Patient Protection During the 106th Congress: Side-by-Side Comparison of House- and Senate-Passed Bills

Patient Protection During the 106th Congress: Side-by-Side Comparison of House- and Senate-Passed Bills

Order Code RL30144
CRS Report for Congress
Received through the CRS Web
Patient Protection During the 106th Congress:
Side-by-Side Comparison of House- and
Senate-Passed Bills
Updated January 16, 2001
Jean Hearne and Hinda Chaikind, Coordinators
Judy Johnson, Bob Lyke,
Sharon Kearney
Domestic Social Policy Division
Fran Larkins
Information Research Division
Kimberly Jones, Jon O. Shimabukuro
American Law Division
Congressional Research Service ˜ The Library of Congress

Patient Protection During the 106th Congress: Side-by-Side
Comparison of House- and Senate-Passed Bills
Summary
This report compares the major provisions of two patient protection bills
considered during the 106th Congress; H.R. 2990 as passed by the House and the
Senate Amendment. These bills offered various ways to regulate employment-based
health plans and insurance issuers relating to access, disclosure, grievances and
appeals, market reforms, insurance affordability, confidentiality, and health care
lawsuit reform among other provisions. They also would have expanded tax benefits
for health insurance and long-term care. The Conference Committee appointed to
negotiate an agreement was not able to resolve the differences between the two bills
and the 106th Congress adjourned without sending a bill to the President. In the event
that the 107th Congress turns again to such issues, the provisions of the two bills may
provide background and could serve as a starting point for a renewed debate.
There were a number of substantive differences between the House-passed bill
and the Senate amendment. The largest differences were in the scope of their
application to private health insurance plans, the expansion of patients’ legal remedies,
and the provisions intended to increase access to health insurance coverage.
With one exception, the provisions in the House-passed bill would have applied
to group health plans and health insurance issuers offering health insurance coverage
in both the group and individual market. The Senate amendment was more restrictive
in its scope of coverage for many provisions. Certain provisions would have only
applied to self-insured group health plans ( plans where the employers maintain the
risk rather than transferring the risk to an insurance company) while others would
have been applicable to group health plans and health insurance issuers in the group
market and individual market.
On access to legal remedies, H.R. 2990 would have amended ERISA (§514) to
prevent its preemption provision from interfering with any state law allowing the
recovery of damages for personal injury or wrongful death. The Senate amendment,
on the other hand, would not have changed current law allowing only for a civil action
to recover the cost of benefits and some legal costs if a health plan fails to provide
reimbursement for a medical item or service that external reviewers have determined
a beneficiary is entitled to receive.
Finally, the House bill would have created two new legal entities; Association
Health Plans (AHPs) and HealthMarts (HMs). Both AHPs and HMs are intended to
increase incentives for employers to band together to purchase insurance coverage for
their employees.
This side-by-side comparison does not discuss the provisions regarding
retirement accounts or revenue offsets.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Access to Obstetric and Gynecologic Care and Pediatric Care . . . . . . . . . . 3
Access to Specialists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Emergency Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Continuity of Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Prescription Drugs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Clinical Trials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Choice of Plans and Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Behavioral Health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Breast Cancer Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Information Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Medical Communications (Gag Rule) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Other Patient Protections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Quality Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Provider Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Protections for Patient Advocacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Grievance and Appeals Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Grievances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Initial Coverage Determinations and Utilization Review . . . . . . . . . . . . . . 11
Appeals Process — Internal Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Appeals Process — External Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Medical Necessity Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ERISA Preemption and Access to State Law . . . . . . . . . . . . . . . . . . . . . . 17
Market Reform and Insurance Affordability . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Association Health Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
HealthMarts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Community Health Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Other Provisions Relating To Health And Health Insurance . . . . . . . . . . . . . . . 24
Medical Savings Accounts (MSAs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Cafeteria Plans and Flexible Spending Accounts . . . . . . . . . . . . . . . . . . . . 25
Self-Employed Health Insurance Deduction . . . . . . . . . . . . . . . . . . . . . . . 26
Expanded Health Insurance Deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Long-Term Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Orphan Drug Tax Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Taxable Vaccines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Tax Credit for Clinical Testing Research . . . . . . . . . . . . . . . . . . . . . . . . . 29
Genetic Information and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Agency for Healthcare Quality and Research . . . . . . . . . . . . . . . . . . . . . . 31

Patient Protection During the 106th Congress:
Side-by-Side Comparison of House- and
Senate-Passed Bills
Introduction
At the start of the 106th Congress several leadership bills from the 105th Congress
were reintroduced with relatively minor modifications. After debate in the House and
the Senate, both chambers passed patient protection bills. H.R. 2990 combines two
House-passed bills. On October 6th 1999, the House passed the “Quality Care for the
Uninsured Act of 1999" (H.R. 2990, introduced by Representatives Talent and
Shadegg). This bill would increase access to health insurance and expand tax benefits.
On October 7th, the House passed the “Bipartisan Consensus Managed Care
Improvement Act of 1999" (H.R. 2723, introduced by Representative Norwood and
Dingell). This bill would provide patient protections for consumers in managed care
plans and with other forms of health care coverage. Pursuant H. Res. 323, which
passed on October 6th, H.R. 2723 was then added as new matter to H.R. 2990. The
House has appointed its conferees.
The Senate passed a Patients’ Bill of Rights Plus Act (S. 1344, introduced by
Senator Lott) on July 15, 1999. The Senate bill also includes provisions intended to
increase access to health insurance, protect consumers in managed care plans, and
expand tax benefits. On October 14th, the Senate amended H.R. 2990 as passed by
the House, striking all language after the enacting clause and substituting the language
in S. 1344. The Senate has appointed it conferees and has requested a conference.
The reader may find the following definitions helpful. They are based on terms
used in the Health Insurance Portability and Accountability Act (HIPAA) (P.L. 104-
191); many have been incorporated into the patient protection bills under
consideration here.
Health insurance coverage
Benefits consisting of medical care under any hospital or medical service policy
or certificate, hospital or medical service plan contract, or health maintenance
organization (HMO) contract offered by a health insurance issuer.
Health insurance issuer
An insurance company, insurance service, or insurance organization (including
a HMO) which is licensed to engage in the business of insurance in a state and
which is subject to state law which regulates insurance. This term does not
include a group health plan.

CRS-2
Group health plan
An employee welfare benefit plan to the extent that the plan provides medical
care to employees or their dependents directly or through insurance,
reimbursement, or otherwise.
Self-insured group health plan
A plan in which the employer takes some or all of the risk of paying for the
plan’s covered items and services. Many self-insured plans assume risk for some
amount of claims and then buy stop-loss coverage from a third party to cover
losses over a preset amount or percentage of claims.
Insured group health plans
A plan in which the employer pays the insurer a premium in exchange for the
insurer assuming the risk of the plan’s covered items and services.

CRS-3
Side-by-Side Comparison of H.R. 2990 and the Senate Amendment for
Patient Protections
Provisions
House passed (H.R. 2990)
Senate Amendment
Bill status
Division A — Quality care for the Uninsured Act of 1999, passed by the
Passed by the Senate on October 14, 1999.
House on October 6, 1999.
Division B—Bipartisan Consensus Managed Care Improvement Act of
1999, passed by the House on October 7, 1999.
Applicability
Group health plans and health insurance issuers offering both group
Group health plans, except that access provisions (emergency
health insurance coverage and individual health insurance coverage
care; POS option; obstetric and gynecological car, pediatrics and
except that the requirement for access to a Point of Service (POS) option
specialty care; continuity of care; medical communications; and
does not apply to individual health insurance plans.
behavioral health care) apply to self-insured group health plans
See Note for further exceptions.
only.
Access
Access to Obstetric and Gynecologic Care and Pediatric Care
Provisions
House passed (H.R. 2990)
Senate Amendment
Ob/Gyn care
Prohibits group health plans or issuers from requiring authorization or
For self-insured plans only, requires group health plans to wave
referral from the primary health care professional or otherwise for
referral requirements for female participants or beneficiaries who
coverage of ob/gyn care provided by a participating health care
seek coverage for obstetrical care and related follow-up
professional, including a physician who specializes in obstetrics and
obstetrical care or routine gynecological care.
gynecology.
Requires that the ordering of other related routine care by a
Requires that the ordering of other ob/gyn care be treated as authorized
physician specializing in ob/gyn be treated as authorized by the
by the primary care professional.
primary care provider.
Pediatric care
Allows a participant to designate a physician who specializes in
For self-insured plans only, prohibits plans from requiring
pediatrics as a primary care provider for a child of the participant.
authorization or referral by a primary care provider in order for
a participant or beneficiary to obtain coverage for routine
pediatric care.
Requires that the ordering of other routine care by a physician
specializing in pediatrics be treated as authorized by the primary
care provider.

CRS-4
Access to Specialists
Provisions
House passed (H.R. 2990)
Senate Amendment
General
Requires plans or issuers to make or provide for referral to an available
For self-insured plans only, requires group health plans to ensure
and accessible specialist with adequate expertise (including pediatric
timely access to specialty care when covered under the plan in
expertise) for persons with a condition or disease of sufficient
accordance with the medical exigencies of the case.
seriousness and complexity to require treatment by a specialist. A
“specialist” means a practitioner, facility or center.
Specialty care means with respect to a condition, care and
treatment provided by a health care practitioner, facility, or
If conditions merit the use of a non-participating specialist, services
center that has adequate expertise through appropriate training
must be provided at no additional cost to the patient (beyond the costs
and experience.
for a participating specialist).
A plan or issuer may require that care be pursuant to a treatment
Persons with an ongoing special condition (which is life-threatening,
plan developed by the specialist and in consultation with a case
degenerative, or disabling AND requires specialized medical care over
manager or primary care provider or participant, and approved
a prolonged period of time) may have their primary and specialty care
by the plan in a timely manner (in accordance with the medical
coordinated and provided by a specialist for such a condition.
exigencies of the case).
Allows standing referrals to a specialist if a person has a condition that
requires ongoing specialty care, as determined by the plan or issuer, or
to a primary care provider in consultation
with the medical director and the specialist (if any).
A plan or issuer may require that care be pursuant to a treatment plan
developed by the specialist and approved by the plan or issuer, in
consultation with the designated primary care provider or specialist and
the individual.
Emergency Services
Provisions
House passed (H.R. 2990)
Senate Amendment
General
Requires plans that cover emergency medical services to cover
For self-insured plans only, requires plans that cover emergency
“emergency services” without prior authorization and without regard to
medical care to cover “emergency screening exams” and
network limitations, if a prudent layperson could reasonably expect the
“emergency ambulance services” without prior authorization and
absence of immediate medical attention to result in serious jeopardy to
without regard to network limitations, to the extent that a prudent
the individual’s health.
layperson, who possesses an average knowledge of health and
medicine, would determine such “emergency medical care” to be
Requires plans that cover maintenance and post stabilization services to
necessary.
charge beneficiaries, who receive those services from non-participating
providers, amounts that do not exceed what would have been incurred
Requires that benefits be provided for “additional emergency

CRS-5
Provisions
House passed (H.R. 2990)
Senate Amendment
if the services were authorized and provided by an network provider.
medical services” in an emergency department to the extent that
they are necessary to stabilize an emergency medical condition
following an emergency medical screening exam.
In the case of emergency care provided at a non-participating
facility, requires plans to cover “additional services to maintain
stability” if the non-participating provider sought approval from
the plan.
Definition
Defines “emergency” services as a medical screening examination and
Defines “emergency medical care”as covered inpatient and
ancillary services to evaluate an emergency medical condition and such
outpatient services that are furnished by participating and non-
further medical examination and treatment as required to stabilize the
participating providers that are needed to evaluate or stabilize an
patient.
emergency medical condition.
Defines “emergency medical condition” as a medical condition
Defines “emergency medical condition”as a condition
manifesting itself by acute symptoms of sufficient severity (including
manifesting itself by acute symptoms of sufficient severity
severe pain), as determined by a prudent layperson could, without
(including severe pain), as determined by a prudent layperson
treatment, reasonably expect to place their health in serious jeopardy or
could, without treatment, reasonably expect to place their health
cause serious impairment or dysfunction.
in serious jeopardy or cause serious impairment or dysfunction.
Compensation
Prohibits plans or issuers from charging patients more for using a non-
Same as House-passed bill H.R. 2990 and also allows cost-
network provider than would have been charged if the services were
sharing to be imposed on patients for emergency medical care if
provided in-network.
any such charges are uniformly applied to “similarly situated”
participants.
Continuity of Care
Provisions
House passed (H.R. 2990)
Senate Amendment
General
Requires plans or issuers to continue to cover treatment for pregnancy
Similar to House-passed bill H.R. 2990, except:
and ongoing special conditions (which is life-threatening, degenerative,
(1) applies only to self-insured plans;
or disabling AND requires special medical care over a prolonged period
(2) continuity of care for pregnant women is limited to those who
of time) with a terminated provider for enrollees who are undergoing a
have entered into the second trimester of pregnancy at the time
course of treatment with such a provider at the time of contract or
of contract termination;
benefit termination.
(3) does not include exception for patients awaiting surgery or
organ transplantation;
Coverage shall be continued for “up to 90 days,” in general, except for
(4) for institutional or inpatient care, continuity of care is
enrollees who are pregnant at the time of contract termination
extended until date of discharge or termination of the period of
(coverage through the provision of postpartum care), terminal illness
institutionalization; and
(coverage for the remainder of the individual’s life), and for patients
(5) does not limit continuity of care to women who are pregnant
awaiting surgery or organ transplantation (coverage until the date of
and individuals with ongoing special conditions.

CRS-6
Provisions
House passed (H.R. 2990)
Senate Amendment
discharge following surgery or transplant).
Requires a comprehensive study of the cost, quality, and
coordination of coverage for patients at the end of their lives.
Plans may condition such continued coverage by the provider agreeing
to accept the payment rates and cost sharing amounts established under
the prior agreement and adhering to the plans’ quality standards,
policies and procedures.
Prescription Drugs
Provisions
House passed (H.R. 2990)
Senate Amendment
General
Requires plans and issuers that limit prescription drug benefits to those
Same as House-passed bill H.R. 2990, except:
included in a formulary to provide exceptions from the formulary
1) applies only to self-insured group health plans; and
limitation when a non-formulary alternative is medically indicated.
2) does not require disclosure on the use of the formulary to
Also requires the plan or issuer to ensure participation of participating
providers and beneficiaries.
physicians and pharmacists in the development of the formulary and to
disclose the use of the formulary to providers and beneficiaries.
Clinical Trials
Provisions
House passed (H.R. 2990)
Senate Amendment
General
Prohibits plans and issuers which cover “qualified individuals” from
Similar to House-passed bill H..R. 2990, except:
denying, limiting, or imposing additional conditions on the coverage of
(1) applies only to self-insured plans, and
routine patient costs (but not including the cost of the tests or
(2) applies only to cancer clinical trials.
measurements conducted primarily for the purpose of the clinical trial
involved) incurred through participation in an approved and funded
Also requires the Secretary to:
clinical trial.
(1) set up a process to establish standards relating to the coverage
of routine patient cost for individuals in cancer clinical trials; and
The plan or issuer may require the use of a participating provider, if the
(2) conduct a study and report to Congress on the impact on
provider is participating in the trial and will accept the individual as a
group health plans of covering the costs under this section.
participant.
A qualified individual is a person:
(1) who has a life-threatening or serious illness for which no standard
treatment is effective;
(2) who is eligible to participate in an approved clinical trial according
to the trial protocol;
(3) whose participation in the trial offers meaningful potential for
significant clinical benefits for the individual; and

CRS-7
Provisions
House passed (H.R. 2990)
Senate Amendment
(4) a participating physician concludes, or the individual establishes,
that the individual’s participation in the trial is appropriate (based on
meeting conditions (1)-(3)).
Approved clinical trails are those approved and funded by the National
Institutes of Health (NIH), and/or a cooperative group or center of the
NIH, or a peer reviewed study or investigation of the Department of
Veteran’s Affairs or the Department of Defense.
Choice of Plans and Providers
Provisions
House passed (H.R. 2990)
Senate Amendment
Access to point-of-service (POS)
Requires group health insurance issuers (in connection with group
Similar to House-passed bill H.R. 2990, except:
option
health plans) offering a restricted provider network, to make a POS
(1) applies only to self-insured group health plans; and
option available for enrollees to purchase. (Referred to as a “consumer
(2) small employers (2-50 employees) are exempt from POS
choice option”.)
requirements.
Does not require a POS option if an individual is given a choice of
Does not require a POS option if such coverage would not be
health insurance coverage through another group health plan or through
available and accessible with reasonable promptness.
another insurance issuer in the group market.
Choice of providers
Requires group health plans and issuers to allow enrollees to receive
No provision.
primary care from any primary care provider who participates in the
plan and is available.
Pursuant to appropriate referral procedures, requires group health plans
and issuers to allow enrollees to receive medically necessary specialty
care from any participating provider who is available. (Does not pre-
empt plans from imposing limitations on the choice of participating
health care providers, for such specialty care, as long as enrollees are
clearly informed.)
Behavioral Health
Provisions
House passed (H.R. 2990)
Senate Amendment
General
No provision.
For self-insured plans, prohibits plans from discouraging or
prohibiting enrollees from self-paying for behavioral health care
once the plan has denied coverage for such care or from
terminating providers that accept self-payment for such services.

CRS-8
Breast Cancer Treatment
Provisions
House passed (H.R. 2990)
Senate Amendment
General
No provision.
Requires plans and issuers (not limited to self-insured plans) to
ensure inpatient coverage for the surgical treatment of breast
cancer (including a mastectomy, lumpectomy, or lymph node
dissection) for a period of time as determined to be medically
appropriate by the attending physician, in consultation with the
patient. The determination should be consistent with generally
accepted medical standards.
Prohibits the use of specified incentives to avoid compliance with
mandate. Requirements do not apply in states with more
stringent laws.
Disclosure
Information Disclosure
Provisions
House passed (H.R. 2990)
Senate Amendment
Who provides information? How
Requires group health plans and health insurance issuers to provide
Requires group health plans or health insurance issuers to
often? To whom?
information in printed form to participants and beneficiaries:
provide for the disclosure of information at least annually to
(1) at the time of enrollment and at least annually thereafter;
enrollees, or upon request to a potential enrollee. Information
(2) when there is a significant change in the required information; and
must be in an accessible format that is understandable to an
(3) when specified information is requested by participants, an
average plan participant or beneficiary.
applicable authority, and prospective participants and beneficiaries.
The Secretary of Labor is required to issue regulations
coordinating these requirements to reduce duplication.
What information is disclosed?
Required:
Required:
C Service area;
C Description of covered items, services and any exclusions;
C Benefits/exclusions;
C In-and out-of-network features;
C Network characteristics;
C Cost sharing;
C Cost sharing;
C Annual or lifetime limits on benefits;
C Extent to which benefits may be obtained from nonparticipating
C Terms and premiums or cost-sharing for any optional
providers and maximum out of pocket costs for these services;
supplemental benefits;
C Types, numbers, mix and distribution of providers participating in
C Restrictions on payments for services by a non-participating
plan or network and extent to which participant, beneficiary, or
professional and liability of participant for additional payment
enrollee may select from among them;
for these services;
C Name, address, and telephone numbers for these providers and
C Plan service area, any out-of-area coverage;

CRS-9
Provisions
House passed (H.R. 2990)
Senate Amendment
whether available to accept new patients;
C Extent to which enrollee may select primary care provider
C Procedures and any limits for enrollees in selecting, accessing, or
from in and outside of network;
changing participating primary and specialty providers;
C Any procedures for advance directives and organ donations;
C Rights and procedures for obtaining referrals to participating and
C Requirements and procedures for obtaining preauthorization,
nonparticipating providers;
including telephone numbers and mailing addresses;
C Process for determining experimental coverage;
C Requirements and procedures for referrals for specialty care;
C Use of prescription drug formulary;
C Definition of medical necessity used in making coverage
C Any out-of-network coverage;
decisions;
C Any point-of-service option, including any additional costs to
C Rules and methods for appealing coverage decisions and filing
enrollee;
grievances;
C Assistance for those who do not speak English or have special
C Provisions for obtaining off-formulary medications;
communications needs in accessing providers under the plan or
C Rules for access to emergency room care and any available
coverage;
education materials on proper use of emergency services;
C Out-of-area coverage;
C Coverage of experimental treatments or clinical trials and
C Process, procedures for obtaining emergency services, explanation
circumstances under which access is available;
of appropriate use, and locations where emergency services and post-
C Any preventative services;
stabilization care are provided;
C Manner of access to obstetrician, gynecologist, pediatrician;
C Percentage of premiums used for benefits (loss-ratios);
C Manner in which continuity of care may be obtained;
C Prior authorization rules with mailing address and telephone number
C A statement regarding the availability of the following
for enrollees seeking information or treatment authorization;
information upon request.
C Appeal and grievance rights and procedures;
C Any public accreditation information and any quality indicators the
plan or issuer makes available;
C Notice of these disclosure requirements and that the following
information is available upon request.
What information is disclosed?
Upon Request:
Upon Request:
C Procedures and requirements under any utilization review program;
C Names, addresses, telephone numbers of participating health
C Procedures used, any requirements, and the nature of restrictions
care professionals and facilities;
under any drug formulary program;
C State licensure status and, if available, education, training,
C Number and total disposition of grievances and appeals;
specialty qualifications or certifications of professionals;
C General description of compensation of health care professionals;
C Summary of compensation method for health care
C Credentials of specific participating providers; and
professionals and facilities;
C List of current participating health care providers.
C Summary of utilization review procedures;
C List of specific medications in formulary;
C Specific coverage exclusions;
C Availability of translation/interpretation services for non-
English speakers and persons with communication
disabilities; and

CRS-10
Provisions
House passed (H.R. 2990)
Senate Amendment
C Any public information on accreditation or quality indicators
made available by the plan.
Uniform Explanation of Benefits
Establishes a panel to devise a single form for use by third-party health
No provision.
care payers for the remittance of claims to providers.
Medical Communications (Gag Rule)
Provisions
House passed (H.R. 2990)
Senate Amendment
General
Requires that a plan or issuer not prohibit or restrict a health care
Similar to House-passed bill H.R. 2990, except:
professional from advising a patient about their health status or medical
(1) applies only to self-insured plans, and
care or treatment for their condition or disease, regardless of whether
(2) does not address contract provisions.
such treatments are covered under the plan, if the professional is acting
within the lawful scope of practice.
Any contract provision or agreement that restricts or prohibits medical
communication shall be null and void.
Other Patient Protections
Quality Measurement
Provisions
House passed (H.R. 2990)
Senate Amendment
General
No provision.
No provision (but see related provisions in section on “Agency
for Healthcare Quality Research”, below).
Quality research and advice
No provision.
Requires the Secretary and the Institute of Medicine to study and
report on information on health care professionals currently
available, legal barriers to sharing formation, and make
recommendations on disclosure of this information.
Provider Provisions
Provisions
House passed (H.R. 2990)
Senate Amendment
Provider incentive plans
Prohibits any provider incentive plans as defined by Section XVIII of
No provision.
the Social Security Act as any compensation arrangement between an
eligible organization and a physician or physician group that may
directly or indirectly have the effect of reducing or limiting services
provided.
Discrimination
Prohibits discrimination with respect to participation or indemnification
Similar to House-passed bill H.R. 2990, except applies only to

CRS-11
Provisions
House passed (H.R. 2990)
Senate Amendment
any provider who is acting according to license or certification under
self-insured plans.
state law, on the basis of such license or certification.
Does not require coverage of particular benefits or the inclusion of every
willing provider. Does not prohibit including providers only as
necessary to meet the needs of plan or issuer.
Prompt payment of claims
Requires plans and issuers offering group health insurance to provide
No provision.
for prompt payment of claims with respect to covered benefits.
Protections for Patient Advocacy
Provisions
House passed (H.R. 2990)
Senate Amendment
No retaliation
Protects enrollees, beneficiaries, participants and providers from
No provision.
retaliation by a plan or issuer for using appeals and grievance processes.
Quality advocacy
Prohibits a plan or issuer from retaliating against a protected health care
No provision.
professional (licensed or certified health care professional who is an
employee or has a contract with the plan or issuer) who acts in good
faith to participate in an investigation. Specifies requirements for
internal procedures and exceptions and defines terms.
Grievance and Appeals Processes
Grievances (Complaints about issues other than coverage determinations or benefit payments)
Provisions
House passed (H.R. 2990)
Senate Amendment
Generally
Requires group health plans and health insurance issuers to maintain a
Requires group health plans and health insurance issuers to have
system that addresses oral and written grievances. Grievances may
written procedures for addressing grievances. Decisions are not
involve any question, complaint, or concern brought by a participant,
appealable.
beneficiary, or enrollee that is not a claim for benefits. Decisions are
not appealable.
Initial Coverage Determinations and Utilization Review
Provisions
House passed (H.R. 2990)
Senate Amendment
Timing of Review—generally
Prior Authorization Services: Requires plans or issuers to make a
Routine Determinations: Requires plans and issuers to issue
determination as soon as possible in accordance with the medical
initial coverage decisions within 30 days after the date on which
exigencies of the case, but not later than 14 days after receiving the
the request for review is submitted. Notice of the decision must

CRS-12
Provisions
House passed (H.R. 2990)
Senate Amendment
request for prior authorization, except if additional information is
be issued not later than 2 working days after the decision is
required to make a determination, the deadline may be extended to 14
made.
days after receiving the additional information, but in no case later than
28 days after receiving the initial request for prior authorization.
Expedited cases
Expedited Cases (Cases where delay could seriously jeopardize the life
Expedited Determinations (Cases where the failure to provide
or health of the participant, beneficiary, or enrollee or such an
immediate care could seriously jeopardize the life or health of the
individual’s ability to regain maximum function): Requires plans or
participant or beneficiary): A decision must be made within 72
issuers to make a determination within 72 hours after the request for
hours after a request for review is submitted. Notice of the
prior authorization is made.
decision must be issued within that 72 hour period. To receive
expedited review, documentation is needed from the treating
health care professional.
Ongoing Care
Ongoing Care (e.g., hospitalization): Requires plans or issuers to make
A plan or issuer shall maintain procedures to certify or deny
a determination as soon as possible with sufficient time prior to the
coverage of an extended stay or additional services. Notice of the
termination or reduction of care to allow for an appeal.
decision must be issued within 1 working day of the
determination.
Previously provided services
Previously Provided Services: A determination must be made within 30
Retrospective Determinations: A decision must be made within
days of receiving all of the information reasonably necessary to make a
30 working days after the date on which the plan or issuer
decision, but in no case later than 60 days after the receipt of the claim
receives all necessary information. Notice of the decision must
for benefits.
be issued within 5 working days after the date on which the
determination is made.
Failure to meet deadlines
Failure to follow these deadlines shall be treated as a denial of the
Failure to follow these deadlines shall be treated as an adverse
claim.
coverage determination for purposes of proceeding to internal
review.
Appeals Process — Internal Review
Provisions
House passed (H.R. 2990)
Senate Amendment
Requests for review
A participant, beneficiary, or enrollee has at least 180 days to request
A participant or beneficiary has at least 180 days after the date of
and obtain review.
the adverse coverage determination to make an appeal.
Decisions that may proceed to
No provision.
Decisions regarding payment, coverage, and cost-sharing can
internal review
proceed to internal review.
Who conducts review?
Review is conducted by
Review is conducted by
(1) a named fiduciary if the dispute involves a claim for benefits under
(1) an individual with appropriate expertise who was not directly
the plans,
involved in the initial determination, or
(2) a named appropriate individual if the dispute involves denied
(2) a physician with appropriate expertise in a case involving
coverage,
issues of medical necessity or appropriateness, or experimental
(3) a physician in a case of medical judgment, or in certain
and investigational treatment.

CRS-13
Provisions
House passed (H.R. 2990)
Senate Amendment
circumstances a specialist; and
(4) an individual who has been selected by the plan or issuer; and did
not make the initial denial.
Timing of review-generally
Routine Cases: Review must be completed in accordance with the
Routine Determinations: Review must be conducted within 30
medical exigencies of the case, but not later than 14 days after receiving
working days after the date on which a request for review is
the request for internal review. The deadline may be extended to 28
received. Notice of the decision must be issued not later than 2
days if additional information is needed.
working days after the completion of review.
Expedited cases
Expedited Cases: Review must be completed within 72 hours of
Expedited Determinations: Review must be conducted in
receiving a request for review.
accordance with the medical exigencies of the case, but not later
than 72 hours after the request for review is received. Such a
request must include documentation of medical exigency by the
treating health care professional. Notice of the decision must be
issued within the 72-hour period.
Appeals Process — External Review
Provisions
House passed (H.R. 2990)
Senate Amendment
Requests for review
Appeals must be “timely.” The appropriate Secretary shall establish
Establishes that a written request for review must be submitted
additional standards to carry out review.
within 30 working days after receiving the initial review
decision.
A plan or issuer may require a filing fee of up to $25, unless the
individual certifies that he or she is indigent. The filing fee shall be
refunded if the recommendation of the external appeal entity is to
reverse or modify the denial of a claim for benefits.
When external review is available
External review is available for benefit denials that:
External review is available for benefit denials that:
(1) are based on a decision that the item or service is not medically
(1) are based on decisions of medical necessity and that exceed
necessary;
a significant financial threshold;
(2) involve an investigational or experimental treatment; or
(2) are based on decisions of medical necessity and there is a
(3) involve a decision requiring medical judgment to determine whether
significant risk of placing the life or health of the participant in
a benefit is covered.
jeopardy; or
External review is also available when the deadline for internal review
(3) involve an experimental or investigational treatment
has not been met.
External review is also available when the deadline for internal
review has not been met.
Who conducts review?
Review is conducted by a qualified external appeal entity in accordance
The plan or issuer must select an external appeals entity that will
with the following:
designate an independent external reviewer.
(1) For group health plans, the entity must be certified either by the

CRS-14
Provisions
House passed (H.R. 2990)
Senate Amendment
Secretary of Labor, under a process recognized or approved by the
The following may be selected as the external appeals entity:
Secretary of Labor, or by a qualified private standard-setting
(1) an independent external review entity licensed or credentialed
organization;
by a state;
(2) For health insurance issuers operating in a state, the entity must be
(2) a state agency established to conduct independent external
certified by the applicable state authority or under a process recognized
reviews;
or approved by such authority. If the state has not established a
(3) any entity under contract with the federal government to
certification process, the entity must be certified either by the Secretary
provide independent external review services;
of HHS, under a process recognized or approved by such Secretary, or
(4) any entity accredited as an independent external review
by a qualified private standard-setting organization.
entity; or
(5) any entity meeting criteria established by the Secretary of
With respect to health insurance issuers in a state, the state may provide
Labor.
for external review to be conducted by a qualified external appeal entity
that is designated by the state or that is selected by the state in a manner
An independent external reviewer shall:
determined by the state to assure an unbiased determination.
(1) be appropriately credentialed or licensed to deliver health
care services;
The external appeal entity must conduct its activities through a panel of
(2) not have any material, professional, familial, or financial
not fewer than 3 clinical peers, and have sufficient medical, legal, and
affiliation with the case under review, the participant or
other expertise and sufficient staffing to conduct its activities in a timely
beneficiary, the treating health care professional, the treating
manner.
institution, or the manufacturer or any drug, device, or procedure
proposed for the participant or beneficiary;
The external appeal entity (and its clinical peer members) must:
(3) have expertise in the diagnosis or treatment under review and
(1) not have a familial, financial, or professional relationship with any
be a physician of the same specialty, when reasonably available;
related party;
(4) receive only reasonable and customary compensation from the
(2) receive only reasonable compensation that is not contingent on any
plan or issuer that is not contingent on the decision rendered; and
decision rendered;
(5) not be held liable for decisions regarding medical
(3) be free from recourse by the plan or issuer; and
determinations.
(4) not otherwise have a conflict of interest with a related party as
determined under any regulations prescribed by the Secretary.
Standard of review
The external appeal entity shall consider the following evidence:
An independent external reviewer (IER) shall consider all valid,
(1) the internal review decision and any guidelines or standards used to
relevant, scientific, and clinical evidence to determine the
reach the decision;
medical necessity, appropriateness, or experimental nature of the
(2) any personal health and medical information supplied with respect
proposed treatment.
to the individual; and
(3) the opinion of the participant’s treating physician or health care
The IER shall also consider all appropriate and available
professional.
information, including any clinical practice guidelines used by
the plan or issuer, the patient’s medical record, expert consensus,
They external appeal entity may also consider:
and medical literature.
(1) the results of studies that meet professionally recognized standards

CRS-15
Provisions
House passed (H.R. 2990)
Senate Amendment
or that have been published in peer-reviewed journals;
(2) the results of professional consensus conferences conducted or
financed in whole or in part by one or more government agencies;
(3) government treatment guidelines;
(4) a community standard of care;
(5) expert testimony; and
(6) the results of peer reviews conducted by the plan or issuer involved.
The review process shall provide for a fair, de novo determination.
Timing of review — generally
A determination shall be made in accordance with the medical
Routine Determinations: Timeframes for selecting an external
exigencies of the case, but not later than 21 days after receiving the
review entity, selecting an independent external reviewer, and
request for external review.
conducting the review are as follows, (or earlier in accordance
with the medical exigencies of the case):
(1) The plan or issuer has up to 5 working days to select an
external appeals entity and notify the participant or beneficiary
of the entity;
(2) Once the entity is designated, it has up to 30 days to designate
an independent external reviewer; and
(3) The review must be conducted no later than 30 working days
after either the date on which a reviewer is designated or all
necessary information is received, whichever is later.
Expedited cases
Expedited Appeals: A determination must be made within 72 hours
Expedited Determinations: The initial timeframe of 5 days for
after receiving the request for external review.
the plan to select an entity and 30 days for the entity to select an
independent reviewer, or earlier in accordance with the medical
exigencies of the case would still apply. However, the review
must be conducted withing 72 hours after the date on which a
reviewer is designated or all necessary information is received,
whichever is later.
Binding decisions
The decision of the external appeal entity is binding on the plan and
Same as House-passed bill H.R. 2990.
issuer involved in the determination.
Civil penalties/enforcement
A court of competent jurisdiction may order a civil penalty of up to
The Secretary of Labor may assess a civil penalty against any
$1,000 a day from the date on which a determination was transmitted
plan of up to $10,000 for the plan’s failure or refusal to comply
to the plan or issuer if the determination is not followed. The court
with any deadlines.
shall also issue an order requiring the person responsible for authorizing
the benefit to cease and desist from failing to act in accordance with the
The Secretary shall assess a civil penalty of $10,000 against a
determination. This order shall also compel the payment of attorney’s
plan if treatment is not commenced in accordance with a
fees.
determination of an independent external reviewer. The penalty

CRS-16
Provisions
House passed (H.R. 2990)
Senate Amendment
The appropriate Secretary may also assess a civil penalty for any
will be paid to the participant or beneficiary involved.
pattern or practice of repeated refusals to authorize benefits after
external review, or any pattern or practice of repeated violations of the
Where a plan or issuer fails to provide reimbursement in
requirements of the external review process. The penalty shall be
accordance with a determination by the external reviewers, the
payable only upon proof of clear and convincing evidence of such
beneficiary commence a civil action to recover only the amount
pattern or practice and shall not exceed the lesser of
of unpaid reimbursement and any necessary legal costs incurred
(1) 25% of the aggregate value of the benefits that have not been
in recovering such reimbursement.
provided or have been unlawfully delayed; or
(2) $500,000.
The appropriate Secretary may petition for the removal of any person
with the capacity to authorize benefits who has engaged in such pattern
or practice.
Study
No provision.
The General Accounting Office (GAO) shall conduct and submit
a study to Congress that includes an assessment of the process
involved during an independent external review and the basis of
decision-making by the independent external reviewer.
Medical Necessity Determinations
Provisions
House passed (H.R. 2990)
Senate Amendment
General
Not specifically defined.
Not specifically defined.
External appeal entity shall consider, but is not bound by any language
Directs external reviewers to independently determine the
in the plan or coverage document relating to the definitions of the terms
medical necessity or appropriateness of care under appeal. See
medical necessity, medically necessary or appropriate, or experimental,
“standards of review” section above.
investigational, or related terms.

CRS-17
ERISA Preemption and Access to State Law
Provisions
House passed (H.R. 2990)
Senate Amendment
General
The bill would amend Section 514 of ERISA to allow a participant or
Does not change current ERISA Section 514 preemption of state
beneficiary to bring a cause of action under state law to recover damages
laws. (Maintains current law remedies for equitable relief in
for personal injury or wrongful death resulting from acts connected to
state or federal court.)
or arising out of an arrangement regarding “the provision of insurance,
administrative services, or medical services” to or for a group health
Determination of external reviewer is binding upon the plan or
plan. It bars from review those decisions denying coverage for items
issuer. If plan or issuer fails to comply with external review
specifically excluded from the plan.
decision, participant or beneficiary may obtain item or service
from any provider, and then seek reimbursement from the plan
or issuer.
Damages
Generally, the bill does not have a provision regarding damages. The
Does not alter current law, which allows the participant or
amount of damages a participant or beneficiary would recover would be
beneficiary to recover the costs of the benefit, reasonable
determined by state law.
attorney’s fees, and court costs.
However, the bill would prevent the award of punitive damages if: (1)
the decision was subject to external review as defined in the bill; (2) an
external review was conducted; and (3) the plan promptly followed the
recommendation issued by the external review entity. A participant or
beneficiary must exhaust internal and external review, unless death or
injury has occurred. If the participant or beneficiary files an action
before external review has taken place, the plan or issuer may still avoid
punitive damages if it requests external review within 30 days after the
date the externally appealable decision was made, and the remaining
requirements are met. This provision would not apply to a state cause
of action for wrongful death, if the state law only allows for punitive
damages.
Employer Protections
The bill expressly states that it does not authorize a cause of action
No provision.
against a group health plan, employer or plan sponsor (or its
employees). Further, the bill does not permit a cause of action under
state law for failing to provide a benefit or service that is not covered by
the plan. This provision also expressly prohibits a person from seeking
recovery, indemnification, or contribution from the group health plan,
employer or plan sponsor (or its employees) for damages awarded under
the Act. However, the bill also includes an exception to these
provisions where the group health plan, employer or plan sponsor (or
its employees) exercised its discretionary authority to make a benefits
decision and the decision resulted in harm. The exercise of

CRS-18
Provisions
House passed (H.R. 2990)
Senate Amendment
discretionary authority does not include the decision to include or
exclude certain benefits from the plan, to provide extra-contractual
benefits, or a decision not to provide a benefit while internal or external
review is being conducted.
Exhaustion of Internal & External
Internal and external review must be exhausted , unless injury or death
No provision.
Review
has occurred before completion of such processes. In the case where
injury or death has occurred and the patient files a court action without
review, the plan may initiate and complete internal and external review.
Punitive damages would not be available where the plan has complied
with the external review process and decision.
Weight Given to External Review
No provision, state law would apply.
Determination of external reviewer is binding upon the plan or
Decision in Legal Proceedings
issuer.
Impact on State Causes of Action
The bill would amend ERISA’s preemption clause to allow a cause of
Does not change current ERISA § 514 preemption of state laws.
action under state law to recover damages for personal injury or
(Maintains current law remedies for equitable relief.)
wrongful death resulting from acts connected to or arising out of an
arrangement regarding “the provision of insurance, administrative
services, or medical services” to or for a group health plan.
Jurisdiction
The bill would amend ERISA’s preemption clause to allow a cause of
This bill would amend ERISA § 502 to create a federal cause of
action under state law to recover damages for personal injury or
action for reimbursement of a claim when the plan or issuer fails
wrongful death resulting from acts connected to or arising out of an
to comply with external review.
arrangement regarding “the provision of insurance, administrative
services, or medical services” to or for a group health plan.
Limitation of Actions
The bill prohibits a cause of action by a participant or beneficiary for
No provision.
damages under Section 1101 of the Act which covers utilization review
activities. A participant or beneficiary may seek relief based on the
individual circumstances of the participant/beneficiary under sections
of the bill covering access to emergency care, specialty care, obstetrical
or gynecological care, pediatric care, continuity of care and coverage for
participation in clinical trials. Relief is limited to recovery of the
benefit, item or service and attorney’s fees and costs at the discretion of
the court. The bill states that such actions may not be brought as a class
action.

CRS-19
Market Reform and Insurance Affordability
Association Health Plans
Provisions
House passed (H.R. 2990)
Senate Amendment
Eligibility requirements
Establishes that an association health plan (AHP) is a group health plan
No provision (i.e., does not preempt state laws that govern
that offers at least one fully-insured health insurance coverage option
AHPs).
(unless it is not available), has been certified, and is operated by a board
of trustees with complete fiscal control and responsibility for all
operations. The association sponsoring the plan must have been in
existence for at least 3 years for substantial purposes other than
providing health insurance coverage. AHPs may include a collectively
bargained multi-employer plan or a group health plan established and
maintained by a franchiser for its franchisees.
A church plan is also eligible to elect AHP status if it complies with
fiduciary, reporting, and actuarial standards.

To be certified, a “self-insured” AHP must have at least 1,000
participants and beneficiaries. The self-insured AHP must have also
offered coverage on the date of enactment or represent a broad cross-
section of trades or represent one or more trades with average or above
health insurance risk.
Participation and coverage
Requires that all employers participating in the AHP be members or
No provision.
affiliated members of the sponsor. All individuals under the plan must
be active or retired employees, owners, officers, directors, partners, or
their beneficiaries. This applies to partnerships and self-employed
individuals. For plans which were in existence on the date of
enactment, no unaffiliated employer may participate unless they were
affiliated on the date of certification or did not maintain or contribute
to a group health plan for the previous 12-month period.
Prohibits discrimination by requiring that all employers who are
association members be eligible for participation, all geographically
available coverage options are made available upon request to eligible
employers, and eligible individuals not be excluded from enrolling
because of health status. Premium contribution rates for any particular
small employer cannot be based on the health status or claims
experience of plan participants or beneficiaries or on the type of

CRS-20
Provisions
House passed (H.R. 2990)
Senate Amendment
business or industry in which the employer is engaged.
Both health insurance coverage and any self-insured benefit options
must be distributed by state-licensed health insurance agents.
Reserve requirements and
Reserves for AHPs which offer benefit options that are not fully-insured
No provision.
provisions for solvency
must be sufficient for unearned contributions, benefit liabilities,
expected administrative costs, any other obligations and a margin for
error recommended by the plan’s qualified actuary. AHPs must also
obtain aggregate and specific stop-loss insurance; indemnification
insurance for any claims the plan is unable to satisfy if the plan is
terminated; and must also make annual payments to an Association
Health Plan Fund to guarantee that indemnification insurance is always
available. The plan must maintain minimum surplus of at least
$500,000. If an AHP is unable to provide benefits when due or is
otherwise in a financially hazardous condition, the Secretary of Labor
is required to act as a trustee to administer the plan for the duration of
the insolvency. A certified AHP may terminate only if the trustees
provide 60 days advance written notice to participants and beneficiaries
and submit a plan for timely payment of all benefit obligations. A
Solvency Standards Working Group is to be established within 90 days
after enactment to recommend initial regulations.
ERISA preemption
Establishes that certified AHPs are exempt from state benefit mandates,
No provision.
except that AHPs must comply with any federal or state laws that
require coverage of specific diseases, maternal and newborn
hospitalization, and mental health. Clarifies that states may regulate
self-insured multiple employer welfare arrangements providing medical
care which do not elect to meet the certification requirements for AHPs.
Enforcement
Requires states to certify and enforce the provisions applicable to AHPs;
No provision.
failing to enter into an agreement to do so, the applicable authority is
the Department of Labor. Provides for criminal penalties for willful
misrepresentation as an exempt AHP or collectively bargained status;
provides for cease activity orders; and establishes the responsibility of
the board of trustees for meeting required claims procedures.
The Secretary of Labor is required to report to Congress no later than
January 1, 2004 on the effect of AHPs on reducing the number of
uninsured individuals.

CRS-21
HealthMarts
Provisions
House passed (H.R. 2990)
Senate Amendment
General
Defines a HealthMart (HM) as a legal nonprofit entity that makes health
No provision.
benefits coverage available to all small employers, and eligible
employees. The HM is operated under the direction of a board that
includes at least two representatives each of small employers, their
employees, health care providers, and entities that underwrite or
administer health benefits coverage. The HM assumes no insurance
risk, but provides health benefits coverage through contracts with health
insurance issuers. The HM is considered a group health plan for
purposes of ERISA fiduciary and disclosure requirements. The HM also
provides administrative services for purchasers.
An HM must specify the geographic area in which it makes coverage
available. Geographic areas must encompass at least one entire county
or equivalent area. HMs can serve more than one state or portions of
two or more contiguous states. Multiple HMs can be established in a
single geographic area. HMs can serve more than one state or portions
of two or more contiguous states. Geographic areas must encompass at
least one entire county or equivalent area. (Does not require health
insurance issuers to provide coverage outside their service area or to
cover the entire geographic area served by a HM.)
By end of first year of operation and thereafter, HMs must maintain at
least 10 small employers and 100 employees/dependents.
An HM cannot require a purchaser to sign a contract for more than 1
year, but a purchaser can elect to sign for a longer period.
Creates the Health Care Marketplace Division under the authority of the
Secretary of HHS to administer the HM provisions.
The Secretary of HHS is required to submit a report to Congress every
30 months (for 10 years) on the effectiveness of HMs in promoting
coverage of uninsured individuals.
Benefits and premium rate
A HM must offer (through one or more issuers) at least two coverage
requirements
options. Benefits must be underwritten by issuers licensed and/or
regulated under state law unless offered through a Community Health
Insuring Organization, meet state standards relating to consumer

CRS-22
Provisions
House passed (H.R. 2990)
Senate Amendment
protection, and be approved or allowed under state law. (In certain
cases of discrimination or delay, an issuer may have grounds to request
that an applicable federal authority waive state approval requirements.)
In accordance with existing federal law, any health benefits coverage
offered through a HM must provide full portability for employees who
remain members of the same HM if both employers are purchasers in
the HM.
Premium rates are established by the health insurance issuer on a policy
or product specific basis and may vary only as permissible under State
law.
Rates may not vary among similarly situated individuals on the basis of
health status.
Health insurance issuers may establish premium discounts or rebates for
HM members in return for adherence to wellness programs.
Enrollment
Requires HMs to offer health benefits coverage to all eligible employees
No provision.
in small businesses (2 to 50 employees) in any geographic area in
which it operates.
A HM cannot deny enrollment or renewal of coverage on the basis of
health status-related factors.
Requires a 30-day annual open enrollment period during which
members can change coverage options.
If a contract between the HM and an issuer is terminated and the HM
continues to offer coverage, the HM is required to make coverage
available from among remaining issuers.
An HM purchaser must agree not to obtain or sponsor health benefits
coverage through any source other than the HM (with exceptions for
persons living out of the HM coverage area).
Information disclosure
Requires HMs to collect and disseminate consumer-oriented information
No provision.
(as defined by the HM) on the scope and cost of, and enrollee
satisfaction with, coverage options. To the extent practicable, such
information should include provider performance, locations and hours

CRS-23
Provisions
House passed (H.R. 2990)
Senate Amendment
of operation of providers and outcomes.
State law application
Does “not preempt” state laws relating to:
No provision.
(1) the regulation of underwriters, including licensure and solvency
requirements,
(2) application of premium taxes, guaranty funds, and contributions to
high-risk pools,
(3) fair marketing requirements and other consumer protections,
(4) requirements relating to the adjustment of rates for health insurance
coverage, and
(5) disease-specific state benefit mandates and state laws enacted to
implement federal benefit mandates.
Preempts state laws related to:
(1) benefit mandates (other than those described above
(2) grouping requirements (which bar employers from joining together
for the sole purpose of purchasing health insurance), and
(3) any other requirement that directly or indirectly impedes offering
coverage through a HM.
Community Health Organizations
Provisions
House passed (H.R. 2990)
Senate Amendment
General
Allows for waivers of state licensing requirements for certain
No provision.
community health organizations (CHO) that offer health insurance
coverage. The Secretary shall establish solvency standards for such
CHOs. CHOs are defined as a federally-qualified health center or an
organization controlled by one or more federally-qualified health center.

CRS-24
Other Provisions Relating To Health And Health Insurance
Medical Savings Accounts (MSAs)
Provisions
House passed (H.R. 2990)
Senate Amendment
Expanded Availability
Removes the current law provision restricting MSAs to employees of
Similar to House-passed bill H.R. 2990 except as noted.
small employers and self-employed individuals, making them generally
available to individuals with qualifying high deductible health plans.
MSAs would continue to be disallowed under cafeteria plans.
Allows MSAs to be offered under cafeteria plans.
(Rollovers from cafeteria plans and flexible spending accounts to
Eliminates limitations on the number of taxpayers who can have MSAs.
MSAs would be allowed.)
Provides that notwithstanding any other provision of law, health
Monthly contributions to accounts could be made up to one-twelfth of
insurance issuers may offer and eligible individuals may
the annual insurance deductible. Contributions no longer would be
purchase high deductible plans as defined in section
limited by compensation (if employed) or net earnings (if self-
220(c)(2)(A). For four years after enactment, high deductible
employed). Contributions to an account could be made by both an
health plans could not be required to provide payment for items
employer and an employee.
or services that are exempt from the plan’s deductible.
Reduces minimum insurance deductibles (prior to applying the cost-of-
Contributions to an account could continue to be made by either
living adjustment) from $1,500 to $1,000 in the case of single coverage
an employer or an employee, but not both.
and $3,000 to $2,000 in the case of family coverage.
The penalty for distributions not used for qualified medical
Amendments would apply to taxable years beginning after December
expenses would not apply to distributions that do not reduce the
31,2000.
account balance to less than the annual insurance deductible.
Clarifies that network-based managed care plans shall not fail to
be considered high deductible plans if services are rendered by
out-of-network providers, so long as the annual deductible and
limit on out-of-pocket expenses for those services are not lower
than those applicable to network providers.
Amendments would apply to taxable years beginning after
December 31, 1999.
MSAs and FEHBP
No provision.
Authorizes government contributions to an MSA of an employee
or annuitant who is enrolled in a catastrophic health plan under
the Federal Employees Health Benefits Program (FEHBP). The
MSA contribution would equal the amount by which the
maximum contribution allowed under Section 8906(b)(1) of Title
5 U.S.C. exceeds the government contribution for the

CRS-25
Provisions
House passed (H.R. 2990)
Senate Amendment
catastrophic coverage of the individual. The latter contribution
may not exceed 100% of the premium of the catastrophic plan
(or, as under current law, 72% of the weighted average premium,
whichever is less).
Requires the Office of Personnel Management to contract for a
catastrophic plan with any carrier that offers such plan and, as of
the date of enactment, offers a FEHBP plan. The Office may
contract for catastrophic plans with other qualified carriers.
Provides that catastrophic plans are service benefit, indemnity
benefit, or employee organization plans that provide benefits
named under subsection 8904(a)(1) or (2) of title 5 U.S.C.
except that annual deductible and out-of-pocket limits specified
in subsection 220(c)(2) of the Internal Revenue Code shall apply.
(Annual deductible limits would be lowered by this legislation.)
Provides that the Office of Personnel Management (OPM) shall
prescribe regulations under which various requirements of
FEHBP shall apply to catastrophic plans.
Amendments would apply to contract terms beginning on or after
January 1, 2000.
Cafeteria Plans and Flexible Spending Accounts
Provisions
House passed (H.R. 2990)
Senate Amendment
Carryovers and Rollovers
No provision.
Provides that a plan would not fail to be treated as a cafeteria
plan or flexible spending account (FSA) solely because unused
nontaxable benefits may be carried forward to succeeding taxable
years; in addition, no amount would be included in gross income
because a carryover is allowed. These figures would not apply
to annual amounts carried forward that exceed $500 (subject to
a cost-of-living adjustment).
In the case of unused health or dependent care FSAs, participants
must be allowed to elect to receive such amounts as distributions
in lieu of a carryover.

CRS-26
Provisions
House passed (H.R. 2990)
Senate Amendment
Distributions would not be included in gross income to the extent
they are rolled over (by a trustee-to-trustee transfer or a
contribution within 60 days) to (1) a Section 401(k) plan, (2) a
Section 403(b) annuity plan, (3) a Section 457 deferred
compensation plan, or (4) a medical savings account (MSA). A
rollover would be treated as an eligible rollover under these
sections and not taken into account in applying any limitation or
participation requirement on employer or employee contributions
for the taxable year of the rollover.
Amendments would apply to taxable years beginning after
December 31, 1999.
Self-Employed Health Insurance Deduction
Provisions
House passed (H.R. 2990)
Senate Amendment
Deduction for health insurance
Allows self-employed taxpayers a 100% deduction for health insurance
Similar, but effective for taxable years beginning after December
costs, effective for taxable years beginning after December 31, 2000.
31, 1999.
Allows the deduction even if taxpayer is eligible to participate (but does
Retains current law restriction that taxpayer cannot be eligible to
not) in employer-subsidized health plan.
participate in employer-subsidized plan.
Expanded Health Insurance Deduction
Provisions
House passed (H.R. 2990)
Senate Amendment
Deduction for health insurance.
Allows individual taxpayers a deduction (not limited to itemizers) for
No provision.
amount paid for health insurance, limited to 25% in 2002 through 2004,
35% in 2005, 65% in 2006, and 100% in 2007 and thereafter.
Deduction does not apply to ancillary coverage for accidents, disability,
dental care, vision care, or a specified illness, nor for fixed amount per
day (or any other period) for hospitalization. Deduction also does not
apply if taxpayer participates in health plan maintained by employer or
employer of the spouse if 50% or more of its cost is paid or incurred by
employer. Deduction also does not apply if taxpayer is covered by
Medicare, Medicaid, State Children’s Health Insurance Programs, or by
armed forces or veterans health care, or by Indian Health Care
Improvement Act program or FEHBP (aside from continuation coverage
for the latter).

CRS-27
Provisions
House passed (H.R. 2990)
Senate Amendment
Amendments would be affective for taxable years beginning after
December 31, 2001.
Long-Term Care
Provisions
House passed (H.R. 2990)
Senate Amendment
Long-term care included in
Allows qualified long-term care insurance contracts to be included in
Allows qualified long-term care insurance contracts to be
cafeteria plans and flexible
cafeteria plans (subject to age-related limitations of Section 213(d)(10)).
included in cafeteria plans (not subject to age-related
spending accounts
limitations).
Allows long-term care benefits to be provided through flexible spending
accounts.
Does not delete restriction in section 106(c) against providing
benefits through flexible spending accounts.
Amendments would be effective taxable years beginning after December
31, 2001.
Amendments would be effective taxable years beginning after
December 31, 1999.
Deduction for long-term care
Allows individual taxpayers a deduction (not limited to itemizers) for
Similar, except:
insurance
amount paid for long-term care insurance (plans with coverage for
(1) deduction is not limited during a phase-in period,
qualified long-term care services or which are qualified long-term care
(2) deduction does not apply if taxpayer is eligible to participate
insurance contracts), limited to 25% in 2002 through 2004, 35% in
in subsidized plan maintained by any employer or former
2005, 65% in 2006, and 100% in 2007 and thereafter. Qualified long-
employer of taxpayer or spouse, and
term care insurance contracts are subject to age limitations of current
(3) deduction shall not be taken into account in determining
law. Deduction does not apply if taxpayer participates in long-term
individual’s net earnings from self-employment.
care plan maintained by employer or employer of the spouse if 50% or
more of its cost is paid or incurred by employer.
Amendments would be effective for taxable years beginning after
December 31, 1999.
Amendments would be effective for taxable years beginning after
December 31, 2001.
Additional personal exemption
Allows individual taxpayers an additional personal exemption for
No provision.
qualified family members who need long-term care. Defines qualified
family member as one who:
(1) is an ancestor of the taxpayer or of the taxpayer’s spouse (or who is
the spouse of the ancestor),
(2) is a member for the entire year of a household maintained by the
taxpayer, and
(3) has been certified by a physician as needing long-term care for a
period that is at least 180 consecutive days (a portion of which is in the
taxable year).

CRS-28
Provisions
House passed (H.R. 2990)
Senate Amendment
Individuals with long-term care needs are (1) unable to perform at least
two activities of daily living (ADLs, as defined in Section
7702B(c)(2)(B)) due to a loss of functional capacity, or (2) require
substantial supervision to be protected from threats to health and safety
due to severe cognitive impairment and are unable to perform without
substantial reminding or cuing at least one ADL or are unable to engage
in age appropriate activities. The certification must be within the
previous 39 ½ month period.
Amendments would be effective for taxable years beginning after
December 31, 2000.
Study of long-term care needs
No provision.
Requires the Secretary of Health and Human Services (HHS)to
provide for a study to determine the future demand for long-term
care services and options to finance those services. Provides that
the study shall address:
(1) relevant demographic characteristics affecting long-term care,
(2) viability and capacity of community-based and other long-
term health services,
(3) how to improve the quality of services,
(4) the integration of services between providers and federal
programs,
(5) the possibility of expanding private sector initiatives
including long-term care insurance, (6) the effect of the Health
Insurance Portability and Ac
countability Act (HIPAA) on the provision and financing of long-
term care services and insurance, and
(7) the financial impact of the provision of long-term health care
services on caregivers and other family members.
Requires the Secretary to arrange for the study to be conducted by
the Institute of Medicine (or, if this cannot be arranged, by
another qualified non-governmental entity) and in consultation
with experts from a wide range of public and private groups.
Requires the Secretary to report on the study not later than one
year after enactment, including findings and recommendations
and cost estimates.

CRS-29
Orphan Drug Tax Credit
Provisions
House passed (H.R. 2990)
Senate Amendment
Qualifying expenses
Expands qualifying expenses to include human clinical testing expenses
No provision.
incurred after date on which taxpayer files application under Section
526 of the Federal Food, Drug, and Cosmetic Act.
Amendments would apply to amounts paid or incurred after December
31, 2000.
Taxable Vaccines
Provisions
House passed (H.R. 2990)
Senate Amendment
Inclusion of certain vaccines
Includes any conjugate vaccine against streptococcus pneumoniae in the
Similar to House-passed bill H.R. 2990, except not contingent on
list of taxable vaccines.
Trust Fund amendments.
Amendment would apply to vaccine sales beginning the day after the
Centers for Disease Control makes a final recommendation for routine
administration to children of this vaccine, but only if amendments to
Vaccine Injury Compensation Trust Fund take effect.
Tax rate
Reduces the tax rate applicable to all taxable vaccines from 75 cents to
No provision.
50 cents for sales after December 31, 2004.
Amendment would apply to vaccine sales after December 31, 2004, but
only if amendments to Vaccine Injury Compensation Trust Fund take
effect.
Vaccine Injury Compensation
Repeals provisions of the Vaccine Injury Compensation Program
No provisions.
Trust Fund
Modification Act to remove duplicative and contradictory provisions
concerning payments from the Trust Fund.
Changes effective date to incorporate vaccine added by P.L. 105-277.
Report on Vaccine Injury
Directs the General Accounting Office to report on the operation of the
No provision.
Compensation Trust Fund
Trust Fund and its adequacy to meet future claims.
Tax Credit for Clinical Testing Research
Provisions
House passed (H.R. 2990)
Senate Amendment
Tax credit for clinical testing
Authorizes a tax credit (as part of the general business credit) for
No provision.
research expenses
increasing clinical testing research activities at educational institutions,

CRS-30
Provisions
House passed (H.R. 2990)
Senate Amendment
teaching hospitals, foundations, and hospitals designated as cancer
centers by the National Cancer Institute. Credit would equal 40 percent
of the excess of qualified medical innovation expenses for the taxable
year over a medical innovation base period amount.
Amendments would apply to taxable years beginning after December
31, 2000.
Genetic Information and Services
Provisions
House passed (H.R. 2990)
Senate Amendment
General
No provision.
Amends the Employee Retirement Income Security Act of 1974
(ERISA), the Public Health Service Act (PHS), and the Internal
Revenue Code of 1986, respectively to prohibit health plans or
health insurance issuers, both in group and individual markets,
from using predictive genetic information to set premiums.
Health plans or issuers may request, but not require, that
individuals or their family members authorize the collection of
predictive genetic information for diagnosis, treatment, or
payment purposes related to health care. Requires plans to
provide notice of confidentiality safeguards when requesting such
information.
Requires plans to post or provide notice of confidentiality
practices and to have safeguards in place with respect to
predictive genetic information. Requires the Secretary to develop
a model notice.
In the individual market, predictive genetic information cannot
be used as a condition of eligibility for enrollment.

CRS-31
Agency for Healthcare Quality and Research
Provisions
House passed (H.R. 2990)
Senate Amendment
General
No provision.
Renames the Agency for Health Care Policy and Research
(AHCPR) as the Agency for Healthcare Research and Quality.
The mission of the Agency will be to enhance the quality,
appropriateness, and effectiveness of healthcare services, and
access to these services.
Requires the Agency to conduct and support research related to
all aspects of healthcare; produce and disseminate scientific data
for use by patients, practitioners, consumers, and others; and
foster private and public efforts to improve healthcare quality. In
doing this, the Director must undertake and support research,
demonstration projects and evaluations to deliver health services
to populations in rural areas and for low-income groups and
minority groups, among other things.
The Agency must identify and disseminate methods or systems
used to assess health care research results, in particular to judge
the strength of the scientific evidence behind healthcare practice,
recommendations in the research literature, and technology
assessments. In addition, the agency will be required to use
research methods and processes that link research directly with
clinical practice in geographically diverse locations throughout
the United States.
Requires the Director of the Agency to conduct and support
specific assessments of healthcare technologies through grants,
cooperative agreements, or contracts with entities, including
research institutions, professional organizations, and third party
payers.
Requires the Secretary of HHS to enter into a contract with the
Institute of Medicine to describe and evaluate current quality
improvement research and monitoring processes, identify options
and make recommendations to improve the efficiency and
effectiveness of quality improvement programs. Requires the
Secretary to report to the Senate Committees on Finance and
Health, Education, Labor and Pensions and House Committees

CRS-32
Provisions
House passed (H.R. 2990)
Senate Amendment
on Ways and Means and Commerce, on the quality improvement
programs of HHS for Medicare, Medicaid, and CHIP programs
under Titles XVIII, XIX, and XXI of the Social Security Act.
Establishes an Advisory Council for Healthcare Research and
Quality to advise the Secretary and Director on activities related
to the mission of the Agency for Health care Research and
Quality. The Council would make recommendations related to:
priorities of health care research; the field of health care and
related disciplines; and the appropriate role of the Agency in
each of these areas.
Note: Re applicability of House-passed bill H.R. 2990 for specified provisions (access to choice of providers, emergency care, specialists, continued treatment, clinical trials, non-
formulary drugs, and payment of claims) a group health plan that provides health benefits through a health insurance issuer, can be deemed as meeting the requirements even if the
insurer fails to meet the requirements as long as the plan sponsor did not cause the failure.
For other specified provision (information disclosure, internal and external grievance and appeals, and prohibitions relating to medical communications, discrimination, improper
incentive arrangements, and protections for patient advocacy), the Secretary is provided with authority to relieve a group health plan from requirements, if an issuer which contracts
with the group health plan also is obligated to meet the requirements or for other reasons.