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The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress, and was published on Aug 2, 1994.
TABLE OF CONTENTS: Title I: Health Insurance and Delivery Systems Reform Subtitle A: Federal Standards for State Regulatory Programs Subtitle B: Coordination With Other Provisions of Law Title II: Coverage Title III: Premium and Cost-Sharing Assistance Title IV: Administrative Simplification and Privacy Title V: Malpractice and Fraud Subtitle A: Federal Tort Reform Subtitle B: Expanded Efforts to Combat Health Care Fraud and Abuse Affecting Federal Outlay Programs Title VI: Medicare, Medical Education, and Medicaid Subtitle A: Medicare Subtitle B: Medical Education Subtitle C: Home and Community-Based Services Subtitle D: Medicaid Program Title VII: Revenue Provisions Subtitle A: Financing Provisions Subtitle B: Tax Treatment of Employer-Provided Health Care Subtitle C: Deduction for Individuals Purchasing Own Health Insurance Subtitle D: Exempt Organizations Subtitle E: Tax Treatment of Long-Term Care Insurance and Services Subtitle F: Health Care Trust Funds Subtitle G: Other Revenue Provisions Subtitle H: Ensuring Health Care Financing Health Security Act - States that it is the purpose of this Act to achieve universal health insurance coverage through: (1) subsidies for the purchase of health insurance; (2) affordable standardized health insurance; (3) elimination of exclusionary practices by health insurance companies; (4) a permanent National Health Commission for recommending periodically to the Congress how to increase the number of people covered by health insurance; (5) reduction of health costs through more open competitive markets and continued advances in medical education and research; and (6) health care provided under Medicare and Medicaid and health programs of the Departments of Defense and of Veterans Affairs, and the Indian Health Service. Title I: Health Insurance and Delivery Systems Reform - Subtitle A: Federal Standards for State Regulatory Programs - Amends the Social Security Act (SSA) to add a new title XXI under which States are required to establish accreditation, certification, enforcement, and information programs for certifying all health plans and long-term care policies (except multistate self-insured health plans which will be certified by the Secretary of Labor) issued, sold, offered for sale, or operated in the State that meet certain standards incorporating specified requirements, such as those pertaining to community rating, preexisting conditions, and a patient's right to self-determination in health care services, as certified standard, nonstandard, or supplemental health plans or certified long-term care policies in order to participate in Medicaid. (Sec. 101) Requires establishment of such programs also for: (1) enforcing applicable standards for such plans and policies; (2) providing consumers in the State with comparative value information on the performance of all health plans in each community rating area established in the State; (3) designating State health plan service areas for purposes of access to essential community providers, delivery of benefits, and improved access to underserved areas; (4) providing for reinsurance, risk adjustment, and cost-sharing adjustment programs; (5) specifying an annual general enrollment period; (6) providing for a premium approval process for long-term care policies; (7) providing for the certification of workplace wellness programs; (8) enforcing employer responsibilities with regard to employee access to standard plans; (9) oversight of purchasing cooperatives; (10) supporting quality assurances for measuring access to and appropriateness of health care services provided to consumers; (11) supporting development of community health networks and plans; (12) supporting development of community health networks and plans; (13) providing coordination between health plans and automobile medical liability policies; (14) developing remedy and enforcement mechanisms (including early resolution programs) as described for dealing with complaints involving health plans, collecting any civil monetary penalties assessed by the Secretary of Health and Human Services (HHS) under such program, and for handling civil actions brought to invalidate any provision of this Act; and (15) conforming State laws and procedures to the rules regarding fraud and medical malpractice under SSA title XI. Directs the Secretary to initially determine and approve the compliance of such State programs with the Federal guidelines under this new title and periodically review such State programs to determine if they continue to comply with such guidelines. Provides funding for such programs. Sets forth requirements relating to: (1) possessions of the United States; (2) State single-payer systems; and (3) treatment of certain State laws. Directs the Secretary to: (1) develop certification criteria for workplace wellness programs; and (2) certify certain private accreditation entities. Describes the various benefit packages and the categories of items and services included in them (such as mental illness and substance abuse services as well as family planning services and services for pregnant women). Prescribes general cost-sharing under the standard benefits package. Creates in HHS a National Health Benefits Board to: (1) establish cost-sharing schedules to be provided by standard packages; and (2) define the standards to be used by a health plan in determining whether an item or service under certain categories of health care items and services is medically necessary or appropriate for an enrollee in the plan. Outlines the process for congressional consideration of any Board recommendations to modify standard benefit packages and cost-sharing assistance. Authorizes appropriations. Sets forth special provisions relating to abortion and religious beliefs, providing that nothing under this new title shall be construed to require the creation or maintenance of abortion clinics or other abortion providers within a State or any region of a State. Details general employer responsibilities pertaining to payroll deductions and other specified matters in enrolling their employees in certified standard health plans. Lists specific duties of purchasing cooperatives, which include making enrollment information available, enrolling community-rated individuals in certified standard health plans, and collecting and forwarding plan premiums to the plan, as well as specific requirements governing the organization and operation of purchasing cooperatives. Provides for access to standard health benefit plan coverage through qualified association plans. Sets forth special rules for church and multiemployer plans. Requires the Secretary to direct the Agency for Health Care Policy and Research and the Health Care Financing Administration to support and conduct research on the effects of health care reform on health care delivery systems and methods for risk adjustment. Authorizes appropriations. Requires the Secretary to award grants to States or community-based, independent, not-for-profit organizations that have submitted applications to establish demonstration projects that provide certified standard health plans with the technical assistance to implement the results of quality improvement research into medical practice. Directs the Secretary to submit an annual report to the Congress which: (1) reviews the results of the quality improvement research grants; (2) evaluates consumer information programs established by participating States; (3) tracks the evolution of national performance measures and other research; and (4) evaluates State, regional, and national trends on quality of health care. Allows the Secretary to make grants to and enter into contracts with: (1) eligible public or private non-profit consortia for the development of community health groups (i.e. certified community health plans or community health networks); and (2) community health groups for their operation. Authorizes the Secretary to make certain types of financial assistance available to a community health group or isolated rural facility applying for capital assistance. Directs the Secretary to: (1) award grants to eligible entities to establish demonstration projects to promote telemedicine and other uses of the telecommunications network in rural areas; and (2) establish the Interagency Task Force on Rural Telemedicine to, among other things, identify specific uses for telemedicine that have proven to be effective and review the policy of the Health Care Financing Administration relating to reimbursement for telemedicine services. Subtitle B: Coordination With Other Provisions of Law - Eliminates immunity from antitrust suits under provisions commonly known as the McCarran-Ferguson Act with respect to health insurance. (Sec. 112) Elevates the position of the Director of the Office of Rural Health to the position of the Assistant Secretary for Rural Health and expands that official's duties. (Sec. 113) Permits the Secretary of Labor to issue special reporting and disclosure rules for employer group health plans and make other conforming amendments to the Employee Retirement Income Security Act of 1974 (ERISA). Repeals ERISA provisions on multiple employer welfare arrangements. Title II: Coverage - Amends SSA to add a new title XXII under which is established the National Health Care Commission to monitor and respond to: (1) trends in health insurance coverage; and (2) changes in per-capita premiums and other indicators of health care inflation. Requires the Commission to report to the Congress biennially on the status of health insurance coverage in the nation and the national goal of universal coverage. Authorizes appropriations. Provides that if 95 percent of the resident population is not covered by 2002, the Commission shall submit to the Congress an implementing bill which such statutory provisions as the Commission determines are necessary or appropriate to implement recommendations developed by it to achieve that target. Title III: Premium and Cost-Sharing Assistance - Amends SSA title XIX (Medicaid) to require State Medicaid plans to provide for a State program furnishing premium and cost-sharing assistance in accordance with a new Medicaid part B (State Programs for Premium and Cost-Sharing Assistance), which includes a grant program for providing cost-sharing assistance for certain individuals with incomes above 100 percent of the poverty line. Title IV: Administrative Simplification and Privacy - Amends SSA title XI to: (1) delay employer reporting requirements under Medicare and Medicaid Coverage Data Bank provisions; (2) terminate the Bank, effective January 1, 1996; (3) provide for administration simplification in the health care system, including Medicaid and Medicare, through an information network developed according to certain specified data element standards and requirements for electronic transmission and accessing of certain health information; (4) direct the Secretary to establish standards for certifying health information network services as qualified services and for establishing the form of health security cards issued by health plans and the information to be encoded electronically on such cards; (5) provide penalties for failure to comply with data element standards and requirements and for misuse of health security cards and personal health identifiers; (6) provide billing rules for clinical laboratory services; (7) establish the Health Care Information Advisory Committee for advising the Secretary and the Congress with respect to the health information network and network operations; (8) provide for demonstration projects to promote development and use of electronically integrated community-based clinical information systems and computerized patient medical records; (9) provide for privacy of health information; and (10) authorize appropriations. Amends SSA title XVIII (Medicare) to repeal provisions requiring the identification of secondary payer situations. Title V: Malpractice and Fraud - Subtitle A: Federal Tort Reform - Amends SSA title XI to provide for Federal medical malpractice provisions preempting inconsistent State laws (with specified exceptions) for governing malpractice actions brought in State or Federal courts (except with regard to actions arising from a vaccine-related injury or death covered under the Public Health Service Act) without establishing any new basis for bringing malpractice in Federal courts. Requires: (1) States participating under new SSA title XXI to establish alternative dispute resolution procedures for settling medical malpractice claims; and (2) any such claims to have gone through and reached final resolution under such procedures in order for any medical malpractice liability action to be brought with respect to such claim in a participating State. Authorizes the Secretary to provide funds to one or more eligible participating States to establish no-fault medical liability system demonstration projects to replace the common law tort liability system for medical injuries. Authorizes appropriations. Subtitle B: Expanded Efforts to Control Health Care Fraud and Abuse Affecting Federal Outlay Programs - Amends SSA title XI to provide for additional measures for controlling health care fraud and abuse affecting Federal outlay programs, among other means by: (1) mandating a joint program by the Secretary and the Attorney General to coordinate Federal, State, and local law enforcement programs to control fraud and abuse affecting Federal outlay programs; (2) providing qualified immunity to individuals providing information to such officials on health care fraud or abuse; (3) establishing the HHS Office of Inspector General Asset Forfeiture Proceeds Fund, consisting of all proceeds from forfeitures that have been transferred to the HHS Inspector General (IG) from the Department of Justice Asset Forfeiture Fund and available to the IG for investigation expenses; (4) allowing rewards for information leading to possible prosecution for a Federal health care offense; and (5) making revisions with regard to civil monetary penalties for health care fraud and abuse, including increasing such penalties, and with regard to private rights of action and mandatory exclusion from health care program participation. (Sec. 531) Amends Federal criminal code and (Civil False Claims Act) provisions, covering health care fraud as well as theft and embezzlement, false statements, and bribery and graft in connection with health care, and false claims for payments by health plans in order to conform to the changes made above under SSA. Title VI: Medicare, Medical Education, and Medicaid - Subtitle A: Medicare - Amends SSA title XVIII to replace provisions on payments to health maintenance organizations and competitive medical plans with provisions on payments to certain certified standard health plans, modifying provisions with regard to risk-contracting. (Sec. 611) Makes various specified changes in provisions related to Medicare part A (Hospital Insurance) and concerned with: (1) inpatient hospital services updates for prospective payment system hospitals; (2) payment reductions for capital-related costs for inpatient hospital services; (3) disproportionate share payment reductions; (4) payment methodology for rehabilitation and long-term care hospitals; (5) new designations of new long-term hospitals; (6) extension of the freeze on updates to routine service cost limits for skilled nursing facilities; (7) payments for sole community hospitals with teaching programs and multihospital campuses; (8) Medicare-dependent, small rural hospitals; (9) the rural health transition grant program; (10) a new limited service hospital program replacing the essential access community hospital program; (11) rural primary care hospitals and medical assistance facilities; and (12) termination of indirect medical education payments. (Sec. 622) Directs the Secretary to study and report to the Congress on subacute care. (Sec. 631) Makes various specified changes in provisions related to Medicare part B (Supplementary Medical Insurance) and concerned with: (1) updates for physicians' services; (2) volume performance standard rates of increase; (3) limitations on payment for physicians' services relating to inpatient stays in certain hospitals; (4) underserved area bonus payments; (5) development and implementation of resource-based methodology for practice expenses; (6) demonstration projects for Medicare State-based performance standard rate of increase; (7) elimination of formula-driven overpayments for certain outpatient hospital services; (8) eye or eye and ear hospitals; (9) imposition of coinsurance on laboratory services; (10) competition acquisition for items and services and laboratory services; (11) expanded coverage for physician assistants and nurse practitioners; and (12) general part B premiums. (Sec. 651) Makes various specified changes in provisions related to Medicare parts A and B and concerned with: (1) Medicare as secondary payer; (2) physician referral exceptions; (3) Medicare supplemental policies; (4) reductions in routine cost limits for home health services; (5) termination of graduate medical education payments; and (6) extension of social health maintenance organization demonstrations. (Sec. 653) Requires the Secretary to use a competitive process to contract with centers of excellence for cataract surgery and coronary artery by-pass surgery with payment under Medicare to be made for services subject to such contracts on the basis of specified negotiated or all-inclusive rates. (Sec. 659) Requires the Prospective Payment Assessment Commission and the Physician Payment Review Commission to each study and report to the Congress on Medicare spending. (Sec. 660) Directs the Secretary to develop a process to ensure that Medicare claims are submitted first by Medicare, Medicare supplemental policies, and other policies that provide supplemental benefits under Medicare before providers can submit claims to Medicare beneficiaries. Subtitle B: Medical Education - Amends SSA title XVIII to add a new part D (Medical Education) providing Federal payments to: (1) qualified applicants of approved physician and dental training programs and graduate nurse training programs; (2) medical schools for certain costs; and (3) academic health centers and other eligible institutions. Establishes the Graduate Medical Education and Academic Health Centers and Biomedical and Behavioral Research Trust Fund Advisory Committee to study and report to the Congress on operations of the Graduate Medical Education and Academic Health Centers Trust Fund, and the Biomedical and Behavioral Research Trust Fund. Authorizes appropriations. Subtitle C: Home and Community-Based Services - Amends SSA title XIX to add new parts: (1) C (State Programs for Home and Community-Based Services for Individuals with Disabilities) under which each State with an approved plan for home and community-based services for individuals with disabilities can receive Federal payments to provide such services to such individuals; and (2) D (Payments to Hospitals Serving Vulnerable Populations). Subtitle D: Medicaid Program - (Sec. 671) Limits: (1) coverage under Medicaid of items and services covered under the standard benefits package; and (2) State expenditures to certified health plans. Provides that no certified health plan with a Medicaid contract could have more than 50 percent of its enrollment composed of SSI-Medicaid recipients. (Sec. 673) Replaces disproportionate share hospital payment provisions with provisions relating to payments to hospitals serving vulnerable populations. (Sec. 674) Sets forth Medicaid long-term care provisions, including provisions for payments for personal care services and frail elderly services. (Sec. 675) Provides for an increased resource disregard for individuals receiving certain services. (Sec. 676) Increases the number of frail elderly demonstration project waivers. Amends the Omnibus Budget Reconciliation Act of 1986 to provide for the development of waiver protocols and model certification guidelines for an organization operating a demonstration project under such a waiver. (Sec. 677) Eliminates the: (1) requirement of prior institutionalization with respect to habilitation services furnished under a waiver for home or community-based services; and (2) rule regarding availability of beds in certain institutions. (Sec. 679) Provides for Medicaid coverage of all certified nurse practitioner and clinical nurse specialist services. Title VII: Revenue Provisions - Subtitle A: Financing Provisions - Amends the Internal Revenue Code to increase the excise taxes on cigarettes and other tobacco products. Applies such increase to tobacco products manufactured and sold in Puerto Rico. Increases such taxes for a temporary period for the funding of subsidies for children and pregnant women. (Sec. 703) Imposes an excise tax on the manufacture or importation of roll-your-own tobacco. (Sec. 705) Imposes a tax: (1) on a percentage of premiums received under taxable health insurance policies; and (2) on a percentage of amounts received for health-related administrative services. Imposes on self-insured plans a monthly tax on a percentage of the accident or health coverage expenditures and direct administrative expenditures. (Sec. 706) Imposes a 25 percent tax on high cost health plans to be paid by the issuer or the plan sponsor. Makes such tax non-deductible. (Sec. 711) Provides for the recapture of certain health care subsidies received by high-income individuals. Transfers such amounts to the Supplementary Medical Insurance Trust Fund. (Sec. 715) Increases the excise tax on certain hollow point and large caliber handgun ammunition. (Sec. 716) Requires certain shareholders of S corporations and limited partners who materially participate in corporate activities to include their share of income or loss from such corporation when determining net earnings from self-employment. (Sec. 717) Provides for extending Medicare coverage and applying the hospital insurance tax to all State and local government employees. Subtitle B: Tax Treatment of Employer-Provided Health Care - Imposes a tax on employer-provided health benefits that do not meet the requirements for permitted coverage. (Sec. 722) Includes in gross income health insurance coverage provided through flexible spending arrangements. (Sec. 723) Extends the deduction for health insurance costs of self-employed individuals until December 31, 1995. Subtitle C: Deduction for Individuals Purchasing Own Health Insurance - Allows a full deduction for the costs to individuals who purchase their own health insurance. Allows such deduction against the gross income of the individual. Subtitle D: Exempt Organizations - Sets forth qualification and disclosure requirements for tax-exempt health care organizations. (Sec. 742) Imposes an excise tax on the beneficiary of a taxable insurement and on the management of the participating tax-exempt health care organization. (Sec. 743) Provides for the treatment of health maintenance organizations, parent organizations, and health insurance purchasing cooperatives as tax-exempt entities. (Sec. 744) Provides for the taxation as an insurance company other than a life insurance company of certain organizations that provide health insurance and other prepaid health care services. (Sec. 746) Provides a tax exemption for certain qualified high risk insurance pools. (Sec. 748) Provides for the tax treatment of bonds of certain nonprofit tax-exempt organizations in a manner similar to governmental bonds. Subtitle E: Tax Treatment of Long-Term Care Insurance and Services - Treats qualified long-term care services as medical care for purposes of the medical expense deduction. (Sec. 752) Provides for the treatment of long-term care insurance as accident and health insurance. (Sec. 753) Allows accelerated death benefits under life insurance contracts to be paid to terminally ill individuals. Subtitle F: Health Care Trust Funds - Establishes the following trust funds to finance health-related programs: (1) the Health Security Trust Fund; (2) the Graduate Medical Education and Academic Health Centers Trust fund; and (3) the Biomedical and Behavioral Research Trust fund. Provides funding for such Trust Funds through tax and assessments made under this Act. Subtitle G: Other Revenue Provisions - Requires the Secretary of the Treasury to submit to specified congressional committees a legislative proposal providing statutory standards for the classification of workers as employees or independent contractors. (Sec. 772) Increases the penalty for failure to file correct information for returns involving payments for services. (Sec. 775) Allows a tax credit for certain primary health services providers that practice in health professional shortage areas. (Sec. 776) Increases the amount allowed to be expensed as a depreciable business asset if such asset is medical equipment. (Sec. 781) Requires additional reserves for post-retirement medical and life insurance benefits to cover not less than ten years of the working lives of covered employees and to be maintained as separate accounts. (Sec. 783) Allows a tax credit for the cost of personal assistance services required by certain employed individuals. Limits the amount of such credit and provides a cost-of-living adjustment. (Sec. 785) Makes the limit on annual deferrals inapplicable in the case of an individual covered under an excess benefit arrangement maintained by a tax-exempt group medical practice. Subtitle H: Ensuring Health Care Financing - Sets forth provision to ensure that programs under this Act and unanticipated increases in other Federal health spending do not increase the Federal deficit.