespread support, for a good reason.
Let me specifically address my friend Lindsey Graham's comments about
the underlying Republican bill and how it relates to the substitute on
liability. My friend Lindsey Graham is trying to improve the GOP bill.
Consider the family of Joyce Chiang. Her complaints of severe
abdominal pain and requests for a referral to a specialist went
unheeded. The delay prevented the timely discovery of a colon cancer
that might have been cured. Instead, by the time she got the additional
tests she requested, the cancer had perforated her bowel and no amount
of surgery could save her.
Under the Hastert bill, Joyce Chiang's family could only collect $500
for every day the care was denied. But I would say that is hardly an
effective remedy or deterrent, when it can cost health plans more to
provide the needed care than it would potentially cost them in a
subsequent legal action.
Mr. Speaker, I am not interested in granting tobacco companies legal
protections for their conduct; and I cannot see how it serves our
constituents to allow health plans who are making life-and-death
decisions to hide from their consequences.
Republicans believe in personal responsibility, and this immunity
that is preserved in the Hastert bill flies in the face of that. Health
plans should be treated like any other industry and held accountable
for their negligent actions.
Furthermore, the GOP bill does not get at a fundamental underlying
problem, and that is that the HMOs can define what is medically
necessary. Before our Committee on Commerce we had a medical reviewer
describe how she had made decisions that resulted in the loss of life
because she could manipulate the way the HMO defined ``medically
necessary.'' Under the Ganske-Dingell bill, we address that problem.
Their bill does not.
I strongly urge my Republican colleagues to vote for the best bill,
the one that addresses the smart bomb of HMOs, the issue of what is
defined as ``medically necessary.''
Mr. HASTERT. Mr. Speaker, I yield 3 minutes to the gentleman from
Florida (Mr. Weldon).

[[Page H6395]]

Mr. WELDON of Florida. Mr. Speaker, I thank the gentleman for
yielding.
I am a practicing physician. And I do not plan on staying in this
body. I plan on returning in a few short years to my practice. And I
think it is a wonderful thing that we are having this debate today. We
both want to do what we can to restore the doctor-patient relationship.
We both want to do what we can to return quality as number one in
health care in the United States. They have their plan. We have ours.
Now, I believe that there is an important feature in our bill that
makes our bill the better bill over their bill. But I want to address a
few points made by my colleague the gentleman from Iowa (Mr. Ganske).
I served on the task force that produced this bill, and one of the
most important things that I was going after was timely access to
specialists. And contrary to the claims that were made by him and the
claims by others, we have important language in our bill that will
require people in managed care entities to have timely access to
specialists.
Here is the difference between their bill and our bill, and I will
tell my colleagues about it. I was on a radio talk show last week where
a lady called in and she was saying some bad things about her HMO and
she said, ``The other HMO I was in was just as bad. I had switched.'' I
said, ``What do you mean, you switched from one HMO to another HMO? Are
you in the FEHBP plan?'' And she said, ``Yes.'' And I said, ``Well, you
know, I am in that, too; and there are some better plans that you could
select. Why didn't you select one of those better coverage plans?'' And
do you know what she said to me? ``Well, we cannot afford it. That is
why I am in an HMO.''
Now, we are to be led to believe by our colleagues on the other side
of the aisle that their bill which is going to place all these
government mandates is not going to drive up costs for that lady?
Let me tell my colleagues something. Every month in my practice a
clerk from my billing office brought a stack of charts of working
people who were not able to pay their bills and I did what thousands of
other physicians all across America do; I wrote off those bills,
thousands of dollars every year. Why? Because those people had no
health insurance.
Now we are led to believe by these folks that they here in Washington
are going to make all these HMOs do all these wonderful things that are
mandated in their bill and it is not going to drive up costs, it is not
going to increase the number of uninsured?
Let me tell my colleagues something. We have a good bill here that is
going to work very hard to restore quality and it is not going to drive
up costs. Indeed, we believe the provisions in this bill, which allow
small employers to pool, which has malpractice reform, is actually
going to drive down costs. It is going to allow more people to get
insurance.
We have, in my opinion, the better bill. And I can say that as
somebody who is going to go back in a few short years to be working in
the system.

____________________