[House Report 110-538]
[From the U.S. Government Publishing Office]
110th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 110-538
======================================================================
PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 1424) TO AMEND SECTION
712 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, SECTION
2705 OF THE PUBLIC HEALTH SERVICE ACT, AND SECTION 9812 OF THE INTERNAL
REVENUE CODE OF 1986 TO REQUIRE EQUITY IN THE PROVISION OF MENTAL
HEALTH AND SUBSTANCE-RELATED DISORDER BENEFITS UNDER GROUP HEALTH PLANS
_______
March 4, 2008.--Referred to the House Calendar and ordered to be
printed
_______
Ms. Castor, from the Committee on Rules, submitted the following
R E P O R T
[To accompany H. Res. 1014]
The Committee on Rules, having had under consideration
House Resolution 1014, by a nonrecord vote report the same to
the House with the recommendation that the resolution be
adopted.
SUMMARY OF PROVISIONS OF THE RESOLUTION
The resolution provides for consideration of H.R. 1424, the
Paul Wellstone Mental Health and Addiction Equity Act of 2007,
under a closed rule providing two hours of general debate in
the House with 40 minutes equally divided and controlled by the
Chairman and Ranking Minority Member of the Committee on Energy
and Commerce, 40 minutes equally divided and controlled by the
Chairman and Ranking Minority Member of the Committee on Ways
and Means, and 40 minutes equally divided and controlled by the
Chairman and Ranking Minority Member of the Committee on
Education and Labor. The rule waives all points of order
against consideration of the bill except for clauses 9 and 10
of rule XXI. The rule provides that the bill shall be
considered as read. The rule provides that in lieu of the
amendments recommended by the Committees on Energy and
Commerce, Ways and Means, and Education and Labor, the
amendment in the nature of a substitute printed in this report
shall be considered as adopted. The rule waives all points of
order against the bill as amended. This waiver does not affect
the point of order available under clause 9 of rule XXI
(regarding earmark disclosure). The rule provides one motion to
recommit with or without instructions. The rule provides that
in the engrossment of H.R. 1424, the text of H.R. 493, as
passed the House, shall be added at the end of H.R. 1424.
Finally, the rule provides that the Chair may postpone further
consideration of the bill to a time designated by the Speaker.
EXPLANATION OF WAIVERS
The waiver of all points of order against consideration of
the bill (except for clauses 9 and 10 of rule XXI) includes a
waiver of rule XIII, clause 4(a), requiring a three-day layover
of the committee report and a waiver of rule XIII clause 3(c)
regarding the statement of performance goals in committee
reports. Although the rule waives all points of order against
the provisions in the bill, as amended, the Committee is not
aware of any points of order. The waiver of all points of order
is prophylactic.
COMMITTEE VOTES
The results of each record vote on an amendment or motion
to report, together with the names of those voting for and
against, are printed below:
Rules Committee record vote No. 441
Date: March 4, 2008.
Measure: H.R. 1424.
Motion by: Mr. Dreier.
Summary of motion: To make in order and provide appropriate
waivers for an amendment submitted by Reps. Wilson, Heather
(NM)/Kline (MN)/Camp (MI), #11, which provides a substitute for
the language of H.R. 1424 by incorporating the text of S. 558.
The amendment also includes a provision that requires all
states to implement an electronic asset-verification program
for Medicaid eligibility verification.
Results: Defeated 2-7.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Welch--Nay; Castor--Nay; Arcuri--Nay; Sutton--Nay;
Dreier--Yea; Hastings (WA)--Yea.
Rules Committee record vote No. 442
Date: March 4, 2008.
Measure: H.R. 1424.
Motion by: Mr. Dreier.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Barton (TX), #3, which
provides that, to the extent the requirements of DSM apply,
plans shall also maintain coverage for mental health disorders
or conditions arising out of abortions, or loss of an unborn
child.
Results: Defeated 2-7.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Welch--Nay; Castor--Nay; Arcuri--Nay; Sutton--Nay;
Dreier--Yea; Hastings (WA)--Yea.
Rules Committee record vote No. 443
Date: March 4, 2008.
Measure: H.R. 1424.
Motion by: Mr. Dreier.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Barton (TX), #4, which
provides that nothing about codification of the DSM creates a
defense in criminal cases including for child abusers. Nothing
about the codification of the DSM overrides any requirements
for reporting of criminal conduct, including for child abusers,
or creates any new privilege against disclosure.
Results: Defeated 2-7.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Welch--Nay; Castor--Nay; Arcuri--Nay; Sutton--Nay;
Dreier--Yea; Hastings (WA)--Yea.
Rules Committee record vote No. 444
Date: March 4, 2008.
Measure: H.R. 1424.
Motion by: Mr. Hastings (WA).
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Hastings (WA) and Rep.
McMorris (WA), #7, which removes the prohibition on physician
referral to hospitals that are more than 40 percent doctor
owned. The amendment also removes the limitation on hospital
facility expansion.
Results: Defeated 2-7.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Welch--Nay; Castor--Nay; Arcuri--Nay; Sutton--Nay;
Dreier--Yea; Hastings (WA)--Yea.
Rules Committee record vote No. 445
Date: March 4, 2008.
Measure: H.R. 1424.
Motion by: Mr. Hastings (WA).
Summary of motion: To make in order and provide appropriate
waivers for the amendments en bloc by Reps. Hastings (WA) and
McMorris (WA), #8, which removes the prohibition on physician
referral to hospitals that are more than 40 percent doctor
owned and the limitation on hospital facility expansion for
hospitals that meet the following requirements: (1) over half
of their care is provided to Medicare and Medicaid patients and
(2) have obtained a certificate of need from the state; and the
amendment by Rep. Hastings (WA) and Rep. McMorris (WA), #9,
which removes the prohibition on physician referral to
hospitals that are more than 40 percent doctor owned and the
limitation on hospital facility expansion in cases where the
Governor submits written notice to the Secretary that the
hospital is needed to maintain an adequate level of access to
care in the state.
Results: Defeated 2-7.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Welch--Nay; Castor--Nay; Arcuri--Nay; Sutton--Nay;
Dreier--Yea; Hastings (WA)--Yea.
Rules Committee record vote No. 446
Date: March 4, 2008.
Measure: H.R. 1424.
Motion by: Mr. Hastings (WA).
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Hinojosa (TX), #5, which
exempts large full service hospitals from the ownership
requirements and would make it easier for large full service
hospitals to qualify for the expansion exception. The amendment
would allow the Secretary to disallow the grandfather if there
is overutilization.
Results: Defeated 2-7.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Welch--Nay; Castor--Nay; Arcuri--Nay; Sutton--Nay;
Dreier--Yea; Hastings (WA)--Yea.
Rules Committee record vote No. 447.
Date: March 4, 2008.
Measure: H.R. 1424.
Motion by: Mr. Hastings (WA).
Summary of motion: To make in order and provide
appropriate waivers for an amendment by Rep. Broun (GA), #2,
which strikes the increased cost exemption for plans in the
bill, reverting to the existing law which exempts firms whose
costs rise 1% as a result of the federal mandates.
Results: Defeated 2-7.
Vote by Members: McGovern--Nay, Hastings (FL)--Nay;
Matsui--Nay; Welch--Nay; Castor--Nay; Arcuri--Nay; Sutton--Nay;
Dreier--Yea; Hastings (WA)--Yea.
SUMMARY OF THE AMENDMENT IN THE NATURE OF A SUBSTITUTE TO BE
CONSIDERED AS ADOPTED
The Amendment in the Nature of a Substitute expands the
Mental Health Parity Act of 1996 to provide for equity in the
terms of employer sponsored health benefits for mental health
and substance-related disorders compared to medical and
surgical disorders. It ensures that health plans do not charge
higher copayments, coinsurance, deductibles, and impose maximum
out-of-pocket limits and lower day and visit limits on mental
health and addiction care than for medical and surgical
benefits. The Department of Health and Human Services, the
Department of Labor, and the Internal Revenue Service can
penalize insurers for discriminatory practices in plan design
under this bill and individuals may sue in court to obtain
promised benefits. It includes an increase in the rebate, or
discount, that pharmaceutical companies are required to provide
to State Medicaid programs for drugs provided to Medicaid
beneficiaries. It includes language to prohibit physicians from
referring patients to hospitals in which they have an ownership
interest, but also provides the ability to grandfather and grow
existing physician-owned hospitals.
TEXT OF THE AMENDMENT IN THE NATURE OF A SUBSTITUTE TO BE CONSIDERED AS
ADOPTED
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Paul
Wellstone Mental Health and Addiction Equity Act of 2007''.
(b) Table of Contents.--The table of contents of this Act is
as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Amendments to the Employee Retirement Income Security Act of
1974.
Sec. 3. Amendments to the Public Health Service Act relating to the
group market.
Sec. 4. Amendments to the Internal Revenue Code of 1986.
Sec. 5. Medicaid drug rebate.
Sec. 6. Limitation on Medicare exception to the prohibition on certain
physician referrals for hospitals.
Sec. 7. Studies and reports.
SEC. 2. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974.
(a) Extension of Parity to Treatment Limits and Beneficiary
Financial Requirements.--Section 712 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1185a) is amended--
(1) in subsection (a), by adding at the end the
following new paragraphs:
``(3) Treatment limits.--In the case of a group
health plan that provides both medical and surgical
benefits and mental health or substance-related
disorder benefits--
``(A) No treatment limit.--If the plan or
coverage does not include a treatment limit (as
defined in subparagraph (D)) on substantially
all medical and surgical benefits in any
category of items or services, the plan or
coverage may not impose any treatment limit on
mental health or substance-related disorder
benefits that are classified in the same
category of items or services.
``(B) Treatment limit.--If the plan or
coverage includes a treatment limit on
substantially all medical and surgical benefits
in any category of items or services, the plan
or coverage may not impose such a treatment
limit on mental health or substance-related
disorder benefits for items and services within
such category that is more restrictive than the
predominant treatment limit that is applicable
to medical and surgical benefits for items and
services within such category.
``(C) Categories of items and services for
application of treatment limits and beneficiary
financial requirements.--For purposes of this
paragraph and paragraph (4), there shall be the
following five categories of items and services
for benefits, whether medical and surgical
benefits or mental health and substance-related
disorder benefits, and all medical and surgical
benefits and all mental health and substance
related benefits shall be classified into one
of the following categories:
``(i) Inpatient, in-network.--Items
and services not described in clause
(v) furnished on an inpatient basis and
within a network of providers
established or recognized under such
plan or coverage.
``(ii) Inpatient, out-of-network.--
Items and services not described in
clause (v) furnished on an inpatient
basis and outside any network of
providers established or recognized
under such plan or coverage.
``(iii) Outpatient, in-network.--
Items and services not described in
clause (v) furnished on an outpatient
basis and within a network of providers
established or recognized under such
plan or coverage.
``(iv) Outpatient, out-of-network.--
Items and services not described in
clause (v) furnished on an outpatient
basis and outside any network of
providers established or recognized
under such plan or coverage.
``(v) Emergency care.--Items and
services, whether furnished on an
inpatient or outpatient basis or within
or outside any network of providers,
required for the treatment of an
emergency medical condition (as defined
in section 1867(e) of the Social
Security Act, including an emergency
condition relating to mental health or
substance-related disorders).
``(D) Treatment limit defined.--For purposes
of this paragraph, the term `treatment limit'
means, with respect to a plan or coverage,
limitation on the frequency of treatment,
number of visits or days of coverage, or other
similar limit on the duration or scope of
treatment under the plan or coverage.
``(E) Predominance.--For purposes of this
subsection, a treatment limit or financial
requirement with respect to a category of items
and services is considered to be predominant if
it is the most common or frequent of such type
of limit or requirement with respect to such
category of items and services.
``(4) Beneficiary financial requirements.--In the
case of a group health plan that provides both medical
and surgical benefits and mental health or substance-
related disorder benefits--
``(A) No beneficiary financial requirement.--
If the plan or coverage does not include a
beneficiary financial requirement (as defined
in subparagraph (C)) on substantially all
medical and surgical benefits within a category
of items and services (specified under
paragraph (3)(C)), the plan or coverage may not
impose such a beneficiary financial requirement
on mental health or substance-related disorder
benefits for items and services within such
category.
``(B) Beneficiary financial requirement.--
``(i) Treatment of deductibles, out-
of-pocket limits, and similar financial
requirements.--If the plan or coverage
includes a deductible, a limitation on
out-of-pocket expenses, or similar
beneficiary financial requirement that
does not apply separately to individual
items and services on substantially all
medical and surgical benefits within a
category of items and services (as
specified in paragraph (3)(C)), the
plan or coverage shall apply such
requirement (or, if there is more than
one such requirement for such category
of items and services, the predominant
requirement for such category) both to
medical and surgical benefits within
such category and to mental health and
substance-related disorder benefits
within such category and shall not
distinguish in the application of such
requirement between such medical and
surgical benefits and such mental
health and substance-related disorder
benefits.
``(ii) Other financial
requirements.--If the plan or coverage
includes a beneficiary financial
requirement not described in clause (i)
on substantially all medical and
surgical benefits within a category of
items and services, the plan or
coverage may not impose such financial
requirement on mental health or
substance-related disorder benefits for
items and services within such category
in a way that results in greater out-
of-pocket expenses to the participant
or beneficiary than the predominant
beneficiary financial requirement
applicable to medical and surgical
benefits for items and services within
such category.
``(C) Beneficiary financial requirement
defined.--For purposes of this paragraph, the
term `beneficiary financial requirement'
includes, with respect to a plan or coverage,
any deductible, coinsurance, co-payment, other
cost sharing, and limitation on the total
amount that may be paid by a participant or
beneficiary with respect to benefits under the
plan or coverage, but does not include the
application of any aggregate lifetime limit or
annual limit.''; and
(2) in subsection (b)--
(A) by striking ``construed--'' and all that
follows through ``(1) as requiring'' and
inserting ``construed as requiring'';
(B) by striking ``; or'' and inserting a
period; and
(C) by striking paragraph (2).
(b) Expansion to Substance-Related Disorder Benefits and
Revision of Definition.--Such section is further amended--
(1) by striking ``mental health benefits'' each place
it appears (other than in any provision amended by
paragraph (2)) and inserting ``mental health or
substance-related disorder benefits'',
(2) by striking ``mental health benefits'' each place
it appears in subsections (a)(1)(B)(i), (a)(1)(C),
(a)(2)(B)(i), and (a)(2)(C) and inserting ``mental
health and substance-related disorder benefits'', and
(3) in subsection (e), by striking paragraph (4) and
inserting the following new paragraphs:
``(4) Mental health benefits.--The term `mental
health benefits' means benefits with respect to
services for mental health conditions, as defined under
the terms of the plan and in accordance with applicable
law, but does not include substance-related disorder
benefits.
``(5) Substance-related disorder benefits.--The term
`substance-related disorder benefits' means benefits
with respect to services for substance-related
disorders, as defined under the terms of the plan and
in accordance with applicable law.''.
(c) Availability of Plan Information About Criteria for
Medical Necessity.--Subsection (a) of such section, as amended
by subsection (a)(1), is further amended by adding at the end
the following new paragraph:
``(5) Availability of plan information.--The criteria
for medical necessity determinations made under the
plan with respect to mental health and substance-
related disorder benefits (or the health insurance
coverage offered in connection with the plan with
respect to such benefits) shall be made available by
the plan administrator (or the health insurance issuer
offering such coverage) in accordance with regulations
to any current or potential participant, beneficiary,
or contracting provider upon request. The reason for
any denial under the plan (or coverage) of
reimbursement or payment for services with respect to
mental health and substance-related disorder benefits
in the case of any participant or beneficiary shall, on
request or as otherwise required, be made available by
the plan administrator (or the health insurance issuer
offering such coverage) to the participant or
beneficiary in accordance with regulations.''.
(d) Minimum Benefit Requirements.--Subsection (a) of such
section is further amended by adding at the end the following
new paragraph:
``(6) Minimum scope of coverage and equity in out-of-
network benefits.--
``(A) Minimum scope of mental health and
substance-related disorder benefits.--In the
case of a group health plan (or health
insurance coverage offered in connection with
such a plan) that provides any mental health or
substance-related disorder benefits, the plan
or coverage shall include benefits for any
mental health condition or substance-related
disorder included in the most recent edition of
the Diagnostic and Statistical Manual of Mental
Disorders published by the American Psychiatric
Association.
``(B) Equity in coverage of out-of-network
benefits.--
``(i) In general.--In the case of a
plan or coverage that provides both
medical and surgical benefits and
mental health or substance-related
disorder benefits, if medical and
surgical benefits are provided for
substantially all items and services in
a category specified in clause (ii)
furnished outside any network of
providers established or recognized
under such plan or coverage, the mental
health and substance-related disorder
benefits shall also be provided for
items and services in such category
furnished outside any network of
providers established or recognized
under such plan or coverage in
accordance with the requirements of
this section.
``(ii) Categories of items and
services.--For purposes of clause (i),
there shall be the following three
categories of items and services for
benefits, whether medical and surgical
benefits or mental health and
substance-related disorder benefits,
and all medical and surgical benefits
and all mental health and substance-
related disorder benefits shall be
classified into one of the following
categories:
``(I) Emergency.--Items and
services, whether furnished on
an inpatient or outpatient
basis, required for the
treatment of an emergency
medical condition (as defined
in section 1867(e) of the
Social Security Act, including
an emergency condition relating
to mental health or substance-
related disorders).
``(II) Inpatient.--Items and
services not described in
subclause (I) furnished on an
inpatient basis.
``(III) Outpatient.--Items
and services not described in
subclause (I) furnished on an
outpatient basis.''.
(e) Revision of Increased Cost Exemption.--Paragraph (2) of
subsection (c) of such section is amended to read as follows:
``(2) Increased cost exemption.--
``(A) In general.--With respect to a group
health plan (or health insurance coverage
offered in connection with such a plan), if the
application of this section to such plan (or
coverage) results in an increase for the plan
year involved of the actual total costs of
coverage with respect to medical and surgical
benefits and mental health and substance-
related disorder benefits under the plan (as
determined and certified under subparagraph
(C)) by an amount that exceeds the applicable
percentage described in subparagraph (B) of the
actual total plan costs, the provisions of this
section shall not apply to such plan (or
coverage) during the following plan year, and
such exemption shall apply to the plan (or
coverage) for 1 plan year.
``(B) Applicable percentage.--With respect to
a plan (or coverage), the applicable percentage
described in this paragraph shall be--
``(i) 2 percent in the case of the
first plan year to which this paragraph
applies; and
``(ii) 1 percent in the case of each
subsequent plan year.
``(C) Determinations by actuaries.--
Determinations as to increases in actual costs
under a plan (or coverage) for purposes of this
subsection shall be made in writing and
prepared and certified by a qualified and
licensed actuary who is a member in good
standing of the American Academy of Actuaries.
Such determinations shall be made available by
the plan administrator (or health insurance
issuer, as the case may be) to the general
public.
``(D) 6-month determinations.--If a group
health plan (or a health insurance issuer
offering coverage in connection with such a
plan) seeks an exemption under this paragraph,
determinations under subparagraph (A) shall be
made after such plan (or coverage) has complied
with this section for the first 6 months of the
plan year involved.
``(E) Notification.--An election to modify
coverage of mental health and substance-related
disorder benefits as permitted under this
paragraph shall be treated as a material
modification in the terms of the plan as
described in section 102(a) and notice of which
shall be provided a reasonable period in
advance of the change.
``(F) Notification of appropriate agency.--
``(i) In general.--A group health
plan that, based on a certification
described under subparagraph (C),
qualifies for an exemption under this
paragraph, and elects to implement the
exemption, shall notify the Department
of Labor of such election.
``(ii) Requirement.--A notification
under clause (i) shall include--
``(I) a description of the
number of covered lives under
the plan (or coverage) involved
at the time of the
notification, and as
applicable, at the time of any
prior election of the cost-
exemption under this paragraph
by such plan (or coverage);
``(II) for both the plan year
upon which a cost exemption is
sought and the year prior, a
description of the actual total
costs of coverage with respect
to medical and surgical
benefits and mental health and
substance-related disorder
benefits under the plan; and
``(III) for both the plan
year upon which a cost
exemption is sought and the
year prior, the actual total
costs of coverage with respect
to mental health and substance-
related disorder benefits under
the plan.
``(iii) Confidentiality.--A
notification under clause (i) shall be
confidential. The Department of Labor
shall make available, upon request to
the appropriate committees of Congress
and on not more than an annual basis,
an anonymous itemization of such
notifications, that includes--
``(I) a breakdown of States
by the size and any type of
employers submitting such
notification; and
``(II) a summary of the data
received under clause (ii).
``(G) No impact on application of state
law.--The fact that a plan or coverage is
exempt from the provisions of this section
under subparagraph (A) shall not affect the
application of State law to such plan or
coverage.
``(H) Construction.--Nothing in this
paragraph shall be construed as preventing a
group health plan (or health insurance coverage
offered in connection with such a plan) from
complying with the provisions of this section
notwithstanding that the plan or coverage is
not required to comply with such provisions due
to the application of subparagraph (A).''.
(f) Change in Exclusion for Smallest Employers.--Subsection
(c)(1)(B) of such section is amended--
(1) by inserting ``(or 1 in the case of an employer
residing in a State that permits small groups to
include a single individual)'' after ``at least 2'' the
first place it appears; and
(2) by striking ``and who employs at least 2
employees on the first day of the plan year''.
(g) Elimination of Sunset Provision.--Such section is amended
by striking subsection (f).
(h) Clarification Regarding Preemption.--Such section is
further amended by inserting after subsection (e) the following
new subsection:
``(f) Preemption, Relation to State Laws.--
``(1) In general.--This part shall not be construed
to supersede any provision of State law which
establishes, implements, or continues in effect any
consumer protections, benefits, methods of access to
benefits, rights, external review programs, or remedies
solely relating to health insurance issuers in
connection with group health insurance coverage
(including benefit mandates or regulation of group
health plans of 50 or fewer employees) except to the
extent that such provision prevents the application of
a requirement of this part.
``(2) Continued preemption with respect to group
health plans.--Nothing in this section shall be
construed to affect or modify the provisions of section
514 with respect to group health plans.
``(3) Other state laws.--Nothing in this section
shall be construed to exempt or relieve any person from
any laws of any State not solely related to health
insurance issuers in connection with group health
coverage insofar as they may now or hereafter relate to
insurance, health plans, or health coverage.'''.
(i) Conforming Amendments to Heading.--
(1) In general.--The heading of such section is
amended to read as follows:
``SEC. 712. EQUITY IN MENTAL HEALTH AND SUBSTANCE-RELATED DISORDER
BENEFITS.''.
(2) Clerical amendment.--The table of contents in
section 1 of such Act is amended by striking the item
relating to section 712 and inserting the following new
item:
``Sec. 712. Equity in mental health and substance-related disorder
benefits.''.
(j) Effective Date.--
(1) In general.--The amendments made by this section
shall apply with respect to plan years beginning on or
after January 1, 2009.
(2) Special rule for collective bargaining
agreements.--In the case of a group health plan
maintained pursuant to one or more collective
bargaining agreements between employee representatives
and one or more employers ratified before the date of
the enactment of this Act, the amendments made by this
section shall not apply to plan years beginning before
the later of--
(A) the date on which the last of the
collective bargaining agreements relating to
the plan terminates (determined without regard
to any extension thereof agreed to after the
date of the enactment of this Act), or
(B) January 1, 2009.
For purposes of subparagraph (A), any plan amendment
made pursuant to a collective bargaining agreement
relating to the plan which amends the plan solely to
conform to any requirement added by this section shall
not be treated as a termination of such collective
bargaining agreement.
(k) DOL Annual Sample Compliance.--The Secretary of Labor
shall annually sample and conduct random audits of group health
plans (and health insurance coverage offered in connection with
such plans) in order to determine their compliance with the
amendments made by this Act and shall submit to the appropriate
committees of Congress an annual report on such compliance with
such amendments. The Secretary shall share the results of such
audits with the Secretaries of Health and Human Services and of
the Treasury.
(l) Assistance to Participants and Beneficiaries.--The
Secretary of Labor shall provide assistance to participants and
beneficiaries of group health plans with any questions or
problems with compliance with the requirements of this Act. The
Secretary shall notify participants and beneficiaries how they
can obtain assistance from State consumer and insurance
agencies and the Secretary shall coordinate with State agencies
to ensure that participants and beneficiaries are protected and
afforded the rights provided under this Act.
SEC. 3. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT RELATING TO THE
GROUP MARKET.
(a) Extension of Parity to Treatment Limits and Beneficiary
Financial Requirements.--Section 2705 of the Public Health
Service Act (42 U.S.C. 300gg-5) is amended--
(1) in subsection (a), by adding at the end the
following new paragraphs:
``(3) Treatment limits.--In the case of a group
health plan that provides both medical and surgical
benefits and mental health or substance-related
disorder benefits--
``(A) No treatment limit.--If the plan or
coverage does not include a treatment limit (as
defined in subparagraph (D)) on substantially
all medical and surgical benefits in any
category of items or services (specified in
subparagraph (C)), the plan or coverage may not
impose any treatment limit on mental health or
substance-related disorder benefits that are
classified in the same category of items or
services.
``(B) Treatment limit.--If the plan or
coverage includes a treatment limit on
substantially all medical and surgical benefits
in any category of items or services, the plan
or coverage may not impose such a treatment
limit on mental health or substance-related
disorder benefits for items and services within
such category that is more restrictive than the
predominant treatment limit that is applicable
to medical and surgical benefits for items and
services within such category.
``(C) Categories of items and services for
application of treatment limits and beneficiary
financial requirements.--For purposes of this
paragraph and paragraph (4), there shall be the
following five categories of items and services
for benefits, whether medical and surgical
benefits or mental health and substance-related
disorder benefits, and all medical and surgical
benefits and all mental health and substance
related benefits shall be classified into one
of the following categories:
``(i) Inpatient, in-network.--Items
and services not described in clause
(v) furnished on an inpatient basis and
within a network of providers
established or recognized under such
plan or coverage.
``(ii) Inpatient, out-of-network.--
Items and services not described in
clause (v) furnished on an inpatient
basis and outside any network of
providers established or recognized
under such plan or coverage.
``(iii) Outpatient, in-network.--
Items and services not described in
clause (v) furnished on an outpatient
basis and within a network of providers
established or recognized under such
plan or coverage.
``(iv) Outpatient, out-of-network.--
Items and services not described in
clause (v) furnished on an outpatient
basis and outside any network of
providers established or recognized
under such plan or coverage.
``(v) Emergency care.--Items and
services, whether furnished on an
inpatient or outpatient basis or within
or outside any network of providers,
required for the treatment of an
emergency medical condition (as defined
in section 1867(e) of the Social
Security Act, including an emergency
condition relating to mental health or
substance-related disorders).
``(D) Treatment limit defined.--For purposes
of this paragraph, the term `treatment limit'
means, with respect to a plan or coverage,
limitation on the frequency of treatment,
number of visits or days of coverage, or other
similar limit on the duration or scope of
treatment under the plan or coverage.
``(E) Predominance.--For purposes of this
subsection, a treatment limit or financial
requirement with respect to a category of items
and services is considered to be predominant if
it is the most common or frequent of such type
of limit or requirement with respect to such
category of items and services.
``(4) Beneficiary financial requirements.--In the
case of a group health plan that provides both medical
and surgical benefits and mental health or substance-
related disorder benefits--
``(A) No beneficiary financial requirement.--
If the plan or coverage does not include a
beneficiary financial requirement (as defined
in subparagraph (C)) on substantially all
medical and surgical benefits within a category
of items and services (specified in paragraph
(3)(C)), the plan or coverage may not impose
such a beneficiary financial requirement on
mental health or substance-related disorder
benefits for items and services within such
category.
``(B) Beneficiary financial requirement.--
``(i) Treatment of deductibles, out-
of-pocket limits, and similar financial
requirements.--If the plan or coverage
includes a deductible, a limitation on
out-of-pocket expenses, or similar
beneficiary financial requirement that
does not apply separately to individual
items and services on substantially all
medical and surgical benefits within a
category of items and services, the
plan or coverage shall apply such
requirement (or, if there is more than
one such requirement for such category
of items and services, the predominant
requirement for such category) both to
medical and surgical benefits within
such category and to mental health and
substance-related disorder benefits
within such category and shall not
distinguish in the application of such
requirement between such medical and
surgical benefits and such mental
health and substance-related disorder
benefits.
``(ii) Other financial
requirements.--If the plan or coverage
includes a beneficiary financial
requirement not described in clause (i)
on substantially all medical and
surgical benefits within a category of
items and services, the plan or
coverage may not impose such financial
requirement on mental health or
substance-related disorder benefits for
items and services within such category
in a way that results in greater out-
of-pocket expenses to the participant
or beneficiary than the predominant
beneficiary financial requirement
applicable to medical and surgical
benefits for items and services within
such category.
``(C) Beneficiary financial requirement
defined.--For purposes of this paragraph, the
term `beneficiary financial requirement'
includes, with respect to a plan or coverage,
any deductible, coinsurance, co-payment, other
cost sharing, and limitation on the total
amount that may be paid by a participant or
beneficiary with respect to benefits under the
plan or coverage, but does not include the
application of any aggregate lifetime limit or
annual limit.''; and
(2) in subsection (b)--
(A) by striking ``construed--'' and all that
follows through ``(1) as requiring'' and
inserting ``construed as requiring'';
(B) by striking ``; or'' and inserting a
period; and
(C) by striking paragraph (2).
(b) Expansion to Substance-Related Disorder Benefits and
Revision of Definition.--Such section is further amended--
(1) by striking ``mental health benefits'' each place
it appears (other than in any provision amended by
paragraph (2)) and inserting ``mental health or
substance-related disorder benefits'',
(2) by striking ``mental health benefits'' each place
it appears in subsections (a)(1)(B)(i), (a)(1)(C),
(a)(2)(B)(i), and (a)(2)(C) and inserting ``mental
health and substance-related disorder benefits'', and
(3) in subsection (e), by striking paragraph (4) and
inserting the following new paragraphs:
``(4) Mental health benefits.--The term `mental
health benefits' means benefits with respect to
services for mental health conditions, as defined under
the terms of the plan and in accordance with applicable
law, but does not include substance-related disorder
benefits.
``(5) Substance-related disorder benefits.--The term
`substance-related disorder benefits' means benefits
with respect to services for substance-related
disorders, as defined under the terms of the plan and
in accordance with applicable law.''.
(c) Availability of Plan Information About Criteria for
Medical Necessity.--Subsection (a) of such section, as amended
by subsection (a)(1), is further amended by adding at the end
the following new paragraph:
``(5) Availability of plan information.--The criteria
for medical necessity determinations made under the
plan with respect to mental health and substance-
related disorder benefits (or the health insurance
coverage offered in connection with the plan with
respect to such benefits) shall be made available by
the plan administrator (or the health insurance issuer
offering such coverage) in accordance with regulations
to any current or potential participant, beneficiary,
or contracting provider upon request. The reason for
any denial under the plan (or coverage) of
reimbursement or payment for services with respect to
mental health and substance-related disorder benefits
in the case of any participant or beneficiary shall, on
request or as otherwise required, be made available by
the plan administrator (or the health insurance issuer
offering such coverage) to the participant or
beneficiary in accordance with regulations.''.
(d) Minimum Benefit Requirements.--Subsection (a) of such
section is further amended by adding at the end the following
new paragraph:
``(6) Minimum scope of coverage and equity in out-of-
network benefits.--
``(A) Minimum scope of mental health and
substance-related disorder benefits.--In the
case of a group health plan (or health
insurance coverage offered in connection with
such a plan) that provides any mental health or
substance-related disorder benefits, the plan
or coverage shall include benefits for any
mental health condition or substance-related
disorder included in the most recent edition of
the Diagnostic and Statistical Manual of Mental
Disorders published by the American Psychiatric
Association.
``(B) Equity in coverage of out-of-network
benefits.--
``(i) In general.--In the case of a
group health plan (or health insurance
coverage offered in connection with
such a plan) that provides both medical
and surgical benefits and mental health
or substance-related disorder benefits,
if medical and surgical benefits are
provided for substantially all items
and services in a category specified in
clause (ii) furnished outside any
network of providers established or
recognized under such plan or coverage,
the mental health and substance-related
disorder benefits shall also be
provided for items and services in such
category furnished outside any network
of providers established or recognized
under such plan or coverage in
accordance with the requirements of
this section.
``(ii) Categories of items and
services.--For purposes of clause (i),
there shall be the following three
categories of items and services for
benefits, whether medical and surgical
benefits or mental health and
substance-related disorder benefits,
and all medical and surgical benefits
and all mental health and substance-
related disorder benefits shall be
classified into one of the following
categories:
``(I) Emergency.--Items and
services, whether furnished on
an inpatient or outpatient
basis, required for the
treatment of an emergency
medical condition (as defined
in section 1867(e) of the
Social Security Act, including
an emergency condition relating
to mental health or substance-
related disorders).
``(II) Inpatient.--Items and
services not described in
subclause (I) furnished on an
inpatient basis.
``(III) Outpatient.--Items
and services not described in
subclause (I) furnished on an
outpatient basis.''.
(e) Revision of Increased Cost Exemption.--Paragraph (2) of
subsection (c) of such section is amended to read as follows:
``(2) Increased cost exemption.--
``(A) In general.--With respect to a group
health plan (or health insurance coverage
offered in connection with such a plan), if the
application of this section to such plan (or
coverage) results in an increase for the plan
year involved of the actual total costs of
coverage with respect to medical and surgical
benefits and mental health and substance-
related disorder benefits under the plan (as
determined and certified under subparagraph
(C)) by an amount that exceeds the applicable
percentage described in subparagraph (B) of the
actual total plan costs, the provisions of this
section shall not apply to such plan (or
coverage) during the following plan year, and
such exemption shall apply to the plan (or
coverage) for 1 plan year.
``(B) Applicable percentage.--With respect to
a plan (or coverage), the applicable percentage
described in this paragraph shall be--
``(i) 2 percent in the case of the
first plan year to which this paragraph
applies; and
``(ii) 1 percent in the case of each
subsequent plan year.
``(C) Determinations by actuaries.--
Determinations as to increases in actual costs
under a plan (or coverage) for purposes of this
subsection shall be made in writing and
prepared and certified by a qualified and
licensed actuary who is a member in good
standing of the American Academy of Actuaries.
Such determinations shall be made available by
the plan administrator (or health insurance
issuer, as the case may be) to the general
public.
``(D) 6-month determinations.--If a group
health plan (or a health insurance issuer
offering coverage in connection with such a
plan) seeks an exemption under this paragraph,
determinations under subparagraph (A) shall be
made after such plan (or coverage) has complied
with this section for the first 6 months of the
plan year involved.
``(E) Notification.--A group health plan
under this part shall comply with the notice
requirement under section 712(c)(2)(E) of the
Employee Retirement Income Security Act of 1974
with respect to a modification of mental health
and substance-related disorder benefits as
permitted under this paragraph as if such
section applied to such plan.
``(F) Notification of appropriate agency.--
``(i) In general.--A group health
plan that, based on a certification
described under subparagraph (C),
qualifies for an exemption under this
paragraph, and elects to implement the
exemption, shall notify the Secretary
of Health and Human Services of such
election.
``(ii) Requirement.--A notification
under clause (i) shall include--
``(I) a description of the
number of covered lives under
the plan (or coverage) involved
at the time of the
notification, and as
applicable, at the time of any
prior election of the cost-
exemption under this paragraph
by such plan (or coverage);
``(II) for both the plan year
upon which a cost exemption is
sought and the year prior, a
description of the actual total
costs of coverage with respect
to medical and surgical
benefits and mental health and
substance-related disorder
benefits under the plan; and
``(III) for both the plan
year upon which a cost
exemption is sought and the
year prior, the actual total
costs of coverage with respect
to mental health and substance-
related disorder benefits under
the plan.
``(iii) Confidentiality.--A
notification under clause (i) shall be
confidential. The Secretary of Health
and Human Services shall make
available, upon request to the
appropriate committees of Congress and
on not more than an annual basis, an
anonymous itemization of such
notifications, that includes--
``(I) a breakdown of States
by the size and any type of
employers submitting such
notification; and
``(II) a summary of the data
received under clause (ii).
``(G) Construction.--Nothing in this
paragraph shall be construed as preventing a
group health plan (or health insurance coverage
offered in connection with such a plan) from
complying with the provisions of this section
notwithstanding that the plan or coverage is
not required to comply with such provisions due
to the application of subparagraph (A).''.
(f) Change in Exclusion for Smallest Employers.--Subsection
(c)(1)(B) of such section is amended--
(1) by inserting ``(or 1 in the case of an employer
residing in a State that permits small groups to
include a single individual)'' after ``at least 2'' the
first place it appears; and
(2) by striking ``and who employs at least 2
employees on the first day of the plan year''.
(g) Elimination of Sunset Provision.--Such section is amended
by striking out subsection (f).
(h) Clarification Regarding Preemption.--Such section is
further amended by inserting after subsection (e) the following
new subsection:
``(f) Preemption, Relation to State Laws.--
``(1) In general.--Nothing in this section shall be
construed to preempt any State law that provides
greater consumer protections, benefits, methods of
access to benefits, rights or remedies that are greater
than the protections, benefits, methods of access to
benefits, rights or remedies provided under this
section.
``(2) Construction.--Nothing in this section shall be
construed to affect or modify the provisions of section
2723 with respect to group health plans.''.
(i) Conforming Amendment to Heading.--The heading of such
section is amended to read as follows:
``SEC. 2705. EQUITY IN MENTAL HEALTH AND SUBSTANCE-RELATED DISORDER
BENEFITS.''.
(j) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall
apply with respect to plan years beginning on or after
January 1, 2009.
(2) Elimination of sunset.--The amendment made by
subsection (g) shall apply to benefits for services
furnished after December 31, 2007.
(3) Special rule for collective bargaining
agreements.--In the case of a group health plan
maintained pursuant to one or more collective
bargaining agreements between employee representatives
and one or more employers ratified before the date of
the enactment of this Act, the amendments made by this
section shall not apply to plan years beginning before
the later of--
(A) the date on which the last of the
collective bargaining agreements relating to
the plan terminates (determined without regard
to any extension thereof agreed to after the
date of the enactment of this Act), or
(B) January 1, 2009.
For purposes of subparagraph (A), any plan amendment
made pursuant to a collective bargaining agreement
relating to the plan which amends the plan solely to
conform to any requirement added by this section shall
not be treated as a termination of such collective
bargaining agreement.
SEC. 4. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.
(a) Extension of Parity to Treatment Limits and Beneficiary
Financial Requirements.--Section 9812 of the Internal Revenue
Code of 1986 is amended--
(1) in subsection (a), by adding at the end the
following new paragraphs:
``(3) Treatment limits.--In the case of a group
health plan that provides both medical and surgical
benefits and mental health or substance-related
disorder benefits--
``(A) No treatment limit.--If the plan does
not include a treatment limit (as defined in
subparagraph (D)) on substantially all medical
and surgical benefits in any category of items
or services (specified in subparagraph (C)),
the plan may not impose any treatment limit on
mental health or substance-related disorder
benefits that are classified in the same
category of items or services.
``(B) Treatment limit.--If the plan includes
a treatment limit on substantially all medical
and surgical benefits in any category of items
or services, the plan may not impose such a
treatment limit on mental health or substance-
related disorder benefits for items and
services within such category that is more
restrictive than the predominant treatment
limit that is applicable to medical and
surgical benefits for items and services within
such category.
``(C) Categories of items and services for
application of treatment limits and beneficiary
financial requirements.--For purposes of this
paragraph and paragraph (4), there shall be the
following five categories of items and services
for benefits, whether medical and surgical
benefits or mental health and substance-related
disorder benefits, and all medical and surgical
benefits and all mental health and substance
related benefits shall be classified into one
of the following categories:
``(i) Inpatient, in-network.--Items
and services not described in clause
(v) furnished on an inpatient basis and
within a network of providers
established or recognized under such
plan.
``(ii) Inpatient, out-of-network.--
Items and services not described in
clause (v) furnished on an inpatient
basis and outside any network of
providers established or recognized
under such plan.
``(iii) Outpatient, in-network.--
Items and services not described in
clause (v) furnished on an outpatient
basis and within a network of providers
established or recognized under such
plan.
``(iv) Outpatient, out-of-network.--
Items and services not described in
clause (v) furnished on an outpatient
basis and outside any network of
providers established or recognized
under such plan.
``(v) Emergency care.--Items and
services, whether furnished on an
inpatient or outpatient basis or within
or outside any network of providers,
required for the treatment of an
emergency medical condition (as defined
in section 1867(e) of the Social
Security Act, including an emergency
condition relating to mental health or
substance-related disorders).
``(D) Treatment limit defined.--For purposes
of this paragraph, the term `treatment limit'
means, with respect to a plan, limitation on
the frequency of treatment, number of visits or
days of coverage, or other similar limit on the
duration or scope of treatment under the plan.
``(E) Predominance.--For purposes of this
subsection, a treatment limit or financial
requirement with respect to a category of items
and services is considered to be predominant if
it is the most common or frequent of such type
of limit or requirement with respect to such
category of items and services.
``(4) Beneficiary financial requirements.--In the
case of a group health plan that provides both medical
and surgical benefits and mental health or substance-
related disorder benefits--
``(A) No beneficiary financial requirement.--
If the plan does not include a beneficiary
financial requirement (as defined in
subparagraph (C)) on substantially all medical
and surgical benefits within a category of
items and services (specified in paragraph
(3)(C)), the plan may not impose such a
beneficiary financial requirement on mental
health or substance-related disorder benefits
for items and services within such category.
``(B) Beneficiary financial requirement.--
``(i) Treatment of deductibles, out-
of-pocket limits, and similar financial
requirements.--If the plan includes a
deductible, a limitation on out-of-
pocket expenses, or similar beneficiary
financial requirement that does not
apply separately to individual items
and services on substantially all
medical and surgical benefits within a
category of items and services, the
plan shall apply such requirement (or,
if there is more than one such
requirement for such category of items
and services, the predominant
requirement for such category) both to
medical and surgical benefits within
such category and to mental health and
substance-related disorder benefits
within such category and shall not
distinguish in the application of such
requirement between such medical and
surgical benefits and such mental
health and substance-related disorder
benefits.
``(ii) Other financial
requirements.--If the plan includes a
beneficiary financial requirement not
described in clause (i) on
substantially all medical and surgical
benefits within a category of items and
services, the plan may not impose such
financial requirement on mental health
or substance-related disorder benefits
for items and services within such
category in a way that results in
greater out-of-pocket expenses to the
participant or beneficiary than the
predominant beneficiary financial
requirement applicable to medical and
surgical benefits for items and
services within such category.
``(C) Beneficiary financial requirement
defined.--For purposes of this paragraph, the
term `beneficiary financial requirement'
includes, with respect to a plan, any
deductible, coinsurance, co-payment, other cost
sharing, and limitation on the total amount
that may be paid by a participant or
beneficiary with respect to benefits under the
plan, but does not include the application of
any aggregate lifetime limit or annual
limit.'', and
(2) in subsection (b)--
(A) by striking ``construed--'' and all that
follows through ``(1) as requiring'' and
inserting ``construed as requiring'',
(B) by striking ``; or'' and inserting a
period, and
(C) by striking paragraph (2).
(b) Expansion to Substance-Related Disorder Benefits and
Revision of Definition.--Section 9812 of such Code is further
amended--
(1) by striking ``mental health benefits'' each place
it appears (other than in any provision amended by
paragraph (2)) and inserting ``mental health or
substance-related disorder benefits'',
(2) by striking ``mental health benefits'' each place
it appears in subsections (a)(1)(B)(i), (a)(1)(C),
(a)(2)(B)(i), and (a)(2)(C) and inserting ``mental
health and substance-related disorder benefits'', and
(3) in subsection (e), by striking paragraph (4) and
inserting the following new paragraphs:
``(4) Mental health benefits.--The term `mental
health benefits' means benefits with respect to
services for mental health conditions, as defined under
the terms of the plan and in accordance with applicable
law, but does not include substance-related disorder
benefits.
``(5) Substance-related disorder benefits.--The term
`substance-related disorder benefits' means benefits
with respect to services for substance-related
disorders, as defined under the terms of the plan and
in accordance with applicable law.''.
(c) Availability of Plan Information About Criteria for
Medical Necessity.--Subsection (a) of section 9812 of such
Code, as amended by subsection (a)(1), is further amended by
adding at the end the following new paragraph:
``(5) Availability of plan information.--The criteria
for medical necessity determinations made under the
plan with respect to mental health and substance-
related disorder benefits shall be made available by
the plan administrator in accordance with regulations
to any current or potential participant, beneficiary,
or contracting provider upon request. The reason for
any denial under the plan of reimbursement or payment
for services with respect to mental health and
substance-related disorder benefits in the case of any
participant or beneficiary shall, on request or as
otherwise required, be made available by the plan
administrator to the participant or beneficiary in
accordance with regulations.''.
(d) Minimum Benefit Requirements.--Subsection (a) of section
9812 of such Code is further amended by adding at the end the
following new paragraph:
``(6) Minimum scope of coverage and equity in out-of-
network benefits.--
``(A) Minimum scope of mental health and
substance-related disorder benefits.--In the
case of a group health plan that provides any
mental health or substance-related disorder
benefits, the plan shall include benefits for
any mental health condition or substance-
related disorder included in the most recent
edition of the Diagnostic and Statistical
Manual of Mental Disorders published by the
American Psychiatric Association.
``(B) Equity in coverage of out-of-network
benefits.--
``(i) In general.--In the case of a
group health plan that provides both
medical and surgical benefits and
mental health or substance-related
disorder benefits, if medical and
surgical benefits are provided for
substantially all items and services in
a category specified in clause (ii)
furnished outside any network of
providers established or recognized
under such plan, the mental health and
substance-related disorder benefits
shall also be provided for items and
services in such category furnished
outside any network of providers
established or recognized under such
plan in accordance with the
requirements of this section.
``(ii) Categories of items and
services.--For purposes of clause (i),
there shall be the following three
categories of items and services for
benefits, whether medical and surgical
benefits or mental health and
substance-related disorder benefits,
and all medical and surgical benefits
and all mental health and substance-
related disorder benefits shall be
classified into one of the following
categories:
``(I) Emergency.--Items and
services, whether furnished on
an inpatient or outpatient
basis, required for the
treatment of an emergency
medical condition (as defined
in section 1867(e) of the
Social Security Act, including
an emergency condition relating
to mental health or substance-
related disorders).
``(II) Inpatient.--Items and
services not described in
subclause (I) furnished on an
inpatient basis.
``(III) Outpatient.--Items
and services not described in
subclause (I) furnished on an
outpatient basis.''.
(e) Revision of Increased Cost Exemption.--Paragraph (2) of
section 9812(c) of such Code is amended to read as follows:
``(2) Increased cost exemption.--
``(A) In general.--With respect to a group
health plan, if the application of this section
to such plan results in an increase for the
plan year involved of the actual total costs of
coverage with respect to medical and surgical
benefits and mental health and substance-
related disorder benefits under the plan (as
determined and certified under subparagraph
(C)) by an amount that exceeds the applicable
percentage described in subparagraph (B) of the
actual total plan costs, the provisions of this
section shall not apply to such plan during the
following plan year, and such exemption shall
apply to the plan for 1 plan year.
``(B) Applicable percentage.--With respect to
a plan, the applicable percentage described in
this paragraph shall be--
``(i) 2 percent in the case of the
first plan year to which this paragraph
applies, and
``(ii) 1 percent in the case of each
subsequent plan year.
``(C) Determinations by actuaries.--
Determinations as to increases in actual costs
under a plan for purposes of this subsection
shall be made in writing and prepared and
certified by a qualified and licensed actuary
who is a member in good standing of the
American Academy of Actuaries. Such
determinations shall be made available by the
plan administrator to the general public.
``(D) 6-month determinations.--If a group
health plan seeks an exemption under this
paragraph, determinations under subparagraph
(A) shall be made after such plan has complied
with this section for the first 6 months of the
plan year involved.
``(E) Notification of appropriate agency.--
``(i) In general.--A group health
plan that, based on a certification
described under subparagraph (C),
qualifies for an exemption under this
paragraph, and elects to implement the
exemption, shall notify the Secretary
of the Treasury of such election.
``(ii) Requirement.--A notification
under clause (i) shall include--
``(I) a description of the
number of covered lives under
the plan (or coverage) involved
at the time of the
notification, and as
applicable, at the time of any
prior election of the cost-
exemption under this paragraph
by such plan (or coverage);
``(II) for both the plan year
upon which a cost exemption is
sought and the year prior, a
description of the actual total
costs of coverage with respect
to medical and surgical
benefits and mental health and
substance-related disorder
benefits under the plan; and
``(III) for both the plan
year upon which a cost
exemption is sought and the
year prior, the actual total
costs of coverage with respect
to mental health and substance-
related disorder benefits under
the plan.
``(iii) Confidentiality.--A
notification under clause (i) shall be
confidential. The Secretary of the
Treasury shall make available, upon
request to the appropriate committees
of Congress and on not more than an
annual basis, an anonymous itemization
of such notifications, that includes--
``(I) a breakdown of States
by the size and any type of
employers submitting such
notification; and
``(II) a summary of the data
received under clause (ii).
``(F) Construction.--Nothing in this
paragraph shall be construed as preventing a
group health plan from complying with the
provisions of this section notwithstanding that
the plan is not required to comply with such
provisions due to the application of
subparagraph (A).''.
(f) Change in Exclusion for Smallest Employers.--Paragraph
(1) of section 9812(c) of such Code is amended to read as
follows:
``(1) Small employer exemption.--
``(A) In general.--This section shall not
apply to any group health plan for any plan
year of a small employer.
``(B) Small employer.--For purposes of
subparagraph (A), the term `small employer'
means, with respect to a calendar year and a
plan year, an employer who employed an average
of at least 2 (or 1 in the case of an employer
residing in a State that permits small groups
to include a single individual) but not more
than 50 employees on business days during the
preceding calendar year. For purposes of the
preceding sentence, all persons treated as a
single employer under subsection (b), (c), (m),
or (o) of section 414 shall be treated as 1
employer and rules similar to rules of
subparagraphs (B) and (C) of section
4980D(d)(2) shall apply.''.
(g) Elimination of Sunset Provision.--Section 9812 of such
Code is amended by striking subsection (f).
(h) Conforming Amendments to Heading.--
(1) In general.--The heading of section 9812 of such
Code is amended to read as follows:
``SEC. 9812. EQUITY IN MENTAL HEALTH AND SUBSTANCE-RELATED DISORDER
BENEFITS.''.
(2) Clerical amendment.--The table of sections for
subchapter B of chapter 100 of such Code is amended by
striking the item relating to section 9812 and
inserting the following new item:
``Sec. 9812. Equity in mental health and substance-related disorder
benefits.''.
(i) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall
apply with respect to plan years beginning on or after
January 1, 2009.
(2) Elimination of sunset.--The amendment made by
subsection (g) shall apply to benefits for services
furnished after December 31, 2007.
(3) Special rule for collective bargaining
agreements.--In the case of a group health plan
maintained pursuant to one or more collective
bargaining agreements between employee representatives
and one or more employers ratified before the date of
the enactment of this Act, the amendments made by this
section (other than subsection (g)) shall not apply to
plan years beginning before the later of--
(A) the date on which the last of the
collective bargaining agreements relating to
the plan terminates (determined without regard
to any extension thereof agreed to after the
date of the enactment of this Act), or
(B) January 1, 2009.
For purposes of subparagraph (A), any plan amendment
made pursuant to a collective bargaining agreement
relating to the plan which amends the plan solely to
conform to any requirement added by this section shall
not be treated as a termination of such collective
bargaining agreement.
SEC. 5. MEDICAID DRUG REBATE.
Paragraph (1)(B)(i) of section 1927(c) of the Social Security
Act (42 U.S.C. 1396r-8(c)) is amended--
(1) by striking ``and'' at the end of subclause (IV);
(2) in subclause (V)--
(A) by inserting ``and before January 1,
2009, and after December 31, 2014,'' after
``December 31, 1995,''; and
(B) by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following new subclause:
``(VI) after December 31,
2008, and before January 1,
2015, is 20.1 percent.''.
SEC. 6. LIMITATION ON MEDICARE EXCEPTION TO THE PROHIBITION ON CERTAIN
PHYSICIAN REFERRALS FOR HOSPITALS.
(a) In General.--Section 1877 of the Social Security Act (42
U.S.C. 1395nn) is amended--
(1) in subsection (d)(2)--
(A) in subparagraph (A), by striking ``and''
at the end;
(B) in subparagraph (B), by striking the
period at the end and inserting ``; and''; and
(C) by adding at the end the following new
subparagraph:
``(C) in the case where the entity is a
hospital, the hospital meets the requirements
of paragraph (3)(D).'';
(2) in subsection (d)(3)--
(A) in subparagraph (B), by striking ``and''
at the end;
(B) in subparagraph (C), by striking the
period at the end and inserting ``; and''; and
(C) by adding at the end the following new
subparagraph:
``(D) the hospital meets the requirements
described in subsection (i)(1) not later than
18 months after the date of the enactment of
this subparagraph.''; and
(3) by adding at the end the following new
subsection:
``(i) Requirements for Hospitals To Qualify for Hospital
Exception to Ownership or Investment Prohibition.--
``(1) Requirements described.--For purposes of
subsection (d)(3)(D), the requirements described in
this paragraph for a hospital are as follows:
``(A) Provider agreement.--The hospital had--
``(i) physician ownership on the date
of enactment of this subsection; and
``(ii) a provider agreement under
section 1866 in effect on such date of
enactment.
``(B) Limitation on expansion of facility
capacity.--Except as provided in paragraph (3),
the number of operating rooms and beds of the
hospital at any time on or after the date of
the enactment of this subsection are no greater
than the number of operating rooms and beds as
of such date.
``(C) Preventing conflicts of interest.--
``(i) The hospital submits to the
Secretary an annual report containing a
detailed description of--
``(I) the identity of each
physician owner and any other
owners of the hospital; and
``(II) the nature and extent
of all ownership interests in
the hospital.
``(ii) The hospital has procedures in
place to require that any referring
physician owner discloses to the
patient being referred, by a time that
permits the patient to make a
meaningful decision regarding the
receipt of care, as determined by the
Secretary--
``(I) the ownership interest
of such referring physician in
the hospital; and
``(II) if applicable, any
such ownership interest of the
treating physician.
``(iii) The hospital does not
condition any physician ownership
interests either directly or indirectly
on the physician owner making or
influencing referrals to the hospital
or otherwise generating business for
the hospital.
``(iv) The hospital discloses the
fact that the hospital is partially
owned by physicians--
``(I) on any public website
for the hospital; and
``(II) in any public
advertising for the hospital.
``(D) Ensuring bona fide investment.--
``(i) Physician owners in the
aggregate do not own more than 40
percent of the total value of the
investment interests held in the
hospital or in an entity whose assets
include the hospital.
``(ii) The investment interest of any
individual physician owner does not
exceed 2 percent of the total value of
the investment interests held in the
hospital or in an entity whose assets
include the hospital.
``(iii) Any ownership or investment
interests that the hospital offers to a
physician owner are not offered on more
favorable terms than the terms offered
to a person who is not a physician
owner.
``(iv) The hospital (or any investors
in the hospital) does not directly or
indirectly provide loans or financing
for any physician owner investments in
the hospital.
``(v) The hospital (or any investors
in the hospital) does not directly or
indirectly guarantee a loan, make a
payment toward a loan, or otherwise
subsidize a loan, for any individual
physician owner or group of physician
owners that is related to acquiring any
ownership interest in the hospital.
``(vi) Investment returns are
distributed to each investor in the
hospital in an amount that is directly
proportional to the investment of
capital by such investor in the
hospital.
``(vii) Physician owners do not
receive, directly or indirectly, any
guaranteed receipt of or right to
purchase other business interests
related to the hospital, including the
purchase or lease of any property under
the control of other investors in the
hospital or located near the premises
of the hospital.
``(viii) The hospital does not offer
a physician owner the opportunity to
purchase or lease any property under
the control of the hospital or any
other investor in the hospital on more
favorable terms than the terms offered
to an individual who is not a physician
owner.
``(E) Patient safety.--
``(i) Insofar as the hospital admits
a patient and does not have any
physician available on the premises to
provide services during all hours in
which the hospital is providing
services to such patient, before
admitting the patient--
``(I) the hospital discloses
such fact to a patient; and
``(II) following such
disclosure, the hospital
receives from the patient a
signed acknowledgment that the
patient understands such fact.
``(ii) The hospital has the capacity
to--
``(I) provide assessment and
initial treatment for patients;
and
``(II) refer and transfer
patients to hospitals with the
capability to treat the needs
of the patient involved.
``(2) Publication of information reported.--The
Secretary shall publish, and update on an annual basis,
the information submitted by hospitals under paragraph
(1)(C)(i) on the public Internet website of the Centers
for Medicare & Medicaid Services.
``(3) Exception to prohibition on expansion of
facility capacity.--
``(A) Process.--
``(i) Establishment.--The Secretary
shall establish and implement a process
under which an applicable hospital (as
defined in subparagraph (E)) may apply
for an exception from the requirement
under paragraph (1)(B).
``(ii) Opportunity for community
input.--The process under clause (i)
shall provide individuals and entities
in the community that the applicable
hospital applying for an exception is
located with the opportunity to provide
input with respect to the application.
``(iii) Timing for implementation.--
The Secretary shall implement the
process under clause (i) on the date
that is 18 months after the date of
enactment of this subsection.
``(iv) Regulations.--Not later than
the date that is 18 months after the
date of enactment of this subsection,
the Secretary shall promulgate
regulations to carry out the process
under clause (i).
``(B) Frequency.--The process described in
subparagraph (A) shall permit an applicable
hospital to apply for an exception up to once
every 2 years.
``(C) Permitted increase.--
``(i) In general.--Subject to clause
(ii) and subparagraph (D), an
applicable hospital granted an
exception under the process described
in subparagraph (A) may increase the
number of operating rooms and beds of
the applicable hospital above the
baseline number of operating rooms and
beds of the applicable hospital (or, if
the applicable hospital has been
granted a previous exception under this
paragraph, above the number of
operating rooms and beds of the
hospital after the application of the
most recent increase under such an
exception) by an amount determined
appropriate by the Secretary.
``(ii) Lifetime 50 percent increase
limitation.--The Secretary shall not
permit an increase in the number of
operating rooms and beds of an
applicable hospital under clause (i) to
the extent such increase would result
in the number of operating rooms and
beds of the applicable hospital
exceeding 150 percent of the baseline
number of operating rooms and beds of
the applicable hospital.
``(iii) Baseline number of operating
rooms and beds.--In this paragraph, the
term `baseline number of operating
rooms and beds' means the number of
operating rooms and beds of the
applicable hospital as of the date of
enactment of this subsection.
``(D) Increase limited to facilities on the
main campus of the hospital.--Any increase in
the number of operating rooms and beds of an
applicable hospital pursuant to this paragraph
may only occur in facilities on the main campus
of the applicable hospital.
``(E) Applicable hospital.--In this
paragraph, the term `applicable hospital' means
a hospital--
``(i) that is located in a county in
which the percentage increase in the
population during the most recent 5-
year period (as of the date of the
application under subparagraph (A)) is
at least 200 percent of the percentage
increase in the population growth of
the United States during that period,
as estimated by Bureau of the Census;
``(ii) whose annual percent of total
inpatient admissions and outpatient
visits that represent inpatient
admissions and outpatient visits under
the program under title XIX is equal to
or greater than the average percent
with respect to such admissions and
visits for all hospitals located in the
State;
``(iii) that does not discriminate
against beneficiaries of Federal health
care programs and does not permit
physicians practicing at the hospital
to discriminate against such
beneficiaries;
``(iv) that is located in a State in
which the average bed capacity in the
State is less than the national average
bed capacity; and
``(v) in the case of a hospital
located--
``(I) in a core-based
statistical area, that is
located in such an area in
which the average bed occupancy
rate in such area is greater
than 80 percent; or
``(II) outside of a core-
based statistical area, that is
located in a State in which the
average bed occupancy rate is
greater than 80 percent.
``(F) Publication of final decisions.--The
Secretary shall publish final decisions with
respect to applications under this paragraph in
the Federal Register.
``(G) Limitation on review.--There shall be
no administrative or judicial review under
section 1869, section 1878, or otherwise of the
process under this paragraph (including the
establishment of such process).
``(4) Collection of ownership and investment
information.--For purposes of clauses (i) and (ii) of
paragraph (1)(D), the Secretary shall collect physician
ownership and investment information for each hospital
as it existed on the date of the enactment of this
subsection.
``(5) Physician owner defined.--For purposes of this
subsection, the term `physician owner' means a
physician (or an immediate family member of such
physician) with a direct or an indirect ownership
interest in the hospital.''.
(b) Enforcement.--
(1) Ensuring compliance.--The Secretary of Health and
Human Services shall establish policies and procedures
to ensure compliance with the requirements described in
subsection (i)(1) of section 1877 of the Social
Security Act, as added by subsection (a)(3), beginning
on the date such requirements first apply. Such
policies and procedures may include unannounced site
reviews of hospitals.
(2) Audits.--Beginning not later than 18 months after
the date of the enactment of this Act, the Secretary of
Health and Human Services shall conduct audits to
determine if hospitals violate the requirements
referred to in paragraph (1).
(c) Adjustment to PAQI Fund.--Section 1848(l)(2)(A)(i)(III)
of the Social Security Act (42 U.S.C. 1395w-
4(l)(2)(A)(i)(III)), as amended by section 101(a)(2) of the
Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law
110-173), is amended by striking ``$4,960,000,000'' and
inserting ``$5,120,000,000''.
SEC. 7. STUDIES AND REPORTS.
(a) Implementation of Act.--
(1) GAO study.--The Comptroller General of the United
States shall conduct a study that evaluates the effect
of the implementation of the amendments made by this
Act on--
(A) the cost of health insurance coverage;
(B) access to health insurance coverage
(including the availability of in-network
providers);
(C) the quality of health care;
(D) Medicare, Medicaid, and State and local
mental health and substance abuse treatment
spending;
(E) the number of individuals with private
insurance who received publicly funded health
care for mental health and substance-related
disorders;
(F) spending on public services, such as the
criminal justice system, special education, and
income assistance programs;
(G) the use of medical management of mental
health and substance-related disorder benefits
and medical necessity determinations by group
health plans (and health insurance issuers
offering health insurance coverage in
connection with such plans) and timely access
by participants and beneficiaries to
clinically-indicated care for mental health and
substance-use disorders; and
(H) other matters as determined appropriate
by the Comptroller General.
(2) Report.--Not later than 2 years after the date of
enactment of this Act, the Comptroller General shall
prepare and submit to the appropriate committees of the
Congress a report containing the results of the study
conducted under paragraph (1).
(b) GAO Report on Uniform Patient Placement Criteria.--Not
later than 18 months after the date of the enactment of this
Act, the Comptroller General shall submit to each House of the
Congress a report on availability of uniform patient placement
criteria for mental health and substance-related disorders that
could be used by group health plans and health insurance
issuers to guide determinations of medical necessity and the
extent to which health plans utilize such criteria. If such
criteria do not exist, the report shall include recommendations
on a process for developing such criteria.
(c) DOL Biannual Report on Any Obstacles in Obtaining
Coverage.--Every two years, the Secretary of Labor, in
consultation with the Secretaries of Health and Human Services
and the Treasury, shall submit to the appropriate committees of
each House of the Congress a report on obstacles, if any, that
individuals face in obtaining mental health and substance-
related disorder care under their health plans.