Directs the Secretary of Health and Human Services to establish the Health Care Consumer Assistance Fund, to be used to award grants to eligible States to carry out consumer assistance activities designed to provide information, assistance, and referrals to consumers of health insurance products.
Requires access to care, including non-network providers, timely access to specialty care, direct access to specialists in obstetrics and gynecology, investigational drug and device coverage, coverage for patients in clinical trials, and the inpatient period for breast cancer patients.
Prohibits restricting a health care professional's communications with a patient, discrimination against a provider solely because of the provider's license or certification, improper incentives, and retaliation for patient advocacy, including by providers. Requires prompt claims payment.
Delays the required submission date of a letter of credit by carriers administering Supplementary Medical Insurance.
Sets forth patient safety improvement provisions.
Amends the Employee Retirement Income Security Act of 1974 and the Public Health Service Act to prohibit certain employee group health plans or related insurances providing both medical-surgical and mental health benefits from imposing mental health treatment limitations or financial requirements unless comparable limitations and requirements are imposed upon medical-surgical benefits.
Provides for the automatic enrollment in Title XXI (currently, the State Children's Health Insurance Program - renamed the FamilyCare Program under this Act) of the Social Security Act of children born to title XXI parents.
Provides expanded Medicaid benefits for disabled children and for psychiatric care for individuals under age 21.
Amends Social Security Act provisions with respect to the welfare-to-work transition under the Medicaid program.
Authorizes the Secretary to award demonstration grants to a limited number of States to conduct innovative programs designed to improve outreach to homeless individuals and families under specified programs for the homeless (including Medicaid and FamilyCare) with respect to enrollment of such individuals and families and the provision of services under such programs.
Amends the Indian Health Care Act to guarantee specified amounts of funding for Indian health care.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 10 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 10
To protect consumers in managed care plans and other health coverage,
to provide for parity with respect to mental health coverage, to reduce
medical errors, and to increase the access of individuals to quality
health care.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 7, 2003
Mr. Daschle (for himself, Mr. Kennedy, Ms. Stabenow, Mrs. Clinton, Mr.
Schumer, Mrs. Murray, Mr. Corzine, Mr. Durbin, Mr. Lieberman, Ms.
Mikulski, Mr. Levin, Mr. Rockefeller, Mr. Akaka, Mr. Johnson, Mr.
Sarbanes, Mr. Dayton, Mr. Lautenberg, Mr. Leahy, Mr. Reid, and Mr.
Pryor) introduced the following bill; which was read twice and referred
to the Committee on Finance
_______________________________________________________________________
A BILL
To protect consumers in managed care plans and other health coverage,
to provide for parity with respect to mental health coverage, to reduce
medical errors, and to increase the access of individuals to quality
health care.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Health Care
Coverage Expansion and Quality Improvement Act of 2003''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--PATIENT PROTECTIONS
Sec. 101. Short title.
Subtitle A--Improving Managed Care
Chapter 1--Utilization Review; Claims; and Internal and External
Appeals
Sec. 111. Utilization review activities.
Sec. 112. Procedures for initial claims for benefits and prior
authorization determinations.
Sec. 113. Internal appeals of claims denials.
Sec. 114. Independent external appeals procedures.
Sec. 115. Health care consumer assistance fund.
Chapter 2--Access To Care
Sec. 121. Consumer choice option.
Sec. 122. Choice of health care professional.
Sec. 123. Access to emergency care.
Sec. 124. Timely access to specialists.
Sec. 125. Patient access to obstetrical and gynecological care.
Sec. 126. Access to pediatric care.
Sec. 127. Continuity of care.
Sec. 128. Access to needed prescription drugs.
Sec. 129. Coverage for individuals participating in approved clinical
trials.
Sec. 130. Required coverage for minimum hospital stay for mastectomies
and lymph node dissections for the
treatment of breast cancer and coverage for
secondary consultations.
Chapter 3--Access To Information
Sec. 131. Patient access to information.
Chapter 4--Protecting The Doctor-patient Relationship
Sec. 141. Prohibition of interference with certain medical
communications.
Sec. 142. Prohibition of discrimination against providers based on
licensure.
Sec. 143. Prohibition against improper incentive arrangements.
Sec. 144. Payment of claims.
Sec. 145. Protection for patient advocacy.
Chapter 5--Definitions
Sec. 151. Definitions.
Sec. 152. Preemption; State flexibility; construction.
Sec. 153. Exclusions.
Sec. 154. Treatment of excepted benefits.
Sec. 155. Regulations.
Sec. 156. Incorporation into plan or coverage documents.
Sec. 157. Preservation of protections.
Subtitle B--Application of Quality Care Standards to Group Health Plans
and Health Insurance Coverage Under the Public Health Service Act
Sec. 161. Application to group health plans and group health insurance
coverage.
Sec. 162. Application to individual health insurance coverage.
Sec. 163. Cooperation between Federal and State authorities.
Subtitle C--Amendments to the Employee Retirement Income Security Act
of 1974
Sec. 171. Application of patient protection standards to group health
plans and group health insurance coverage
under the Employee Retirement Income
Security Act of 1974.
Sec. 172. Availability of civil remedies.
Sec. 173. Limitation on certain class action litigation.
Sec. 174. Limitations on actions.
Sec. 175. Cooperation between Federal and State authorities.
Sec. 176. Sense of the Senate concerning the importance of certain
unpaid services.
Subtitle D--Effective Dates; Coordination in Implementation
Sec. 181. Effective dates.
Sec. 182. Coordination in implementation.
Sec. 183. Severability.
Subtitle E--Miscellaneous Provisions
Sec. 191. No impact on Social Security Trust Fund.
Sec. 192. Customs user fees.
Sec. 193. Fiscal year 2003 medicare payments.
Sec. 194. Sense of Senate with respect to participation in clinical
trials and access to specialty care.
Sec. 195. Sense of the Senate regarding fair review process.
Sec. 196. Annual review.
TITLE II--MENTAL HEALTH PARITY
Sec. 201. Short title.
Sec. 202. Amendment to the Employee Retirement Income Security Act of
1974.
Sec. 203. Amendment to the Public Health Service Act relating to the
group market.
Sec. 204. Preemption.
Sec. 205. General accounting office study.
TITLE III--PATIENT SAFETY
Sec. 301. Short title.
Sec. 302. Purpose.
Sec. 303. Patient safety improvements.
Sec. 304. Required use of product identification technology.
TITLE IV--TAX CREDIT FOR OFFERING EMPLOYER-BASED HEALTH INSURANCE
COVERAGE
Sec. 401. Credit for employee health insurance expenses.
TITLE V--FAMILYCARE
Sec. 501. Renaming of title XXI program.
Sec. 502. Familycare coverage of parents and pregnant women under the
medicaid program and title XXI.
Sec. 503. Automatic enrollment of children born to title XXI parents.
Sec. 504. Optional coverage of legal immigrants under the medicaid
program and title XXI.
Sec. 505. Optional coverage of children through age 20 under the
medicaid program and title XXI.
Sec. 506. Application of simplified title XXI procedures under the
medicaid program.
Sec. 507. Improving welfare-to-work transition under the medicaid
program.
Sec. 508. Elimination of 100 hour rule and other AFDC-related
eligibility restrictions.
Sec. 509. Increased Federal reimbursement for language services under
the medicaid program and title XXI.
Sec. 510. Limitations on conflicts of interest.
Sec. 511. Title XXI funding.
Sec. 512. Changes to rules for redistribution and extended availability
of title XXI fiscal year 2000 and
subsequent fiscal year allotments.
Sec. 513. Demonstration programs to improve medicaid and title XXI
outreach to homeless individuals and
families.
Sec. 514. Technical and conforming amendments to authority to pay
medicaid expansion costs from title XXI
appropriation.
Sec. 515. Additional title XXI revisions.
TITLE VI--FAMILY OPPORTUNITY
Sec. 601. Opportunity for families of disabled children to purchase
medicaid coverage for such children.
Sec. 602. Treatment of inpatient psychiatric hospital services for
individuals under age 21 in home or
community-based services waivers.
Sec. 603. Development and support of family-to-family health
information centers.
Sec. 604. Restoration of medicaid eligibility for certain SSI
beneficiaries.
TITLE VII--TEMPORARY STATE FISCAL RELIEF
Sec. 701. Temporary State fiscal relief.
TITLE VIII--IMPROVEMENT OF THE PROCESS FOR THE DEVELOPMENT AND
IMPLEMENTATION OF MEDICAID AND SCHIP WAIVERS
Sec. 801. Improvement of the process for the development and
implementation of medicaid and SCHIP
waivers.
TITLE IX--INDIAN HEALTH CARE FUNDING
Sec. 901. Guaranteed adequate funding for Indian health care.
TITLE I--PATIENT PROTECTIONS
SEC. 101. SHORT TITLE.
This title may be cited as the ``Bipartisan Patient Protection
Act''.
Subtitle A--Improving Managed Care
CHAPTER 1--UTILIZATION REVIEW; CLAIMS; AND INTERNAL AND EXTERNAL
APPEALS
SEC. 111. UTILIZATION REVIEW ACTIVITIES.
(a) Compliance With Requirements.--
(1) In general.--A group health plan, and a health
insurance issuer that provides health insurance coverage, shall
conduct utilization review activities in connection with the
provision of benefits under such plan or coverage only in
accordance with a utilization review program that meets the
requirements of this section and section 112.
(2) Use of outside agents.--Nothing in this section shall
be construed as preventing a group health plan or health
insurance issuer from arranging through a contract or otherwise
for persons or entities to conduct utilization review
activities on behalf of the plan or issuer, so long as such
activities are conducted in accordance with a utilization
review program that meets the requirements of this section.
(3) Utilization review defined.--For purposes of this
section, the terms ``utilization review'' and ``utilization
review activities'' mean procedures used to monitor or evaluate
the use or coverage, clinical necessity, appropriateness,
efficacy, or efficiency of health care services, procedures or
settings, and includes prospective review, concurrent review,
second opinions, case management, discharge planning, or
retrospective review.
(b) Written Policies and Criteria.--
(1) Written policies.--A utilization review program shall
be conducted consistent with written policies and procedures
that govern all aspects of the program.
(2) Use of written criteria.--
(A) In general.--Such a program shall utilize
written clinical review criteria developed with input
from a range of appropriate actively practicing health
care professionals, as determined by the plan, pursuant
to the program. Such criteria shall include written
clinical review criteria that are based on valid
clinical evidence where available and that are directed
specifically at meeting the needs of at-risk
populations and covered individuals with chronic
conditions or severe illnesses, including gender-
specific criteria and pediatric-specific criteria where
available and appropriate.
(B) Continuing use of standards in retrospective
review.--If a health care service has been specifically
pre-authorized or approved for a participant,
beneficiary, or enrollee under such a program, the
program shall not, pursuant to retrospective review,
revise or modify the specific standards, criteria, or
procedures used for the utilization review for
procedures, treatment, and services delivered to the
enrollee during the same course of treatment.
(C) Review of sample of claims denials.--Such a
program shall provide for a periodic evaluation of the
clinical appropriateness of at least a sample of
denials of claims for benefits.
(c) Conduct of Program Activities.--
(1) Administration by health care professionals.--A
utilization review program shall be administered by qualified
health care professionals who shall oversee review decisions.
(2) Use of qualified, independent personnel.--
(A) In general.--A utilization review program shall
provide for the conduct of utilization review
activities only through personnel who are qualified and
have received appropriate training in the conduct of
such activities under the program.
(B) Prohibition of contingent compensation
arrangements.--Such a program shall not, with respect
to utilization review activities, permit or provide
compensation or anything of value to its employees,
agents, or contractors in a manner that encourages
denials of claims for benefits.
(C) Prohibition of conflicts.--Such a program shall
not permit a health care professional who is providing
health care services to an individual to perform
utilization review activities in connection with the
health care services being provided to the individual.
(3) Accessibility of review.--Such a program shall provide
that appropriate personnel performing utilization review
activities under the program, including the utilization review
administrator, are reasonably accessible by toll-free telephone
during normal business hours to discuss patient care and allow
response to telephone requests, and that appropriate provision
is made to receive and respond promptly to calls received
during other hours.
(4) Limits on frequency.--Such a program shall not provide
for the performance of utilization review activities with
respect to a class of services furnished to an individual more
frequently than is reasonably required to assess whether the
services under review are medically necessary and appropriate.
SEC. 112. PROCEDURES FOR INITIAL CLAIMS FOR BENEFITS AND PRIOR
AUTHORIZATION DETERMINATIONS.
(a) Procedures of Initial Claims for Benefits.--
(1) In general.--A group health plan, and a health
insurance issuer offering health insurance coverage, shall--
(A) make a determination on an initial claim for
benefits by a participant, beneficiary, or enrollee (or
authorized representative) regarding payment or
coverage for items or services under the terms and
conditions of the plan or coverage involved, including
any cost-sharing amount that the participant,
beneficiary, or enrollee is required to pay with
respect to such claim for benefits; and
(B) notify a participant, beneficiary, or enrollee
(or authorized representative) and the treating health
care professional involved regarding a determination on
an initial claim for benefits made under the terms and
conditions of the plan or coverage, including any cost-
sharing amounts that the participant, beneficiary, or
enrollee may be required to make with respect to such
claim for benefits, and of the right of the
participant, beneficiary, or enrollee to an internal
appeal under section 113.
(2) Access to information.--
(A) Timely provision of necessary information.--
With respect to an initial claim for benefits, the
participant, beneficiary, or enrollee (or authorized
representative) and the treating health care
professional (if any) shall provide the plan or issuer
with access to information requested by the plan or
issuer that is necessary to make a determination
relating to the claim. Such access shall be provided
not later than 5 days after the date on which the
request for information is received, or, in a case described in
subparagraph (B) or (C) of subsection (b)(1), by such earlier time as
may be necessary to comply with the applicable timeline under such
subparagraph.
(B) Limited effect of failure on plan or issuer's
obligations.--Failure of the participant, beneficiary,
or enrollee to comply with the requirements of
subparagraph (A) shall not remove the obligation of the
plan or issuer to make a decision in accordance with
the medical exigencies of the case and as soon as
possible, based on the available information, and
failure to comply with the time limit established by
this paragraph shall not remove the obligation of the
plan or issuer to comply with the requirements of this
section.
(3) Oral requests.--In the case of a claim for benefits
involving an expedited or concurrent determination, a
participant, beneficiary, or enrollee (or authorized
representative) may make an initial claim for benefits orally,
but a group health plan, or health insurance issuer offering
health insurance coverage, may require that the participant,
beneficiary, or enrollee (or authorized representative) provide
written confirmation of such request in a timely manner on a
form provided by the plan or issuer. In the case of such an
oral request for benefits, the making of the request (and the
timing of such request) shall be treated as the making at that
time of a claim for such benefits without regard to whether and
when a written confirmation of such request is made.
(b) Timeline for Making Determinations.--
(1) Prior authorization determination.--
(A) In general.--A group health plan, and a health
insurance issuer offering health insurance coverage,
shall make a prior authorization determination on a
claim for benefits (whether oral or written) in
accordance with the medical exigencies of the case and
as soon as possible, but in no case later than 14 days
from the date on which the plan or issuer receives
information that is reasonably necessary to enable the
plan or issuer to make a determination on the request
for prior authorization and in no case later than 28
days after the date of the claim for benefits is
received.
(B) Expedited determination.--Notwithstanding
subparagraph (A), a group health plan, and a health
insurance issuer offering health insurance coverage,
shall expedite a prior authorization determination on a
claim for benefits described in such subparagraph when
a request for such an expedited determination is made
by a participant, beneficiary, or enrollee (or
authorized representative) at any time during the
process for making a determination and a health care
professional certifies, with the request, that a
determination under the procedures described in
subparagraph (A) would seriously jeopardize the life or
health of the participant, beneficiary, or enrollee or
the ability of the participant, beneficiary, or
enrollee to maintain or regain maximum function. Such determination
shall be made in accordance with the medical exigencies of the case and
as soon as possible, but in no case later than 72 hours after the time
the request is received by the plan or issuer under this subparagraph.
(C) Ongoing care.--
(i) Concurrent review.--
(I) In general.--Subject to clause
(ii), in the case of a concurrent
review of ongoing care (including
hospitalization), which results in a
termination or reduction of such care,
the plan or issuer must provide by
telephone and in printed form notice of
the concurrent review determination to
the individual or the individual's
designee and the individual's health
care provider in accordance with the
medical exigencies of the case and as
soon as possible, with sufficient time
prior to the termination or reduction
to allow for an appeal under section
113(b)(3) to be completed before the
termination or reduction takes effect.
(II) Contents of notice.--Such
notice shall include, with respect to
ongoing health care items and services,
the number of ongoing services
approved, the new total of approved
services, the date of onset of
services, and the next review date, if
any, as well as a statement of the
individual's rights to further appeal.
(ii) Rule of construction.--Clause (i)
shall not be construed as requiring plans or
issuers to provide coverage of care that would
exceed the coverage limitations for such care.
(2) Retrospective determination.--A group health plan, and
a health insurance issuer offering health insurance coverage,
shall make a retrospective determination on a claim for
benefits in accordance with the medical exigencies of the case
and as soon as possible, but not later than 30 days after the
date on which the plan or issuer receives information that is
reasonably necessary to enable the plan or issuer to make a
determination on the claim, or, if earlier, 60 days after the
date of receipt of the claim for benefits.
(c) Notice of a Denial of a Claim for Benefits.--Written notice of
a denial made under an initial claim for benefits shall be issued to
the participant, beneficiary, or enrollee (or authorized
representative) and the treating health care professional in accordance
with the medical exigencies of the case and as soon as possible, but in
no case later than 2 days after the date of the determination (or, in
the case described in subparagraph (B) or (C) of subsection (b)(1),
within the 72-hour or applicable period referred to in such
subparagraph).
(d) Requirements of Notice of Determinations.--The written notice
of a denial of a claim for benefits determination under subsection (c)
shall be provided in printed form and written in a manner calculated to
be understood by the participant, beneficiary, or enrollee and shall
include--
(1) the specific reasons for the determination (including a
summary of the clinical or scientific evidence used in making
the determination);
(2) the procedures for obtaining additional information
concerning the determination; and
(3) notification of the right to appeal the determination
and instructions on how to initiate an appeal in accordance
with section 113.
(e) Definitions.--For purposes of this part:
(1) Authorized representative.--The term ``authorized
representative'' means, with respect to an individual who is a
participant, beneficiary, or enrollee, any health care
professional or other person acting on behalf of the individual
with the individual's consent or without such consent if the
individual is medically unable to provide such consent.
(2) Claim for benefits.--The term ``claim for benefits''
means any request for coverage (including authorization of
coverage), for eligibility, or for payment in whole or in part,
for an item or service under a group health plan or health
insurance coverage.
(3) Denial of claim for benefits.--The term ``denial''
means, with respect to a claim for benefits, a denial (in whole
or in part) of, or a failure to act on a timely basis upon, the
claim for benefits and includes a failure to provide benefits
(including items and services) required to be provided under
this subtitle.
(4) Treating health care professional.--The term ``treating
health care professional'' means, with respect to services to
be provided to a participant, beneficiary, or enrollee, a
health care professional who is primarily responsible for
delivering those services to the participant, beneficiary, or
enrollee.
SEC. 113. INTERNAL APPEALS OF CLAIMS DENIALS.
(a) Right to Internal Appeal.--
(1) In general.--A participant, beneficiary, or enrollee
(or authorized representative) may appeal any denial of a claim
for benefits under section 112 under the procedures described
in this section.
(2) Time for appeal.--
(A) In general.--A group health plan, and a health
insurance issuer offering health insurance coverage,
shall ensure that a participant, beneficiary, or
enrollee (or authorized representative) has a period of
not less than 180 days beginning on the date of a
denial of a claim for benefits under section 112 in
which to appeal such denial under this section.
(B) Date of denial.--For purposes of subparagraph
(A), the date of the denial shall be deemed to be the
date as of which the participant, beneficiary, or
enrollee knew of the denial of the claim for benefits.
(3) Failure to act.--The failure of a plan or issuer to
issue a determination on a claim for benefits under section 112
within the applicable timeline established for such a
determination under such section is a denial of a claim for
benefits for purposes this chapter as of the date of the
applicable deadline.
(4) Plan waiver of internal review.--A group health plan,
or health insurance issuer offering health insurance coverage,
may waive the internal review process under this section. In
such case the plan or issuer shall provide notice to the
participant, beneficiary, or enrollee (or authorized
representative) involved, the participant, beneficiary, or
enrollee (or authorized representative) involved shall be
relieved of any obligation to complete the internal review
involved, and may, at the option of such participant,
beneficiary, enrollee, or representative proceed directly to
seek further appeal through external review under section 114
or otherwise.
(b) Timelines for Making Determinations.--
(1) Oral requests.--In the case of an appeal of a denial of
a claim for benefits under this section that involves an
expedited or concurrent determination, a participant,
beneficiary, or enrollee (or authorized representative) may
request such appeal orally. A group health plan, or health
insurance issuer offering health insurance coverage, may
require that the participant, beneficiary, or enrollee (or
authorized representative) provide written confirmation of such
request in a timely manner on a form provided by the plan or
issuer. In the case of such an oral request for an appeal of a
denial, the making of the request (and the timing of such
request) shall be treated as the making at that time of a
request for an appeal without regard to whether and when a
written confirmation of such request is made.
(2) Access to information.--
(A) Timely provision of necessary information.--
With respect to an appeal of a denial of a claim for
benefits, the participant, beneficiary, or enrollee (or
authorized representative) and the treating health care
professional (if any) shall provide the plan or issuer
with access to information requested by the plan or
issuer that is necessary to make a determination
relating to the appeal. Such access shall be provided
not later than 5 days after the date on which the
request for information is received, or, in a case
described in subparagraph (B) or (C) of paragraph (3),
by such earlier time as may be necessary to comply with
the applicable timeline under such subparagraph.
(B) Limited effect of failure on plan or issuer's
obligations.--Failure of the participant, beneficiary,
or enrollee to comply with the requirements of
subparagraph (A) shall not remove the obligation of the
plan or issuer to make a decision in accordance with
the medical exigencies of the case and as soon as
possible, based on the available information, and
failure to comply with the time limit established by
this paragraph shall not remove the obligation of the
plan or issuer to comply with the requirements of this
section.
(3) Prior authorization determinations.--
(A) In general.--Except as provided in this
paragraph or paragraph (4), a group health plan, and a
health insurance issuer offering health insurance
coverage, shall make a determination on an appeal of a
denial of a claim for benefits under this subsection in
accordance with the medical exigencies of the case and
as soon as possible, but in no case later than 14 days
from the date on which the plan or issuer receives
information that is reasonably necessary to enable the
plan or issuer to make a determination on the appeal
and in no case later than 28 days after the date the
request for the appeal is received.
(B) Expedited determination.--Notwithstanding
subparagraph (A), a group health plan, and a health
insurance issuer offering health insurance coverage,
shall expedite a prior authorization determination on an appeal of a
denial of a claim for benefits described in subparagraph (A), when a
request for such an expedited determination is made by a participant,
beneficiary, or enrollee (or authorized representative) at any time
during the process for making a determination and a health care
professional certifies, with the request, that a determination under
the procedures described in subparagraph (A) would seriously jeopardize
the life or health of the participant, beneficiary, or enrollee or the
ability of the participant, beneficiary, or enrollee to maintain or
regain maximum function. Such determination shall be made in accordance
with the medical exigencies of the case and as soon as possible, but in
no case later than 72 hours after the time the request for such appeal
is received by the plan or issuer under this subparagraph.
(C) Ongoing care determinations.--
(i) In general.--Subject to clause (ii), in
the case of a concurrent review determination
described in section 112(b)(1)(C)(i)(I), which
results in a termination or reduction of such
care, the plan or issuer must provide notice of
the determination on the appeal under this
section by telephone and in printed form to the
individual or the individual's designee and the
individual's health care provider in accordance
with the medical exigencies of the case and as
soon as possible, with sufficient time prior to
the termination or reduction to allow for an
external appeal under section 114 to be
completed before the termination or reduction
takes effect.
(ii) Rule of construction.--Clause (i)
shall not be construed as requiring plans or
issuers to provide coverage of care that would
exceed the coverage limitations for such care.
(4) Retrospective determination.--A group health plan, and
a health insurance issuer offering health insurance coverage,
shall make a retrospective determination on an appeal of a
denial of a claim for benefits in no case later than 30 days
after the date on which the plan or issuer receives necessary
information that is reasonably necessary to enable the plan or
issuer to make a determination on the appeal and in no case
later than 60 days after the date the request for the appeal is
received.
(c) Conduct of Review.--
(1) In general.--A review of a denial of a claim for
benefits under this section shall be conducted by an individual
with appropriate expertise who was not involved in the initial
determination.
(2) Peer review of medical decisions by health care
professionals.--A review of an appeal of a denial of a claim
for benefits that is based on a lack of medical necessity and
appropriateness, or based on an experimental or investigational
treatment, or requires an evaluation of medical facts--
(A) shall be made by a physician (allopathic or
osteopathic); or
(B) in a claim for benefits provided by a non-
physician health professional, shall be made by
reviewer (or reviewers) including at least one
practicing non-physician health professional of the
same or similar specialty;
with appropriate expertise (including, in the case of a child,
appropriate pediatric expertise) and acting within the
appropriate scope of practice within the State in which the
service is provided or rendered, who was not involved in the
initial determination.
(d) Notice of Determination.--
(1) In general.--Written notice of a determination made
under an internal appeal of a denial of a claim for benefits
shall be issued to the participant, beneficiary, or enrollee
(or authorized representative) and the treating health care
professional in accordance with the medical exigencies of the
case and as soon as possible, but in no case later than 2 days
after the date of completion of the review (or, in the case
described in subparagraph (B) or (C) of subsection (b)(3),
within the 72-hour or applicable period referred to in such
subparagraph).
(2) Final determination.--The decision by a plan or issuer
under this section shall be treated as the final determination
of the plan or issuer on a denial of a claim for benefits. The
failure of a plan or issuer to issue a determination on an
appeal of a denial of a claim for benefits under this section
within the applicable timeline established for such a
determination shall be treated as a final determination on an
appeal of a denial of a claim for benefits for purposes of
proceeding to external review under section 114.
(3) Requirements of notice.--With respect to a
determination made under this section, the notice described in
paragraph (1) shall be provided in printed form and written in
a manner calculated to be understood by the participant,
beneficiary, or enrollee and shall include--
(A) the specific reasons for the determination
(including a summary of the clinical or scientific
evidence used in making the determination);
(B) the procedures for obtaining additional
information concerning the determination; and
(C) notification of the right to an independent
external review under section 114 and instructions on
how to initiate such a review.
SEC. 114. INDEPENDENT EXTERNAL APPEALS PROCEDURES.
(a) Right to External Appeal.--A group health plan, and a health
insurance issuer offering health insurance coverage, shall provide in
accordance with this section participants, beneficiaries, and enrollees
(or authorized representatives) with access to an independent external
review for any denial of a claim for benefits.
(b) Initiation of the Independent External Review Process.--
(1) Time to file.--A request for an independent external
review under this section shall be filed with the plan or
issuer not later than 180 days after the date on which the participant,
beneficiary, or enrollee receives notice of the denial under section
113(d) or notice of waiver of internal review under section 113(a)(4)
or the date on which the plan or issuer has failed to make a timely
decision under section 113(d)(2) and notifies the participant or
beneficiary that it has failed to make a timely decision and that the
beneficiary must file an appeal with an external review entity within
180 days if the participant or beneficiary desires to file such an
appeal.
(2) Filing of request.--
(A) In general.--Subject to the succeeding
provisions of this subsection, a group health plan, or
health insurance issuer offering health insurance
coverage, may--
(i) except as provided in subparagraph
(B)(i), require that a request for review be in
writing;
(ii) limit the filing of such a request to
the participant, beneficiary, or enrollee
involved (or an authorized representative);
(iii) except if waived by the plan or
issuer under section 113(a)(4), condition
access to an independent external review under
this section upon a final determination of a
denial of a claim for benefits under the
internal review procedure under section 113;
(iv) except as provided in subparagraph
(B)(ii), require payment of a filing fee to the
plan or issuer of a sum that does not exceed
$25; and
(v) require that a request for review
include the consent of the participant,
beneficiary, or enrollee (or authorized
representative) for the release of necessary
medical information or records of the
participant, beneficiary, or enrollee to the
qualified external review entity only for
purposes of conducting external review
activities.
(B) Requirements and exception relating to general
rule.--
(i) Oral requests permitted in expedited or
concurrent cases.--In the case of an expedited
or concurrent external review as provided for
under subsection (e), the request for such
review may be made orally. A group health plan,
or health insurance issuer offering health
insurance coverage, may require that the
participant, beneficiary, or enrollee (or
authorized representative) provide written
confirmation of such request in a timely manner
on a form provided by the plan or issuer. Such
written confirmation shall be treated as a
consent for purposes of subparagraph (A)(v). In
the case of such an oral request for such a
review, the making of the request (and the
timing of such request) shall be treated as the
making at that time of a request for such a
review without regard to whether and when a
written confirmation of such request is made.
(ii) Exception to filing fee requirement.--
(I) Indigency.--Payment of a filing
fee shall not be required under
subparagraph (A)(iv) where there is a
certification (in a form and manner
specified in guidelines established by
the appropriate Secretary) that the
participant, beneficiary, or enrollee
is indigent (as defined in such
guidelines).
(II) Fee not required.--Payment of
a filing fee shall not be required
under subparagraph (A)(iv) if the plan
or issuer waives the internal appeals
process under section 113(a)(4).
(III) Refunding of fee.--The filing
fee paid under subparagraph (A)(iv)
shall be refunded if the determination
under the independent external review
is to reverse or modify the denial
which is the subject of the review.
(IV) Collection of filing fee.--The
failure to pay such a filing fee shall
not prevent the consideration of a
request for review but, subject to the
preceding provisions of this clause,
shall constitute a legal liability to
pay.
(c) Referral to Qualified External Review Entity Upon Request.--
(1) In general.--Upon the filing of a request for
independent external review with the group health plan, or
health insurance issuer offering health insurance coverage, the
plan or issuer shall immediately refer such request, and
forward the plan or issuer's initial decision (including the
information described in section 113(d)(3)(A)), to a qualified
external review entity selected in accordance with this
section.
(2) Access to plan or issuer and health professional
information.--With respect to an independent external review
conducted under this section, the participant, beneficiary, or
enrollee (or authorized representative), the plan or issuer,
and the treating health care professional (if any) shall
provide the external review entity with information that is
necessary to conduct a review under this section, as determined
and requested by the entity. Such information shall be provided
not later than 5 days after the date on which the request for
information is received, or, in a case described in clause (ii)
or (iii) of subsection (e)(1)(A), by such earlier time as may
be necessary to comply with the applicable timeline under such
clause.
(3) Screening of requests by qualified external review
entities.--
(A) In general.--With respect to a request referred
to a qualified external review entity under paragraph
(1) relating to a denial of a claim for benefits, the
entity shall refer such request for the conduct of an
independent medical review unless the entity determines
that--
(i) any of the conditions described in
clauses (ii) or (iii) of subsection (b)(2)(A)
have not been met;
(ii) the denial of the claim for benefits
does not involve a medically reviewable
decision under subsection (d)(2);
(iii) the denial of the claim for benefits
relates to a decision regarding whether an
individual is a participant, beneficiary, or
enrollee who is enrolled under the terms and
conditions of the plan or coverage (including
the applicability of any waiting period under
the plan or coverage); or
(iv) the denial of the claim for benefits
is a decision as to the application of cost-
sharing requirements or the application of a
specific exclusion or express limitation on the
amount, duration, or scope of coverage of items
or services under the terms and conditions of
the plan or coverage unless the decision is a
denial described in subsection (d)(2).
Upon making a determination that any of clauses (i)
through (iv) applies with respect to the request, the
entity shall determine that the denial of a claim for
benefits involved is not eligible for independent
medical review under subsection (d), and shall provide
notice in accordance with subparagraph (C).
(B) Process for making determinations.--
(i) No deference to prior determinations.--
In making determinations under subparagraph
(A), there shall be no deference given to
determinations made by the plan or issuer or
the recommendation of a treating health care
professional (if any).
(ii) Use of appropriate personnel.--A
qualified external review entity shall use
appropriately qualified personnel to make
determinations under this section.
(C) Notices and general timelines for
determination.--
(i) Notice in case of denial of referral.--
If the entity under this paragraph does not
make a referral to an independent medical
reviewer, the entity shall provide notice to
the plan or issuer, the participant,
beneficiary, or enrollee (or authorized
representative) filing the request, and the
treating health care professional (if any) that
the denial is not subject to independent
medical review. Such notice--
(I) shall be written (and, in
addition, may be provided orally) in a
manner calculated to be understood by a
participant or enrollee;
(II) shall include the reasons for
the determination;
(III) include any relevant terms
and conditions of the plan or coverage;
and
(IV) include a description of any
further recourse available to the
individual.
(ii) General timeline for determinations.--
Upon receipt of information under paragraph
(2), the qualified external review entity, and
if required the independent medical reviewer,
shall make a determination within the overall
timeline that is applicable to the case under
review as described in subsection (e), except
that if the entity determines that a referral
to an independent medical reviewer is not
required, the entity shall provide notice of
such determination to the participant,
beneficiary, or enrollee (or authorized
representative) within such timeline and within
2 days of the date of such determination.
(d) Independent Medical Review.--
(1) In general.--If a qualified external review entity
determines under subsection (c) that a denial of a claim for
benefits is eligible for independent medical review, the entity
shall refer the denial involved to an independent medical
reviewer for the conduct of an independent medical review under
this subsection.
(2) Medically reviewable decisions.--A denial of a claim
for benefits is eligible for independent medical review if the
benefit for the item or service for which the claim is made
would be a covered benefit under the terms and conditions of
the plan or coverage but for one (or more) of the following
determinations:
(A) Denials based on medical necessity and
appropriateness.--A determination that the item or
service is not covered because it is not medically
necessary and appropriate or based on the application
of substantially equivalent terms.
(B) Denials based on experimental or
investigational treatment.--A determination that the
item or service is not covered because it is
experimental or investigational or based on the
application of substantially equivalent terms.
(C) Denials otherwise based on an evaluation of
medical facts.--A determination that the item or
service or condition is not covered based on grounds
that require an evaluation of the medical facts by a
health care professional in the specific case involved
to determine the coverage and extent of coverage of the
item or service or condition.
(3) Independent medical review determination.--
(A) In general.--An independent medical reviewer
under this section shall make a new independent
determination with respect to whether or not the denial
of a claim for a benefit that is the subject of the
review should be upheld, reversed, or modified.
(B) Standard for determination.--The independent
medical reviewer's determination relating to the
medical necessity and appropriateness, or the
experimental or investigational nature, or the
evaluation of the medical facts, of the item, service,
or condition involved shall be based on the medical
condition of the participant, beneficiary, or enrollee
(including the medical records of the participant,
beneficiary, or enrollee) and valid, relevant
scientific evidence and clinical evidence, including
peer-reviewed medical literature or findings and
including expert opinion.
(C) No coverage for excluded benefits.--Nothing in
this subsection shall be construed to permit an
independent medical reviewer to require that a group
health plan, or health insurance issuer offering health
insurance coverage, provide coverage for items or
services for which benefits are specifically excluded
or expressly limited under the plan or coverage in the
plain language of the plan document (and which are
disclosed under section 131(b)(1)(C)). Notwithstanding
any other provision of this title, any exclusion of an
exact medical procedure, any exact time limit on the
duration or frequency of coverage, and any exact dollar
limit on the amount of coverage that is specifically
enumerated and defined (in the plain language of the
plan or coverage documents) under the plan or coverage
offered by a group health plan or health insurance
issuer offering health insurance coverage and that is
disclosed under section 131(b)(1) shall be considered
to govern the scope of the benefits that may be
required: Provided, That the terms and conditions of
the plan or coverage relating to such an exclusion or
limit are in compliance with the requirements of law.
(D) Evidence and information to be used in medical
reviews.--In making a determination under this
subsection, the independent medical reviewer shall also
consider appropriate and available evidence and
information, including the following:
(i) The determination made by the plan or
issuer with respect to the claim upon internal
review and the evidence, guidelines, or
rationale used by the plan or issuer in
reaching such determination.
(ii) The recommendation of the treating
health care professional and the evidence,
guidelines, and rationale used by the treating
health care professional in reaching such
recommendation.
(iii) Additional relevant evidence or
information obtained by the reviewer or
submitted by the plan, issuer, participant,
beneficiary, or enrollee (or an authorized
representative), or treating health care
professional.
(iv) The plan or coverage document.
(E) Independent determination.--In making
determinations under this section, a qualified external
review entity and an independent medical reviewer
shall--
(i) consider the claim under review without
deference to the determinations made by the
plan or issuer or the recommendation of the
treating health care professional (if any); and
(ii) consider, but not be bound by, the
definition used by the plan or issuer of
``medically necessary and appropriate'', or
``experimental or investigational'', or other
substantially equivalent terms that are used by
the plan or issuer to describe medical
necessity and appropriateness or experimental
or investigational nature of the treatment.
(F) Determination of independent medical
reviewer.--An independent medical reviewer shall, in
accordance with the deadlines described in subsection
(e), prepare a written determination to uphold,
reverse, or modify the denial under review. Such
written determination shall include--
(i) the determination of the reviewer;
(ii) the specific reasons of the reviewer
for such determination, including a summary of
the clinical or scientific evidence used in
making the determination; and
(iii) with respect to a determination to
reverse or modify the denial under review, a
timeframe within which the plan or issuer must
comply with such determination.
(G) Nonbinding nature of additional
recommendations.--In addition to the determination
under subparagraph (F), the reviewer may provide the
plan or issuer and the treating health care
professional with additional recommendations in
connection with such a determination, but any such
recommendations shall not affect (or be treated as part
of) the determination and shall not be binding on the
plan or issuer.
(e) Timelines and Notifications.--
(1) Timelines for independent medical review.--
(A) Prior authorization determination.--
(i) In general.--The independent medical
reviewer (or reviewers) shall make a
determination on a denial of a claim for
benefits that is referred to the reviewer under
subsection (c)(3) in accordance with the
medical exigencies of the case and as soon as
possible, but in no case later than 14 days
after the date of receipt of information under
subsection (c)(2) if the review involves a
prior authorization of items or services and in
no case later than 21 days after the date the
request for external review is received.
(ii) Expedited determination.--
Notwithstanding clause (i) and subject to
clause (iii), the independent medical reviewer
(or reviewers) shall make an expedited
determination on a denial of a claim for
benefits described in clause (i), when a
request for such an expedited determination is
made by a participant, beneficiary, or enrollee
(or authorized representative) at any time
during the process for making a determination,
and a health care professional certifies, with
the request, that a determination under the
timeline described in clause (i) would
seriously jeopardize the life or health of the
participant, beneficiary, or enrollee or the
ability of the participant, beneficiary, or
enrollee to maintain or regain maximum
function. Such determination shall be made in
accordance with the medical exigencies of the
case and as soon as possible, but in no case
later than 72 hours after the time the request
for external review is received by the
qualified external review entity.
(iii) Ongoing care determination.--
Notwithstanding clause (i), in the case of a
review described in such clause that involves a
termination or reduction of care, the notice of
the determination shall be completed not later
than 24 hours after the time the request for
external review is received by the qualified
external review entity and before the end of
the approved period of care.
(B) Retrospective determination.--The independent
medical reviewer (or reviewers) shall complete a review
in the case of a retrospective determination on an
appeal of a denial of a claim for benefits that is
referred to the reviewer under subsection (c)(3) in no
case later than 30 days after the date of receipt of
information under subsection (c)(2) and in no case
later than 60 days after the date the request for
external review is received by the qualified external
review entity.
(2) Notification of determination.--The external review
entity shall ensure that the plan or issuer, the participant,
beneficiary, or enrollee (or authorized representative) and the
treating health care professional (if any) receives a copy of
the written determination of the independent medical reviewer
prepared under subsection (d)(3)(F). Nothing in this paragraph
shall be construed as preventing an entity or reviewer from
providing an initial oral notice of the reviewer's
determination.
(3) Form of notices.--Determinations and notices under this
subsection shall be written in a manner calculated to be
understood by a participant.
(f) Compliance.--
(1) Application of determinations.--
(A) External review determinations binding on
plan.--The determinations of an external review entity
and an independent medical reviewer under this section
shall be binding upon the plan or issuer involved.
(B) Compliance with determination.--If the
determination of an independent medical reviewer is to
reverse or modify the denial, the plan or issuer, upon
the receipt of such determination, shall authorize
coverage to comply with the medical reviewer's
determination in accordance with the timeframe
established by the medical reviewer.
(2) Failure to comply.--
(A) In general.--If a plan or issuer fails to
comply with the timeframe established under paragraph
(1)(B) with respect to a participant, beneficiary, or
enrollee, where such failure to comply is caused by the
plan or issuer, the participant, beneficiary, or
enrollee may obtain the items or services involved (in
a manner consistent with the determination of the
independent external reviewer) from any provider
regardless of whether such provider is a participating
provider under the plan or coverage.
(B) Reimbursement.--
(i) In general.--Where a participant,
beneficiary, or enrollee obtains items or
services in accordance with subparagraph (A),
the plan or issuer involved shall provide for
reimbursement of the costs of such items or
services. Such reimbursement shall be made to
the treating health care professional or to the
participant, beneficiary, or enrollee (in the
case of a participant, beneficiary, or enrollee
who pays for the costs of such items or
services).
(ii) Amount.--The plan or issuer shall
fully reimburse a professional, participant,
beneficiary, or enrollee under clause (i) for
the total costs of the items or services
provided (regardless of any plan limitations
that may apply to the coverage of such items or
services) so long as the items or services were
provided in a manner consistent with the
determination of the independent medical
reviewer.
(C) Failure to reimburse.--Where a plan or issuer
fails to provide reimbursement to a professional,
participant, beneficiary, or enrollee in accordance
with this paragraph, the professional, participant,
beneficiary, or enrollee may commence a civil action
(or utilize other remedies available under law) to
recover only the amount of any such reimbursement that
is owed by the plan or issuer and any necessary legal
costs or expenses (including attorney's fees) incurred
in recovering such reimbursement.
(D) Available remedies.--The remedies provided
under this paragraph are in addition to any other
available remedies.
(3) Penalties against authorized officials for refusing to
authorize the determination of an external review entity.--
(A) Monetary penalties.--
(i) In general.--In any case in which the
determination of an external review entity is
not followed by a group health plan, or by a
health insurance issuer offering health
insurance coverage, any person who, acting in
the capacity of authorizing the benefit, causes such refusal may, in
the discretion of a court of competent jurisdiction, be liable to an
aggrieved participant, beneficiary, or enrollee for a civil penalty in
an amount of up to $1,000 a day from the date on which the
determination was transmitted to the plan or issuer by the external
review entity until the date the refusal to provide the benefit is
corrected.
(ii) Additional penalty for failing to
follow timeline.--In any case in which
treatment was not commenced by the plan in
accordance with the determination of an
independent external reviewer, the Secretary
shall assess a civil penalty of $10,000 against
the plan and the plan shall pay such penalty to
the participant, beneficiary, or enrollee
involved.
(B) Cease and desist order and order of attorney's
fees.--In any action described in subparagraph (A)
brought by a participant, beneficiary, or enrollee with
respect to a group health plan, or a health insurance
issuer offering health insurance coverage, in which a
plaintiff alleges that a person referred to in such
subparagraph has taken an action resulting in a refusal
of a benefit determined by an external appeal entity to
be covered, or has failed to take an action for which
such person is responsible under the terms and
conditions of the plan or coverage and which is
necessary under the plan or coverage for authorizing a
benefit, the court shall cause to be served on the
defendant an order requiring the defendant--
(i) to cease and desist from the alleged
action or failure to act; and
(ii) to pay to the plaintiff a reasonable
attorney's fee and other reasonable costs
relating to the prosecution of the action on
the charges on which the plaintiff prevails.
(C) Additional civil penalties.--
(i) In general.--In addition to any penalty
imposed under subparagraph (A) or (B), the
appropriate Secretary may assess a civil
penalty against a person acting in the capacity
of authorizing a benefit determined by an
external review entity for one or more group
health plans, or health insurance issuers
offering health insurance coverage, for--
(I) any pattern or practice of
repeated refusal to authorize a benefit
determined by an external appeal entity
to be covered; or
(II) any pattern or practice of
repeated violations of the requirements
of this section with respect to such
plan or coverage.
(ii) Standard of proof and amount of
penalty.--Such penalty shall be payable only
upon proof by clear and convincing evidence of
such pattern or practice and shall be in an
amount not to exceed the lesser of--
(I) 25 percent of the aggregate
value of benefits shown by the
appropriate Secretary to have not been
provided, or unlawfully delayed, in
violation of this section under such
pattern or practice; or
(II) $500,000.
(D) Removal and disqualification.--Any person
acting in the capacity of authorizing benefits who has
engaged in any such pattern or practice described in
subparagraph (C)(i) with respect to a plan or coverage,
upon the petition of the appropriate Secretary, may be
removed by the court from such position, and from any
other involvement, with respect to such a plan or
coverage, and may be precluded from returning to any
such position or involvement for a period determined by
the court.
(4) Protection of legal rights.--Nothing in this subsection
or chapter shall be construed as altering or eliminating any
cause of action or legal rights or remedies of participants,
beneficiaries, enrollees, and others under State or Federal law
(including sections 502 and 503 of the Employee Retirement
Income Security Act of 1974), including the right to file
judicial actions to enforce rights.
(g) Qualifications of Independent Medical Reviewers.--
(1) In general.--In referring a denial to 1 or more
individuals to conduct independent medical review under
subsection (c), the qualified external review entity shall
ensure that--
(A) each independent medical reviewer meets the
qualifications described in paragraphs (2) and (3);
(B) with respect to each review at least 1 such
reviewer meets the requirements described in paragraphs
(4) and (5); and
(C) compensation provided by the entity to the
reviewer is consistent with paragraph (6).
(2) Licensure and expertise.--Each independent medical
reviewer shall be a physician (allopathic or osteopathic) or
health care professional who--
(A) is appropriately credentialed or licensed in 1
or more States to deliver health care services; and
(B) typically treats the condition, makes the
diagnosis, or provides the type of treatment under
review.
(3) Independence.--
(A) In general.--Subject to subparagraph (B), each
independent medical reviewer in a case shall--
(i) not be a related party (as defined in
paragraph (7));
(ii) not have a material familial,
financial, or professional relationship with
such a party; and
(iii) not otherwise have a conflict of
interest with such a party (as determined under
regulations).
(B) Exception.--Nothing in subparagraph (A) shall
be construed to--
(i) prohibit an individual, solely on the
basis of affiliation with the plan or issuer,
from serving as an independent medical reviewer
if--
(I) a non-affiliated individual is
not reasonably available;
(II) the affiliated individual is
not involved in the provision of items
or services in the case under review;
(III) the fact of such an
affiliation is disclosed to the plan or
issuer and the participant,
beneficiary, or enrollee (or authorized
representative) and neither party
objects; and
(IV) the affiliated individual is
not an employee of the plan or issuer
and does not provide services
exclusively or primarily to or on
behalf of the plan or issuer;
(ii) prohibit an individual who has staff
privileges at the institution where the
treatment involved takes place from serving as
an independent medical reviewer merely on the
basis of such affiliation if the affiliation is
disclosed to the plan or issuer and the
participant, beneficiary, or enrollee (or
authorized representative), and neither party
objects; or
(iii) prohibit receipt of compensation by
an independent medical reviewer from an entity
if the compensation is provided consistent with
paragraph (6).
(4) Practicing health care professional in same field.--
(A) In general.--In a case involving treatment, or
the provision of items or services--
(i) by a physician, a reviewer shall be a
practicing physician (allopathic or
osteopathic) of the same or similar specialty,
as a physician who, acting within the
appropriate scope of practice within the State in which the service is
provided or rendered, typically treats the condition, makes the
diagnosis, or provides the type of treatment under review; or
(ii) by a non-physician health care
professional, a reviewer (or reviewers) shall
include at least one practicing non-physician
health care professional of the same or similar
specialty as the non-physician health care
professional who, acting within the appropriate
scope of practice within the State in which the
service is provided or rendered, typically
treats the condition, makes the diagnosis, or
provides the type of treatment under review.
(B) Practicing defined.--For purposes of this
paragraph, the term ``practicing'' means, with respect
to an individual who is a physician or other health
care professional that the individual provides health
care services to individual patients on average at
least 2 days per week.
(5) Pediatric expertise.--In the case of an external review
relating to a child, a reviewer shall have expertise under
paragraph (2) in pediatrics.
(6) Limitations on reviewer compensation.--Compensation
provided by a qualified external review entity to an
independent medical reviewer in connection with a review under
this section shall--
(A) not exceed a reasonable level; and
(B) not be contingent on the decision rendered by
the reviewer.
(7) Related party defined.--For purposes of this section,
the term ``related party'' means, with respect to a denial of a
claim under a plan or coverage relating to a participant,
beneficiary, or enrollee, any of the following:
(A) The plan, plan sponsor, or issuer involved, or
any fiduciary, officer, director, or employee of such
plan, plan sponsor, or issuer.
(B) The participant, beneficiary, or enrollee (or
authorized representative).
(C) The health care professional that provides the
items or services involved in the denial.
(D) The institution at which the items or services
(or treatment) involved in the denial are provided.
(E) The manufacturer of any drug or other item that
is included in the items or services involved in the
denial.
(F) Any other party determined under any
regulations to have a substantial interest in the
denial involved.
(h) Qualified External Review Entities.--
(1) Selection of qualified external review entities.--
(A) Limitation on plan or issuer selection.--The
appropriate Secretary shall implement procedures--
(i) to assure that the selection process
among qualified external review entities will
not create any incentives for external review
entities to make a decision in a biased manner;
and
(ii) for auditing a sample of decisions by
such entities to assure that no such decisions
are made in a biased manner.
No such selection process under the procedures
implemented by the appropriate Secretary may give
either the patient or the plan or issuer any ability to
determine or influence the selection of a qualified
external review entity to review the case of any
participant, beneficiary, or enrollee.
(B) State authority with respect to qualified
external review entities for health insurance
issuers.--With respect to health insurance issuers
offering health insurance coverage in a State, the
State may provide for external review activities to be
conducted by a qualified external appeal entity that is
designated by the State or that is selected by the
State in a manner determined by the State to assure an
unbiased determination.
(2) Contract with qualified external review entity.--Except
as provided in paragraph (1)(B), the external review process of
a plan or issuer under this section shall be conducted under a
contract between the plan or issuer and 1 or more qualified
external review entities (as defined in paragraph (4)(A)).
(3) Terms and conditions of contract.--The terms and
conditions of a contract under paragraph (2) shall--
(A) be consistent with the standards the
appropriate Secretary shall establish to assure there
is no real or apparent conflict of interest in the
conduct of external review activities; and
(B) provide that the costs of the external review
process shall be borne by the plan or issuer.
Subparagraph (B) shall not be construed as applying to the
imposition of a filing fee under subsection (b)(2)(A)(iv) or
costs incurred by the participant, beneficiary, or enrollee (or
authorized representative) or treating health care professional
(if any) in support of the review, including the provision of
additional evidence or information.
(4) Qualifications.--
(A) In general.--In this section, the term
``qualified external review entity'' means, in relation
to a plan or issuer, an entity that is initially
certified (and periodically recertified) under
subparagraph (C) as meeting the following requirements:
(i) The entity has (directly or through
contracts or other arrangements) sufficient
medical, legal, and other expertise and
sufficient staffing to carry out duties of a
qualified external review entity under this
section on a timely basis, including making
determinations under subsection (b)(2)(A) and
providing for independent medical reviews under
subsection (d).
(ii) The entity is not a plan or issuer or
an affiliate or a subsidiary of a plan or
issuer, and is not an affiliate or subsidiary
of a professional or trade association of plans
or issuers or of health care providers.
(iii) The entity has provided assurances
that it will conduct external review activities
consistent with the applicable requirements of
this section and standards specified in
subparagraph (C), including that it will not
conduct any external review activities in a
case unless the independence requirements of
subparagraph (B) are met with respect to the
case.
(iv) The entity has provided assurances
that it will provide information in a timely
manner under subparagraph (D).
(v) The entity meets such other
requirements as the appropriate Secretary
provides by regulation.
(B) Independence requirements.--
(i) In general.--Subject to clause (ii), an
entity meets the independence requirements of
this subparagraph with respect to any case if
the entity--
(I) is not a related party (as
defined in subsection (g)(7));
(II) does not have a material
familial, financial, or professional
relationship with such a party; and
(III) does not otherwise have a
conflict of interest with such a party
(as determined under regulations).
(ii) Exception for reasonable
compensation.--Nothing in clause (i) shall be
construed to prohibit receipt by a qualified
external review entity of compensation from a
plan or issuer for the conduct of external
review activities under this section if the compensation is provided
consistent with clause (iii).
(iii) Limitations on entity compensation.--
Compensation provided by a plan or issuer to a
qualified external review entity in connection
with reviews under this section shall--
(I) not exceed a reasonable level;
and
(II) not be contingent on any
decision rendered by the entity or by
any independent medical reviewer.
(C) Certification and recertification process.--
(i) In general.--The initial certification
and recertification of a qualified external
review entity shall be made--
(I) under a process that is
recognized or approved by the
appropriate Secretary; or
(II) by a qualified private
standard-setting organization that is
approved by the appropriate Secretary
under clause (iii).
In taking action under subclause (I), the
appropriate Secretary shall give deference to
entities that are under contract with the
Federal Government or with an applicable State
authority to perform functions of the type
performed by qualified external review
entities.
(ii) Process.--The appropriate Secretary
shall not recognize or approve a process under
clause (i)(I) unless the process applies
standards (as promulgated in regulations) that
ensure that a qualified external review
entity--
(I) will carry out (and has carried
out, in the case of recertification)
the responsibilities of such an entity
in accordance with this section,
including meeting applicable deadlines;
(II) will meet (and has met, in the
case of recertification) appropriate
indicators of fiscal integrity;
(III) will maintain (and has
maintained, in the case of
recertification) appropriate
confidentiality with respect to
individually identifiable health
information obtained in the course of
conducting external review activities;
and
(IV) in the case of
recertification, shall review the
matters described in clause (iv).
(iii) Approval of qualified private
standard-setting organizations.--For purposes
of clause (i)(II), the appropriate Secretary
may approve a qualified private standard-
setting organization if such Secretary finds
that the organization only certifies (or
recertifies) external review entities that meet
at least the standards required for the
certification (or recertification) of external
review entities under clause (ii).
(iv) Considerations in recertifications.--
In conducting recertifications of a qualified
external review entity under this paragraph,
the appropriate Secretary or organization
conducting the recertification shall review
compliance of the entity with the requirements
for conducting external review activities under
this section, including the following:
(I) Provision of information under
subparagraph (D).
(II) Adherence to applicable
deadlines (both by the entity and by
independent medical reviewers it refers
cases to).
(III) Compliance with limitations
on compensation (with respect to both
the entity and independent medical
reviewers it refers cases to).
(IV) Compliance with applicable
independence requirements.
(V) Compliance with the requirement
of subsection (d)(1) that only
medically reviewable decisions shall be
the subject of independent medical
review and with the requirement of
subsection (d)(3) that independent
medical reviewers may not require
coverage for specifically excluded
benefits.
(v) Period of certification or
recertification.--A certification or
recertification provided under this paragraph
shall extend for a period not to exceed 2
years.
(vi) Revocation.--A certification or
recertification under this paragraph may be
revoked by the appropriate Secretary or by the
organization providing such certification upon
a showing of cause. The Secretary, or
organization, shall revoke a certification or
deny a recertification with respect to an
entity if there is a showing that the entity
has a pattern or practice of ordering coverage
for benefits that are specifically excluded
under the plan or coverage.
(vii) Petition for denial or withdrawal.--
An individual may petition the Secretary, or an
organization providing the certification
involves, for a denial of recertification or a
withdrawal of a certification with respect to
an entity under this subparagraph if there is a
pattern or practice of such entity failing to
meet a requirement of this section.
(viii) Sufficient number of entities.--The
appropriate Secretary shall certify and
recertify a number of external review entities
which is sufficient to ensure the timely and
efficient provision of review services.
(D) Provision of information.--
(i) In general.--A qualified external
review entity shall provide to the appropriate
Secretary, in such manner and at such times as
such Secretary may require, such information
(relating to the denials which have been
referred to the entity for the conduct of
external review under this section) as such
Secretary determines appropriate to assure
compliance with the independence and other
requirements of this section to monitor and
assess the quality of its external review
activities and lack of bias in making
determinations. Such information shall include
information described in clause (ii) but shall
not include individually identifiable medical
information.
(ii) Information to be included.--The
information described in this subclause with
respect to an entity is as follows:
(I) The number and types of denials
for which a request for review has been
received by the entity.
(II) The disposition by the entity
of such denials, including the number
referred to a independent medical
reviewer and the reasons for such
dispositions (including the application
of exclusions), on a plan or issuer-
specific basis and on a health care
specialty-specific basis.
(III) The length of time in making
determinations with respect to such
denials.
(IV) Updated information on the
information required to be submitted as
a condition of certification with
respect to the entity's performance of
external review activities.
(iii) Information to be provided to
certifying organization.--
(I) In general.--In the case of a
qualified external review entity which
is certified (or recertified) under
this subsection by a qualified private
standard-setting organization, at the request of the organization, the
entity shall provide the organization with the information provided to
the appropriate Secretary under clause (i).
(II) Additional information.--
Nothing in this subparagraph shall be
construed as preventing such an
organization from requiring additional
information as a condition of
certification or recertification of an
entity.
(iv) Use of information.--Information
provided under this subparagraph may be used by
the appropriate Secretary and qualified private
standard-setting organizations to conduct
oversight of qualified external review
entities, including recertification of such
entities, and shall be made available to the
public in an appropriate manner.
(E) Limitation on liability.--No qualified external
review entity having a contract with a plan or issuer,
and no person who is employed by any such entity or who
furnishes professional services to such entity
(including as an independent medical reviewer), shall
be held by reason of the performance of any duty,
function, or activity required or authorized pursuant
to this section, to be civilly liable under any law of
the United States or of any State (or political
subdivision thereof) if there was no actual malice or
gross misconduct in the performance of such duty,
function, or activity.
(5) Report.--Not later than 12 months after the general
effective date referred to in section 181, the General
Accounting Office shall prepare and submit to the appropriate
committees of Congress a report concerning--
(A) the information that is provided under
paragraph (3)(D);
(B) the number of denials that have been upheld by
independent medical reviewers and the number of denials
that have been reversed by such reviewers; and
(C) the extent to which independent medical
reviewers are requiring coverage for benefits that are
specifically excluded under the plan or coverage.
SEC. 115. HEALTH CARE CONSUMER ASSISTANCE FUND.
(a) Grants.--
(1) In general.--The Secretary of Health and Human Services
(referred to in this section as the ``Secretary'') shall
establish a fund, to be known as the ``Health Care Consumer
Assistance Fund'', to be used to award grants to eligible
States to carry out consumer assistance activities (including
programs established by States prior to the enactment of this
Act) designed to provide information, assistance, and referrals
to consumers of health insurance products.
(2) State eligibility.--To be eligible to receive a grant
under this subsection a State shall prepare and submit to the
Secretary an application at such time, in such manner, and
containing such information as the Secretary may require,
including a State plan that describes--
(A) the manner in which the State will ensure that
the health care consumer assistance office (established
under paragraph (4)) will educate and assist health
care consumers in accessing needed care;
(B) the manner in which the State will coordinate
and distinguish the services provided by the health
care consumer assistance office with the services
provided by Federal, State and local health-related
ombudsman, information, protection and advocacy,
insurance, and fraud and abuse programs;
(C) the manner in which the State will provide
information, outreach, and services to underserved,
minority populations with limited English proficiency
and populations residing in rural areas;
(D) the manner in which the State will oversee the
health care consumer assistance office, its activities,
product materials and evaluate program effectiveness;
(E) the manner in which the State will ensure that
funds made available under this section will be used to
supplement, and not supplant, any other Federal, State,
or local funds expended to provide services for
programs described under this section and those
described in subparagraphs (C) and (D);
(F) the manner in which the State will ensure that
health care consumer office personnel have the
professional background and training to carry out the
activities of the office; and
(G) the manner in which the State will ensure that
consumers have direct access to consumer assistance
personnel during regular business hours.
(3) Amount of grant.--
(A) In general.--From amounts appropriated under
subsection (b) for a fiscal year, the Secretary shall
award a grant to a State in an amount that bears the
same ratio to such amounts as the number of individuals
within the State covered under a group health plan or
under health insurance coverage offered by a health
insurance issuer bears to the total number of
individuals so covered in all States (as determined by
the Secretary). Any amounts provided to a State under
this subsection that are not used by the State shall be
remitted to the Secretary and reallocated in accordance
with this subparagraph.
(B) Minimum amount.--In no case shall the amount
provided to a State under a grant under this subsection
for a fiscal year be less than an amount equal to 0.5
percent of the amount appropriated for such fiscal year
to carry out this section.
(C) Non-federal contributions.--A State will
provide for the collection of non-Federal contributions
for the operation of the office in an amount that is
not less than 25 percent of the amount of Federal funds
provided to the State under this section.
(4) Provision of funds for establishment of office.--
(A) In general.--From amounts provided under a
grant under this subsection, a State shall, directly or
through a contract with an independent, nonprofit
entity with demonstrated experience in serving the
needs of health care consumers, provide for the
establishment and operation of a State health care
consumer assistance office.
(B) Eligibility of entity.--To be eligible to enter
into a contract under subparagraph (A), an entity shall
demonstrate that it has the technical, organizational,
and professional capacity to deliver the services
described in subsection (b) to all public and private
health insurance participants, beneficiaries,
enrollees, or prospective enrollees.
(C) Existing state entity.--Nothing in this section
shall prevent the funding of an existing health care
consumer assistance program that otherwise meets the
requirements of this section.
(b) Use of Funds.--
(1) By state.--A State shall use amounts provided under a
grant awarded under this section to carry out consumer
assistance activities directly or by contract with an
independent, non-profit organization. An eligible entity may
use some reasonable amount of such grant to ensure the adequate
training of personnel carrying out such activities. To receive
amounts under this subsection, an eligible entity shall provide
consumer assistance services, including--
(A) the operation of a toll-free telephone hotline
to respond to consumer requests;
(B) the dissemination of appropriate educational
materials on available health insurance products and on
how best to access health care and the rights and
responsibilities of health care consumers;
(C) the provision of education on effective methods
to promptly and efficiently resolve questions,
problems, and grievances;
(D) the coordination of educational and outreach
efforts with health plans, health care providers,
payers, and governmental agencies;
(E) referrals to appropriate private and public
entities to resolve questions, problems and grievances;
and
(F) the provision of information and assistance,
including acting as an authorized representative,
regarding internal, external, or administrative
grievances or appeals procedures in nonlitigative
settings to appeal the denial, termination, or
reduction of health care services, or the refusal to
pay for such services, under a group health plan or
health insurance coverage offered by a health insurance
issuer.
(2) Confidentiality and access to information.--
(A) State entity.--With respect to a State that
directly establishes a health care consumer assistance
office, such office shall establish and implement
procedures and protocols in accordance with applicable
Federal and State laws.
(B) Contract entity.--With respect to a State that,
through contract, establishes a health care consumer
assistance office, such office shall establish and
implement procedures and protocols, consistent with
applicable Federal and State laws, to ensure the
confidentiality of all information shared by a
participant, beneficiary, enrollee, or their personal
representative and their health care providers, group
health plans, or health insurance insurers with the
office and to ensure that no such information is used
by the office, or released or disclosed to State
agencies or outside persons or entities without the
prior written authorization (in accordance with section
164.508 of title 45, Code of Federal Regulations) of
the individual or personal representative. The office
may, consistent with applicable Federal and State
confidentiality laws, collect, use or disclose
aggregate information that is not individually
identifiable (as defined in section 164.501 of title
45, Code of Federal Regulations). The office shall
provide a written description of the policies and
procedures of the office with respect to the manner in
which health information may be used or disclosed to
carry out consumer assistance activities. The office
shall provide health care providers, group health
plans, or health insurance issuers with a written authorization (in
accordance with section 164.508 of title 45, Code of Federal
Regulations) to allow the office to obtain medical information relevant
to the matter before the office.
(3) Availability of services.--The health care consumer
assistance office of a State shall not discriminate in the
provision of information, referrals, and services regardless of
the source of the individual's health insurance coverage or
prospective coverage, including individuals covered under a
group health plan or health insurance coverage offered by a
health insurance issuer, the medicare or medicaid programs
under title XVIII or XIX of the Social Security Act (42 U.S.C.
1395 and 1396 et seq.), or under any other Federal or State
health care program.
(4) Designation of responsibilities.--
(A) Within existing state entity.--If the health
care consumer assistance office of a State is located
within an existing State regulatory agency or office of
an elected State official, the State shall ensure
that--
(i) there is a separate delineation of the
funding, activities, and responsibilities of
the office as compared to the other funding,
activities, and responsibilities of the agency;
and
(ii) the office establishes and implements
procedures and protocols to ensure the
confidentiality of all information shared by a
participant, beneficiary, or enrollee or their
personal representative and their health care
providers, group health plans, or health
insurance issuers with the office and to ensure
that no information is disclosed to the State
agency or office without the written
authorization of the individual or their
personal representative in accordance with
paragraph (2).
(B) Contract entity.--In the case of an entity that
enters into a contract with a State under subsection
(a)(3), the entity shall provide assurances that the
entity has no conflict of interest in carrying out the
activities of the office and that the entity is
independent of group health plans, health insurance
issuers, providers, payers, and regulators of health
care.
(5) Subcontracts.--The health care consumer assistance
office of a State may carry out activities and provide services
through contracts entered into with 1 or more nonprofit
entities so long as the office can demonstrate that all of the
requirements of this section are complied with by the office.
(6) Term.--A contract entered into under this subsection
shall be for a term of 3 years.
(c) Report.--Not later than 1 year after the Secretary first awards
grants under this section, and annually thereafter, the Secretary shall
prepare and submit to the appropriate committees of Congress a report
concerning the activities funded under this section and the
effectiveness of such activities in resolving health care-related
problems and grievances.
(d) Authorization of Appropriations.--There are authorized to be
appropriated such sums as may be necessary to carry out this section.
CHAPTER 2--ACCESS TO CARE
SEC. 121. CONSUMER CHOICE OPTION.
(a) In General.--If--
(1) a health insurance issuer providing health insurance
coverage in connection with a group health plan offers to
enrollees health insurance coverage which provides for coverage
of services (including physician pathology services) only if
such services are furnished through health care professionals
and providers who are members of a network of health care
professionals and providers who have entered into a contract
with the issuer to provide such services, or
(2) a group health plan offers to participants or
beneficiaries health benefits which provide for coverage of
services only if such services are furnished through health
care professionals and providers who are members of a network
of health care professionals and providers who have entered
into a contract with the plan to provide such services,
then the issuer or plan shall also offer or arrange to be offered to
such enrollees, participants, or beneficiaries (at the time of
enrollment and during an annual open season as provided under
subsection (c)) the option of health insurance coverage or health
benefits which provide for coverage of such services which are not
furnished through health care professionals and providers who are
members of such a network unless such enrollees, participants, or
beneficiaries are offered such non-network coverage through another
group health plan or through another health insurance issuer in the
group market.
(b) Additional Costs.--The amount of any additional premium charged
by the health insurance issuer or group health plan for the additional
cost of the creation and maintenance of the option described in
subsection (a) and the amount of any additional cost sharing imposed
under such option shall be borne by the enrollee, participant, or
beneficiary unless it is paid by the health plan sponsor or group
health plan through agreement with the health insurance issuer.
(c) Open Season.--An enrollee, participant, or beneficiary, may
change to the offering provided under this section only during a time
period determined by the health insurance issuer or group health plan.
Such time period shall occur at least annually.
SEC. 122. CHOICE OF HEALTH CARE PROFESSIONAL.
(a) Primary Care.--If a group health plan, or a health insurance
issuer that offers health insurance coverage, requires or provides for
designation by a participant, beneficiary, or enrollee of a
participating primary care provider, then the plan or issuer shall
permit each participant, beneficiary, and enrollee to designate any
participating primary care provider who is available to accept such
individual.
(b) Specialists.--
(1) In general.--Subject to paragraph (2), a group health
plan and a health insurance issuer that offers health insurance
coverage shall permit each participant, beneficiary, or
enrollee to receive medically necessary and appropriate
specialty care, pursuant to appropriate referral procedures,
from any qualified participating health care professional who
is available to accept such individual for such care.
(2) Limitation.--Paragraph (1) shall not apply to specialty
care if the plan or issuer clearly informs participants,
beneficiaries, and enrollees of the limitations on choice of
participating health care professionals with respect to such
care.
(3) Construction.--Nothing in this subsection shall be
construed as affecting the application of section 124 (relating
to access to specialty care).
SEC. 123. ACCESS TO EMERGENCY CARE.
(a) Coverage of Emergency Services.--
(1) In general.--If a group health plan, or health
insurance coverage offered by a health insurance issuer,
provides or covers any benefits with respect to services in an
emergency department of a hospital, the plan or issuer shall
cover emergency services (as defined in paragraph (2)(B))--
(A) without the need for any prior authorization
determination;
(B) whether the health care provider furnishing
such services is a participating provider with respect
to such services;
(C) in a manner so that, if such services are
provided to a participant, beneficiary, or enrollee--
(i) by a nonparticipating health care
provider with or without prior authorization,
or
(ii) by a participating health care
provider without prior authorization,
the participant, beneficiary, or enrollee is not liable
for amounts that exceed the amounts of liability that
would be incurred if the services were provided by a
participating health care provider with prior
authorization; and
(D) without regard to any other term or condition
of such coverage (other than exclusion or coordination
of benefits, or an affiliation or waiting period,
permitted under section 2701 of the Public Health
Service Act, section 701 of the Employee Retirement
Income Security Act of 1974, or section 9801 of the
Internal Revenue Code of 1986, and other than
applicable cost-sharing).
(2) Definitions.--In this section:
(A) Emergency medical condition.--The term
``emergency medical condition'' means a medical
condition manifesting itself by acute symptoms of
sufficient severity (including severe pain) such that a
prudent layperson, who possesses an average knowledge
of health and medicine, could reasonably expect the
absence of immediate medical attention to result in a
condition described in clause (i), (ii), or (iii) of
section 1867(e)(1)(A) of the Social Security Act.
(B) Emergency services.--The term ``emergency
services'' means, with respect to an emergency medical
condition--
(i) a medical screening examination (as
required under section 1867 of the Social
Security Act) that is within the capability of
the emergency department of a hospital,
including ancillary services routinely
available to the emergency department to
evaluate such emergency medical condition, and
(ii) within the capabilities of the staff
and facilities available at the hospital, such
further medical examination and treatment as
are required under section 1867 of such Act to
stabilize the patient.
(C) Stabilize.--The term ``to stabilize'', with
respect to an emergency medical condition (as defined
in subparagraph (A)), has the meaning given in section
1867(e)(3) of the Social Security Act (42 U.S.C.
1395dd(e)(3)).
(b) Reimbursement for Maintenance Care and Post-Stabilization
Care.--A group health plan, and health insurance coverage offered by a
health insurance issuer, must provide reimbursement for maintenance
care and post-stabilization care in accordance with the requirements of
section 1852(d)(2) of the Social Security Act (42 U.S.C. 1395w-
22(d)(2)). Such reimbursement shall be provided in a manner consistent
with subsection (a)(1)(C).
(c) Coverage of Emergency Ambulance Services.--
(1) In general.--If a group health plan, or health
insurance coverage provided by a health insurance issuer,
provides any benefits with respect to ambulance services and
emergency services, the plan or issuer shall cover emergency
ambulance services (as defined in paragraph (2)) furnished
under the plan or coverage under the same terms and conditions
under subparagraphs (A) through (D) of subsection (a)(1) under
which coverage is provided for emergency services.
(2) Emergency ambulance services.--For purposes of this
subsection, the term ``emergency ambulance services'' means
ambulance services (as defined for purposes of section
1861(s)(7) of the Social Security Act) furnished to transport
an individual who has an emergency medical condition (as
defined in subsection (a)(2)(A)) to a hospital for the receipt
of emergency services (as defined in subsection (a)(2)(B)) in a
case in which the emergency services are covered under the plan
or coverage pursuant to subsection (a)(1) and a prudent
layperson, with an average knowledge of health and medicine,
could reasonably expect that the absence of such transport
would result in placing the health of the individual in serious
jeopardy, serious impairment of bodily function, or serious
dysfunction of any bodily organ or part.
SEC. 124. TIMELY ACCESS TO SPECIALISTS.
(a) Timely Access.--
(1) In general.--A group health plan and a health insurance
issuer offering health insurance coverage shall ensure that
participants, beneficiaries, and enrollees receive timely
access to specialists who are appropriate to the condition of,
and accessible to, the participant, beneficiary, or enrollee,
when such specialty care is a covered benefit under the plan or
coverage.
(2) Rule of construction.--Nothing in paragraph (1) shall
be construed--
(A) to require the coverage under a group health
plan or health insurance coverage of benefits or
services;
(B) to prohibit a plan or issuer from including
providers in the network only to the extent necessary
to meet the needs of the plan's or issuer's
participants, beneficiaries, or enrollees; or
(C) to override any State licensure or scope-of-
practice law.
(3) Access to certain providers.--
(A) In general.--With respect to specialty care
under this section, if a participating specialist is
not available and qualified to provide such care to the
participant, beneficiary, or enrollee, the plan or
issuer shall provide for coverage of such care by a
nonparticipating specialist.
(B) Treatment of nonparticipating providers.--If a
participant, beneficiary, or enrollee receives care
from a nonparticipating specialist pursuant to
subparagraph (A), such specialty care shall be provided
at no additional cost to the participant, beneficiary,
or enrollee beyond what the participant, beneficiary,
or enrollee would otherwise pay for such specialty care
if provided by a participating specialist.
(b) Referrals.--
(1) Authorization.--Subject to subsection (a)(1), a group
health plan or health insurance issuer may require an
authorization in order to obtain coverage for specialty
services under this section. Any such authorization--
(A) shall be for an appropriate duration of time or
number of referrals, including an authorization for a
standing referral where appropriate; and
(B) may not be refused solely because the
authorization involves services of a nonparticipating
specialist (described in subsection (a)(3)).
(2) Referrals for ongoing special conditions.--
(A) In general.--Subject to subsection (a)(1), a
group health plan and a health insurance issuer shall
permit a participant, beneficiary, or enrollee who has
an ongoing special condition (as defined in
subparagraph (B)) to receive a referral to a specialist
for the treatment of such condition and such specialist
may authorize such referrals, procedures, tests, and
other medical services with respect to such condition,
or coordinate the care for such condition, subject to
the terms of a treatment plan (if any) referred to in
subsection (c) with respect to the condition.
(B) Ongoing special condition defined.--In this
subsection, the term ``ongoing special condition''
means a condition or disease that--
(i) is life-threatening, degenerative,
potentially disabling, or congenital; and
(ii) requires specialized medical care over
a prolonged period of time.
(c) Treatment Plans.--
(1) In general.--A group health plan or health insurance
issuer may require that the specialty care be provided--
(A) pursuant to a treatment plan, but only if the
treatment plan--
(i) is developed by the specialist, in
consultation with the case manager or primary
care provider, and the participant,
beneficiary, or enrollee, and
(ii) is approved by the plan or issuer in a
timely manner, if the plan or issuer requires
such approval; and
(B) in accordance with applicable quality assurance
and utilization review standards of the plan or issuer.
(2) Notification.--Nothing in paragraph (1) shall be
construed as prohibiting a plan or issuer from requiring the
specialist to provide the plan or issuer with regular updates
on the specialty care provided, as well as all other reasonably
necessary medical information.
(d) Specialist Defined.--For purposes of this section, the term
``specialist'' means, with respect to the condition of the participant,
beneficiary, or enrollee, a health care professional, facility, or
center that has adequate expertise through appropriate training and
experience (including, in the case of a child, appropriate pediatric
expertise) to provide high quality care in treating the condition.
SEC. 125. PATIENT ACCESS TO OBSTETRICAL AND GYNECOLOGICAL CARE.
(a) General Rights.--
(1) Direct access.--A group health plan, and a health
insurance issuer offering health insurance coverage, described
in subsection (b) may not require authorization or referral by
the plan, issuer, or any person (including a primary care
provider described in subsection (b)(2)) in the case of a
female participant, beneficiary, or enrollee who seeks coverage
for obstetrical or gynecological care provided by a
participating health care professional who specializes in
obstetrics or gynecology.
(2) Obstetrical and gynecological care.--A group health
plan and a health insurance issuer described in subsection (b)
shall treat the provision of obstetrical and gynecological
care, and the ordering of related obstetrical and gynecological
items and services, pursuant to the direct access described
under paragraph (1), by a participating health care
professional who specializes in obstetrics or gynecology as the
authorization of the primary care provider.
(b) Application of Section.--A group health plan, or health
insurance issuer offering health insurance coverage, described in this
subsection is a group health plan or coverage that--
(1) provides coverage for obstetric or gynecologic care;
and
(2) requires the designation by a participant, beneficiary,
or enrollee of a participating primary care provider.
(c) Construction.--Nothing in subsection (a) shall be construed
to--
(1) waive any exclusions of coverage under the terms and
conditions of the plan or health insurance coverage with
respect to coverage of obstetrical or gynecological care; or
(2) preclude the group health plan or health insurance
issuer involved from requiring that the obstetrical or
gynecological provider notify the primary care health care
professional or the plan or issuer of treatment decisions.
SEC. 126. ACCESS TO PEDIATRIC CARE.
(a) Pediatric Care.--In the case of a person who has a child who is
a participant, beneficiary, or enrollee under a group health plan, or
health insurance coverage offered by a health insurance issuer, if the
plan or issuer requires or provides for the designation of a
participating primary care provider for the child, the plan or issuer
shall permit such person to designate a physician (allopathic or
osteopathic) who specializes in pediatrics as the child's primary care
provider if such provider participates in the network of the plan or
issuer.
(b) Construction.--Nothing in subsection (a) shall be construed to
waive any exclusions of coverage under the terms and conditions of the
plan or health insurance coverage with respect to coverage of pediatric
care.
SEC. 127. CONTINUITY OF CARE.
(a) Termination of Provider.--
(1) In general.--If--
(A) a contract between a group health plan, or a
health insurance issuer offering health insurance
coverage, and a treating health care provider is
terminated (as defined in paragraph (e)(4)), or
(B) benefits or coverage provided by a health care
provider are terminated because of a change in the
terms of provider participation in such plan or
coverage,
the plan or issuer shall meet the requirements of paragraph (3)
with respect to each continuing care patient.
(2) Treatment of termination of contract with health
insurance issuer.--If a contract for the provision of health
insurance coverage between a group health plan and a health
insurance issuer is terminated and, as a result of such
termination, coverage of services of a health care provider is
terminated with respect to an individual, the provisions of
paragraph (1) (and the succeeding provisions of this section)
shall apply under the plan in the same manner as if there had
been a contract between the plan and the provider that had been
terminated, but only with respect to benefits that are covered
under the plan after the contract termination.
(3) Requirements.--The requirements of this paragraph are
that the plan or issuer--
(A) notify the continuing care patient involved, or
arrange to have the patient notified pursuant to
subsection (d)(2), on a timely basis of the termination
described in paragraph (1) (or paragraph (2), if
applicable) and the right to elect continued
transitional care from the provider under this section;
(B) provide the patient with an opportunity to
notify the plan or issuer of the patient's need for
transitional care; and
(C) subject to subsection (c), permit the patient
to elect to continue to be covered with respect to the
course of treatment by such provider with the
provider's consent during a transitional period (as
provided for under subsection (b)).
(4) Continuing care patient.--For purposes of this section,
the term ``continuing care patient'' means a participant,
beneficiary, or enrollee who--
(A) is undergoing a course of treatment for a
serious and complex condition from the provider at the
time the plan or issuer receives or provides notice of
provider, benefit, or coverage termination described in
paragraph (1) (or paragraph (2), if applicable);
(B) is undergoing a course of institutional or
inpatient care from the provider at the time of such
notice;
(C) is scheduled to undergo non-elective surgery
from the provider at the time of such notice;
(D) is pregnant and undergoing a course of
treatment for the pregnancy from the provider at the
time of such notice; or
(E) is or was determined to be terminally ill (as
determined under section 1861(dd)(3)(A) of the Social
Security Act) at the time of such notice, but only with
respect to a provider that was treating the terminal
illness before the date of such notice.
(b) Transitional Periods.--
(1) Serious and complex conditions.--The transitional
period under this subsection with respect to a continuing care
patient described in subsection (a)(4)(A) shall extend for up
to 90 days (as determined by the treating health care
professional) from the date of the notice described in
subsection (a)(3)(A).
(2) Institutional or inpatient care.--The transitional
period under this subsection for a continuing care patient
described in subsection (a)(4)(B) shall extend until the
earlier of--
(A) the expiration of the 90-day period beginning
on the date on which the notice under subsection
(a)(3)(A) is provided; or
(B) the date of discharge of the patient from such
care or the termination of the period of
institutionalization, or, if later, the date of
completion of reasonable follow-up care.
(3) Scheduled non-elective surgery.--The transitional
period under this subsection for a continuing care patient
described in subsection (a)(4)(C) shall extend until the
completion of the surgery involved and post-surgical follow-up
care relating to the surgery and occurring within 90 days after
the date of the surgery.
(4) Pregnancy.--The transitional period under this
subsection for a continuing care patient described in
subsection (a)(4)(D) shall extend through the provision of
post-partum care directly related to the delivery.
(5) Terminal illness.--The transitional period under this
subsection for a continuing care patient described in
subsection (a)(4)(E) shall extend for the remainder of the
patient's life for care that is directly related to the
treatment of the terminal illness or its medical
manifestations.
(c) Permissible Terms and Conditions.--A group health plan or
health insurance issuer may condition coverage of continued treatment
by a provider under this section upon the provider agreeing to the
following terms and conditions:
(1) The treating health care provider agrees to accept
reimbursement from the plan or issuer and continuing care
patient involved (with respect to cost-sharing) at the rates
applicable prior to the start of the transitional period as
payment in full (or, in the case described in subsection
(a)(2), at the rates applicable under the replacement plan or
coverage after the date of the termination of the contract with
the group health plan or health insurance issuer) and not to
impose cost-sharing with respect to the patient in an amount
that would exceed the cost-sharing that could have been imposed
if the contract referred to in subsection (a)(1) had not been
terminated.
(2) The treating health care provider agrees to adhere to
the quality assurance standards of the plan or issuer
responsible for payment under paragraph (1) and to provide to
such plan or issuer necessary medical information related to
the care provided.
(3) The treating health care provider agrees otherwise to
adhere to such plan's or issuer's policies and procedures,
including procedures regarding referrals and obtaining prior
authorization and providing services pursuant to a treatment
plan (if any) approved by the plan or issuer.
(d) Rules of Construction.--Nothing in this section shall be
construed--
(1) to require the coverage of benefits which would not
have been covered if the provider involved remained a
participating provider; or
(2) with respect to the termination of a contract under
subsection (a) to prevent a group health plan or health
insurance issuer from requiring that the health care provider--
(A) notify participants, beneficiaries, or
enrollees of their rights under this section; or
(B) provide the plan or issuer with the name of
each participant, beneficiary, or enrollee who the
provider believes is a continuing care patient.
(e) Definitions.--In this section:
(1) Contract.--The term ``contract'' includes, with respect
to a plan or issuer and a treating health care provider, a
contract between such plan or issuer and an organized network
of providers that includes the treating health care provider,
and (in the case of such a contract) the contract between the
treating health care provider and the organized network.
(2) Health care provider.--The term ``health care
provider'' or ``provider'' means--
(A) any individual who is engaged in the delivery
of health care services in a State and who is required
by State law or regulation to be licensed or certified
by the State to engage in the delivery of such services
in the State; and
(B) any entity that is engaged in the delivery of
health care services in a State and that, if it is
required by State law or regulation to be licensed or
certified by the State to engage in the delivery of
such services in the State, is so licensed.
(3) Serious and complex condition.--The term ``serious and
complex condition'' means, with respect to a participant,
beneficiary, or enrollee under the plan or coverage--
(A) in the case of an acute illness, a condition
that is serious enough to require specialized medical
treatment to avoid the reasonable possibility of death
or permanent harm; or
(B) in the case of a chronic illness or condition,
is an ongoing special condition (as defined in section
124(b)(2)(B)).
(4) Terminated.--The term ``terminated'' includes, with
respect to a contract, the expiration or nonrenewal of the
contract, but does not include a termination of the contract
for failure to meet applicable quality standards or for fraud.
SEC. 128. ACCESS TO NEEDED PRESCRIPTION DRUGS.
(a) In General.--To the extent that a group health plan, or health
insurance coverage offered by a health insurance issuer, provides
coverage for benefits with respect to prescription drugs, and limits
such coverage to drugs included in a formulary, the plan or issuer
shall--
(1) ensure the participation of physicians and pharmacists
in developing and reviewing such formulary;
(2) provide for disclosure of the formulary to providers;
and
(3) in accordance with the applicable quality assurance and
utilization review standards of the plan or issuer, provide for
exceptions from the formulary limitation when a non-formulary
alternative is medically necessary and appropriate and, in the
case of such an exception, apply the same cost-sharing
requirements that would have applied in the case of a drug
covered under the formulary.
(b) Coverage of Approved Drugs and Medical Devices.--
(1) In general.--A group health plan (and health insurance
coverage offered in connection with such a plan) that provides
any coverage of prescription drugs or medical devices shall not
deny coverage of such a drug or device on the basis that the
use is investigational, if the use--
(A) in the case of a prescription drug--
(i) is included in the labeling authorized
by the application in effect for the drug
pursuant to subsection (b) or (j) of section
505 of the Federal Food, Drug, and Cosmetic
Act, without regard to any postmarketing
requirements that may apply under such Act; or
(ii) is included in the labeling authorized
by the application in effect for the drug under
section 351 of the Public Health Service Act,
without regard to any postmarketing
requirements that may apply pursuant to such section; or
(B) in the case of a medical device, is included in
the labeling authorized by a regulation under
subsection (d) or (3) of section 513 of the Federal
Food, Drug, and Cosmetic Act, an order under subsection
(f) of such section, or an application approved under
section 515 of such Act, without regard to any
postmarketing requirements that may apply under such
Act.
(2) Construction.--Nothing in this subsection shall be
construed as requiring a group health plan (or health insurance
coverage offered in connection with such a plan) to provide any
coverage of prescription drugs or medical devices.
SEC. 129. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED CLINICAL
TRIALS.
(a) Coverage.--
(1) In general.--If a group health plan, or health
insurance issuer that is providing health insurance coverage,
provides coverage to a qualified individual (as defined in
subsection (b)), the plan or issuer--
(A) may not deny the individual participation in
the clinical trial referred to in subsection (b)(2);
(B) subject to subsection (c), may not deny (or
limit or impose additional conditions on) the coverage
of routine patient costs for items and services
furnished in connection with participation in the
trial; and
(C) may not discriminate against the individual on
the basis of the enrollee's participation in such
trial.
(2) Exclusion of certain costs.--For purposes of paragraph
(1)(B), routine patient costs do not include the cost of the
tests or measurements conducted primarily for the purpose of
the clinical trial involved.
(3) Use of in-network providers.--If one or more
participating providers is participating in a clinical trial,
nothing in paragraph (1) shall be construed as preventing a
plan or issuer from requiring that a qualified individual
participate in the trial through such a participating provider
if the provider will accept the individual as a participant in
the trial.
(b) Qualified Individual Defined.--For purposes of subsection (a),
the term ``qualified individual'' means an individual who is a
participant or beneficiary in a group health plan, or who is an
enrollee under health insurance coverage, and who meets the following
conditions:
(1)(A) The individual has a life-threatening or serious
illness for which no standard treatment is effective.
(B) The individual is eligible to participate in an
approved clinical trial according to the trial protocol with
respect to treatment of such illness.
(C) The individual's participation in the trial offers
meaningful potential for significant clinical benefit for the
individual.
(2) Either--
(A) the referring physician is a participating
health care professional and has concluded that the
individual's participation in such trial would be
appropriate based upon the individual meeting the
conditions described in paragraph (1); or
(B) the participant, beneficiary, or enrollee
provides medical and scientific information
establishing that the individual's participation in
such trial would be appropriate based upon the
individual meeting the conditions described in
paragraph (1).
(c) Payment.--
(1) In general.--Under this section a group health plan and
a health insurance issuer shall provide for payment for routine
patient costs described in subsection (a)(2) but is not
required to pay for costs of items and services that are
reasonably expected (as determined by the appropriate
Secretary) to be paid for by the sponsors of an approved
clinical trial.
(2) Payment rate.--In the case of covered items and
services provided by--
(A) a participating provider, the payment rate
shall be at the agreed upon rate; or
(B) a nonparticipating provider, the payment rate
shall be at the rate the plan or issuer would normally
pay for comparable services under subparagraph (A).
(d) Approved Clinical Trial Defined.--
(1) In general.--In this section, the term ``approved
clinical trial'' means a clinical research study or clinical
investigation--
(A) approved and funded (which may include funding
through in-kind contributions) by one or more of the
following:
(i) the National Institutes of Health;
(ii) a cooperative group or center of the
National Institutes of Health, including a
qualified nongovernmental research entity to
which the National Cancer Institute has awarded
a center support grant;
(iii) either of the following if the
conditions described in paragraph (2) are met--
(I) the Department of Veterans
Affairs;
(II) the Department of Defense; or
(B) approved by the Food and Drug Administration.
(2) Conditions for departments.--The conditions described
in this paragraph, for a study or investigation conducted by a
Department, are that the study or investigation has been
reviewed and approved through a system of peer review that the
appropriate Secretary determines--
(A) to be comparable to the system of peer review
of studies and investigations used by the National
Institutes of Health; and
(B) assures unbiased review of the highest ethical
standards by qualified individuals who have no interest
in the outcome of the review.
(e) Construction.--Nothing in this section shall be construed to
limit a plan's or issuer's coverage with respect to clinical trials.
SEC. 130. REQUIRED COVERAGE FOR MINIMUM HOSPITAL STAY FOR MASTECTOMIES
AND LYMPH NODE DISSECTIONS FOR THE TREATMENT OF BREAST
CANCER AND COVERAGE FOR SECONDARY CONSULTATIONS.
(a) Inpatient Care.--
(1) In general.--A group health plan, and a health
insurance issuer providing health insurance coverage, that
provides medical and surgical benefits shall ensure that
inpatient coverage with respect to the treatment of breast
cancer is provided for a period of time as is determined by the
attending physician, in consultation with the patient, to be
medically necessary and appropriate following--
(A) a mastectomy;
(B) a lumpectomy; or
(C) a lymph node dissection for the treatment of
breast cancer.
(2) Exception.--Nothing in this section shall be construed
as requiring the provision of inpatient coverage if the
attending physician and patient determine that a shorter period
of hospital stay is medically appropriate.
(b) Prohibition on Certain Modifications.--In implementing the
requirements of this section, a group health plan, and a health
insurance issuer providing health insurance coverage, may not modify
the terms and conditions of coverage based on the determination by a
participant, beneficiary, or enrollee to request less than the minimum
coverage required under subsection (a).
(c) Secondary Consultations.--
(1) In general.--A group health plan, and a health
insurance issuer providing health insurance coverage, that
provides coverage with respect to medical and surgical services
provided in relation to the diagnosis and treatment of cancer
shall ensure that full coverage is provided for secondary
consultations by specialists in the appropriate medical fields
(including pathology, radiology, and oncology) to confirm or
refute such diagnosis. Such plan or issuer shall ensure that
full coverage is provided for such secondary consultation
whether such consultation is based on a positive or negative
initial diagnosis. In any case in which the attending physician
certifies in writing that services necessary for such a
secondary consultation are not sufficiently available from
specialists operating under the plan or coverage with respect
to whose services coverage is otherwise provided under such
plan or by such issuer, such plan or issuer shall ensure that
coverage is provided with respect to the services necessary for
the secondary consultation with any other specialist selected
by the attending physician for such purpose at no additional
cost to the individual beyond that which the individual would
have paid if the specialist was participating in the network of
the plan or issuer.
(2) Exception.--Nothing in paragraph (1) shall be construed
as requiring the provision of secondary consultations where the
patient determines not to seek such a consultation.
(d) Prohibition on Penalties or Incentives.--A group health plan,
and a health insurance issuer providing health insurance coverage, may
not--
(1) penalize or otherwise reduce or limit the reimbursement
of a provider or specialist because the provider or specialist
provided care to a participant, beneficiary, or enrollee in
accordance with this section;
(2) provide financial or other incentives to a physician or
specialist to induce the physician or specialist to keep the
length of inpatient stays of patients following a mastectomy,
lumpectomy, or a lymph node dissection for the treatment of
breast cancer below certain limits or to limit referrals for
secondary consultations; or
(3) provide financial or other incentives to a physician or
specialist to induce the physician or specialist to refrain
from referring a participant, beneficiary, or enrollee for a
secondary consultation that would otherwise be covered by the
plan or coverage involved under subsection (c).
CHAPTER 3--ACCESS TO INFORMATION
SEC. 131. PATIENT ACCESS TO INFORMATION.
(a) Requirement.--
(1) Disclosure.--
(A) In general.--A group health plan, and a health
insurance issuer that provides coverage in connection
with health insurance coverage, shall provide for the
disclosure to participants, beneficiaries, and
enrollees--
(i) of the information described in
subsection (b) at the time of the initial
enrollment of the participant, beneficiary, or
enrollee under the plan or coverage;
(ii) of such information on an annual
basis--
(I) in conjunction with the
election period of the plan or coverage
if the plan or coverage has such an
election period; or
(II) in the case of a plan or
coverage that does not have an election
period, in conjunction with the
beginning of the plan or coverage year;
and
(iii) of information relating to any
material reduction to the benefits or
information described in such subsection or
subsection (c), in the form of a notice
provided not later than 30 days before the date
on which the reduction takes effect.
(B) Participants, beneficiaries, and enrollees.--
The disclosure required under subparagraph (A) shall be
provided--
(i) jointly to each participant,
beneficiary, and enrollee who reside at the
same address; or
(ii) in the case of a beneficiary or
enrollee who does not reside at the same
address as the participant or another enrollee,
separately to the participant or other
enrollees and such beneficiary or enrollee.
(2) Provision of information.--Information shall be
provided to participants, beneficiaries, and enrollees under
this section at the last known address maintained by the plan
or issuer with respect to such participants, beneficiaries, or
enrollees, to the extent that such information is provided to
participants, beneficiaries, or enrollees via the United States
Postal Service or other private delivery service.
(b) Required Information.--The informational materials to be
distributed under this section shall include for each option available
under the group health plan or health insurance coverage the following:
(1) Benefits.--A description of the covered benefits,
including--
(A) any in- and out-of-network benefits;
(B) specific preventive services covered under the
plan or coverage if such services are covered;
(C) any specific exclusions or express limitations
of benefits described in section 114(d)(3)(C);
(D) any other benefit limitations, including any
annual or lifetime benefit limits and any monetary
limits or limits on the number of visits, days, or
services, and any specific coverage exclusions; and
(E) any definition of medical necessity used in
making coverage determinations by the plan, issuer, or
claims administrator.
(2) Cost sharing.--A description of any cost-sharing
requirements, including--
(A) any premiums, deductibles, coinsurance,
copayment amounts, and liability for balance billing,
for which the participant, beneficiary, or enrollee
will be responsible under each option available under
the plan;
(B) any maximum out-of-pocket expense for which the
participant, beneficiary, or enrollee may be liable;
(C) any cost-sharing requirements for out-of-
network benefits or services received from
nonparticipating providers; and
(D) any additional cost-sharing or charges for
benefits and services that are furnished without
meeting applicable plan or coverage requirements, such
as prior authorization or precertification.
(3) Disenrollment.--Information relating to the
disenrollment of a participant, beneficiary, or enrollee.
(4) Service area.--A description of the plan or issuer's
service area, including the provision of any out-of-area
coverage.
(5) Participating providers.--A directory of participating
providers (to the extent a plan or issuer provides coverage
through a network of providers) that includes, at a minimum,
the name, address, and telephone number of each participating
provider, and information about how to inquire whether a
participating provider is currently accepting new patients.
(6) Choice of primary care provider.--A description of any
requirements and procedures to be used by participants,
beneficiaries, and enrollees in selecting, accessing, or
changing their primary care provider, including providers both
within and outside of the network (if the plan or issuer
permits out-of-network services), and the right to select a
pediatrician as a primary care provider under section 126 for a
participant, beneficiary, or enrollee who is a child if such
section applies.
(7) Preauthorization requirements.--A description of the
requirements and procedures to be used to obtain
preauthorization for health services, if such preauthorization
is required.
(8) Experimental and investigational treatments.--A
description of the process for determining whether a particular
item, service, or treatment is considered experimental or
investigational, and the circumstances under which such
treatments are covered by the plan or issuer.
(9) Specialty care.--A description of the requirements and
procedures to be used by participants, beneficiaries, and
enrollees in accessing specialty care and obtaining referrals
to participating and nonparticipating specialists, including
any limitations on choice of health care professionals referred
to in section 122(b)(2) and the right to timely access to
specialists care under section 124 if such section applies.
(10) Clinical trials.--A description of the circumstances
and conditions under which participation in clinical trials is
covered under the terms and conditions of the plan or coverage,
and the right to obtain coverage for approved clinical trials
under section 129 if such section applies.
(11) Prescription drugs.--To the extent the plan or issuer
provides coverage for prescription drugs, a statement of
whether such coverage is limited to drugs included in a
formulary, a description of any provisions and cost-sharing
required for obtaining on- and off-formulary medications, and a
description of the rights of participants, beneficiaries, and
enrollees in obtaining access to access to prescription drugs
under section 128 if such section applies.
(12) Emergency services.--A summary of the rules and
procedures for accessing emergency services, including the
right of a participant, beneficiary, or enrollee to obtain
emergency services under the prudent layperson standard under
section 123, if such section applies, and any educational
information that the plan or issuer may provide regarding the
appropriate use of emergency services.
(13) Claims and appeals.--A description of the plan or
issuer's rules and procedures pertaining to claims and appeals,
a description of the rights (including deadlines for exercising
rights) of participants, beneficiaries, and enrollees under
chapter 1 in obtaining covered benefits, filing a claim for
benefits, and appealing coverage decisions internally and
externally (including telephone numbers and mailing addresses
of the appropriate authority), and a description of any
additional legal rights and remedies available under section
502 of the Employee Retirement Income Security Act of 1974 and
applicable State law.
(14) Advance directives and organ donation.--A description
of procedures for advance directives and organ donation
decisions if the plan or issuer maintains such procedures.
(15) Information on plans and issuers.--The name, mailing
address, and telephone number or numbers of the plan
administrator and the issuer to be used by participants,
beneficiaries, and enrollees seeking information about plan or
coverage benefits and services, payment of a claim, or
authorization for services and treatment. Notice of whether the
benefits under the plan or coverage are provided under a
contract or policy of insurance issued by an issuer, or whether
benefits are provided directly by the plan sponsor who bears
the insurance risk.
(16) Translation services.--A summary description of any
translation or interpretation services (including the
availability of printed information in languages other than
English, audio tapes, or information in Braille) that are
available for non-English speakers and participants,
beneficiaries, and enrollees with communication disabilities
and a description of how to access these items or services.
(17) Accreditation information.--Any information that is
made public by accrediting organizations in the process of
accreditation if the plan or issuer is accredited, or any
additional quality indicators (such as the results of enrollee
satisfaction surveys) that the plan or issuer makes public or
makes available to participants, beneficiaries, and enrollees.
(18) Notice of requirements.--A description of any rights
of participants, beneficiaries, and enrollees that are
established by the Bipartisan Patient Protection Act (excluding
those described in paragraphs (1) through (17)) if such
sections apply. The description required under this paragraph
may be combined with the notices of the type described in
sections 711(d), 713(b), or 606(a)(1) of the Employee
Retirement Income Security Act of 1974 and with any other
notice provision that the appropriate Secretary determines may
be combined, so long as such combination does not result in any
reduction in the information that would otherwise be provided
to the recipient.
(19) Availability of additional information.--A statement
that the information described in subsection (c), and
instructions on obtaining such information (including telephone
numbers and, if available, Internet websites), shall be made
available upon request.
(20) Designated decisionmakers.--A description of the
participants and beneficiaries with respect to whom each
designated decisionmaker under the plan has assumed liability
under section 502(o) of the Employee Retirement Income Security
Act of 1974 and the name and address of each such
decisionmaker.
(c) Additional Information.--The informational materials to be
provided upon the request of a participant, beneficiary, or enrollee
shall include for each option available under a group health plan or
health insurance coverage the following:
(1) Status of providers.--The State licensure status of the
plan or issuer's participating health care professionals and
participating health care facilities, and, if available, the
education, training, specialty qualifications or certifications
of such professionals.
(2) Compensation methods.--A summary description by
category of the applicable methods (such as capitation, fee-
for-service, salary, bundled payments, per diem, or a
combination thereof) used for compensating prospective or
treating health care professionals (including primary care
providers and specialists) and facilities in connection with
the provision of health care under the plan or coverage.
(3) Prescription drugs.--Information about whether a
specific prescription medication is included in the formulary
of the plan or issuer, if the plan or issuer uses a defined
formulary.
(4) Utilization review activities.--A description of
procedures used and requirements (including circumstances,
timeframes, and appeals rights) under any utilization review
program under sections 111 and 112, including any drug
formulary program under section 128.
(5) External appeals information.--Aggregate information on
the number and outcomes of external medical reviews, relative
to the sample size (such as the number of covered lives) under
the plan or under the coverage of the issuer.
(d) Manner of Disclosure.--The information described in this
section shall be disclosed in an accessible medium and format that is
calculated to be understood by a participant or enrollee.
(e) Rules of Construction.--Nothing in this section shall be
construed to prohibit a group health plan, or a health insurance issuer
in connection with health insurance coverage, from--
(1) distributing any other additional information
determined by the plan or issuer to be important or necessary
in assisting participants, beneficiaries, and enrollees in the
selection of a health plan or health insurance coverage; and
(2) complying with the provisions of this section by
providing information in brochures, through the Internet or
other electronic media, or through other similar means, so long
as--
(A) the disclosure of such information in such form
is in accordance with requirements as the appropriate
Secretary may impose, and
(B) in connection with any such disclosure of
information through the Internet or other electronic
media--
(i) the recipient has affirmatively
consented to the disclosure of such information
in such form,
(ii) the recipient is capable of accessing
the information so disclosed on the recipient's
individual workstation or at the recipient's
home,
(iii) the recipient retains an ongoing
right to receive paper disclosure of such
information and receives, in advance of any
attempt at disclosure of such information to
him or her through the Internet or other
electronic media, notice in printed form of
such ongoing right and of the proper software
required to view information so disclosed, and
(iv) the plan administrator appropriately
ensures that the intended recipient is
receiving the information so disclosed and
provides the information in printed form if the
information is not received.
CHAPTER 4--PROTECTING THE DOCTOR-PATIENT RELATIONSHIP
SEC. 141. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL
COMMUNICATIONS.
(a) General Rule.--The provisions of any contract or agreement, or
the operation of any contract or agreement, between a group health plan
or health insurance issuer in relation to health insurance coverage
(including any partnership, association, or other organization that
enters into or administers such a contract or agreement) and a health
care provider (or group of health care providers) shall not prohibit or
otherwise restrict a health care professional from advising such a
participant, beneficiary, or enrollee who is a patient of the
professional about the health status of the individual or medical care
or treatment for the individual's condition or disease, regardless of
whether benefits for such care or treatment are provided under the plan
or coverage, if the professional is acting within the lawful scope of
practice.
(b) Nullification.--Any contract provision or agreement that
restricts or prohibits medical communications in violation of
subsection (a) shall be null and void.
SEC. 142. PROHIBITION OF DISCRIMINATION AGAINST PROVIDERS BASED ON
LICENSURE.
(a) In General.--A group health plan, and a health insurance issuer
with respect to health insurance coverage, shall not discriminate with
respect to participation or indemnification as to any provider who is
acting within the scope of the provider's license or certification
under applicable State law, solely on the basis of such license or
certification.
(b) Construction.--Subsection (a) shall not be construed--
(1) as requiring the coverage under a group health plan or
health insurance coverage of a particular benefit or service or
to prohibit a plan or issuer from including providers only to
the extent necessary to meet the needs of the plan's or
issuer's participants, beneficiaries, or enrollees or from
establishing any measure designed to maintain quality and
control costs consistent with the responsibilities of the plan
or issuer;
(2) to override any State licensure or scope-of-practice
law; or
(3) as requiring a plan or issuer that offers network
coverage to include for participation every willing provider
who meets the terms and conditions of the plan or issuer.
SEC. 143. PROHIBITION AGAINST IMPROPER INCENTIVE ARRANGEMENTS.
(a) In General.--A group health plan and a health insurance issuer
offering health insurance coverage may not operate any physician
incentive plan (as defined in subparagraph (B) of section 1852(j)(4) of
the Social Security Act) unless the requirements described in clauses
(i), (ii)(I), and (iii) of subparagraph (A) of such section are met
with respect to such a plan.
(b) Application.--For purposes of carrying out paragraph (1), any
reference in section 1852(j)(4) of the Social Security Act to the
Secretary, a Medicare+Choice organization, or an individual enrolled
with the organization shall be treated as a reference to the applicable
authority, a group health plan or health insurance issuer,
respectively, and a participant, beneficiary, or enrollee with the plan
or organization, respectively.
(c) Construction.--Nothing in this section shall be construed as
prohibiting all capitation and similar arrangements or all provider
discount arrangements.
SEC. 144. PAYMENT OF CLAIMS.
A group health plan, and a health insurance issuer offering health
insurance coverage, shall provide for prompt payment of claims
submitted for health care services or supplies furnished to a
participant, beneficiary, or enrollee with respect to benefits covered
by the plan or issuer, in a manner that is no less protective than the
provisions of section 1842(c)(2) of the Social Security Act (42 U.S.C.
1395u(c)(2)).
SEC. 145. 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 subtitle.
(b) Protection for Quality Advocacy by Health Care Professionals.--
(1) In general.--A group health plan and a health insurance
issuer may not retaliate or discriminate against a protected
health care professional because the professional in good
faith--
(A) discloses information relating to the care,
services, or conditions affecting one or more
participants, beneficiaries, or enrollees of the plan
or issuer to an appropriate public regulatory agency,
an appropriate private accreditation body, or
appropriate management personnel of the plan or issuer;
or
(B) initiates, cooperates, or otherwise
participates in an investigation or proceeding by such
an agency with respect to such care, services, or
conditions.
If an institutional health care provider is a participating
provider with such a plan or issuer or otherwise receives
payments for benefits provided by such a plan or issuer, the
provisions of the previous sentence shall apply to the provider
in relation to care, services, or conditions affecting one or
more patients within an institutional health care provider in
the same manner as they apply to the plan or issuer in relation
to care, services, or conditions provided to one or more
participants, beneficiaries, or enrollees; and for purposes of
applying this sentence, any reference to a plan or issuer is
deemed a reference to the institutional health care provider.
(2) Good faith action.--For purposes of paragraph (1), a
protected health care professional is considered to be acting
in good faith with respect to disclosure of information or
participation if, with respect to the information disclosed as
part of the action--
(A) the disclosure is made on the basis of personal
knowledge and is consistent with that degree of
learning and skill ordinarily possessed by health care
professionals with the same licensure or certification
and the same experience;
(B) the professional reasonably believes the
information to be true;
(C) the information evidences either a violation of
a law, rule, or regulation, of an applicable
accreditation standard, or of a generally recognized
professional or clinical standard or that a patient is
in imminent hazard of loss of life or serious injury;
and
(D) subject to subparagraphs (B) and (C) of
paragraph (3), the professional has followed reasonable
internal procedures of the plan, issuer, or
institutional health care provider established for the
purpose of addressing quality concerns before making
the disclosure.
(3) Exception and special rule.--
(A) General exception.--Paragraph (1) does not
protect disclosures that would violate Federal or State
law or diminish or impair the rights of any person to
the continued protection of confidentiality of
communications provided by such law.
(B) Notice of internal procedures.--Subparagraph
(D) of paragraph (2) shall not apply unless the
internal procedures involved are reasonably expected to
be known to the health care professional involved. For
purposes of this subparagraph, a health care
professional is reasonably expected to know of internal
procedures if those procedures have been made available
to the professional through distribution or posting.
(C) Internal procedure exception.--Subparagraph (D)
of paragraph (2) also shall not apply if--
(i) the disclosure relates to an imminent
hazard of loss of life or serious injury to a
patient;
(ii) the disclosure is made to an
appropriate private accreditation body pursuant
to disclosure procedures established by the
body; or
(iii) the disclosure is in response to an
inquiry made in an investigation or proceeding
of an appropriate public regulatory agency and
the information disclosed is limited to the
scope of the investigation or proceeding.
(4) Additional considerations.--It shall not be a violation
of paragraph (1) to take an adverse action against a protected
health care professional if the plan, issuer, or provider
taking the adverse action involved demonstrates that it would
have taken the same adverse action even in the absence of the
activities protected under such paragraph.
(5) Notice.--A group health plan, health insurance issuer,
and institutional health care provider shall post a notice, to
be provided or approved by the Secretary of Labor, setting
forth excerpts from, or summaries of, the pertinent provisions
of this subsection and information pertaining to enforcement of
such provisions.
(6) Constructions.--
(A) Determinations of coverage.--Nothing in this
subsection shall be construed to prohibit a plan or
issuer from making a determination not to pay for a
particular medical treatment or service or the services
of a type of health care professional.
(B) Enforcement of peer review protocols and
internal procedures.--Nothing in this subsection shall
be construed to prohibit a plan, issuer, or provider
from establishing and enforcing reasonable peer review
or utilization review protocols or determining whether
a protected health care professional has complied with
those protocols or from establishing and enforcing
internal procedures for the purpose of addressing
quality concerns.
(C) Relation to other rights.--Nothing in this
subsection shall be construed to abridge rights of
participants, beneficiaries, enrollees, and protected
health care professionals under other applicable
Federal or State laws.
(7) Protected health care professional defined.--For
purposes of this subsection, the term ``protected health care
professional'' means an individual who is a licensed or
certified health care professional and who--
(A) with respect to a group health plan or health
insurance issuer, is an employee of the plan or issuer
or has a contract with the plan or issuer for provision
of services for which benefits are available under the
plan or issuer; or
(B) with respect to an institutional health care
provider, is an employee of the provider or has a
contract or other arrangement with the provider
respecting the provision of health care services.
CHAPTER 5--DEFINITIONS
SEC. 151. DEFINITIONS.
(a) Incorporation of General Definitions.--Except as otherwise
provided, the provisions of section 2791 of the Public Health Service
Act shall apply for purposes of this subtitle in the same manner as
they apply for purposes of title XXVII of such Act.
(b) Secretary.--Except as otherwise provided, the term
``Secretary'' means the Secretary of Health and Human Services, in
consultation with the Secretary of Labor and the term ``appropriate
Secretary'' means the Secretary of Health and Human Services in
relation to carrying out this subtitle under sections 2706 and 2751 of
the Public Health Service Act and the Secretary of Labor in relation to
carrying out this subtitle under section 714 of the Employee Retirement
Income Security Act of 1974.
(c) Additional Definitions.--For purposes of this subtitle:
(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 subtitle, the
applicable State authority (as defined in section
2791(d) of the Public Health Service Act), or the
Secretary of Health and Human Services, if such
Secretary is enforcing such provision under section
2722(a)(2) or 2761(a)(2) of the Public Health Service
Act.
(2) Enrollee.--The term ``enrollee'' means, with respect to
health insurance coverage offered by a health insurance issuer,
an individual enrolled with the issuer to receive such
coverage.
(3) Group health plan.--The term ``group health plan'' has
the meaning given such term in section 733(a) of the Employee
Retirement Income Security Act of 1974, except that such term
includes a employee welfare benefit plan treated as a group health plan
under section 732(d) of such Act or defined as such a plan under
section 607(1) of such Act.
(4) Health care professional.--The term ``health care
professional'' means an individual who is licensed, accredited,
or certified under State law to provide specified health care
services and who is operating within the scope of such
licensure, accreditation, or certification.
(5) Health care provider.--The term ``health care
provider'' includes a physician or other health care
professional, as well as an institutional or other facility or
agency that provides health care services and that is licensed,
accredited, or certified to provide health care items and
services under applicable State law.
(6) Network.--The term ``network'' means, with respect to a
group health plan or health insurance issuer offering health
insurance coverage, the participating health care professionals
and providers through whom the plan or issuer provides health
care items and services to participants, beneficiaries, or
enrollees.
(7) Nonparticipating.--The term ``nonparticipating'' means,
with respect to a health care provider that provides health
care items and services to a participant, beneficiary, or
enrollee under group health plan or health insurance coverage,
a health care provider that is not a participating health care
provider with respect to such items and services.
(8) Participating.--The term ``participating'' means, with
respect to a health care provider that provides health care
items and services to a participant, beneficiary, or enrollee
under group health plan or health insurance coverage offered by
a health insurance issuer, a health care provider that
furnishes such items and services under a contract or other
arrangement with the plan or issuer.
(9) Prior authorization.--The term ``prior authorization''
means the process of obtaining prior approval from a health
insurance issuer or group health plan for the provision or
coverage of medical services.
(10) Terms and conditions.--The term ``terms and
conditions'' includes, with respect to a group health plan or
health insurance coverage, requirements imposed under this
subtitle with respect to the plan or coverage.
SEC. 152. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.
(a) Continued Applicability of State Law With Respect to Health
Insurance Issuers.--
(1) In general.--Subject to paragraph (2), this subtitle
shall not be construed to supersede any provision of State law
which establishes, implements, or continues in effect any
standard or requirement solely relating to health insurance
issuers (in connection with group health insurance coverage or
otherwise) except to the extent that such standard or
requirement prevents the application of a requirement of this
subtitle.
(2) Continued preemption with respect to group health
plans.--Nothing in this subtitle shall be construed to affect
or modify the provisions of section 514 of the Employee
Retirement Income Security Act of 1974 with respect to group
health plans.
(3) Construction.--In applying this section, a State law
that provides for equal access to, and availability of, all
categories of licensed health care providers and services shall
not be treated as preventing the application of any requirement
of this subtitle.
(b) Application of Substantially Compliant State Laws.--
(1) In general.--In the case of a State law that imposes,
with respect to health insurance coverage offered by a health
insurance issuer and with respect to a group health plan that
is a non-Federal governmental plan, a requirement that
substantially complies (within the meaning of subsection (c))
with a patient protection requirement (as defined in paragraph
(3)) and does not prevent the application of other requirements
under this title (except in the case of other substantially
compliant requirements), in applying the requirements of this
subtitle under section 2707 and 2753 (as applicable) of the
Public Health Service Act (as added by subtitle B), subject to
subsection (a)(2)--
(A) the State law shall not be treated as being
superseded under subsection (a); and
(B) the State law shall apply instead of the
patient protection requirement otherwise applicable
with respect to health insurance coverage and non-
Federal governmental plans.
(2) Limitation.--In the case of a group health plan covered
under title I of the Employee Retirement Income Security Act of
1974, paragraph (1) shall be construed to apply only with
respect to the health insurance coverage (if any) offered in
connection with the plan.
(3) Definitions.--In this section:
(A) Patient protection requirement.--The term
``patient protection requirement'' means a requirement
under this subtitle, and includes (as a single
requirement) a group or related set of requirements
under a section or similar unit under this subtitle.
(B) Substantially compliant.--The terms
``substantially compliant'', substantially complies'',
or ``substantial compliance'' with respect to a State
law, mean that the State law has the same or similar
features as the patient protection requirements and has
a similar effect.
(c) Determinations of Substantial Compliance.--
(1) Certification by states.--A State may submit to the
Secretary a certification that a State law provides for patient
protections that are at least substantially compliant with one
or more patient protection requirements. Such certification
shall be accompanied by such information as may be required to
permit the Secretary to make the determination described in
paragraph (2)(A).
(2) Review.--
(A) In general.--The Secretary shall promptly
review a certification submitted under paragraph (1)
with respect to a State law to determine if the State
law substantially complies with the patient protection
requirement (or requirements) to which the law relates.
(B) Approval deadlines.--
(i) Initial review.--Such a certification
is considered approved unless the Secretary
notifies the State in writing, within 90 days
after the date of receipt of the certification,
that the certification is disapproved (and the
reasons for disapproval) or that specified
additional information is needed to make the
determination described in subparagraph (A).
(ii) Additional information.--With respect
to a State that has been notified by the
Secretary under clause (i) that specified
additional information is needed to make the
determination described in subparagraph (A),
the Secretary shall make the determination
within 60 days after the date on which such
specified additional information is received by
the Secretary.
(3) Approval.--
(A) In general.--The Secretary shall approve a
certification under paragraph (1) unless--
(i) the State fails to provide sufficient
information to enable the Secretary to make a
determination under paragraph (2)(A); or
(ii) the Secretary determines that the
State law involved does not provide for patient
protections that substantially comply with the
patient protection requirement (or
requirements) to which the law relates.
(B) State challenge.--A State that has a
certification disapproved by the Secretary under
subparagraph (A) may challenge such disapproval in the
appropriate United States district court.
(C) Deference to states.--With respect to a
certification submitted under paragraph (1), the
Secretary shall give deference to the State's
interpretation of the State law involved with respect
to the patient protection involved.
(D) Public notification.--The Secretary shall--
(i) provide a State with a notice of the
determination to approve or disapprove a
certification under this paragraph;
(ii) promptly publish in the Federal
Register a notice that a State has submitted a
certification under paragraph (1);
(iii) promptly publish in the Federal
Register the notice described in clause (i)
with respect to the State; and
(iv) annually publish the status of all
States with respect to certifications.
(4) Construction.--Nothing in this subsection shall be
construed as preventing the certification (and approval of
certification) of a State law under this subsection solely
because it provides for greater protections for patients than
those protections otherwise required to establish substantial
compliance.
(5) Petitions.--
(A) Petition process.--Effective on the date on
which the provisions of this title become effective, as
provided for in section 181, a group health plan, health insurance
issuer, participant, beneficiary, or enrollee may submit a petition to
the Secretary for an advisory opinion as to whether or not a standard
or requirement under a State law applicable to the plan, issuer,
participant, beneficiary, or enrollee that is not the subject of a
certification under this subsection, is superseded under subsection
(a)(1) because such standard or requirement prevents the application of
a requirement of this subtitle.
(B) Opinion.--The Secretary shall issue an advisory
opinion with respect to a petition submitted under
subparagraph (A) within the 60-day period beginning on
the date on which such petition is submitted.
(d) Definitions.--For purposes of this section:
(1) State law.--The term ``State law'' includes all laws,
decisions, rules, regulations, or other State action having the
effect of law, of any State. A law of the United States
applicable only to the District of Columbia shall be treated as
a State law rather than a law of the United States.
(2) State.--The term ``State'' includes a State, the
District of Columbia, Puerto Rico, the Virgin Islands, Guam,
American Samoa, the Northern Mariana Islands, any political
subdivisions of such, or any agency or instrumentality of such.
SEC. 153. EXCLUSIONS.
(a) No Benefit Requirements.--Nothing in this subtitle shall be
construed to require a group health plan or a health insurance issuer
offering health insurance coverage to include specific items and
services under the terms of such a plan or coverage, other than those
provided under the terms and conditions of such plan or coverage.
(b) Exclusion From Access to Care Managed Care Provisions for Fee-
for-Service Coverage.--
(1) In general.--The provisions of sections 121 through 127
shall not apply to a group health plan or health insurance
coverage if the only coverage offered under the plan or
coverage is fee-for-service coverage (as defined in paragraph
(2)).
(2) Fee-for-service coverage defined.--For purposes of this
subsection, the term ``fee-for-service coverage'' means
coverage under a group health plan or health insurance coverage
that--
(A) reimburses hospitals, health professionals, and
other providers on a fee-for-service basis without
placing the provider at financial risk;
(B) does not vary reimbursement for such a provider
based on an agreement to contract terms and conditions
or the utilization of health care items or services
relating to such provider;
(C) allows access to any provider that is lawfully
authorized to provide the covered services and that
agrees to accept the terms and conditions of payment
established under the plan or by the issuer; and
(D) for which the plan or issuer does not require
prior authorization before providing for any health
care services.
SEC. 154. TREATMENT OF EXCEPTED BENEFITS.
(a) In General.--The requirements of this subtitle and the
provisions of sections 502(a)(1)(C), 502(n), and 514(d) of the Employee
Retirement Income Security Act of 1974 (added by section 172) shall not
apply to excepted benefits (as defined in section 733(c) of such Act),
other than benefits described in section 733(c)(2)(A) of such Act, in
the same manner as the provisions of part 7 of subtitle B of title I of
such Act do not apply to such benefits under subsections (b) and (c) of
section 732 of such Act.
(b) Coverage of Certain Limited Scope Plans.--Only for purposes of
applying the requirements of this subtitle under sections 2707 and 2753
of the Public Health Service Act, section 714 of the Employee
Retirement Income Security Act of 1974, and section 9813 of the
Internal Revenue Code of 1986, the following sections shall be deemed
not to apply:
(1) Section 2791(c)(2)(A) of the Public Health Service Act.
(2) Section 733(c)(2)(A) of the Employee Retirement Income
Security Act of 1974.
(3) Section 9832(c)(2)(A) of the Internal Revenue Code of
1986.
SEC. 155. REGULATIONS.
The Secretaries of Health and Human Services, Labor, and the
Treasury shall issue such regulations as may be necessary or
appropriate to carry out this subtitle. 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 subtitle.
SEC. 156. INCORPORATION INTO PLAN OR COVERAGE DOCUMENTS.
The requirements of this subtitle with respect to a group health
plan or health insurance coverage are, subject to section 154, deemed
to be incorporated into, and made a part of, such plan or the policy,
certificate, or contract providing such coverage and are enforceable
under law as if directly included in the documentation of such plan or
such policy, certificate, or contract.
SEC. 157. PRESERVATION OF PROTECTIONS.
(a) In General.--The rights under this title (including the right
to maintain a civil action and any other rights under the amendments
made by this title) may not be waived, deferred, or lost pursuant to
any agreement not authorized under this title.
(b) Exception.--Subsection (a) shall not apply to an agreement
providing for arbitration or participation in any other nonjudicial
procedure to resolve a dispute if the agreement is entered into
knowingly and voluntarily by the parties involved after the dispute has
arisen or is pursuant to the terms of a collective bargaining
agreement. Nothing in this subsection shall be construed to permit the
waiver of the requirements of sections 113 and 114 (relating to
internal and external review).
Subtitle B--Application of Quality Care Standards to Group Health Plans
and Health Insurance Coverage Under the Public Health Service Act
SEC. 161. APPLICATION TO GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE
COVERAGE.
(a) In General.--Subpart 2 of part A of title XXVII of the Public
Health Service Act is amended by adding at the end the following new
section:
``SEC. 2707. PATIENT PROTECTION STANDARDS.
``Each group health plan shall comply with patient protection
requirements under subtitle A of the Bipartisan Patient Protection Act,
and each health insurance issuer shall comply with patient protection
requirements under such subtitle with respect to group health insurance
coverage it offers, and such requirements shall be deemed to be
incorporated into this subsection.''.
(b) Conforming Amendment.--Section 2721(b)(2)(A) of such Act (42
U.S.C. 300gg-21(b)(2)(A)) is amended by inserting ``(other than section
2707)'' after ``requirements of such subparts''.
SEC. 162. APPLICATION TO INDIVIDUAL HEALTH INSURANCE COVERAGE.
Part B of title XXVII of the Public Health Service Act is amended
by inserting after section 2752 the following new section:
``SEC. 2753. PATIENT PROTECTION STANDARDS.
``Each health insurance issuer shall comply with patient protection
requirements under subtitle A of the Bipartisan Patient Protection Act
with respect to individual health insurance coverage it offers, and
such requirements shall be deemed to be incorporated into this
subsection.''.
SEC. 163. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
Part C of title XXVII of the Public Health Service Act (42 U.S.C.
300gg-91 et seq.) is amended by adding at the end the following:
``SEC. 2793. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
``(a) Agreement with States.--A State may enter into an agreement
with the Secretary for the delegation to the State of some or all of
the Secretary's authority under this title to enforce the requirements
applicable under subtitle A of the Bipartisan Patient Protection Act
with respect to health insurance coverage offered by a health insurance
issuer and with respect to a group health plan that is a non-Federal
governmental plan.
``(b) Delegations.--Any department, agency, or instrumentality of a
State to which authority is delegated pursuant to an agreement entered
into under this section may, if authorized under State law and to the
extent consistent with such agreement, exercise the powers of the
Secretary under this title which relate to such authority.''.
Subtitle C--Amendments to the Employee Retirement Income Security Act
of 1974
SEC. 171. APPLICATION OF PATIENT PROTECTION STANDARDS TO GROUP HEALTH
PLANS AND GROUP HEALTH INSURANCE COVERAGE UNDER THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.
Subpart B of part 7 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 is amended by adding at the end
the following new section:
``SEC. 714. PATIENT PROTECTION STANDARDS.
``(a) In General.--Subject to subsection (b), a group health plan
(and a health insurance issuer offering group health insurance coverage
in connection with such a plan) shall comply with the requirements of
subtitle A of the Bipartisan Patient Protection Act (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 subtitle A of
the Bipartisan Patient Protection Act 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 121 (relating to consumer choice
option).
``(B) Section 122 (relating to choice of health
care professional).
``(C) Section 123 (relating to access to emergency
care).
``(D) Section 124 (relating to timely access to
specialists).
``(E) Section 125 (relating to patient access to
obstetrical and gynecological care).
``(F) Section 126 (relating to access to pediatric
care).
``(G) Section 127 (relating to continuity of care),
but only insofar as a replacement issuer assumes the
obligation for continuity of care.
``(H) Section 128 (relating to access to needed
prescription drugs).
``(I) Section 129 (relating to coverage for
individuals participating in approved clinical trials).
``(J) Section 130 (relating to required coverage
for minimum hospital stay for mastectomies and lymph
node dissections for the treatment of breast cancer and
coverage for secondary consultations).
``(K) Section 144 (relating to payment of claims).
``(2) Information.--With respect to information required to
be provided or made available under section 131 of the
Bipartisan Patient Protection Act, in the case of a group health plan
that provides benefits in the form of health insurance coverage through
a health insurance issuer, the Secretary shall determine the
circumstances under which the plan is not required to provide or make
available the information (and is not liable for the issuer's failure
to provide or make available the information), if the issuer is
obligated to provide and make available (or provides and makes
available) such information.
``(3) Internal appeals.--With respect to the internal
appeals process required to be established under section 113 of
such Act, in the case of a group health plan that provides
benefits in the form of health insurance coverage through a
health insurance issuer, the Secretary shall determine the
circumstances under which the plan is not required to provide
for such process and system (and is not liable for the issuer's
failure to provide for such process and system), if the issuer
is obligated to provide for (and provides for) such process and
system.
``(4) External appeals.--Pursuant to rules of the
Secretary, insofar as a group health plan enters into a
contract with a qualified external appeal entity for the
conduct of external appeal activities in accordance with
section 114 of such Act, the plan shall be treated as meeting
the requirement of such section and is not liable for the
entity's failure to meet any requirements under such section.
``(5) Application to prohibitions.--Pursuant to rules of
the Secretary, if a health insurance issuer offers health
insurance coverage in connection with a group health plan and
takes an action in violation of any of the following sections
of the Bipartisan Patient Protection Act, the group health plan
shall not be liable for such violation unless the plan caused
such violation:
``(A) Section 141 (relating to prohibition of
interference with certain medical communications).
``(B) Section 142 (relating to prohibition of
discrimination against providers based on licensure).
``(C) Section 143 (relating to prohibition against
improper incentive arrangements).
``(D) Section 145 (relating to protection for
patient advocacy).
``(6) Construction.--Nothing in this subsection shall be
construed to affect or modify the responsibilities of the
fiduciaries of a group health plan under part 4 of subtitle B.
``(7) Treatment of substantially compliant state laws.--For
purposes of applying this subsection in connection with health
insurance coverage, any reference in this subsection to a
requirement in a section or other provision in the Bipartisan
Patient Protection Act with respect to a health insurance
issuer is deemed to include a reference to a requirement under
a State law that substantially complies (as determined under
section 152(c) of such Act) with the requirement in such
section or other provisions.
``(8) Application to certain prohibitions against
retaliation.--With respect to compliance with the requirements
of section 145(b)(1) of the Bipartisan Patient Protection Act,
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 145(b)(1) of the
Bipartisan Patient Protection Act may file with the Secretary a
complaint within 180 days of the date of the alleged
retaliation or discrimination.
``(2) Investigation.--The Secretary shall investigate such
complaints and shall determine if a violation of such section
has occurred and, if so, shall issue an order to ensure that
the protected health care professional does not suffer any loss
of position, pay, or benefits in relation to the plan, issuer,
or provider involved, as a result of the violation found by the
Secretary.
``(d) Conforming Regulations.--The Secretary shall issue
regulations to coordinate the requirements on group health plans and
health insurance issuers under this section with the requirements
imposed under the other provisions of this title. In order to reduce
duplication and clarify the rights of participants and beneficiaries
with respect to information that is required to be provided, such
regulations shall coordinate the information disclosure requirements
under section 131 of the Bipartisan Patient Protection Act with the
reporting and disclosure requirements imposed under part 1, so long as
such coordination does not result in any reduction in the information
that would otherwise be provided to participants and beneficiaries.''.
(b) Satisfaction of ERISA Claims Procedure Requirement.--Section
503 of such Act (29 U.S.C. 1133) is amended by inserting ``(a)'' after
``Sec. 503.'' and by adding at the end the following new subsection:
``(b) In the case of a group health plan (as defined in section
733), compliance with the requirements of chapter 1 of subtitle A of
the Bipartisan Patient Protection Act, and compliance with regulations
promulgated by the Secretary, in the case of a claims denial, shall be
deemed compliance with subsection (a) with respect to such claims
denial.''.
(c) Conforming Amendments.--(1) Section 732(a) of such Act (29
U.S.C. 1185(a)) is amended by striking ``section 711'' and inserting
``sections 711 and 714''.
(2) The table of contents in section 1 of such Act is amended by
inserting after the item relating to section 713 the following new
item:
``Sec. 714. Patient protection standards.''.
(3) Section 502(b)(3) of such Act (29 U.S.C. 1132(b)(3)) is amended
by inserting ``(other than section 135(b))'' after ``part 7''.
SEC. 172. AVAILABILITY OF CIVIL REMEDIES.
(a) Availability of Federal Civil Remedies in Cases Not Involving
Medically Reviewable Decisions.--
(1) In general.--Section 502 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1132) is amended by
adding at the end the following new subsections:
``(n) Cause of Action Relating to Provision of Health Benefits.--
``(1) In general.--In any case in which--
``(A) a person who is a fiduciary of a group health
plan, a health insurance issuer offering health
insurance coverage in connection with the plan, or an
agent of the plan, issuer, or plan sponsor, upon
consideration of a claim for benefits of a participant
or beneficiary under section 112 of the Bipartisan
Patient Protection Act (relating to procedures for
initial claims for benefits and prior authorization
determinations) or upon review of a denial of such a
claim under section 113 of such Act (relating to
internal appeal of a denial of a claim for benefits),
fails to exercise ordinary care in making a decision--
``(i) regarding whether an item or service
is covered under the terms and conditions of
the plan or coverage,
``(ii) regarding whether an individual is a
participant or beneficiary who is enrolled
under the terms and conditions of the plan or
coverage (including the applicability of any
waiting period under the plan or coverage), or
``(iii) as to the application of cost-
sharing requirements or the application of a
specific exclusion or express limitation on the
amount, duration, or scope of coverage of items
or services under the terms and conditions of
the plan or coverage, and
``(B) such failure is a proximate cause of personal
injury to, or the death of, the participant or
beneficiary,
such plan, plan sponsor, or issuer shall be liable to the
participant or beneficiary (or the estate of such participant
or beneficiary) for economic and noneconomic damages (but not
exemplary or punitive damages) in connection with such personal
injury or death.
``(2) Cause of action must not involve medically reviewable
decision.--
``(A) In general.--A cause of action is established
under paragraph (1)(A) only if the decision referred to
in paragraph (1)(A) does not include a medically
reviewable decision.
``(B) Medically reviewable decision.--For purposes
of this subsection, the term `medically reviewable
decision' means a denial of a claim for benefits under
the plan which is described in section 114(d)(2) of the
Bipartisan Patient Protection Act (relating to
medically reviewable decisions).
``(3) Limitation regarding certain types of actions saved
from preemption of state law.--A cause of action is not
established under paragraph (1)(A) in connection with a failure
described in paragraph (1)(A) to the extent that a cause of
action under State law (as defined in section 514(c)) for such
failure would not be preempted under section 514.
``(4) Definitions and related rules.--For purposes of this
subsection and subsection (o)--
``(A) Ordinary care.--The term `ordinary care'
means, with respect to a determination on a claim for
benefits, that degree of care, skill, and diligence
that a reasonable and prudent individual would exercise
in making a fair determination on a claim for benefits
of like kind to the claims involved.
``(B) Personal injury.--The term `personal injury'
means a physical injury and includes an injury arising
out of the treatment (or failure to treat) a mental
illness or disease.
``(C) Claim for benefits; denial.--The terms `claim
for benefits' and `denial of a claim for benefits' have
the meanings provided such terms in section 112(e) of
the Bipartisan Patient Protection Act.
``(D) Terms and conditions.--The term `terms and
conditions' includes, with respect to a group health
plan or health insurance coverage, requirements imposed
under subtitle A of the Bipartisan Patient Protection
Act.
``(E) Treatment of excepted benefits.--Under
section 154(a) of the Bipartisan Patient Protection
Act, the provisions of this subsection and subsection
(a)(1)(C) do not apply to certain excepted benefits.
``(F) Group health plan and other related terms.--
The provisions of sections 732(d) and 733 apply for
purposes of this subsection in the same manner as they
apply for purposes of part 7, except that the term
`group health plan' includes a group health plan (as
defined in section 607(1)).
``(5) Exclusion of employers and other plan sponsors.--
``(A) Causes of action against employers and plan
sponsors precluded.--Subject to subparagraph (B),
paragraph (1)(A) does not authorize a cause of action
against an employer or other plan sponsor maintaining
the plan (or against an employee of such an employer or
sponsor acting within the scope of employment).
``(B) Certain causes of action permitted.--
Notwithstanding subparagraph (A), a cause of action may
arise against an employer or other plan sponsor (or
against an employee of such an employer or sponsor
acting within the scope of employment) under paragraph
(1)(A), to the extent there was direct participation by
the employer or other plan sponsor (or employee) in the
decision of the plan under section 112 of the
Bipartisan Patient Protection Act upon consideration of
a claim for benefits or under section 113 of such Act
upon review of a denial of a claim for benefits.
``(C) Direct participation.--
``(i) In general.--For purposes of
subparagraph (B), the term `direct
participation' means, in connection with a
decision described in paragraph (1)(A), the
actual making of such decision or the actual
exercise of control in making such decision.
``(ii) Rules of construction.--For purposes
of clause (i), the employer or plan sponsor (or
employee) shall not be construed to be engaged
in direct participation because of any form of
decisionmaking or other conduct that is merely
collateral or precedent to the decision
described in paragraph (1)(A) on a particular
claim for benefits of a participant or
beneficiary, including (but not limited to)--
``(I) any participation by the
employer or other plan sponsor (or
employee) in the selection of the group
health plan or health insurance
coverage involved or the third party
administrator or other agent;
``(II) any engagement by the
employer or other plan sponsor (or
employee) in any cost-benefit
analysis undertaken in connection with the selection of, or continued
maintenance of, the plan or coverage involved;
``(III) any participation by the
employer or other plan sponsor (or
employee) in the process of creating,
continuing, modifying, or terminating
the plan or any benefit under the plan,
if such process was not substantially
focused solely on the particular
situation of the participant or
beneficiary referred to in paragraph
(1)(A); and
``(IV) any participation by the
employer or other plan sponsor (or
employee) in the design of any benefit
under the plan, including the amount of
copayment and limits connected with
such benefit.
``(iii) Irrelevance of certain collateral
efforts made by employer or plan sponsor.--For
purposes of this subparagraph, an employer or
plan sponsor shall not be treated as engaged in
direct participation in a decision with respect
to any claim for benefits or denial thereof in
the case of any particular participant or
beneficiary solely by reason of--
``(I) any efforts that may have
been made by the employer or plan
sponsor to advocate for authorization
of coverage for that or any other
participant or beneficiary (or any
group of participants or
beneficiaries), or
``(II) any provision that may have
been made by the employer or plan
sponsor for benefits which are not
covered under the terms and conditions
of the plan for that or any other
participant or beneficiary (or any
group of participants or
beneficiaries).
``(D) Application to certain plans.--
``(i) In general.--Notwithstanding any
other provision of this subsection, no group
health plan described in clause (ii) (or plan
sponsor of such a plan) shall be liable under
paragraph (1) for the performance of, or the
failure to perform, any non-medically
reviewable duty under the plan.
``(ii) Definition.--A group health plan
described in this clause is--
``(I) a group health plan that is
self-insured and self administered by
an employer (including an employee of
such an employer acting within the
scope of employment); or
``(II) a multiemployer plan as
defined in section 3(37)(A) (including
an employee of a contributing employer
or of the plan, or a fiduciary of the
plan, acting within the scope of employment or fiduciary
responsibility) that is self-insured and self-administered.
``(6) Exclusion of physicians and other health care
professionals.--
``(A) In general.--No treating physician or other
treating health care professional of the participant or
beneficiary, and no person acting under the direction
of such a physician or health care professional, shall
be liable under paragraph (1) for the performance of,
or the failure to perform, any non-medically reviewable
duty of the plan, the plan sponsor, or any health
insurance issuer offering health insurance coverage in
connection with the plan.
``(B) Definitions.--For purposes of subparagraph
(A)--
``(i) Health care professional.--The term
`health care professional' means an individual
who is licensed, accredited, or certified under
State law to provide specified health care
services and who is operating within the scope
of such licensure, accreditation, or
certification.
``(ii) Non-medically reviewable duty.--The
term `non-medically reviewable duty' means a
duty the discharge of which does not include
the making of a medically reviewable decision.
``(7) Exclusion of hospitals.--No treating hospital of the
participant or beneficiary shall be liable under paragraph (1)
for the performance of, or the failure to perform, any non-
medically reviewable duty (as defined in paragraph (6)(B)(ii))
of the plan, the plan sponsor, or any health insurance issuer
offering health insurance coverage in connection with the plan.
``(8) Rule of construction relating to exclusion from
liability of physicians, health care professionals, and
hospitals.--Nothing in paragraph (6) or (7) shall be construed
to limit the liability (whether direct or vicarious) of the
plan, the plan sponsor, or any health insurance issuer offering
health insurance coverage in connection with the plan.
``(9) Requirement of exhaustion.--
``(A) In general.--A cause of action may not be
brought under paragraph (1) in connection with any
denial of a claim for benefits of any individual until
all administrative processes under sections 112 and 113
of the Bipartisan Patient Protection Act (if
applicable) have been exhausted.
``(B) Exception for needed care.--A participant or
beneficiary may seek relief exclusively in Federal
court under subsection 502(a)(1)(B) prior to the
exhaustion of administrative remedies under sections
112, 113, or 114 of the Bipartisan Patient Protection
Act (as required under subparagraph (A)) if it is
demonstrated to the court that the exhaustion of such
remedies would cause irreparable harm to the health of
the participant or beneficiary. Notwithstanding the awarding of relief
under subsection 502(a)(1)(B) pursuant to this subparagraph, no relief
shall be available as a result of, or arising under, paragraph (1)(A)
or paragraph (10)(B), with respect to a participant or beneficiary,
unless the requirements of subparagraph (A) are met.
``(C) Receipt of benefits during appeals process.--
Receipt by the participant or beneficiary of the
benefits involved in the claim for benefits during the
pendency of any administrative processes referred to in
subparagraph (A) or of any action commenced under this
subsection--
``(i) shall not preclude continuation of
all such administrative processes to their
conclusion if so moved by any party, and
``(ii) shall not preclude any liability
under subsection (a)(1)(C) and this subsection
in connection with such claim.
The court in any action commenced under this subsection
shall take into account any receipt of benefits during
such administrative processes or such action in
determining the amount of the damages awarded.
``(D) Admissible.--Any determination made by a
reviewer in an administrative proceeding under section
113 of the Bipartisan Patient Protection Act shall be
admissible in any Federal court proceeding and shall be
presented to the trier of fact.
``(10) Statutory damages.--
``(A) In general.--The remedies set forth in this
subsection (n) shall be the exclusive remedies for
causes of action brought under this subsection.
``(B) Assessment of civil penalties.--In addition
to the remedies provided for in paragraph (1) (relating
to the failure to provide contract benefits in
accordance with the plan), a civil assessment, in an
amount not to exceed $5,000,000, payable to the
claimant may be awarded in any action under such
paragraph if the claimant establishes by clear and
convincing evidence that the alleged conduct carried
out by the defendant demonstrated bad faith and
flagrant disregard for the rights of the participant or
beneficiary under the plan and was a proximate cause of
the personal injury or death that is the subject of the
claim.
``(11) Limitation on attorneys' fees.--
``(A) In general.--Notwithstanding any other
provision of law, or any arrangement, agreement, or
contract regarding an attorney's fee, the amount of an
attorney's contingency fee allowable for a cause of
action brought pursuant to this subsection shall not
exceed \1/3\ of the total amount of the plaintiff's
recovery (not including the reimbursement of actual
out-of-pocket expenses of the attorney).
``(B) Determination by district court.--The last
Federal district court in which the action was pending
upon the final disposition, including all appeals, of
the action shall have jurisdiction to review the
attorney's fee to ensure that the fee is a reasonable
one.
``(12) Limitation of action.--Paragraph (1) shall not apply
in connection with any action commenced after 3 years after the
later of--
``(A) the date on which the plaintiff first knew,
or reasonably should have known, of the personal injury
or death resulting from the failure described in
paragraph (1), or
``(B) the date as of which the requirements of
paragraph (9) are first met.
``(13) Tolling provision.--The statute of limitations for
any cause of action arising under State law relating to a
denial of a claim for benefits that is the subject of an action
brought in Federal court under this subsection shall be tolled
until such time as the Federal court makes a final disposition,
including all appeals, of whether such claim should properly be
within the jurisdiction of the Federal court. The tolling
period shall be determined by the applicable Federal or State
law, whichever period is greater.
``(14) Purchase of insurance to cover liability.--Nothing
in section 410 shall be construed to preclude the purchase by a
group health plan of insurance to cover any liability or losses
arising under a cause of action under subsection (a)(1)(C) and
this subsection.
``(15) Exclusion of directed recordkeepers.--
``(A) In general.--Subject to subparagraph (C),
paragraph (1) shall not apply with respect to a
directed recordkeeper in connection with a group health
plan.
``(B) Directed recordkeeper.--For purposes of this
paragraph, the term `directed recordkeeper' means, in
connection with a group health plan, a person engaged
in directed recordkeeping activities pursuant to the
specific instructions of the plan or the employer or
other plan sponsor, including the distribution of
enrollment information and distribution of disclosure materials under
this Act or subtitle A of the Bipartisan Patient Protection Act and
whose duties do not include making decisions on claims for benefits.
``(C) Limitation.--Subparagraph (A) does not apply
in connection with any directed recordkeeper to the
extent that the directed recordkeeper fails to follow
the specific instruction of the plan or the employer or
other plan sponsor.
``(16) Exclusion of health insurance agents.--Paragraph (1)
does not apply with respect to a person whose sole involvement
with the group health plan is providing advice or
administrative services to the employer or other plan sponsor
relating to the selection of health insurance coverage offered
in connection with the plan.
``(17) No effect on state law.--No provision of State law
(as defined in section 514(c)(1)) shall be treated as
superseded or otherwise altered, amended, modified,
invalidated, or impaired by reason of the provisions of
subsection (a)(1)(C) and this subsection.
``(18) Relief from liability for employer or other plan
sponsor by means of designated decisionmaker.--
``(A) In general.--Notwithstanding the direct
participation (as defined in paragraph (5)(C)(i)) of an
employer or plan sponsor, in any case in which there is
(or is deemed under subparagraph (B) to be) a
designated decisionmaker under subparagraph (B) that
meets the requirements of subsection (o)(1) for an
employer or other plan sponsor--
``(i) all liability of such employer or
plan sponsor involved (and any employee of such
employer or sponsor acting within the scope of
employment) under this subsection in connection
with any participant or beneficiary shall be
transferred to, and assumed by, the designated
decisionmaker, and
``(ii) with respect to such liability, the
designated decisionmaker shall be substituted
for the employer or sponsor (or employee) in
the action and may not raise any defense that
the employer or sponsor (or employee) could not
raise if such a decisionmaker were not so
deemed.
``(B) Automatic designation.--A health insurance
issuer shall be deemed to be a designated decisionmaker
for purposes of subparagraph (A) with respect to the
participants and beneficiaries of an employer or plan
sponsor, whether or not the employer or plan sponsor
makes such a designation, and shall be deemed to have
assumed unconditionally all liability of the employer
or plan sponsor under such designation in accordance
with subsection (o), unless the employer or plan
sponsor affirmatively enters into a contract to prevent
the service of the designated decisionmaker.
``(C) Treatment of certain trust funds.--For
purposes of this paragraph, the terms `employer' and
`plan sponsor', in connection with the assumption by a
designated decisionmaker of the liability of employer
or other plan sponsor pursuant to this paragraph, shall
be construed to include a trust fund maintained
pursuant to section 302 of the Labor Management
Relations Act, 1947 (29 U.S.C. 186) or the Railway
Labor Act (45 U.S.C. 151 et seq.).
``(19) Previously provided services.--
``(A) in general.--Except as provided in this
paragraph, a cause of action shall not arise under
paragraph (1) where the denial involved relates to an
item or service that has already been fully provided to
the participant or beneficiary under the plan or
coverage and the claim relates solely to the subsequent
denial of payment for the provision of such item or
service.
``(B) Exception.--Nothing in subparagraph (A) shall
be construed to--
``(i) prohibit a cause of action under
paragraph (1) where the nonpayment involved
results in the participant or beneficiary being
unable to receive further items or services
that are directly related to the item or
service involved in the denial referred to in
subparagraph (A) or that are part of a
continuing treatment or series of procedures;
or
``(ii) limit liability that otherwise would
arise from the provision of the item or
services or the performance of a medical
procedure.
``(20) Exemption from personal liability for individual
members of boards of directors, joint boards of trustees,
etc.--Any individual who is--
``(A) a member of a board of directors of an
employer or plan sponsor; or
``(B) a member of an association, committee,
employee organization, joint board of trustees, or
other similar group of representatives of the entities
that are the plan sponsor of plan maintained by two or
more employers and one or more employee organizations;
shall not be personally liable under this subsection for
conduct that is within the scope of employment or of plan-
related duties of the individuals unless the individual acts in
a fraudulent manner for personal enrichment.
``(o) Requirements for Designated Decisionmakers of Group Health
Plans.--
``(1) In general.--For purposes of subsection (n)(18) and
section 514(d)(9), a designated decisionmaker meets the
requirements of this paragraph with respect to any participant
or beneficiary if--
``(A) such designation is in such form as may be
prescribed in regulations of the Secretary,
``(B) the designated decisionmaker--
``(i) meets the requirements of paragraph
(2),
``(ii) assumes unconditionally all
liability of the employer or plan sponsor
involved (and any employee of such employer or
sponsor acting within the scope of employment)
either arising under subsection (n) or arising
in a cause of action permitted under section
514(d) in connection with actions (and failures
to act) of the employer or plan sponsor (or
employee) occurring during the period in which
the designation under subsection (n)(18) or
section 514(d)(9) is in effect relating to such
participant and beneficiary,
``(iii) agrees to be substituted for the
employer or plan sponsor (or employee) in the
action and not to raise any defense with
respect to such liability that the employer or
plan sponsor (or employee) may not raise, and
``(iv) where paragraph (2)(B) applies,
assumes unconditionally the exclusive authority
under the group health plan to make medically
reviewable decisions under the plan with
respect to such participant or beneficiary, and
``(C) the designated decisionmaker and the
participants and beneficiaries for whom the
decisionmaker has assumed liability are identified in
the written instrument required under section 402(a)
and as required under section 131(b)(19) of the
Bipartisan Patient Protection Act.
Any liability assumed by a designated decisionmaker pursuant to
this subsection shall be in addition to any liability that it
may otherwise have under applicable law.
``(2) Qualifications for designated decisionmakers.--
``(A) In general.--Subject to subparagraph (B), an
entity is qualified under this paragraph to serve as a
designated decisionmaker with respect to a group health
plan if the entity has the ability to assume the
liability described in paragraph (1) with respect to participants and
beneficiaries under such plan, including requirements relating to the
financial obligation for timely satisfying the assumed liability, and
maintains with the plan sponsor and the Secretary certification of such
ability. Such certification shall be provided to the plan sponsor or
named fiduciary and to the Secretary upon designation under subsection
(n)(18)(B) or section 517(d)(9)(B) and not less frequently than
annually thereafter, or if such designation constitutes a multiyear
arrangement, in conjunction with the renewal of the arrangement.
``(B) Special qualification in the case of certain
reviewable decisions.--In the case of a group health
plan that provides benefits consisting of medical care
to a participant or beneficiary only through health
insurance coverage offered by a single health insurance
issue, such issuer is the only entity that may be
qualified under this paragraph to serve as a designated
decisionmaker with respect to such participant or
beneficiary, and shall serve as the designated
decisionmaker unless the employer or other plan sponsor
acts affirmatively to prevent such service.
``(3) Requirements relating to financial obligations.--For
purposes of paragraph (2)(A), the requirements relating to the
financial obligation of an entity for liability shall include--
``(A) coverage of such entity under an insurance
policy or other arrangement, secured and maintained by
such entity, to effectively insure such entity against
losses arising from professional liability claims,
including those arising from its service as a
designated decisionmaker under this part; or
``(B) evidence of minimum capital and surplus
levels that are maintained by such entity to cover any
losses as a result of liability arising from its
service as a designated decisionmaker under this part.
The appropriate amounts of liability insurance and minimum
capital and surplus levels for purposes of subparagraphs (A)
and (B) shall be determined by an actuary using sound actuarial
principles and accounting practices pursuant to established
guidelines of the American Academy of Actuaries and in
accordance with such regulations as the Secretary may prescribe
and shall be maintained throughout the term for which the
designation is in effect. The provisions of this paragraph
shall not apply in the case of a designated decisionmaker that
is a group health plan, plan sponsor, or health insurance
issuer and that is regulated under Federal law or a State
financial solvency law.
``(4) Limitation on appointment of treating physicians.--A
treating physician who directly delivered the care, treatment,
or provided the patient service that is the subject of a cause
of action by a participant or beneficiary under subsection (n)
or section 514(d) may not be designated as a designated
decisionmaker under this subsection with respect to such
participant or beneficiary.''.
(2) Conforming amendment.--Section 502(a)(1) of such Act
(29 U.S.C. 1132(a)(1)) is amended--
(A) by striking ``or'' at the end of subparagraph
(A);
(B) in subparagraph (B), by striking ``plan;'' and
inserting ``plan, or''; and
(C) by adding at the end the following new
subparagraph:
``(C) for the relief provided for in subsection (n)
of this section.''.
(b) Rules Relating to ERISA Preemption.--Section 514 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1144) is
amended--
(1) by redesignating subsection (d) as subsection (f); and
(2) by inserting after subsection (c) the following new
subsections:
``(d) Preemption Not To Apply to Causes of Action under State Law
Involving Medically Reviewable Decision.--
``(1) Non-preemption of certain causes of action.--
``(A) In general.--Except as provided in this
subsection, nothing in this title (including section
502) shall be construed to supersede or otherwise
alter, amend, modify, invalidate, or impair any cause
of action under State law of a participant or
beneficiary under a group health plan (or the estate of
such a participant or beneficiary) against the plan,
the plan sponsor, any health insurance issuer offering
health insurance coverage in connection with the plan,
or any managed care entity in connection with the plan
to recover damages resulting from personal injury or
for wrongful death if such cause of action arises by
reason of a medically reviewable decision.
``(B) Medically reviewable decision.--For purposes
of subparagraph (A), the term `medically reviewable
decision' means a denial of a claim for benefits under
the plan which is described in section 114(d)(2) of the
Bipartisan Patient Protection Act (relating to
medically reviewable decisions).
``(C) Limitation on punitive damages.--
``(i) In general.--Except as provided in
clauses (ii) and (iii), with respect to a cause
of action described in subparagraph (A) brought
with respect to a participant or beneficiary,
State law is superseded insofar as it provides
any punitive, exemplary, or similar damages if,
as of the time of the personal injury or death,
all the requirements of the following sections
of the Bipartisan Patient Protection Act were
satisfied with respect to the participant or
beneficiary:
``(I) Section 112 (relating to
procedures for initial claims for
benefits and prior authorization
determinations).
``(II) Section 113 of such Act
(relating to internal appeals of claims
denials).
``(III) Section 114 of such Act
(relating to independent external
appeals procedures).
``(ii) Exception for certain actions for
wrongful death.--Clause (i) shall not apply
with respect to an action for wrongful death if
the applicable State law provides (or has been
construed to provide) for damages in such an
action which are only punitive or exemplary in
nature.
``(iii) Exception for willful or wanton
disregard for the rights or safety of others.--
Clause (i) shall not apply with respect to any
cause of action described in subparagraph (A)
if, in such action, the plaintiff establishes
by clear and convincing evidence that conduct
carried out by the defendant with willful
or wanton disregard for the rights or safety of others was a proximate
cause of the personal injury or wrongful death that is the subject of
the action.
``(2) Definitions and related rules.--For purposes of this
subsection and subsection (e)--
``(A) Treatment of excepted benefits.--Under
section 154(a) of the Bipartisan Patient Protection
Act, the provisions of this subsection do not apply to
certain excepted benefits.
``(B) Personal injury.--The term `personal injury'
means a physical injury and includes an injury arising
out of the treatment (or failure to treat) a mental
illness or disease.
``(C) Claim for benefit; denial.--The terms `claim
for benefits' and `denial of a claim for benefits'
shall have the meaning provided such terms under
section 112(e) of the Bipartisan Patient Protection
Act.
``(D) Managed care entity.--
``(i) In general.--The term `managed care
entity' means, in connection with a group
health plan and subject to clause (ii), any
entity that is involved in determining the
manner in which or the extent to which items or
services (or reimbursement therefor) are to be
provided as benefits under the plan.
``(ii) Treatment of treating physicians,
other treating health care professionals, and
treating hospitals.--Such term does not include
a treating physician or other treating health
care professional (as defined in section
502(n)(6)(B)(i)) of the participant or
beneficiary and also does not include a
treating hospital insofar as it is acting
solely in the capacity of providing treatment
or care to the participant or beneficiary.
Nothing in the preceding sentence shall be
construed to preempt vicarious liability of any
plan, plan sponsor, health insurance issuer, or
managed care entity.
``(E) Group health plan and other related terms.--
The provisions of sections 732(d) and 733 apply for
purposes of this subsection in the same manner as they
apply for purposes of part 7, except that the term
`group health plan' includes a group health plan (as
defined in section 607(1)).
``(3) Exclusion of employers and other plan sponsors.--
``(A) Causes of action against employers and plan
sponsors precluded.--Subject to subparagraph (B),
paragraph (1) does not apply with respect to--
``(i) any cause of action against an
employer or other plan sponsor maintaining the
plan (or against an employee of such an
employer or sponsor acting within the scope of
employment), or
``(ii) a right of recovery, indemnity, or
contribution by a person against an employer or
other plan sponsor (or such an employee) for
damages assessed against the person pursuant to
a cause of action to which paragraph (1)
applies.
``(B) Certain causes of action permitted.--
Notwithstanding subparagraph (A), paragraph (1) applies
with respect to any cause of action that is brought by
a participant or beneficiary under a group health plan
(or the estate of such a participant or beneficiary) to
recover damages resulting from personal injury or for
wrongful death against any employer or other plan
sponsor maintaining the plan (or against an employee of
such an employer or sponsor acting within the scope of
employment) if such cause of action arises by reason of
a medically reviewable decision, to the extent that
there was direct participation by the employer or other
plan sponsor (or employee) in the decision.
``(C) Direct participation.--
``(i) Direct participation in decisions.--
For purposes of subparagraph (B), the term
`direct participation' means, in connection
with a decision described in subparagraph (B),
the actual making of such decision or the
actual exercise of control in making such
decision or in the conduct constituting the
failure.
``(ii) Rules of construction.--For purposes
of clause (i), the employer or plan sponsor (or
employee) shall not be construed to be engaged
in direct participation because of any form of
decisionmaking or other conduct that is merely
collateral or precedent to the decision
described in subparagraph (B) on a particular
claim for benefits of a particular participant
or beneficiary, including (but not limited
to)--
``(I) any participation by the
employer or other plan sponsor (or
employee) in the selection of the group
health plan or health insurance
coverage involved or the third party
administrator or other agent;
``(II) any engagement by the
employer or other plan sponsor (or
employee) in any cost-benefit analysis
undertaken in connection with the
selection of, or continued maintenance
of, the plan or coverage involved;
``(III) any participation by the
employer or other plan sponsor (or
employee) in the process of creating,
continuing, modifying, or terminating
the plan or any benefit under the plan,
if such process was not substantially
focused solely on the particular
situation of the participant or
beneficiary referred to in paragraph
(1)(A); and
``(IV) any participation by the
employer or other plan sponsor (or
employee) in the design of any benefit
under the plan, including the amount of
copayment and limits connected with
such benefit.
``(iv) Irrelevance of certain collateral
efforts made by employer or plan sponsor.--For
purposes of this subparagraph, an employer or
plan sponsor shall not be treated as engaged in
direct participation in a decision with respect
to any claim for benefits or denial thereof in
the case of any particular participant or
beneficiary solely by reason of--
``(I) any efforts that may have
been made by the employer or plan
sponsor to advocate for authorization
of coverage for that or any other
participant or beneficiary (or any
group of participants or
beneficiaries), or
``(II) any provision that may have
been made by the employer or plan
sponsor for benefits which are not covered under the terms and
conditions of the plan for that or any other participant or beneficiary
(or any group of participants or beneficiaries).
``(4) Requirement of exhaustion.--
``(A) In general.--Except as provided in
subparagraph (D), a cause of action may not be brought
under paragraph (1) in connection with any denial of a
claim for benefits of any individual until all
administrative processes under sections 112, 113, and
114 of the Bipartisan Patient Protection Act (if
applicable) have been exhausted.
``(B) Late manifestation of injury.--
``(i) In general.--A participant or
beneficiary shall not be precluded from
pursuing a review under section 114 of the
Bipartisan Patient Protection Act regarding an
injury that such participant or beneficiary has
experienced if the external review entity first
determines that the injury of such participant
or beneficiary is a late manifestation of an
earlier injury.
``(ii) Definition.--In this subparagraph,
the term `late manifestation of an earlier
injury' means an injury sustained by the
participant or beneficiary which was not known,
and should not have been known, by such
participant or beneficiary by the latest date
that the requirements of subparagraph (A)
should have been met regarding the claim for
benefits which was denied.
``(C) Exception for needed care.--A participant or
beneficiary may seek relief exclusively in Federal
court under subsection 502(a)(1)(B) prior to the
exhaustion of administrative remedies under sections
112, 113, or 114 of the Bipartisan Patient Protection
Act (as required under subparagraph (A)) if it is
demonstrated to the court that the exhaustion of such
remedies would cause irreparable harm to the health of
the participant or beneficiary. Notwithstanding the
awarding of relief under subsection 502(a)(1)(B)
pursuant to this subparagraph, no relief shall be
available as a result of, or arising under, paragraph
(1)(A) unless the requirements of subparagraph (A) are
met.
``(D) Failure to review.--
``(i) In general.--If the external review
entity fails to make a determination within the
time required under section 114(e)(1)(A)(i), a
participant or beneficiary may bring an action
under section 514(d) after 10 additional days
after the date on which such time period has
expired and the filing of such action shall not
affect the duty of the independent medical
reviewer (or reviewers) to make a determination pursuant to section
114(e)(1)(A)(i).
``(ii) Expedited determination.--If the
external review entity fails to make a
determination within the time required under
section 114(e)(1)(A)(ii), a participant or
beneficiary may bring an action under this
subsection and the filing of such an action
shall not affect the duty of the independent
medical reviewer (or reviewers) to make a
determination pursuant to section
114(e)(1)(A)(ii).
``(E) Receipt of benefits during appeals process.--
Receipt by the participant or beneficiary of the
benefits involved in the claim for benefits during the
pendency of any administrative processes referred to in
subparagraph (A) or of any action commenced under this
subsection--
``(i) shall not preclude continuation of
all such administrative processes to their
conclusion if so moved by any party, and
``(ii) shall not preclude any liability
under subsection (a)(1)(C) and this subsection
in connection with such claim.
``(F) Admissible.--Any determination made by a
reviewer in an administrative proceeding under section
114 of the Bipartisan Patient Protection Act shall be
admissible in any Federal or State court proceeding and
shall be presented to the trier of fact.
``(5) Tolling provision.--The statute of limitations for
any cause of action arising under section 502(n) relating to a
denial of a claim for benefits that is the subject of an action
brought in State court shall be tolled until such time as the
State court makes a final disposition, including all appeals,
of whether such claim should properly be within the
jurisdiction of the State court. The tolling period shall be
determined by the applicable Federal or State law, whichever
period is greater.
``(6) Exclusion of directed recordkeepers.--
``(A) In general.--Subject to subparagraph (C),
paragraph (1) shall not apply with respect to a
directed recordkeeper in connection with a group health
plan.
``(B) Directed recordkeeper.--For purposes of this
paragraph, the term `directed recordkeeper' means, in
connection with a group health plan, a person engaged
in directed recordkeeping activities pursuant to the
specific instructions of the plan or the employer or
other plan sponsor, including the distribution of
enrollment information and distribution of disclosure
materials under this Act or subtitle A of the
Bipartisan Patient Protection Act and whose duties do
not include making decisions on claims for benefits.
``(C) Limitation.--Subparagraph (A) does not apply
in connection with any directed recordkeeper to the
extent that the directed recordkeeper fails to follow
the specific instruction of the plan or the employer or other plan
sponsor.
``(7) Construction.--Nothing in this subsection shall be
construed as--
``(A) saving from preemption a cause of action
under State law for the failure to provide a benefit
for an item or service which is specifically excluded
under the group health plan involved, except to the
extent that--
``(i) the application or interpretation of
the exclusion involves a determination
described in section 114(d)(2) of the
Bipartisan Patient Protection Act, or
``(ii) the provision of the benefit for the
item or service is required under Federal law
or under applicable State law consistent with
subsection (b)(2)(B);
``(B) preempting a State law which requires an
affidavit or certificate of merit in a civil action;
``(C) affecting a cause of action or remedy under
State law in connection with the provision or
arrangement of excepted benefits (as defined in section
733(c)), other than those described in section
733(c)(2)(A); or
``(D) affecting a cause of action under State law
other than a cause of action described in paragraph
(1)(A).
``(8) Purchase of insurance to cover liability.--Nothing in
section 410 shall be construed to preclude the purchase by a
group health plan of insurance to cover any liability or losses
arising under a cause of action described in paragraph (1)(A).
``(9) Relief from liability for employer or other plan
sponsor by means of designated decisionmaker.--
``(A) In general.--Paragraph (1) shall not apply
with respect to any cause of action described in
paragraph (1)(A) under State law insofar as such cause
of action provides for liability with respect to a
participant or beneficiary of an employer or plan
sponsor (or an employee of such employer or sponsor
acting within the scope of employment), if with respect
to the employer or plan sponsor there is (or is deemed
under subparagraph (B) to be) a designated
decisionmaker that meets the requirements of section
502(o)(1) with respect to such participant or
beneficiary. Such paragraph (1) shall apply with
respect to any cause of action described in paragraph
(1)(A) under State law against the designated
decisionmaker of such employer or other plan sponsor
with respect to the participant or beneficiary.
``(B) Automatic designation.--A health insurance
issuer shall be deemed to be a designated decisionmaker
for purposes of subparagraph (A) with respect to the
participants and beneficiaries of an employer or plan
sponsor, whether or not the employer or plan sponsor
makes such a designation, and shall be deemed to have
assumed unconditionally all liability of the employer
or plan sponsor under such designation in accordance
with subsection (o), unless the employer or plan
sponsor affirmatively enters into a contract to prevent
the service of the designated decisionmaker.
``(C) Treatment of certain trust funds.--For
purposes of this paragraph, the terms `employer' and
`plan sponsor', in connection with the assumption by a
designated decisionmaker of the liability of employer
or other plan sponsor pursuant to this paragraph, shall
be construed to include a trust fund maintained
pursuant to section 302 of the Labor Management
Relations Act, 1947 (29 U.S.C. 186) or the Railway
Labor Act (45 U.S.C. 151 et seq.).
``(10) Previously provided services.--
``(A) In general.--Except as provided in this
paragraph, a cause of action shall not arise under
paragraph (1) where the denial involved relates to an
item or service that has already been fully provided to
the participant or beneficiary under the plan or
coverage and the claim relates solely to the subsequent
denial of payment for the provision of such item or
service.
``(B) Exception.--Nothing in subparagraph (A) shall
be construed to--
``(i) prohibit a cause of action under
paragraph (1) where the nonpayment involved
results in the participant or beneficiary being
unable to receive further items or services
that are directly related to the item or
service involved in the denial referred to in
subparagraph (A) or that are part of a
continuing treatment or series of procedures;
``(ii) prohibit a cause of action under
paragraph (1) relating to quality of care; or
``(iii) limit liability that otherwise
would arise from the provision of the item or
services or the performance of a medical
procedure.
``(11) Exemption from personal liability for individual
members of boards of directors, joint boards of trustees,
etc.--Any individual who is--
``(A) a member of a board of directors of an
employer or plan sponsor; or
``(B) a member of an association, committee,
employee organization, joint board of trustees, or
other similar group of representatives of the entities
that are the plan sponsor of plan maintained by two or
more employers and one or more employee organizations;
shall not be personally liable under this subsection for
conduct that is within the scope of employment or of plan-
related duties of the individuals unless the individual acts in
a fraudulent manner for personal enrichment.
``(12) Choice of law.--A cause of action brought under
paragraph (1) shall be governed by the law (including choice of
law rules) of the State in which the plaintiff resides.
``(13) Limitation on attorneys' fees.--
``(A) In general.--Notwithstanding any other
provision of law, or any arrangement, agreement, or
contract regarding an attorney's fee, the amount of an
attorney's contingency fee allowable for a cause of
action brought under paragraph (1) shall not exceed \1/
3\ of the total amount of the plaintiff's recovery (not
including the reimbursement of actual out-of-pocket
expenses of the attorney).
``(B) Determination by court.--The last court in
which the action was pending upon the final
disposition, including all appeals, of the action may
review the attorney's fee to ensure that the fee is a
reasonable one.
``(C) No preemption of state law.--Subparagraph (A)
shall not apply with respect to a cause of action under
paragraph (1) that is brought in a State that has a law
or framework of laws with respect to the amount of an
attorney's contingency fee that may be incurred for the
representation of a participant or beneficiary (or the
estate of such participant or beneficiary) who brings
such a cause of action.
``(e) Rules of Construction Relating to Health Care.--Nothing in
this title shall be construed as--
``(1) affecting any State law relating to the practice of
medicine or the provision of, or the failure to provide,
medical care, or affecting any action (whether the liability is
direct or vicarious) based upon such a State law,
``(2) superseding any State law permitted under section
152(b)(1)(A) of the Bipartisan Patient Protection Act, or
``(3) affecting any applicable State law with respect to
limitations on monetary damages.
``(f) No Right of Action for Recovery, Indemnity, or Contribution
by Issuers Against Treating Health Care Professionals and Treating
Hospitals.--In the case of any care provided, or any treatment decision
made, by the treating health care professional or the treating hospital
of a participant or beneficiary under a group health plan which
consists of medical care provided under such plan, any cause of action
under State law against the treating health care professional or the
treating hospital by the plan or a health insurance issuer providing
health insurance coverage in connection with the plan for recovery,
indemnity, or contribution in connection with such care (or any
medically reviewable decision made in connection with such care) or
such treatment decision is superseded.''.
(c) Effective Date.--The amendments made by this section shall
apply to acts and omissions (from which a cause of action arises)
occurring on or after the applicable effective under section 181.
SEC. 173. LIMITATION ON CERTAIN CLASS ACTION LITIGATION.
Section 502 of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1132), as amended by section 172, is further amended by
adding at the end the following:
``(p) Limitation on Class Action Litigation.--
``(1) In general.--Any claim or cause of action that is
maintained under subsection (n) or (o) in connection with a
group health plan, or health insurance coverage issued in
connection with a group health plan, as a class action,
derivative action, or as an action on behalf of any group of 2
or more claimants, may be maintained only if the class, the
derivative claimant, or the group of claimants is limited to
the participants or beneficiaries of a group health plan
established by only 1 plan sponsor. No action maintained by
such class, such derivative claimant, or such group of
claimants may be joined in the same proceeding with any action
maintained by another class, derivative claimant, or group of
claimants or consolidated for any purpose with any other
proceeding. In this paragraph, the terms `group health plan'
and `health insurance coverage' have the meanings given such
terms in section 733.
``(2) Effective date.--This subsection shall apply to all
civil actions that are filed on or after January 1, 2004.''.
SEC. 174. LIMITATIONS ON ACTIONS.
Section 502 of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1132) (as amended by section 172(a)) is amended further by
adding at the end the following new subsection:
``(q) Limitations on Actions Relating to Group Health Plans.--
``(1) In general.--Except as provided in paragraph (2), no
action may be brought under subsection (a)(1)(B), (a)(2), or
(a)(3) by a participant or beneficiary seeking relief based on
the application of any provision in section 111, chapter 2, or
chapter 4 of subtitle A of the Bipartisan Patient Protection
Act (as incorporated under section 714).
``(2) Certain actions allowable.--An action may be brought
under subsection (a)(1)(B), (a)(2), or (a)(3) by a participant
or beneficiary seeking relief based on the application of
section 111, 123, 124, 125, 126, 127, 128(a)(3), 129, or 130 of
the Bipartisan Patient Protection Act (as incorporated under
section 714) to the individual circumstances of that
participant or beneficiary, except that--
``(A) such an action may not be brought or
maintained as a class action; and
``(B) in such an action, relief may only provide
for the provision of (or payment of) benefits, items,
or services denied to the individual participant or
beneficiary involved (and for attorney's fees and the
costs of the action, at the discretion of the court)
and shall not provide for any other relief to the
participant or beneficiary or for any relief to any
other person.
``(3) Other provisions unaffected.--Nothing in this
subsection shall be construed as affecting subsections
(a)(1)(C) and (n) or section 514(d).
``(4) Enforcement by secretary unaffected.--Nothing in this
subsection shall be construed as affecting any action brought
by the Secretary.''.
SEC. 175. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
Subpart C of part 7 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1191 et seq.) is
amended by adding at the end the following new section:
``SEC. 735. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
``(a) Agreement with States.--A State may enter into an agreement
with the Secretary for the delegation to the State of some or all of
the Secretary's authority under this title to enforce the requirements
applicable under subtitle A of the Bipartisan Patient Protection Act
with respect to health insurance coverage offered by a health insurance
issuer and with respect to a group health plan that is a non-Federal
governmental plan.
``(b) Delegations.--Any department, agency, or instrumentality of a
State to which authority is delegated pursuant to an agreement entered
into under this section may, if authorized under State law and to the
extent consistent with such agreement, exercise the powers of the
Secretary under this title which relate to such authority.''.
SEC. 176. SENSE OF THE SENATE CONCERNING THE IMPORTANCE OF CERTAIN
UNPAID SERVICES.
It is the sense of the Senate that the court should consider the
loss of a nonwage earning spouse or parent as an economic loss for the
purposes of this section. Furthermore, the court should define the
compensation for the loss not as minimum services, but, rather, in
terms that fully compensate for the true and whole replacement cost to
the family.
Subtitle D--Effective Dates; Coordination in Implementation
SEC. 181. EFFECTIVE DATES.
(a) Group Health Coverage.--
(1) In general.--Subject to paragraph (2) and subsection
(d), the amendments made by sections 161(a), 171, and 173 (and
subtitle A 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, 2003 (in this
section referred to as the ``general effective date'').
(2) Treatment of collective bargaining agreements.--In the
case of a group health plan maintained pursuant to one or more
collective bargaining agreements between employee
representatives and one or more employers ratified before the
date of the enactment of this Act, the amendments made by
sections 161(a), 171, and 173 (and subtitle A insofar as it
relates to such sections) shall not apply to plan years
beginning before the later of--
(A) the date on which the last collective
bargaining agreements relating to the plan terminates
(excluding any extension thereof agreed to after the
date of the enactment of this Act); or
(B) the general effective date;
but shall apply not later than 1 year after the general
effective date. For purposes of subparagraph (A), any plan
amendment made pursuant to a collective bargaining agreement
relating to the plan which amends the plan solely to conform to
any requirement added by this title shall not be treated as a
termination of such collective bargaining agreement.
(b) Individual Health Insurance Coverage.--Subject to subsection
(d), the amendments made by section 162 shall apply with respect to
individual health insurance coverage offered, sold, issued, renewed, in
effect, or operated in the individual market on or after the general
effective date.
(c) Treatment of Religious Nonmedical Providers.--
(1) In general.--Nothing in this title (or the amendments
made thereby) shall be construed to--
(A) restrict or limit the right of group health
plans, and of health insurance issuers offering health
insurance coverage, to include as providers religious
nonmedical providers;
(B) require such plans or issuers to--
(i) utilize medically based eligibility
standards or criteria in deciding provider
status of religious nonmedical providers;
(ii) use medical professionals or criteria
to decide patient access to religious
nonmedical providers;
(iii) utilize medical professionals or
criteria in making decisions in internal or
external appeals regarding coverage for care by
religious nonmedical providers; or
(iv) compel a participant or beneficiary to
undergo a medical examination or test as a
condition of receiving health insurance
coverage for treatment by a religious
nonmedical provider; or
(C) require such plans or issuers to exclude
religious nonmedical providers because they do not
provide medical or other required data, if such data is
inconsistent with the religious nonmedical treatment or
nursing care provided by the provider.
(2) Religious nonmedical provider.--For purposes of this
subsection, the term ``religious nonmedical provider'' means a
provider who provides no medical care but who provides only
religious nonmedical treatment or religious nonmedical nursing
care.
(d) Transition for Notice Requirement.--The disclosure of
information required under section 131 of this title shall first be
provided pursuant to--
(1) subsection (a) with respect to a group health plan that
is maintained as of the general effective date, not later than
30 days before the beginning of the first plan year to which
subtitle A applies in connection with the plan under such
subsection; or
(2) subsection (b) with respect to a individual health
insurance coverage that is in effect as of the general
effective date, not later than 30 days before the first date as of
which subtitle A applies to the coverage under such subsection.
SEC. 182. COORDINATION IN IMPLEMENTATION.
The Secretary of Labor and the Secretary of Health and Human
Services shall ensure, through the execution of an interagency
memorandum of understanding among such Secretaries, that--
(1) regulations, rulings, and interpretations issued by
such Secretaries relating to the same matter over which such
Secretaries have responsibility under the provisions of this
title (and the amendments made thereby) are administered so as
to have the same effect at all times; and
(2) coordination of policies relating to enforcing the same
requirements through such Secretaries in order to have a
coordinated enforcement strategy that avoids duplication of enforcement
efforts and assigns priorities in enforcement.
SEC. 183. SEVERABILITY.
If any provision of this title, an amendment made by this title, or
the application of such provision or amendment to any person or
circumstance is held to be unconstitutional, the remainder of this
title, the amendments made by this title, and the application of the
provisions of such to any person or circumstance shall not be affected
thereby.
Subtitle E--Miscellaneous Provisions
SEC. 191. NO IMPACT ON SOCIAL SECURITY TRUST FUND.
(a) In General.--Nothing in this title (or an amendment made by
this title) shall be construed to alter or amend the Social Security
Act (or any regulation promulgated under that Act).
(b) Transfers.--
(1) Estimate of secretary.--The Secretary of the Treasury
shall annually estimate the impact that the enactment of this
title has on the income and balances of the trust funds
established under section 201 of the Social Security Act (42
U.S.C. 401).
(2) Transfer of funds.--If, under paragraph (1), the
Secretary of the Treasury estimates that the enactment of this
title has a negative impact on the income and balances of the
trust funds established under section 201 of the Social
Security Act (42 U.S.C. 401), the Secretary shall transfer, not
less frequently than quarterly, from the general revenues of
the Federal Government an amount sufficient so as to ensure
that the income and balances of such trust funds are not
reduced as a result of the enactment of such Act.
SEC. 192. CUSTOMS USER FEES.
Section 13031(j)(3) of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) is amended by striking
``2003'' and inserting ``2011, except that fees may not be charged
under paragraphs (9) and (10) of such subsection after March 31,
2006''.
SEC. 193. FISCAL YEAR 2003 MEDICARE PAYMENTS.
Notwithstanding any other provision of law, any letter of credit
under part B of title XVIII of the Social Security Act (42 U.S.C. 1395j
et seq.) that would otherwise be sent to the Treasury or the Federal
Reserve Board on September 30, 2003, by a carrier with a contract under
section 1842 of that Act (42 U.S.C. 1395u) shall be sent on October 1,
2003.
SEC. 194. SENSE OF SENATE WITH RESPECT TO PARTICIPATION IN CLINICAL
TRIALS AND ACCESS TO SPECIALTY CARE.
(a) Findings.--The Senate finds the following:
(1) Breast cancer is the most common form of cancer among
women, excluding skin cancers.
(2) During 2001, 182,800 new cases of female invasive
breast cancer will be diagnosed, and 40,800 women will die from
the disease.
(3) In addition, 1,400 male breast cancer cases are
projected to be diagnosed, and 400 men will die from the
disease.
(4) Breast cancer is the second leading cause of cancer
death among all women and the leading cause of cancer death
among women between ages 40 and 55.
(5) This year 8,600 children are expected to be diagnosed
with cancer.
(6) 1,500 children are expected to die from cancer this
year.
(7) There are approximately 333,000 people diagnosed with
multiple sclerosis in the United States and 200 more cases are
diagnosed each week.
(8) Parkinson's disease is a progressive disorder of the
central nervous system affecting 1,000,000 in the United
States.
(9) An estimated 198,100 men will be diagnosed with
prostate cancer this year.
(10) 31,500 men will die from prostate cancer this year. It
is the second leading cause of cancer in men.
(11) While information obtained from clinical trials is
essential to finding cures for diseases, it is still research
which carries the risk of fatal results. Future efforts should
be taken to protect the health and safety of adults and
children who enroll in clinical trials.
(12) While employers and health plans should be responsible
for covering the routine costs associated with federally
approved or funded clinical trials, such employers and health
plans should not be held legally responsible for the design,
implementation, or outcome of such clinical trials, consistent
with any applicable State or Federal liability statutes.
(b) Sense of the Senate.--It is the sense of the Senate that--
(1) men and women battling life-threatening, deadly
diseases, including advanced breast or ovarian cancer, should
have the opportunity to participate in a federally approved or
funded clinical trial recommended by their physician;
(2) an individual should have the opportunity to
participate in a federally approved or funded clinical trial
recommended by their physician if--
(A) that individual--
(i) has a life-threatening or serious
illness for which no standard treatment is
effective;
(ii) is eligible to participate in a
federally approved or funded clinical trial
according to the trial protocol with respect to
treatment of the illness;
(B) that individual's participation in the trial
offers meaningful potential for significant clinical
benefit for the individual; and
(C) either--
(i) the referring physician is a
participating health care professional and has
concluded that the individual's participation
in the trial would be appropriate, based upon
the individual meeting the conditions described
in subparagraph (A); or
(ii) the participant, beneficiary, or
enrollee provides medical and scientific
information establishing that the individual's
participation in the trial would be
appropriate, based upon the individual meeting
the conditions described in subparagraph (A);
(3) a child with a life-threatening illness, including
cancer, should be allowed to participate in a federally
approved or funded clinical trial if that participation meets
the requirements of paragraph (2);
(4) a child with a rare cancer should be allowed to go to a
cancer center capable of providing high quality care for that
disease; and
(5) a health maintenance organization's decision that an
in-network physician without the necessary expertise can
provide care for a seriously ill patient, including a woman
battling cancer, should be appealable to an independent,
impartial body, and that this same right should be available to
all Americans in need of access to high quality specialty care.
SEC. 195. SENSE OF THE SENATE REGARDING FAIR REVIEW PROCESS.
(a) Findings.--The Senate finds the following:
(1) A fair, timely, impartial independent external appeals
process is essential to any meaningful program of patient
protection.
(2) The independence and objectivity of the review
organization and review process must be ensured.
(3) It is incompatible with a fair and independent appeals
process to allow a health maintenance organization to select
the review organization that is entrusted with providing a
neutral and unbiased medical review.
(4) The American Arbitration Association and arbitration
standards adopted under chapter 44 of title 28, United States
Code (28 U.S.C. 651 et seq.) both prohibit, as inherently
unfair, the right of one party to a dispute to choose the judge in that
dispute.
(b) Sense of the Senate.--It is the sense of the Senate that--
(1) every patient who is denied care by a health
maintenance organization or other health insurance company
should be entitled to a fair, speedy, impartial appeal to a
review organization that has not been selected by the health
plan;
(2) the States should be empowered to maintain and develop
the appropriate process for selection of the independent
external review entity;
(3) a child battling a rare cancer whose health maintenance
organization has denied a covered treatment recommended by its
physician should be entitled to a fair and impartial external
appeal to a review organization that has not been chosen by the
organization or plan that has denied the care; and
(4) patient protection legislation should not pre-empt
existing State laws in States where there already are strong
laws in place regarding the selection of independent review
organizations.
SEC. 196. ANNUAL REVIEW.
(a) In General.--Not later than 24 months after the general
effective date referred to in section 181(a)(1), and annually
thereafter for each of the succeeding 4 calendar years (or until a
repeal is effective under subsection (b)), the Secretary of Health and
Human Services shall request that the Institute of Medicine of the
National Academy of Sciences prepare and submit to the appropriate
committees of Congress a report concerning the impact of this title,
and the amendments made by this title, on the number of individuals in
the United States with health insurance coverage.
(b) Funding.--From funds appropriated to the Department of Health
and Human Services for fiscal years 2004 and 2005, the Secretary of
Health and Human Services shall provide for such funding as the
Secretary determines necessary for the conduct of the study of the
National Academy of Sciences under this section.
TITLE II--MENTAL HEALTH PARITY
SEC. 201. SHORT TITLE.
This title may be cited as the ``Mental Health Equitable Treatment
Act of 2003''.
SEC. 202. AMENDMENT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974.
(a) In General.--Section 712 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1185a) is amended to read as follows:
``SEC. 712. MENTAL HEALTH PARITY.
``(a) In General.--In the case of a group health plan (or health
insurance coverage offered in connection with such a plan) that
provides both medical and surgical benefits and mental health benefits,
such plan or coverage shall not impose any treatment limitations or
financial requirements with respect to the coverage of benefits for
mental illnesses unless comparable treatment limitations or financial
requirements are imposed on medical and surgical benefits.
``(b) Construction.--
``(1) In general.--Nothing in this section shall be
construed as requiring a group health plan (or health insurance
coverage offered in connection with such a plan) to provide any
mental health benefits.
``(2) Medical management of mental health benefits.--
Consistent with subsection (a), nothing in this section shall
be construed to prevent the medical management of mental health
benefits, including through concurrent and retrospective
utilization review and utilization management practices,
preauthorization, and the application of medical necessity and
appropriateness criteria applicable to behavioral health and
the contracting and use of a network of participating
providers.
``(3) No requirement of specific services.--Nothing in this
section shall be construed as requiring a group health plan (or
health insurance coverage offered in connection with such a
plan) to provide coverage for specific mental health services,
except to the extent that the failure to cover such services
would result in a disparity between the coverage of mental
health and medical and surgical benefits.
``(c) Small Employer Exemption.--
``(1) In general.--This section shall not apply to any
group health plan (and group health insurance coverage offered
in connection with a group health plan) for any plan year of
any employer who employed an average of at least 2 but not more
than 50 employees on business days during the preceding
calendar year.
``(2) Application of certain rules in determination of
employer size.--For purposes of this subsection--
``(A) Application of aggregation rule for
employers.--Rules similar to the rules under
subsections (b), (c), (m), and (o) of section 414 of
the Internal Revenue Code of 1986 shall apply for
purposes of treating persons as a single employer.
``(B) Employers not in existence in preceding
year.--In the case of an employer which was not in
existence throughout the preceding calendar year, the
determination of whether such employer is a small
employer shall be based on the average number of
employees that it is reasonably expected such employer
will employ on business days in the current calendar
year.
``(C) Predecessors.--Any reference in this
paragraph to an employer shall include a reference to
any predecessor of such employer.
``(d) Separate Application to Each Option Offered.--In the case of
a group health plan that offers a participant or beneficiary two or
more benefit package options under the plan, the requirements of this
section shall be applied separately with respect to each such option.
``(e) In-Network and Out-of-Network Rules.--In the case of a plan
or coverage option that provides in-network mental health benefits,
out-of-network mental health benefits may be provided using treatment
limitations or financial requirements that are not comparable to the
limitations and requirements applied to medical and surgical benefits
if the plan or coverage provides such in-network mental health benefits
in accordance with subsection (a) and provides reasonable access to in-
network providers and facilities.
``(f) Definitions.--For purposes of this section--
``(1) Financial requirements.--The term `financial
requirements' includes deductibles, coinsurance, co-payments,
other cost sharing, and limitations on the total amount that
may be paid by a participant or beneficiary with respect to
benefits under the plan or health insurance coverage and shall
include the application of annual and lifetime limits.
``(2) Medical or surgical benefits.--The term `medical or
surgical benefits' means benefits with respect to medical or
surgical services, as defined under the terms of the plan or
coverage (as the case may be), but does not include mental
health benefits.
``(3) Mental health benefits.--The term `mental health
benefits' means benefits with respect to services, as defined
under the terms and conditions of the plan or coverage (as the
case may be), for all categories of mental health conditions
listed in the Diagnostic and Statistical Manual of Mental
Disorders, Fourth Edition (DSM IV-TR), or the most recent
edition if different than the Fourth Edition, if such services
are included as part of an authorized treatment plan that is in
accordance with standard protocols and such services meet the
plan or issuer's medical necessity criteria. Such term does not
include benefits with respect to the treatment of substance
abuse or chemical dependency.
``(4) Treatment limitations.--The term `treatment
limitations' means limitations on the frequency of treatment,
number of visits or days of coverage, or other similar limits
on the duration or scope of treatment under the plan or
coverage.''.
(b) Effective Date.--The amendment made by this section shall apply
with respect to plan years beginning on or after January 1, 2004.
SEC. 203. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT RELATING TO THE
GROUP MARKET.
(a) In General.--Section 2705 of the Public Health Service Act (42
U.S.C. 300gg-5) is amended to read as follows:
``SEC. 2705. MENTAL HEALTH PARITY.
``(a) In General.--In the case of a group health plan (or health
insurance coverage offered in connection with such a plan) that
provides both medical and surgical benefits and mental health benefits,
such plan or coverage shall not impose any treatment limitations or
financial requirements with respect to the coverage of benefits for
mental illnesses unless comparable treatment limitations or financial
requirements are imposed on medical and surgical benefits.
``(b) Construction.--
``(1) In general.--Nothing in this section shall be
construed as requiring a group health plan (or health insurance
coverage offered in connection with such a plan) to provide any
mental health benefits.
``(2) Medical management of mental health benefits.--
Consistent with subsection (a), nothing in this section shall
be construed to prevent the medical management of mental health
benefits, including through concurrent and retrospective
utilization review and utilization management practices,
preauthorization, and the application of medical necessity and
appropriateness criteria applicable to behavioral health and
the contracting and use of a network of participating
providers.
``(3) No requirement of specific services.--Nothing in this
section shall be construed as requiring a group health plan (or
health insurance coverage offered in connection with such a
plan) to provide coverage for specific mental health services,
except to the extent that the failure to cover such services
would result in a disparity between the coverage of mental
health and medical and surgical benefits.
``(c) Small Employer Exemption.--
``(1) In general.--This section shall not apply to any
group health plan (and group health insurance coverage offered
in connection with a group health plan) for any plan year of
any employer who employed an average of at least 2 but not more
than 50 employees on business days during the preceding
calendar year.
``(2) Application of certain rules in determination of
employer size.--For purposes of this subsection--
``(A) Application of aggregation rule for
employers.--Rules similar to the rules under
subsections (b), (c), (m), and (o) of section 414 of
the Internal Revenue Code of 1986 shall apply for
purposes of treating persons as a single employer.
``(B) Employers not in existence in preceding
year.--In the case of an employer which was not in
existence throughout the preceding calendar year, the
determination of whether such employer is a small
employer shall be based on the average number of
employees that it is reasonably expected such employer
will employ on business days in the current calendar
year.
``(C) Predecessors.--Any reference in this
paragraph to an employer shall include a reference to
any predecessor of such employer.
``(d) Separate Application to Each Option Offered.--In the case of
a group health plan that offers a participant or beneficiary two or
more benefit package options under the plan, the requirements of this
section shall be applied separately with respect to each such option.
``(e) In-Network and Out-of-Network Rules.--In the case of a plan
or coverage option that provides in-network mental health benefits,
out-of-network mental health benefits may be provided using treatment
limitations or financial requirements that are not comparable to the
limitations and requirements applied to medical and surgical benefits
if the plan or coverage provides such in-network mental health benefits
in accordance with subsection (a) and provides reasonable access to in-
network providers and facilities.
``(f) Definitions.--For purposes of this section--
``(1) Financial requirements.--The term `financial
requirements' includes deductibles, coinsurance, co-payments,
other cost sharing, and limitations on the total amount that
may be paid by a participant, beneficiary or enrollee with
respect to benefits under the plan or health insurance coverage
and shall include the application of annual and lifetime
limits.
``(2) Medical or surgical benefits.--The term `medical or
surgical benefits' means benefits with respect to medical or
surgical services, as defined under the terms of the plan or
coverage (as the case may be), but does not include mental
health benefits.
``(3) Mental health benefits.--The term `mental health
benefits' means benefits with respect to services, as defined
under the terms and conditions of the plan or coverage (as the
case may be), for all categories of mental health conditions
listed in the Diagnostic and Statistical Manual of Mental
Disorders, Fourth Edition (DSM IV-TR), or the most recent
edition if different than the Fourth Edition, if such services
are included as part of an authorized treatment plan that is in
accordance with standard protocols and such services meet the
plan or issuer's medical necessity criteria. Such term does not
include benefits with respect to the treatment of substance
abuse or chemical dependency.
``(4) Treatment limitations.--The term `treatment
limitations' means limitations on the frequency of treatment,
number of visits or days of coverage, or other similar limits
on the duration or scope of treatment under the plan or
coverage.''.
(b) Effective Date.--The amendment made by this section shall apply
with respect to plan years beginning on or after January 1, 2004.
SEC. 204. PREEMPTION.
Nothing in the amendments made by this title shall be construed to
preempt any provision of State law, with respect to health insurance
coverage offered by a health insurance issuer in connection with a
group health plan, that provides protections to enrollees that are
greater than the protections provided under such amendments. Nothing in
the amendments made by this title shall be construed to affect or
modify section 514 of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1144).
SEC. 205. GENERAL ACCOUNTING OFFICE STUDY.
(a) Study.--The Comptroller General shall conduct a study that
evaluates the effect of the implementation of the amendments made by
this title on the cost of health insurance coverage, access to health
insurance coverage (including the availability of in-network
providers), the quality of health care, and other issues as determined
appropriate by the Comptroller General.
(b) Report.--Not later than 2 years after the date of enactment of
this Act, the Comptroller General shall prepare and submit to the
appropriate committees of Congress a report containing the results of
the study conducted under subsection (a).
TITLE III--PATIENT SAFETY
SEC. 301. SHORT TITLE.
This title may be cited as the ``Patient Safety Improvement and
Medical Injury Reduction Act''.
SEC. 302. PURPOSE.
It is the purpose of this title to improve patient safety by
promoting the voluntary reporting of patient safety events and medical
errors and other measures.
SEC. 303. PATIENT SAFETY IMPROVEMENTS.
Title IX of the Public Health Service Act (42 U.S.C. 299 et seq.)
is amended--
(1) in section 912(c), by inserting ``, in accordance with
part C,'' after ``The Director shall'';
(2) by redesignating part C as part E;
(3) by redesignating sections 921 through 928, as sections
941 through 948, respectively;
(4) in section 948(1) (as so redesignated), by striking
``921'' and inserting ``941''; and
(5) by inserting after part B the following:
``PART C--PATIENT SAFETY IMPROVEMENT
``SEC. 921. DEFINITIONS.
``In this part:
``(1) Center.--The term `Center' means the Center for
Quality Improvement and Patient Safety established under
section 922(a).
``(2) Health care provider.--The term `health care
provider' means an individual or entity licensed or otherwise
authorized under State law to provide health care services,
including--
``(A) a hospital, nursing facility, comprehensive
outpatient rehabilitation facility, home health agency,
and hospice program;
``(B) a physician, physician assistant, nurse
practitioner, clinical nurse specialist, nurse
anesthetist, certified nurse midwife, psychologist,
certified social worker, registered dietitian or
nutrition professional, physical or occupational
therapist, or other individual health care
practitioner;
``(C) a pharmacist; and
``(D) a renal dialysis facility, ambulatory
surgical center, pharmacy, physician or health care
practitioner's office, long-term care facility,
behavioral health residential treatment facility,
clinical laboratory, or community health center.
``(3) Identifiable information.--The term `identifiable
information' means information that is presented in a form and
manner that allows the identification of any health care
provider, patient, or reporter of patient safety information.
With respect to patients, such information includes any
individually identifiable health information as that term is
defined in the regulations promulgated pursuant to section
264(c) of the Health Insurance Portability and Accountability
Act of 1996 (Public Law 104-191; 110 Stat. 2033).
``(4) National patient safety database.--The term `National
Patient Safety Database' means the database of nonidentifiable
information concerning patient safety that is coordinated by,
and developed in collaboration with, the Director under section
922(c)(3)(B).
``(5) National patient safety research demonstration
system.--The term `National Patient Safety Research
Demonstration System' means a system under which the Director
will enter into voluntary agreements with a geographically and
institutionally diverse group of eligible entities to collect
data for the purpose of conducting research on patient safety
under section 922(c)(3)(C).
``(6) Nonidentifiable information.--The term
`nonidentifiable information' means information that is
presented in a form and manner that prevents the identification
of any health care provider, patient, or reporter of patient
safety information. With respect to patients, such information
must be de-identified consistent with the regulations
promulgated pursuant to section 264(c) of the Health Insurance
Portability and Accountability Act of 1996 (Public Law 104-191;
110 Stat. 2033).
``(7) Patient safety information.--The term `patient safety
information' means any reports, records, memoranda, analyses,
deliberative work, statements, or root cause analyses that are
collected or developed to improve patient safety or health care
quality and that--
``(A) are developed by a health care provider for
the purpose of reporting to a patient safety
organization and that are reported on a timely basis to
such an organization; or
``(B) are collected or developed by a patient
safety organization or by the National Patient Safety
Database or National Patient Safety Research
Demonstration System, regardless of whether the
information is transmitted to the health care provider
that reported the original information.
``(8) Patient safety organization.--The term `patient
safety organization' means a private or public organization, or
component thereof, that is certified, through a process to be
determined by the Director under section 925, to perform each
of the following activities:
``(A) The conduct, as the organization or
component's primary activity, of activities to improve
patient safety and the quality of health care delivery.
``(B) The collection and analysis of patient safety
information that is submitted by health care providers.
``(C) The development and dissemination of
evidence-based information to health care providers
with respect to improving patient safety (such as
recommendations, protocols, or information regarding
best practices).
``(D) The utilization of patient safety information
to carry out activities limited to those described
under this paragraph and for the purposes of
encouraging a culture of safety and of providing direct
feedback and assistance to health care providers to
effectively minimize patient risk.
``(E) The maintenance of appropriate
confidentiality with respect to identifiable
information.
``(F) The provision of appropriate security
measures with respect to patient safety information.
``(G) The submission of nonidentifiable information
to the Agency consistent with standards established by
the Director under section 924 for the National Patient
Safety Database.
``SEC. 922. PRIVILEGE.
``(a) In General.--Notwithstanding any other provision of law,
patient safety information shall be privileged and confidential in
accordance with this section.
``(b) Scope of Privilege.--Subject to the succeeding provisions of
this section, such information shall not be--
``(1) subject to a civil or administrative subpoena;
``(2) subject to discovery in connection with a civil or
administrative proceeding;
``(3) disclosed pursuant to section 552 of title 5, United
States Code (commonly known as the Freedom of Information Act)
or any other similar Federal or State law; or
``(4) admitted as evidence or otherwise disclosed in any
Federal or State civil or administrative proceeding.
``(c) Exceptions to Privilege.--The privilege provided for under
this section shall not apply to--
``(1) records of a patient's medical diagnosis and
treatment, patient or hospital records, other primary health
care information or other documents, records, or data that
exist separately from the process of collecting or developing
information for the purposes of this part;
``(2) information merely by reason of its inclusion,
report, or the fact of its submission, to a patient safety
organization, the National Patient Safety Database, or the
National Patient Safety Research Demonstration System; and
``(3) information available from sources other than a
report or submission made under this part, which may be
discovered or admitted in a Federal or State civil or
administrative proceeding, if discoverable or admissible under
applicable Federal or State law.
``(d) Disclosures.--Nothing in this section shall be construed to
prohibit any of the following disclosures:
``(1) The disclosure of nonidentifiable information by a
health care provider, patient safety organization, or the
Director.
``(2) The disclosure of identifiable information by a
health care provider or patient safety organization, if such
disclosure--
``(A) is authorized by the provider for the
purposes of improving quality and safety;
``(B) is to an entity or person subject to the
requirements of section 264(c) of the Health Insurance
Portability and Accountability Act of 1996 (Public Law
104-191; 110 Stat. 2033), or any regulation promulgated
under such section; and
``(C) is not in conflict with such section or any
regulation promulgated under such section.
``(3) The disclosure of patient safety information by a
provider or patient safety organization to the Food and Drug
Administration.
``(e) Rules of Construction.--
``(1) In general.--Nothing in this section shall be
construed to limit or extend other privileges that are
available under Federal or State laws, including peer review
and confidentiality protections.
``(2) Construction regarding use of patient safety
information.--
``(A) Internal use permitted to improve patient
safety, quality, and efficiency.--Nothing in this part
shall be construed to limit a health care provider from
using patient safety information within the provider to
improve patient safety, health care quality, or
administrative efficiency of the provider.
``(B) Treatment.--Information that is collected as
patient safety information is not disqualified from
being treated as patient safety information because of
its use for the purposes described in subparagraph (A)
and such use shall not constitute a waiver of any
privilege or protection established under this section
or under State law.
``(3) State mandatory reporting requirements.--Nothing in
this part shall be construed as preempting or otherwise
affecting any mandatory reporting requirement for health care
providers under State law.
``(f) Application of Privacy Regulations.--For purposes of applying
the regulations promulgated pursuant to section 264(c) of the Health
Insurance Portability and Accountability Act of 1996 (Public Law 104-
191; 110 Stat. 2033)--
``(1) patient safety organizations that collect or receive
identifiable information shall be treated as covered entities;
and
``(2) activities of such organizations described in section
923(b)(2)(A) in relation to a health care provider are deemed
to be health care operations of the provider.
Nothing in this section shall be construed to alter or affect the
implementation of such regulation or such section 264(c).
``(g) Waivers.--
``(1) In general.--Nothing in this part shall be construed
as precluding a health care provider from waiving the privilege
established under this section.
``(2) Limitation.--The disclosure of patient safety
information pursuant to this part shall not constitute a waiver
of any other Federal or State privilege.
``(h) Continuation of Privilege.--Patient safety information of an
organization that is certified as a patient safety organization shall
continue to be privileged and confidential, in accordance with this
section, if the organization's certification is terminated or revoked
or if the organization otherwise ceases to qualify as a patient safety
organization until the information is otherwise disposed of in
accordance with section 925(g).
``(i) Penalty.--
``(1) Prohibition.--Except as provided in this part, and
subject to paragraph (2), it shall be unlawful for any person
to disclose patient safety information in violation of this
section.
``(2) Relation to hipaa.--The penalty under this subsection
for a disclosure described in paragraph (1) shall not apply if
the person making such disclosure is subject to a penalty under
section 264(c) of the Health Insurance Portability and
Accountability Act of 1996 (Public Law 104-191; 110 Stat.
2033), or any regulation promulgated under such section, for
such disclosure.
``(3) Amount.--Any person who violates paragraph (1) shall
be subject to a civil monetary penalty of not more than $25,000
for each such violation involved. Such penalty shall be imposed
and collected in the same manner as civil money penalties are
imposed and collected under subsection (a) of section 1128A of
the Social Security Act.
``(j) Survey and Report.--
``(1) Survey.--The Comptroller General of the United States
shall conduct a survey of State laws that relate to patient
safety information peer review systems, including laws that
establish an evidentiary privilege applicable to information
developed in such systems, and shall review the manner in which
such laws have been interpreted by the courts and the
effectiveness of such laws in promoting patient safety.
``(2) Report.--Not later than 9 months after the date of
enactment of this part, the Comptroller General shall prepare
and submit to Congress a report concerning the results of the
survey conducted under paragraph (1).
``SEC. 923. REPORTER PROTECTION.
``(a) In General.--A health care provider may not take an adverse
employment action, as described in subsection (b), against an
individual based upon the fact that the individual in good faith
reported--
``(1) to the provider with the intention of having it
reported to a patient safety organization, or
``(2) directly to a patient safety organization,
information that would constitute patient safety information if the
provider were to have submitted it on a timely basis to a patient
safety organization in accordance with this part.
``(b) Adverse Employment Action.--For purposes of this section, an
`adverse employment action' includes--
``(1) the failure to promote an individual or provide any
other employment-related benefit for which the individual would
otherwise be eligible;
``(2) an evaluation or decision made in relation to
accreditation, certification, credentialing or licensing of the
individual; and
``(3) a personnel action that is adverse to the individual
concerned.
``(c) Remedies.--The provisions of the first sentence of section
1128A(a) of the Social Security Act shall apply with respect to a
health care provider's violation of subsection (a) in the same manner
as they apply to an act referred to in section 1128A(a)(7) of such Act.
``(d) Penalty.--Any person who violated the provisions of this
section shall be subject to a fine of not more than $25,000,
imprisonment for not more than 6 months, or both, per disclosure and
payment of the costs of prosecution.
``SEC. 924. CENTER FOR QUALITY IMPROVEMENT AND PATIENT SAFETY.
``(a) In General.--The Director shall establish a center to be
known as the Center for Quality Improvement and Patient Safety to carry
out the duties described in subsection (b).
``(b) Duties.--
``(1) In general.--The Center shall carry out the following
duties:
``(A) Conduct and support research, demonstrations,
and evaluations of the quality of health care and the
promotion of patient safety, and the measurement of
health care quality.
``(B) Develop, evaluate, and disseminate methods
for identifying and promoting effective patient safety
programs.
``(C) Provide for the certification and
recertification of patient safety organizations in
accordance with section 925.
``(D) Establish a National Patient Safety Database
to collect, support, and coordinate the analysis of
nonidentifiable information submitted to the Database
in accordance with subsection (d).
``(E) Establish a National Patient Safety Research
Demonstration System under which the Director will
enter into voluntary agreements with a geographically
and institutionally diverse group of eligible entities
to collect data for the purpose of conducting research
on patient safety.
``(F) Facilitate the development of consensus,
including through annual meetings, among health care
providers, patients, and other interested parties
concerning patient safety and recommendations to
improve patient safety.
``(G) Provide technical assistance and support to
States that have (or are developing) medical errors
reporting systems, assist States in developing
standardized methods for data collection, and collect
data from State reporting systems for inclusion in the
National Patient Safety Database.
``(2) Consultation.--In carrying out the duties under
paragraph (1) (including the establishment of the Database),
the Director shall consult with and develop partnerships, as
appropriate, with health care organizations, health care
providers, public and private sector entities, patient safety
organizations, health care consumers, and other relevant
experts to improve patient safety.
``(c) Implementation and Consultation.--In carrying out this
section, the Director shall--
``(1) facilitate the development of patient safety goals
and track the progress made in meeting those goals; and
``(2) ensure that information submitted by a patient safety
organization to the National Patient Safety Database, as
provided for under subsection (d), is comparable and useful for
research and analysis and that the research findings and
patient safety alerts that result from such analyses are
presented in clear and consistent formats that enhance the
usefulness of such alerts.
``(d) National Patient Safety Database.--
``(1) In general.--The Director shall--
``(A) establish a National Patient Safety Database
to collect nonidentifiable information concerning
patient safety that is reported on a voluntary basis
which shall be used to analyze national, regional, and
State trends and patterns in patient safety and medical
errors; and
``(B) establish common formats for the voluntary
reporting of information under subparagraph (A),
including the establishment of necessary data elements,
common and consistent definitions, and a standardized
computer interface for the processing of such data.
To the extent practicable, formats established under
subparagraph (A) shall be consistent with the administrative
simplification provisions of part C of title XI of the Social
Security Act
``(2) Database.--In carrying out this subsection, the
Director--
``(A) shall establish and modify as necessary
criteria to determine the organizations that may
voluntarily contribute to, and the data that comprises,
the National Patient Safety Database;
``(B) shall ensure that the National Patient Safety
Database is only used by qualified entities or
individuals for purposes of research, education, and
enhancing patient safety as determined appropriate by
the Director in accordance with criteria applied by the
Director;
``(C) may enter into contracts for the
administration of the Database with private and public
entities with experience in the administration of
similar databases;
``(D) shall ensure that the methodologies for the
collection of nonidentifiable patient safety
information for the National Patient Safety Database
include the methodologies developed or recommended by
the Patient Safety Task Force of the Department of
Health and Human Services; and
``(E) may, to the extent practicable, facilitate
the direct link of information between health care
providers and patient safety organizations and between
patient safety organizations and the National Patient
Safety Database.
``(3) National patient safety research demonstration
system.--
``(A) Establishment.--
``(i) In general.--Not later than 1 year
after the date of enactment of this part, the
Director shall establish a National Patient
Safety Research Demonstration System under
which the Director will enter into voluntary
agreements with a geographically and
institutionally diverse group of eligible
entities to collect information for the purpose
of conducting research on patient safety. The
Director may contract with other organizations
to carry out this paragraph.
``(ii) Purpose.--The purpose of the
demonstration system established under clause
(i) is to conduct targeted research on patient
safety and to test promising systems and
methods of improving patient safety.
``(iii) Number and types of
organizations.--In carrying out clause (i), the
Director shall determine the number and types
of health care organizations with which to
enter into agreements, as well as the types of
patient safety events the particular health
care organizations with which the Director
enters into an agreement should identify and
the types of analyses that such organizations
should perform.
``(B) Eligibility.--To be eligible to enter into an
agreement under subparagraph (A) an entity shall--
``(i) be a health care organization; and
``(ii) prepare and submit to the Director
an application at such time, in such manner,
and containing such information as the Director
may require.
``(C) Submission of reports.--
``(i) In general.--A health care
organization that enters into a voluntary
agreement under subparagraph (A) shall, with
respect to such organization, submit reports of
patient safety events, or reports of specific
types of patient safety events if so prescribed
by the agreement, and shall submit, if
prescribed by the agreement, root cause analyses concerning such events
(using standards developed by the Director), and corrective action
plans to the Director.
``(ii) Processing of information.--The
Director shall process the reports submitted
under clause (i) in the same manner as reports
are processed through the National Patient
Safety Database.
``(iii) Provision of recommendations.--The
Director shall provide feedback concerning
patient safety event reports directly to the
health care organizations that are
participating in the demonstration system under
this paragraph.
``(D) Technical assistance.--The Director shall
provide health care organizations participating in the
demonstration system under this paragraph with
technical support and may provide technology support,
including computer software and hardware, through the
patient safety improvement grants under section 932 and
section 934.
``(E) Evaluation.--Upon the expiration of the 5-
year period beginning on the date on which the
demonstration system is established under this
paragraph, the Director shall prepare and submit to the
Committee on Health, Education, Labor, and Pensions of
the Senate and the Committee on Energy and Commerce of
the House of Representatives a report that includes--
``(i) information on the types of data
collected through the demonstration system;
``(ii) research conducted with data
collected through the demonstration system; and
``(iii) the identification of promising
systems and methods of reducing patient safety
events.
``(F) Rule of construction.--Nothing in this
paragraph shall be construed to preempt Federal or
State mandatory reporting or sentinel surveillance
systems in effect on the date of enactment of this
part, or Federal or State mandatory reporting or
sentinel surveillance systems developed after such date
of enactment.
``(e) Authorization of Appropriations.--There are authorized to be
appropriated such sums as may be necessary for each fiscal year to
carry out this section.
``SEC. 925. PATIENT SAFETY ORGANIZATIONS.
``(a) Certification and Recertification.--
``(1) In general.--The initial certification and
recertification of a patient safety organization under section
924 shall be made under a process that is approved by the
Director and is consistent with criteria published by the
Director.
``(2) Revocation.--Such a certification or recertification
of a patient safety organization may be revoked by the Director
upon a showing of cause (including the disclosure of
information in violation of section 922).
``(3) Termination.--Such a certification provided for a
patient safety organization shall terminate (subject to
recertification) on the earlier of--
``(A) the date that is 3 years after the date on
which such certification was provided; or
``(B) the date on which the Director revokes the
certification.
``(b) Organization Requirements.--A patient safety organization
shall meet the following criteria as conditions for certification:
``(1) The mission of the organization shall be to conduct
activities to improve patient safety and the quality of health
care delivery.
``(2) The organization shall collect and analyze patient
safety information that is voluntarily reported by more than
one health care provider on a local, regional, State, or
national basis.
``(3) The organization shall have appropriately qualified
staff, including licensed or certified medical professionals.
``(4) The organization is managed, controlled, and operated
independently from health care providers that report patient
safety information to it under this part, and the
organization--
``(A) does not have a material familial or
financial relationship (except for fees charged to
health care providers) with any health care provider
from whom it receives patient safety information;
``(B) does not otherwise have a conflict of
interest with such a health care provider (as
determined under regulations); and
``(C) is not a health insurer or other entity that
offers a group health plan or health insurance
coverage, or a component of such an entity.
``(5) The organization seeks to collect data from health
care providers in a standardized manner that permits valid
comparisons of similar cases among similar health care
providers.
``(6) The organization meets such other requirements as the
Director may by regulation require.
``(c) Limitation on Use of Patient Safety Information by Patient
Safety Organizations.--A patient safety organization may not use
patient safety information reported by a health care provider in
accordance with this part to take regulatory or enforcement actions it
otherwise performs (or is responsible for performing) in relation to
such provider.
``(d) Technical Assistance.--The Director may provide technical
assistance to patient safety organizations in providing recommendations
and advice to health care providers reporting patient safety
information under this part. Such assistance shall include advice with
respect to methodology, communication, dissemination of information,
data collection, security, and confidentiality concerns.
``(e) Component Organizations.--If a patient safety organization is
a component of a larger organization, the patient safety organization
shall--
``(1) maintain patient safety information within the
component, separately from the rest of the larger organization,
and establish appropriate security measures to maintain the
confidentiality of the patient safety information;
``(2) not disclose patient safety information to the larger
organization; and
``(3) not create a conflict of interest with the larger
organization.
``(f) Construction.--Nothing in this part shall be construed to
limit or discourage the reporting of information relating to patient
safety within a health care provider.
``(g) Treatment of Information.--If an organization no longer
qualifies as a patient safety organization under this section, with
respect to any patient safety information that such organization
received from a health care provider, the organization shall comply
with one of the following:
``(1) With the approval of the provider and another patient
safety organization, the organization shall transfer such
information to such other organization.
``(2) If practicable, the organization shall return the
information to the provider.
``(3) The organization shall destroy the patient safety
information.
``PART D--PATIENT SAFETY IMPROVEMENT GRANTS
``SEC. 931. GRANTS FOR COMMUNITY PARTNERSHIPS FOR HEALTH CARE
IMPROVEMENT.
``(a) In General.--The Secretary shall award grants to eligible
entities to enable such entities to establish, enhance or improve
community partnerships for health care improvement among providers
within a community for the purpose of improving the quality of medical
care, including the prescribing, dispensing, and use of prescription
drugs, within such community.
``(b) Eligible Entities.--To be eligible to receive a grant under
subsection (a) an entity shall--
``(1) be a--
``(A) hospital;
``(B) health care clinic;
``(C) skilled nursing facility;
``(D) non-profit entity, or component thereof,
established for the purpose of establishing, enhancing
or improving a community partnership for health care
improvement; or
``(E) consortium of any of the entities described
in subparagraphs (A) through (D); and
``(2) prepare and submit to the Secretary an application at
such time, in such manner, and containing such information as
the Secretary may reasonably require, including assurances
satisfactory to the Secretary that the community partnership
for health care improvement in connection with which the entity
is submitting the application does, at the time of application,
or will, within a reasonable amount of time from the date of
application, include the substantive participation of a broad
range of entities (that may include providers, payers,
patients, and governmental entities) involved in the delivery
of health care within the community.
``(c) Limitations.--In carrying out subsection (a), the Secretary
shall not--
``(1) award any single entity more than $2,000,000 in any
single fiscal year; or
``(2) award grants under this section to any single entity
for more than 3 fiscal years.
``(d) Definition.--In this section, the term `community partnership
for health care improvement' means a formal cooperative arrangement
including health care facilities and nonprofit organizations within a
community that--
``(1) is entered into for the purpose of significantly
reducing the incidence of patient safety events or
significantly improving the quality of health care, including
the appropriate use of prescription drugs, at health care
facilities participating in such partnership using one or more
quantifiable indicators of such improvement;
``(2) collects quantifiable data on the incidence of
patient safety events or on the quality of health care in
connection with one or more specific medical procedures
conducted at the health care facilities participating in such
partnerships;
``(3) makes available to the health care facilities
participating in such partnership the data described in
paragraph (2); and
``(4) promotes cooperation and communication among
providers employed by the health care facilities participating
in such partnership for the purposes described in paragraph
(1).
``(e) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section, $50,000,000 for fiscal year
2004, and such sums as may be necessary for each subsequent fiscal
year.
``SEC. 932. TECHNICAL STANDARDS FOR HEALTH CARE INFORMATION TECHNOLOGY
SYSTEMS.
``(a) In General.--By not later than 2 years after the date of the
enactment of this part, the Secretary shall develop or adopt (and shall
periodically review and update) voluntary, national standards--
``(1) that promote the interoperability of health care
information technology systems across all health care settings;
and
``(2) for computerized physician order entry systems,
including standards relating to--
``(A) data formats or other methods of encoding
medical information that facilitate transfer of data
among such systems;
``(B) the protection of the confidentiality of
individually identifiable health information contained
within such systems from unauthorized access or
disclosure;
``(C) procedures for issuing warnings when
prescribing errors may be imminent;
``(D) procedures for ensuring that recommendations
or warnings issued by such systems reflect good medical
practice; and
``(E) other matters determined appropriate by the
Secretary.
``(b) Cost and Increased Efficiency.--In promulgating regulations
to carry out this section, the Secretary shall take into account the
cost that meeting the standards under subsection (a) would have on
providing health care in the United States and the increased
efficiencies in providing such care achieved under the standards.
``(c) Consultation and Coordination.--The Secretary shall develop
and update the standards under subsection (a) in consultation with (and
with coordination between)--
``(1) the National Committee for Vital and Health
Statistics;
``(2) the Medical Information Technology Advisory Board
(established under section 933); and
``(3) the Secretary of Veterans Affairs and the Secretary
of Defense.
``(d) Dissemination.--The Secretary shall provide for the
dissemination of the standards developed and updated under this
section.
``(e) Limitation.--Effective beginning on the date that is 4 years
after the date of enactment of this part, the Secretary may not
purchase any health care information technology system unless such
system conforms to the standards developed or adopted under subsection
(a), to the extent that such standards have been developed or adopted.
``(f) Authorization of Appropriations.--There are authorized to be
appropriated such sums as may be necessary for each fiscal year to
carry out this section.
``SEC. 933. MEDICAL INFORMATION TECHNOLOGY ADVISORY BOARD.
``(a) Establishment.--
``(1) In general.--Not later than 3 months after the date
of the enactment of this part, the Secretary shall appoint an
advisory board to be known as the `Medical Information
Technology Advisory Board' (in this section referred to as the
`MITAB').
``(2) Chairperson.--The Secretary shall designate one
member of the MITAB to serve as the chairperson. The
chairperson shall be an individual affiliated with an
organization having expertise creating American National
Standards Institute (ANSI) accepted standards in health care
information technology and a member of the National Committee
for Vital and Health Statistics.
``(b) Composition.--
``(1) In general.--The MITAB shall consist of not more than
17 members that include--
``(A) experts from the fields of medical
information, information technology, medical continuous
quality improvement, medical records security and
privacy, individual and institutional health care
clinical providers, health researchers, and health care
purchasers;
``(B) one or more staff experts from each of the
following: the Centers for Medicare & Medicaid
Services, the Agency for Healthcare Research and
Quality, and the Institute of Medicine of the National
Academy of Sciences;
``(C) representatives of private organizations with
expertise in medical informatics;
``(D) a representative of a teaching hospital;
``(E) one or more representatives of the health
care information technology industry; and
``(F) a representative of an organization
representing health care consumers.
``(2) Terms of appointment.--The term of any appointment
under paragraph (1) to the MITAB shall be for 2 years. Such an
appointment may be renewed for one additional term.
``(3) Meetings.--The MITAB shall meet at the call of its
chairperson or a majority of its members.
``(4) Vacancies.--A vacancy on the MITAB shall be filled in
the same manner in which the original appointment was made not
later than 30 days after the MITAB is given notice of the
vacancy and shall not affect the power of the remaining members
to execute the duties of the MITAB.
``(5) Compensation.--Members of the MITAB shall receive no
additional pay, allowances, or benefits by reason of their
service on the MITAB.
``(6) Expenses.--Each member of the MITAB shall receive
travel expenses and per diem in lieu of subsistence in
accordance with sections 5702 and 5703 of title 5, United
States Code.
``(c) Duties.--
``(1) In general.--The MITAB shall on an ongoing basis
advise, and make recommendations to, the Secretary regarding
medical information technology, including the following:
``(A) The best current practices in medical
information technology.
``(B) Methods for the adoption (not later than 2
years after the date of the enactment of this part) of
a uniform health care information system interface
between and among old and new computer systems.
``(C) Recommendations for health care vocabulary,
messaging, and other technology standards (including a
common lexicon for computer technology) necessary to
achieve the interoperability of health care information
systems for the purposes described in subparagraph (E).
``(D) Methods of implementing--
``(i) health care information technology
interoperability standardization; and
``(ii) records security.
``(E) Methods to promote information exchange among
health care providers so that long-term compatibility
among information systems is maximized, in order to do
one or more of the following:
``(i) To maximize positive outcomes in
clinical care--
``(I) by providing decision support
for diagnosis and care; and
``(II) by assisting in the
emergency treatment of a patient
presenting at a facility where there is
no medical record for the patient.
``(ii) To contribute to (and be consistent
with) the development of the patient assessment
instrument provided for under section 545 of
the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000, and to
assist in minimizing the need for new and
different records as patients move from
provider to provider.
``(iii) To reduce or eliminate the need for
redundant records, paperwork, and the
repetitive taking of patient histories and
administering of tests.
``(iv) To minimize medical errors, such as
administration of contraindicated drugs.
``(v) To provide a compatible information
technology architecture that facilitates future
quality and cost-saving needs and that avoids
the financing and development of information
technology systems that are not readily
compatible.
``(2) Reports.--
``(A) Initial report.--Not later than 18 months
after the date of the enactment of this part, the MITAB
shall submit to Congress and the Secretary an initial
report concerning the matters described in paragraph
(1). The report shall include--
``(i) the practices described in paragraph
(1)(A), including the status of health care
information technology standards being
developed by private sector and public-private
groups;
``(ii) recommendations for accelerating the
development of common health care terminology
standards;
``(iii) recommendations for completing
development of health care information system
messaging standards; and
``(iv) progress toward meeting the deadline
described in paragraph (1)(B) for adoption of
methods described in such paragraph.
``(B) Subsequent reports.--During each of the 2
years after the year in which the report is submitted
under subparagraph (A), the MITAB shall submit to
Congress and the Secretary an annual report relating to
additional recommendations, best practices, results of
information technology improvements, analyses of
private sector efforts to implement the
interoperability standards established in section 1184
of the Social Security Act, and such other matters as
may help ensure the most rapid dissemination of best
practices in health care information technology.
``(d) Staff and Support Services.--
``(1) Executive director.--
``(A) Appointment.--The Chairperson shall appoint
an executive director of the MITAB.
``(B) Compensation.--The executive director shall
be paid the rate of basic pay for level V of the
Executive Schedule.
``(2) Staff.--With the approval of the MITAB, the executive
director may appoint such personnel as the executive director
considers appropriate.
``(3) Applicability of civil service laws.--The staff of
the MITAB shall be appointed without regard to the provisions
of title 5, United States Code, governing appointments in the
competitive service, and shall be paid without regard to the
provisions of chapter 51 and subchapter III of chapter 53 of
such title (relating to classification and General Schedule pay
rates).
``(4) Experts and consultants.--With the approval of the
MITAB, the executive director may procure temporary and
intermittent services under section 3109(b) of title 5, United
States Code.
``(e) Powers.--
``(1) Hearings and other activities.--For the purpose of
carrying out its duties, the MITAB may hold such hearings and
undertake such other activities as the MITAB determines to be
necessary to carry out its duties.
``(2) Detail of federal employees.--Upon the request of the
MITAB, the head of any Federal agency is authorized to detail,
without reimbursement, any of the personnel of such agency to
the MITAB to assist the MITAB in carrying out its duties. Any
such detail shall not interrupt or otherwise affect the civil
service status or privileges of the Federal employee.
``(3) Technical assistance.--Upon the request of the MITAB,
the head of a Federal agency shall provide such technical
assistance to the MITAB as the MITAB determines to be necessary
to carry out its duties.
``(4) Obtaining information.--The MITAB may secure directly
from any Federal agency information necessary to enable it to
carry out its duties, if the information may be disclosed under
section 552 of title 5, United States Code. Upon request of the
Chairman of the MITAB, the head of such agency shall furnish
such information to the MITAB.
``(f) Termination.--The MITAB shall terminate 30 days after the
date of submission of its final report under subsection (c)(2)(B).
``(g) Testing.--The Secretary, in consultation with the MITAB,
shall test the efficacy, usability, and scalability, of standards
within a variety of clinical settings that may include a rural hospital
or community health center, a community hospital, a children's
hospital, and an urban academic center.
``(h) Applicability of FACA.--The provisions of the Federal
Advisory Committee Act (5 U.S.C. App.) shall apply to the MITAB.
``(i) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Health and Human Services such sums as
are necessary to carry out this section.
``SEC. 934. GRANTS FOR COMPUTERIZED PHYSICIAN ORDER ENTRY SYSTEMS.
``(a) In General.--The Secretary may award grants to eligible
entities to enable such entities to develop, install, or train
personnel in the use of, computerized physician order entry systems.
``(b) Eligibility.--To be eligible to receive a grant under
subsection (a), an entity shall--
``(1) be a nonprofit hospital, health care clinic,
community health center, skilled nursing facility, or other
nonprofit entity determined to be eligible by the Secretary;
``(2) prepare and submit to the Secretary an application at
such time, in such manner, and containing such information as
the Secretary may require, including a description of the
computerized medication prescribing system that the entity
intends to implement using amounts received under the grant;
and
``(3) provide assurances that are satisfactory to the
Secretary that any computerized physician order entry systems,
for which amounts are to be expended under an award made under
subsection (a), conform to the technical standards established
by the Secretary for such systems under section 932(a)(2).
``(c) Matching Requirement.--
``(1) In general.--The Secretary may not make a grant to an
entity under subsection (a) unless that entity agrees that,
with respect to the costs to be incurred by the entity in
carrying out the activities for which the grant is being
awarded, the entity will make available (directly or through
donations from public or private entities) non-Federal
contributions toward such costs in an amount equal to $1 for
each $2 of Federal funds provided under the grant.
``(2) Determination of amount contributed.--Non-Federal
contributions required in paragraph (1) may be in cash or in
kind, fairly evaluated, including equipment or services.
Amounts provided by the Federal Government, or services
assisted or subsidized to any significant extent by the Federal
Government, may not be included in determining the amount of
such non-Federal contributions.
``(d) Study.--
``(1) In general.--The Secretary, acting through The
Director of the Agency for Healthcare Research and Quality,
shall support a study to assess existing scientific evidence
regarding the effectiveness and cost-effectiveness of the use
of electronic prescription programs intended to improve the
efficiency of prescription ordering and the safe and effective
use of prescription drugs. The study shall address the
following:
``(A) The ability of such programs to reduce
medical errors and improve the quality and safety of
patient care.
``(B) The impact of the use of such programs on
physicians, pharmacists, and patients, including such
factors as direct and indirect costs, changes in
productivity, and satisfaction.
``(C) The effectiveness of strategies for
overcoming barriers to the use of electronic
prescription programs.
``(2) Report.--The Secretary shall ensure that, not later
than 18 months after the date of enactment of this part, a
report containing the findings of the study under paragraph (1)
is submitted to the appropriate committees of the Congress.
``(3) Dissemination of findings.--The Secretary shall
disseminate the findings of the study under paragraph (1) to
appropriate public and private entities.
``(e) Definitions.--In this section and section 932:
``(1) Computerized physician order entry system.--The term
`computerized physician order entry system' means an
information technology system that--
``(A) shall--
``(i) permit a qualified practitioner who
wishes to enter a medication order for a
patient to enter such order via a computer that
is linked to a database capable of accessing
the medical record of the patient who is
intended to receive such medication;
``(ii) incorporate prescribing error
prevention software so that a warning
(including documentation regarding the cause of
such warning) is generated by such system if a
medication order is entered that is likely to
lead to an adverse drug event; and
``(iii) require documented acknowledgment
that a qualified practitioner entering a
medication order that has generated the warning
described in clause (ii) has read the
appropriate documentation regarding the cause
of such warning prior to overriding such
warning; and
``(B) may allow for the electronic submission of
prescriptions to pharmacies or pharmacy benefit
managers and the processing of such submissions by
pharmacies.
``(2) Qualified practitioner.--The term `qualified
practitioner' means a practitioner licensed to administer
prescription drugs.
``(f) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section, $100,000,000 for fiscal year
2004, and such sums as may be necessary for each of fiscal years 2005
through 2008.
``SEC. 935. GRANTS FOR INFORMATICS SYSTEMS.
``(a) In General.--The Secretary may establish a program to make
grants to eligible entities for the purpose of assisting such entities
in offsetting the costs related to purchasing, leasing, licensing,
developing, and implementing standardized clinical health care
informatics systems, other than computerized prescriber order entry
systems, that are designed to improve patient safety and reduce adverse
events and health care complications resulting from medication errors.
``(b) Costs Defined.--In this section, the term `costs' includes
total expenditures incurred for--
``(1) purchasing, leasing, licensing, and installing
computer software and hardware;
``(2) making improvements to existing computer software and
hardware;
``(3) purchasing or leasing communications capabilities
necessary for clinical data access, storage, and exchange; and
``(4) providing education and training to eligible entity
staff on computer patient safety information systems.
``(c) Eligibility.--To be eligible to receive a grant under this
section, an entity shall--
``(1) be a hospital, health care clinic, community health
center, skilled nursing facility, patient safety organization,
or other entity determined to be eligible by the Secretary; and
``(2) prepare and submit to the Secretary an application at
such time, in such manner, and containing such information as
the Secretary may require, including a description of the type
of informatics system that the entity intends to implement
using amounts received under the grant.
``(d) Types of Imformatics Systems.--
``(1) In general.--Not later than 6 months after the date
of enactment of this part, the Secretary shall identify the
informatics systems, other than computerized physician order
entry systems, and other information technology or
telecommunications systems demonstrated to improve patient
safety and reduce adverse events and health care complications
resulting from medication errors, that may be adopted and
applied by eligible entities through funds under this section.
``(2) Systems.--The systems described in paragraph (1) may
include bar coding, software to collect and analyze medication
errors, clinical decision-support systems, software to detect
inappropriately prescribed drugs or doses, drug utilization
review programs, and disease management systems.
``(e) Matching Requirement.--
``(1) In general.--The Secretary may not make a grant to an
entity under subsection (a) unless that entity agrees that,
with respect to the costs to be incurred by the entity in
carrying out the activities for which the grant is being
awarded, the entity will make available (directly or through
donations from public or private entities) non-Federal
contributions toward such costs in an amount equal to $1 for
each $1 of Federal funds provided under the grant.
``(2) Determination of amount contributed.--Non-Federal
contributions required in paragraph (1) may be in cash or in
kind, fairly evaluated, including equipment or services.
Amounts provided by the Federal Government, or services
assisted or subsidized to any significant extent by the Federal
Government, may not be included in determining the amount of
such non-Federal contributions.
``(f) Additional Information.--An eligible entity receiving a grant
under this section shall furnish the Secretary with such information as
the Secretary may require to--
``(1) evaluate the project for which the grant is made,
including how the project has improved patient safety and has
reduced patient safety events and health care complications
resulting from medication errors; and
``(2) ensure that funding provided under the grant is
expended for the purposes for which it is made.
``(g) Reports.--
``(1) Interim reports.--
``(A) In general.--The Secretary shall submit, at
least annually, a report to the Committee on Health,
Education, Labor, and Pensions of the Senate and the
Committee on Energy and Commerce of the House of
Representatives on the grant program established under
this section.
``(B) Contents.--A report submitted pursuant to
subparagraph (A) shall include information on--
``(i) the number of grants made;
``(ii) the nature of the projects for which
funding is provided under the grant program;
``(iii) the geographic distribution of
grant recipients; and
``(iv) such other matters as the Secretary
determines appropriate.
``(2) Final report.--Not later than 5 years after the date
of enactment of this part, the Secretary shall submit a final
report to the committees referred to in paragraph (1)(A) on the
grant program.
``(h) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section, $50,000,000 for fiscal year
2004, and such sums as may be necessary for each subsequent fiscal
year.
``SEC. 936. GRANTS FOR PATIENT SAFETY RESEARCH.
``(a) In General.--The Secretary may conduct research and award
grants to promote research on patient safety.
``(b) Process.--The Secretary shall establish a formal process to
gather information on priorities, methodologies and approaches for
medical errors, including medication errors, and patient safety
research. In gathering such information, the Secretary shall ensure
that input is obtained from a wide range of individuals and
organizations who will use and can benefit from the availability of
such information.
``(c) Coordination.--The Secretary shall ensure that activities are
carried out under subsection (a) in cooperation and coordination with
existing research initiatives, programs, and activities.
``(d) Other Industries.--In carrying out this section, the
Secretary shall consider the experiences of other industries in
reducing errors within such industries and the processes that such
industries employ to reduce errors.
``(e) Issues.--The issues to be addressed with respect to the
research to be conducted and supported under this subsection may
include--
``(1) the types and causes of errors in the provision of
health care, both in the United States and internationally,
such as those identified by the reporting system developed by
the Linnaeus Collaboration and the United States Pharmacopeia;
``(2) the identification and comparison of trends in errors
in geographically and demographically diverse health care
facilities;
``(3) training requirements for health care professionals
to ensure that such professionals provide quality health care
generally, in specific settings, and for specific practices;
``(4) the development of effective communication methods
and tools between disciplines to improve patient safety;
``(5) the use of interdisciplinary teams to improve patient
safety;
``(6) the barriers to medical error reduction strategies;
``(7) the use of standardized processes in providing
medication, including the application of these processes in
demographically diverse health care facilities;
``(8) the application of a national standardized taxonomy
for medication errors;
``(9) the effect of educational programs on the consistent
application of standardized definitions, terminology, and
formats; and
``(10) other areas determined appropriate by the Secretary.
``(f) Eligibility.--To be eligible to receive a grant under
subsection (a), an entity shall--
``(1) be a patient safety organization, health care
provider, health care provider association, research
organization, university, or other entity determined to be
eligible by the Secretary; and
``(2) prepare and submit to the Secretary an application at
such time, in such manner, and containing such information as
the Secretary may require.
``(g) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section, $50,000,000 for fiscal year
2004, and such sums as may be necessary for each subsequent fiscal
year.''.
SEC. 304. REQUIRED USE OF PRODUCT IDENTIFICATION TECHNOLOGY.
The Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) is
amended--
(1) in section 502, by adding at the end the following:
``(u) If it is a drug or biological product, unless it includes a
unique product identifier for the drug or biological product as
required by regulations under section 510(o).''; and
(2) in section 510, by adding at the end the following:
``(o)(1) The Secretary shall issue, and may periodically revise,
regulations requiring the manufacturer of any drug or biological
product, or the packager or labeler of a drug or biological product, to
include a unique product identifier on the packaging of the drug or
biological product.
``(2) For purposes of this subsection, the term `unique product
identifier' means an identification that--
``(A) is affixed by the manufacturer, labeler, or packager
to each drug or biological product described in paragraph (1);
``(B) uniquely identifies the item and meets the standards
required by this section; and
``(C) can be read by a scanning device or other technology
acceptable to the Secretary.
``(3) A unique product identifier required by regulations issued or
revised under paragraph (1) shall be based on--
``(A) the National Drug Code maintained by the Food and
Drug Administration;
``(B) commercially accepted standards established by
organizations that are accredited by the American National
Standards Institute, such as the Health Industry Business
Communication Council or the Uniform Code Council; or
``(C) other identification formats that the Secretary deems
appropriate.
``(4) The Secretary may, at the Secretary's discretion, waive the
requirements of this subsection, or add additional provisions that are
necessary to safeguard the public health.''.
TITLE IV--TAX CREDIT FOR OFFERING EMPLOYER-BASED HEALTH INSURANCE
COVERAGE
SEC. 401. CREDIT FOR EMPLOYEE HEALTH INSURANCE EXPENSES.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to business-related
credits) is amended by adding at the end the following:
``SEC. 45G. EMPLOYEE HEALTH INSURANCE EXPENSES.
``(a) General Rule.--For purposes of section 38, in the case of an
eligible small employer, the employee health insurance expenses credit
determined under this section is an amount equal to the applicable
percentage of the amount paid by the taxpayer during the taxable year
for qualified employee health insurance expenses.
``(b) Applicable Percentage.--For purposes of subsection (a)--
``(1) In general.--Except as provided in paragraphs (2) and
(3), the applicable percentage is equal to 50 percent reduced
(but not below zero) by 1.25 percentage points for each
qualified employee of the employer in excess of 10 qualified
employees (as determined under the rules under subsection
(c)(1)).
``(2) Limitation based on annual wages.--
``(A) In general.--The percentage which would (but
for this paragraph) be taken into account as the
applicable percentage for purposes of subsection (a)
for the taxable year shall be reduced (but not below
zero) by the applicable percentage points for each
$1,000 (or fraction thereof) by which the average
amount of wages paid or incurred by an eligible small
employer to qualified employees at an annual rate
during the taxable year exceeds $10,000.
``(B) Applicable percentage points.--For purposes
of subparagraph (A), the applicable percentage points
are equal to--
``(i) in the case of an employer with not
more than 10 qualified employees (as so
determined), 2.22 percentage points, and
``(ii) in the case of an employer with more
than 10 qualified employees (as so determined),
the ratio of the number of qualified employees
of such employer to 450, expressed as
percentage points.
``(C) Wages.--For purposes of this paragraph, the
term `wages' has the meaning given such term by section
3121(a) (determined without regard to any dollar
limitation contained in such section).
``(3) High contribution bonus.--With respect to any taxable
year during which an eligible small employer pays 100 percent
of qualified employee health insurance expenses for the
qualified employees of the small employer, the applicable
percentage otherwise determined for such taxable year under the
preceding paragraphs of this subsection shall be increased by 5
percentage points.
``(c) Definitions.--For purposes of this section--
``(1) Eligible small employer.--
``(A) In general.--The term `eligible small
employer' means, with respect to any taxable year, any
employer if such employer employed an average of 50 or
fewer employees on business days during either of the 2
preceding taxable years. For purposes of the preceding
sentence, a preceding taxable year may be taken into
account only if the employer was in existence
throughout such year.
``(B) Employers not in existence in preceding
year.--In the case of an employer which was not in
existence throughout the 1st preceding taxable year,
the determination under subparagraph (A) shall be based
on the average number of employees that it is
reasonably expected such employer will employ on
business days in the current taxable year.
``(2) Qualified employee health insurance expenses.--
``(A) In general.--The term `qualified employee
health insurance expenses' means any amount paid by an
employer for health insurance coverage to the extent
such amount is attributable to coverage provided to any
employee while such employee is a qualified employee.
``(B) Exception for amounts paid under salary
reduction arrangements.--No amount paid or incurred for
health insurance coverage pursuant to a salary
reduction arrangement shall be taken into account under
subparagraph (A).
``(C) Health insurance coverage.--The term `health
insurance coverage' has the meaning given such term by
section 9832(b)(1).
``(3) Qualified employee.--
``(A) In general.--The term `qualified employee'
means, with respect to any period, an employee of an
employer who is not provided health insurance coverage
under--
``(i) a health plan of the employee's
spouse,
``(ii) title XVIII, XIX, or XXI of the
Social Security Act,
``(iii) chapter 17 of title 38, United
States Code,
``(iv) chapter 55 of title 10, United
States Code,
``(v) chapter 89 of title 5, United States
Code,
``(vi) the Indian Health Care Improvement
Act, or
``(vii) any other provision of law.
``(B) Treatment of certain employees.--For purposes
of subparagraph (A), the term `employee'--
``(i) shall not include an employee within
the meaning of section 401(c)(1), and
``(ii) shall include a leased employee
within the meaning of section 414(n).
``(d) Certain rules made applicable.--For purposes of this section,
rules similar to the rules of section 52 shall apply.
``(e) Denial of Double Benefit.--No deduction or credit under any
other provision of this chapter shall be allowed with respect to
qualified employee health insurance expenses taken into account under
subsection (a).''.
(b) Credit To Be Part of General Business Credit.--Section 38(b) of
the Internal Revenue Code of 1986 (relating to current year business
credit) is amended by striking ``plus'' at the end of paragraph (14),
by striking the period at the end of paragraph (15) and inserting ``,
plus'', and by adding at the end the following:
``(16) the employee health insurance expenses credit
determined under section 45G.''.
(c) No Carrybacks.--Subsection (d) of section 39 of the Internal
Revenue Code of 1986 (relating to carryback and carryforward of unused
credits) is amended by adding at the end the following:
``(11) No carryback of section 45G credit before effective
date.--No portion of the unused business credit for any taxable
year which is attributable to the employee health insurance
expenses credit determined under section 45G may be carried
back to a taxable year ending before the date of the enactment
of section 45G.''.
(d) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by adding at the end the following:
``Sec. 45G. Employee health insurance
expenses.''.
(e) Employer Outreach.--The Internal Revenue Service shall, in
conjunction with the Small Business Administration, develop materials
and implement an educational program to ensure that business personnel
are aware of--
(1) the eligibility criteria for the tax credit provided
under section 45G of the Internal Revenue Code of 1986 (as
added by this section),
(2) the methods to be used in calculating such credit, and
(3) the documentation needed in order to claim such credit,
so that the maximum number of eligible businesses may claim the tax
credit.
(f) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred in taxable years beginning after the
date of the enactment of this Act.
TITLE V--FAMILYCARE
SEC. 501. RENAMING OF TITLE XXI PROGRAM.
(a) In General.--The heading of title XXI of the Social Security
Act (42 U.S.C. 1397aa et seq.) is amended to read as follows:
``TITLE XXI--FAMILYCARE PROGRAM''.
(b) Program References.--Any reference in any provision of Federal
law or regulation to ``SCHIP'' or ``State children's health insurance
program'' under title XXI of the Social Security Act shall be deemed a
reference to the FamilyCare program under such title.
SEC. 502. FAMILYCARE COVERAGE OF PARENTS AND PREGNANT WOMEN UNDER THE
MEDICAID PROGRAM AND TITLE XXI.
(a) Incentives To Implement FamilyCare Coverage.--
(1) Under medicaid.--
(A) Establishment of new optional eligibility
category.--Section 1902(a)(10)(A)(ii) of the Social
Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) is
amended--
(i) by striking ``or'' at the end of
subclause (XVII);
(ii) by adding ``or'' at the end of
subclause (XVIII); and
(iii) by adding at the end the following:
``(XIX) who are individuals
described in subsection (k)(1)
(relating to parents of categorically
eligible children);''.
(B) Parents described.--Section 1902 of the Social
Security Act is further amended by inserting after
subsection (j) the following:
``(k)(1)(A) Individuals described in this paragraph are
individuals--
``(i) who are the parents of an individual who is under 19
years of age (or such higher age as the State may have elected
under section 1902(l)(1)(D) (as amended by section 505 of the
Health Care Coverage Expansion and Quality Improvement Act of
2003) and who is eligible for medical assistance under
subsection (a)(10)(A);
``(ii) who are not otherwise eligible for medical
assistance under such subsection or under a waiver approved
under section 1115 or otherwise (except under section 1931 or
under subsection (a)(10)(A)(ii)(XIX)); and
``(iii) whose family income exceeds the effective income
level or resource level applicable under the State plan under
part A of title IV as in effect as of July 16, 1996, but does
not exceed the highest effective income level applicable to a
child in the family under this title.
``(B) In establishing an income eligibility level for individuals
described in this paragraph, a State may vary such level consistent
with the various income levels established under subsection (l)(2)
based on the ages of children described in subsection (l)(1) in order
to ensure, to the maximum extent possible, that such individuals shall
be enrolled in the same program as their children.
``(C) An individual may not be treated as being described in this
paragraph unless, at the time of the individual's enrollment under this
title, the child referred to in subparagraph (A)(i) of the individual
is also enrolled under this title.
``(D) In this subsection, the term `parent' has the meaning given
the term `caretaker relative' for purposes of carrying out section
1931.
``(2) In the case of a parent described in paragraph (1) who is
also the parent of a child who is eligible for child health assistance
under title XXI, the State may elect (on a uniform basis) to cover all
such parents under section 2111 or under this title.''.
(C) Enhanced matching funds available if certain
conditions met.--Section 1905 of the Social Security
Act (42 U.S.C. 1396d) is amended--
(i) in the fourth sentence of subsection
(b), by striking ``or subsection (u)(3)'' and
inserting ``, (u)(3), or (u)(4)''; and
(ii) in subsection (u)--
(I) by redesignating paragraph (4)
as paragraph (6), and
(II) by inserting after paragraph
(3) the following:
``(4) For purposes of subsection (b) and section 2105(a)(1):
``(A) FamilyCare parents.--The expenditures described in
this subparagraph are the expenditures described in the
following clauses (i) and (ii):
``(i) Parents.--If the conditions described in
clause (iii) are met, expenditures for medical
assistance for parents described in section 1902(k)(1)
and for parents who would be described in such section
but for the fact that they are eligible for medical
assistance under section 1931 or under a waiver
approved under section 1115.
``(ii) Certain pregnant women.--If the conditions
described in clause (iv) are met, expenditures for
medical assistance for pregnant women described in
subsection (n) or under section 1902(l)(1)(A) in a
family the income of which exceeds the effective income
level applicable under subsection (a)(10)(A)(i)(III) or
(l)(2)(A) of section 1902 to a family of the size
involved as of January 1, 2003.
``(iii) Conditions for expenditures for parents.--
The conditions described in this clause are the
following:
``(I) The State has a State child health
plan under title XXI which (whether implemented
under such title or under this title) has an
effective income level for children that is at
least 200 percent of the poverty line.
``(II) Such State child health plan does
not limit the acceptance of applications, does
not use a waiting list for children who meet
eligibility standards to qualify for
assistance, and provides benefits to all
children in the State who apply for and meet
eligibility standards.
``(III) The State plans under this title
and title XXI do not provide coverage for
parents with higher family income without
covering parents with a lower family income.
``(IV) The State does not apply an income
level for parents that is lower than the
effective income level (expressed as a percent
of the poverty line) that has been specified
under the State plan under title XIX (including under a waiver
authorized by the Secretary or under section 1902(r)(2)), as of January
1, 2003, to be eligible for medical assistance as a parent under this
title.
``(iv) Conditions for expenditures for certain
pregnant women.--The conditions described in this
clause are the following:
``(I) The State has established an
effective income eligibility level for pregnant
women under subsection (a)(10)(A)(i)(III) or
(l)(2)(A) of section 1902 that is at least 185
percent of the poverty line.
``(II) The State plans under this title and
title XXI do not provide coverage for pregnant
women described in subparagraph (A)(ii) with
higher family income without covering such
pregnant women with a lower family income.
``(III) The State does not apply an income
level for pregnant women that is lower than the
effective income level (expressed as a percent
of the poverty line and considering applicable
income disregards) that has been specified
under the State plan under subsection
(a)(10)(A)(i)(III) or (l)(2)(A) of section
1902, as of January 1, 2003, to be eligible for
medical assistance as a pregnant woman.
``(IV) The State satisfies the conditions
described in subclauses (I) and (II) of clause
(iii).
``(v) Definitions.--For purposes of this
subsection:
``(I) The term `parent' has the meaning
given such term for purposes of section
1902(k)(1).
``(II) The term `poverty line' has the
meaning given such term in section
2110(c)(5).''.
(D) Appropriation from title xxi allotment for
medicaid expansion costs for parents; elimination of
counting medicaid child presumptive eligibility costs
against title xxi allotment.--Subparagraph (B) of
section 2105(a)(1) of the Social Security Act, as
amended by section 515(a), is amended to read as
follows:
``(B) FamilyCare parents.--Expenditures for medical
assistance that are attributable to expenditures
described in section 1905(u)(4)(A).''.
(E) Only counting enhanced portion for coverage of
additional pregnant women.--Section 1905 of the Social
Security Act (42 U.S.C. 1396d) is amended--
(i) in the fourth sentence of subsection
(b), by inserting ``(except in the case of
expenditures described in subsection (u)(5))''
after ``do not exceed'';
(ii) in subsection (u), by inserting after
paragraph (4) (as inserted by subparagraph
(C)), the following:
``(5) For purposes of the fourth sentence of subsection (b) and
section 2105(a), the following payments under this title do not count
against a State's allotment under section 2104:
``(A) Regular fmap for expenditures for pregnant women with
income above january 1, 2003 income level and below 185 percent
of poverty.--The portion of the payments made for expenditures
described in paragraph (4)(A)(ii) that represents the amount
that would have been paid if the enhanced FMAP had not been
substituted for the Federal medical assistance percentage.''.
(2) Under title xxi.--
(A) FamilyCare coverage.--Title XXI of the Social
Security Act (42 U.S.C. 1397aa et seq.) is amended by
adding at the end the following:
``SEC. 2111. OPTIONAL FAMILYCARE COVERAGE OF PARENTS OF TARGETED LOW-
INCOME CHILDREN OR TARGETED LOW-INCOME PREGNANT WOMEN.
``(a) Optional Coverage.--Notwithstanding any other provision of
this title, a State may provide for coverage, through an amendment to
its State child health plan under section 2102, of parent health
assistance for targeted low-income parents, pregnancy-related
assistance for targeted low-income pregnant women, or both, in
accordance with this section, but only if--
``(1) with respect to the provision of parent health
assistance, the State meets the conditions described in clause
(iii) of section 1905(u)(4)(A);
``(2) with respect to the provision of pregnancy-related
assistance, the State meets the conditions described in clause
(iv) of section 1905(u)(4)(A); and
``(3) in the case of parent health assistance for targeted
low-income parents, the State elects to provide medical
assistance under section 1902(a)(10)(A)(ii)(XIX), under section
1931, or under a waiver under section 1115 to individuals
described in section 1902(k)(1)(A)(i) and elects an effective
income level that, consistent with paragraphs (1)(B) and (2) of
section 1902(k), ensures to the maximum extent possible, that
such individuals shall be enrolled in the same program as their
children if their children are eligible for coverage under
title XIX (including under a waiver authorized by the Secretary
or under section 1902(r)(2)).''.
``(b) Definitions.--For purposes of this title:
``(1) Parent health assistance.--The term `parent health
assistance' has the meaning given the term child health
assistance in section 2110(a) as if any reference to targeted
low-income children were a reference to targeted low-income
parents.
``(2) Parent.--The term `parent' has the meaning given the
term `caretaker relative' for purposes of carrying out section
1931.
``(3) Pregnancy-related assistance.--The term `pregnancy-
related assistance' has the meaning given the term child health
assistance in section 2110(a) as if any reference to targeted
low-income children were a reference to targeted low-income pregnant
women, except that the assistance shall be limited to services related
to pregnancy (which include prenatal, delivery, and postpartum
services) and to other conditions that may complicate pregnancy.
``(4) Targeted low-income parent.--The term `targeted low-
income parent' has the meaning given the term targeted low-
income child in section 2110(b) as if the reference to a child
were deemed a reference to a parent (as defined in paragraph
(3)) of the child; except that in applying such section--
``(A) there shall be substituted for the income
level described in paragraph (1)(B)(ii)(I) the
applicable income level in effect for a targeted low-
income child;
``(B) in paragraph (3), January 1, 2003, shall be
substituted for July 1, 1997; and
``(C) in paragraph (4), January 1, 2003, shall be
substituted for March 31, 1997.
``(5) Targeted low-income pregnant woman.--The term
`targeted low-income pregnant woman' has the meaning given the
term targeted low-income child in section 2110(b) as if any
reference to a child were a reference to a woman during
pregnancy and through the end of the month in which the 60-day
period beginning on the last day of her pregnancy ends; except
that in applying such section--
``(A) there shall be substituted for the income
level described in paragraph (1)(B)(ii)(I) the
applicable income level in effect for a targeted low-
income child;
``(B) in paragraph (3), January 1, 2003, shall be
substituted for July 1, 1997; and
``(C) in paragraph (4), January 1, 2003, shall be
substituted for March 31, 1997.
``(c) References to Terms and Special Rules.--In the case of, and
with respect to, a State providing for coverage of parent health
assistance to targeted low-income parents or pregnancy-related
assistance to targeted low-income pregnant women under subsection (a),
the following special rules apply:
``(1) Any reference in this title (other than in subsection
(b)) to a targeted low-income child is deemed to include a
reference to a targeted low-income parent or a targeted low-
income pregnant woman (as applicable).
``(2) Any such reference to child health assistance--
``(A) with respect to such parents is deemed a
reference to parent health assistance; and
``(B) with respect to such pregnant women, is
deemed a reference to pregnancy-related assistance.
``(3) In applying section 2103(e)(3)(B) in the case of a
family or pregnant woman provided coverage under this section,
the limitation on total annual aggregate cost-sharing shall be
applied to the entire family or such pregnant woman.
``(4) In applying section 2110(b)(4), any reference to
`section 1902(l)(2) or 1905(n)(2) (as selected by a State)' is
deemed a reference to the effective income level applicable to
parents under section 1931 or under a waiver approved under
section 1115, or, in the case of a pregnant woman, the income
level established under section 1902(l)(2)(A).
``(5) In applying section 2102(b)(3)(B), any reference to
children found through screening to be eligible for medical
assistance under the State medicaid plan under title XIX is
deemed a reference to parents and pregnant women.''.
(B) Additional allotment for states providing
coverage of parents or pregnant women.--
(i) In general.--Section 2104 of the Social
Security Act (42 U.S.C. 1397dd) is amended by
inserting after subsection (c) the following:
``(d) Additional Allotments for State Coverage of Parents or
Pregnant Women.--
``(1) Appropriation; total allotment.--For the purpose of
providing additional allotments to States under this title,
there is appropriated, out of any money in the Treasury not
otherwise appropriated--
``(A) for fiscal year 2004, $2,000,000,000;
``(B) for fiscal year 2005, $4,000,000,000;
``(C) for fiscal year 2006, $4,000,000,000;
``(D) for fiscal year 2007, $5,000,000,000;
``(E) for fiscal year 2008, $5,000,000,000;
``(F) for fiscal year 2009, $6,000,000,000;
``(G) for fiscal year 2010, $7,000,000,000;
``(H) for fiscal year 2011, $8,000,000,000;
``(I) for fiscal year 2012, $9,000,000,000;
``(J) for fiscal year 2013 and each fiscal year
thereafter, the amount of the allotment provided under
this paragraph for the preceding fiscal year increased
by the percentage increase (if any) in the medical care
expenditure category of the Consumer Price Index for
All Urban Consumers (United States city average).
``(2) State and territorial allotments.--
``(A) In general.--In addition to the allotments
provided under subsections (b) and (c), subject to
paragraphs (3) and (4), of the amount available for the
additional allotments under paragraph (1) for a fiscal
year, the Secretary shall allot to each State with a
State child health plan approved under this title--
``(i) in the case of such a State other
than a commonwealth or territory described in
subparagraph (B), the same proportion as the
proportion of the State's allotment under
subsection (b) (determined without regard to
subsection (f)) to the total amount of the
allotments under subsection (b) for such States
eligible for an allotment under this paragraph
for such fiscal year; and
``(ii) in the case of a commonwealth or
territory described in subsection (c)(3), the
same proportion as the proportion of the
commonwealth's or territory's allotment under
subsection (c) (determined without regard to
subsection (f)) to the total amount of the
allotments under subsection (c) for
commonwealths and territories eligible for an
allotment under this paragraph for such fiscal
year.
``(B) Availability and redistribution of unused
allotments.--In applying subsections (e) and (f) with
respect to additional allotments made available under
this subsection, the procedures established under such
subsections shall ensure such additional allotments are
only made available to States which have elected to
provide coverage under section 2111.
``(3) Use of additional allotment.--Additional allotments
provided under this subsection are not available for amounts
expended before October 1, 2003. Such amounts are available for
amounts expended on or after such date for child health
assistance for targeted low-income children, as well as for
parent health assistance for targeted low-income parents, and
pregnancy-related assistance for targeted low-income pregnant
women.
``(4) Requiring election to provide coverage.--No payments
may be made to a State under this title from an allotment
provided under this subsection unless the State has made an
election to provide parent health assistance for targeted low-
income parents, or pregnancy-related assistance for targeted
low-income pregnant women.''.
(ii) Conforming amendments.--Section 2104
of the Social Security Act (42 U.S.C. 1397dd)
is amended--
(I) in subsection (a), by inserting
``subject to subsection (d),'' after
``under this section,'';
(II) in subsection (b)(1), by
inserting ``and subsection (d)'' after
``Subject to paragraph (4)''; and
(III) in subsection (c)(1), by
inserting ``subject to subsection
(d),'' after ``for a fiscal year,''.
(C) No cost-sharing for pregnancy-related
benefits.--Section 2103(e)(2) of the Social Security
Act (42 U.S.C. 1397cc(e)(2)) is amended--
(i) in the heading, by inserting ``and
pregnancy-related services'' after ``preventive
services''; and
(ii) by inserting before the period at the
end the following: ``and for pregnancy-related
services''.
(3) Effective date.--The amendments made by this subsection
apply to items and services furnished on or after October 1,
2003, without regard to whether regulations implementing such
amendments have been issued.
(b) Optional Application of Presumptive Eligibility Provisions to
Parents.--Section 1920A of the Social Security Act (42 U.S.C. 1396r-1a)
is amended by adding at the end the following:
``(e) A State may elect to apply the previous provisions of this
section to provide for a period of presumptive eligibility for medical
assistance for a parent (as defined for purposes of section 1902(k)(1))
of a child with respect to whom such a period is provided under this
section.''.
(c) Conforming Amendments.--
(1) Eligibility categories.--Section 1905(a) of the Social
Security Act (42 U.S.C. 1396d(a)) is amended, in the matter
before paragraph (1)--
(A) by striking ``or'' at the end of clause (xii);
(B) by inserting ``or'' at the end of clause
(xiii); and
(C) by inserting after clause (xiii) the following:
``(xiv) who are parents described (or treated as if
described) in section 1902(k)(1),''.
(2) Income limitations.--Section 1903(f)(4) of the Social
Security Act (42 U.S.C. 1396b(f)(4)) is amended by inserting
``1902(a)(10)(A)(ii)(XIX),'' after
``1902(a)(10)(A)(ii)(XVIII),''.
(3) Conforming amendment relating to no waiting period for
pregnant women.--Section 2102(b)(1)(B) of the Social Security
Act (42 U.S.C. 1397bb(b)(1)(B)) is amended--
(A) by striking ``, and'' at the end of clause (i)
and inserting a semicolon;
(B) by striking the period at the end of clause
(ii) and inserting ``; and''; and
(C) by adding at the end the following:
``(iii) may not apply a waiting period
(including a waiting period to carry out
paragraph (3)(C)) in the case of a targeted
low-income parent who is pregnant.''.
SEC. 503. AUTOMATIC ENROLLMENT OF CHILDREN BORN TO TITLE XXI PARENTS.
(a) Title XXI.--Section 2102(b)(1) (42 U.S.C. 1397bb(b)(1)) is
amended by adding at the end the following:
``(C) Automatic eligibility of children born to
parents or pregnant women.--Such eligibility standards
shall provide for automatic coverage of a child born to
an individual who is provided assistance under this
title in the same manner as medical assistance would be
provided under section 1902(e)(4) to a child described
in such section.''.
(b) Conforming Amendment to Medicaid.--Section 1902(e)(4) (42
U.S.C. 1396a(e)(4)) is amended in the first sentence by striking ``so
long as the child is a member of the woman's household and the woman
remains (or would remain if pregnant) eligible for such assistance''.
SEC. 504. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS UNDER THE MEDICAID
PROGRAM AND TITLE XXI.
(a) Medicaid Program.--Section 1903(v) of the Social Security Act
(42 U.S.C. 1396b(v)) is amended--
(1) in paragraph (1), by striking ``paragraph (2)'' and
inserting ``paragraphs (2) and (4)''; and
(2) by adding at the end the following:
``(4)(A) A State may elect (in a plan amendment under this title)
to provide medical assistance under this title for aliens who are
lawfully residing in the United States (including battered aliens
described in section 431(c) of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996) and who are otherwise eligible
for such assistance, within any of the following eligibility
categories:
``(i) Pregnant women.--Women during pregnancy (and during
the 60-day period beginning on the last day of the pregnancy).
``(ii) Children.--Children (as defined under such plan),
including optional targeted low-income children described in
section 1905(u)(2)(B).
``(iii) Parents.--If the State has elected the eligibility
category described in clause (ii), caretaker relatives who are
parents (including individuals treated as a caregiver for
purposes of carrying out section 1931) of children (described
in such clause or otherwise) who are eligible for medical
assistance under the plan.
``(B)(i) In the case of a State that has elected to provide medical
assistance to a category of aliens under subparagraph (A), no debt
shall accrue under an affidavit of support against any sponsor of such
an alien on the basis of provision of assistance to such category and
the cost of such assistance shall not be considered as an unreimbursed
cost.
``(ii) The provisions of sections 401(a), 402(b), 403, and 421 of
the Personal Responsibility and Work Opportunity Reconciliation Act of
1996 shall not apply to a State that makes an election under
subparagraph (A).''.
(b) Title XXI.--Section 2107(e)(1) of the Social Security Act (42
U.S.C. 1397gg(e)(1)) is amended by adding at the end the following:
``(E) Section 1903(v)(4) (relating to optional
coverage of categories of lawful resident alien
pregnant women, children, and parents), but only with
respect to an eligibility category under this title, if
the same eligibility category has been elected under
such section for purposes of title XIX.''.
(c) Effective Date.--The amendments made by this section take
effect on October 1, 2003, and apply to medical assistance and child
health assistance furnished on or after such date, whether or not
regulations implementing such amendments have been issued.
SEC. 505. OPTIONAL COVERAGE OF CHILDREN THROUGH AGE 20 UNDER THE
MEDICAID PROGRAM AND TITLE XXI.
(a) Medicaid.--
(1) In general.--Section 1902(l)(1)(D) of the Social
Security Act (42 U.S.C. 1396a(l)(1)(D)) is amended by inserting
``(or, at the election of a State, 20 or 21 years of age)''
after ``19 years of age''.
(2) Conforming amendments.--
(A) Section 1902(e)(3)(A) of the Social Security
Act (42 U.S.C. 1396a(e)(3)(A)) is amended by inserting
``(or 1 year less than the age the State has elected
under subsection (l)(1)(D))'' after ``18 years of
age''.
(B) Section 1902(e)(12) of the Social Security Act
(42 U.S.C. 1396a(e)(12)) is amended by inserting ``or
such higher age as the State has elected under
subsection (l)(1)(D)'' after ``19 years of age''.
(C) Section 1920A(b)(1) of the Social Security Act
(42 U.S.C. 1396r-1a(b)(1)) is amended by inserting ``or
such higher age as the State has elected under section
1902(l)(1)(D)'' after ``19 years of age''.
(D) Section 1928(h)(1) of the Social Security Act
(42 U.S.C. 1396s(h)(1)) is amended by inserting ``or 1
year less than the age the State has elected under
section 1902(l)(1)(D)'' before the period at the end.
(E) Section 1932(a)(2)(A) of the Social Security
Act (42 U.S.C. 1396u-2(a)(2)(A)) is amended by
inserting ``(or such higher age as the State has
elected under section 1902(l)(1)(D))'' after ``19 years
of age''.
(b) Title XXI.--Section 2110(c)(1) of the Social Security Act (42
U.S.C. 1397jj(c)(1)) is amended by inserting ``(or such higher age as
the State has elected under section 1902(l)(1)(D))''.
(c) Effective Date.--The amendments made by this section take
effect on October 1, 2003, and apply to medical assistance and child
health assistance provided on or after such date, whether or not
regulations implementing such amendments have been issued.
SEC. 506. APPLICATION OF SIMPLIFIED TITLE XXI PROCEDURES UNDER THE
MEDICAID PROGRAM.
(a) Application Under Medicaid.--
(1) In general.--Section 1902(l) of the Social Security Act
(42 U.S.C. 1396a(l)) is amended--
(A) in paragraph (3), by inserting ``subject to
paragraph (5)'', after ``Notwithstanding subsection
(a)(17),''; and
(B) by adding at the end the following:
``(5) With respect to determining the eligibility of individuals
under 19 years of age (or such higher age as the State has elected
under paragraph (1)(D)) for medical assistance under subsection
(a)(10)(A) and, separately, with respect to determining the eligibility
of individuals for medical assistance under subsection
(a)(10)(A)(i)(VIII) or (a)(10)(A)(ii)(XIX), notwithstanding any other
provision of this title, if the State has established a State child
health plan under title XXI--
``(A) the State may not apply a resource standard;
``(B) the State shall use the same simplified eligibility
form (including, if applicable, permitting application other
than in person) as the State uses under such State child health
plan with respect to such individuals;
``(C) the State shall provide for initial eligibility
determinations and redeterminations of eligibility using
verification policies, forms, and frequency that are no less
restrictive than the policies, forms, and frequency the State
uses for such purposes under such State child health plan with
respect to such individuals; and
``(D) the State shall not require a face-to-face interview
for purposes of initial eligibility determinations and
redeterminations unless the State requires such an interview
for such purposes under such child health plan with respect to
such individuals.''.
(2) Effective date.--The amendments made by paragraph (1)
apply to determinations of eligibility made on or after the
date that is 1 year after the date of the enactment of this
Act, whether or not regulations implementing such amendments
have been issued.
(b) Presumptive Eligibility.--
(1) In general.--Section 1920A(b)(3)(A)(i) of the Social
Security Act (42 U.S.C. 1396r-1a(b)(3)(A)(i)) is amended by
inserting ``a child care resource and referral agency,'' after
``a State or tribal child support enforcement agency,''.
(2) Application to presumptive eligibility for pregnant
women under medicaid.--Section 1920(b) of the Social Security
Act (42 U.S.C. 1396r-1(b)) is amended by adding at the end
after and below paragraph (2) the following flush sentence:
``The term `qualified provider' includes a qualified entity as defined
in section 1920A(b)(3).''.
(3) Application under title xxi.--
(A) In general.--Section 2107(e)(1)(D) of the
Social Security Act (42 U.S.C. 1397gg(e)(1)) is amended
to read as follows:
``(D) Sections 1920 and 1920A (relating to
presumptive eligibility).''.
(B) Conforming elimination of resource test.--
Section 2102(b)(1)(A) of such Act (42 U.S.C.
1397bb(b)(1)(A)) is amended--
(i) by striking `` and resources (including
any standards relating to spenddowns and
disposition of resources)''; and
(ii) by adding at the end the following:
``Effective 1 year after the date of the
enactment of the Health Care Coverage Expansion
and Quality Improvement Act of 2003, such
standards may not include the application of a
resource standard or test.''.
(c) Automatic Reassessment of Eligibility for Title XXI and
Medicaid Benefits for Children Losing Medicaid or Title XXI
Eligibility.--
(1) Loss of medicaid eligibility.--Section 1902(a) of the
Social Security Act (42 U.S.C. 1396a(a)) is amended--
(A) by striking the period at the end of paragraph
(65) and inserting ``; and'', and
(B) by inserting after paragraph (65) the
following:
``(66) provide, in the case of a State with a State child
health plan under title XXI, that before medical assistance to
a child (or a parent of a child) is discontinued under this
title, a determination of whether the child (or parent) is
eligible for benefits under title XXI shall be made and, if
determined to be so eligible, the child (or parent) shall be
automatically enrolled in the program under such title without
the need for a new application.''.
(2) Loss of title xxi eligibility and coordination with
medicaid.--Section 2102(b) of the Social Security Act (42
U.S.C. 1397bb(b)) is amended--
(A) in paragraph (3), by redesignating
subparagraphs (D) and (E) as subparagraphs (E) and (F),
respectively, and by inserting after subparagraph (C)
the following:
``(D) that before health assistance to a child (or
a parent of a child) is discontinued under this title,
a determination of whether the child (or parent) is
eligible for benefits under title XIX is made and, if
determined to be so eligible, the child (or parent) is
automatically enrolled in the program under such title
without the need for a new application;'';
(B) by redesignating paragraph (4) as paragraph
(5); and
(C) by inserting after paragraph (3) the following
new paragraph:
``(4) Coordination with medicaid.--The State shall
coordinate the screening and enrollment of individuals under
this title and under title XIX consistent with the following:
``(A) Information that is collected under this
title or under title XIX which is needed to make an
eligibility determination under the other title shall
be transmitted to the appropriate administering entity
under such other title in a timely manner so that
coverage is not delayed and families do not have to
submit the same information twice. Families shall be
provided the information they need to complete the
application process for coverage under both titles and
be given appropriate notice of any determinations made
on their applications for such coverage.
``(B) If a State does not use a joint application
under this title and such title, the State shall--
``(i) promptly inform a child's parent or
caretaker in writing and, if appropriate,
orally, that a child has been found likely to
be eligible under title XIX;
``(ii) provide the family with an
application for medical assistance under such
title and offer information about what (if any)
further information, documentation, or other
steps are needed to complete such application
process;
``(iii) offer assistance in completing such
application process; and
``(iv) promptly transmit the separate
application under this title or the information
obtained through such application, and all
other relevant information and documentation,
including the results of the screening process,
to the State agency under title XIX for a final
determination on eligibility under such title.
``(C) Applicants are notified in writing of--
``(i) benefits (including restrictions on
cost-sharing) under title XIX; and
``(ii) eligibility rules that prohibit
children who have been screened eligible for
medical assistance under such title from being
enrolled under this title, other than
provisional temporary enrollment while a final
eligibility determination is being made under
such title.
``(D) If the agency administering this title is
different from the agency administering a State plan
under title XIX, such agencies shall coordinate the
screening and enrollment of applicants for such
coverage under both titles.
``(E) The coordination procedures established
between the program under this title and under title
XIX shall apply not only to the initial eligibility
determination of a family but also to any renewals or
redeterminations of such eligibility.''.
(3) Effective date.--The amendments made by paragraphs (1)
and (2) apply to individuals who lose eligibility under the
medicaid program under title XIX, or under a State child health
insurance plan under title XXI, respectively, of the Social
Security Act on or after October 1, 2003 (or, if later, 60 days
after the date of the enactment of this Act), whether or not
regulations implementing such amendments have been issued.
(d) Provision of Medicaid and CHIP Applications and Information
Under the School Lunch Program.--Section 9(b)(2)(B) of the Richard B.
Russell National School Lunch Act (42 U.S.C. 1758(b)(2)(B)) is
amended--
(1) by striking ``(B) Applications'' and inserting ``(B)(i)
Applications''; and
(2) by adding at the end the following:
``(ii)(I) Applications for free and reduced price lunches that are
distributed pursuant to clause (i) to parents or guardians of children
in attendance at schools participating in the school lunch program
under this Act shall also contain information on the availability of
medical assistance under title XIX of the Social Security Act (42
U.S.C. 1396 et seq.) and of child health and FamilyCare assistance
under title XXI of such Act, including information on how to obtain an
application for assistance under such programs.
``(II) Information on the programs referred to in subclause (I)
shall be provided on a form separate from the application form for free
and reduced price lunches under clause (i).''.
(e) 12-Months Continuous Eligibility.--
(1) Medicaid.--Section 1902(e)(12) of the Social Security
Act (42 U.S.C. 1396a(e)(12)) is amended--
(A) by striking ``At the option of the State, the
plan may'' and inserting ``The plan shall'';
(B) by striking ``an age specified by the State
(not to exceed 19 years of age)'' and inserting ``19
years of age (or such higher age as the State has
elected under subsection (l)(1)(D)) or, at the option
of the State, who is eligible for medical assistance as
the parent of such a child''; and
(C) in subparagraph (A), by striking ``a period
(not to exceed 12 months) '' and inserting ``the 12-
month period beginning on the date''.
(2) Title xxi.--Section 2102(b)(2) of such Act (42 U.S.C.
1397bb(b)(2)) is amended by adding at the end the following:
``Such methods shall provide 12-months continuous eligibility
for children under this title in the same manner that section
1902(e)(12) provides 12-months continuous eligibility for
children described in such section under title XIX. If a State
has elected to apply section 1902(e)(12) to parents, such
methods may provide 12-months continuous eligibility for
parents under this title in the same manner that such section
provides 12-months continuous eligibility for parents described
in such section under title XIX.''.
(3) Effective date.--
(A) In general.--The amendments made by this
subsection shall take effect on October 1, 2003 (or, if
later, 60 days after the date of the enactment of this
Act), whether or not regulations implementing such
amendments have been issued.
SEC. 507. IMPROVING WELFARE-TO-WORK TRANSITION UNDER THE MEDICAID
PROGRAM.
(a) Option of Continuous Eligibility for 12 Months; Option of
Continuing Coverage for Up To an Additional Year.--
(1) Option of continuous eligibility for 12 months by
making reporting requirements optional.--Section 1925(b) (42
U.S.C. 1396r-6(b)) is amended--
(A) in paragraph (1), by inserting ``, at the
option of a State,'' after ``and which'';
(B) in paragraph (2)(A), by inserting ``Subject to
subparagraph (C):'' after ``(A) Notices.--'';
(C) in paragraph (2)(B), by inserting ``Subject to
subparagraph (C):'' after ``(B) Reporting
requirements.--'';
(D) by adding at the end the following new
subparagraph:
``(C) State option to waive notice and reporting
requirements.--A State may waive some or all of the
reporting requirements under clauses (i) and (ii) of
subparagraph (B). Insofar as it waives such a reporting
requirement, the State need not provide for a notice
under subparagraph (A) relating to such requirement.'';
and
(E) in paragraph (3)(A)(iii), by inserting ``the
State has not waived under paragraph (2)(C) the
reporting requirement with respect to such month under
paragraph (2)(B) and if'' after ``6-month period if''.
(2) State option to extend eligibility for low-income
individuals for up to 12 additional months.--Section 1925 (42
U.S.C. 1396r-6) is further amended--
(A) by redesignating subsections (c) through (f) as
subsections (d) through (g), respectively; and
(B) by inserting after subsection (b) the following
new subsection:
``(c) State Option of Up To 12 Months of Additional Eligibility.--
``(1) In general.--Notwithstanding any other provision of
this title, each State plan approved under this title may
provide, at the option of the State, that the State shall offer
to each family which received assistance during the entire 6-
month period under subsection (b) and which meets the
applicable requirement of paragraph (2), in the last month of
the period the option of extending coverage under this
subsection for the succeeding period not to exceed 12 months.
``(2) Income restriction.--The option under paragraph (1)
shall not be made available to a family for a succeeding period
unless the State determines that the family's average gross
monthly earnings (less such costs for such child care as is
necessary for the employment of the caretaker relative) as of
the end of the 6-month period under subsection (b) does not
exceed 185 percent of the 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.
``(3) Application of extension rules.--The provisions of
paragraphs (2), (3), (4), and (5) of subsection (b) shall apply
to the extension provided under this subsection in the same
manner as they apply to the extension provided under subsection
(b)(1), except that for purposes of this subsection--
``(A) any reference to a 6-month period under
subsection (b)(1) is deemed a reference to the
extension period provided under paragraph (1) and any
deadlines for any notices or reporting and the premium
payment periods shall be modified to correspond to the
appropriate calendar quarters of coverage provided
under this subsection; and
``(B) any reference to a provision of subsection
(a) or (b) is deemed a reference to the corresponding
provision of subsection (b) or of this subsection,
respectively.''.
(b) State Option To Waive Receipt of Medicaid for 3 of Previous 6
Months To Qualify for TMA.--Section 1925(a)(1) (42 U.S.C. 1396r-
6(a)(1)) is amended by adding at the end the following: ``A State may,
at its option, also apply the previous sentence in the case of a family
that was receiving such aid for fewer than 3 months, or that had
applied for and was eligible for such aid for fewer than 3 months,
during the 6 immediately preceding months described in such
sentence.''.
(c) Elimination of Sunset for TMA.--
(1) Subsection (g) of section 1925 of such Act (42 U.S.C.
1396r-6), as redesignated under subsection (a)(2)(A), is
repealed.
(2) Section 1902(e)(1) of such Act (42 U.S.C. 1396a(e)(1))
is amended by striking ``(A) Notwithstanding'' and all that
follows through ``During such period, for'' in subparagraph (B)
and inserting ``For''.
(d) CMS Report on Enrollment and Participation Rates Under TMA.--
Section 1925 (42 U.S.C. 1396r-6), as amended by subsections (a)(2)(A)
and (c), is amended by inserting after subsection (f) the following:
``(g) Additional Provisions.--
``(1) Collection and reporting of participation
information.--Each State shall--
``(A) collect and submit to the Secretary, in a
format specified by the Secretary, information on
average monthly enrollment and average monthly
participation rates for adults and children under this
section; and
``(B) make such information publicly available.
Such information shall be submitted under subparagraph (A) at
the same time and frequency in which other enrollment
information under this title is submitted to the Secretary.
Using such information, the Secretary shall submit to Congress
annual reports concerning such rates.''.
(e) Coordination of Work.--Section 1925(g) (42 U.S.C. 1396r-6(g)),
as added by subsection (d), is amended by adding at the end the
following new paragraph:
``(2) Coordination with administration for children and
families.--The Administrator of the Centers for Medicare &
Medicaid Services, in carrying out this section, shall work with the
Assistant Secretary for the Administration for Children and Families to
develop guidance or other technical assistance for States regarding
best practices in guaranteeing access to transitional medical
assistance under this section.''.
(f) Elimination of TMA Requirement for States That Extend Coverage
to Children and Parents Through 185 Percent of Poverty.--
(1) In general.--Section 1925 of the Social Security Act
(42 U.S.C. 1396r-6) is further amended by inserting after
subsection (g), as added by subsection (d), the following:
``(h) Provisions Optional for States That Extend Coverage to
Children and Parents Through 185 Percent of Poverty.--A State may meet
(but is not required to meet) the requirements of subsections (a) and
(b) if it provides for medical assistance under section 1931 to
families (including both children and caretaker relatives) the average
gross monthly earning of which (less such costs for such child care as
is necessary for the employment of a caretaker relative) is at or below
a level that is at least 185 percent of the 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.''.
(2) Conforming amendments.--Section 1925 of the Social
Security Act (42 U.S.C. 1396r-6) is further amended, in
subsections (a)(1) and (b)(1), by inserting ``, but subject to
subsection (h),'' after ``Notwithstanding any other provision
of this title,'' each place it appears.
(g) Requirement of Notice for All Families Losing TANF.--Subsection
(a)(2) of section 1925 of such Act (42 U.S.C. 1396r-6) is amended by
adding at the end the following flush sentences:
``Each State shall provide, to families whose aid under part A
or E of title IV has terminated but whose eligibility for
medical assistance under this title continues, written notice
of their ongoing eligibility for such medical assistance. If a
State makes a determination that any member of a family whose
aid under part A or E of title IV is being terminated is also
no longer eligible for medical assistance under this title, the
notice of such determination shall be supplemented by a 1-page
notification form describing the different ways in which
individuals and families may qualify for such medical
assistance and explaining that individuals and families do not
have to be receiving aid under part A or E of title IV in order
to qualify for such medical assistance. Such notice shall
further be supplemented by information on how to apply for
child health assistance under the State children's health
insurance program under title XXI and how to apply for medical
assistance under this title.''.
(h) Extending Use of Outstationed Workers To Accept Applications
for Transitional Medical Assistance.--Section 1902(a)(55) of the Social
Security Act (42 U.S.C. 1396a(a)(55)) is amended by inserting ``and
under section 1931'' after ``(a)(10)(A)(ii)(IX)''.
(i) Effective Dates.--
(1) In general.--Except as provided in this subsection, the
amendments made by this section shall apply to calendar
quarters beginning on or after October 1, 2003, without regard
to whether or not final regulations to carry out such
amendments have been promulgated by such date.
(2) Notice.--The amendment made by subsection (g) shall
take effect 6 months after the date of enactment of this Act.
(3) Delay permitted for state plan amendment.--In the case
of a State plan for medical assistance under title XIX of the
Social Security Act which the Secretary of Health and Human
Services determines requires State legislation (other than
legislation appropriating funds) in order for the plan to meet
the additional requirements imposed by the amendments made by
this section, the State plan shall not be regarded as failing
to comply with the requirements of such title solely on the
basis of its failure to meet these additional requirements
before the first day of the first calendar quarter beginning
after the close of the first regular session of the State
legislature that begins after the date of enactment of this
Act. For purposes of the previous sentence, in the case of a
State that has a 2-year legislative session, each year of such
session shall be deemed to be a separate regular session of the
State legislature.
SEC. 508. ELIMINATION OF 100 HOUR RULE AND OTHER AFDC-RELATED
ELIGIBILITY RESTRICTIONS.
(a) In General.--Section 1931(b)(1)(A)(ii) of the Social Security
Act (42 U.S.C. 1396u-1(b)(1)(A)(ii)) is amended by inserting ``other
than the requirement that the child be deprived of parental support or
care by reason of the death, continued absence from the home,
incapacity, or unemployment of a parent,'' after ``section 407(a),''.
(b) Conforming Amendment.--Section 1905(a) of the Social Security
Act (42 U.S.C. 1396d(a)) is amended, in the matter before paragraph
(1), in clause (ii), by striking ``if such child is (or would, if
needy, be) a dependent child under part A of title IV''.
(c) Effective Date.--The amendments made by this section apply to
eligibility determinations made on or after October 1, 2003, whether or
not regulations implementing such amendments have been issued.
SEC. 509. INCREASED FEDERAL REIMBURSEMENT FOR LANGUAGE SERVICES UNDER
THE MEDICAID PROGRAM AND TITLE XXI.
(a) Medicaid.--Section 1903(a)(3) of the Social Security Act (42
U.S.C. 1396b(a)(3)) is amended--
(1) in subparagraph (D), by striking ``plus'' at the end
and inserting ``and''; and
(2) by adding at the end the following:
``(E) 90 percent of the sums expended with respect
to costs incurred during such quarter as are
attributable to the provision of language services,
including oral interpretation, translations of written
materials, and other language services, for individuals
with limited English proficiency who apply for, or
receive, medical assistance under the State plan;
plus''.
(b) SCHIP.--Section 2105(a)(1) of the Social Security Act (42
U.S.C.1397ee(a)), as amended by section 515, is amended--
(1) in the matter preceding subparagraph (A), by inserting
``or, in the case of expenditures described in subparagraph
(D)(iv), 90 percent'' after ``enhanced FMAP''; and
(2) in subparagraph (D)--
(A) in clause (iii), by striking ``and'' at the
end;
(B) be redesignating clause (iv) as clause (v); and
(C) by inserting after clause (iii) the following:
``(iv) for expenditures attributable to the
provision of language services, including oral
interpretation, translations of written
materials, and other language services, for
individuals with limited English proficiency
who apply for, or receive, child health
assistance under the plan; and''.
(c) Effective Date.--The amendments made by this section take
effect on October 1, 2003.
SEC. 510. LIMITATIONS ON CONFLICTS OF INTEREST.
(a) Limitation on Conflicts of Interest in Marketing Activities.--
(1) Title xxi.--Section 2105(c) of the Social Security Act
(42 U.S.C. 300aa-5(c)) is amended by adding at the end the
following:
``(8) Limitation on expenditures for marketing
activities.--Amounts expended by a State for the use of an
administrative vendor in marketing health benefits coverage to
low-income children under this title shall not be considered,
for purposes of subsection (a)(2)(D), to be reasonable costs to
administer the plan unless the following conditions are met
with respect to the vendor:
``(A) The vendor is independent of any entity
offering the coverage in the same area of the State in
which the vendor is conducting marketing activities.
``(B) No person who is an owner, employee,
consultant, or has a contract with the vendor either
has any direct or indirect financial interest with such
an entity or has been excluded from participation in
the program under this title or title XVIII or XIX or
debarred by any Federal agency, or subject to a civil
money penalty under this Act.''.
(b) Prohibition of Affiliation With Debarred Individuals.--
(1) Medicaid.--Section 1903(i) of the Social Security Act
(42 U.S.C. 1396b(i))is amended--
(A) by striking the period at the end of paragraph
(20) and inserting ``; or''; and
(B) by inserting after paragraph (20) the
following:
``(21) with respect to any amounts expended for an entity
that receives payments under the plan unless--
``(A) no person with an ownership or control
interest (as defined in section 1124(a)(3)) in the
entity is a person that is debarred, suspended, or
otherwise excluded from participating in procurement or
non-procurement activities under the Federal
Acquisition Regulation; and
``(B) such entity has not entered into an
employment, consulting, or other agreement for the
provision of items or services that are material to
such entity's obligations under the plan with a person
described in subparagraph (A).''.
(2) Title xxi.--Section 2107(e)(1) of the Social Security
Act (42 U.S.C. 1397gg(e)(1)), as amended by sections 505(b) and
507(b)(3), is further amended--
(A) in subparagraph (B), by striking ``and (17)''
and inserting ``(17), and (21)''; and
(B) by adding at the end the following:
``(F) Section 1902(a)(67) (relating to prohibition
of affiliation with debarred individuals).''.
(c) Effective Date.--The amendments made by this section shall
apply to expenditures made on or after October 1, 2003, whether or not
regulations implementing such amendments have been issued.
SEC. 511. TITLE XXI FUNDING.
(a) In General.--Section 2104(a) of the Social Security Act (42
U.S.C. 1397dd(a)) is amended--
(1) in paragraphs (6) and (7), by striking
``$3,150,000,000'' each place it appears and inserting
``$4,275,000,000'';
(2) in paragraphs (8) and (9), by striking
``$4,050,000,000'' each place it appears and inserting
``$5,050,000,000'';
(3) in paragraph (9), by striking ``and'';
(4) in paragraph (10)--
(A) by striking ``$5,000,000,000'' and inserting
``$6,000,000,000''; and
(B) by striking the period and inserting a semi-
colon; and
(5) by adding at the end the following new paragraph:
``(11) for fiscal year 2008 and each fiscal year
thereafter, the amount of the allotment provided under this
subsection for the preceding fiscal year increased by the
percentage increase (if any) in the medical care expenditure
category of the Consumer Price Index for All Urban Consumers
(United States city average).''.
(b) Additional Allotment To Territories.--Section 2104(c)(4)(B) of
the Social Security Act (42 U.S.C. 1397dd(c)(4)(B)) is amended to read
as follows:
``(B) Appropriations.--For purposes of providing
allotments pursuant to subparagraph (A), there is
appropriated, out of any money in the Treasury not
otherwise appropriated, $32,000,000 for fiscal year
1999, $40,000,000 for each of fiscal years 2000 through
2004, $50,000,000 for each of fiscal years 2005, 2006
and 2007, and for fiscal year 2008 and each fiscal year
thereafter, the amount under this paragraph for the
preceding fiscal year increased by the percentage
increase (if any) in the medical care expenditure
category of the Consumer Price Index for All Urban Consumers (United
States city average).''.
(c) Effective Date.--This section, and the amendments made by this
section, shall be effective as if this section had been enacted on
September 30, 2002, and amounts under title XXI of the Social Security
Act (42 U.S.C. 1397aa et seq.) from allotments for fiscal years
beginning with fiscal year 2000 are available for expenditure on and
after October 1, 2002, under the amendments made by this section as if
this section had been enacted on September 30, 2002.
SEC. 512. CHANGES TO RULES FOR REDISTRIBUTION AND EXTENDED AVAILABILITY
OF TITLE XXI FISCAL YEAR 2000 AND SUBSEQUENT FISCAL YEAR
ALLOTMENTS.
(a) In General.--Section 2104(g) of the Social Security Act (42
U.S.C. 1397dd(g)) is amended--
(1) in the subsection heading--
(A) by striking ``and'' after ``1998'' and
inserting a comma; and
(B) by inserting ``, and 2000 and subsequent fiscal
year'' after ``1999'';
(2) in paragraph (1)--
(A) in subparagraph (A)--
(i) in the matter preceding clause (i)--
(I) by inserting ``or for fiscal
year 2000 by the end of fiscal year
2002, or allotments for fiscal year
2001 and subsequent fiscal years by the
end of the last fiscal year for which
such allotments are available under
subsection (e), subject to paragraph
(2)(C)'' after ``2001,''; and
(II) by striking ``1998 or 1999''
and inserting ``1998, 1999, 2000, or
subsequent fiscal year'';
(ii) in clause (i)--
(I) in subclause (I), by striking
``or'' at the end;
(II) in subclause (II), by striking
the period and inserting a semicolon;
and
(III) by adding at the end the
following:
``(III) the fiscal year 2000
allotment, the amount by which the
State's expenditures under this title
in fiscal years 2000, 2001, and 2002
exceed the State's allotment for fiscal
year 2000 under subsection (b);
``(IV) the fiscal year 2001
allotment, the amount by which the
State's expenditures under this title
in fiscal years 2001, 2002, and 2003
exceed the State's allotment for fiscal
year 2001 under subsection (b); or
``(V) the allotment for any
subsequent fiscal year, the amount by
which the State's expenditures under
this title in the period such allotment
is available under subsection (e)
exceeds the State's allotment for that
fiscal year under subsection (b).'';
and
(iii) in clause (ii), by striking ``1998 or
1999 allotment'' and inserting ``1998, 1999,
2000, or subsequent fiscal year allotment'';
(B) in subparagraph (B)--
(i) in the matter preceding clause (i), by
striking ``with respect to fiscal year 1998 or
1999'';
(ii) in clause (ii)--
(I) by inserting ``with respect to
fiscal year 1998 or 1999,'' after
``subsection (e)''; and
(II) by striking ``and'' at the
end;
(iii) by redesignating clause (iii) as
clause (iv); and
(iv) by inserting after clause (ii), the
following:
``(iii) notwithstanding subsection (e),
with respect to fiscal year 2000 or any
subsequent fiscal year, shall remain available
for expenditure by the State through the end of
the fiscal year in which the State is allotted
a redistribution under this paragraph; and'';
(3) in paragraph (2)--
(A) in the paragraph heading, by striking ``1998
and 1999'' and inserting ``1998, 1999, 2000, and
subsequent fiscal year'';
(B) in subparagraph (A), by adding at the end the
following:
``(iii) Fiscal year 2000 allotment.--Of the
amounts allotted to a State pursuant to this
section for fiscal year 2000 that were not
expended by the State by the end of fiscal year
2002, the amount specified in subparagraph (B)
for fiscal year 2000 for such State shall
remain available for expenditure by the State
through the end of fiscal year 2003.
``(iv) Fiscal year 2001 allotment.--Of the
amounts allotted to a State pursuant to this
section for fiscal year 2001 that were not
expended by the State by the end of fiscal year
2003, the amount specified in subparagraph (B)
for fiscal year 2001 for such State shall
remain available for expenditure by the State
through the end of 2004.
``(v) Subsequent fiscal year allotments.--
Of the amounts allotted to a State pursuant to
this section for any fiscal year after 2001,
that were not expended by the State by the end
of the last fiscal year such amounts are
available under subsection (e), the amount
specified in subparagraph (B) for that fiscal
year for such State shall remain available for
expenditure by the State through the end of the
fiscal year following the last fiscal year such
amounts are available under subsection (e).'';
(C) in subparagraph (B), by striking ``The'' and
inserting ``Subject to subparagraph (C), the'';
(D) by redesignating subparagraph (C) as
subparagraph (D); and
(E) by inserting after subparagraph (B), the
following:
``(C) Floor for fiscal years 2000 and 2001.--For
fiscal years 2000 and 2001, if the total amounts that
would otherwise be redistributed under paragraph (1)
exceed 60 percent of the total amount available for
redistribution under subsection (f) for the fiscal
year, the amount remaining available for expenditure by
the State under subparagraph (A) for such fiscal years
shall be--
``(i) the amount equal to--
``(I) 40 percent of the total
amount available for redistribution
under subsection (f) from the
allotments for the applicable fiscal
year; multiplied by
``(II) the ratio of the amount of
such State's unexpended allotment for
that fiscal year to the total amount
available for redistribution under
subsection (f) from the allotments for
the fiscal year.''; and
(4) in paragraph (3), by adding at the end the following:
``For purposes of calculating the amounts described in
paragraphs (1) and (2) relating to the allotment for any fiscal
year after 1999, the Secretary shall use the amount reported by
the States not later than November 30 of the applicable
calendar year on HCFA Form 64 or HCFA Form 21, as approved by
the Secretary.''.
(b) Establishment of Caseload Stabilization Pool and Additional
Redistribution of Allotments.--Section 2104 of the Social Security Act
(42 U.S.C. 1397dd) is amended by adding at the end the following:
``(h) Redistribution of Caseload Stabilization Pool Amounts.--
``(1) Additional redistribution to stabilize caseloads.--
``(A) In general.--With respect to fiscal year 2003
and any subsequent fiscal year, the Secretary shall
redistribute to an eligible State (as defined in
subparagraph (B)) the amount available for
redistribution to the State (as determined under
subparagraph (C)) from the caseload stabilization pool
established under paragraph (3).
``(B) Definition of eligible state.--For purposes
of subparagraph (A), an eligible State is a State whose
total expenditures under this title through the end of
the previous fiscal year exceed the total allotments
made available to the State under subsection (b) or
subsection (c) (not including amounts made available
under subsection (f)) through the previous fiscal year.
``(C) Amount of additional redistribution.--For
purposes of subparagraph (A), the amount available for
redistribution to a State under subparagraph (A) is
equal to--
``(i) the ratio of the State's allotment
for the previous fiscal year under subsection
(b) or subsection (c) to the total allotments
made available under such subsections to
eligible States as defined under subparagraph
(A) for the previous fiscal year; multiplied by
``(ii) the total amounts available in the
caseload stabilization pool established under
paragraph (3).
``(2) Period of availability.--Amounts redistributed under
this subsection shall remain available for expenditure by the
State through the end of the fiscal year in which the State
receives any such amounts.
``(3) Caseload stabilization pool.--For purposes of making
a redistribution under paragraph (1), the Secretary shall
establish a caseload stabilization pool that includes the
following amounts:
``(A) Any amount made available to a State under
subsection (g) but not expended within the periods
required under subparagraphs (g)(1)(B)(ii),
(g)(1)(B)(iii), or (g)(2)(A).
``(B) Any amount made available to a State under
this subsection but not expended within the period
required under paragraph (2).''.
(c) Authority for Qualifying States To Use Portion of SCHIP Funds
for Medicaid Expenditures.--Section 2105 of the Social Security Act (42
U.S.C. 1397ee) is amended by adding at the end the following:
``(g) Authority for Qualifying States To Use Certain Funds for
Medicaid Expenditures.--
``(1) State option.--
``(A) In general.--Notwithstanding any other
provision of law, with respect to fiscal year 2003 and
each fiscal year thereafter, a qualifying State (as
defined in paragraph (2)) may elect to use not more
than 20 percent of the amount allotted to the State
under subsection (b) or (c) of section 2104 for the
fiscal year (instead of for expenditures under this
title) for payments for such fiscal year under title
XIX in accordance with subparagraph (B).
``(B) Payments to states.--
``(i) In general.--In the case of a
qualifying State that has elected the option
described in subparagraph (A), subject to the
total amount of funds described with respect to
the State in subparagraph (A), the Secretary
shall pay the State an amount each quarter
equal to the additional amount that would have
been paid to the State under title XIX for
expenditures of the State for the fiscal year
described in clause (ii) if the enhanced FMAP
(as determined under subsection (b)) had been
substituted for the Federal medical assistance
percentage (as defined in section 1905(b)) of
such expenditures.
``(ii) Expenditures described.--For
purposes of clause (i), the expenditures
described in this clause are expenditures for
such fiscal years for providing medical
assistance under title XIX to individuals who
have not attained age 19 and whose family
income exceeds 150 percent of the poverty line.
``(2) Qualifying state.--In this subsection, the term
`qualifying State' means a State that--
``(A) as of March 31, 1997, has an income
eligibility standard with respect to any 1 or more
categories of children (other than infants) who are
eligible for medical assistance under section
1902(a)(10)(A) that is at least 185 percent of the
poverty line; and
``(B) satisfies the requirements described in
paragraph (3).
``(3) Requirements.--The requirements described in this
paragraph are the following:
``(A) SCHIP income eligibility.--The State has a
State child health plan that (whether implemented under
title XIX or this title)--
``(i) as of January 1, 2003, has an income
eligibility standard that is at least 200
percent of the poverty line;
``(ii) subject to subparagraph (B), does
not limit the acceptance of applications for
children; and
``(iii) provides benefits to all children
in the State who apply for and meet eligibility
standards on a statewide basis.
``(B) No waiting list imposed.--With respect to
children whose family income is at or below 200 percent
of the poverty line, the State does not impose any
numerical limitation, waiting list, or similar
limitation on the eligibility of such children for
child health assistance under such State plan.
``(C) Additional requirements.--The State has
implemented at least 4 of the following policies and
procedures (relating to coverage of children under
title XIX and this title):
``(i) Uniform, simplified application
form.--With respect to children who are
eligible for medical assistance under section
1902(a)(10)(A), the State uses the same
uniform, simplified application form
(including, if applicable, permitting
application other than in person) for purposes
of establishing eligibility for benefits under
title XIX and this title.
``(ii) Elimination of asset test.--The
State does not apply any asset test for
eligibility under section 1902(l) or this title
with respect to children.
``(iii) Adoption of 12-month continuous
enrollment.--The State provides that
eligibility shall not be regularly redetermined
more often than once every year under this
title or for children described in section
1902(a)(10)(A).
``(iv) Same verification and
redetermination policies; automatic
reassessment of eligibility.--With respect to
children who are eligible for medical
assistance under section 1902(a)(10)(A), the
State provides for initial eligibility
determinations and redeterminations of
eligibility using the same verification
policies (including with respect to face-to-
face interviews), forms, and frequency as the
State uses for such purposes under this title,
and, as part of such redeterminations, provides
for the automatic reassessment of the
eligibility of such children for assistance
under title XIX and this title.
``(v) Outstationing enrollment staff.--The
State provides for the receipt and initial
processing of applications for benefits under
this title and for children under title XIX at
facilities defined as disproportionate share
hospitals under section 1923(a)(1)(A) and
Federally-qualified health centers described in
section 1905(l)(2)(B) consistent with section
1902(a)(55).''.
(d) Effective Date.--This section, and the amendments made by this
section, shall be effective as if this section had been enacted on
September 30, 2002, and amounts under title XXI of the Social Security
Act (42 U.S.C. 1397aa et seq.) from allotments for fiscal years 1998
through 2000 are available for expenditure on and after October 1,
2002, under the amendments made by this section as if this section had
been enacted on September 30, 2002.
SEC. 513. DEMONSTRATION PROGRAMS TO IMPROVE MEDICAID AND TITLE XXI
OUTREACH TO HOMELESS INDIVIDUALS AND FAMILIES.
(a) Authority.--The Secretary of Health and Human Services may
award demonstration grants to not more than 7 States (or other
qualified entities) to conduct innovative programs that are designed to
improve outreach to homeless individuals and families under the
programs described in subsection (b) with respect to enrollment of such
individuals and families under such programs and the provision of
services (and coordinating the provision of such services) under such
programs.
(b) Programs for Homeless Described.--The programs described in
this subsection are as follows:
(1) Medicaid.--The program under title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.).
(2) CHIP.--The program under title XXI of the Social
Security Act (42 U.S.C. 1397aa et seq.).
(3) TANF.--The program under part of A of title IV of the
Social Security Act (42 U.S.C. 601 et seq.).
(4) SAMHSA block grants.--The program of grants under part
B of title XIX of the Public Health Service Act (42 U.S.C.
300x-1 et seq.).
(5) Food stamp program.--The program under the Food Stamp
Act of 1977 (7 U.S.C. 2011 et seq.).
(6) Workforce investment act.--The program under the
Workforce Investment Act of 1999 (29 U.S.C. 2801 et seq.).
(7) Welfare-to-work.--The welfare-to-work program under
section 403(a)(5) of the Social Security Act (42 U.S.C.
603(a)(5)).
(8) Other programs.--Other public and private benefit
programs that serve low-income individuals.
(c) Appropriations.--For the purposes of carrying out this section,
there is appropriated for fiscal year 2004, out of any funds in the
Treasury not otherwise appropriated, $10,000,000, to remain available
until expended.
SEC. 514. TECHNICAL AND CONFORMING AMENDMENTS TO AUTHORITY TO PAY
MEDICAID EXPANSION COSTS FROM TITLE XXI APPROPRIATION.
(a) Authority To Pay Medicaid Expansion Costs From Title XXI
Appropriation.--Section 2105(a) of the Social Security Act (42 U.S.C.
1397ee(a)) is amended to read as follows:
``(a) Allowable Expenditures.--
``(1) In general.--Subject to the succeeding provisions of
this section, the Secretary shall pay to each State with a plan
approved under this title, from its allotment under section
2104, an amount for each quarter equal to the enhanced FMAP of
the following expenditures in the quarter:
``(A) Child health assistance under medicaid.--
Expenditures for child health assistance under the plan
for targeted low-income children in the form of
providing medical assistance for expenditures described
in the fourth sentence of section 1905(b).
``(B) Reserved.--[reserved].
``(C) Child health assistance under this title.--
Expenditures for child health assistance under the plan
for targeted low-income children in the form of
providing health benefits coverage that meets the
requirements of section 2103.
``(D) Assistance and administrative expenditures
subject to limit.--Expenditures only to the extent
permitted consistent with subsection (c)--
``(i) for other child health assistance for
targeted low-income children;
``(ii) for expenditures for health services
initiatives under the plan for improving the
health of children (including targeted low-
income children and other low-income children);
``(iii) for expenditures for outreach
activities as provided in section 2102(c)(1)
under the plan; and
``(iv) for other reasonable costs incurred
by the State to administer the plan.
``(2) Order of payments.--Payments under a subparagraph of
paragraph (1) from a State's allotment for expenditures
described in each such subparagraph shall be made on a
quarterly basis in the order of such subparagraph in such
paragraph.
``(3) No duplicative payment.--In the case of expenditures
for which payment is made under paragraph (1), no payment shall
be made under title XIX.''.
(b) Conforming Amendments.--
(1) Section 1905(u).--Section 1905(u)(1)(B) of the Social
Security Act (42 U.S.C. 1396d(u)(1)(B)) is amended by inserting
``and section 2105(a)(1)'' after ``subsection (b)''.
(2) Section 2105(c).--Section 2105(c)(2)(A) of the Social
Security Act (42 U.S.C. 1397ee(c)(2)(A)) is amended by striking
``subparagraphs (A), (C), and (D) of''.
(c) Effective Date.--The amendments made by this section shall be
effective as if included in the enactment of the Balanced Budget Act of
1997 (Public Law 105-33; 111 Stat. 251), whether or not regulations
implementing such amendments have been issued.
SEC. 515. ADDITIONAL TITLE XXI REVISIONS.
(a) Limiting Cost-Sharing to 2.5 Percent for Families With Income
Below 150 Percent of Poverty.--Section 2103(e)(3)(A) of the Social
Security Act (42 U.S.C. 1397cc(e)(3)(A)) is amended--
(1) by striking ``and'' at the end of clause (i);
(2) by striking the period at the end of clause (ii) and
inserting ``; and''; and
(3) by adding at the end the following new clause:
``(iii) total annual aggregate cost-sharing
described in clauses (i) and (ii) with respect
to all such targeted low-income children in a
family under this title that exceeds 2.5
percent of such family's income for the year
involved.''.
(b) Reporting of Enrollment Data.--
(1) Quarterly reports.--Section 2107(b)(1) of such Act (42
U.S.C. 1397gg(b)(1)) is amended by adding at the end the
following: ``In quarterly reports on enrollment required under
this paragraph, a State shall include information on the age,
gender, race, ethnicity, service delivery system, and family
income of individuals enrolled.''.
(2) Annual reports.--Section 2108(b)(1)(B)(i) of such Act
(42 U.S.C. 1397hh(b)(1)(B)(i)) is amended by inserting
``primary language of enrollees,'' after ``family income,''.
(c) Employer Coverage Waiver Changes.--Section 2105(c)(3) of such
Act (42 U.S.C. 1397ee(c)(3)) is amended--
(1) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii) and indenting appropriately;
(2) by designating the matter beginning with ``Payment may
be made'' as a subparagraph (A) with the heading ``In general''
and indenting appropriately; and
(3) by adding at the end the following new subparagraphs:
``(B) Application of requirements.--In carrying out
subparagraph (A)--
``(i) the Secretary shall not require a
minimum employer contribution level that is
separate from the requirement of cost-
effectiveness under subparagraph (A)(i), but a
State shall identify a reasonable minimum
employer contribution level that is based on
data demonstrating that such a level is
representative to the employer-sponsored
insurance market in the State and shall monitor
employer contribution levels over time to
determine whether substitution is occurring and
report the findings in annual reports under
section 2108(a);
``(ii) the State shall establish a waiting
period of at least 6 months without group
health coverage, but may establish reasonable
exceptions to such period and shall not apply
such a waiting period to a child who is
provided coverage under a group health plan
under section 1906;
``(iii) subject to clause (iv), the State
shall provide satisfactory assurances that the
minimum benefits and cost-sharing protections
established under this title are provided,
either through the coverage under subparagraph
(A) or as a supplement to such coverage; and
``(iv) coverage under such subparagraph
shall not be considered to violate clause (iii)
because it does not comply with requirements
relating to reviews of health service decisions
if the enrollee involved is provided the option
of being provided benefits directly under this
title.
``(C) Access to external review process.--In
carrying out subparagraph (A), if a State provides
coverage under a group health plan that does not meet
the following external review requirements, the State
must give applicants and enrollees (at initial
enrollment and at each redetermination of eligibility)
the option to obtain health benefits coverage other
than through that group health plan:
``(i) The enrollee has an opportunity for
external review of a--
``(I) delay, denial, reduction,
suspension, or termination of health
services, in whole or in part,
including a determination about the
type or level of services; and
``(II) failure to approve, furnish,
or provide payment for health services
in a timely manner.
``(ii) The external review is conducted by
the State or a impartial contractor other than
the contractor responsible for the matter
subject to external review.
``(iii) The external review decision is
made on a timely basis in accordance with the
medical needs of the patient. If the medical
needs of the patient do not dictate a shorter
time frame, the review must be completed--
``(I) within 90 calendar days of
the date of the request for internal or
external review; or
``(II) within 72 hours if the
enrollee's physician or plan determines
that the deadline under subclause (I)
could seriously jeopardize the
enrollee's life or health or ability to
attain, maintain, or regain maximum
function (except that a State may
extend the 72-hour deadline by up to 14
days if the enrollee requests an
extension).
``(iv) The external review decision shall
be in writing.
``(v) Applicants and enrollees have an
opportunity--
``(I) to represent themselves or
have representatives of their choosing
in the review process;
``(II) timely review their files
and other applicable information
relevant to the review of the decision;
and
``(III) fully participate in the
review process, whether the review is
conducted in person or in writing,
including by presenting supplemental
information during the review
process.''.
(d) Effective Date.--The amendments made by this section apply as
of October 1, 2003, whether or not regulations implementing such
amendments have been issued.
TITLE VI--FAMILY OPPORTUNITY
SEC. 601. OPPORTUNITY FOR FAMILIES OF DISABLED CHILDREN TO PURCHASE
MEDICAID COVERAGE FOR SUCH CHILDREN
(a) State Option To Allow Families of Disabled Children To Purchase
Medicaid Coverage for Such Children.--
(1) In general.--Section 1902 of the Social Security Act
(42 U.S.C. 1396a), as amended by section 502(a)(1)(A), is
amended--
(A) in subsection (a)(10)(A)(ii)--
(i) by striking ``or'' at the end of
subclause (XVIII);
(ii) by adding ``or'' at the end of
subclause (XIX); and
(iii) by adding at the end the following
new subclause:
``(XX) who are disabled children
described in subsection (cc)(1);''; and
(B) by adding at the end the following new
subsection:
``(cc)(1) Individuals described in this paragraph are individuals--
``(A) who have not attained 18 years of age;
``(B) who would be considered disabled under section
1614(a)(3)(C) but for having earnings or deemed income or
resources (as determined under title XVI for children) that
exceed the requirements for receipt of supplemental security
income benefits; and
``(C) whose family income does not exceed such income level
as the State establishes and does not exceed--
``(i) 250 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; or
``(ii) such higher percent of such poverty line as
a State may establish, except that--
``(I) any medical assistance provided to an
individual whose family income exceeds 250
percent of such poverty line may only be
provided with State funds; and
``(II) no Federal financial participation
shall be provided under section 1903(a) for any
medical assistance provided to such an
individual.''.
(2) Interaction with employer-sponsored family coverage.--
Section 1902(cc) of Social Security Act (42 U.S.C. 1396a(cc)),
as added by paragraph (1)(B), is amended by adding at the end
the following new paragraph:
``(2)(A) If an employer of a parent of an individual described in
paragraph (1) offers family coverage under a group health plan (as
defined in section 2791(a) of the Public Health Service Act), the State
shall--
``(i) require such parent to apply for, enroll in, and pay
premiums for, such coverage as a condition of such parent's
child being or remaining eligible for medical assistance under
subsection (a)(10)(A)(ii)(XIX) if the parent is determined
eligible for such coverage and the employer contributes at
least 50 percent of the total cost of annual premiums for such
coverage; and
``(ii) if such coverage is obtained--
``(I) subject to paragraph (2) of section 1916(h),
reduce the premium imposed by the State under that
section in an amount that reasonably reflects the
premium contribution made by the parent for private
coverage on behalf of a child with a disability; and
``(II) treat such coverage as a third party
liability under subsection (a)(25).
``(B) In the case of a parent to which subparagraph (A) applies, a
State, subject to paragraph (1)(C)(ii), may provide for payment of any
portion of the annual premium for such family coverage that the parent
is required to pay. Any payments made by the State under this
subparagraph shall be considered, for purposes of section 1903(a), to
be payments for medical assistance.''.
(b) State Option To Impose Income-Related Premiums.--Section 1916
of the Social Security Act (42 U.S.C. 1396o) is amended--
(1) in subsection (a), by striking ``subsection (g)'' and
inserting ``subsections (g) and (h)''; and
(2) by adding at the end the following new subsection:
``(h)(1) With respect to disabled children provided medical
assistance under section 1902(a)(10)(A)(ii)(XX), subject to paragraph
(2), a State may (in a uniform manner for such children) require the
families of such children to pay monthly premiums set on a sliding
scale based on family income.
``(2) A premium requirement imposed under paragraph (1) may only
apply to the extent that--
``(A) the aggregate amount of such premium and any premium
that the parent is required to pay for family coverage under
section 1902(cc)(2)(A)(i) does not exceed 5 percent of the
family's income; and
``(B) the requirement is imposed consistent with section
1902(cc)(2)(A)(ii)(I).
``(3) A State shall not require prepayment of a premium imposed
pursuant to paragraph (1) and shall not terminate eligibility of a
child under section 1902(a)(10)(A)(ii)(XX) for medical assistance under
this title on the basis of failure to pay any such premium until such
failure continues for a period of not less than 60 days from the date
on which the premium became past due. The State may waive payment of
any such premium in any case where the State determines that requiring
such payment would create an undue hardship.''.
(c) Conforming Amendments.--Section 1903(f)(4) of the Social
Security Act (42 U.S.C. 1396b(f)(4)), as amended by section 502(c)(2)
is amended in the matter preceding subparagraph (A), by inserting
``1902(a)(10)(A)(ii)(XX),'' after ``1902(a)(10)(A)(ii)(XIX),''.
(d) Effective Date.--The amendments made by this section shall
apply to medical assistance for items and services furnished on or
after October 1, 2004.
SEC. 602. TREATMENT OF INPATIENT PSYCHIATRIC HOSPITAL SERVICES FOR
INDIVIDUALS UNDER AGE 21 IN HOME OR COMMUNITY-BASED
SERVICES WAIVERS.
(a) In General.--Section 1915(c) of the Social Security Act (42
U.S.C. 1396n(c)) is amended--
(1) in paragraph (1)--
(A) in the first sentence, by inserting ``, or
would require inpatient psychiatric hospital services
for individuals under age 21,'' after ``intermediate
care facility for the mentally retarded''; and
(B) in the second sentence, by inserting ``, or
would require inpatient psychiatric hospital services
for individuals under age 21'' before the period;
(2) in paragraph (2)(B), by striking ``or services in an
intermediate care facility for the mentally retarded'' each
place it appears and inserting ``services in an intermediate
care facility for the mentally retarded, or inpatient
psychiatric hospital services for individuals under age 21'';
(3) in paragraph (2)(C)--
(A) by inserting ``, or who are determined to be
likely to require inpatient psychiatric hospital
services for individuals under age 21,'' after ``, or
intermediate care facility for the mentally retarded'';
and
(B) by striking ``or services in an intermediate
care facility for the mentally retarded'' and inserting
``services in an intermediate care facility for the
mentally retarded, or inpatient psychiatric hospital
services for individuals under age 21''; and
(4) in paragraph (7)(A)--
(A) by inserting ``or would require inpatient
psychiatric hospital services for individuals under age
21,'' after ``intermediate care facility for the
mentally retarded,''; and
(B) by inserting ``or who would require inpatient
psychiatric hospital services for individuals under age
21'' before the period.
(b) Effective Date.--The amendments made by subsection (a) apply
with respect to medical assistance provided on or after January 1,
2004.
SEC. 603. DEVELOPMENT AND SUPPORT OF FAMILY-TO-FAMILY HEALTH
INFORMATION CENTERS.
Section 501 of the Social Security Act (42 U.S.C. 701) is amended
by adding at the end the following new subsection:
``(c)(1)(A) For the purpose of enabling the Secretary (through
grants, contracts, or otherwise) to provide for special projects of
regional and national significance for the development and support of
family-to-family health information centers described in paragraph
(2)--
``(i) there is appropriated to the Secretary, out of any
money in the Treasury not otherwise appropriated--
``(I) $3,000,000 for fiscal year 2003;
``(II) $4,000,000 for fiscal year 2004; and
``(III) $5,000,000 for fiscal year 2005; and
``(ii) there is authorized to be appropriated to the
Secretary, $5,000,000 for each of fiscal years 2006 and 2007.
``(B) Funds appropriated or authorized to be appropriated under
subparagraph (A) shall--
``(i) be in addition to amounts appropriated under
subsection (a) and retained under section 502(a)(1) for the
purpose of carrying out activities described in subsection
(a)(2); and
``(ii) remain available until expended.
``(2) The family-to-family health information centers described in
this paragraph are centers that--
``(A) assist families of children with disabilities or
special health care needs to make informed choices about health
care in order to promote good treatment decisions, cost-
effectiveness, and improved health outcomes for such children;
``(B) provide information regarding the health care needs
of, and resources available for, children with disabilities or
special health care needs;
``(C) identify successful health delivery models for such
children;
``(D) develop with representatives of health care
providers, managed care organizations, health care purchasers,
and appropriate State agencies a model for collaboration
between families of such children and health professionals;
``(E) provide training and guidance regarding caring for
such children;
``(F) conduct outreach activities to the families of such
children, health professionals, schools, and other appropriate
entities and individuals; and
``(G) are staffed by families of children with disabilities
or special health care needs who have expertise in Federal and
State public and private health care systems and health
professionals.
``(3) The Secretary shall develop family-to-family health
information centers described in paragraph (2) under this subsection in
accordance with the following:
``(A) With respect to fiscal year 2003, such centers shall
be developed in not less than 25 States.
``(B) With respect to fiscal year 2004, such centers shall
be developed in not less than 40 States.
``(C) With respect to fiscal year 2005, such centers shall
be developed in not less than 50 States and the District of
Columbia.
``(4) The provisions of this title that are applicable to the funds
made available to the Secretary under section 502(a)(1) apply in the
same manner to funds made available to the Secretary under paragraph
(1)(A).
``(5) For purposes of this subsection, the term `State' means each
of the 50 States and the District of Columbia.''.
SEC. 604. RESTORATION OF MEDICAID ELIGIBILITY FOR CERTAIN SSI
BENEFICIARIES.
(a) In General.--Section 1902(a)(10)(A)(i)(II) of the Social
Security Act (42 U.S.C. 1396a(a)(10)(A)(i)(II)) is amended--
(1) by inserting ``(aa)'' after ``(II)'';
(2) by striking ``) and'' and inserting ``and'';
(3) by striking ``section or who are'' and inserting
``section), (bb) who are''; and
(4) by inserting before the comma at the end the following:
``, or (cc) who are under 21 years of age and with respect to
whom supplemental security income benefits would be paid under
title XVI if subparagraphs (A) and (B) of section 1611(c)(7)
were applied without regard to the phrase `the first day of the
month following'''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to medical assistance for items and services furnished on or
after the first day of the first calendar quarter that begins after the
date of enactment of this Act.
TITLE VII--TEMPORARY STATE FISCAL RELIEF
SEC. 701. TEMPORARY STATE FISCAL RELIEF.
(a) Permitting Maintenance of Fiscal Year 2002 FMAP for Last 2
Calendar Quarters of Fiscal Year 2003.--Notwithstanding any other
provision of law, but subject to subsection (e), if the FMAP determined
without regard to this section for a State for fiscal year 2003 is less
than the FMAP as so determined for fiscal year 2002, the FMAP for the
State for fiscal year 2002 shall be substituted for the State's FMAP
for the third and fourth calendar quarters of fiscal year 2003, before
the application of this section.
(b) Permitting Maintenance of Fiscal Year 2003 FMAP for Fiscal Year
2004.--Notwithstanding any other provision of law, but subject to
subsection (e), if the FMAP determined without regard to this section
for a State for fiscal year 2004 is less than the FMAP as so determined
for fiscal year 2003, the FMAP for the State for fiscal year 2003 shall
be substituted for the State's FMAP for each calendar quarter of fiscal
year 2004, before the application of this section.
(c) General 2.38 Percentage Points Increase for Last 2 Calendar
Quarters of Fiscal Year 2003 and Fiscal Year 2004.--Notwithstanding any
other provision of law, but subject to subsections (e) and (f), for
each State for the third and fourth calendar quarters of fiscal year
2003 and each calendar quarter of fiscal year 2004, the FMAP (taking
into account the application of subsections (a) and (b)) shall be
increased by 2.38 percentage points.
(d) Increase in Cap on Medicaid Payments To Territories.--
Notwithstanding any other provision of law, but subject to subsection
(f), with respect to the third and fourth calendar quarters of fiscal
year 2003 and each calendar quarter of fiscal year 2004, the amounts
otherwise determined for Puerto Rico, the Virgin Islands, Guam, the
Northern Mariana Islands, and American Samoa under subsections (f) and
(g) of section 1108 of the Social Security Act (42 U.S.C. 1308) shall
each be increased by an amount equal to 4.76 percent of such amounts.
(e) Scope of Application.--The increases in the FMAP for a State
under this section shall apply only for purposes of title XIX of the
Social Security Act and shall not apply with respect to--
(1) disproportionate share hospital payments described in
section 1923 of such Act (42 U.S.C. 1396r-4); or
(2) payments under title IV or XXI of such Act (42 U.S.C.
601 et seq. and 1397aa et seq.).
(f) State Eligibility.--
(1) In general.--Subject to paragraph (2), a State is
eligible for an increase in its FMAP under subsection (c) or an
increase in a cap amount under subsection (d) only if the eligibility
under its State plan under title XIX of the Social Security Act
(including any waiver under such title or under section 1115 of such
Act (42 U.S.C. 1315)) is no more restrictive than the eligibility under
such plan (or waiver) as in effect on January 1, 2003.
(2) State reinstatement of eligibility permitted.--A State
that has restricted eligibility under its State plan under
title XIX of the Social Security Act (including any waiver
under such title or under section 1115 of such Act (42 U.S.C.
1315)) after January 1, 2003, but prior to the date of
enactment of this Act is eligible for an increase in its FMAP
under subsection (c) or an increase in a cap amount under
subsection (d) in the first calendar quarter (and subsequent
calendar quarters) in which the State has reinstated
eligibility that is no more restrictive than the eligibility
under such plan (or waiver) as in effect on January 1, 2003.
(3) Rule of construction.--Nothing in paragraph (1) or (2)
shall be construed as affecting a State's flexibility with
respect to benefits offered under the State medicaid program
under title XIX of the Social Security Act (42 U.S.C. 1396 et
seq.) (including any waiver under such title or under section
1115 of such Act (42 U.S.C. 1315)).
(g) Definitions.--In this section:
(1) FMAP.--The term ``FMAP'' means the Federal medical
assistance percentage, as defined in section 1905(b) of the
Social Security Act (42 U.S.C. 1396d(b)).
(2) State.--The term ``State'' has the meaning given such
term for purposes of title XIX of the Social Security Act (42
U.S.C. 1396 et seq.).
(h) Repeal.--Effective as of October 1, 2004, this subsection is
repealed.
TITLE VIII--IMPROVEMENT OF THE PROCESS FOR THE DEVELOPMENT AND
IMPLEMENTATION OF MEDICAID AND SCHIP WAIVERS
SEC. 801. IMPROVEMENT OF THE PROCESS FOR THE DEVELOPMENT AND
IMPLEMENTATION OF MEDICAID AND SCHIP WAIVERS.
(a) In General.--Section 1115 of the Social Security Act (42 U.S.C.
1315) is amended by inserting after subsection (c) the following:
``(d) In the case of any experimental, pilot, or demonstration
project undertaken under subsection (a) to assist in promoting the
objectives of title XIX or XXI in a State that would result in a
nontrivial impact on eligibility, enrollment, benefits, cost-sharing,
or financing with respect to a State program under title XIX or XXI (in
this subsection referred to as a `medicaid waiver' and a `SCHIP
waiver', respectively,) the following shall apply:
``(1) The Secretary may not approve a proposal for a
medicaid waiver, SCHIP waiver, or an amendment to a previously
approved medicaid waiver or SCHIP waiver unless the State
requesting approval certifies that the following process was
used to develop the proposal:
``(A) Prior to publication of the notice required
under subparagraph (B), the State--
``(i) provided notice (which may have been
accomplished by electronic mail) of the State's
intent to develop the proposal to the medical
care advisory committee established for the
State for purposes of complying with section
1902(a)(4) and any individual or organization
that requests such notice; and
``(ii) convened at least 1 meeting of such
medical care advisory committee at which the
proposal and any modifications of the proposal
were considered and discussed.
``(B) At least 60 days prior to the date that the
State submits the proposal to the Secretary, the State
published for written comment (in accordance with the
State's procedure for issuing regulations) a notice of
the proposal that contains at least the following:
``(i) Information regarding how the public
may submit comments to the State on the
proposal.
``(ii) A statement of the State's
projections regarding the likely effect and
impact of the proposal on any individuals who
are eligible for, or receiving, medical
assistance, child health assistance, or other
health benefits coverage under a State program
under title XIX or XXI and the State's
assumptions on which such projections are
based.
``(iii) A statement of the State's
projections regarding the likely effect and
impact of the proposal on any providers or
suppliers of items or services for which
payment may be made under title XIX or XXI and
the State's assumptions on which such
projections are based.
``(C) Concurrent with the publication of the notice
required under subparagraph (B), the State--
``(i) posted the proposal (and any
modifications of the proposal) on the State's
Internet website; and
``(ii) provided the notice (which may have
been accomplished by electronic mail) to the
medical care advisory committee referred to in
subparagraph (A)(i) and to any individual or
organization that requested such notice.
``(D) Not later than 30 days after publication of
the notice required under subparagraph (B), the State
convened at least 1 open meeting of the medical care
advisory committee referred to in subparagraph (A)(i),
at which the proposal and any modifications of the
proposal were the primary items considered and
discussed.
``(E) After publication of the notice required
under subparagraph (B), the State--
``(i) held at least 2 public hearings on
the proposal and any modifications of the
proposal; and
``(ii) held the last such public hearing at
least 15 days before the State submitted the
proposal to the Secretary.
``(F) The State has a record of all public comments
submitted in response to the notice required under
subparagraph (B) or at any hearings or meetings
required under this paragraph regarding the proposal.
``(2) A State shall include with any proposal submitted to
the Secretary for a medicaid waiver, SCHIP waiver, or an
amendment to a previously approved medicaid waiver or SCHIP
waiver the following:
``(A) A detailed description of the public notice
and input process used to develop the proposal in
accordance with the requirements of paragraph (1).
``(B) Copies of all notices required under
paragraph (1).
``(C) The dates of all meetings and hearings
required under paragraph (1).
``(D) A summary of the public comments received in
response to the notices required under paragraph (1) or
at any hearings or meetings required under that
paragraph regarding the proposal and the State's
response to the comments.
``(E) A certification that the State complied with
any applicable notification requirements with respect
to Indian tribes during the development of the proposal
in accordance with paragraph (1).
``(3) The Secretary shall return to a State without action
any proposal for a medicaid waiver, SCHIP waiver, or an
amendment to a previously approved medicaid waiver or SCHIP
waiver that fails to satisfy the requirements of paragraphs (1)
and (2).
``(4) With respect to all proposals for medicaid waivers,
SCHIP waivers, or amendments to a previously approved medicaid
waiver or SCHIP waiver received by the Secretary the following
shall apply:
``(A) Each month the Secretary shall publish a
notice in the Federal Register identifying all of the
proposals for such waivers or amendments that were
received by the Secretary during the preceding month.
``(B) The notice required under subparagraph (A)
shall provide information regarding the method by which
comments on the proposals will be received from the
public.
``(C) Not later than 7 days after receipt of a
proposal for a medicaid waiver, SCHIP waiver, or an
amendment to a previously approved medicaid waiver or
SCHIP waiver, the Secretary shall--
``(i) provide notice (which may be
accomplished by electronic mail) to any
individual or organization that has requested
such notification;
``(ii) publish on the Internet website of
the Centers for Medicare & Medicaid Services a
copy of the proposal, including any appendices
or modifications of the proposal; and
``(iii) ensure that the information posted
on the website is updated to accurately reflect
the proposal.
``(D) The Secretary shall provide for a period of
not less than 30 days from the later of the date of
publication of the notice required under subparagraph
(A) that first identifies receipt of the proposal or
the date on which an Internet website containing the
information required under subparagraph (C)(ii) with
respect to the proposal is first published, in which
written comments on the proposal may be submitted from
all interested parties.
``(E) After the completion of the public comment
period required under subparagraph (D), if the
Secretary intends to approve the proposal, as
originally submitted or revised, the Secretary shall--
``(i) publish and post on the Internet
website for the Centers for Medicare & Medicaid
Services the proposed terms and conditions for
such approval and updated versions of the
statements required to be published by the
State under clauses (ii) and (iii) of paragraph
(1)(B);
``(ii) provide at least a 15-day period for
the submission of written comments on such
proposed terms and conditions and such
statements; and
``(iii) retain, and make available upon
request, all comments received concerning the
proposal, the terms and conditions for approval
of the proposal, or such statements.
``(F) In no event may the Secretary approve or deny
a proposal for a medicaid waiver, SCHIP waiver, or an
amendment to a previously approved medicaid waiver or
SCHIP waiver until the Secretary--
``(i) reviews and considers all comments
submitted in response to the notices required
under this paragraph; and
``(ii) considers the nature and impact of
the proposal; and
``(iii) determines that the proposal--
``(I) is based on a reasonable
hypothesis which the proposal is
designed to test in a methodologically
sound manner; and
``(II) will be evaluated on a
yearly basis utilizing a sound
methodology to determine whether the
proposal has resulted in a change in
access to health care or in health
outcomes for any beneficiaries of
medical assistance, child health
assistance, or other health benefits
coverage whose assistance or coverage
would be altered as a result of the
proposal.
``(G) Not later than 3 days after the approval of
any proposal for a medicaid waiver, SCHIP waiver, or
amendment to a previously approved medicaid waiver or
SCHIP waiver, the Secretary shall post on the Internet
website for the Centers for Medicare & Medicaid
Services the following:
``(i) The text of the approved medicaid
waiver, SCHIP waiver, or amendment to a
previously approved medicaid waiver or SCHIP
waiver.
``(ii) A list identifying each provision of
title XIX or XXI, and each regulation relating
to either such title, for which compliance is
waived under the approved waiver or amendment
or for which costs that would otherwise not be
permitted under the provision will be allowed.
``(iii) The terms and conditions for
approval of the waiver or amendment.
``(v) The approval letter.
``(vi) The protocol for the waiver or
amendment.
``(vii) The evaluation design for the
waiver or amendment.
``(viii) The results of the evaluation of
the waiver or amendment.
Any item required to be posted under this subparagraph
that is not available within 3 days of the approval of
the waiver or amendment shall be posted as soon as the
item becomes available.
``(H) Each month the Secretary shall publish a
notice in the Federal Register that identifies any
proposals for medicaid waivers, SCHIP waivers, or
amendments to a previously approved medicaid waiver or
SCHIP waiver that were approved, denied, or returned to
the State without action during the preceding month.
``(5) Any provision under title XIX or XXI, or under any
regulation in effect that relates to either such title, that is
not explicitly waived by the Secretary when the medicaid
waiver, SCHIP waiver, or amendment is approved and identified
in the list required under paragraph (4)(G)(ii), is not waived
and a State shall continue to comply with any such
requirement.''.
(b) Clarification of Limitations of Waiver Authority.--
(1) Section 1115 waivers.--Paragraphs (1) and (2) of
section 1115(a) of such Act (42 U.S.C. 1315(a)) are each
amended by inserting ``and only to the extent that waiving such
requirements is likely to assist in promoting the objectives of
the title in which such section is located,'' after ``as the
case may be,''.
(2) EPSDT.--Section 1902(e) of the Social Security Act (42
U.S.C. 1396a(e)) is amended by adding at the end the following:
``(13) Notwithstanding section 1115(a), with respect to any waiver,
experimental, pilot, or demonstration project that involves the use of
funds made available under this title, or an amendment to such a
project that has been approved as of the date of enactment of this
paragraph, the Secretary may not waive compliance with the requirements
of subsection (a)(43) (relating to early and periodic screening,
diagnostic, and treatment services as described in section 1905(r)).''.
(3) Use of schip funds.--
(A) In general.--Section 2107 of the Social
Security Act (42 U.S.C. 1397gg) is amended by adding at
the end the following:
``(f) Limitation of Waiver Authority.--Notwithstanding subsection
(e)(2)(A) and section 1115(a), the Secretary may not approve a waiver,
experimental, pilot, or demonstration project, or an amendment to such
a project that has been approved as of the date of enactment of this
subsection, that would allow funds made available under this title to
be used to provide child health assistance or other health benefits
coverage to childless adults. For purposes of the preceding sentence, a
caretaker relative (as such term is defined for purposes of carrying
out section 1931) shall not be considered a childless adult.''.
(B) Conforming Amendment.--Section 2105(c)(1) of
the Social Security Act (42 U.S.C. 1397ee(c)(1)) is
amended by inserting before the period the following:
``and may not include coverage of childless adults. For
purposes of the preceding sentence, a caretaker
relative (as such term is defined for purposes of
carrying out section 1931) shall not be considered a
childless adult.''.
(c) Rule of Construction.--Nothing in this section or the
amendments made by this section shall be construed to--
(1) authorize the waiver of any provision of title XIX or
XXI of the Social Security Act (42 U.S.C. 1396 et seq., 1397aa
et seq.) that is not otherwise authorized to be waived under
such titles or under title XI of such Act (42 U.S.C. 1301 et
seq.) as of the date of enactment of this Act; or
(2) imply congressional approval of any waiver,
experimental, pilot, or demonstration project affecting the
medicaid program under title XIX of the Social Security Act or
the State children's health insurance program under title XXI
of such Act that has been approved as of such date of
enactment.
(d) Effective Date.--This section and the amendments made by this
section take effect on the date of enactment of this Act and apply to
proposals to conduct a waiver, experimental, pilot, or demonstration
project affecting the medicaid program under title XIX of the Social
Security Act or the State children's health insurance program under
title XXI of such Act, and to any proposals to amend such projects,
that are approved or extended on or after such date of enactment.
TITLE IX--INDIAN HEALTH CARE FUNDING
SEC. 901. GUARANTEED ADEQUATE FUNDING FOR INDIAN HEALTH CARE.
Section 825 of the Indian Health Care Improvement Act (25 U.S.C.
1680o) is amended to read as follows:
``SEC. 825. FUNDING.
``(a) In General.--Notwithstanding any other provision of law, not
later than 30 days after the date of enactment of this section, on
October 1, 2003, and on each October 1 thereafter, out of any funds in
the Treasury not otherwise appropriated, the Secretary of the Treasury
shall transfer to the Secretary to carry out this title the amount
determined under subsection (d).
``(b) Use and Availability.--
``(1) In general.--An amount transferred under subsection
(a)--
``(A) shall remain available until expended; and
``(B) shall be used to carry out any programs,
functions, and activities relating to clinical services
(as defined in paragraph (2)) of the Service and
Service units.
``(2) Clinical services defined.--For purposes of paragraph
(1)(B), the term `clinical services' includes all programs of
the Indian Health Service which are funded directly or under
the authority of the Indian Self-Determination and Education
Assistance Act, for the purposes of--
``(A) clinical care, including inpatient care,
outpatient care (including audiology, clinical eye and
vision care), primary care, secondary and tertiary
care, and long term care;
``(B) preventive health, including mammography and
other cancer screening;
``(C) dental care;
``(D) mental health, including community mental
health services, inpatient mental health services,
dormitory mental health services, therapeutic and
residential treatment centers;
``(E) emergency medical services;
``(F) treatment and control of, and rehabilitative
care related to, alcoholism and drug abuse (including
fetal alcohol syndrome) among Indians;
``(G) accident prevention programs;
``(H) home health care;
``(I) community health representatives;
``(J) maintenance and repair; and
``(K) traditional health care practices and
training of traditional health care practitioners.
``(c) Receipt and Acceptance.--The Secretary shall be entitled to
receive, shall accept, and shall use to carry out this title the funds
transferred under subsection (a), without further appropriation.
``(d) Amount.--The amount referred to in subsection (a) is--
``(1) for fiscal year 2004, the amount equal to 390 percent
of the amount obligated by the Service during fiscal year 2002
for the purposes described in subsection (b)(2); and
``(2) for fiscal year 2005 and each fiscal year thereafter,
the amount equal to the product obtained by multiplying--
``(A) the number of Indians served by the Service
as of September 30 of the preceding the fiscal year;
and
``(B) the per capita baseline amount, as determined
under subsection (e).
``(e) Per Capita Baseline Amount.--
``(1) In general.--For the purpose of subsection (d)(2)(B),
the per capita baseline amount shall be equal to the sum of--
``(A) the quotient obtained by dividing--
``(i) the amount specified in subsection
(d)(1); by
``(ii) the number of Indians served by the
Service as of September 30, 2002; and
``(B) any applicable increase under paragraph (2).
``(2) Increase.--For each fiscal year, the Secretary shall
provide a percentage increase (rounded to the nearest dollar)
in the per capita baseline amount equal to the percentage by
which--
``(A) the Consumer Price Index for all Urban
Consumers published by the Department of Labor
(relating to the United States city average for medical
care and not seasonally adjusted) for the 1-year period
ending on the June 30 of the fiscal year preceding the
fiscal year for which the increase is made; exceeds
``(B) that Consumer Price Index for the 1-year
period preceding the 1-year period described in
subparagraph (A).''.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR 1/9/2003 S134)
Read twice and referred to the Committee on Finance.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line