PATIENTS' BILL OF RIGHTS ACT OF 1998
H.R. 3605/S. 1890
Section-by-Section Analysis
The provisions of this bill apply to all private health
plans in the country -- including ERISA plans. It creates a set of federal standards to
protect access to care, ensure quality care, and provide health plan accountability. The
bill is drafted in the Kennedy/Kassebaum model which means that the Department of Labor
has primary jurisdiction for ERISA-covered plans, the states have primary jurisdiction
over traditional insured plans, and, if a state chooses not to enforce any provision of
this act, the enforcement will be carried out by the Department of Health and Human
Services.
TITLE I -- PATIENTS BILL OF RIGHTS
SUBTITLE A -- ACCESS TO CARE
Some people experience difficulties in obtaining access to appropriate medical care in
managed care settings. This bill establishes a set of standards that health plans must
meet. To the extent services are covered under a benefit package, they must be provided
according to these common-sense rules.
- Sec. 101. ACCESS TO EMERGENCY SERVICES: Because of fear of denial of
coverage, managed care patients have died delaying seeking emergency care or been injured
when driving past nearby emergency rooms to more distant network ERs. The bill would
remove these major barriers to emergency care by prohibiting prior authorization for
emergency care. Coverage of emergency care, including out-of-network care, is based upon
the "prudent layperson" standard, which means that a health plan is required to
cover an emergency visit based on the symptoms rather than the final diagnosis. This
prevents health plans from being able to deny coverage for an emergency visit for a
suspected heart attack that turns out to be severe indigestion. The bill also prohibits
plans from charging patients more for out-of-network emergency care. In addition, plans
are required to cover post-stabilization and maintenance care, when necessary, pursuant to
guidelines already being established by the Secretary of HHS for Medicare and Medicaid.
- Sec. 102. COVERAGE OPTIONS: Some patients in closed-panel HMOs may need
the option to see non-participating providers. Unfortunately, such choice is often not
available to consumers today if their employers offer only one plan. Studies have shown
that when a person has a "choice" of health plans offered to them, their level
of satisfaction with their care increases enormously.
Under this bill, if an employer
offers only one health plan and that health plan is a closed panel HMO, that plan is
required to offer the employees the opportunity to purchase a point-of-service option in
addition to the basic plan offered through the employer. The offer is made upon enrollment
and does not require any contributions from the employer.
- Sec. 103. CHOICE OF PROVIDERS: Health plans must offer their patients
the freedom to choose among available primary care providers and specialty care providers.
In the case of specialists, the plan can limit patients' choice to a set number of
specialty providers if the plan has notified patients that there will be such limits.
- Sec. 104. ACCESS TO SPECIALTY CARE: Uncertainty about whether a health
plan will meet a particular health need generates legitimate, grave concerns. This bill
establishes certain standards to ensure hassle-free access to appropriate specialty care
as follows:
Obstetrical and Gynecological Care: Women are able to select their
OB-GYN as their primary care provider. Women can directly access OB-GYNs for routine
gynecological care and pregnancy-related services without prior authorization from their
primary care providers.
Specialty Care: Plans must have a process for individuals with serious
or chronic conditions to be referred to specialists. If the plan does not have an
appropriate specialist in-network, it must provide an outside referral to such a
specialist at no additional cost to the patient.
For example, if a child needed a pediatric neurologist, but the plan only had an
adult neurologist, that plan would refer the child to such an outside specialist at no
extra-cost to the family than if the care had been provided in-network.
Under this bill, patients with serious, on-going medical conditions are able to choose
a specialist to coordinate their primary and specialty care. The patient would be able to
access this doctor without a referral from the traditional primary care provider, or so-
called "gatekeeper" and the specialist could act as the primary care provider
for that patient.
Health plans must have a process to allow for a "standing referral" to ease
the ability of patients with conditions that require ongoing specialty care to receive
that care.
- Sec. 105. CONTINUITY OF CARE: When health plans terminate providers
without cause or when employers switch health plans for their employees, quality of care
for patients currently undergoing treatment can be severely threatened. This bill allows
for a transition program to lessen those problems.
Patients are able to continue the
course of treatment with the terminated provider (or a provider who is not in their new
plan in the case of an employer changing plans) for up to 90 days. Longer exceptions are
allowed for institutionalized patients, pregnant women, and terminally ill patients. In
all instances, the health care providers must agree to accept the payment rates and
policies and procedures of the pertinent health plan in order to continue the care.
- Sec. 106. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED CLINICAL TRIALS:
For certain illnesses, care through a clinical trial may be the only hope for a cure. This
bill prohibits health plans from denying patients participation in a defined category of
clinical trials and requires plans to cover the routine patient costs of participation. In
order to qualify, an individual must have a life threatening or serious illness for which
no standard treatment is effective, must meet the protocols of the clinical trial, and
participation must offer meaningful potential for significant clinical benefit. In
addition, either the patient's doctor must conclude such treatment is appropriate, or the
patient must have medical data that supports enrollment in the trial. The health plan pays
the clinical trial sponsor for routine care at an agreed-upon rate or at the same rates
they would have paid for care within their plan. There are specific eligibility criteria
used to define a qualified clinical trial.
- Sec. 107. ACCESS TO NEEDED PRESCRIPTION DRUGS: Health plans today
typically use drug formularies to hold down costs. These formularies dictate which
particular drugs a provider may prescribe. If a health plan provides coverage for
prescription drugs through a formulary, participating physicians and pharmacists must be
involved in the development of the formulary. Plans must disclose formulary restrictions
and provide an exception process that enables coverage of non-formulary treatments when
medically indicated.
- Sec. 108. ADEQUACY OF PROVIDER NETWORK: Health plans are required to
have a sufficient number, distribution and variety of participating qualified health care
professionals to assure that all covered health care services are available and accessible
in a timely manner to all plan members.
- Sec. 109. NONDISCRIMINATION IN DELIVERY OF HEALTH SERVICES: Health
plans may not discriminate in the delivery of health care against any member based on
race, ethnicity, national origin, religion, sex, age, mental or physical disability,
sexual orientation, genetic information, or source of payment. This only applies to care
provided to plan enrollees and does not affect the issuance of insurance.
SUBTITLE B -- QUALITY ASSURANCE
In today's health care system, patients have real concerns that quality of care is
taking a backseat to cost containment. The bill makes health plans responsible for
following basic guidelines to ensure quality is monitored and improved.
- Sec. 111. INTERNAL QUALITY ASSURANCE PROGRAM: Health plans must
maintain an ongoing internal quality assurance program. Criteria used to assess quality
include: how well a health plan provides preventive care and meets the special needs of
its members (such as children or the chronically ill). Plans must identify the
"outcomes" of care: do members stay well, or if they become sick, are they
treated successfully? Plans can meet these requirements by meeting Medicare's HMO
standards or by being accredited through a national accreditation organization that is
certified by the Secretary of HHS as having standards that are at least as stringent as
those in this bill.
- Sec. 112. COLLECTION OF STANDARDIZED DATA: Enrollees, prospective
enrollees, and employers need standardized information on health plans to compare quality
and decide which plans best meet their needs. Each health plan must collect and report
uniform quality data to the Secretary that includes: aggregate utilization data, the
demographic characteristics of members, disease-specific and age-specific mortality rates,
satisfaction of enrollees (including voluntary disenrollment and grievance and appeals
data), and quality indicators.
- Sec. 113. PROCESS FOR SELECTION OF PROVIDERS: Health plans must have a
written process for the selection of participating health care providers that includes
minimum professional requirements. Plans cannot use a doctor's high-risk patient base or
location in an area with residents in poorer health status as a basis for excluding them
from participation. Health plans may not discriminate against providers acting within the
scope of their license solely on the basis of that license. However, health plans are not
prohibited from arranging their provider networks to meet the needs of their members. In
addition, health plans cannot discriminate in their selection of participating providers
based on race, national origin, sex, age, religion, disability, or sexual orientation.
- Sec. 114. DRUG UTILIZATION PROGRAM: Managed care enrollees -- and their
doctors -- are concerned that health plans use non-medical or lower level staff to deny
medical care that doctors prescribe in order to save money. If a health plan provides
coverage for prescription drugs, it must establish and maintain a program that encourages
the appropriate use of prescription drugs and take appropriate action to reduce the
incidence of improper drug use and adverse drug reactions and interactions.
- Sec. 115. STANDARDS FOR UTILIZATION REVIEW ACTIVITIES: Health plans
that use utilization review for determinations of coverage (or that contract with an
outside entity to conduct such reviews) must meet certain standards.
Standards: The health plan must have written policies and procedures
for UR that utilize written clinical review criteria. The utilization review program must
be administered by qualified health professionals appropriately trained to conduct
utilization review. Utilization review personnel cannot be compensated in a manner that
provides any incentive for the person to make inappropriate review decisions, and the
number of reviews and their frequency (the "hassle" factor ) must be reasonable.
The program must have a toll-free number and be accessible during normal business hours,
and have a system to respond to after hours calls. If a service/treatment was
pre-authorized, the plan cannot change that coverage retroactively. If a patient or their
representative is dissatisfied with a preliminary utilization review decision, the plan
must provide the opportunity for them to discuss the decision with the medical director or
another appropriate plan representative who has the authority to reverse the initial
decision.
Timing of Decisions: For prior authorization requirements, a decision
must be made within three business days (or less, depending upon the medical urgency of
the case). For continuation of care, a decision must be completed in one business day. For
previously provided services, a decision must be made within 30 days.
Notice of Adverse Determinations: In the case of an adverse
determination, a decision must be provided in writing with an explanation of the reasons
for the denial and the patient's right for appeal. The plan must also allow the patient
access to the clinical review data relied upon to make the determination.
- Sec. 116. HEALTH CARE QUALITY ADVISORY BOARD: A private/public advisory
board would be established to advise the Secretary of HHS on the standardized minimum data
set and other activities to improve health care quality.
SUBTITLE C -- PATIENT INFORMATION
Purchasers -- both individual patients and employers -- need reliable and complete
information on health plans if they are to choose the best plan available to meet their
needs. Well-run health plans already provide, or should be able to easily provide, most of
this information. To avoid information overload, the bill requires that only the most
important information be automatically provided while other, more detailed information is
available upon request. The information must be in a uniform format which allows
comparison among plans, and must be updated on a regular basis.
- Sec. 122. Patient Confidentiality: Health plans are required to
establish procedures to safeguard the privacy of any individually identifiable
information, to maintain such records and information in a manner that is accurate and
timely, and to assure timely access of such individuals to such records and information.
(This is the same as the confidentiality requirements of the Balanced Budget Act of 1997).
- Sec. 123. Health Plan Ombudsmen: Even with the best information and
grievance and appeals rights, the health care marketplace can be confusing. The bill
establishes grants for states to establish health insurance ombudsman programs to help
people navigate the system. If a state does not establish such an office, HHS will provide
the services in that state. The duties of the ombudsmen include helping people choose
among plans and assisting those who encounter difficulty in using a plan.
SUBTITLE D -- GRIEVANCE AND APPEALS PROCEDURES
Within a managed care plan, consumers are concerned that it is difficult to register
complaints or obtain reconsideration of a decision , that appeals of coverage decisions
are not fair and can take too long, and that patients' health or life can be severely
compromised while fighting a plan's bureaucracy.
The bill establishes a system for processing complaints and appealing adverse decisions
on a timely, fair basis, with expedited procedures for life-threatening situations. The
system includes an independent external appeals process, which is fundamental to assuring
that decisions to deny or approve care are based on medical appropriateness -- not cost.
- Sec. 131. ESTABLISHMENT OF PROCESS: A plan must have in place a system
to provide for the presentation and resolution of grievances brought by plan members,
including a written explanation of the process, a system to document and track cases, and
systems that assure timely resolution.
- Sec. 132. INTERNAL APPEALS OF ADVERSE DETERMINATIONS: Appealable
decisions are any of the following: the denial, reduction or termination of benefits
because it was determined experimental or not medically necessary or appropriate; failure
to cover emergency services; failure to provide a choice of provider; failure to furnish
qualified providers; denial of access to specialists; failure to provide continuation
care; failure to provide coverage of routine patient costs under approved clinical trials;
failure to provide access to needed drugs; discrimination in delivery of services.
The
process must include a health care professional who is independent of the case at hand and
it must also include a health professional (who may be the same person) with the same
training/expertise as the case being brought before them. This process must be timely,
based on the medical urgency of the case, but no longer than 72 hours for expedited cases
and 15 business days in the case of all other appeals. With cause, the plan may extend the
time period for resolution of an appeal, except in expedited cases where no extension is
allowed. If the appeal is denied, the plan must provide the patient with an explanation of
the denial in writing and notification of their rights to an external appeal.
Expedited appeals: Some cases may require immediate attention. For
that reason, enrollees may access an expedited review.
Right to external appeal: If the plan does not meet the deadlines of
the above process, the patient has the right to go directly to the external process, if
the case meets the criteria for that level of appeal.
- Sec. 133. EXTERNAL APPEALS OF ADVERSE DETERMINATIONS: The external
appeal process is used for cases not resolved through the internal process -- or cases
which the plan did not complete under the appropriate timeline -- and must involve a claim
in which the decision is based on a determination that such services are not medically
necessary and the amount exceeds a significant threshold, or the patient's life or health
is jeopardized. The procedure may vary depending whether it is for ERISA self-insured
plans or for traditional insurance plans. In each case, the applicable state or federal
authority can choose to construct their own external review entity, certify one external
review entity, or certify multiple such entities. Such entities must also meet
recertification standards. Each health plan must then have a contract with the appropriate
entity (ies) which includes payment by the plan for the direct costs of the external
appeal process.
The external appeal process must provide for a fair, "de
novo" determination ( meaning the case is reviewed anew). The external appeal entity
makes the determination if this is an urgent case that requires an expedited process. All
participants have the opportunity to submit evidence, and the right to an oral
presentation. The plan is also required to provide timely access to all information. The
timeline of these decisions are that they should be made as quickly as possible, but in no
case more than 72 hours for expedited decisions and 60 days for other decisions. In
addition, the external appeal entity must inform patients of their rights to proceed to
the courts.
Qualifications of external review entities: The entities must meet the
following standards: there be no real or apparent conflict of interest; that external
appeals are conducted using clinical peers (health professionals with the same training);
and have sufficient medical, legal, and other expertise and staffing to appropriately
conduct the required activities. In addition, in states that choose to allow health plans
to select among multiple external appeals entities, the state must conduct an audit of a
sample of decisions to ensure that there is no bias in the decision-making process on the
part of the external appeal entities.
SUBTITLE E -- PROTECTING THE DOCTOR-PATIENT
RELATIONSHIP
- Sec. 141. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL COMMUNICATIONS:
Consumers have legitimate fears that medical decision-making in many managed care plans is
made by company bureaucrats with actuarial guidelines rather than their own doctors. In
some cases, the health plan administrators refuse to allow doctors to tell a patient that
a particular service might be appropriate because it would cost the health plan too much
money.
To address this issue, the bill prohibits the use of "gag clauses"
that hinder open communication between health care professionals and their patients.
- Sec. 142. PROHIBITION AGAINST TRANSFER OF INDEMNIFICATION OR IMPROPER INCENTIVE
ARRANGEMENTS: Some doctors may be reluctant to refer patients to specialists
because of financial penalties imposed on the doctor as a result of such a referral. The
bill ends a plan's ability to transfer liability in this fashion from the plan to the
provider. And, it limits financial incentives to underserve consistent with current
Medicare law.
- Sec. 143. ADDITIONAL PROVIDER PARTICIPATION RULES: The bill establishes
a set of reasonable procedures relating to the participation of health professionals. Such
procedures include: notice of the plan participation rules, written notice of adverse
participation decisions, a process within the plan for appealing such adverse decisions,
and consultation with participating health professionals regarding plan policies.
- Sec. 144 PROTECTION FOR PATIENT ADVOCACY:
Often, health care
professionals are the first ones to notice quality of care problems. However, since these
individuals are paid by the health plan, they are often in a position that prevents them
from coming forward with their concerns -- even for individual patients.
Protection for Use of Utilization Review and Grievance Process: Health
care providers who advocate on behalf of a patient, with the patient s consent, through
the utilization review or grievance process are protected from retaliation by the health
plan. Health plan members are also protected from any such action.
Protection for Quality Advocacy by Health Care Professionals: Health
care professionals who in good faith disclose quality of care concerns to an appropriate
public regulatory agency, an appropriate private accreditation body, or appropriate
management personnel of the health plan or institutional provider are protected from
retribution by health plans. This protection extends to the participation, initiation or
cooperation of a health care professional in an investigation or proceeding by an above
listed agency.
SUBTITLE F -- PROMOTING GOOD MEDICAL PRACTICE
Because health plans have gone so far in limiting length-of-stays or denying coverage
for women with breast cancer, the bill includes the following two provisions to protect
quality of care for women:
- Sec. 152. STANDARD RELATING TO BENEFITS FOR CERTAIN BREAST CANCER TREATMENTS:
Health plans must cover a hospital stay of at least 48 hours for women undergoing a
mastectomy and no less than 24 hours for women having a lumpectomy with lymph node
dissection. Doctors and patients, not health plan accountants, can decide on earlier
discharge or outpatient surgery. This provision does not override more protective state
laws.
- Sec. 153. STANDARDS RELATING TO BENEFITS FOR RECONSTRUCTIVE BREAST SURGERY:
Health plans that provide coverage for breast surgery in connection with mastectomies
shall also provide coverage for prostheses or reconstructive breast surgery, and for
lymphodema related to the surgery. This provision does not override more protective state
laws.
SUBTITLE G -- DEFINITIONS
- Sec. 191: DEFINITIONS OF TERMS USED IN THE BILL.
- Sec. 192: PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION: Nothing in this
bill changes the current health regulatory structure whereby states have authority to
regulate fully-insured plans and the Department of Labor maintains jurisdiction over
self-insured plans.
TITLE II -- APPLICATION OF PATIENT
PROTECTION STANDARDS
TO GROUP HEALTH PLANS AND HEALTH INSURANCE COVERAGE
UNDER PUBLIC HEALTH SERVICE ACT
The provisions of this title track the structure of the Health Insurance Portability
and Accountability Act (HIPAA) to make the same set of protections apply in both the group
and the individual health insurance market. Unlike HIPAA, there would be no opt-out for
state and local governments.
TITLE III -- AMENDMENTS TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974
- Sec. 301. APPLICATION OF PATIENT PROTECTION STANDARDS TO GROUP HEALTH PLANS AND
GROUP HEALTH INSURANCE COVERAGE UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.
This provision extends the bill's patient protection standards to ERISA group health
plans. If an employer provides coverage through an insurance plan, they are protected from
certain responsibilities that are transferred to the responsibility of the health
insurance issuer.
- Sec. 302. ERISA PREEMPTION NOT TO APPLY TO CERTAIN ACTIONS INVOLVING HEALTH
INSURANCE POLICY HOLDERS: Because ERISA preempts state laws, health plans are
currently not liable (except for the value of the benefit) if they arbitrarily limit care
to their patients and the limitation results in harm to the patient. The bill amends ERISA
to allow state law to determine whether a patient can bring a state cause of action
against health plan administrators who cause harm through their actions. The provision
explicitly protects from liability employers who are not involved in the decision-making
that resulted in harm.
TITLE IV -- APPLICATION TO GROUP
HEALTH PLANS UNDER THE INTERNAL REVENUE CODE OF 1986
Following the structure of the Health Insurance Portability and Accountability Act,
this title provides enforcement through the Internal Revenue Code.
TITLE V -- EFFECTIVE DATES;
COORDINATION IN IMPLEMENTATION
This title coordinates implementation dates. In general, the effective date is January
1, 1999. For collective bargaining agreements, it is effective after the contract
terminates if that is later than the general effective date.
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