PROHIBITION OF TRANSFER OF FUNDS

(New section 1151) Prohibits the transferring of funds appropriated for any program authorized under title XI to any other program. Requires that only funds appropriated under title XI are to be used to carry out the provisions of title XI. Requires that only funds appropriated under titles IX and XI of the Public Health Service Act are to be used to initially develop, construct, and initially operate health maintenance organizations, health service organizations, and any other entities that provide (either directly or indirectly through arrangements with others) prepaid health care to defined populations.

TITLE IV-COMMISSION ON QUALITY HEALTH CARE (Section 401) This title is entitled, "The Commission on Quality Health Care Act of 1972."

(Section 402) Title IV creates a Commission on Quality Health Care to establish parameters and standards to promote quality health care in the United States.

(Section 403) Adds new title XII to the Public Health Service Act entitled, "Commission on Quality Health Care," and parts A and B of new title XII.

PART A-COMMISSION ON QUALITY HEALTH CARE

ESTABLISHMENT OF THE COMMISSION

(Section 403-new section 1201) Establishes a Commission on Quality Health Care as an independent agency in the Executive Branch. The Commission shall consist of five members who because of their experience or education are particularly qualified to serve. Membership shall include representatives of the health care delivery industry, private organizations developing quality health care standards, and consumers who are not related to the delivery of health care. Of the five, at least two shall be consumers not related to the delivery of health care. Commission members shall serve a five-year term, except for the first five members appointed. Members cannot serve more than two terms.

DUTIES AND POWERS OF THE COMMISSION

(New section 1202) Sets forth the functions of the Commission. The Commission shall:

a. Investigate and conduct studies to develop quality health care standards;

b. establish (not later than two years after this Act is enacted) quality health care standards, including standards that relate to the inputs, processes, and outcome of health care delivery;

c. prescribe quality control systems for health maintenance organizations, health service organizations, and other providers of health care affected by this Act. Such systems shall be intended to:

(1) improve and assess medical care quality;

(2) evaluate the inputs, processes, utilization characteristics, and outcomes of health care in relation to those groups receiving such care; and establish relationships between such inputs, processes, and outcomes;

(3) concentrate on those categories of disease which occur most commonly and on which the impact of medical treatment can be most effective;

d. issue certificates of compliance to health care providers which certify that such providers meet quality health care standards established by the Commission;

e. revoke or suspend certificates of compliance;

f. monitor health care provider bi-annual reports to assure that quality standards are maintained;

g. conduct a research and development program to:

(1) improve the technology for assessing medical care quality;

(2) assess and compare medical care quality provided under alternative health care delivery systems;

(3) analyze the effects of providing information to consumers and improve methods for disseminating information; and

(4) analyze the impact of the quality assurance program on the level of health care;

h. collect, summarize, and distribute information on the impact of medical services and the health status of the population of the United States:

i. provide technical assistance to health care providers who are developing quality control programs;

j. study the levels, costs, and quality of health care provided under Federal health care programs;

k. administer the insurance program established under part B of title XII; and

1. report annually to the Congress on the activities conducted under this Act and make recommendations for additional necessary legislation.

Requires the Commission to consider the following when developing Quality Health Care Standards:

a. existing State regulations;

b. existing quality standards for Federal health agencies; and c. results of the Federal Medical Malpractice Insurance Program (established under Part B).

(New section 1203) Authorizes administrative powers that enable the Commission to carry out the provisions of this Act. Such powers include: appointing and compensating personnel; promulgating regulations; acquiring or constructing equipment and facilities; employing experts; appointing advisory committees; utilizing other public agencies; accepting voluntary assistance; accepting unconditional gifts; and taking those actions necessary to accomplish the objectives of the Commission.

(New section 1204) Provides for the compensation of the chairman and members of the Commission.

APPLICABILITY OF STANDARDS

(New section 1205) Allows a health care provider (receiving assistance under title XI) to apply for an order to permit it to be temporarily out-of-compliance with a quality health care standard (or

portions of a standard). The Commission is authorized to grant the order if the applicant:

a. Is unable to comply with the standard because personnel or equipment are unavailable, or necessary construction cannot be completed by the standard's effective date; and

b. has an effective program for coming into compliance with the standard as soon as possible.

The Commission is authorized to grant variances for standards (or portions of standards) if it determines or if the Secretary certifies that the variance is necessary to permit a provider to participate in an approved project, designed to validate new and improved health care delivery techniques.

REPORTS AND MAINTENANCE OF RECORDS

(New section 1206) Requires providers to keep records of their activities which are governed by this Act. Such records must be made available to the Commission and to the Secretary.

Providers are required to make monthly reports to the Commission on activities concerning gross utilization aggregates; disenrollment rates; and overall mortality rates. Reports on other activities may also be required.

The Commission is authorized to prescribe rules and regulations for inspecting a provider's records and facilities.

DISCLOSURE TO CONSUMERS

(New section 1207) Requires providers to publish descriptions of any health care benefit plan covered under this Act. Plan descriptions must be published within 90 days after the plan is established or when the plan becomes subject to the provisions of this Act.

Plan descriptions are required to be comprehensive and written in a manner easily understood by the average enrollee. Descriptions must include the following information:

a. Fees and prices:

b. benefits and services of benefit packages;
c. accessibility and availability of services;

d. name and type of plan administration; and
e. statement of certification by the Commission.

The Commission is required to monitor the published plan descriptions and take action on any insufficient, inaccurate, or inadequate information disclosed. Plan descriptions must also include procedures for presenting benefit claims and remedies available for redress of denied claims. Providers are to distribute copies of plan descriptions to every enrollee upon his enrollment and make such descriptions available to the general public.

TRANSFER OF FUNCTIONS

(New section 1208) The functions, records, property, personnel, and funds of the National Center for Health Statistics are transferred to the Commission on Quality Health Care.

The President is authorized to transfer to the Commission those additional functions (not otherwise transferred under this Act) that

relate to the Commission's presently authorized functions. Such transfers must be made within six months of the effective date of this Act.

PENALTIES

(New section 1209) Authorizes the Commission to suspend the certificates of approval of any provider that is found, after a hearing, to be out-of-compliance with quality health care standards and suspend a provider's eligibility for grants, loans, loan guarantees, and interest subsidies under title XI. Notice of such suspension shall be sent to the provider and to the Secretary.

Providers who have had certificates suspended for an unreasonable period of time (as determined by the Commission) shall have their certificates revoked and shall be responsible for repaying part or all of amounts received under title XI. The Commission is authorized to arrange with such providers for reimbursement of such amounts. Providers who repeatedly violate the requirements of section 1207 (concerning disclosure of benefit plans) may be assessed a civil penalty of not more than $10,000 per violation. Persons who make false statements on any document required under this Act, upon conviction, will be punished by a fine of not more than $10,000 or by imprisonment of not more than six months, or both. Civil penalties owed under this Act shall be deposited into the Treasury of the United States.

ARBITRATION

(New section 1210) Permits health care providers (with valid certificates of compliance) to require their patients with malpractice claims to agree to submit to binding arbitration. Such agreements must be valid in the jurisdiction in which they are made and must provide for the selection of arbitrators.

AUTHORIZATION

(New section 1211) Such sums as may be necessary are authorized to be appropriated for the Commission on Quality Health Care.

DEFINITIONS

(New section 1212) Defines the terms "input measure," "process measure," "utilization characteristics," "outcome measure." "population outcome measure," "Commission," and "Insurance Program."

PART B-FEDERAL MEDICAL MALPRACTICE INSURANCE PROGRAM

(New section 1220) Establishes a Federal Medical Malpractice Insurance Program, to be administered by the Commission on Quality Health Care.

(New section 1221) Requires the Commission to make the Federal Medical Malpractice Insurance Program available to health care providers.

(New section 1222) Directs the Commission to insure only those health care providers that have valid certificates of compliance and

agreements with patients to submit malpractice claims to binding arbitration.

(New section 1223) Authorizes the Commission to obtain information, as necessary, to estimate on an areawide or other appropriate basis:

a. premium rates currently being charged for medical malpractice insurance; and

b. such other rates, if any, that would, in the judgment of the Commission, encourage the purchase of medical malpractice insurance. Directs the Commission (when making such estimates) to use the services of other Federal agencies (on a reimbursable basis) or enter into contracts with others for such purposes.

(New section 1224) Requires the Commission (from time to time) to prescribe:

a. premium rates for the Federal Medical Malpractice Insurance Program; and

b. terms and conditions for such rates.

Such prescribed rates are to be based on estimates arrived at under section 1223 and other necessary information. Such rates (if feasible) are also to:

a. take into consideration the risks involved in offering such insurance;

b. be adequate to provide reserves for anticipated losses, or be reasonable so as to encourage the purchase of such insurance; and

c. be stated so as to reflect the basis for such rates.

TREASURY BORROWING

(New section 1225) Authorizes the Commission to issue to the Secretary of the Treasury, and have outstanding $500 million (or greater amounts if approved by the President), notes or other obligations in such forms, and under such terms as the Commission may prescribe with the approval of the Secretary of the Treasury.

The Secretary of the Treasury shall determine the rate of interest for such notes or obligations and may use proceeds of sales of any securities issued under the Second Liberty Bond Act, and the purpose for which securities may be issued under the Act are extended to include purchases of such notes and obligations.

The Secretary of the Treasury may at any time sell such notes or obligations. Purchases, sales, or redemptions by the Secretary of the Treasury of such notes or obligations shall be treated as public debt. transactions.

Funds borrowed by the Commission (under this authority) shall be deposited in the Medical Malpractice Insurance Fund (established under section 1226).

INSURANCE FUND

(New section 1226) Establishes in the Treasury, a Medical Malpractice Insurance Fund to enable the Commission to carry out the Federal Malpractice Insurance Program. The Fund shall be available to: a. repay amounts borrowed from the Secretary of the Treasury;