To amend the Employee Retirement Income Security Act of 1974 and the Public Health Service Act to require managed care group health plans and managed care health insurance coverage to meet certain consumer protection requirements.
To amend the Employee Retirement Income Security Act of 1974 and the Public Health Service Act to require managed care group health plans and managed care health insurance coverage to meet certain consumer protection requirements.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
This Act may be cited as the `Quality Health Care and Consumer Protection Act'.
The purpose of this Act is to ensure that enrollees in managed care group health plans and managed care health insurance coverage receive adequate health care services by ensuring that--
(1) Subpart B of part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974, as amended by section 702(a) of Public Law 104-204, is amended by adding at the end the following new section:
`SEC. 713. QUALITY HEALTH CARE AND CONSUMER PROTECTION ACT.
`(a) ACCESS TO PERSONNEL AND FACILITIES-
`(1) IN GENERAL- A managed care group health plan (and a
health insurance issuer offering managed care group health
insurance) shall--
`(A) include a sufficient number and type of primary care
practitioners and specialists, throughout the service area,
to meet the needs of enrollees and to provide meaningful
choice; and
`(B) demonstrate that it offers the following:
`(i) An adequate number of accessible acute care
hospital services, within a reasonable distance and
travel time for enrollees.
`(ii) An adequate number of accessible primary care
practitioners, within a reasonable distance and travel
time for enrollees.
`(iii) An adequate number of accessible specialists
and subspecialists, within a reasonable distance and
travel time for enrollees.
`(iv) The availability of specialty medical services,
including physical therapy, occupational therapy, and
rehabilitation services.
`(v) The availability of specialists who are not
participating providers or professionals, when a
patient's unique medical circumstances warrant it.
Clause (iii) shall be construed as requiring access to
nonparticipating health care professionals who are
specialists for treatment of a specific condition if and
when there are not sufficient number of such specialists
who are participating health care professionals.
`(2) CONTINUITY OF CARE- A managed care group health plan
(and a health insurance issuer offering managed care group
health insurance) shall--
`(A) provide for continuity of care with established
primary care practitioners, when the health care
professional's contract is terminated, and
`(B) allow enrollees, at no additional out-of-pocket
cost, to continue receiving services from a primary care
practitioner whose contract with the plan or issuer is
terminated without cause for a period of at least 60 days
if the enrollee requests such continuation.
`(3) TELEPHONE ACCESS- A managed care group health plan (and
a health insurance issuer offering managed care group health
insurance) shall provide telephone access to the plan or issuer
for sufficient time during business and evening hours to ensure
enrollee access for routine care, and 24 hour telephone access
to either the plan, issuer, or a participating provider or
professional, for emergency care or authorization for such care.
`(4) STANDARDS FOR WAITING TIMES- A managed care group health
plan (and a health insurance issuer offering managed care group
health insurance) shall establish reasonable standards for
waiting times for enrollees to obtain appointments, subject to
special rules for emergency services under paragraph (5). Such
standards shall include appointment scheduling guidelines based
on the type of health care service, including prenatal care
appointments, well-child visits and immunizations, routine
physicals, follow-up appointments for chronic conditions, and
urgent care.
`(5) COVERAGE OF EMERGENCY SERVICES-
`(A) IN GENERAL- A managed care group health plan (and a
health insurance issuer offering managed care group health
insurance) shall cover and reimburse expenses for treatment
of an emergency medical condition if the treatment is
obtained, without prior authorization.
`(B) EMERGENCY MEDICAL CONDITION DEFINED- The term
`emergency medical condition' means a medical condition,
the onset of which is sudden and unexpected, that manifests
itself by symptoms of sufficient severity, that a
prudent layperson, who possesses an average knowledge of health and
medicine, could reasonably assume that the condition requires
immediate medical treatment, and could expect the absence of
medical attention to result in serious impairment to bodily
functions or place the person's health in serious jeopardy.
`(C) PRUDENT LAYPERSON DEFINED- In this paragraph, the
term `prudent layperson' means a person without specific
medical training for the illness or condition in question
who acts as a reasonable person would under similar
circumstances.
`(b) ASSURING ADEQUATE CHOICE OF HEALTH CARE PROFESSIONALS-
`(1) IN GENERAL- A managed care group health plan (and a
health insurance issuer offering managed care group health
insurance) shall provide that each enrollee shall have adequate
choice among participating health care professionals who are
accessible and qualified.
`(2) CHOICE- A managed care group health plan (and a health
insurance issuer offering managed care group health insurance)
shall permit enrollees to choose their own primary care
practitioner from a list of health care professionals within
the plan or coverage. Such list shall be updated as health care
professionals are added or removed and shall include--
`(A) a sufficient number of primary care practitioners
who are accepting new enrollees; and
`(B) a sufficient mix of primary care practitioners that
reflects a diversity that is adequate to meet the needs of
the enrollees' varied characteristics, including age,
gender, race, and health status.
`(3) MEDICAL SPECIALISTS- A managed care group health plan
(and a health insurance issuer offering managed care group
health insurance) shall develop a system to permit enrollees to
use a medical specialist primary care practitioner, when the
enrollee's medical conditions (including suffering from a
chronic disease or medical condition) warrant it.
`(4) CONTINUITY OF CARE- A managed care group health plan
(and a health insurance issuer offering managed care group
health insurance) shall provide--
`(A) continuity of care and appropriate referral to
specialists within the plan or coverage, when specialty
care is warranted,
`(B) enrollees with access to medical specialists on a
timely basis, and
`(C) enrollees with a choice of specialists when a
referral is made.
`(5) REQUIREMENT FOR POINT OF SERVICE OPTION- A managed care
group health plan (and a health insurance issuer offering
managed care group health insurance) shall offer each enrollee
with an enrollment option under which the enrollee may receive
benefits for services provided by nonparticipating health care
professional or provider. The plan or issuer may require that
the enrollee pay a reasonable premium to reflect the cost of
such option.
`(6) CONSULTATION FOR SECOND OPINIONS- A managed care group
health plan (and a health insurance issuer offering managed
care group health insurance) shall provide enrollees with
access to a consultation for a second option.
`(c) PROHIBITION OF GAG RULES- A managed care group health plan
(and a health insurance issuer offering managed care group health
insurance)--
`(1) shall not have any contract provision with a health care
professional that limits the health care professional's
disclosure to an enrollee or on behalf of an enrollee of any
information relating to the enrollee's medical condition or
treatment options; and
`(2) shall not penalize (through contract termination or
otherwise) a health care professional--
`(A) because the professional offers referrals, or
discusses any or all medically necessary or appropriate
care or treatment options (including disclosing any
information, determined by the health care professional to
be in the best interest of the enrollee) with, or on behalf
of, an enrollee; or
`(B) for discussing financial incentives and financial
arrangements between the health care professional and the
plan or issuer.
`(d) COVERAGE OF DRUGS AND DEVICES-
`(1) IN GENERAL- A managed care group health plan (and a
health insurance issuer offering managed care group health
insurance) that provides benefits with respect to drugs and
medical devices shall provide coverage for all drugs and
medical devices approved by the Food and Drug Administration,
whether or not that drug or device has been approved for the
specific treatment or condition, so long as the primary care
practitioner or other medical specialist treating the enrollee
determines the drug or device is medically necessary and
appropriate for the enrollee's condition.
`(2) OPERATION OF DRUG UTILIZATION REVIEW PROGRAM- A managed
care group health plan (and a health insurance issuer offering
managed care group health insurance) that provides benefits
with respect to prescription drugs shall establish and operate
a drug utilization review program that includes the following:
`(A) Retrospective review of prescription drugs furnished
to enrollees.
`(B) Education of physicians, enrollees, and pharmacists
regarding the appropriate use of prescription drugs.
`(C) An ongoing periodic examination of data on
outpatient prescription drugs to ensure quality therapeutic
outcomes for enrollees.
`(D) A primary emphasis on enhancing quality of care for
enrollees by assuring appropriate drug therapy.
`(E) Clinically relevant criteria and standards for drug
therapy.
`(F) Application of nonproprietary criteria and
standards, developed and revised through an open,
professional consensus process.
`(G) Interventions which focus on improving therapeutic
outcomes.
`(H) An educational outreach program that--
`(i) is directed to enrollees, pharmacists, and other
health care professionals, and
`(ii) emphasizes the appropriate use of prescription
drugs.
`(I) Denial of services under prospective review of drug
therapy only in cases of enrollee ineligibility, coverage
limitations, or fraud.
`(J) Determination of the appropriate drug therapy for
the enrollee by the prescribing health care professional
and prohibitions of substitutions without the direct
approval of such professional.
`(e) COVERAGE OF EXPERIMENTAL TREATMENTS-
`(1) IN GENERAL- A managed care group health plan (and a
health insurance issuer offering managed care group health
insurance) that limits coverage for services shall define the
limitation and disclose the limits in any agreement or
certificate of coverage. Such disclosure shall include--
`(A) who is authorized to make such a determination, and
`(B) the criteria the plan or issuer uses to determine
whether a service is experimental.
`(2) DENIALS- A managed care group health plan (and a health
insurance issuer offering managed care group health insurance)
that denies coverage for an experimental treatment, procedure,
drug, or device, for an enrollee who has a terminal condition
or illness shall provide the enrollee with a denial letter
within 20 working days of the submitted request. The letter
shall include--
`(A) the name and title of the individual making the
decision;
`(B) a statement setting forth the specific medical and
scientific reasons for denying coverage;
`(C) a description of alternative treatment, services, or
supplies covered by the plan or under the coverage, if any;
and
`(D) a copy of the plan's or issuer's grievance and
appeal procedure.
`(3) EXPERIMENTAL TREATMENT DEFINED- In this subsection, the
term `experimental treatment' means treatment that, while not
commonly used for a particular condition or illness,
nevertheless is recognized for treatment of the particular
condition or illness, and there is no clearly superior,
nonexperimental treatment alternative available to the enrollee.
`(f) QUALITY ASSURANCE PROGRAM-
`(1) IN GENERAL- A managed care group health plan (and a
health insurance issuer offering managed care group health
insurance) shall develop comprehensive quality assurance
standards, adequate to identify, evaluate, and remedy problems
relating to access, continuity, and quality of care. The
standards shall include--
`(A) an ongoing, written, internal quality assurance
program;
`(B) specific written guidelines for quality of care
studies and monitoring, including attention to vulnerable
populations;
`(C) performance and clinical outcomes-based criteria;
`(D) a procedure for remedial action to correct quality
problems, including written procedures for taking
appropriate corrective action;
`(E) a plan for data gathering and assessment under
subsection (g); and
`(F) a peer review process.
`(2) PROCESS FOR SELECTION OF PROFESSIONALS- A managed care
group health plan (and a health insurance issuer offering
managed care group health insurance) shall have a process for
selection of health care professionals who will be
participating professionals, with written policies and
procedures for standards used by the plan or issuer. Such
process shall meet the following requirements:
`(A) The plan or issuer shall establish minimum
professional requirements.
`(B) The plan or issuer shall demonstrate that it has
consulted with appropriately qualified health care
professionals to establish the requirements.
`(C) The process shall include verification of the
individual practitioner's license, history of suspension or
revocation, and liability claims history.
`(D) The plan or issuer shall establish a formal,
written, ongoing, process for the reevaluation of all
participating health care professionals within a specified
number of years after the initial acceptance. Such
reevaluations shall include updates of the previous review
criteria and an assessment of the performance pattern based
on criteria including enrollee clinical outcomes, number of
complaints, and malpractice actions.
`(3) LIMITATION ON USE OF PROFESSIONALS- A managed care group
health plan (and a health insurance issuer offering managed
care group health insurance) shall not use a health care
professional beyond, or outside of, the professional's legally
authorized scope of practice.
`(g) DATA SYSTEMS AND CONFIDENTIALITY-
`(1) IN GENERAL- A managed care group health plan (and a
health insurance issuer offering managed care group health
insurance) shall provide information on the plan's or issuer's
structure, decision making process, health care benefits and
exclusions, cost and cost-sharing requirements, list of
participating providers and health care professionals as well
as grievance and appeal procedures, to all potential enrollees,
all enrollees covered by the plan or coverage, and, to the
Secretary of Labor and to the Secretary of Health and Human
Services (or, with respect to a health insurance issuer, to the
State oversight agency).
`(2) REPORTING OF DATA- A managed care group health plan (and
a health insurance issuer offering managed care group health
insurance) shall collect and report annually to the Secretary
of Labor and to the Secretary of Health and Human Services (or,
in the case of a health insurance issuer, State oversight
agency) specified data including--
`(A) gross outpatient and hospital utilization data;
`(B) enrollee clinical outcome data;
`(C) the number and types of enrollee grievances or
complaints during the year, the status of decisions, and
the average time required to reach a decision; and
`(D) the number, amount, and disposition of malpractice
claims resolved during the year by the plan or issuer and
any of its participating health care providers and
professionals.
`(3) REPORTING- All data specified in paragraphs (1) and (2)
shall be reported to the Secretary of Labor and to the
Secretary of Health and Human Services (or, in the case of a
health insurance issuer, the State oversight agency) and shall
be available to the public on a timely basis.
`(4) MEDICAL RECORDS AND CONFIDENTIALITY- A managed care
group health plan (and a health insurance issuer offering
managed care group health insurance) shall--
`(A) establish written policies and procedures for the
handling of medical records and enrollee communications to
ensure enrollee confidentiality;
`(B) ensure the confidentiality of specified enrollee
information, including, prior medical history, medical
record information and claims information, except where
disclosure of this information is required by law; and
`(C) not release any individual patient record
information, unless such a release is authorized in writing
by the enrollee or otherwise required be law.
`(h) CLINICAL DECISION MAKING-
`(1) APPOINTMENT OF MEDICAL DIRECTOR- A managed care group
health plan (and a health insurance issuer offering managed
care group health insurance) shall appoint a medical director
who is a licensed physician in the State in which the plan or
issuer operates, who shall be responsible for treatment
policies protocols, quality assurance activities, and
utilization management decisions of the plan or issuer.
`(2) DISCLOSURE ABOUT FINANCIAL ARRANGEMENTS- A managed care
group health plan (and a health insurance issuer offering
managed care group health insurance) shall inform enrollees of
the financial arrangements between the plan or issuer and
participating providers and professionals (including
pharmacists), if those arrangements include incentives or
bonuses for restriction of services.
`(3) QUALITY ASSURANCE DEFINED- In this subsection, the term
`quality assurance' means the ongoing evaluation of the quality
of health care provided to enrollees.
`(4) OVERSIGHT- The Secretary of Labor and the Secretary of
Health and Human Services are responsible for performance of
annual audits of managed care group health plans and, in the
case of a health insurance issuer, the State oversight agency
is responsible for performance of annual audits of managed care
health insurance coverage offered by such issuers, in order to
review enrollee clinical outcome data, enrollee service data,
and operational and other financial data.
`(i) GRIEVANCE PROCEDURES, REVIEWS, AND APPEALS-
`(1) IN GENERAL- A managed care group health plan (and a
health insurance issuer offering managed care group health
insurance) shall provide written notification to enrollees, in
a language enrollees understand, regarding the right to file a
grievance concerning denials or limitations of coverage under
the plan or coverage. At a minimum, such notification shall be
given--
`(A) prior to enrollment in the plan or under the
coverage; and
`(B) at the time care is denied or limited under the plan
or coverage.
`(2) NOTICE OF RIGHT TO FILE GRIEVANCE- At the time of such a
denial, such a plan or issuer shall notify the enrollee of the
right to file a grievance. Such notice shall be in writing and
shall include the reason for denial, the name of the individual
responsible for the decision, the criteria for determination,
and the enrollee's right to file a grievance.
`(3) GRIEVANCE PROCEDURES- The grievance procedures under the
plan or coverage shall include--
`(A) identification of the reviewing body and an
explanation of the process of review;
`(B) an initial investigation and review;
`(C) notification within a reasonable amount of time of
the outcome of the grievance; and
`(D) an appeal procedure.
`(4) TIME LIMITS-
`(A) IN GENERAL- Such a plan or issuer shall set
reasonable time limits for each part of the review process,
but in no case shall the review extend beyond 30 days.
`(B) EXPEDITED REVIEW- Such a plan or issuer shall
provide for expedited review for cases involving an
imminent, emergent, or serious threat to the health of an
enrollee. In such case the plan or issuer shall--
`(i) immediately inform the enrollee of this right, and
`(ii) provide the enrollee with a written statement
of the disposition or pending status of the grievance
within 72 hours of the commencement of the review
process.
`(5) REPORTING- Such a plan or issuer shall report to the
Secretary of Labor and to the Secretary of Health and Human
Services (or, in the case of a health insurance issuer, the
State oversight agency), the number of grievances and appeals
received by the plan or issuer within a specified time period,
including if applicable, the outcomes or current status of the
grievance and appeals as well as the average time taken to
resolve both grievances and appeals.
`(6) DEFINITIONS- In this subsection:
`(A) APPEAL- The term `appeal' means a formal process
whereby an enrollee whose care has been reduced, denied, or
terminated, or
whereby the enrollee deems the care inappropriate, can contest an
adverse grievance decision by the plan or issuer.
`(B) The term `expedited review' means a review process
which takes no more than 72 hours after the review is
commenced.
`(C) The term `grievance' means a written complaint
submitted by or on behalf of the enrollee.
`(j) NOTICE UNDER GROUP HEALTH PLAN- The imposition of the
requirements of this section shall be treated as a material
modification in the terms of the plan described in section
102(a)(1), for purposes of assuring notice of such requirements
under the plan; except that the summary description required to be
provided under the last sentence of section 104(b)(1) with respect
to such modification shall be provided by not later than 60 days
after the first day of the first plan year in which such
requirements apply.
`(k) GENERAL DEFINITIONS- For purposes of this section:
`(1) The term `enrollee' means an individual who is entitled
to benefits under a managed care group health plan or under
managed care health insurance coverage offered in connection
with such a plan.
`(2) The term `health care provider' means a clinic, hospital
physician organization, preferred provider organization,
independent practice association, or other appropriately
licensed provider of health care services or supplies.
`(3) The term `health care professional' means a physician or
other health care practitioner providing health care services.
`(4) The term `managed care' means, with respect to a group
health plan or health insurance coverage, a plan or coverage
that provides financial incentives for enrollees to obtain
benefits through participating health care providers or
professionals.
`(5) The term `participating' means, with respect to a health
care provider or professional and a group health plan or health
insurance coverage offered by a health insurance issuer, such a
provider or professional that has entered into an agreement
with the plan or issuer with respect to the provision of health
care services to enrollees under the plan or coverage.
`(6) The term `primary care practitioner' means, with respect
to a group health plan or health insurance coverage offered by
a health insurance issuer, a health care professional (who may
be a family practice physician, general practice physician,
internist, obstetrician/gynecologist, or pediatrician)
designated by the plan or issuer to coordinate, supervise, or
provide ongoing care to enrollees.
`(7) The term `State oversight agency' means, with respect to
a health insurance issuer, the State agency responsible for the
regulation of the issuer.'.
(B) Section 731(c) of such Act (29 U.S.C. 1191(c)), as
amended by section 603(b)(1) of Public Law 104-204, is amended
by striking `section 711' and inserting `sections 711 and 713'.
(C) Section 732(a) of such Act (29 U.S.C. 1191a(a)), as
amended by section 603(b)(2) of Public Law 104-204, is amended
by striking `section 711' and inserting `sections 711 and 713'.
(D) 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. Managed care consumer protections.'.
(1) Subpart 2 of part A of title XXVII of
the Public Health Service Act, as amended by section 703(a) of
Public Law 104-204, is amended by adding at the end the following
new section:
`SEC. 2706. QUALITY HEALTH CARE AND CONSUMER PROTECTION ACT.
`(a) ACCESS TO PERSONNEL AND FACILITIES-
`(1) IN GENERAL- A managed care group health plan (and a
health insurance issuer offering managed care group health
insurance) shall--
`(A) include a sufficient number and type of primary care
practitioners and specialists, throughout the service area,
to meet the needs of enrollees and to provide meaningful
choice; and
`(B) demonstrate that it offers the following:
`(i) An adequate number of accessible acute care
hospital services, within a reasonable distance and
travel time for enrollees.
`(ii) An adequate number of accessible primary care
practitioners, within a reasonable distance and travel
time for enrollees.
`(iii) An adequate number of accessible specialists
and subspecialists, within a reasonable distance and
travel time for enrollees.
`(iv) The availability of specialty medical services,
including physical therapy, occupational therapy, and
rehabilitation services.
`(v) The availability of specialists who are not
participating providers or professionals, when a
patient's unique medical circumstances warrant it.
Clause (iii) shall be construed as requiring access to
nonparticipating health care professionals who are
specialists for treatment of a specific condition if and
when there are not sufficient number of such specialists
who are participating health care professionals.
`(2) CONTINUITY OF CARE- A managed care group health plan
(and a health insurance issuer offering managed care group
health insurance) shall--
`(A) provide for continuity of care with established
primary care practitioners, when the health care
professional's contract is terminated, and
`(B) allow enrollees, at no additional out-of-pocket
cost, to continue receiving services from a primary care
practitioner whose contract with the plan or issuer is
terminated without cause for a period of at least 60 days
if the enrollee requests such continuation.
`(3) TELEPHONE ACCESS- A managed care group health plan (and
a health insurance issuer offering managed care group health
insurance) shall provide telephone access to the plan or issuer
for sufficient time during business and evening hours to ensure
enrollee access for routine care, and 24 hour telephone access
to either the plan, issuer, or a participating provider or
professional, for emergency care or authorization for such care.
`(4) STANDARDS FOR WAITING TIMES- A managed care group health
plan (and a health insurance issuer offering managed care group
health insurance) shall establish reasonable standards for
waiting times for enrollees to obtain appointments, subject to
special rules for emergency services under paragraph (5). Such
standards shall include appointment scheduling guidelines based
on the type of health care service, including prenatal care
appointments, well-child visits and immunizations, routine
physicals, follow-up appointments for chronic conditions, and
urgent care.
`(5) COVERAGE OF EMERGENCY SERVICES-
`(A) IN GENERAL- A managed care group health plan (and a
health insurance issuer offering managed care group health
insurance) shall cover and reimburse expenses for treatment
of an emergency medical condition if the treatment is
obtained, without prior authorization.
`(B) EMERGENCY MEDICAL CONDITION DEFINED- The term
`emergency medical condition' means a medical condition,
the onset of which is sudden and unexpected, that manifests
itself by symptoms of sufficient severity, that a prudent
layperson, who possesses an average knowledge of health and
medicine, could reasonably assume that the condition
requires immediate medical treatment, and could expect the
absence of medical attention to result in serious
impairment to bodily functions or place the person's health
in serious jeopardy.
`(C) PRUDENT LAYPERSON DEFINED- In this paragraph, the
term `prudent layperson' means a person without specific
medical training for the illness or condition in question
who acts as a reasonable person would under similar
circumstances.
`(b) ASSURING ADEQUATE CHOICE OF HEALTH CARE PROFESSIONALS-
`(1) IN GENERAL- A managed care group health plan (and a
health insurance issuer offering managed care group health
insurance) shall provide that each enrollee shall have adequate
choice among participating health care professionals who are
accessible and qualified.
`(2) CHOICE- A managed care group health plan (and a health
insurance issuer offering managed care group health insurance)
shall permit enrollees to choose their own primary care
practitioner from a list of health care professionals within
the plan or coverage. Such list shall be updated as health care
professionals are added or removed and shall include--
`(A) a sufficient number of primary care practitioners
who are accepting new enrollees; and
`(B) a sufficient mix of primary care practitioners that
reflects a diversity that is adequate to meet the needs of
the enrollees' varied characteristics, including age,
gender, race, and health status.
`(3) MEDICAL SPECIALISTS- A managed care group health plan
(and a health insurance issuer offering managed care group
health insurance) shall develop a system to permit enrollees to
use a medical specialist primary care practitioner, when the
enrollee's medical conditions (including suffering from a
chronic disease or medical condition) warrant it.
`(4) CONTINUITY OF CARE- A managed care group health plan
(and a health insurance issuer offering managed care group
health insurance) shall provide--
`(A) continuity of care and appropriate referral to
specialists within the plan or coverage, when specialty
care is warranted,
`(B) enrollees with access to medical specialists on a
timely basis, and
`(C) enrollees with a choice of specialists when a
referral is made.
`(5) REQUIREMENT FOR POINT OF SERVICE OPTION- A managed care
group health plan (and a health insurance issuer offering
managed care group health insurance) shall offer each enrollee
with an enrollment option under which the enrollee may receive
benefits for services provided by nonparticipating health care
professional or provider. The plan or issuer may require that
the enrollee pay a reasonable premium to reflect the cost of
such option.
`(6) CONSULTATION FOR SECOND OPINIONS- A managed care group
health plan (and a health insurance issuer offering managed
care group health insurance) shall provide enrollees with
access to a consultation for a second option.
`(c) PROHIBITION OF GAG RULES- A managed care group health plan
(and a health insurance issuer offering managed care group health
insurance)--
`(1) shall not have any contract provision with a health care
professional that limits the health care professional's
disclosure to an enrollee or on behalf of an enrollee of any
information relating to the enrollee's medical condition or
treatment options; and
`(2) shall not penalize (through contract termination or
otherwise) a health care professional--
`(A) because the professional offers referrals, or
discusses any or all medically necessary or appropriate
care or treatment options (including disclosing any
information, determined by the health care professional to
be in the best interest of the enrollee) with, or on behalf
of, an enrollee; or
`(B) for discussing financial incentives and financial
arrangements between the health care professional and the
plan or issuer.
`(d) COVERAGE OF DRUGS AND DEVICES-
`(1) IN GENERAL- A managed care group health plan (and a
health insurance issuer offering managed care group health
insurance) that provides benefits with respect to drugs and
medical devices shall provide coverage for all drugs and
medical devices approved by the Food and Drug Administration,
whether or not that drug or device has been approved for the
specific treatment or condition, so long as the primary care
practitioner or other medical specialist treating the enrollee
determines the drug or device is medically necessary and
appropriate for the enrollee's condition.
`(2) OPERATION OF DRUG UTILIZATION REVIEW PROGRAM- A managed
care group health plan (and a health insurance issuer offering
managed care group health insurance) that provides benefits
with respect to prescription drugs shall establish and operate
a drug utilization review program that includes the following:
`(A) Retrospective review of prescription drugs furnished
to enrollees.
`(B) Education of physicians, enrollees, and pharmacists
regarding the appropriate use of prescription drugs.
`(C) An ongoing periodic examination of data on
outpatient prescription drugs to ensure quality therapeutic
outcomes for enrollees.
`(D) A primary emphasis on enhancing quality of care for
enrollees by assuring appropriate drug therapy.
`(E) Clinically relevant criteria and standards for drug
therapy.
`(F) Application of nonproprietary criteria and
standards, developed and revised through an open,
professional consensus process.
`(G) Interventions which focus on improving therapeutic
outcomes.
`(H) An educational outreach program that--
`(i) is directed to enrollees, pharmacists, and other
health care professionals, and
`(ii) emphasizes the appropriate use of prescription
drugs.
`(I) Denial of services under prospective review of drug
therapy only in cases of enrollee ineligibility, coverage
limitations, or fraud.
`(J) Determination of the appropriate drug therapy for
the enrollee by the prescribing health care professional
and prohibitions of substitutions without the direct
approval of such professional.
`(e) COVERAGE OF EXPERIMENTAL TREATMENTS-
`(1) IN GENERAL- A managed care group health plan (and a
health insurance issuer offering managed care group health
insurance) that limits coverage for services shall define the
limitation and disclose the limits in any agreement or
certificate of coverage. Such disclosure shall include--
`(A) who is authorized to make such a determination, and
`(B) the criteria the plan or issuer uses to determine
whether a service is experimental.
`(2) DENIALS- A managed care group health plan (and a health
insurance issuer offering managed care group health insurance)
that denies coverage for an experimental treatment, procedure,
drug, or device, for an enrollee who has a terminal condition
or illness shall provide the enrollee with a denial letter
within 20 working days of the submitted request. The letter
shall include--
`(A) the name and title of the individual making the
decision;
`(B) a statement setting forth the specific medical and
scientific reasons for denying coverage;
`(C) a description of alternative treatment, services, or
supplies covered by the plan or under the coverage, if any;
and
`(D) a copy of the plan's or issuer's grievance and
appeal procedure.
`(3) EXPERIMENTAL TREATMENT DEFINED- In this subsection, the
term `experimental treatment' means treatment that, while not
commonly used for a particular condition or illness,
nevertheless is recognized for treatment of the particular
condition or illness, and there is no clearly superior,
nonexperimental treatment alternative available to the enrollee.
`(f) QUALITY ASSURANCE PROGRAM-
`(1) IN GENERAL- A managed care group health plan (and a
health insurance issuer offering managed care group health
insurance) shall develop comprehensive quality assurance
standards, adequate to identify, evaluate, and remedy problems
relating to access, continuity, and quality of care. The
standards shall include--
`(A) an ongoing, written, internal quality assurance
program;
`(B) specific written guidelines for quality of care
studies and monitoring, including attention to vulnerable
populations;
`(C) performance and clinical outcomes-based criteria;
`(D) a procedure for remedial action to correct quality
problems, including written procedures for taking
appropriate corrective action;
`(E) a plan for data gathering and assessment under
subsection (g); and
`(F) a peer review process.
`(2) PROCESS FOR SELECTION OF PROFESSIONALS- A managed care
group health plan (and a health insurance issuer offering
managed care group health insurance) shall have a process for
selection of health care professionals who will be
participating professionals, with written policies and
procedures for standards used by the plan or issuer. Such
process shall meet the following requirements:
`(A) The plan or issuer shall establish minimum
professional requirements.
`(B) The plan or issuer shall demonstrate that it has
consulted with appropriately qualified health care
professionals to establish the requirements.
`(C) The process shall include verification of the
individual practitioner's license, history of suspension or
revocation, and liability claims history.
`(D) The plan or issuer shall establish a formal,
written, ongoing, process for the reevaluation of all
participating health care professionals within a specified
number of years after the initial acceptance. Such
reevaluations shall include updates of the previous review
criteria and an assessment of the performance pattern based
on criteria including enrollee clinical outcomes, number of
complaints, and malpractice actions.
`(3) LIMITATION ON USE OF PROFESSIONALS- A managed care group
health plan (and a health insurance issuer offering managed
care group health insurance) shall not use a health care
professional beyond, or outside of, the professional's legally
authorized scope of practice.
`(g) DATA SYSTEMS AND CONFIDENTIALITY-
`(1) IN GENERAL- A managed care group health plan (and a
health insurance issuer offering managed care group health
insurance) shall provide information on the plan's or issuer's
structure, decision making process, health care benefits and
exclusions, cost and cost-sharing requirements, list of
participating providers and health care professionals as well
as grievance and appeal procedures, to all potential enrollees,
all enrollees covered by the plan or coverage, and, to the
Secretary (or, with respect to a health insurance issuer, to
the State oversight agency).
`(2) REPORTING OF DATA- A managed care group health plan (and
a health insurance issuer offering managed care group health
insurance) shall collect and report annually to the Secretary
(or, in the case of a health insurance issuer, State oversight
agency) specified data including--
`(A) gross outpatient and hospital utilization data;
`(B) enrollee clinical outcome data;
`(C) the number and types of enrollee grievances or
complaints during the year, the status of decisions, and
the average time required to reach a decision; and
`(D) the number, amount, and disposition of malpractice
claims resolved during the year by the plan or issuer and
any of its participating health care providers and
professionals.
`(3) REPORTING- All data specified in paragraphs (1) and (2)
shall be reported to the Secretary or, in the case of a health
insurance issuer, the State oversight agency and shall be
available to the public on a timely basis.
`(4) MEDICAL RECORDS AND CONFIDENTIALITY- A managed care
group health plan (and a health insurance issuer offering
managed care group health insurance) shall--
`(A) establish written policies and procedures for the
handling of medical records and enrollee communications to
ensure enrollee confidentiality;
`(B) ensure the confidentiality of specified enrollee
information, including, prior medical history, medical
record information and claims information, except where
disclosure of this information is required by law; and
`(C) not release any individual patient record
information, unless such a release is authorized in writing
by the enrollee or otherwise required be law.
`(h) CLINICAL DECISION MAKING-
`(1) APPOINTMENT OF MEDICAL DIRECTOR- A managed care group
health plan (and a health insurance issuer offering managed
care group health insurance) shall appoint a medical director
who is a licensed physician in the State in which the plan or
issuer operates, who shall be responsible for treatment
policies protocols, quality assurance activities, and
utilization management decisions of the plan or issuer.
`(2) DISCLOSURE ABOUT FINANCIAL ARRANGEMENTS- A managed care
group health plan (and a health insurance issuer offering
managed care group
health insurance) shall inform enrollees of the financial
arrangements between the plan or issuer and participating providers
and professionals (including pharmacists), if those arrangements
include incentives or bonuses for restriction of services.
`(3) QUALITY ASSURANCE DEFINED- In this subsection, the term
`quality assurance' means the ongoing evaluation of the quality
of health care provided to enrollees.
`(4) OVERSIGHT- The Secretary is responsible for performance
of annual audits of managed care group health plans and, in the
case of a health insurance issuer, the State oversight agency
is responsible for performance of annual audits of managed care
health insurance coverage offered by such issuers, in order to
review enrollee clinical outcome data, enrollee service data,
and operational and other financial data.
`(i) GRIEVANCE PROCEDURES, REVIEWS, AND APPEALS-
`(1) IN GENERAL- A managed care group health plan (and a
health insurance issuer offering managed care group health
insurance) shall provide written notification to enrollees, in
a language enrollees understand, regarding the right to file a
grievance concerning denials or limitations of coverage under
the plan or coverage. At a minimum, such notification shall be
given--
`(A) prior to enrollment in the plan or under the
coverage; and
`(B) at the time care is denied or limited under the plan
or coverage.
`(2) NOTICE OF RIGHT TO FILE GRIEVANCE- At the time of such a
denial, such a plan or issuer shall notify the enrollee of the
right to file a grievance. Such notice shall be in writing and
shall include the reason for denial, the name of the individual
responsible for the decision, the criteria for determination,
and the enrollee's right to file a grievance.
`(3) GRIEVANCE PROCEDURES- The grievance procedures under the
plan or coverage shall include--
`(A) identification of the reviewing body and an
explanation of the process of review;
`(B) an initial investigation and review;
`(C) notification within a reasonable amount of time of
the outcome of the grievance; and
`(D) an appeal procedure.
`(4) TIME LIMITS-
`(A) IN GENERAL- Such a plan or issuer shall set
reasonable time limits for each part of the review process,
but in no case shall the review extend beyond 30 days.
`(B) EXPEDITED REVIEW- Such a plan or issuer shall
provide for expedited review for cases involving an
imminent, emergent, or serious threat to the health of an
enrollee. In such case the plan or issuer shall--
`(i) immediately inform the enrollee of this right, and
`(ii) provide the enrollee with a written statement
of the disposition or pending status of the grievance
within 72 hours of the commencement of the review
process.
`(5) REPORTING- Such a plan or issuer shall report to the
Secretary or, in the case of a health insurance issuer, the
State oversight agency, the number of grievances and appeals
received by the plan or issuer within a specified time period,
including if applicable, the outcomes or current status of the
grievance and appeals as well as the average time taken to
resolve both grievances and appeals.
`(6) DEFINITIONS- In this subsection:
`(A) APPEAL- The term `appeal' means a formal process
whereby an enrollee whose care has been reduced, denied, or
terminated, or whereby the enrollee deems the care
inappropriate, can contest an adverse grievance decision by
the plan or issuer.
`(B) The term `expedited review' means a review process
which takes no more than 72 hours after the review is
commenced.
`(C) The term `grievance' means a written complaint
submitted by or on behalf of the enrollee.
`(j) NOTICE- A group health plan under this part shall comply
with the notice requirement under section 713(j) of the Employee
Retirement Income Security Act of 1974 with respect to the
requirements of this section as if such section applied to such plan.
`(k) GENERAL DEFINITIONS- For purposes of this section:
`(1) The term `enrollee' means an individual who is entitled
to benefits under a managed care group health plan or under
managed care health insurance coverage offered in connection
with such a plan.
`(2) The term `health care provider' means a clinic, hospital
physician organization, preferred provider organization,
independent practice association, or other appropriately
licensed provider of health care services or supplies.
`(3) The term `health care professional' means a physician or
other health care practitioner providing health care services.
`(4) The term `managed care' means, with respect to a group
health plan or health insurance coverage, a plan or coverage
that provides financial incentives for enrollees to obtain
benefits through participating health care providers or
professionals.
`(5) The term `participating' means, with respect to a health
care provider or professional and a group health plan or health
insurance coverage offered by a health insurance issuer, such a
provider or professional that has entered into an agreement
with the plan or issuer with respect to the provision of health
care services to enrollees under the plan or coverage.
`(6) The term `primary care practitioner' means, with respect
to a group health plan or health insurance coverage offered by
a health insurance issuer, a health care professional (who may
be a family practice physician, general practice physician,
internist, obstetrician/gynecologist, or pediatrician)
designated by the plan or issuer to coordinate, supervise, or
provide ongoing care to enrollees.
`(7) The term `State oversight agency' means, with respect to
a health insurance issuer, the State agency responsible for the
regulation of the issuer.'.
(2) Section 2723(c) of such Act (42 U.S.C. 300gg-23(c)), as
amended by section 604(b)(2) of Public Law 104-204, is amended by
striking `section 2704' and inserting `sections 2704 and 2706'.
SEC. 4. MANAGED CARE CONSUMER PROTECTIONS UNDER INDIVIDUAL HEALTH INSURANCE COVERAGE.
(a) IN GENERAL- Part B of title XXVII of the Public Health Service Act, as amended by section 605(a) of Public Law 104-204, is amended by inserting after section 2751 the following new section:
`SEC. 2752. MANAGED CARE CONSUMER PROTECTIONS.
`(a) IN GENERAL- The provisions of section 2706 (other than
subsection (j)) shall apply to health insurance coverage offered by
a health insurance issuer in the individual market in the same
manner as it applies to health insurance coverage offered by a
health insurance issuer in connection with a group health plan.
`(b) NOTICE- A health insurance issuer under this part shall
comply with the notice requirement under section 713(j) of the
Employee Retirement Income Security Act of 1974 with respect to the
requirements referred to in subsection (a) as if such section
applied to such issuer and such issuer were a group health plan.'.
(b) CONFORMING AMENDMENT- Section 2762(b)(2) of such Act (42
U.S.C. 300gg-62(b)(2)), as added by section 605(b)(3)(B) of Public
Law 104-204, is amended by striking `section 2751' and inserting
`sections 2751 and 2752'.
(a) GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE COVERAGE-
(1)
Subject to paragraph (2), the amendments made by section 3 shall
apply with respect to group health plans for plan years beginning
on or after January 1, 1998.
(2) 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 section 3 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) January 1, 1998.
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
section 3 shall not be treated as a termination of such collective
bargaining agreement.
(b) INDIVIDUAL HEALTH INSURANCE COVERAGE- The amendments made by
section 4 shall apply with respect to health insurance coverage
offered, sold, issued, renewed, in effect, or operated in the
individual market on or after January 1, 1998.
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