Advancement of Health Care Reform Act of 1994

TABLE OF CONTENTS:

Title I:

Subtitle A: Short title; Table of Contents

Subtitle B: Federally Qualified Health Insurance Plan

Subtitle C: Certification of Federally Qualified Health

Insurance Plans

Title II: Paperwork Reduction and Administrative

Simplification

Title III: Health Care Liability Reform

Subtitle A: General Provisions

Subtitle B: Medical Malpractice and Product Liability

Reform

Subtitle C: Requirements for State Alternative Dispute

Resolution Systems (ADR)

Title IV: Antitrust Provisions

Title V: Anti-Fraud and Abuse Control Program

Subtitle A: All-Payer Fraud and Abuse Control Program

Subtitle B: Revisions to Current Sanctions for Fraud and

Abuse

Subtitle C: Administrative and Miscellaneous Provisions

Subtitle D: Amendments to Criminal Law

Title VI: Expanding Access in Rural Areas

Title VII: Tax Provisions

Title VIII: Revenue Provisions

Advancement of Health Care Reform Act of 1994 - Amends COBRA provisions of the Internal Revenue Code with respect to continuation coverage requirements to permit the options of: (1) identical coverage; (2) coverage with an annual $1,000 deductible; and (3) coverage with an annual $3,000 deductible. Permits penalty-free withdrawals from qualified retirement plans for such coverage.

Subtitle B: Federally Qualified Health Insurance Plan - Establishes standards for the certification of a health insurance plan as a federally qualified health insurance plan. Requires a federally qualified plan to, among other requirements: (1) cover medically necessary acute care, including, physician services, inpatient, outpatient, and emergency hospital services and appropriate alternatives to hospitalization, and inpatient and outpatient prescription drugs; (2) have specified limits on deductibles and coinsurance payments; (3) vary premium rates only in the basis of age, sex, and geography, except that discounts may be offered to individuals who participate in specified programs which promote healthy behavior, prevent the onset of illness, or provide for the early detection of illness; (4) provide guaranteed issue at standard rates to all applicants and not exclude from coverage, on the basis of a preexisting medical condition, an individual who has been continuously insured for the preceeding year or, in the care of a break in coverage, not exclude an indivdual from coverage for more than one year; and (5) not exclude a policyholder from coverage, except for nonpayment of premiums or fraud or misrepresentation by the policyholder.

Subtitle C: Certification of Federally Qualified Health Insurance Plans - Requires each State to establish a regulatory program with specified requirements, including: (1) procedures certifying that the requirements of subtitle B have been met by a health insurance plan applying as a federally qualified health insurance plan; (2) meeting solvency standards; (3) reporting requirements under which carriers report to the Internal Revenue Service regarding the acquisition and termination by individuals of coverage under federally qualified health insurance plans; and (4) requirements for the passback of claims and premiums with respect to an individual who has been continuously treated for a treatment and who moves to a new plan; and requirements concerning market practices, risk adjustment or reinsurance, and nonbinding standards for premiums rating practices and guaranteed renewability of coverage.

Title II: Paperwork Reduction and Administrative Simplification - Preempts State quill pen laws.

(Sec. 202) Provides for the confidentiality of electronic health care information.

(Sec. 203) Directs the Secretary to establish national goals for the health care industry concerning the: (1) standardization for the electronic receipt and transmission of health plan information; (2) use of uniform health claims forms and identification numbers; (3) priority of insurers when benefits are payable under two or more health plans; and (4) availability of information among health plans when benefits are payable under two more plans. Requires the Secretary to promulgate requirements if the industry does not meet the goals. Provides for monetary penalties on any health plan that does not meets the Secretary's requirements.

Title III: Health Care Liability Reform - Subtitle A: General Provisions - Makes the provisions of this title applicable to any medical malpractice liability claim or action in any Federal or State court, except for a vaccine-related claim or action or to the extent that title XXI of the Public Health Service Act applies.

Subtitle B: Medical Malpractice and Product Liability Reform - Requires the initial resolution of a medical malpractice liability action through the alternative dispute resolution process.

Limits the total amount of damages that may be awarded for noneconomic losses resulting from a medical malpractice or health care product liability claim to $250,000, unless there is a finding of special circumstances. Prohibits punitive or exemplary damages, unless malicious, wanton, willful, or excessively reckless behavior was involved. Prohibits punitive or exemplary damages against the manufacturer of a medical product. Directs that any punitive or exemplary damages awarded must be paid to the State for use in carrying out quality assurance activities. Provides for the periodic payment of damages exceeding $100,000.

Sets forth provisions: (1) limiting attorney's fees; (2) permitting a defendant to be held severally but not jointly liable; (3) setting the statute of limitations; (4) requiring each State to develop a set of specialty clinical practice guidelines which; if used to establish a rebuttable presumption, may only be overcome by the presentation of clear and convincing evidence; (5) which permit a finding of negligence only if the defendants conduct was not reasonable; and (6) making special provision for certain obstetric services.

Subtitle C: Requirements for State Alternative Dispute Resolution Systems (ADR) - Establishes the basic requirements for a State's ADR and provides for the certification of such systems. Sets forth reporting requirements concerning the evaluation of such systems.

Title IV: Antitrust Provisions - Exempts from the antitrust laws specified "safe harbor" activities related to the provision of health care services. Sets forth provision 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. 402) 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. 403) 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. 404) 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. 405) Sets forth provisions regarding notifications providing for a reduction in certain penalties under the antitrust laws for health care cooperative ventures.

(Sec. 406) Directs the Attorney General to: (1) periodically review the safe harbors and certificates of review; and (2) promulgate such rules, regulations, and guidelines as necessary to carry out provisions of this title.

(Sec. 408) Establishes within the Department of Health and Human Services an Office of Health Care Competition Policy.

Title V: Anti-Fraud And Abuse Control Program - Subtitle A: All-Payer Fraud and Abuse Control Program - Requires the Secretary to establish in the Office of the Inspector General of the Department of Health and Human Services a program to control fraud and abuse under the universal health care plan. Establishes the Anti-Fraud and Abuse Trust Fund.

(Sec. 502) Amends title XI of the Social Security Act (SSA) to provide for the application of the penalties for Medicare and Medicaid fraud to all health care programs.

(Sec. 503) Requires the Secretary to establish a program through which Medicare-eligible individuals may report instances of suspected fraud under Medicare.

Subtitle B: Revisions to Current Sanctions for Fraud and Abuse - Revises current SSA title XI sanctions for fraud and abuse involving Medicare and State health care programs, providing for: (1) program exclusion for individuals convicted of a felony relating to fraud or the unlawful manufacture or dispensing of a controlled substance; (2) new offenses under civil monetary penalty provisions, such as the offering of inducements to program-eligible individuals; (3) establishment of a minimum period of exclusion for practitioners and persons who fail to meet statutory obligations; (4) intermediate sanctions on eligible health maintenance organizations for program violations; and (5) procedures for imposing such sanctions.

Subtitle C: Administrative and Miscellaneous Provisions - Directs the Secretary to establish a national health care fraud and abuse data collection program for the reporting by each government agency and health care plan of final adverse actions against health care providers, suppliers, and practitioners. Requires program information to be made available to the public for a reasonable fee.

(Sec. 522) Amends SSA title XI to require the Secretary to publish in the Federal Register a listing of all final adverse actions taken during the quarter.

Subtitle D: Amendments to Criminal Law - Amends the Federal criminal code to set penalties for knowingly executing a scheme or artifice to: (1) defraud any health care plan in connection with the delivery of, or payment for, health care benefits, items, or services (benefits); or (2) obtain, by means of false or fraudulent pretenses, representations, or promises, money or property owned by, or under the custody or control of, any health care plan or person in connection with the delivery of, or payment for, health care benefits.

(Sec. 532) Directs the court, upon a finding that a Federal health care offense is of a type that poses a serious threat to the health of any individual, or has a significant detrimental impact on the health care system, to order a person convicted of that offense to forfeit property that was used in the commission of the offense or that constitutes or was derived from proceeds traceable to the offense that is of a value proportionate to the seriousness of the offense.

(Sec. 533) Authorizes the Attorney General to commence a civil action in Federal court to enjoin a violation constituting a Federal health care offense.

(Sec. 534) Makes commission of a Federal health care offense a predicate to a violation of the Racketeer Influenced and Corrupt Organizations (RICO) statute.

Subtitle E: Amendments to Civil False Claims Act - Makes provisions of the Civil False Claims Act applicable to the use of false records or statements made to a health care plan. Includes within the definition of "claim" for purposes of such Act any request or demand for money or property which is made or presented to a health care plan.

Title VI: Expanding Access In Rural Areas - Rural Health Innovation Demonstration Act of 1993 - Amends the Public Health Service Act to authorize competitive grants: (1) to develop networks among rural and urban health care providers to preserve and share health care resources and enhance the quality and availability of health care in rural areas; (2) to develop and administer cooperatives in rural areas that will establish an effective case management and reimbursement system designed to support the economic viability of essential public or private health services, facilities, health care systems, and health care resources; and (3) to develop and implement a plan for mental health outreach programs in rural areas.

(Sec. 605) Authorizes grants to enable rural communities to provide stipends to encourage health professional trainees to practice in such areas.

Reauthorizes area health education center programs.

Title VII: Tax Provisions - Amends the Internal Revenue Code to prohibit a business expense deduction for an employer's expenses for a group health plan or contributions to an employee's medical savings account, unless the plan is a federally qualified health plan.

Extends permanently and increases to 100 percent the health insurance tax deduction for self-employed individuals.

Title VIII: Revenue Provisions - Amends the Congressional Budget Act of 1974, with respect to FY 1995 through 1998, to provide for a discretionary spending limit reduction of four-tenths of one percent in the discretionary category of the amounts set forth in H. Con. Res. 64.