Consumer Choice Health Security Act of 1994

TABLE OF CONTENTS:

Title I: Tax and Insurance Provisions

Subtitle A: Tax Treatment of Health Care Expenses

Subtitle B: Insurance Provisions

Subtitle C: Employer Provisions

Subtitle D: Federal Preemption

Subtitle E: Report

Title II: Medicare and Medicaid Reforms

Subtitle A: Medicare

Subtitle B: Medicaid

Title III: Health Care Liability Reform

Title IV: Administrative Cost Savings

Subtitle A: Standardization of Claims Processing

Subtitle B: Electronic Medical Data Standards

Subtitle C: Development and Distribution of Comparative

Value Information

Subtitle D: Preemption of State Quill Pen Laws

Title V: Anti-Fraud

Subtitle A: Criminal Prosecution of Health Care Fraud

Subtitle B: Coordination of Health Care Anti-Fraud and

Abuse Activities

Title VI: Antitrust Provisions

Title VII: Long-Term Care

Title VIII: Welfare Restrictions for Aliens

Title IX: Increase in Assistance to Community and Migrant

Health Centers from Residual Savings

Consumer Choice Health Security Act of 1994 - Title I: Tax and Insurance Provisions - Subtitle A: Tax Treatment of Health Care Expenses - Amends the Internal Revenue Code to allow a tax credit for health care expenses based upon percentages of qualified health insurance premiums and adjusted gross income. Provides for employers to make advance payments of such credit.

(Sec. 102) Allows individuals a tax credit for a percentage of contributions made to a medical care savings account established for the benefit of an eligible individual.

Exempts such accounts from taxation.

Establishes an excise tax for excess contributions to medical care savings accounts and makes such accounts subject to the tax on prohibited transactions.

(Sec. 103) Terminates the medical expense deduction, the deduction for health insurance costs of self-employed individuals, and the exclusion for employer-provided health insurance.

Subtitle B: Insurance Provisions - Part I: Federally Qualified Health Insurance Plans - Sets forth requirements for federally qualified health insurance plans, including coverage for acute medical care, cost-sharing, premium rating practices, and guaranteed issuance and renewability.

Part II: Certification of Federally Qualified Health Insurance Plans - Requires States to meet standards for regulatory programs for the certification of federally qualified health insurance plans.

Subtitle C: Employer Provisions - Requires employers to: (1) withhold health insurance premiums from employee wages and remit such premiums to the employee's chosen insurer; and (2) notify each employee of their right to claim an advance refundable tax credit for such premiums.

(Sec. 122) Provides for the conversion of existing insurance plans to required coverage under this Act.

(Sec. 125) Establishes the Benefits Cash Out Commission to propose a procedure under which individuals may cash out Federal health benefits. Provides for congressional consideration of such proposal prior to its implementation.

(Sec. 126) Imposes excise taxes on employers and health insurance carriers for noncompliance with this Act.

Subtitle D: Federal Preemption - Preempts specified State laws concerning health insurance.

Subtitle E: Report - Requires the Secretary of Health and Human Services to report to the Congress five years after the enactment of this Act on certain aspects of health insurance coverage.

Title II: Medicare and Medicaid Reforms - Subtitle A: Medicare - Directs the Secretary to study and report to the Congress on the feasibility of permitting future Medicare beneficiaries to elect, upon attaining Medicare eligibility, to retain private health insurance coverage and receive, in lieu of Medicare benefits, certificates for use in purchasing private health insurance coverage.

(Sec. 202) Amends title XVIII (Medicare) of the Social Security Act (SSA) to eliminate Medicare hospital disproportionate share adjustment payments.

(Sec. 203) Revises the formula to reduce the adjustment for indirect medical education.

(Sec. 204) Declares that the amount payable for post-hospital extended care services furnished an individual during any spell of illness shall be reduced by a copayment equal to 20 percent of the average of all per day costs for such services.

(Sec. 205) Changes payment updates for all payment rates under the hospital insurance program from a fiscal year to a calendar year basis.

(Sec. 206) Revises the existing schedule to accelerate the transition to prospective rates for facility costs in hospital outpatient departments.

Subtitle B: Medicaid - Amends SSA title XIX (Medicaid) to specify a cap on Federal payments for acute medical services furnished under the Medicaid program.

(Sec. 212) Directs the Secretary to establish a process under which a State with an approved plan may apply for waivers of SSA requirements in order to establish innovative and cost effective programs for furnishing acute medical services to eligible Medicaid recipients.

(Sec. 213) Terminates disproportionate share payments.

(Sec. 214) Directs the Secretary to make grants to States for programs under which individuals with incomes below 150 percent of the income official poverty line are provided health insurance coverage, acute medical services, preventive care, and disease prevention services.

Title III: Health Care Liability Reform - Health Care Liability Reform Act of 1994 - Applies this subtitle to any health care malpractice action filed in any Federal or State court and any such claim resolved through arbitration.

(Sec. 303) Limits to $100,000 what any person may be required to pay in a single payment in damages for expenses to be incurred in the future, but allows for periodic payments.

States that the total amount of damages received by an individual shall be reduced by any other compensatory payments received under certain Federal, State, or private programs.

Sets a statute of limitations for medical malpractice liability claims of two years after an alleged injury should reasonably have been discovered, but in no event more than four years after the alleged injury occurred (or in the case of a minor under age six, no later than the tenth birthday).

Sets forth limitations on attorney's fees.

(Sec. 304) Prohibits the application of strict liability to any manufacturer or seller of a health care product approved by the Food and Drug Administration (FDA) for any injury alleged to have resulted from: (1) a defect in product design; or (2) a failure to warn or instruct regarding a risk posed by the product that was neither known nor reasonably knowable at the time the product left the manufacturer's or seller's control.

States that a manufacturer or seller of a health care product that is to be prescribed by, or used at the direction of, a health care professional shall not be liable (except in specified circumstances) for harm allegedly caused by a failure to warn or instruct the ultimate product user or recipient (unless the FDA specifically requires a warning or instruction to the ultimate user or recipient), if the manufacturer or seller provided adequate warning or instruction to the user's or recipient's health care professional.

(Sec. 305) Limits to $250,000 the total amount of noneconomic damages awardable to a plaintiff and family for losses resulting from the injury which is the subject of a medical malpractice liability action. Declares that the liability of each defendant in such an action shall be several only and not joint, and limited to the defendant's percentage of responsibility.

Allows punitive damages only if clear and convincing evidence establishes that the claimant suffered harm as the result of conduct by the defendant exhibiting conscious, flagrant indifference to the health of persons who might be harmed by the product. Prohibits the award of punitive damages against a manufacturer or seller (except in specified circumstances) for harm caused by an FDA-approved health care product.

Title IV: Administrative Cost Savings - Subtitle A: Standardization of Claims Processing - Directs the HHS Secretary to adopt (taking into account the recommendations of specified taskforces) standards relating to: (1) data elements for use in paper and electronic claims processing; (2) uniform claims forms; and (3) uniform electronic transmission of the data elements. Sets forth requirements for application of such standards, and their periodic review and revision.

Subtitle B: Electronic Medical Data Standards - Directs the HHS Secretary to promulgate electronic medical data standards meeting specified criteria for hospitals and other providers. Sets a deadline for each hospital with a Medicare participation agreement to meet such standards.

(Sec. 413) Authorizes the heads of appropriate Federal agencies, as of January 1, 2000, to require health care providers to present and transmit data elements electronically according to such standards.

(Sec. 415) Directs the HHS Secretary to establish an advisory commission to monitor and advise about the standards established under this subtitle and operational concerns about their implementation. Authorizes appropriations.

Subtitle C: Development and Distribution of Comparative Value Information - Requires States to develop and implement a health care value information program meeting certain criteria according to a specified schedule. Authorizes the HHS Secretary to make grants to States to enable them to develop such programs.

(Sec. 422) Directs the HHS Secretary to take necessary action to implement a comparable information program in any State that fails to develop and implement one.

(Sec. 423) Requires the head of each Federal agency responsible for provision of health insurance or of health care services to individuals to develop promptly health care comparative value information.

Subtitle D: Preemption of State Quill Pen Laws - Preempts any State law that requires medical or health insurance records (including billing information) to be maintained in written rather than electronic form.

Title V: Anti-Fraud - Subtitle A: Criminal Prosecution of Health Care Fraud - Amends the Federal criminal code to impose penalties upon a health care provider that knowingly engages in any scheme or artifice to defraud a person in connection with the provision of health care.

(Sec. 502) Authorizes the Attorney General to pay a reward of up to $10,000 to a person who furnishes information unknown to the Government relating to a possible prosecution for health care fraud, with exceptions.

Subtitle B: Coordination of Health Care Anti-Fraud and Abuse Activities - Amends the Social Security Act to provide for: (1) the application of Federal health anti-fraud and abuse sanctions to all fraud and abuse against any health insurance plan; and (2) treble damages for making or causing to be made false statements or representations involving Medicare or State health care programs, for illegal remuneration, and for false statements or representations with respect to the condition or operation of health care institutions.

Directs the Secretary of Health and Human Services, in consultation with State and local health care officials, to: (1) identify opportunities for the satisfaction of community service obligations that a court may impose upon the conviction of a criminal offense involving Medicare or State health care programs; and (2) make information concerning such opportunities available to Federal and State law enforcement officers and State and local health care officials.

Title VI: Antitrust Provisions - Exempts from the antitrust laws specified "safe harbor" activities related to the provision of health care services. Sets forth provisions regarding the award of attorney fees and costs of suit to the prevailing party in an action based on a claim involving activity found to be exempt.

(Sec. 602) Lists as safe harbors specified: (1) activities relating to health care services of combinations of health care providers with market share below a specified threshold; (2) activities of medical self-regulatory entities relating to standard setting or enforcement activities not conducted for purposes of financial gain; (3) participation of a health care provider in a written survey of the prices of services, reimbursement levels, or the compensation and benefits of employees and personnel; (4) activities relating to health care joint ventures for high technology and costly equipment and services; (5) activities relating to hospital mergers; (6) joint purchasing arrangements; and (7) negotiations.

(Sec. 603) Directs the Attorney General to publish a notice in the Federal Register soliciting proposals for additional safe harbors and to review and report to the Congress on proposed safe harbors. Sets forth criteria in establishing safe harbors, including: (1) the extent to which a competitive or collaborative activity will accomplish an increase in health care access and quality, the establishment of cost efficiencies, and increased ability of health care facilities to provide services in medically underserved areas or to underserved populations; and (2) whether designation as a safe harbor will result in specified desirable outcomes.

(Sec. 604) Directs the Attorney General to issue certificates of review for providers of health care services and to assist persons in applying for such certificates. Sets forth provisions regarding applications for, revocation of, and review of determinations regarding such certificates. Limits the disclosure of information.

(Sec. 605) Sets forth provisions regarding notifications providing for a reduction in certain penalties under the antitrust laws for health care cooperative ventures.

(Sec. 606) Directs the Attorney General to: (1) review the safe harbors and certificates of review periodically; and (2) promulgate such rules, regulations, and guidelines as necessary to carry out provisions of this title.

Title VII: Long-Term Care - Amends the Internal Revenue Code to exclude from gross income certain amounts withdrawn from individual retirement accounts and certain employer cash or deferred arrangements to pay long-term care premiums.

(Sec. 702) Provides for the nonrecognition of gain or loss on the exchange of any life insurance contract or an endowment or annuity contract for a long- term care insurance contract.

(Sec. 703) Provides for the exclusion as a death benefit of any amount paid or advanced to an individual under a life insurance contract because such individual is terminally ill, or chronically ill and has been permanently confined to a qualified facility.

Title VIII: Welfare Restrictions for Aliens - Makes aliens (with exceptions for refugees, aged, and current residents) ineligible for specified public welfare assistance (except for emergency medical assistance).

Amends the Social Security Act to require State Aid to Families with Dependent Children (AFDC) agencies to provide information on illegal aliens to the Immigration and Naturalization Service.

Title IX: Increase in Assistance to Community and Migrant Health Centers From Residual Savings - Directs the HHS Secretary to provide for a program of grants to migrant and community health centers to promote primary health care services for underserved individuals. Authorizes appropriations.

(Sec. 901) Requires the Secretary to study and report to Congress on the impact of such grants on access to health care, birth outcomes, and the use of emergency room services.