Summary: H.R.5514 — 102nd Congress (1991-1992)All Information (Except Text)

There is one summary for H.R.5514. Bill summaries are authored by CRS.

Shown Here:
Introduced in House (06/30/1992)

Health Choice Act of 1992 - Title I: Eligibility and Choice of Plan - Entitles each individual to benefits if they are: (1) a U.S. resident and either a citizen, national, or lawful resident alien; and (2) neither a beneficiary under title XVIII (Medicare) of the Social Security Act nor an active armed forces member.

Phases in benefits over six years, phase one for prenatal and delivery services and services for children under six, phase two for individuals under 22 and individuals between 60 and 65, and phase three for all eligible individuals.

Requires: (1) residents of a State to choose benefits under any arrangement provided by their State's plan; and (2) nonresidents to choose either an employment-based, managed care, or fee-for-service plan. Allows collective bargaining agreements to specify the plan in which the individual must enroll. Mandates distribution of materials and a toll-free telephone number regarding plan choice.

Title II: Benefits - Subtitle A: Services - Includes in "basic health services:" (1) clinical preventive services; (2) physicians' services, rural health clinic services, and Federally qualified health center services; (3) hospital services; (4) post-hospital skilled nursing facility services; (5) part-time or intermittent home health services; (6) hospice care; (7) covered outpatient drugs; and (8) other medical and health services as defined by the National Health Board established by this Act.

Considers services reasonable and necessary only if they would be so considered under Medicare and requires review of any national coverage determination to be made as under Medicare.

Applies certain Medicare exclusions to this title.

Subtitle B: Cost-Sharing - Part 1: General Requirements - Mandates certain deductibles for general services, inpatient services, and prescription drugs.

Allows a Health Choice plan to require copayments and limited coinsurance.

Prohibits deductibles or coinsurance for clinical preventive services. Mandates cost-sharing rules for capitated plans and special payment methodologies. Allows certain cost-sharing for restricted provider managed care plans. Prohibits premiums for basic health services.

Part 2: Reduction in Cost-Sharing for Low-Income Individuals - Reduces deductibles for certain low income individuals. Provides for advance and retroactive cost-sharing assistance and for help in completing assistance applications.

Mandates reconciliation of advance assistance with actual income.

Considers an individual or family that has been determined eligible for aid under specified provisions of parts A (Aid to Families with Dependent Children) and E (Foster Care and Adoption Assistance) of title IV or Supplemental Security Income benefits of the Social Security Act to have an adjusted total income below the poverty line.

Title III: Requirements for Health Choice Plans - Subtitle A: Qualified State Health Insurance Plans - Requires each qualified State health insurance plan to enroll each eligible State resident, except for an individual enrolled in a qualified multi-state employment-based health plan. Mandates health care fraud and abuse measures.

Subtitle B: Qualified Employment-Based Health Plans - Requires that a qualified employment-based health plan (EBHP) specify its eligibility basis. Allows the plan to group individuals into classifications based on factors determined by the Board. Prohibits enrollment denial within a classification or on the basis of health status or use of health services.

Declares that an EBHP is a multi-state plan if the percentage of individuals from one State does not exceed a level set by the Board.

Subtitle C: Qualified Managed Care Plans - Specifies certain requirements for a restricted provider managed care plan, including a prohibition of expulsion on the basis of health status or use of health services, continuation of coverage if the plan terminates, and coverage of out-of-plan services.

Subtitle D: Fee-for-Service Choice Plan - Requires the Board to operate a fee-for-service choice plan (Choice Plan) providing basic health services through any willing provider.

Makes Medicare beneficiaries, notwithstanding other provisions of this Act, eligible for clinical preventive services under a Choice Plan.

Applies certain provisions of the Social Security Act relating to: (1) withholding of payments for certain Medicaid providers to this subtitle; and (2) physician referrals to referrals for clinical laboratory services under the Choice Plan.

Requires the determination of the amount, scope, and duration of Choice Plan benefits to be made by the Board.

Subtitle E: Plan Requirements and Related Provisions - Part 1: Requirements Applicable to Health Choice Plans Generally - Requires each Health Choice plan to provide for at least all basic health services. Prohibits pre-existing condition exclusions.

Requires that enrollment of an individual in a Health Choice include enrollment of that individual's family members.

Provides for coordination and portability of coverage under qualified plans.

Prohibits a Health Choice plan from paying for basic health services unless the provider is qualified to have payment made. Provides for the qualification of hospitals, physicians, other providers and suppliers, and Indian health service facilities, applying certain Medicare provisions. Requires risk management programs.

Allows fee-for-service and capitated plans to restrict coverage through utilization review programs meeting standards set by the Board.

Prohibits a Health Choice plan from operating a physician incentive plan (providing compensation or other financial arrangements that may reduce services) unless certain Medicare requirements are met. Protects individuals from liability to providers if a plan fails to make payments for basic health services. Requires each plan to coordinate benefits with low-income assistance under title II of this Act.

Mandates quality assurance mechanisms, measures to control fraud and abuse, transmission of information regarding outcomes and expenditures, and the use of unique provider and individual identifiers and uniform plan cards.

Applies certain Medicare provisions (relating to offset of payments to individuals to collect past-due obligations from a breach of scholarship and loan contracts) to this title.

Requires, after complete phase-in of benefits, fee-for-service claims to be submitted electronically.

Requires each plan to maintain written policies and procedures regarding advance directives, as defined in specified Medicare provisions.

Part 2: Requirements and Other Applicable Provisions for Capitated Plans - Provides for the approval of State, employment-based, and managed care plans. Sets forth minimum enrollment levels for employment-related and managed care plans. Prohibits a capitated plan that has enrolled an individual from denying enrollment to the individual's family. Allows geographic limitations for State and managed care plans. Provides for the setting and calculation of payment amounts for capitated plans.

Requires each capitated plan: (1) except for employment-based plans, to make certain disclosures, including regarding comparing benefits and cost-sharing to fee-for-service plans, describing pre-existing condition limitations, describing provider limits, and disclosing the availability of low-income assistance; (2) to provide grievance and appeals procedures; and (3) to establish insolvency protection.

Provides for enforcement of capitated plan requirements through civil monetary penalties, suspension of enrollment, termination of approval, and intermediate sanctions.

Requires capitated plans to disclose certain information to the Board.

Part 3: Preemption of State Laws - Prohibits State laws and regulations: (1) requiring the offering, as part of a managed care plan or an employment-based plan, of any services; (2) specifying the individuals to be covered under such a plan or the duration of coverage; or (3) requiring a right of conversion from such a plan to an individual plan.

Prohibits a State from prohibiting or regulating: (1) a managed care plan meeting the requirements of subtitle C from taking specified actions; or (2) utilization review programs meeting the requirements of specified provisions of this Act.

Title IV: Cost Containment - Subtitle A: Basic Health Services - Part 1: Establishment of National Limits on Health Care Spending - Requires the Board to: (1) annually monitor nonmedicare and medicare expenditures and, if expenditures exceed allocations, reduce allocations for specified expenditures in the second succeeding year; (2) determine, according to a specified formula, overall nonmedicare and Medicare spending amounts; and (3) apportion nonmedicare spending among the States according to the number of eligible residents, adjusted to reflect certain risk factors, cost differences outside the control of providers, and other considerations the Board deems appropriate.

Requires: (1) the Board to publish, for nonmedicare and Medicare spending, allocations among the classes of services; (2) the nonmedicare allocations to be reduced to account for individuals in capitated plans; and (3) a reduction in the allocation to that class for the second succeeding year after expenditures exceed the allocation.

Allows the Congress, by enacting a law by a specified date in any year, to change the amounts, apportionments, allocations, or reductions set by the Board.

Prohibits administrative or judicial review of: (1) the spending, apportionments, or allocations; (2) exceptions under specified provisions; or (3) payment amounts negotiated, payment methodologies used, or payment amounts established under parts 2 or 3.

Part 2: Development of Negotiated Payment Amounts for Basic Health Services Under Fee-for-Service Choice Plan and the Medicare Program - Provides for negotiation of payment amounts, including Board approval of recommended negotiated amounts.

Part 3: Establishment of Payment Amounts If Negotiated Amounts Not Approved - Provides, if there are no (or unsuccessful) negotiations, for establishment by the Board of the amounts. Specifies the basis for nonmedicare payment amounts.

Part 4: Application of Payment Amounts - Makes the negotiated amounts (or the amounts established by the Board) in a State the payment amounts for the State under the fee-for-service plan.

Makes the negotiated amounts, if approved by the Board, the basis for Medicare payments. Reduces Medicare payments, if the negotiated amounts are not approved by the Board, by a uniform factor as necessary to keep expenditures from exceeding allocations.

Subtitle B: Promotion of Primary Care Services through Changes in Graduate Medical Education - Requires the Board to establish incentives for training needed personnel. Authorizes: (1) payment of additional amounts to particularly successful training programs; and (2) elimination or reduction of payments to hospitals and medical residency programs not meeting needs.

Subtitle C: Administrative Savings - Mandates: (1) uniform claims forms; and (2) standards for electronic billing.

Title V: Control Over Fraud and Abuse - Amends title XI (General Provisions and Professional Standards Review) of the Social Security Act to add references to Health Choice plans to specified provisions: (1) mandating or permitting exclusion of certain individuals from participation in Medicare; (2) mandating civil monetary penalties; and (3) mandating criminal penalties.

Directs the Secretary of Health and Human Services, through the Inspector General, to establish a national data base containing information n health care fraud and abuse, including the identify of providers subjected to certain actions. Requires: (1) each Health Choice plan to report to and query the data base; and (2) coordination with a specified malpractice data base. Provides for confidentiality.

Requires each State to maintain a health care fraud and abuse control unit. Allows a unit described in title XIX (Medicaid) of the Social Security Act to meet this requirement. Provides for the structure, functions, and resources of the unit. Requires cooperative agreements between the unit and similar units in other States, the Inspector General, and the U.S. Attorney General.

Mandates the assignment and use of unique provider identifiers and unique patient identifiers.

Title VI: Administration of Health Choice Program; Health Choice Trust Fund; Quality Assessment - Subtitle A: Administration - Establishes: (1) as an independent agency in the Government, the National Health Board; and (2) the National Advisory Council on Health Policy. Authorizes appropriations from the Health Choice Trust Fund for the Board and the Council.

Subtitle B: Health Choice Trust Fund - Creates in the Treasury the Health Choice Trust Fund (Fund), consisting of: (1) taxes resulting from the value added tax and the health excise tax on employers imposed by this title; and (2) State contributions under this title. Requires the Fund to be managed by the Board. Authorizes the issuance of public debt obligations for purchase by the Fund. Excludes Board receipts and disbursements from U.S. budget totals. Provides for the treatment of the Board with regard to the Balanced Budget and Emergency Deficit Control Act of 1985.

Transfers from the Fund to the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund (Trust Funds) amounts equal to the benefits and administrative costs payable from such Trust Funds as a result of specified provisions of this Act.

Provides for the treatment of amounts owed to the Board or the Fund in bankruptcy and reorganization proceedings.

Mandates transfers from the Fund to the Agency for Health Care Policy and Research to carry out provisions of the Public Health Service Act relating to that Agency.

Requires that expenditures be made from the Fund for grants under title X of this Act relating to: (1) primary care centers and public health clinics serving medically underserved populations; and (2) specialized screening, diagnostic, and treatment services for children.

Mandates expenditures from the Fund for demonstration projects under part 2 of subtitle D (relating to medical malpractice).

Requires a set-asides of Fund expenditures to: (1) assure adequate support in the administration of the fee-for-service choice plan; and (2) expand the Inspector General's capacity to carry out title V (Control Over Fraud and Abuse).

Subtitle C: Miscellaneous - Requires the Board to assess service quality under Health Choice plans, monitor the health status of individuals in the United States, and compile information regarding the appropriateness and quality of services under such plans to provide for a more informed choice in the selection among the plans.

Amends provisions of the Social Security Act relating to outcomes research to require that the needs and priorities of the Health Choice program are reflected in the development and updating of treatment- or condition-specific practice guidelines in specified forms.

Authorizes demonstration projects to improve service delivery and quality and to increase payment efficiency and effectiveness. Requires project funding to come from the Fund.

Mandates reports on: (1) the impact of this Act in meeting goals in "Healthy People, 2000;" (2) consolidating Medicare and other Federal health benefit programs with the Health Choice program; and (3) the impact of this Act on facilities recognized as centers of medical excellence.

Subtitle D: Resolution of Medical Malpractice Claims Relating to Health Choice Program - Part 1: Resolution of Claims - Applies this subtitle to any medical malpractice claim in any Federal or State court relating to Health Choice plan services except for a vaccine-related injury or death or to the extent that title XXI (Vaccines) of the Public Health Service Act applies. Preempts differing State laws.

Mandates the development of practice guidelines for basic health services and requires that any such guideline serve as the standard of care for the resolution of medical malpractice claims.

Requires regulations establishing: (1) factors commonly considered in calculating malpractice economic damages; and (2) a methodology for standardizing the costs or value associated with the factors. Makes the list and methodology admissible. Requires annual compilation of information on damage awards and categorization so as to assist triers of fact in calculating damages.

Provides, when a damage award is over a specified amount, for periodic damage payments, imposes a limit on any single payment, and prohibits certain payments after the plaintiff's death. Reduces damages by the amount of collateral source payments, except for payments under title III or Medicare. Mandates development of a methodology for assisting parties in quantifying the dollar value of non-economic harm.

Requires: (1) 50 percent of any punitive damages to be awarded to the State for activities to prevent medical injuries or to the State health professional licensing agency; and (2) a reduction in punitive damages by the amount of any plaintiff's attorney's fees owed. Limits the application of these requirements in States limiting malpractice award amounts.

Limits attorney's fees.

Part 2: Demonstration Projects, Studies, Etc. - Mandates grants for four-year demonstration projects for model administrative systems for the final resolution of all medical malpractice claims through a non-judicial process. Sets forth system requirements. Waives conflicting State laws.

Requires designation of a list of medical procedures as generally preventable medical outcomes designated to be compensable in advance of the initiation of a medical malpractice claim (accelerated compensation events).

Mandates research relating to the prevention of medical injuries.

Requires each State to use all fees paid to the State for licensing, certification, or accreditation of health practitioners to conduct disciplinary and educational activities.

Mandates a study on the impact of part 1 on specified matters.

Requires an annual report on medical malpractice premiums, including geographic differences.

Title VII: Medicare Benefit Improvement - Amends Medicare provisions to remove the limit on the number of inpatient hospital days covered. Revises requirements regarding inpatient hospital deductibles and eliminates references to inpatient hospital coinsurance. Modifies inpatient psychiatric hospital coverage and payments for emergency hospital services.

Defines "covered outpatient drug" and specifies exclusions. Provides for determination of the payment amount for such drugs according to specified formulas. Declares that the deductible shall be the deductible under specified provisions of title II of this Act. Sets the coinsurance percentage, certain payment limits, and administrative allowances.

Mandates a program to identify (and educate physicians and pharmacists concerning): (1) inappropriate prescribing and dispensing practices; (2) substandard care with respect to such drugs; and (3) potential adverse reactions. Requires related standards.

Provides for the treatment of certain prepaid organizations with regard to prescription drugs, including with regard to drug buy-out plans.

Requires development and annual updating and dissemination of an information guide for physicians comparing average wholesale prices of at least 500 of the most commonly prescribed covered outpatient drugs.

Provides for participation agreements between pharmacies and the Secretary with specified minimum contents.

Directs the Secretary to: (1) provide such electronic equipment and technical assistance as necessary for electronic claims submission by pharmacies; and (2) a point-of-sale electronic system for use by carriers and participating pharmacies in the submission of information on covered drugs dispensed to Medicare beneficiaries. Allows payment for such drugs to be made on the basis of an assignment only to a participating pharmacy.

Imposes civil monetary penalties for violation of a participation agreement, excessive charges, or failure to provide certain information.

Provides for limits on the length of time covered by a prescription.

Amends provisions relating to the use of carriers for administration of benefits to set forth requirements applicable to carriers that make determinations or payments regarding covered outpatient drugs. Allows payment for the operation of the electronic claims system. Mandates interest on late payments by the system. Sets forth special rules for health maintenance organizations and competitive medical plans.

Regulates the amount a provider may charge.

Requires the Director of the Congressional Office of Technology Assessment to provide for the appointment of a Prescription Drug Payment Review Commission. Requires the Commission to report annually to the Congress on methods of determining payment for covered outpatient drugs under Medicare part B. Authorizes appropriations, payable from the Federal Supplementary Medical Insurance Trust Fund.

Mandates studies on: (1) including experimental drugs and biological products as Medicare covered outpatient drugs; (2) use of mail pharmacies to reduce costs to Medicare and Medicare beneficiaries; (3) improving utilization review of covered outpatient drugs; (4) the use, studied on a longitudinal basis, of outpatient prescription drugs by Medicare beneficiaries regarding medical necessity, adverse interactions, cost, and patient stockpiling or wastage; (5) average wholesale prices as compared to actual pharmacy acquisition costs; (6) retail pharmacy overhead costs; and (7) discounts by pharmacies to other third-party insurers.

Mandates a standard Medicare claims form.

Adds tetanus-diphtheria boosters and their administration to the Medicare definition of "medical and other health services." Allows screening mammographies for women over 64 years old 11 (currently, 23) months after a previous screening. Modifies requirements regarding the frequency of screening pap smears.

Eliminates certain Medicare cost-sharing requirements after out-of-pocket cost-sharing equals an amount specified under title II of this Act. Imposes other cost-sharing limits.

Provides for the inpatient hospital deductible when phase two of this Act becomes effective.

Removes provisions relating to: (1) the amount of premiums for individuals enrolled under Medicare part B (Supplementary Medical Insurance); and (2) payment of such premiums. Modifies requirements regarding: (1) the determination of the amount of monthly premiums for certain individuals; and (2) appropriations to cover Government contributions to the Federal Supplementary Medical Insurance Trust Fund and the associated contingency reserve.

Amends title II (Old Age, Survivors, and Disability Insurance (OASDI)) provisions of the Social Security Act relating to entitlement to hospital insurance benefits to entitle every individual over age 64 to hospital insurance benefits under Medicare part A (Hospital Insurance). (Current law imposes certain conditions on such entitlement.) Removes provisions relating to the determination of certain monthly Medicare premiums to be paid by the State.

Removes provisions allowing payment on the basis of an itemized bill. (Current law allows payment on the basis of an itemized bill or on the basis of an assignment.) Revises requirements regarding refunds of amounts billed on an unassigned basis.

Subjects Medicare expenditures to reductions to assure that they do not exceed the allocation for the class of services involved under this Act.

Allows a group health plan that is a qualified employment-based health plan under title III of this Act to take into account that an individual is eligible for Medicare benefits if the individual is: (1) a working aged individual, a disabled active individual in a large group health plan, or an individual with end stage renal disease; and (2) not an eligible individual under this Act.

Appropriates to the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund from the Health Choice Trust Fund amounts equal to the benefits and administrative expenses that result from the amendments made by subtitle A of title VIII of this Act.

Title VIII: Medicaid - Amends Medicaid provisions to prohibit payments to States (and declare that a State is not required to make payments) for basic health services for which payment is made under Medicare or this Act.

Title IX: Financing - Subtitle A: Value Added Tax - Amends the Internal Revenue Code to impose a tax on each taxable transaction, defined as being, in connection with a business, the sale of property in the United States, the performance of services in the United States, and the importing of property into the United States. Includes in the imposition of the tax any sale or leasing of real property and any importing of property, whether or not in connection with a business.

Declares that the taxable amount is the price charged for the property or service or, in the case of exchanges, the fair market value.

Sets a zero tax rate for: (1) food, housing (as a primary residence), and medical care, applying the zero rating to all transactions after such items become clearly identifiable as items to which the zero rating will apply; (2) sales to governmental entities; and (3) the providing by a governmental entity of property and services in connection with education. Taxes sales by a governmental entity only if there is a separate charge or fee.

Sets a zero rate for transactions engaged in by certain charitable (section 501(c)(3)) organizations unless the organization imposes a charge or fee for the service.

Allows a tax credit for the aggregate tax which has been paid by sellers to the taxpayer of property and services which the taxpayer uses in the business to which the transaction relates. Provides for the treatment of excess credit as an overpayment of tax.

Makes the seller liable for the tax. Requires the seller to give the purchaser a tax invoice.

Allows a person whose aggregate taxable transactions (except for transactions involving real property or importing) are under $20,000 to elect to be treated as a nontaxable person.

Allows a tax credit for low income individuals.

Subtitle B: Employer Contribution - Imposes an excise tax on every employer on a percentage of wages paid, specifying a higher percentage for those employers contributing to any employee medical care plan. Imposes a tax on self-employment income. Imposes similar taxes through provisions relating to railroads.

Subtitle C: State Medicaid Contribution - Requires each State, as a requirement for receiving its Federal Medicaid payment, to pay to the Health Choice Trust Fund any excess of Medicaid payment to the State that would have been made (if this Act had not been in effect) for basic health services under subtitle A of title II of this Act over the Medicaid payment actually made for such service.

Title X: Expansion of Primary Care and Public Health Delivery Capacity in Meeting Health Objectives - Amends the Public Health Service Act to authorize appropriations for programs relating to: (1) vaccinations; (2) the prevention and control of tuberculosis, lead poisoning, or sexually transmitted diseases; (3) migrant and community health centers; (4) health services for the homeless and for residents of public housing; (5) family planning; and (6) early intervention services for individuals with HIV disease.

Mandates grants (from Health Choice Trust Funds set aside under title VI of this Act) to plan and develop primary care centers and public health clinics for medically underserved populations, allowing grant funds to be used as under provisions of the Public Health Service Act relating to community health centers. Defines a primary care center to mean a migrant or community health center or an entity qualified to receive a grant under provisions relating to health services for the homeless, health services for residents of public housing, family planning services, or early intervention services for individuals with HIV disease. Defines a public health clinic to mean an entity qualified to receive a grant under provisions relating to vaccinations or the prevention and control of tuberculosis, lead poisoning, or sexually transmitted diseases.

Mandates grants (from Health Choice Trust Funds set aside under title VI of this Act) for specialized screening, diagnostic, and treatment services to children under 22 years old.

Title XI: Reform of Health Insurance Market - Declares that Medicare provisions relating to the revision of National Association of Insurance Commissioners standards regarding Medicare supplemental policies apply in the case of the changes in Medicare benefits made by title VIII.

Requires the Board to promulgate standards relating to health insurance policies offered to supplement the Health Choice program. Prohibits the sale or issue of any nonconforming policy, prescribing civil monetary penalties.

Repeals specified provisions of the Internal Revenue Code, the Employee Retirement Income Security Act of 1974, and the Public Health Service Act relating to continuation coverage.