The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS” mentioning the U.S. Dept. of Justice was published in the Senate section on pages S11374-S11377 on Oct. 30, 2000.
The publication is reproduced in full below:
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
Mr. REED:
S. 3261. A bill to provide for the establishment of an HMO Guaranty Fund to provide payments to States to pay the outstanding health care provider claims of insolvent health maintenance organizations; to the Committee on Finance.
HMO Guaranty Act of 2000
Mr. REED. Mr. President, I rise today to introduce legislation that I hope will help states which have been stricken by managed care plan failures to overcome the devastating effects of such an event on the health insurance sector.
Over the past several years, we have seen an alarming upswing in the number of HMO failures across the nation. According to Weiss Rating, Inc., the nation's only provider of financial safety ratings for HMO's, the number of HMO failures grew 78 percent between 1998 and 1999. Furthermore, Weiss found another 10 HMO's were at high risk of failure due to mounting losses and capital deficits. The growing financial instability we are seeing in the managed care market has serious ramifications for state insurance regulators, not to mention hundreds of thousands of Americans who rely on these plans for their health care.
In light of this volatility in the health insurance market, I believe that the Federal Government can be a constructive and stabilizing force for states dealing with the aftermath of an HMO liquidation. The legislation I am introducing today would create a mechanism that would provide an added layer of protection for providers and subscribers when a participant in the health insurance market fails. Specifically, the bill establishes an HMO Guaranty Fund, which would be used to pay outstanding health care providers' claims for uncovered expenditures and to fulfill contractual obligations made prior to an HMO's bankruptcy. For those families left without health insurance, the fund would also subsidize temporary coverage for subscribers as they seek alternative sources of health insurance.
Many states have responded to a health plan insolvency and the unpaid bills they leave behind by creating a temporary fund designed to at least partially reimburse hospitals and providers for the expenses incurred during the course of providing care to patients. These guaranty funds are typically financed by levying a fairly sizable fee on the remaining health insurers in the state. While this may work in some cases, it is not necessarily appropriate in every circumstance. In other words, not every health care provider and subscriber has the opportunity to access this kind of guaranty fund.
For instance, when Harvard Pilgrim Health Plan of New England failed in my home state of Rhode Island, there was discussion of setting up just such a fund. However, the extremely small size of our insurance market and the few plans that remained in operation simply could not support a bailout of this magnitude. Fortunately, the Rhode Island Insurance regulator was able to reach an agreement with the Massachusetts parent organization of Harvard Pilgrim to pay outstanding provider and hospital claims. Unfortunately, other States might not be as lucky.
It is my view that the Federal Government may be better positioned than an individual State to spread the risk and the premiums required to subsidize the fund across health insurance plans operating around the country. Furthermore, it would also enable both ERISA and non-ERISA plans to be covered under a nationally-based standing fund.
I hope the legislation I am introducing today will mark the beginning of an ongoing discussion that will explore some of the issues surrounding the financial health of HMO's in this Nation. In closing, Mr. President, while it is unlikely that action will be taken on this legislation late in the session. I look forward to working with interested organizations as well as my colleagues to strengthen and enhance the legislation I submit today.
Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the Record, as follows:
S. 3261
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``HMO Guaranty Act of 2000''.
SEC. DEFINITIONS.
In this Act:
(1) Board.--The term ``Board'' means the Board of Directors appointed under section 3(d).
(2) Contractual obligation.--The term ``contractual obligation'' means an obligation by a health maintenance organization, under an agreement, policy, certificate, or evidence of coverage involving a covered individual and the organization, to pay or reimburse the covered individual (or a health care provider who provided items or services to the individual) for services provided prior to the declaration of the insolvency of the health maintenance organization, that remains unpaid at the time of such insolvency. Such term does not include claims by former employees, including medical professional employees, for deferred compensation, severance, vacation, or other employment benefits.
(3) Covered individual.--The term ``covered individual'' means an enrollee or member of a health maintenance organization.
(4) Guaranty fund.--The term ``Guaranty Fund'' means the Federal HMO Guaranty Fund established under section 3.
(5) Health care provider.--The term ``health care provider'' means a physician, hospital, or other person that is licensed or otherwise authorized by the State to provide health care services, and that provided health care services to an enrollee of a health maintenance organization.
(6) Health maintenance organization.--The term ``health maintenance organization'' has the meaning given such term by section 2791(b)(3) of the Public Health Service Act (42 U.S.C. 300gg-91(b)(3)).
(7) Health maintenance organization contract.--The term
``covered health maintenance organization contract'' means a policy, certificate, or other evidence of health care coverage that is issued by a health maintenance organization.
(8) Insolvent organization.--The term ``insolvent organization'' means a health maintenance organization that is declared insolvent by court of competent jurisdiction and placed under the control of a State Commissioner of Insurance for the purpose of liquidation.
(9) Secretary.--The term ``Secretary'' means the Secretary of Health and Human Services, in consultation with the Secretary of Labor and the Secretary of the Treasury.
(10) State.--The term ``State'' includes each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Northern Mariana Islands, or any agency or instrumentality thereof.
(11) Uncovered expenditures.--The term ``uncovered expenditures'' means the expenditures for the provision of health care services that are the obligation of a health maintenance organization that have not been paid by such organization and for which no alternative payment arrangements have been made.
SEC. 3. ESTABLISHMENT OF HMO GUARANTY FUND.
(a) In General.--There is established in the Treasury of the United States a fund to be known as the HMO Guaranty Fund to be used as provided for in this Act.
(b) Amounts in Fund.--
(1) In general.--There shall be deposited into the Guaranty Fund--
(A) amounts collected under section 5(a);
(B) penalties collected under section 5(b); and
(C) earnings on investments of monies in the Guaranty Fund.
(2) Investments.--
(A) In general.--The Secretary of the Treasury shall invest amounts in the Guaranty Fund that are not required to meet current withdrawals. Such investments may be made only in interest-bearing obligations of the United States. For such purpose, such obligations may be acquired on original issue at the issue price, or by purchase of outstanding obligations at the market price.
(B) Availability of income.--Any interest derived from obligations held by the Guaranty Fund and the proceeds from any sale or redemption of such obligations, are hereby appropriated to the Fund.
(c) Use of Guaranty Fund.--Subject to section 4, amounts in the Guaranty Fund shall be used to make payments to a State--
(1) to pay the outstanding health care provider claims for uncovered expenditures, and to fulfill contractual obligations to covered individuals, with respect to an insolvent health maintenance organization; and
(2) to provide for a temporary continuation of health care coverage for covered individuals.
(d) Board of Directors.--
(1) In general.--The Guaranty Fund shall be administered by a Board of Directors to be composed of 9 individuals of which--
(A) three directors shall be appointed by the National Association of Insurance Commissioners from among individuals who serve as insurance regulators of a State;
(B) three directors shall be appointed by a national association which represents the health maintenance organization industry of all States (as determined by the Secretary) from among representatives of health maintenance organizations; and
(C) three directors shall be--
(i) the Secretary of the Treasury, or the designee of the Secretary;
(ii) the Secretary of Health and Human Services, or the designee of the Secretary; and
(iii) the Secretary of Labor, or the designee of the Secretary.
(2) Terms, vacancies.--The members of the Board shall establish the terms of service of the members of the Board appointed under subparagraphs (A) and (B) of paragraph (1). Any vacancy in the Board shall not affect its powers, and shall be filled in the same manner as the original appointment.
(3) Compensation of members.--
(A) In general.--Except as provided in subparagraph (B), each member of the Board who is not an officer or employee of the Federal Government shall serve without compensation. All members of the Board who are officers or employees of the United States shall serve without compensation in addition to that received for their services as officers or employees of the United States.
(B) Travel expenses.--The members of the Board shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for employees of agencies under subchapter I of chapter 57 of title 5, United States Code, while away from their homes or regular places of business in the performance of services for the Board. Such expenses shall be paid from the Guaranty Fund.
(4) Voting.--Each member of the Board shall have 1 vote. The Board shall set policy and decide all matters by a simple majority of the votes cast.
(5) Chairperson.--The Board shall elect a chairperson from among its members.
(6) Meetings.--The Board shall first meet not later than 30 days after the date on which all members are appointed under paragraph (1). Subsequent meetings shall be at the call of the chairperson. The Board may hold public hearings after giving proper notice.
(7) Fiduciary duty.--With respect to the members of the Board that are not appointed under paragraph (1)(A), in carrying out the duties of the Board such members shall have a fiduciary duty to the Guaranty Fund that shall supersede any duty to an employer or other special interest that the member may otherwise represent.
(8) Limitations on liability.--A member of the Board shall not be liable, or in any way responsible, for the obligations of the Guaranty Fund.
(e) Duties.--The Board shall--
(1) administer the Guaranty Fund;
(2) adopt bylaws that permit the Board to enter into contracts to receive contributions and make distributions in accordance with this Act;
(3) establish the application criteria and materials necessary to enable a State to submit an application to the Guaranty Fund;
(4) review and make determination on applications received under section 4(b); and
(5) carry out other activities in accordance with this Act.
SEC. 4. EXPENDITURES FROM THE GUARANTY FUND.
(a) In General.--The Guaranty Fund shall be used to make payments to a State to enable such State to pay the claims of health care providers for health care services provided to covered individuals prior to the declaration of insolvency of a health maintenance organization and to provide for a temporary continuation of health care coverage for such individuals.
(b) Procedure.--
(1) In general.--Upon the declaration by a court of competent jurisdiction that a health maintenance organization is insolvent, the official responsible for regulating health insurance in the State in which the declaration is made may submit an application to the Guaranty Fund for payment under this Act.
(2) Contents of application.--An application submitted by a State under paragraph (1) shall include the following:
(A) Liquidation of assets and return of unused funds.--The application shall contain an accounting of amounts received
(or expected to be received) as a result of the liquidation of the assets of the insolvent organization.
(B) Fund amount.--The application shall contain a request for a specific amount of funds that will be used for the uncovered expenditures and contractual obligations of an insolvent organization.
(C) Uncovered expenditures.--The application shall contain an estimate of the aggregate number of uncovered individuals and aggregate amount of uncovered expenditures with respect to the insolvent organization involved.
(D) Continuation coverage.--The application shall contain an estimate of the aggregate amount of funds needed to provide continuation coverage to uncovered individuals.
(c) Consideration by Board.--Not later than 30 days after the date on which the Guaranty Fund receives a completed application from a State under subsection (b), the Board shall make a determination with respect to payments to the States.
(d) Limitation.--The aggregate amount that may be paid to a State under this section with respect to a single uncovered individual shall not exceed $300,000.
(e) Use for Continuation Coverage.--
(1) In general.--A State may use amounts provided under this section to provide for the continuation of health care coverage for an uncovered individual through a health maintenance organization or other health care coverage that has been determined appropriate by the official responsible for regulating health insurance in the State in collaboration with the Board.
(2) Limitation.--The period of continuation coverage with respect to an uncovered individual under paragraph (1) shall terminate on the earlier of--
(A) the date that is 1 year after the date on which the health maintenance organization was declared insolvent; or
(B) or the date on which the contractual obligation of the health maintenance organization to the individual was to terminate.
(f) Repayment of Funds.--The State shall repay to the Guaranty Fund an amount equal to--
(1) any amounts not utilized by the State on the date on which the liquidation of the insolvent organization is completed; and
(2) any amounts recovered through liquidation that have not been accounted for in the application of the State under subsection (b)(2)(A).
SEC. 5. CONTRIBUTIONS TO THE GUARANTY FUND.
(a) Assessment on Health Maintenance Organizations.--
(1) In general.--Not later than January 1, 2001, and every 6 months thereafter, each health maintenance organization that is licensed by a State to provide health care coverage shall pay to the Guaranty Fund an amount to be determined in accordance with an assessment schedule to be established by the Secretary not later than 180 days after the date of enactment of this Act.
(2) Deferment.--The Board, after consultation with the official responsible for regulating health insurance in the State involved may exempt, abate, or defer, in whole or in part, the assessment of a health maintenance organization under paragraph (1) if the organization demonstrates that the payment of the assessment would endanger the ability of the organization to fulfill its contractual obligations or place the organization in an unsound financial condition.
(3) Prohibition.--A health maintenance organization shall not adjust the amount of premiums paid by enrollees to account for the assessment paid under paragraph (1).
(b) Failure to Pay.--A health maintenance organization that fails to pay an assessment under subsection (a)(1) within 30 days after the date on which such assessment was to be paid shall be subject to a civil penalty in an amount not to exceed $1,000 per day.
SEC. 6. STATE PREEMPTION.
(a) In General.--Nothing in this Act shall be construed to preempt or supersede any provision of State law that establishes, implements, or continues in effect any standard or requirement relating to health maintenance organizations.
(b) Definition.--In this section, the term ``State law'' means all laws, decisions, rules, regulations or other State actions that have the effect of law.
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By Mr. JEFFORDS:
S. 3262. A bill to amend the Communications Act of 1934 to make inapplicable certain political broadcasting provisions to noncommercial educational broadcasting stations; to the Committee on Commerce, Science, and Transportation.
THE PUBLIC BROADCASTING INTEGRITY ACT OF 2000
Mr. JEFFORDS. Mr. President, I rise today to introduce the Public Broadcasting Integrity Act of 2000, legislation that would make the Federal Communications Act's political broadcasting provisions inapplicable to noncommercial educational broadcasting stations.
I believe the current law is well-intentioned to serve the public interest by allowing federal candidates to communicate their views to the general public. However, these provisions are having some unfortunate side effects as federal candidates are exploiting loopholes in the Act to the detriment of public broadcasting. Many Vermonters and my colleagues have seen in recent news reports that public radio and television stations are being forced to give free, uncensored air time to any Federal candidate under provisions of the Federal Communications Act. As a strong supporter of public radio and television, I find this phenomenon disturbing.
I an concerned that this valuable public resource is being commandeered and exploited as a way to get free advertising. Unlike commercial stations, public radio and television are heavily dependent on listener contributions. Many of these listeners are reconsidering their future financial support of these stations if this loophole is not closed and programming is replaced by a flood of political advertising. It seems inevitable that the number of candidates using this avenue will increase dramatically in the next federal election unless we make this minor but important legislative correction.
Mr. President, we can not allow this to happen which is why I am introducing this bill today. I believe this narrowly tailored legislation will close this loophole and preserve the integrity of public broadcasting. I call on my colleagues to join me and support this legislation.
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By Mr. LOTT (for Mr. Ashcroft):
S. 3264. A bill to ensure that individuals with histories of mental illness and other persons prohibited from owning or possessing firearms are stopped from buying firearms by requiring instant background checks prior to making a firearms purchase, and for other purposes; to the Committee on the Judiciary.
the records access improvements act of 2000
Mr. ASHCROFT. Mr. President, issues surrounding possession and ownership of firearms have been some of the most divisive in this legislative session and political season. Americans hold a wide range of differing opinions regarding gun rights and responsibilities, and the proper balance of those rights against the need for public safety. But, despite the larger differences, most Americans agree that there are common sense actions that can be implemented to protect the rights of law-abiding citizens while preventing those with criminal records or histories of violent behavior from access to firearms.
I support the provision in federal law that prohibits certain people from owning or possessing firearms. Under current law, certain categories of persons are unable to purchase guns. These include felons, fugitives from justice, illegal aliens, the mentally incompetent, and persons convicted of crimes of domestic violence. These proscriptions protect law-abiding citizens from those who have demonstrated they cannot use firearms responsibly. This law protects law-abiding gun owners because the fewer people who criminally misuse guns, the less sentiment that there will be to impose more restrictions on lawful gun owners.
In 1994, the Congress passed the Brady Handgun Violence Prevention Act that instituted a system to check whether a prospective gun purchaser, prior to the transfer of a firearms, is ineligible to possess a gun because he or she falls into one of the nine prohibited categories. The permanent phase (phase II) of the Brady Act--that went into effect November 30, 1998--requires an instant background check be done on the buyer when a firearm is purchased from a licensed dealer. Either the State or the Federal Government conducts this check. This is to ensure that those prohibited by federal law from owning guns do not purchase them. It makes sense, and although the legislation was passed before I arrived in the Senate, I support the instant background check.
Since the implementation of the Brady Act in 1994, through the end of calendar year 1999, 22 million background checks have been conducted on potential firearms purchasers. Of that 22 million, more than 536,000 individuals were determined ineligible. And since phase II of the Brady Act went into effect in 1998--mandating Instant Background Checks in place of checks with a mandatory waiting period--more than 8.6 million requests for instant checks were received, with 2.4 percent of applicants being denied.
I would note that unfortunately, this Administration has chosen not to prosecute those felons for attempting to buy a gun, which is a federal crime. Federal prosecutions have fallen at the same time background checks have given law enforcement a reliable tool for tracking down and locking up criminals trying to buy guns. In 1993, the Clinton-Gore Administration prosecuted 633 people for trying to illegally purchase a gun. That fell to 279 in 1997 and rose to 405 in 1999. From 1994 to 1999, the Administration prosecuted an average of 404 defendants for violations of the gun purchasing law annually--a 36-
percent drop from 1993. Obviously, we need to prosecute felons who are attempting to illegally buy guns.
But there is another hole in the current law. While the federal database of state criminal records is fairly comprehensive, the same cannot be said of mental incompetency records. Forty-one states, including the State of Missouri, do not permit records of the criminally insane to be searched prior to a firearm sale. This is a travesty. The result of this loophole is that individuals prohibited from purchasing firearms because of mental impairment are allowed to slip through the cracks--
often with tragic results.
In April of this year, the New York Times did a series of four articles on what they termed as ``rampage'' killings--multiple-victim killings that were not primarily domestic or connected to a robbery or gang. The New York Times examined 102 killers in 100 rampage attacks in a computer-assisted study including the shooting in 1999 at Columbine High School in Littleton, Colorado, a day-trading firm in Atlanta, and a church in Fort Worth, Texas. The New York Times study found that at least half of the killers showed signs of serious mental health problems, and at least eight had been involuntarily committed. These articles highlight the difficulty of enforcing the provision of our gun control laws that prohibits people who have been involuntarily committed to mental institutions from buying a handgun.
For example, Gracie Verduzco, was a 35-year-old paranoid schizophrenic who believed she had a transmitter in her left ear that received messages from a satellite and had been involuntarily hospitalized in Arizona twice. In addition, she had been committed to a mental hospital by a judge in the District of Columbia after she had threatened President Clinton. Despite three involuntary commitments, she was able to buy a .38-caliber revolver at a pawnshop in Tucson, Arizona by lying on her gun application. She used it to kill one person and wound four others there on May 21, 1998.
According to the Justice Department, about 150,000 people a year are committed to mental institutions by court order in the United States. In total, there are now perhaps 2.7 million people who have been involuntarily committed at some point in their lives and are therefore barred by the federal law from buying a handgun. In response to some of the highly publicized cases, authorities in nine states have allowed law enforcement agencies some form of access to mental health records. And the number of ineligible individuals who attempt to purchase guns has been alarming. According to the Illinois State police, 3,699 people were turned down in Illinois from 1996 to 1998, when records showed they had been either voluntarily or involuntarily committed within the last 5 years, the legal test under Illinois law. An additional 5,585 people who were hospitalized from 1996 to 1998 were found to already possess gun permits, which as a result, were revoked.
The New York Times reported, ``But at the national level, as in most states, there has been no comparable effort to create access to court commitment records for gun checks. That lack of action is in stark contrast to the long effort by gun control groups and the Clinton administration in winning enactment of the Brady law to create databases screening out convicted felons, who like the involuntarily committed, were barred by the 1968 law from handgun purchases.''
If we are serious about reducing the criminal misuse of firearms, this has to change. Federal law already makes the purchase or possession of firearms illegal for people the courts deem mentally incompetent, but the law is difficult, if not impossible to enforce because mental-health information is not currently part of computerized, instant background checks. That's why today I introduce the Records Access Improvement Act, to encourage states to make certain mental health information available to the National Instant Criminal Background Check System (NICS).
At present, the instant check system is administered jointly by the states and by the Federal Bureau of Investigation. In 15 states, state agencies serve as points of contact (POCs), and conduct full background checks for both long guns and handguns. In 11 states, state agencies conduct partial background checks for handguns only. In POC states, federal firearm licensees contact the state agency, rather than the FBI. In non-POC States, Federal firearm licensees contact the FBI directly through the NICS system. Over half of the applications for firearm transfers were checked directly by the FBI, while the remainder of applications were checked by State or local agencies.
In February 2000, the Bureau of Justice Statistics (BJS) reported that the identification of non-felons ineligible to purchase firearms is likely to remain problematic under NICS. The Bureau of Justice Statistics stated that new enabling statutes may be required to identify and access such information.
The legislation I am introducing today is such a statute. Specifically, this bill will encourage states to make the information available to the NICS system by tying the receipt of grants made under the Violent Crime Reduction Trust Fund to the provision of relevant data to the Federal Bureau of Investigation. This bill will ensure that the NICS system is as complete as possible, so that the Instant Background Check will be as reliable as possible. The Federal gun law--
the Brady Act--makes it clear that certain persons are ineligible to purchase firearms. It is time that we take the steps necessary for enforcement of the law. This bill is a giant step toward reaching that goal.
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