§271. DUPLICATION AND COORDINATION OF MEDICARE-RELATED PLANS.

Health Insurance Portability and Accountability Act of 1996

TITLE II—PREVENTING HEALTH CARE FRAUD AND ABUSE; ADMINISTRATIVE SIMPLIFICATION

(a) Treatment of Certain Health Insurance Policies as Nonduplicative.—Section 1882(d)(3)(A) (42 U.S.C. 1395ss(d)(3)(A)) is amended—

(a)(1) in clause (iii), by striking ‘‘clause (i)’’ and inserting ‘‘clause (i)(II)’’; and

(a)(2) by adding at the end the following:

‘‘(iv) For purposes of this subparagraph, a health insurance policy (other than a Medicare supplemental policy) providing for benefits which are payable to or on behalf of an individual without regard to other health benefit coverage of such individual is not considered to 'duplicate' any health benefits under this title, under title XIX, or under a health insurance policy, and subclauses (I) and (III) of clause (i) do not apply to such a policy.

‘‘(v) For purposes of this subparagraph, a health insurance policy (or a rider to an insurance contract which is not a health insurance policy) is not considered to 'duplicate' health benefits under this title or under another health insurance policy if it—

‘‘(I) provides health care benefits only for long-term care, nursing home care, home health care, or community-based care, or any combination thereof,

‘‘(II) coordinates against or excludes items and services available or paid for under this title or under another health insurance policy, and

‘‘(III) for policies sold or issued on or after the end of the 90-day period beginning on the date of enactment of the Health Insurance Portability and Accountability Act of 1996 discloses such coordination or exclusion in the policy's outline of coverage.

For purposes of this clause, the terms 'coordinates' and 'coordination' mean, with respect to a policy in relation to health benefits under this title or under another health insurance policy, that the policy under its terms is secondary to, or excludes from payment, items and services to the extent available or paid for under this title or under another health insurance policy.

‘‘(vi)(I) An individual entitled to benefits under part A or enrolled under part B of this title who is applying for a health insurance policy (other than a policy described in subclause (III)) shall be furnished a disclosure statement described in clause (vii) for the type of policy being applied for. Such statement shall be furnished as a part of (or together with) the application for such policy.

‘‘(II) Whoever issues or sells a health insurance policy (other than a policy described in subclause (III)) to an individual described in subclause (I) and fails to furnish the appropriate disclosure statement as required under such subclause shall be fined under title 18, United States Code, or imprisoned not more than 5 years, or both, and, in addition to or in lieu of such a criminal penalty, is subject to a civil money penalty of not to exceed $25,000 (or $15,000 in the case of a person other than the issuer of the policy) for each such violation.

‘‘(III) A policy described in this subclause (to which subclauses (I) and (II) do not apply) is a Medicare supplemental policy or a health insurance policy identified under 60 Federal Register 30880 (June 12, 1995) as a policy not required to have a disclosure statement.

‘‘(IV) Any reference in this section to the revised NAIC model regulation (referred to in subsection (m)(1)(A)) is deemed a reference to such regulation as revised by section 171(m)(2) of the Social Security Act Amendments of 1994 (Public Law 103-432) and as modified by substituting, for the disclosure required under section 16D(2), disclosure under subclause (I) of an appropriate disclosure statement under clause (vii).

‘‘(vii) The disclosure statement described in this clause for a type of policy is the statement specified under subparagraph (D) of this paragraph (as in effect before the date of the enactment of the Health Insurance Portability and Accountability Act of 1996) for that type of policy, as revised as follows:

‘‘(I) In each statement, amend the second line to read as follows:

“THIS IS NOT MEDICARE SUPPLEMENT INSURANCE'.

‘‘(II) In each statement, strike the third line and insert the following: 'Some health care services paid for by Medicare may also trigger the payment of benefits under this policy.'

‘‘(III) In each statement not described in subclause (V), strike the boldface matter that begins 'This insurance' and all that follows up to the next paragraph that begins 'Medicare'.

‘‘(IV) In each statement not described in subclause (V), insert before the boxed matter (that states 'Before You Buy This Insurance') the following: 'This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.'.

‘‘(V) In a statement relating to policies providing both nursing home and non-institutional coverage, to policies providing nursing home benefits only, or policies providing home care benefits only, amend the sentence that begins 'Federal law' to read as follows: 'Federal law requires us to inform you that in certain situations this insurance may pay for some care also covered by Medicare.'.

‘‘(viii)(I) Subject to subclause (II), nothing in this subparagraph shall restrict or preclude a State's ability to regulate health insurance policies, including any health insurance policy that is described in clause (iv), (v), or (vi)(III).

‘‘(II) A State may not declare or specify, in statute, regulation, or otherwise, that a health insurance policy (other than a Medicare supplemental policy) or rider to an insurance contract which is not a health insurance policy, that is described in clause (iv), (v), or (vi)(III) and that is sold, issued, or renewed to an individual entitled to benefits under part A or enrolled under part B 'duplicates' health benefits under this title or under a Medicare supplemental policy.’’.

(b) Conforming Amendments.—Section 1882(d)(3) (42 U.S.C. 1395ss(d)(3)) is amended—

(b)(1) in subparagraph (C)—

(b)(1)(A) by striking ‘‘with respect to (i)’’ and inserting ‘‘with respect to’’, and

(b)(1)(B) by striking ‘‘, (ii) the sale’’ and all that follows up to the period at the end; and

(b)(2) by striking subparagraph (D).

(c) Transitional Provision.— (42 usc 1395ss)

(c)(1) NO penalties.—Subject to paragraph (3), no criminal or civil money penalty may be imposed under section 1882(d)(3)(A) of the Social Security Act for any act or omission that occurred during the transition period (as defined in paragraph (4)) and that relates to any health insurance policy that is described in clause (iv) or (v) of such section (as amended by subsection (a)).

(c)(2) Limitation on legal action.—Subject to paragraph (3), no legal action shall be brought or continued in any Federal or State court insofar as such action—

(c)(2)(A) includes a cause of action which arose, or which is based on or evidenced by any act or omission which occurred, during the transition period; and

(c)(2)(B) relates to the application of section 1882(d)(3)(A) of the Social Security Act to any act or omission with respect to the sale, issuance, or renewal of any health insurance policy that is described in clause (iv) or (v) of such section (as amended by subsection (a)).

(c)(3) Disclosure condition.—In the case of a policy described in clause (iv) of section 1882(d)(3)(A) of the Social Security Act that is sold or issued on or after the effective date of statements under section 171(d)(3)(C) of the Social Security Act Amendments of 1994 and before the end of the 30-day period beginning on the date of the enactment of this Act, paragraphs (1) and (2) shall only apply if disclosure was made in accordance with section 1882(d)(3)(C)(ii) of the Social Security Act (as in effect before the date of the enactment of this Act).

(c)(4) Transition period.—In this subsection, the term ‘‘transition period’’ means the period beginning on November 5, 1991, and ending on the date of the enactment of this Act.

(d) Effective Date.— (42 usc 1395ss)

(d)(1) Except as provided in this subsection, the amendment made by subsection (a) shall be effective as if included in the enactment of section 4354 of the Omnibus Budget Reconciliation Act of 1990.

(d)(2)(A) Clause (vi) of section 1882(d)(3)(A) of the Social Security Act, as added by subsection (a), shall only apply to individuals applying for—

(d)(2)(A)(i) a health insurance policy described in section 1882(d)(3)(A)(iv) of such Act (as added by subsection (a)), after the date of the enactment of this Act, or

(d)(2)(A)(ii) another health insurance policy after the end of the 30-day period beginning on the date of the enactment of this Act.

(d)(2)(B) A seller or issuer of a health insurance policy may substitute, for the disclosure statement described in clause (vii) of such section, the statement specified under section 1882(d)(3)(D) of the Social Security Act (as in effect before the date of the enactment of this Act), without the revision specified in such clause.