SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Health Quality and 
Fairness Act of 1998''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Patient protection standards under the Public Health Service 
                            Act.
                 ``Part C--Patient Protection Standards

``Sec. 2770. Notice.
``Sec. 2771. Coverage of services.
``Sec. 2772. Access to emergency care.
``Sec. 2773. Protecting the doctor-patient relationship.
``Sec. 2774. Quality assurance.
``Sec. 2775. Designation of primary care provider.
``Sec. 2776. Grievance and appeals procedures.
``Sec. 2777. Understandability of information.''.

SEC. 2. PATIENT PROTECTION STANDARDS UNDER THE PUBLIC HEALTH SERVICE 
              ACT.

    (a) Patient Protection Standards.--Title XXVII of the Public Health 
Service Act is amended--
            (1) by redesignating part C as part D, and
            (2) by inserting after part B the following new part:

                 ``Part C--Patient Protection Standards

``SEC. 2770. NOTICE.

    ``A health insurance issuer under this part shall comply with the 
notice requirement under section 711(d) of the Employee Retirement 
Income Security Act of 1974 with respect to the requirements of this 
part as if such section applied to such issuer and such issuer were a 
group health plan.

``SEC. 2771. COVERAGE OF SERVICES.

    ``(a) In General.--If a health insurance issuer offering health 
insurance coverage provides benefits with respect to a service, and a 
physician recommends such service for an enrollee, the issuer shall 
cover any service furnished under the coverage unless a physician who 
has reviewed the notes of the attending physician and any medical 
records of the enrollee determines that such services should not be 
covered.
    ``(b) Written Denial of Coverage.--In a case in which a health 
insurance issuer denies coverage of a service to an enrollee, issuer 
shall provide, in writing, to the enrollee, the physician who 
recommended such service, and the primary physician of the enrollee--
            ``(1) the reasons for the denial of coverage;
            ``(2) the criteria used to determine whether to authorize 
        or deny coverage; and
            ``(3) the right of the enrollee to file a written 
        grievance.

``SEC. 2772. ACCESS TO EMERGENCY CARE.

    ``(a) Coverage of Emergency Services.--
            ``(1) In general.--If health insurance coverage provides 
        any benefits with respect to emergency services (as defined in 
        paragraph (2)(B)), the plan or issuer shall cover emergency 
        services furnished under the plan or coverage--
                    ``(A) without the need for any prior authorization 
                determination;
                    ``(B) whether or not the physician or provider 
                furnishing such services is a participating physician 
                or provider with respect to such services; and
                    ``(C) without regard to any other term or condition 
                of such coverage (other than exclusion or coordination 
                of benefits, or an affiliation or waiting period, 
                permitted under section 2701 of the Public Health 
                Service Act, section 701 of the Employee Retirement 
                Income Security Act of 1974, or section 9801 of the 
                Internal Revenue Code of 1986, and other than 
                applicable cost sharing).
            ``(2) Definitions.--In this section:
                    ``(A) Emergency medical condition based on prudent 
                layperson standard.--The term `emergency medical 
                condition' means a medical condition manifesting itself 
                by acute symptoms of sufficient severity (including 
                severe pain) such that a prudent layperson, who 
                possesses an average knowledge of health and medicine, 
                could reasonably expect the absence of immediate 
                medical attention to result in a condition described in 
                clause (i), (ii), or (iii) of section 1867(e)(1)(A) of 
                the Social Security Act.
                    ``(B) Emergency services.--The term `emergency 
                services' means health care items and services that are 
                necessary for the diagnosis, treatment, and 
                stabilization of an emergency medical condition.

``SEC. 2773. PROTECTING THE DOCTOR-PATIENT RELATIONSHIP.

    ``(a) Prohibition on Restricting Communication.--A health insurance 
issuer offering health insurance coverage may not restrict or interfere 
with any communication between a health care professional and an 
enrollee with respect to information that the health care professional 
determines is relevant to the health care of the enrollee.
    ``(b) Prohibition on Financial Incentives.--A health insurance 
issuer offering health insurance coverage may not offer or pay any 
financial incentive to a provider of health care services to deny, 
reduce, withhold, limit, or delay services to an enrollee.
    ``(c) Prohibition on Retaliation.--A health insurance issuer 
offering health insurance coverage may not terminate a contract, 
demote, refuse to contract with, or refuse to compensate a health care 
professional because the professional--
            ``(1) advocates on behalf of an enrollee;
            ``(2) assists an enrollee in seeking reconsideration of a 
        decision by the issuer to deny coverage for a service; or
            ``(3) reports a violation of law to an appropriate 
        authority.

``SEC. 2774. QUALITY ASSURANCE.

    ``(a) Requirement.--A health insurance issuer offering health 
insurance coverage shall establish and maintain an ongoing quality 
assurance program that meets the requirements of subsection (b).
    ``(b) Program Requirements.--The requirements of this subsection 
for a quality assurance program of an issuer are as follows:
            ``(1) Administration.--The issuer has an identifiable unit 
        with responsibility for administration of the program.
            ``(2) Written plan.--The issuer has a written plan, 
        developed in consultation with health care professionals, that 
        is updated annually and that specifies at least the following:
                    ``(A) Criteria and procedures for the assessment of 
                quality.
                    ``(B) Criteria and procedures for determining 
                coverage of services.
            ``(3) Review.--The program provides for systematic review 
        of the following:
                    ``(A) Outcomes of health care services;
                    ``(B) Peer review;
                    ``(C) A system to collect and maintain information 
                related to the health care services provided to 
                enrollees;
                    ``(D) Guidelines for action when problems related 
                to quality of care are identified.

``SEC. 2775. DESIGNATION OF PRIMARY CARE PROVIDER.

    ``If a health insurance issuer offering health insurance coverage 
requires or provides for an enrollee to designate a participating 
primary care provider--
            ``(1) the issuer shall permit a female enrollee to 
        designate an obstetrician-gynecologist who has agreed to be 
        designated as such, as the enrollee's primary care provider; 
        and
            ``(2) the issuer shall permit the enrollee to designate a 
        physician who specializes in pediatrics as the primary care 
        provider for a child of such enrollee.

``SEC. 2776. GRIEVANCE AND APPEALS PROCEDURES.

    ``(a) Establishment of Grievance System.--A health insurance 
issuer, in connection with the provision of health insurance coverage, 
shall establish and maintain a system to provide for the presentation 
and resolution of oral and written grievances brought by enrollees. The 
system shall include grievances regarding--
            ``(1) payment or reimbursement for covered services;
            ``(2) availability, delivery, and quality of services; and
            ``(3) terms and conditions of the plan or coverage.
    ``(b) General Elements.--The system shall include--
            ``(1) the general components described in subsection (c); 
        and
            ``(2) a process for appeals of adverse denials of 
        benefits--
                    ``(A) through an internal appeal process;
                    ``(B) through an external appeal process; and
                    ``(C) through a process for expediting review of 
                the internal appeals process.
    ``(c) Components of the System.--Such system shall include the 
following components with respect individuals who are enrollees:
            ``(1) The availability of a services representative to 
        assist such individuals, as requested, with the grievance 
        procedures.
            ``(2) A system to record and document, over a period of at 
        least 3 years, all grievances made and their status.
            ``(3) A process providing for timely processing and 
        resolution of grievances.
    ``(d) Internal Appeals Process.--
            ``(1) In general.--Each health insurance issuer shall 
        establish and maintain an internal appeals process under which 
        any enrollee, or provider acting on behalf of such an 
        individual with the individual's consent, who is dissatisfied 
        with the results of the issuer has the opportunity to appeal 
        the results before a review panel.
            ``(2) Deadline.--
                    ``(A) In general.--The issuer shall conclude each 
                appeal as soon as possible after the time of the 
                receipt of the appeal in accordance with medical 
                exigencies of the case involved, but in no event later 
                than--
                            ``(i) 72 hours after the time of receipt of 
                        the appeal in the case of appeals from 
                        decisions regarding urgent care, and
                            ``(ii) 30 business days after such time in 
                        the case of all other appeals.
            ``(3) Notice.--If an issuer denies an appeal, the issuer 
        shall provide the enrollee and provider involved with written 
        notification of the denial and the reasons therefor, together 
        with a written notification of rights to any further appeal.
    ``(e) External Appeals Process.--A health insurance issuer offering 
group health insurance coverage, shall provide for an external appeals 
process which may be used upon completion of the internal review 
process under subsection (d). The process shall be conducted consistent 
with standards established by the Secretary.
    ``(f) Expedited Review Process.--A health insurance issuer shall 
establish written procedures for the expedited consideration of appeals 
in situations in which the timeframe of a standard appeal under the 
respective subsection has reasonable potential to jeopardize seriously 
the life or health of the participant, beneficiary, or enrollee 
involved or has reasonable potential to jeopardize such an individual's 
ability to regain maximum function.

``SEC. 2777. UNDERSTANDABILITY OF INFORMATION.

    ``Information provided to or made available to enrollees under this 
part, whether written or oral, shall be easily understandable by an 
average layperson, with respect to the terms used.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to causes of action arising on or after the date of the enactment 
of this Act.
Health Quality and Fairness Act of 1998 - Amends title XXVII (Assuring Portability, Availability, and Renewability of Health Insurance Coverage) of the Public Health Service Act to establish a new part (Patient Protection Standards) which sets forth health plan standards concerning:  (1) notice; (2) coverage; (3) access to emergency care; (4) the doctor-patient relationship; (5) quality assurance; (6) designation of a primary care provider; (7) grievance and appeals procedures; and (8) understandability of information.
Health Quality and Fairness Act of 1998