103d CONGRESS 2d Session S. 2357 To achieve universal health insurance coverage, and for other purposes. _______________________________________________________________________ IN THE SENATE OF THE UNITED STATES August 3 (legislative day, July 20), 1994 Mr. Mitchell introduced the following bill; which was read the first time _______________________________________________________________________ A BILL . To achieve universal health insurance coverage, and for other purposes. 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 Security Act''. (b) Table of Contents.--The table of contents of this Act is as follows: Sec. 1. Short title; table of contents. TITLE I--IMPROVED ACCESS TO STANDARDIZED AND AFFORDABLE HEALTH PLANS Subtitle A--Rules and Definitions of General Applicability Part 1--Rules of General Applicability Sec. 1001. Access to standardized coverage. Sec. 1002. Standard health plan principles. Sec. 1003. Protection of consumer choice. Part 2--Definitions Sec. 1011. Definitions relating to health plans. Sec. 1012. Definitions relating to employment and income. Sec. 1013. Other general definitions. Subtitle B--Health Plan Standards Part 1--Establishment and Application of Standards Sec. 1101. Establishment of National standards. Sec. 1102. General rules. Part 2--Insurance Market Reform Sec. 1111. Guaranteed issue, availability, and renewability. Sec. 1112. Enrollment. Sec. 1113. Coverage of dependents. Sec. 1114. Nondiscrimination based on health status. Sec. 1115. Benefits. Sec. 1116. Community rating requirements. Sec. 1117. Risk adjustment and reinsurance. Sec. 1118. Financial solvency requirements and consumer protection against provider claims. Part 3--Delivery System Reform Sec. 1121. Prohibition of discrimination. Sec. 1122. Quality assurance standards. Sec. 1123. Consumer grievance process. Sec. 1124. Health security cards. Sec. 1125. Information and marketing standards. Sec. 1126. Information regarding a patient's right to self- determination in health care services. Sec. 1127. Contracts with purchasing cooperatives. Sec. 1128. Health plan arrangements with providers. Sec. 1129. Utilization management protocols and physician incentive plans. Part 4--Supplemental Health Benefits Plans Sec. 1141. Supplemental health benefits plans. Subtitle C--Benefits and Cost-Sharing Part 1--Standard Benefits Packages Sec. 1201. General description of standard benefits packages. Sec. 1202. Description of categories of items and services. Sec. 1203. Definitions. Part 2--National Health Benefits Board Sec. 1211. Creation of National health benefits board; membership. Sec. 1212. Qualifications of board members. Sec. 1213. General duties and responsibilities. Sec. 1214. Powers. Sec. 1215. Funding. Sec. 1216. Applicability of Federal Advisory Committee Act. Sec. 1217. Congressional consideration of Board proposals. Subtitle D--Access to Health Plans Part 1--Access Through Employers Sec. 1301. General employer responsibilities. Sec. 1302. Auditing of records. Sec. 1303. Prohibition of certain employer discrimination. Sec. 1304. Prohibition on self-insuring cost-sharing benefits. Sec. 1305. Responsibilities in single-payer States. Sec. 1306. Development of large employer purchasing groups. Sec. 1307. Rules governing litigation involving retiree health benefits. Sec. 1308. Enforcement. Part 2--Access Tsubpart a--general requirementsing Cooperatives Sec. 1321. Organization and operation. Sec. 1322. Membership. Sec. 1323. Agreements with standard health plans. Sec. 1324. Memberssubpart b--community-rated employers Sec. 1331.subpart c--federal employees health benefits program Sec. 1341. Requirements applicable to FEHBP. Sec. 1342. Special rules for FEHBP supplemental plans. Sec. 1343. Definitions. Part 3--Treatment of Association Plans Sec. 1351. Rules relating to multiple employer welfare arrangements. Sec. 1352. Association plans. Subtitle E--Federal Responsibilities Part 1--Sesubpart a--general dutiesan Services Sec. 1401. General duties and responsibilities. Sec. 1402. Annual report. Sec. 1403. Assistance with family collections. Sec. 1404. Advisory opinions. Ssubpart b--responsibilities relating to review and approval of state systems Sec. 1411. Federal review and action on State systems. Sec. 1412. Failure of participating States to meet conditions for compliance. Sec. 1413. Reduction in payments for health programs by Secretary of Health and Human Services. Sec. 1414. Review of Federal determinations. Sec. 141subpart c--responsibilities in absence of state systems Sec. 1421. Application of subpart. Sec. 1422. Federal assumption of responsibilities in non-participating States. Sec. 1423. Imposition of surcharge on premiums under federally-operated system. Sec.subpart d--establishment of class factors for charging premiums Ssubpart e--risk adjustment and reinsurance methodology for payment of plans Sec. 1435. Development of a risk adjustment and reinsurance subpart f--responsibilities for financial requirements Sec. 1441. Capital standards for community-rated plans. Sec. 1442. Standard forsubpart g--open enrollment Sec. 1445. Periods of authorized changes in enrollment. Sec. 1446. Distribution of comparative information. Sec. 1455. Reports. Part 2--Essential Community Providers Sec. 1461. Certification. Sec. 1462. Categories of providers automatically certified. Sec. 1463. Standards for additional providers. Sec. 1464. Certification process; review; termination of certifications. Sec. 1465. Notification of participating States. Sec. 1466. Health plan requirement. Sec. 1467. Recommendation on continuation of requirement. Sec. 1468. Definitions. Part 3--Specific Responsibilities of Secretary of Labor Sec. 1481. Responsibilities of Secretary of Labor. Sec. 1482. Federal role with respect to multi-State self-insured health plans. Sec. 1483. Assistance with employer collections. Sec. 1484. Penalties for failure of large employer purchasing groups to meet requirements. Sec. 1485. Applicability of ERISA enforcement mechanisms for enforcement of certain requirements. Sec. 1486. Workplace wellness program. Part 4--Office of Rural Health Policy Sec. 1491. Office of rural health policy. Subtitle F--Participating State Responsibilities Part 1--General Responsibilities Sec. 1501. State plan and certification of standard health plans and supplemental health benefits plans. Sec. 1502. Community rating areas and health plan service areas. Sec. 1503. Open enrollment periods. Sec. 1504. Risk adjustment program. Sec. 1505. Guaranty funds. Sec. 1506. Enrollment activities. Sec. 1507. Rural and medically underserved areas. Sec. 1508. Public access sites. Sec. 1509. Requirements relating to possessions of the United States. Sec. 1510. Right of recovery of certain taxes against providers. Part 2--Treatment of State Laws Sec. 1511. Preemption of certain State laws relating to health plans. Sec. 1512. Override of restrictive State practice laws. subpart a--existing state laws Sec. 1521. Continuance of existing Federal law waivers. Sec. 1522. Hawaii prepaid Health Care Act. Sec. 1523. Alternative State provider payment systems. Sec. 1524subpart b--requirements for state single-payer systems Sec. 1531. Single-payer system described. Sec. 1532. General requirements for single-payer systems. Sec. 1533. Special rules for States operating statewide single-payer system. Sec. 1534. Special rules for community rating area-specific single- subpart c--early implementation of comprehensive state programs Sec. 1541. Early implementation of comprehensive State programs. Subtitle G--Miscellaneous Provisions Sec. 1601. Provision of items or services contrary to religious belief or moral conviction. Sec. 1602. Antidiscrimination. TITLE II--NEW BENEFITS Subtitle A--Coverage of Outpatient Prescription Drugs in Medicare Sec. 2000. References in subtitle. Part 1--Coverage of Outpatient Prescription Drugs Sec. 2001. Coverage of outpatient prescription drugs. Sec. 2002. Payment rules and related requirements for covered outpatient drugs. Sec. 2003. Medicare rebates for covered outpatient drugs. Sec. 2004. Prescription drug payment review commission. Sec. 2005. Coverage of home infusion drug therapy services. Sec. 2006. Medicare drug benefit plans. Sec. 2007. Payment for covered outpatient drug benefit under medicare contracts with HMOs and CMPS. Sec. 2008. Maintenance of effort. Subtitle B--Home and Community-Based Services Part 1--Home and Community-based Services for Individuals With Disabilities Sec. 2101. State programs for home and community-based services for individuals with disabilities. Sec. 2102. State plans. Sec. 2103. Individuals with disabilities defined. Sec. 2104. Home and community-based services covered under State plan. Sec. 2105. Cost sharing. Sec. 2106. Quality assurance and safeguards. Sec. 2107. Advisory groups. Sec. 2108. Payments to States. Sec. 2109. Appropriations; allotments to States. Sec. 2110. Federal evaluations. Part 2--Grants Relating to the Development of Hospital Linkage Programs Sec. 2111. Information and technical assistance grants relating to development of hospital linkage programs. Subtitle C--Long-Term Care Insurance Improvement and Accountability Sec. 2200. Short title. Part 1--Promulgation of Standards and Model Benefits Sec. 2201. Standards. Part 2--Establishment and Implementation of Long-term Care Insurance Policy Standards Sec. 2211. Implementation of policy standards. Sec. 2212. Regulation of sales practices. Sec. 2213. Additional responsibilities for carriers. Sec. 2214. Renewability standards for issuance, and basic for cancellation of policies. Sec. 2215. Benefit standards. Sec. 2216. Nonforfeiture. Sec. 2217. Limit of period of contestability and right to return. Sec. 2218. Civil money penalty. Part 3--Long-term Care Insurance Policies, Definition and Endorsements Sec. 2221. Long-term care insurance policy defined. Sec. 2222. Code of conduct with respect to endorsements. Subtitle D--Life Care Sec. 2301. Short title. Sec. 2302. Life care: public insurance program for nursing home care. Subtitle E--Study and Report Sec. 2401. Study of issues related to end of life care. TITLE III--HEALTH PROFESSIONS WORKFORCE Subtitle A--Workforce Priorities Under Federal Payments Sec. 3000. Definitions. Part 1--Institutional Costs of Graduate Medical Education; Workforce subpart a--national council regarding workforce priorities Sec. 3001subpart b--authorized positions in specialty training Sec. 3011. Cooperation regarding approved physician training programs. Sec. 3012. Annual authorization of total number of graduate medical education positions. Sec. 3013. Annual authorization of number of specialty positions; requirements regarding primary health care. Sec. 3014. National Council recommendation of number of graduate medical education positions. Sec. 3015. Alsubpart c--costs of graduate medical education Chapter 1--Operation Of Approved Physician Training Programs Sec. 3031. Federal formula payments to qualified entities for the costs of the operation of approved physician training programs. Sec. 3032. Application for payments. Sec. 3033. Availability of funds for payments; annual amount of payments. Sec. 3034. Payments for dental and podiatric positions. Chapter 2--Academic Health Centers and Other Eligible Institutions Sec. 3051. Federal formula payments to academic health centers and other eligible institutions. Sec. 3052. Request for payments. Sec. 3053. Availability of funds for payments; annual amount of subpart d--transitional provisions Sec. 3055. Transitional payments to institutions. Sec. 3056. Waiver of foreign country residence requirement with respect to international medical graduates. Parsubpart a--payments to medical schoolsts Sec. 3061. Federal payments to medical schools. Sec. 3062. Application for payments. Sec. 3063. Authosubpart b--payments to nursing programsnt of payments. Sec. 3071. Federal payments to graduate nurse training programs. Sec. 3072. Nationsubpart c--payments to dental schools. Sec. 3073. Dsubpart d--payments to schools of public health Sec. 3074. Schools of public health. subpart a--workforce development Sec. 3081. Programs of the Secretary of Health and Human Services. Sec. 3082. Programs of the Secretary of Labor. Sec. 3083. Requirement for certain programs regarding redeployment of subpart b--transitional provisions for workforce stability Sec. 3091. Application. Sec. 3092. Definitions. Sec. 3093. Obligations of displacing employer and affiliated enterprises in event of displacement. Sec. 3094. Employment with successors. Sec. 3095. Collective bargaining obligations during transition period. Sec. 3096. General provisions. Subtitle B--Academic Health Centers Sec. 3131. Discretionary grants regarding access to centers. Subtitle C--Health Research Initiatives Part 1--Programs for Certain Agencies Sec. 3201. Biomedical, behavioral and health services research. Sec. 3202. Health services research. Sec. 3203. AHCPR guidelines and standards. Part 2--Funding for Program Sec. 3211. Authorizations of appropriations. Part 3--Medical Technology Impact Study Sec. 3221. Medical technology impact study. Subtitle D--Core Functions of Public Health Programs; National Initiatives Regarding Preventive Health Part 1--Funding Sec. 3301. Authorizations of appropriations. Part 2--Core Functions of Public Health Programs Sec. 3311. Purposes. Sec. 3312. Grants to States for core functions of public health. Sec. 3313. Submission of information. Sec. 3314. Reports. Sec. 3315. Application for grant. Sec. 3316. Allocations for certain activities. Sec. 3317. Definitions. Sec. 3318. Single application and uniform reporting systems for core functions of public health and public health categorical grant programs administered by the centers for disease control and prevention. Part 3--National Initiatives Regarding Health Promotion and Disease subpart a--general grants Sec. 3331. Grants for national prevention initiatives. Sec. 3332. Priorities. Sec. 3333. Submission of information. Secsubpart b--development of telemedicine in rural underserved areas Sec. 3341. Grants for development of rural telemedicine. Sec. 3342. Report and evaluation of telemedicine. Sec. 3343. Regulations on reimbursement of telemedicine. Sec. 3344. Authorization of appropriations. Sec. 3345. Definitions. Subtitle E--Health Services for Medically Underserved Populations Pasubpart a--authorization of appropriationse subpart b--development of community health groups and health care sites and services Sec. 3421. Grants and contracts for development of plans and networks and the expansion and development of health care sites and services. Sec. 3422. Certain uses of awards. Sec. 3423. Application. Ssubpart c--capital cost of development of community health groups and other purposes Sec. 3441. Direct loans and grants. Sec. 3442. Certain requirements. Sec. 3443. Defaults; right of recovery. Sec. 3444. Provisions regarding construction or expansion of facilities. Sec. 3445. Application for assistance. Sec. 3446. Adsubpart d--enabling and supplemental services Sec. 3461. Grants and contracts for enabling and supplemental services. Sec. 3462. Authorizations of appropriations. Part 2--National Health Service Corps Sec. 3471. Authorizations of appropriations. Sec. 3472. Allocation for participation of nurses in scholarship and loan repayment programs. Sec. 3473. Allocation for participation of psychiatrists, psychologists, and clinical social workers in scholarship and loan repayment programs. Part 3--Payments to Hospitals Serving Vulnerable Populations Sec. 3481. Payments to hospitals. Sec. 3482. Identification of eligible hospitals. Sec. 3483. Amount of payments. Sec. 3484. Base year. Subtitle F--Mental Health; Substance Abuse Part 1--Authorities Regarding Participating States Sec. 3510. Integration of mental health and substance abuse systems. Sec. 3511. Report on integration of mental health systems. Part 2--Assistance for State Managed Mental Health and Substance Abuse Programs Sec. 3531. Availability of assistance. Sec. 3532. Plan requirements. Sec. 3533. Additional Federal responsibilities. Sec. 3534. Authorization of appropriations. Subtitle G--Comprehensive School Health Education; School-Related Health Services Part 1--Healthy Students-Healthy Schools Grants for School Health Education Sec. 3601. Purposes. Sec. 3602. Healthy students-healthy schools grants. Sec. 3603. Healthy Students-Healthy Schools Interagency Task Force. Sec. 3604. Duties of the Secretary. Psubpart a--development and operations Sec. 3681. Authorization of appropriations. Sec. 3682. Eligibility for grants. Sec. 3683. Preferences. Sec. 3684. Planning and development grants. Sec. 3685. Gsubpart b--capital costs of developing projects Sec. 3691. Funding. Subtitle H--Public Health Service Initiative Sec. 3695. Public health service initiative. Subtitle I--Additional Provisions Regarding Public Health Sec. 3901. Curriculum development and implementation regarding domestic violence and women's health. Sec. 3902. Community scholarship programs. Subtitle J--Occupational Safety and Health Sec. 3903. Occupational injury and illness prevention. Subtitle K--Full Funding for WIC Sec. 3905. Full funding for WIC. Subtitle L--Border Health Improvement Sec. 3908. Border Health Commission. TITLE IV--MEDICARE AND MEDICAID Sec. 4000. References in title. Subtitle A--Medicare Part 1--Integration of Medicare Beneficiaries Sec. 4001. Individual election to remain in certain health plans. Sec. 4002. Enrollment and termination of enrollment. Part 2--Provisions Relating to Part A Sec. 4101. Inpatient hospital services update for PPS hospitals. Sec. 4102. Reduction in payments for capital-related costs for inpatient hospital services. Sec. 4103. Reductions in disproportionate share payments. Sec. 4104. Extension of freeze on updates to routine service cost limits for skilled nursing facilities. Sec. 4105. Medicare-dependent, small rural hospitals. Sec. 4106. Provisions relating to rural health transition grant program. Sec. 4107. Payments for sole community hospitals with teaching programs and multihospital campuses. Sec. 4108. Moratorium on designation of new long-term hospitals. Sec. 4109. Revised payment methodology for rehabilitation and long-term care hospitals. Sec. 4110. Termination of indirect medical education payments. Sec. 4111. Limited service hospital program. Sec. 4112. Subacute care study. Part 3--Provisions Relating to Part B Sec. 4201. Updates for physicians' services. Sec. 4202. Substitution of real GDP to adjust for volume and intensity; repeal of restriction on maximum reduction permitted in default update. Sec. 4203. Payment for physicians' services relating to inpatient stays in certain hospitals. Sec. 4204. Changes in underserved area bonus payments. Sec. 4205. Correction of MVPS upward bias. Sec. 4206. Demonstration projects for medicare State-based performance standard rate of increase. Sec. 4207. Elimination of formula-driven overpayments for certain outpatient hospital services. Sec. 4208. Eye or eye and ear hospitals. Sec. 4209. Imposition of coinsurance on laboratory services. Sec. 4210. Application of competitive acquisition process for part B items and services. Sec. 4211. Application of competitive acquisition procedures for laboratory services. Sec. 4212. Expanded coverage for physician assistants and nurse practitioners. Sec. 4213. Elimination of balance billing. Sec. 4214. Development and implementation of resource-based methodology for practice expenses. Sec. 4215. Payments for durable medical equipment. Sec. 4216. General part B premium. Part 4--Provisions Relating to Parts A and B Sec. 4301. Medicare secondary payer changes. Sec. 4302. Increase in medicare secondary payer coverage for end stage renal disease services to 24 months. Sec. 4303. Expansion of centers of excellence. Sec. 4304. Reduction in routine cost limits for home health services. Sec. 4305. Imposition of 20 percent coinsurance on home health services under medicare. Sec. 4306. Termination of graduate medical education payments. Sec. 4307. Medicare select. Subtitle B--Medicaid Program Part 1--Integration of Certain Medicaid Eligibles Into Reformed Health Care System Sec. 4601. Limiting coverage under medicaid of items and services covered under standard benefit package. Part 2--Coordinated Care Services for Disabled Medicaid Eligibles Sec. 4605. Coordinated care services for disabled medicaid eligibles. Part 3--Payments to Hospitals Serving Vulnerable Populations Sec. 4611. Replacement of DSH payment provisions with provisions relating to payments to hospitals serving vulnerable populations. Part 4--Medicaid Long-term Care Provisions Sec. 4615. Increased resource disregard for individuals receiving certain services. Sec. 4616. Frail elderly demonstration project waivers. Sec. 4617. Elimination of requirement of prior institutionalization with respect to habilitation services furnished under a waiver for home or community-based services. Sec. 4618. Elimination of rule regarding availability of beds in certain institutions. Sec. 4619. Preadmission screening for mentally retarded individuals. Part 5--Miscellaneous Sec. 4621. Medicaid coverage of all certified nurse practitioner and clinical nurse specialist services. Sec. 4622. Relief from third party liability requirements when cost- effective. TITLE V--QUALITY AND CONSUMER PROTECTION Subtitle A--Quality Management and Improvement Sec. 5001. National quality council. Sec. 5002. National goals and performance measures of quality. Sec. 5003. Standards and performance measures for health plans. Sec. 5004. Plan data analysis and consumer surveys. Sec. 5005. Evaluation and reporting of quality performance. Sec. 5006. Development and dissemination of practice guidelines. Sec. 5007. Research on health care quality. Sec. 5008. Quality improvement foundations. Sec. 5009. Consumer information and advocacy. Sec. 5010. Authorization of appropriations. Sec. 5011. Role of health plans in quality management. Sec. 5012. Information on health care providers. Sec. 5013. Conforming amendments to Public Health Service Act. Subtitle B--Administrative Simplification Part 1--Purpose and Definitions Sec. 5101. Purpose. Sec. 5102. Definitions. Part 2--Standards for Data Elements and Information Transactions Sec. 5111. General requirements on secretary. Sec. 5112. Standards for data elements of health information. Sec. 5113. Information transaction standards. Sec. 5114. Standards relating to written claims submitted by individuals and written explanations of benefits. Sec. 5115. Timetables for adoption of standards. Part 3--Requirements With Respect to Certain Transactions and Information Sec. 5121. Requirements with respect to certain transactions and information. Sec. 5122. Timetables for compliance with requirements. Part 4--Accessing Health Information Sec. 5131. Accessing health information for authorized purposes. Sec. 5132. Responding to access requests. Sec. 5133. Length of time information should be accessible. Sec. 5134. Timetables for adoption of standards and compliance. Part 5--Standards and Certification for Health Information Network Sec. 5141. Standards and certification for health information network services. Sec. 5142. Ensuring availability of information. Part 6--Penalties Sec. 5151. General penalty for failure to comply with requirements and standards. Part 7--Miscellaneous Provisions Sec. 5161. Imposition of additional requirements. Sec. 5162. Effect on State law. Sec. 5164. Health information continuity. Sec. 5165. Protection of commercial information. Sec. 5166. Payment for health care services or health plan premiums. Sec. 5167. Health security cards. Sec. 5168. Misuse of health security card or personal health identifier. Sec. 5169. Direct billing for clinical laboratory services. Sec. 5170. Authorization of appropriations. Part 8--Assistance to the Secretary Sec. 5171. General requirement on secretary. Sec. 5172. Health information advisory committee. Part 9--Demonstration Projects for Community-based Clinical Information Systems Sec. 5181. Grants for demonstration projects. Part 10--Medicare and Medicaid Coverage Data Bank Sec. 5191. Repeal of medicare and medicaid coverage data bank. Subtitle C--Privacy of Health Information Part 1--Findings and Definitions Sec. 5201. Findings and purposes. Sec. 5202. Definitions. subpart a--general provisionss Sec. 5206. General rules regarding disclosure. Sec. 5207. Authorizations for disclosure of protected health information. Sec. 5208.subpart b--specific disclosures relating to patient Sec. 5211. Disclosures for treatment and financial and administrative transactions. Sec. 5212. Next of kin and directory information. Secsubpart c--disclosure for oversight, public health, and research purposes Sec. 5216. Oversight. Sec. 5217. Public health. subpart d--disclosure for judicial, administrative, and law enforcement purposes Sec. 5221. Judicial and administrative purposes. Sec.subpart e--disclosure pursuant to government subpoena or warrant Sec. 5226. Government subpoenas and warrants. Sec. 5227. Access procedures for law enforcement subpoenas and warrants. Sec. 5228. Challenge procedures for law enforcement warrants and subpart f--disclosure pursuant to private party subpoena Sec. 5231. Private party subpoenas. Sec. 5232. Access procedures for private party subpoenas. Sec. 5233. Challenge procedures for private party subpoenas. Part 3--Procedures for Ensuring Security of Protected Health subpart a--establishment of safeguards Sec. 5236. Establishment of safeguards. Ssubpart b--review of protected health information by subjects of the information Sec. 5241. Inspection of protected health information. Sec. 5242. Amendment of protected health information. Sec. 5243. Nsubpart c--standards for electronic disclosures Sec. 5246. Standards for electronic disclosures. subpart a--no sanctions for permissible actions Sec. 5251. No liability for permissible disclosures. Sec. 5252. No liability for institutional review board determinations. Sec. 5253. Reliance on subpart b--civil sanctions Sec. 5256. Civil penalty. Sec. 5257. Civil actisubpart c--criminal sanctions Sec. 5261. Wrongful disclosure of protected health information. Part 5--Administrative Provisions Sec. 5266. Relationship to other laws. Sec. 5267. Rights of incompetents. Sec. 5268. Exercise of rights. Subtitle D--Expanded Efforts To Combat Health Care Fraud and Abuse Affecting Federal Outlay Programs Part 1--Improved Enforcement Sec. 5301. Health care fraud and abuse affecting Federal outlay programs. Sec. 5302. Establishment of Federal outlay program fraud and abuse control account. Sec. 5303. Use of funds by Inspector General. Sec. 5304. Rewards for information leading to prosecution and conviction. Part 2--Civil Penalties and Rights of Action Sec. 5311. Civil monetary penalties. Sec. 5312. Permitting parties to bring actions on own behalf. Sec. 5313. Exclusion from program participation. Part 3--Amendments to Criminal Law Sec. 5321. Health care fraud. Sec. 5322. Theft or embezzlement. Sec. 5323. False Statements. Sec. 5324. Bribery and graft. Sec. 5325. Injunctive relief relating to health care offenses. Sec. 5326. Grand jury disclosure. Sec. 5327. Forfeitures for violations of fraud statutes. Part 4--Amendments to Civil False Claims Act Sec. 5331. Amendments to Civil False claims Act. Part 5--Effective Date Sec. 5341. Effective date. Subtitle E--Medical Liability Reform Part 1--System Reforms Sec. 5401. Federal tort reform. Sec. 5402. State-based alternative dispute resolution mechanisms. Sec. 5403. Requirement of certificate of merit. Sec. 5404. Limitation on amount of attorney's contingency fees. Sec. 5405. Periodic payment of awards. Sec. 5406. Federal study on medical negligence. Part 2--Demonstration Project Relating to Medical Malpractice Liability Sec. 5411. Pilot program applying practice guidelines to medical malpractice liability actions. Sec. 5412. Enterprise liability demonstration project. Subtitle F--Remedies and Enforcement Part 1--Review of Bensubpart a--general rulesEnrolled Individuals Sec. 5501. Health plan claims procedure. Sec. 5502. Review in area complaint review offices of grievances based on acts or practices by health plans. Sec. 5503. Initial proceedings in complaint review offices. Sec. 5504. Hearings before hearing officers in complaint review offices. Sec. 5505. Civil msubpart b--early resolution programs Sec. 5511. Establishment of early resolution programs in complaint review offices. Sec. 5512. Initiation of participation in mediation proceedings. Sec. 5513. Mediation proceedings. Sec. 5514. Legal effect of participation in mediation proceedings. Sec. 5515. Enforcement of settlement agreements. Sec. 5516. Due process for health care providers. Part 2--Additional Remedies and Enforcement Provisions Sec. 5531. Judicial review of Federal action on State systems. Sec. 5532. Civil enforcement. Sec. 5533. Priority of certain bankruptcy claims. Sec. 5534. Private right to enforce State responsibilities. Sec. 5535. Private right to enforce Federal responsibilities in operating a system in a State. Sec. 5536. Enforcement of consumer protections. Sec. 5537. Discrimination claims. Sec. 5538. Nondiscrimination in federally assisted programs. Sec. 5539. Civil and administration action by essential community provider. Sec. 5540. Facial constitutional challenges. Sec. 5541. Treatment of plans as parties in civil actions. Sec. 5542. Whistleblower protections. Sec. 5543. General nonpreemption of rights and remedies. Subtitle G--Repeal of Exemption Sec. 5601. Repeal of exemption for health insurance. TITLE VI--INDIVIDUAL AND EMPLOYER SUBSIDIES Subtitle A--Individual Premium and Cost-Sharing Assistance Sec. 6001. Requirement to operate State program. Sec. 6002. Assistance with standard health plan premiums. Sec. 6003. Assistance with cost-sharing for standard health plans. Sec. 6004. Eligibility determinations. Sec. 6005. End-of-year reconciliation for premium assistance. Sec. 6006. Enrollment outreach. Sec. 6007. Payments to States. Sec. 6008. Definitions and determinations of income. Subtitle B--Employer Subsidies Sec. 6101. Purpose. Sec. 6102. Eligible employers. Sec. 6103. Employer certification. Sec. 6104. Amount of subsidy. Sec. 6105. Definition. TITLE VII--REVENUE PROVISIONS Sec. 7000. Amendment of 1986 Code. Subtitle A--Financing Provisions Part 1--Increase in Tax on Tobacco Products Sec. 7101. Increase in excise taxes on tobacco products. Sec. 7102. Modifications of certain tobacco tax provisions. Sec. 7103. Imposition of excise tax on manufacture or importation of roll-your-own tobacco. Part 2--Health Related Assessments Sec. 7111. Assessments on insured and self-insured health plans. Sec. 7112. High cost health plan assessment. Part 3--Recapture of Certain Health Care Subsidies Sec. 7121. Recapture of certain health care subsidies received by high- income individuals. Part 4--Other Provisions Sec. 7131. Increase in tax on certain hollow point and large caliber handgun ammunition. Sec. 7132. Modification to self-employment tax treatment of certain S corporation shareholders and partners. Sec. 7133. Extending medicare coverage of, and application of hospital insurance tax to, all State and local government employees. Subtitle B--Tax Treatment of Employer-Provided Health Care Part 1--General Provisions Sec. 7201. Limitation on exclusion for employer-provided health benefits. Sec. 7202. Health benefits may not be provided under cafeteria plans. Sec. 7203. Increase in deduction for health insurance costs of self- employed individuals. Sec. 7204. Limitation on prepayment of medical insurance premiums. Part 2--Voluntary Employer Health Care Contributions Sec. 7111. Tax treatment of voluntary employer health care contributions. Subtitle C--Exempt Health Care Organizations Part 1--General Provisions Sec. 7301. Qualification and disclosure requirements for nonprofit health care organizations. Sec. 7302. Excise taxes for private inurement by tax-exempt health care organizations. Sec. 7303. Treatment of health maintenance organizations, parent organizations, and health insurance purchasing cooperatives. Sec. 7304. Tax treatment of taxable organizations providing health insurance and other prepaid health care services. Sec. 7305. Repeal of section 833. Sec. 7306. Tax exemption for high-risk insurance pools. Part 2--Tax Treatment of Section 501(c)(3) Bonds Sec. 748. Tax treatment of 501(c)(3) bonds similar to governmental bonds. Subtitle D--Tax Treatment of Long-Term Care Insurance and Services Sec. 7401. Qualified long-term care services treated as medical care. Sec. 7402. Treatment of long-term care insurance. Sec. 7403. Tax treatment of accelerated death benefits under life insurance contracts. Sec. 7404. Tax treatment of companies issuing qualified accelerated death benefit riders. Subtitle E--Other Revenue Provisions Part 1--Employment Status Provisions Sec. 7501. Employment status proposal required from Department of the Treasury. Sec. 7502. Increase in services reporting penalties. Part 2--Tax Incentives for Health Services Providers Sec. 7511. Nonrefundable credit for certain primary health services providers. Sec. 7512. Expensing of medical equipment. Part 3--Miscellaneous Provisions Sec. 7521. Post-retirement medical and life insurance reserves. Sec. 7522. Credit for cost of personal assistance services required by employed individuals. Sec. 7523. Disclosure of return information for administration of certain programs under the Health Security Act. Subtitle F--Graduate Medical Education and Academic Health Centers Trust Fund Sec. 7601. Establishment of Graduate Medical Education and Academic Health Centers Trust Fund. TITLE VIII--OTHER FEDERAL PROGRAMS Subtitle A--Indian Health Service Sec. 8101. Purposes. Sec. 8102. Definitions. Sec. 8103. Eligibility and health service coverage of Indians. Sec. 8104. Supplemental Indian health care benefits. Sec. 8105. Provision of health services to non-Indians. Sec. 8106. Essential community providers. Sec. 8107. Payment by other providers. Sec. 8108. Contracting authority. Sec. 8109. Consultation. Sec. 8110. Transitional studies. Sec. 8111. Loans and loan guarantees. Sec. 8112. Simplification of billing. Sec. 8113. Long-term care demonstrations. Sec. 8114. Technical assistance. Sec. 8115. Public health programs. Sec. 8116. Survey of health services available to Indian veterans. Sec. 8117. Rule of construction. Sec. 8118. Authorization of appropriations. Sec. 8119. Funding methodology. TITLE IX--WORKERS COMPENSATION MEDICAL SERVICES Sec. 9000. Application of information requirements. Sec. 9001. Provision of care in disputed cases. Sec. 9002. Demonstration projects. Sec. 9003. Commission on Workers Compensation Medical Services. TITLE X--PREMIUM FINANCING Subtitle A--National Health Care Cost and Coverage Commission Sec. 10001. National Health Care Cost And Coverage Commission. Sec. 10002. Composition. Sec. 10003. Duties of Commission. Sec. 10004. Congressional consideration of Commission recommendations. Sec. 10005. Operation of the Commission. Subtitle B--Employer and Individual Premium Requirements and Assistance Sec. 10101. Application of subtitle. Sec. 10102. Definitions. Part 1--Employer Premium Payments Sec. 10111. Obligation. Sec. 10112. Community-rated employers. Sec. 10113. Experience rated employers. Part 2--subpart a--family sharebilities Sec. 10131. Enrollment and premium payments. Sec. 10132. Family share of premiums. Sec. 10133. Amount of premium. Sec. 10134. Collection shortfall add-on. Sec. 10135. Family credit. Sec. 10136. Premium subsidy. Sec. 101subpart b--payment of family credit by certain families Sec. 10141. Payment of family credit by nonworking and part-time certain families. Sec. 10142. Limitation of liability based on income. TITLE XI--ENSURING HEALTH CARE REFORM FINANCING Sec. 11001. Ensuring health care reform financing. TITLE I--IMPROVED ACCESS TO STANDARDIZED AND AFFORDABLE HEALTH PLANS Subtitle A--Rules and Definitions of General Applicability PART 1--RULES OF GENERAL APPLICABILITY SEC. 1001. ACCESS TO STANDARDIZED COVERAGE. (a) In General.--A participating State system shall require that each health plan (whether insured or self-insured) or long-term care policy issued, sold, offered for sale, or operated in the State shall be certified by the appropriate certifying authority as one of the following: (1) A certified standard health plan. (2) A certified supplemental health benefits plan. (3) A certified long-term care policy under part 2 of subtitle B of title II. (b) Federal Certification of Multistate Self-Insured Plans.--For Federal certification of multistate self-insured health plans, see section 1482. SEC. 1002. STANDARD HEALTH PLAN PRINCIPLES. In accordance with this Act, the following principles shall apply to all standard health plans: (1) No standard health plan may discriminate on the basis of medical history, health status, pre-existing medical conditions, or genetic predisposition to medical conditions. (2) A standard health plan-- (A) shall offer an annual open enrollment period and accept all eligible individuals for coverage; (B) shall not impose a rider that serves to exclude coverage to an individual; and (C) shall not impose waiting periods before coverage begins. (3) A standard health plan shall ensure that all medically necessary or appropriate services, as defined in the benefits package, are provided. (4) Health benefits coverage shall be portable from one standard health plan to another. Nothing in this section shall be construed so as to relieve a standard health plan of any obligation or requirement imposed under this Act. SEC. 1003. PROTECTION OF CONSUMER CHOICE. Nothing in this Act shall be construed as prohibiting the following: (1) An individual from purchasing any health care services. (2) An individual from purchasing supplemental insurance (offered consistent with this Act) to cover health care services not included within the standard benefits package established under subtitle C. (3) An individual who is not an eligible individual from purchasing health insurance. (4) Employers from providing coverage for benefits in addition to such standard benefits package (subject to part 1 of subtitle D). (5) An individual from obtaining (at the expense of such individual) health care from any health care provider of such individual's choice. PART 2--DEFINITIONS SEC. 1011. DEFINITIONS RELATING TO HEALTH PLANS. Except as otherwise specifically provided, in this Act the following definitions and rules apply: (1) Health plan.-- (A) In general.--The term ``health plan'' means any plan or arrangement which provides, or pays the cost of, health benefits. Such term does not include the following, or any combination thereof: (i) Coverage only for accidental death or dismemberment. (ii) Coverage providing wages or payments in lieu of wages for any period during which the employee is absent from work on account of sickness or injury. (iii) A medicare supplemental policy (as defined in section 1882(g)(1) of the Social Security Act). (iv) Coverage issued as a supplement to liability insurance. (v) Worker's compensation or similar insurance. (vi) Automobile medical-payment insurance. (vii) A long-term care policy, including a nursing home fixed indemnity policy (unless the Secretary determines that such a policy provides sufficiently comprehensive coverage of a benefit so that it should be treated as a health plan). (viii) An equivalent health care program. (ix) Such other plan or arrangement as the Secretary determines is not a health plan. Such term includes any plan or arrangement not described in any preceding subparagraph which provides for benefit payments, on a periodic basis, for a specified disease or illness or period of hospitalization without regard to the costs incurred or services rendered during the period to which the payments relate. (B) Insured health plan.-- (i) In general.--The term ``insured health plan'' means any health plan which is a hospital or medical service policy or certificate, hospital or medical service plan contract, or health maintenance organization group contract offered by a carrier. (ii) Carrier.--The term ``carrier'' means a licensed insurance company, a hospital or medical service corporation (including an existing Blue Cross or Blue Shield organization, within the meaning of section 833(c)(2) of Internal Revenue Code of 1986 as in effect before the date of the enactment of this Act), a health maintenance organization, or other entity licensed or certified by the State to provide health insurance or health benefits. The Secretary may issue regulations that provide for affiliated carriers to be treated as a single carrier where appropriate under this Act. (C) Self-insured health plan.--The term `self- insured health plan' means an employee welfare benefit plan, church plan, or other arrangement which-- (i) provides health benefits funded in a manner other than through the purchase of one or more insured health plans, but (ii) does not include any coverage or insurance described in clauses (i) through (ix) of subparagraph (A). (2) Certified standard health plan.-- (A) In general.--The term ``certified standard health plan'' means a standard health plan which is certified by the appropriate certifying authority as meeting the other applicable requirements of this title. (B) Standard health plan.--The term ``standard health plan'' means a health plan which provides for the standard benefits package or the alternative standard benefits package established under subtitle C. (3) Certified supplemental health benefits plan.-- (A) In general.--The term ``certified supplemental health benefits plan'' means a supplemental health benefits plan which is certified by the appropriate certifying authority as meeting the applicable requirements of part 4 of subtitle B. (B) Supplemental health benefits plan.--The term ``supplemental health benefits plan'' means an insured or self-insured health plan which provides health benefits which consist of supplemental services or cost-sharing described in part 4 of subtitle B. Such term does not include a plan which provides for benefit payments, on a periodic basis, for a specified disease or illness or period of hospitalization without regard to the costs incurred or services rendered during the period to which the payments relate. (4) Certified long-term care insurance policy.-- (A) In general.--The term ``certified long-term care insurance policy'' means a long-term care insurance policy which is certified by the applicable certifying authority as meeting the applicable requirements of part 2 of subtitle B of title II. (B) Long-term care insurance policy.--The term ``long-term care insurance policy'' has the meaning given such term by section 2721. (5) Terms and rules relating to community and experience rating.-- (A) Community-rated plan.--The term ``community- rated plan'' means a health plan provided to community- rated individuals which meets the requirements of section 1116. (B) Community-rated employer.--The term ``community-rated employer'' means, with respect to an employee, an employer that is not an experience-rated employer with respect to such employee. (C) Community-rated individual.--The term ``community-rated individual'' means an individual who is not an experience-rated individual. (D) Experience-rated plan.-- (i) In general.--The term ``experience- rated plan'' means a health plan which-- (I) is a self-insured health plan of an experience-rated employer, or (II) is an insured health plan which is experience-rated, but any such plan may cover only experience- rated individuals. (ii) Community rating of government plans.--Such term shall not include a government plan of a State or local government. (E) Experience-rated employer.-- (i) In general.--The term ``experience- rated employer'' means, with respect to any calendar year-- (I) any employer if, on each of 20 days during the preceding calendar year (each day being in a different week), such employer (or any predecessor) employed more than 500 employees for some portion of the day; or (II) a multiemployer plan or rural electric cooperative or rural telephone cooperative association plan that covers 500 or more individuals. (ii) Special rule for leasing businesses.-- In the case of an employer the primary trade or business of which is employee leasing-- (I) all of the employees which such employer leases to other employers shall be treated as community-rated individuals, and (II) this Act shall be applied separately with respect to its other employees. (iii) U.S. postal service.--Such term includes the United States Postal Service. (F) Experience-rated individual.--The term ``experience-rated individual'' means an individual who is an employee of an experience-rated employer or a member of a plan described in subparagraph (E)(i)(II). (6) Special rule for spouses and dependents.--If any individual is offered coverage under a health plan as the spouse or a dependent of a primary enrollee of such plan, such individual shall have the status of such enrollee unless such individual is eligible to elect other coverage and so elects. SEC. 1012. DEFINITIONS RELATING TO EMPLOYMENT AND INCOME. Except as otherwise specifically provided, in this Act the following definitions and rules apply: (1) Employer, employee, employment, and wages defined.-- Except as provided in this section-- (A) the terms ``wages'' and ``employment'' have the meanings given such terms under section 3121 of the Internal Revenue Code of 1986, (B) the term ``employee'' has the meaning given such term under section 3121 of such Code, subject to the provisions of chapter 25 of such Code, and (C) the term ``employer'' has the same meaning as the term ``employer'' as used in such section 3121. (2) Exceptions.--For purposes of paragraph (1)-- (A) Employment.-- (i) Employment included.--Paragraphs (1), (2), (5), (7) (other than clauses (i) through (iv) of subparagraph (C) and clauses (i) through (v) of subparagraph (F)), (8), (9), (10), (11), (13), (15), (18), and (19) of section 3121(b) of the Internal Revenue Code of 1986 shall not apply. (ii) Exclusion of inmates as employees.-- Employment shall not include services performed in a penal institution by an inmate thereof or in a hospital or other health care institution by a patient thereof. (B) Wages.--Paragraph (1) of section 3121(a) of the Internal Revenue Code of 1986 shall not apply. (C) Employees.-- (i) Treatment of self-employed.--The term ``employee'' includes a self-employed individual. (ii) Exclusion of certain foreign employment.--The term ``employee'' does not include an individual with respect to service, if the individual is not a citizen or resident of the United States and the service is performed outside the United States. (3) Aggregation rules for employers.--For purposes of this Act-- (A) all employers treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986 shall be treated as a single employer, and (B) under regulations of the Secretary of Labor, all employees of organizations which are under common control with one or more organizations which are exempt from income tax under subtitle A of the Internal Revenue Code of 1986 shall be treated as employed by a single employer. The regulations prescribed under subparagraph (B) shall be based on principles similar to the principles which apply to taxable organizations under subparagraph (A). SEC. 1013. OTHER GENERAL DEFINITIONS. Except as otherwise specifically provided, in this Act the following definitions apply: (1) Appropriate certifying authority.--The term ``appropriate certifying authority'' means-- (A) except as provided in subparagraph (B), in the case of a standard health plan, a supplemental health benefits plan, or a long-term care insurance plan, the State commissioner or superintendent of insurance or other State authority in the participating State; or (B) in the case of a multistate self-insured health plan or a multistate self-insured supplemental health benefits plan, the Secretary of Labor. (2) Community rating area.--The term ``community rating area'' means an area specified by a State under section 1502(a). (3) Equivalent health care program.--The term ``equivalent health care program'' means-- (A) part A or part B of the medicare program under title XVIII of the Social Security Act, (B) the medicaid program under title XIX of the Social Security Act, (C) the health care program for active military personnel under title 10, United States Code, (D) the veterans health care program under chapter 17 of title 38, United States Code, (E) the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), as defined in section 1073(4) of title 10, United States Code, (F) the Indian health service program under the Indian Health Care Improvement Act (25 U.S.C. 1601 et seq.), and (G) a State single-payer system approved by the Secretary under subpart B of part 3 of subtitle F. (4) Essential community provider.--The term ``essential community provider'' means an entity certified as such a provider under subpart B of part 2 of subtitle E. (5) Health plan sponsor.--The term ``health plan sponsor'' means-- (A) with respect to a community-rated plan, the carrier providing the plan, (B) with respect to an insured experience-rated plan, the carrier providing the plan, and (C) with respect to a self-insured experience-rated plan, the experience-rated employer providing the plan. (6) Medicare program.--The term ``medicare program'' means the health insurance program under title XVIII of the Social Security Act. (7) Medicare-eligible individual.--The term ``medicare- eligible individual'' means an individual who is entitled to benefits under part A of the medicare program. (8) Multiemployer plan.--The term ``multiemployer plan'' has the meaning given such term in section 3(37) of the Employee Retirement Income Security Act of 1974, and includes any plan that is treated as such a plan under title I of such Act. (9) NAIC.--The term ``NAIC'' means the National Association of Insurance Commissioners. (10) Participating provider.--The term ``participating provider'' means, with respect to a health plan, a provider of health care services who is a member of a provider network of the plan. (11) Participating state.--The term ``participating State'' means a State establishing a State program under this title. (12) Purchasing cooperative.--The term ``purchasing cooperative'' means a health insurance cooperative established under part 2 of subtitle D. (13) Residence.-- (A) In general.--An individual is considered to reside in the location in which the individual maintains a primary residence (as established under rules of the Secretary). (B) Multiple residences.--Under such rules and subject to section 1112, in the case of an individual who maintains more than one residence, the primary residence of the individual shall be determined taking into account the proportion of time spent at each residence. (C) Couple.--In the case of a couple only one spouse of which is a qualifying employee, except as the Secretary may provide, the residence of the employee shall be the residence of the couple. (14) Rural electric cooperative.--The term ``rural electric cooperative'' has the meaning given such term in section 3(40)(A)(iv) of the Employee Retirement Income Security Act of 1974. (15) Rural telephone cooperative associations.--The term ``rural telephone cooperative association'' has the meaning given such term in section 3(40)(A)(v) of the Employee Retirement Income Security Act of 1974. (16) Secretary.--The term ``Secretary'' means the Secretary of Health and Human Services. (17) State.--The term ``State'' includes the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands. (18) United States.--The term ``United States'' means the 50 States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and Northern Mariana Islands. Subtitle B--Health Plan Standards PART 1--ESTABLISHMENT AND APPLICATION OF STANDARDS SEC. 1101. ESTABLISHMENT OF NATIONAL STANDARDS. In order for a standard health plan to be eligible to be certified as a standard health plan by a participating State, the standard health plan shall meet the requirements of this Act, including the following uniform national standards established in this subtitle and described in regulations promulgated by the Secretary: (1) The insurance market reform standards of part 2. (2) The delivery system reform standards of part 3. (3) Standards for participation in a guaranty fund established by the State under section 1505 (established by the Secretary of Labor in the case of multistate self-insured standard health plans). (4) Standards for the collection and reporting of data in accordance with subtitle B of title V. (5) Standards for effective grievance procedures that enrollees may utilize in pursuing complaints in accordance with subtitle C of title V. SEC. 1102. GENERAL RULES. (a) Construction.--Whenever in this subtitle a requirement or standard is imposed on a standard health plan, the requirement or standard is deemed to have been imposed on the insurer or sponsor of the plan or policy in relation to that plan or policy. (b) Use of Interim, Final Regulations.--In order to permit the timely implementation of the provisions of this subtitle, the Secretary and the Secretary of Labor are each authorized to issue regulations under this subtitle on an interim basis that become final on the date of publication, subject to change based on subsequent public comment. PART 2--INSURANCE MARKET REFORM SEC. 1111. GUARANTEED ISSUE, AVAILABILITY, AND RENEWABILITY. (a) Guaranteed Issue.--Except as otherwise provided in this section, a standard health plan sponsor-- (1) offering a community-rated standard health plan shall offer such plan to any community-rated individual applying for coverage (either directly with the plan or through an employer or a purchasing cooperative); and (2) offering an experience-rated standard health plan shall offer such plan to any experience-rated individual eligible for coverage under the plan through such individual's experience- rated employer. No plan may engage in any practice that has the effect of attracting or limiting enrollees on the basis of personal characteristics, such as occupation or affiliation with any person or entity, or those characteristics described in section 1602. (b) Availability.-- (1) In general.--A community-rated standard health plan shall be made available to community-rated individuals throughout the entire community rating area in which such plan is offered, including through any employer purchasing cooperative choosing to offer such plan. (2) Geographic limitations.-- (A) Nonnetwork plans.--A community-rated nonnetwork plan (as defined in section 1127(d(2)(A)) may deny coverage under the plan to a community-rated individual who resides outside the community rating area in which such plan is offered. (B) Network plans.--A community-rated network plan (as defined in section 1127(e)(5)(A)) may deny coverage under the plan to a community-rated individual who resides outside the health plan service area in which such plan is offered. (C) Rules regarding denials.--No denial may be made under subparagraph (A) or (B) unless such denial is applied uniformly, without regard to health status, insurability of individuals, or other characteristics described in section 1602. (3) Capacity limitations.-- (A) In general.--With the approval of the appropriate regulatory authority, a standard health plan may limit enrollment because of the plan's capacity to deliver services or to maintain financial stability. If such a limitation is imposed, the limitation may not be imposed on a basis of personal characteristics, such as occupation or affiliation with any person or entity, or those characteristics described in section 1602. (B) Restrictions.--If such a limitation is imposed-- (i) the plan may only enroll individuals under the plan consistent with rules established by the State consistent with subparagraph (C); and (ii) the plan may not discriminate based on the method through which a family seeks enrollment under the plan. (C) State oversight.--Each State shall, in accordance with rules promulgated by the Secretary, establish procedures and methods to assure equal opportunity of enrollment for all families, regardless of when during the open enrollment period, or the method by which, the enrollment has been sought. (c) Renewability; Limitation on Termination.-- (1) In general.--Except as provided in paragraphs (2) and (3), a standard health plan that is issued to an individual shall be renewed, at the option of the individual. (2) Grounds for refusal to renew or terminate.--A standard health plan sponsor may refuse to renew, or may terminate, a standard health plan under this title only for-- (A) in the case of plan in a participating State and any community rating area in such State with respect to which the requirements of title X have not become effective, nonpayment of premiums; (B) fraud on the part of the individual relating to such plan; or (C) misrepresentation of material facts on the part of the individual relating to an application for coverage or claim for benefits. (3) Termination of plans.--A standard health plan may elect not to renew or make available the standard health plan through a particular type of delivery system in a community rating area, but only if the standard health plan-- (A) elects not to renew all of its standard health plans using such delivery system in such community rating area; and (B) provides notice to the appropriate certifying authority and each individual covered under the plan of such termination at least 180 days before the date of expiration of the plan. In such case, a standard health plan sponsor may not provide for the issuance of any standard health plan using such a delivery system in such community rating area during a 5-year period beginning on the date of the termination of the last plan not so renewed. For purposes of this paragraph, the term ``delivery system'' means a delivery system used by a network plan (as defined in section 1128(e)(5)(A)) or a nonnetwork plan. (d) Certain Excluded Plans.--The provisions of this section, other than subsections (c) and (e)(2)(B), shall not apply to any religious fraternal benefit society in existence as of September 1993, which bears the risk of providing insurance to its members, and which is an organization described in section 501(c)(8) of the Internal Revenue Code of 1986 which is exempt from taxation under section 501(a) of such Code. (e) Application of Interim Standards.-- (1) In general.--During the interim standards application period, a health plan sponsor may only offer a health plan in a State if such plan sponsor publicly discloses the health plans such sponsor offers in the State and each offered plan meets the standards specified in paragraph (2). (2) Specified standards.-- (A) Issue and availability.--The standards specified in subsections (a) and (b) if the individual or group applies for coverage during the open enrollment period required under section 1112(h). (B) Renewal.--The standards specified in subsection (c), except paragraph (3) shall be applied by substituting ``State'' for ``community rating area''. (3) Interim standards application periods.--The interim standards application period is-- (A) in the case of the standard specified in paragraph (2)(A), on or after January 1, 1995, and before January 1, 1997; and (B) in the case of the standard specified in paragraph (2)(B), on or after August 1, 1994, and before January 1, 1997. (4) Preemption.--The requirements of this subsection do not preempt any State law unless State law directly conflicts with such requirements. The provision of additional protections under State law shall not be considered to directly conflict with such requirements. The Secretary may issue letter determinations with respect to whether this subsection preempts a provision of State law. (5) Construction.--The provisions of this subsection shall be construed in a manner that assures, to the greatest extent practicable, continuity of health benefits under health plans in effect on the effective date of this title. (6) Special rules for acquisitions and transfers.--The Secretary may issue regulations regarding the application of this subsection in the case of health plans (or groups of such plans) which are transferred from one health plan sponsor to another sponsor through assumption, acquisition, or otherwise. SEC. 1112. ENROLLMENT. (a) In General.--Each standard health plan shall establish an enrollment process consistent with this section. (b) Annual Open Enrollment Period.--Each standard health plan shall permit eligible individuals to enroll (or change enrollment) in the plan during each annual open enrollment period for each community rating area specified by the appropriate certifying authority under section 1503. (c) Additional Periods of Authorized Changes in Enrollment.-- (1) In general.--Each standard health plan shall provide for changes in enrollment with respect to such other periods and occurrences (including changes in residence, appropriate changes in employment, and the insolvency of carriers or experience-rated employers) for which an individual is authorized to change enrollment in standard health plans, as the Secretary shall specify. (2) Disenrollment for Cause.-- (A) In general.--The Secretary shall establish procedures by which individuals enrolled in a standard health plan may disenroll from such plan for good cause (as defined by Secretary) at any time during a year and enroll in another standard health plan. Such procedures shall be implemented by participating States in a manner that ensures continuity of coverage for the standard benefits package or the alternative standard benefits package for such individuals during the year. (B) Additional remedies.--In the case of an individual who changes enrollment from a plan for good cause due to a pattern of underservice under a plan, the Secretary may provide rules under which the carrier providing the standard health plan is liable, to the subsequent standard health plan in which the individual is enrolled, for excess costs (as identified in accordance with such rules) during the period for which it may be reasonably anticipated that the individual would (but for such cause) have continued enrollment with the original standard health plan. (d) Effectiveness of Change of Enrollment.--Except as the Secretary may provide, changes in enrollment during an annual open enrollment period under subsection (a) shall take effect as determined by the appropriate certifying authority. The Secretary shall also provide when a change of enrollment under subsection (c) becomes effective. (e) Direct Enrollment.-- (1) In general.--Subject to paragraph (2), each community- rated standard health plan shall provide for the direct enrollment of community-rated individuals in the plan under methods and procedures established by the Secretary. (2) Enrollment processes.--The Secretary shall provide standards for States to ensure the broad availability and processing of enrollment forms, including direct enrollment through the mail, and other such processes as the Secretary may designate. (f) Marketing Fees.--A community-rated standard health plan may impose a marketing fee surcharge for community-rated individuals enrolling in the plan through an agent, broker, or other authorized sales method, or through a direct enrollment process. Such surcharge shall be in addition to the highest marketing fee of such plan for community-rated individuals enrolled in such a plan through any purchasing cooperative in the community rating area. (g) Change of Enrollment.--As used in this section, the term ``change of enrollment'' includes, with respect to an individual-- (1) a change in the standard health plan in which the individual is enrolled, (2) a change in the type of family enrollment, and (3) the enrollment of the individual at the time the individual's status changes to a community-rated individual, experience-rated individual, or a premium subsidy-eligible individual under section 6002. (h) Application of Interim Standard.-- (1) In general.--During the interim standard application period, a health plan sponsor may only offer a health plan in a State if such plan sponsor publicly discloses the health plans such sponsor offers in the State and each offered plan provides for an annual open enrollment period of at least 30 days. (2) Interim standard application periods.--The interim standard application period is on or after January 1, 1995, and before January 1, 1997. (3) Application of rules.--Paragraphs (4), (5), and (6) of section 1111(d) shall apply to this subsection. SEC. 1113. COVERAGE OF DEPENDENTS. (a) In General.--Except as otherwise provided in this Act, a standard health plan shall enroll all members of the same family (as defined in subsection (b)). (b) Family Defined.--In this Act, unless otherwise provided, the term ``family''-- (1) means, with respect to an individual who is not a child (as defined in subsection (c)), the individual; and (2) includes the following persons (if any): (A) The individual's spouse. (B) The individual's children (and, if applicable, the children of the individual's spouse). (c) Classes of Enrollment; Terminology.-- (1) In general.--In this Act, each of the following is a separate class of enrollment: (A) Coverage only of an individual (referred to in this Act as the ``individual'' enrollment or class of enrollment). (B) Coverage only of a child (referred to in this Act as the `single child' enrollment or class of enrollment). (C) Coverage only of one or more children (referred to in this Act as the `multiple children' enrollment or class of enrollment). (D) Coverage of a married couple without children (referred to in this Act as the ``couple-only'' enrollment or class of enrollment). (E) Coverage of an individual and one or more children (referred to in this Act as the ``single parent'' enrollment or class of enrollment). (F) Coverage of a married couple and one or more children (referred to in this Act as the ``dual parent'' enrollment or class of enrollment). (2) References to family and couple classes of enrollment.--In this Act: (A) Family.--The terms ``family enrollment'' and ``family class of enrollment'', refer to enrollment in a class of enrollment described in any subparagraph of paragraph (1) (other than subparagraph (A)). (B) Couple.--The term ``couple class of enrollment'' refers to enrollment in a class of enrollment described in subparagraph (D) or (F) of paragraph (1). (d) Spouse; Married; Couple.-- (1) In general.--In this Act, the terms ``spouse'' and ``married'' mean, with respect to a person, another individual who is the spouse of the person or married to the person, as determined under applicable State law. (2) Couple.--The term ``couple'' means an individual and the individual's spouse. (e) Child Defined.-- (1) In general.--In this Act, except as otherwise provided, the term ``child'' means an individual who is a child (as determined under paragraph (3)) who-- (A) is under 25 years of age or is disabled, and (B) is unmarried. The Secretary may adjust the age limitation in subparagraph (A) with respect to part-time or full-time students. (2) Application of state law.--Subject to paragraph (3), determinations of whether a person is the child of another person shall be made in accordance with applicable State law. (3) National rules.--The Secretary may establish such national rules respecting individuals who will be treated as children under this Act as the Secretary determines to be necessary. Such rules shall be consistent with the following principles: (A) Step child.--A child includes a step child who is an individual living with an adult in a parent-child relationship. (B) Disabled child.--A child includes an unmarried dependent individual regardless of age who is incapable of self-support because of mental or physical disability which existed before age 25. (C) Certain intergenerational families.--A child includes the grandchild of an individual if-- (i) the parent of the grandchild is a child and the parent and grandchild are living with the grandparent; or (ii) the grandparent has legal custody of the grandchild. (D) Treatment of emancipated minors.--An emancipated minor shall not be treated as a child. (E) Children placed for adoption.-- (i) In general.--A child includes a child who is placed for adoption with an individual, except when the child is a child in State- supervised care. (ii) Placed for adoption.--The term ``placed for adoption'' in connection with any placement for adoption of a child with any individual, means the assumption and retention by such individual of a legal obligation for total or partial support of such child in anticipation of the adoption of such child. (f) Additional Rules.-- (1) In general.--The Secretary shall provide for such additional exceptions and special rules, including rules relating to-- (A) families in which members are not residing in the same area or in which children are not residing with their parents, (B) changes in family composition occurring during a year, (C) treatment of children in State-supervised care, and (D) treatment of children of parents who are separated or divorced, as the Secretary finds appropriate. (2) Children in state-supervised care.-- (A) In general.--In the case of a child in State- supervised care (as described in subparagraph (B)), the child shall be considered as a family of one and enrolled by the State agency who has been awarded temporary or permanent custody of the child (or which has legal responsibility for the child) in a high cost- sharing plan unless the State agency has established a special health service delivery system designated to customize and more efficiently provide health services to children in State-supervised care, in which case the State agency will enroll the child in the plan appropriate to ensure access to such a special health service delivery system. (B) Children in state-supervised care.--For purposes of subparagraph (A), the term ``child in State-supervised care'' means any child who is residing away from the child's parents and is temporarily or permanently, on a voluntary or involuntary basis, under the responsibility of a public child welfare or juvenile services agency or court. Such term includes any child who is not yet made a ward of the court or adjudicated as a delinquent residing in emergency shelter care, any child in the physical custody of public or private agencies, and any child who is with foster parents, or other group or residential care providers. Such term also includes any child who is legally adopted and for whom the Federal or State government is providing adoption assistance payments. (g) Application of Interim Standards.-- (1) In general.--During the interim standards application period, a health plan sponsor may only offer a health plan in a State if such plan meets the standards specified in this section. (2) Interim standards application periods.--The interim standards application period is on or after January 1, 1995, and before January 1, 1997. (3) Application of rules.--Paragraphs (4), (5), and (6) of section 1111(d) shall apply to this subsection. SEC. 1114. NONDISCRIMINATION BASED ON HEALTH STATUS. (a) No Limits on Coverage; No Pre-Existing Condition Limits.-- Except as provided in subsection (b), a standard health plan may not-- (1) terminate, restrict, or limit coverage or establish premiums based on the health status, medical condition, claims experience, receipt of health care, medical history, anticipated need for health care services, disability, or lack of evidence of insurability of an individual; (2) terminate, restrict, or limit coverage in any portion of the plan's community rating area, except as provided in section 1111(b)(2); (3) except as provided in section 1111(c)(2), cancel coverage for any community-rated individual until that individual is enrolled in another applicable standard health plan; (4) impose waiting periods before coverage begins; or (5) impose a rider that serves to exclude coverage of particular individuals or particular health conditions. (b) Treatment of Preexisting Condition Exclusions.-- (1) In general.--Subject to paragraph (4), before January 1, 2002, a standard health plan may impose a limitation or exclusion of benefits relating to treatment of a condition based on the fact that the condition preexisted the effective date of the plan with respect to an individual if-- (A) the condition was diagnosed or treated during the 3-month period ending on the day before the date of enrollment under the plan; (B) the limitation or exclusion extends for a period not more than 6 months after the date of enrollment under the plan; (C) the limitation or exclusion does not apply to an individual who, as of the date of birth, was covered under the plan; or (D) the limitation or exclusion does not relate to pregnancy. (2) Continuous coverage.--A standard health plan shall provide that if an individual under such plan is in a period of continuous coverage with respect to particular services as of the date of enrollment under such plan, any period of exclusion of coverage with respect to a preexisting condition as permitted under paragraph (1) shall be prohibited. (3) Definitions.--As used in this subsection: (A) Period of continuous coverage.--The term ``period of continuous coverage'' means, with respect to particular services, the period beginning on the date an individual is enrolled under a standard health plan or an equivalent health care program which provides benefits with respect to such services and ends on the date the individual is not so enrolled for a continuous period of more than 3 months. (B) Preexisting condition.--The term ``preexisting condition'' means, with respect to coverage under a standard health plan, a condition which was diagnosed, or which was treated, within the 3-month period ending on the day before the first date of such coverage (without regard to any waiting period). (4) No exclusion during amnesty period or with respect to a subsidy-eligible individual.--This subsection shall not apply-- (A) during the first annual open enrollment period specified by the appropriate certifying authority under section 1503, and (B) with respect to the enrollment of an individual eligible for a premium subsidy under subtitle A of title VI. (c) Application of Interim Standard.-- (1) In general.--During the interim standard application period, a health plan sponsor may only offer a health plan in a State if such plan meets the standard specified in paragraph (2). (2) Specified standards.-- (A) Exclusion.--The standards specified in subsection (b) by substituting-- (i) ``6-month'' for ``3-month'' in paragraph (1)(A), and (ii) ``major medical insurance plan or other plan offering coverage similar to the benefits included in the standard benefits package as established under subtitle C'' for ``standard health plan''. (B) Coverage.--A self-insured health plan may not reduce or limit coverage of any condition or course of treatment that is expected to cost more than $2,500 during any 12-month period. (3) Interim standards application period.--The interim standards application period is-- (A) in the case of the standard specified in paragraph (2)(A), on or after January 1, 1995, and before January 1, 1997, and (B) in the case of the standard specified in paragraph (2)(B), on or after August 1, 1994, and before January 1, 1997. (4) Application of rules.--Paragraphs (4), (5), and (6) of section 1111(e) shall apply to this subsection. SEC. 1115. BENEFITS. (a) In General.--A standard health plan shall offer to all enrollees in the plan the standard benefits package or the alternative standard benefits package established under subtitle C. (b) Alternative Standard Benefits Package.-- (1) In general.--A carrier may only offer a standard health plan with an alternative standard benefits package in a community rating area if such carrier also offers a standard health plan with a standard benefits package in such area. (2) Inclusion in risk adjustment and reinsurance programs.--Any standard health plan with an alternative standard benefits packages shall be included in any reinsurance or risk adjustment program under section 1117 operating in the community rating area in which such plan is offered. (3) Offer prohibited if mandates required.--A carrier may not offer an alternative benefits package in a participating State and any community rating area in such State with respect to which the requirements of title X have become effective. SEC. 1116. COMMUNITY RATING REQUIREMENTS. (a) Applicability.--Except as provided in subsection (e), the provisions of this section shall apply to community-rated standard health plans. (b) Standard Premiums With Respect to Community-Rated Individuals.--Subject to subsection (d), each community-rated standard health plan shall establish within each community rating area in which the plan is to be offered a standard premium for individual enrollment for the standard benefits package and the alternative standard benefits package established under subtitle C. (c) Uniform Premiums Within Community Rating Areas.-- (1) In general.--Subject to paragraph (2), the standard premium described in subsection (b) for all community-rated individuals within a community rating area shall be the same. (2) Application to enrollees.-- (A) In general.--The premium charged for coverage in a standard health plan shall be the product of-- (i) the standard premium (established under paragraph (1)); (ii) in the case of enrollment other than individual enrollment, the family adjustment factor specified under subparagraph (B); and (iii) the age adjustment factor (specified under subparagraph (C)). (B) Family adjustment factor.--The Secretary, in consultation with the NAIC, shall develop a family adjustment factor that reflects the relative actuarial costs of benefit packages based on the applicable family enrollment (as compared with such costs for individual enrollment). (C) Age adjustment factor.--The Secretary, in consultation with the NAIC, shall specify, within 6 months of the date of the enactment of this Act, uniform age categories and rating increments for age adjustment factors that reflect the relative actuarial costs of benefit packages among enrollees. The highest age adjustment factor may not exceed twice the lowest age adjustment factor for individuals 18 to 65 years of age. The Secretary shall also provide for the gradual phaseout of age adjustment factors by January 1, 2002. (d) Lower Premium Through Purchasing Cooperatives.--Notwithstanding any other provision of this section, no premium may be charged to a community-rated individual by a community-rated standard health plan in a community rating area which is not the same premium negotiated for such plan offered through any purchasing cooperative in such area. (e) Experience Rating.-- (1) Applicability.--The provisions of this subsection shall apply to experience-rated standard health plans. (2) Rating.--For purposes of applying this section to experience-rated employers, the employees of the employer involved shall constitute the community with respect to the determination of the premium. (3) Premiums.--An experience-rated standard health plan may not vary the premium imposed with respect to experience-rated individuals enrolled in the plan, except as may be allowed under this section with respect to geographic and family coverage factors (as determined by the Secretary of Labor) under the plan. SEC. 1117. RISK ADJUSTMENT AND REINSURANCE. (a) In General.--Except as provided in subsection (b), each standard health plan shall participate in a standard health plan risk adjustment program and a reinsurance program implemented by the State in accordance with section 1504. (b) Multistate Plans.--Each multistate self-insured standard health plan shall participate in a reinsurance program developed by the Secretary of Labor under section 1482. SEC. 1118. FINANCIAL SOLVENCY REQUIREMENTS AND CONSUMER PROTECTION AGAINST PROVIDER CLAIMS. (a) Solvency Protection.--Each standard health plan shall meet financial solvency requirements to assure protection of enrollees with respect to potential insolvency. Each standard health plan shall meet requirements relating to capital and solvency established by the Secretary under section 1401(h). (b) Protection Against Provider Claims.--In the case of a failure of a standard health plan to make payments with respect to the standard benefits covered under the plan for any reason, an individual who is enrolled under the plan is not liable to any health care provider with respect to the provision of health services within such set of benefits for payments in excess of the amount for which the enrollee would have been liable if the plan were to have made payments in a timely manner. PART 3--DELIVERY SYSTEM REFORM SEC. 1121. PROHIBITION OF DISCRIMINATION. (a) In General.--Each standard health plan shall comply with the antidiscrimination requirements of section 1602. (b) Additional Antidiscrimination Requirements.-- (1) In general.--No standard health plan may discriminate on the basis of the provider's status as a member of a health care profession for the purposes of selecting among providers of health services for participation in a provider network, but only if the State authorizes members of that profession to render the services in question and such services are covered in the standard benefits package established under subtitle C. (2) Rule of construction.--Nothing in paragraph (1)(B) shall be construed as requiring any standard health plan to: (A) include in a network any individual provider; (B) establish any defined ratio of different categories of health professionals; or (C) establish any specific utilization review or internal quality standards other than that required in other provisions of this Act. SEC. 1122. QUALITY ASSURANCE STANDARDS. (a) In General.--Each standard health plan shall comply with the plan performance standards in accordance with subtitle A of title V. Each standard health plan shall establish procedures, including ongoing quality improvement procedures, to ensure that the health care services provided to enrollees under the plan will be provided under reasonable standards of quality of care consistent with prevailing professionally recognized standards of medical practice and the quality standards established under subtitle A of title V. (b) Internal Quality Assurance Program.--Each standard health plan shall establish, and communicate to its enrollees and its providers, an ongoing internal program, including periodic reporting, to monitor and evaluate the quality and cost effectiveness of its health care services, pursuant to standards established by the National Quality Council. SEC. 1123. CONSUMER GRIEVANCE PROCESS. Each standard health plan shall demonstrate to the appropriate certifying authority the capability to administer the plan in a manner which ensures due process for all enrollees under rules established by the Secretary. SEC. 1124. HEALTH SECURITY CARDS. Each standard health plan shall issue a health security card to each individual enrolled in such plan in accordance with subtitle B of title V and regulations promulgated by the Secretary. SEC. 1125. INFORMATION AND MARKETING STANDARDS. (a) In General.--Each standard health plan shall provide information to the participating State and each purchasing cooperative through which such plan is offered in accordance with sections 1401(d) and 5009, other applicable information requirements of this Act, and rules promulgated by the Secretary. (b) Marketing Methods; Advertising Materials.--A standard health plan may utilize direct marketing, agency, or other arrangements to distribute health plan information, subject to applicable fair marketing practices laws and standards established by the State or by the Secretary, including standards to prevent selective marketing. All advertising, promotional materials, and other communications with health plan members and the general public must be factually accurate and responsive to the needs of served populations. A standard health plan may not distribute marketing materials to an area smaller than the entire community rating area of the plan. (c) Payment of Agent Commissions.--A standard health plan-- (1) may pay a commission or other remuneration to an agent or broker in marketing the plan to individuals or groups, but (2) may not vary such remuneration based, directly or indirectly, on the anticipated or actual claims experience associated with the group or individuals to which the plan was sold. (d) Materials in Appropriate Languages.--In the case of a community rating area that includes a significant number or proportion of residents with limited English proficiency, each standard health plan in such area shall provide all materials under this Act at an appropriate reading level and in the native languages of such residents, as appropriate. SEC. 1126. INFORMATION REGARDING A PATIENT'S RIGHT TO SELF- DETERMINATION IN HEALTH CARE SERVICES. (a) In General.--Each standard health plan shall provide written information to each individual enrolling in such plan of such individual's right under State law (whether statutory or as recognized by the courts of the State) to make decisions concerning medical care, including the right to accept or refuse medical treatment and the right to formulate advance directives (as defined in section 1866(f)(3) of the Social Security Act (42 U.S.C. 1395cc(f)(3))), and the written policies of the standard health plan with respect to such right. (b) Promotion of Shared Decision Making.--Each standard health plan shall promote shared decision making by assuring that patients are appropriately informed about health care treatment options. SEC. 1127. CONTRACTS WITH PURCHASING COOPERATIVES. (a) Contracts with Cooperatives.--A community-rated standard health plan provided by a carrier shall enter into contracts with each purchasing cooperative seeking such a contract in the community rating area served by the plan. (b) Pricing.--No community-rated standard health plan shall offer a rate to a purchasing cooperative in the community rating area served by the plan that is more than the premium rate determined under section 1116. Such a plan may charge a marketing fee as specified under section 1324(b)(1). SEC. 1128. HEALTH PLAN ARRANGEMENTS WITH PROVIDERS. (a) Providers Outside Area.--A State may not limit the ability of any plan to contract with a provider of health services located outside of the geographic boundaries of a community rating area or the State. (b) Treatment of Cost-Sharing.--Each standard health plan which provides the standard benefits package shall include in its payments to providers such additional reimbursements as may be necessary to reflect cost-sharing reductions to which individuals are entitled under subtitle A of title VI. (c) Provider Verification.--Each standard health plan shall ensure that all health care providers reimbursed by the plan are authorized under State law to provide applicable services. Each standard health plan shall-- (1) verify the credentials of practitioners and facilities; (2) ensure that all providers meet applicable State licensing and certification standards; (3) ensure that each health care provider participating in the plan annually discloses information regarding operations, ownership, finances, and workforce necessary to evaluate the providers compliance with this Act; (4) oversee the quality and performance of participating providers, consistent with section 1122; and (5) investigate and resolve consumer complaints against participating providers. (d) Requirements for Nonnetwork Plans.-- (1) In general.--Each standard health plan shall demonstrate, based on standards established by the Secretary, arrangements with a sufficient number, distribution, and variety of qualified health professionals that will accept the plan's payment rates in full to ensure that all nonnetwork items and services covered by the standard benefits package established under subtitle C are available and accessible to all enrollees throughout the community rating area with reasonable promptness and in a manner which assures continuity. (2) Definitions relating to nonnetwork plans.--For purposes of this Act: (A) Nonnetwork plan defined.--The term ``nonnetwork plan'' means a standard health plan that does not utilize a provider network (as defined in subsection (e)(5)(B)). (B) Nonnetwork items and services.--The term ``nonnetwork items and services'' means items or services provided to an individual enrolled under a standard health plan by a health care provider who is not a member of a provider network of the plan. (e) Requirements for Network Plans.-- (1) Agreements.--Each standard health plan shall enter into agreements or have such other arrangements with a sufficient number, distribution, and variety of qualified health professionals within the network that will accept the plan's payment rates as payments in full to ensure that all services covered by the standard benefit package established under subtitle C are available and accessible to all enrollees throughout the health plan service area (established under section 1502(d)) with reasonable promptness and in a manner which assure continuity. (2) Gatekeeper.--With respect to each standard health plan that utilizes a gatekeeper or similar process to approve health care services, such plan shall ensure that such gatekeeper or process does not create an undue burden for enrollees with complex or chronic health conditions and shall ensure access to relevant specialists for the continued care of such enrollees when medically indicated. In cases of a patient with a severe, complex, or chronic health condition, such plan shall determine, in conjunction with the enrollee and the enrollee's primary care provider, whether it is medically necessary or appropriate to use a specialist or a care coordinator from an interdisciplinary team as the gatekeeper or in the health care approval process. (3) Continued care.--Each standard health plan shall develop and implement mechanisms for coordinating the delivery of care among different providers so as to enhance continuity of care for the patient. (4) Eligible centers of specialized treatment expertise.-- (A) In general.--Each standard health plan must demonstrate that adults, children, and individuals with disabilities have access to specialized treatment expertise when medically indicated by meeting evaluation criteria established by the Secretary. In establishing such criteria, the Secretary may consider a process by which a standard health plan could be deemed to meet such evaluation criteria if such plan demonstrates referrals to designated centers of specialized care when medically necessary or appropriate, informs enrollees of the availability of referral care, and ensures compliance with section 1123. (B) Eligible centers.--The Secretary shall establish criteria for designating centers of specialized care and shall designate eligible centers based on such criteria. The criteria shall include requirements for staff credentials and experience, and requirements for measured outcomes in the diagnosis and treatment of patients. The Secretary shall develop additional criteria for outcomes of specialized treatment as research findings become available. To be designated as a center of specialized care, a center shall-- (i) attract patients from outside the center's local geographic region, from across the State or the Nation; and (ii) either sponsor, participate in, or have medical staff who participate in peer- reviewed research. (C) Limitation.--A State may not establish rules or policies that require or encourage standard health plans to give preference to centers of specialized treatment expertise within the State or within the community rating area. A standard health plan shall not prohibit an academic health center, teaching hospital, or other center for specialized care with which it contracts from contracting with one or more other plans. (D) Specialized treatment expertise.--For purposes of this paragraph, the term ``specialized treatment expertise'', with respect to the treatment of a health condition by an eligible center, means expertise in diagnosing and treating unusual diseases or conditions, diagnosing and treating diseases or conditions which are unusually difficult to diagnose or treat, and providing other specialized health care. (5) Definitions relating to network plans.--For purposes of this Act: (A) Network plan defined.--The term ``network plan'' means a standard health plan that utilizes a provider network. (B) Provider network defined.--The term ``provider network'' means, with respect to a standard health plan, providers that have entered into an agreement with the plan under which such providers are obligated to provide items and services in the standard benefits package established under subtitle C to individuals enrolled in the plan, or have an agreement to provide services on a fee-for-service basis. (C) Network items and services.--The term ``network items and services'' means items or services provided to an individual enrolled under a standard health plan by a health care provider who is a member of a provider network of the plan. (f) Emergency and Urgent Care Services.-- (1) In general.--Each standard health plan shall cover emergency and urgent care services provided to enrollees, without regard to whether or not the provider furnishing such services has a contractual (or other) arrangement with the plan to provide items or services to enrollees of the plan and in the case of emergency services without regard to prior authorization. (2) Payment amounts.--In the case of emergency and urgent care provided to an enrollee outside of a standard health plan's community rating area, the payment amounts of the plan shall be based on the applicable fee schedule described in subsection (g). (g) Application of Plan Fee Schedule.-- (1) In general.--Subject to paragraph (2), each standard health plan that provides for payment for services on a fee- for-service basis and has not established an agreement or contractual arrangement with providers specifying a basis for payment shall make such payment to such providers under a fee schedule established by the plan. (2) Rule of construction.--Nothing in the paragraph (1) shall be construed to prevent a standard health plan from providing for a different basis or level of payment than the fee schedule established under such paragraph as part of a contractual agreement with participating providers under the plan. (h) Physician Participation Program; Requirement of Direct Billing.-- (1) Physician participation program.-- (A) In general.--Each standard health plan shall establish a program under which participating physicians shall agree to accept the plan's payment schedule as payment in full, and agree not to charge patients more than the cost-sharing required by such plan. Each such plan shall make available the list of participating physicians to enrollees and prospective enrollees. (B) Coverage under agreements with plans.--The agreements or other arrangements entered into under subsection (e)(1) between a standard health plan and the health care providers providing the standard benefits package established under subtitle C to individuals enrolled with the plan shall prohibit a provider from engaging in balance billing described in subparagraph (A). (2) Direct billing.-- (A) In general.--A provider may not charge or collect from an enrollee amounts that are payable by the standard health plan (including any cost-sharing reduction assistance payable by the plan) and shall submit charges to such plan in accordance with any applicable requirements of subtitle B of title V (relating to health information systems). (B) Prohibition.--An individual or entity that performs clinical laboratory services may not present or cause to be presented, a claim, bill, or demand for payment to any person other than the individual receiving such services, or to the standard health plan of the individual, except that the Secretary may by regulation establish appropriate exceptions to the requirement of this subparagraph. (3) Prohibition of balance billing of taxes.--Any agreement entered into between a standard health plan and a provider shall prohibit the provider from charging patients the amount of any tax recovered from the provider under section 4518 of the Internal Revenue Code of 1986. (4) Rule of construction.--Nothing in this Act shall be construed to-- (A) require or force an individual to receive health care solely through the individual's standard health plan; or (B) prohibit any individual from privately contracting with any health care provider and paying for the treatment or service provider by such provider on a cash basis or any other basis as agreed to between the individual and the provider. (i) Relation to Detention.--A standard health plan is not required to provide any reimbursement to any detention facility for services performed in that facility for detainees in the facility. SEC. 1129. UTILIZATION MANAGEMENT PROTOCOLS AND PHYSICIAN INCENTIVE PLANS. (a) Requiring Consumer Disclosure.--Each standard health plan shall disclose upon request to enrollees (and prospective enrollees) and to participating providers (and prospective providers), the protocols and financial incentives used by the plan, including utilization management protocols and physician incentive plans for controlling utilization and costs, while protecting proprietary business information to the extent specified by the Secretary. (b) Utilization Management.--The utilization review and management activities of each standard health plan, provided either directly or through contract, shall meet the following standards as defined by the Secretary: (1) Personnel.--All review determinations shall be made by health professionals who are licensed, certified, or otherwise credentialed and who are qualified to review utilization of the treatment being sought. (2) Review process.--Each standard health plan shall base utilization management on current scientific knowledge, stress the efficient delivery of health care and quality outcomes, rely primarily on evaluating and comparing practice patterns rather than routine case-by-case review, be consistent and timely in application, and have a process for making review determinations for urgent and emergency care 24 hours a day. (3) No financial incentive.--Utilization management by each standard health plan may not create financial incentives for reviewers or providers to reduce or limit medically necessary or appropriate services. (c) Physician Incentive Plans.--A standard health plan may not operate a physician incentive plan unless such incentive plan meets the requirements of section 1876(i)(8)(A) of the Social Security Act (42 U.S.C. 1395mm(i)(8)(A)). PART 4--SUPPLEMENTAL HEALTH BENEFITS PLANS SEC. 1141. SUPPLEMENTAL HEALTH BENEFITS PLANS. (a) Treatment of Supplemental Health Benefits Plans.-- (1) In general.--Nothing in this Act may be construed as preventing a standard health plan sponsor from offering and pricing (in a manner that is separate from the offering and pricing of the standard health plans offered by such sponsor in the community rating area) supplemental health benefits plans pursuant to the State certification plan, the requirements of this section, and regulations promulgated by the Secretary. (2) Plans defined.--In this Act: (A) Supplemental health benefits plan.--The term ``supplemental health benefits plan'' means a supplemental services plan or a cost-sharing plan. (B) Supplemental services plan.--The term ``supplemental services plan'' means a health plan which provides-- (i) coverage for services and items not included in the standard benefits package established under subtitle C, (ii) coverage for items and services included in such package but not covered because of a limitation in amount, duration, or scope of benefits, or (iii) both. (C) Cost-sharing plan.--The term ``cost-sharing plan'' means a health plan which provides coverage for deductibles and coinsurance imposed as part of the standard benefits package established under subtitle C. (b) Requirements for Supplemental Services Plans.-- (1) Application of certain health plan standards.-- (A) In general.--The standards specified in subparagraph (B) shall apply with respect to each supplemental services plan in the same manner as such standards apply with respect to a certified standard health plan. (B) Specified standards.--The standards specified in this subparagraph are as follows: (i) Section 1111 (relating to guaranteed issue, availability, and renewability). (ii) Section 1112 (relating to enrollment). (iii) Section 1114 (relating to nondiscrimination based on health status). (iv) Section 1116 (relating to rating limitations for community-rated market). (2) No duplicative health benefits.--A standard health plan sponsor or any other entity may not offer any supplemental services plan that-- (A) duplicates the standard benefits package established under subtitle C, or (B) duplicates any coverage provided under the medicare program to any medicare-eligible individual. (3) Restrictions on marketing abuses.--Not later than May 1, 1995, the Secretary shall develop minimum standards that prohibit marketing practices by standard health plan sponsors and other entities offering supplemental services plans that involve-- (A) providing monetary incentives for, or tying or otherwise conditioning, the sale of the plan to enrollees in a certified standard health plan of the sponsor or entity; (B) linking in any manner to the plan's standard benefits package; or (C) using or disclosing to any party information about the health status or claims experience of participants in a certified standard health plan for the purpose of marketing a supplemental services plan. (c) Requirements for Cost-Sharing Plans.-- (1) Rules for offering of policies.--A cost-sharing plan may be offered to an individual only if-- (A) the plan is offered by the standard health plan in which the individual is enrolled; (B) the standard health plan offers the plan to all individuals enrolled in the standard health plan; (C) the individual is not enrolled in an alternative benefits package; and (D) the plan is offered only during the enrollment periods for standard health plans specified in section 1112. (2) Prohibition of coverage of copayments.--A cost-sharing plan may not provide any benefits relating to any copayments established under subtitle C. (3) Equivalent coverage for all services.--A cost-sharing plan shall provide coverage for items and services in the standard benefits package to the same extent as the plan provides coverage for all items and services in the package. (4) Requirements for pricing.-- (A) In general.--The price of any cost-sharing plan shall-- (i) be the same for each individual or class of family to whom the plan is offered; (ii) include any expected increase in utilization resulting from the purchase of the plan by individuals enrolled in the standard health plan; and (iii) not result in a loss-ratio of less than 90 percent. (B) Loss-ratio defined.--In subparagraph (A)(iii), a ``loss-ratio'' is the ratio of the premium returned to the consumer in payout relative to the total premium collected. Subtitle C--Benefits and Cost-Sharing PART 1--STANDARD BENEFITS PACKAGES SEC. 1201. GENERAL DESCRIPTION OF STANDARD BENEFITS PACKAGES. (a) Standard Benefits Package.--For purposes of this title, a standard benefits package is a benefits package that-- (1)(A) provides all of the items and services under the categories of health care items and services described in section 1202; and (B) provides for at least one of the 3 cost-sharing schedules established under section 1213(c)(2) by the National Health Benefits Board established under section 1211 (referred to in this part as the ``Board'') for such a package; and (2) has an actuarial value that is equivalent to the actuarial value of the benefits package provided by the Blue Cross/Blue Shield Standard Option under the Federal Employees Health Benefits Program as in effect during 1994, adjusted for an average population and adjusted for the particular cost- sharing schedule provided for in the package. (b) Alternative Standard Benefits Package.--For purposes of this title, an alternative standard benefits package is a benefits package that-- (1)(A) provides all of the items and services under the categories of health care items and services described in section 1202; and (B) provides for the very high deductible cost-sharing schedule established under section 1213(c)(3) by the Board for such a package; and (2) has an actuarial value that is less than t