Home > 106th Congressional Bills > S. 3058 (pcs) To amend the Public Health Service Act, the Employee Retirement Income Security Act of 1974, and the Internal Revenue Code of 1986 to protect consumers in managed care plans and other health coverage. [Placed on Calendar Senate] %%Filename:...S. 3058 (pcs) To amend the Public Health Service Act, the Employee Retirement Income Security Act of 1974, and the Internal Revenue Code of 1986 to protect consumers in managed care plans and other health coverage. [Placed on Calendar Senate] %%Filename:...
entity shall reverse or modify the decision.
(C) Consideration of plan or coverage
definitions.--In making such determination, the
external appeal entity shall consider (but not be bound
by) any language in the plan or coverage document
relating to the definitions of the terms medical
necessity, medically necessary or appropriate, or
experimental, investigational, or related terms.
(D) Evidence.--
(i) In general.--An external appeal entity
shall include, among the evidence taken into
consideration--
(I) the decision made by the plan
or issuer upon internal review under
section 102 and any guidelines or
standards used by the plan or issuer in
reaching such decision;
(II) any personal health and
medical information supplied with
respect to the individual whose denial
of claim for benefits has been
appealed; and
(III) the opinion of the
individual's treating physician or
health care professional.
(ii) Additional evidence.--Such entity may
also take into consideration but not be limited
to the following evidence (to the extent
available):
(I) The results of studies that
meet professionally recognized
standards of validity and replicability
or that have been published in peer-
reviewed journals.
(II) The results of professional
consensus conferences conducted or
financed in whole or in part by one or
more Government agencies.
(III) Practice and treatment
guidelines prepared or financed in
whole or in part by Government
agencies.
(IV) Government-issued coverage and
treatment policies.
(V) Community standard of care and
generally accepted principles of
professional medical practice.
(VI) To the extent that the entity
determines it to be free of any
conflict of interest, the opinions of
individuals who are qualified as
experts in one or more fields of health
care which are directly related to the
matters under appeal.
(VII) To the extent that the entity
determines it to be free of any
conflict of interest, the results of
peer reviews conducted by the plan or
issuer involved.
(E) Determination concerning externally appealable
decisions.--A qualified external appeal entity shall
determine--
(i) whether a denial of claim for benefits
is an externally appealable decision (within
the meaning of subsection (a)(2));
(ii) whether an externally appealable
decision involves an expedited appeal; and
(iii) for purposes of initiating an
external review, whether the internal review
process has been completed.
(F) Opportunity to submit evidence.--Each party to
an externally appealable decision may submit evidence
related to the issues in dispute.
(G) Provision of information.--The plan or issuer
involved shall provide timely access to the external
appeal entity to information and to provisions of the
plan or health insurance coverage relating to the
matter of the externally appealable decision, as
determined by the entity.
(H) Timely decisions.--A determination by the
external appeal entity on the decision shall--
(i) be made orally or in writing and, if it
is made orally, shall be supplied to the
parties in writing as soon as possible;
(ii) be made in accordance with the medical
exigencies of the case involved, but in no
event later than 21 days after the date (or, in
the case of an expedited appeal, 72 hours after
the time) of requesting an external appeal of
the decision;
(iii) state, in layperson's language, the
basis for the determination, including, if
relevant, any basis in the terms or conditions
of the plan or coverage; and
(iv) inform the participant, beneficiary,
or enrollee of the individual's rights
(including any limitation on such rights) to
seek further review by the courts (or other
process) of the external appeal determination.
(I) Compliance with determination.--If the external
appeal entity reverses or modifies the denial of a
claim for benefits, the plan or issuer shall--
(i) upon the receipt of the determination,
authorize benefits in accordance with such
determination;
(ii) take such actions as may be necessary
to provide benefits (including items or
services) in a timely manner consistent with
such determination; and
(iii) submit information to the entity
documenting compliance with the entity's
determination and this subparagraph.
(c) Qualifications of External Appeal Entities.--
(1) In general.--For purposes of this section, the term
``qualified external appeal entity'' means, in relation to a
plan or issuer, an entity that is certified under paragraph (2)
as meeting the following requirements:
(A) The entity meets the independence requirements
of paragraph (3).
(B) The entity conducts external appeal activities
through a panel of not fewer than three clinical peers.
(C) The entity has sufficient medical, legal, and
other expertise and sufficient staffing to conduct
external appeal activities for the plan or issuer on a
timely basis consistent with subsection (b)(2)(G).
(D) The entity meets such other requirements as the
appropriate Secretary may impose.
(2) Initial certification of external appeal entities.--
(A) In general.--In order to be treated as a
qualified external appeal entity with respect to--
(i) a group health plan, the entity must be
certified (and, in accordance with subparagraph
(B), periodically recertified) as meeting the
requirements of paragraph (1)--
(I) by the Secretary of Labor;
(II) under a process recognized or
approved by the Secretary of Labor; or
(III) to the extent provided in
subparagraph (C)(i), by a qualified
private standard-setting organization
(certified under such subparagraph); or
(ii) a health insurance issuer operating in
a State, the entity must be certified (and, in
accordance with subparagraph (B), periodically
recertified) as meeting such requirements--
(I) by the applicable State
authority (or under a process
recognized or approved by such
authority); or
(II) if the State has not
established a certification and
recertification process for such
entities, by the Secretary of Health
and Human Services, under a process
recognized or approved by such
Secretary, or to the extent provided in
subparagraph (C)(ii), by a qualified
private standard-setting organization
(certified under such subparagraph).
(B) Recertification process.--The appropriate
Secretary shall develop standards for the
recertification of external appeal entities. Such
standards shall include a review of--
(i) the number of cases reviewed;
(ii) a summary of the disposition of those
cases;
(iii) the length of time in making
determinations on those cases;
(iv) updated information of what was
required to be submitted as a condition of
certification for the entity's performance of
external appeal activities; and
(v) such information as may be necessary to
assure the independence of the entity from the
plans or issuers for which external appeal
activities are being conducted.
(C) Certification of qualified private standard-
setting organizations.--
(i) For external reviews under group health
plans.--For purposes of subparagraph
(A)(i)(III), the Secretary of Labor may provide
for a process for certification (and periodic
recertification) of qualified private standard-
setting organizations which provide for
certification of external review entities. Such
an organization shall only be certified if the
organization does not certify an external
review entity unless it meets standards
required for certification of such an entity by
such Secretary under subparagraph (A)(i)(I).
(ii) For external reviews of health
insurance issuers.--For purposes of
subparagraph (A)(ii)(II), the Secretary of
Health and Human Services may provide for a
process for certification (and periodic
recertification) of qualified private standard-
setting organizations which provide for
certification of external review entities. Such
an organization shall only be certified if the
organization does not certify an external
review entity unless it meets standards
required for certification of such an entity by
such Secretary under subparagraph (A)(ii)(II).
(3) Independence requirements.--
(A) In general.--A clinical peer or other entity
meets the independence requirements of this paragraph
if--
(i) the peer or entity does not have a
familial, financial, or professional
relationship with any related party;
(ii) any compensation received by such peer
or entity in connection with the external
review is reasonable and not contingent on any
decision rendered by the peer or entity;
(iii) except as provided in paragraph (4),
the plan and the issuer have no recourse
against the peer or entity in connection with
the external review; and
(iv) the peer or entity does not otherwise
have a conflict of interest with a related
party as determined under any regulations which
the Secretary may prescribe.
(B) Related party.--For purposes of this paragraph,
the term ``related party'' means--
(i) with respect to--
(I) a group health plan or health
insurance coverage offered in
connection with such a plan, the plan
or the health insurance issuer offering
such coverage; or
(II) individual health insurance
coverage, the health insurance issuer
offering such coverage,
or any plan sponsor, fiduciary, officer,
director, or management employee of such plan
or issuer;
(ii) the health care professional that
provided the health care involved in the
coverage decision;
(iii) the institution at which the health
care involved in the coverage decision is
provided;
(iv) the manufacturer of any drug or other
item that was included in the health care
involved in the coverage decision; or
(v) any other party determined under any
regulations which the Secretary may prescribe
to have a substantial interest in the coverage
decision.
(4) Limitation on liability of reviewers.--No qualified
external appeal entity having a contract with a plan or issuer
under this part and no person who is employed by any such
entity or who furnishes professional services to such entity,
shall be held by reason of the performance of any duty,
function, or activity required or authorized pursuant to this
section, to have violated any criminal law, or to be civilly
liable under any law of the United States or of any State (or
political subdivision thereof) if due care was exercised in the
performance of such duty, function, or activity and there was
no actual malice or gross misconduct in the performance of such
duty, function, or activity.
(d) External Appeal Determination Binding on Plan.--The
determination by an external appeal entity under this section is
binding on the plan and issuer involved in the determination.
(e) Penalties Against Authorized Officials for Refusing to
Authorize the Determination of an External Review Entity.--
(1) Monetary penalties.--In any case in which the
determination of an external review entity is not followed by a
group health plan, or by a health insurance issuer offering
health insurance coverage, any person who, acting in the
capacity of authorizing the benefit, causes such refusal may,
in the discretion in a court of competent jurisdiction, be
liable to an aggrieved participant, beneficiary, or enrollee
for a civil penalty in an amount of up to $1,000 a day from the
date on which the determination was transmitted to the plan or
issuer by the external review entity until the date the refusal
to provide the benefit is corrected.
(2) Cease and desist order and order of attorney's fees.--
In any action described in paragraph (1) brought by a
participant, beneficiary, or enrollee with respect to a group
health plan, or a health insurance issuer offering health
insurance coverage, in which a plaintiff alleges that a person
referred to in such paragraph has taken an action resulting in
a refusal of a benefit determined by an external appeal entity
in violation of such terms of the plan, coverage, or this
subtitle, or has failed to take an action for which such person
is responsible under the plan, coverage, or this title and
which is necessary under the plan or coverage for authorizing a
benefit, the court shall cause to be served on the defendant an
order requiring the defendant--
(A) to cease and desist from the alleged action or
failure to act; and
(B) to pay to the plaintiff a reasonable attorney's
fee and other reasonable costs relating to the
prosecution of the action on the charges on which the
plaintiff prevails.
(3) Additional civil penalties.--
(A) In general.--In addition to any penalty imposed
under paragraph (1) or (2), the appropriate Secretary
may assess a civil penalty against a person acting in
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