(i)

in the heading, by striking by removing and all that follows through information and inserting ; prohibition on anticompetitive agreements;

(ii)

in subsection (a)(5), in the first sentence, by striking section and inserting subsection; and

(iii)

by adding at the end the following:

(b) Protecting health plans network design flexibility

(1) In general

A group health plan or a health insurance issuer offering group or individual health insurance coverage may not enter into an agreement with a covered entity if such agreement, directly or indirectly—

(A)

restricts (including by operation of any agreement in effect between such covered entity and another covered entity) the group health plan or health insurance issuer from—

(i)

directing or steering participants or beneficiaries to other health care providers who are not subject to such agreement; or

(ii)

offering incentives to encourage participants or beneficiaries to utilize specific health care providers;

(B)

requires the group health plan or health insurance issuer to enter into any additional agreement with an affiliate of the covered entity;

(C)

requires the group health plan or health insurance issuer to agree to payment rates or other terms for any affiliate of the covered entity not party to the agreement; or

(D)

restricts other group health plans or health insurance issuers not party to the agreement from paying a lower rate for items or services than the plan or issuer involved in the agreement pays for such items or services.

(2) Exceptions for certain provider group and value-based network designs

Paragraph (1)(A) shall not apply to a group health plan or health insurance issuer offering group or individual health insurance coverage with respect to—

(A)

a health maintenance organization, if such health maintenance organization operates primarily through exclusive contracts with multi-specialty physician groups, nor to any arrangement between such a health maintenance organization and its affiliates; or

(B)

a value-based network arrangement, such as an exclusive provider network, accountable care organization, center of excellence, a provider sponsored health insurance issuer that operates primarily through aligned multi-specialty physician group practices or integrated health systems, or such other similar network arrangements as determined by the Secretary through guidance or rulemaking.

(3) Covered entity defined

For purposes of this subsection, the term covered entity means a health care provider, network or association of providers, third-party administrator, or other service provider offering access to a network of providers.

(4) State grandfathering option

An applicable State authority may make a determination that the prohibitions under paragraph (1)(A) (relating to conditions that would direct or steer enrollees to, or offer incentives to encourage enrollees to use, other health care providers) will not apply in the State with respect to any specified agreement executed on June 19, 2019, and any agreements related to such specified agreement executed on or before December 31, 2020, for a maximum length of nonapplicability of up to 10 years from the date of execution of the contract if the applicable State authority determines that the contract is unlikely to significantly lessen competition. With respect to a specified agreement for which an applicable State authority has made a determination under the preceding sentence, an applicable State authority may determine whether renewal of the contract, within the applicable 10-year period, is allowed.

(5) Rule of construction

Except as provided in paragraph (1), nothing in this subsection shall be construed to limit network design or cost or quality initiatives by a group health plan or health insurance issuer, including accountable care organizations, exclusive provider organizations, networks that tier providers by cost or quality or steer enrollees to centers of excellence, or other pay-for-performance programs.

(i)

in the heading, by striking by removing and all that follows through information and inserting ; prohibition on anticompetitive agreements;

(ii)

in subsection (a)(4), in the first sentence, by striking section and inserting subsection; and

(iii)

by adding at the end the following:

(b) Protecting health plans network design flexibility

(1) In general

A group health plan or a health insurance issuer offering group health insurance coverage may not enter into an agreement with a covered entity if such agreement, directly or indirectly—

(A)

restricts (including by operation of any agreement in effect between such covered entity and another covered entity) the group health plan or health insurance issuer from—

(i)

directing or steering participants or beneficiaries to other health care providers who are not subject to such agreement; or

(ii)

offering incentives to encourage participants or beneficiaries to utilize specific health care providers;

(B)

requires the group health plan or health insurance issuer to enter into any additional agreement with an affiliate of the covered entity;

(C)

requires the group health plan or health insurance issuer to agree to payment rates or other terms for any affiliate of the covered entity not party to the agreement; or

(D)

restricts other group health plans or health insurance issuers not party to the agreement from paying a lower rate for items or services than the plan or issuer involved in the agreement pays for such items or services.

(2) Exceptions for certain provider group and value-based network designs

Paragraph (1)(A) shall not apply to a group health plan or health insurance issuer offering group health insurance coverage with respect to—

(A)

a health maintenance organization, if such health maintenance organization operates primarily through exclusive contracts with multi-specialty physician groups, nor to any arrangement between such a health maintenance organization and its affiliates; or

(B)

a value-based network arrangement, such as an exclusive provider network, accountable care organization, center of excellence, a provider sponsored health insurance issuer that operates primarily through aligned multi-specialty physician group practices or integrated health systems, or such other similar network arrangements as determined by the Secretary through guidance or rulemaking.

(3) Covered entity defined

For purposes of this subsection, the term covered entity means a health care provider, network or association of providers, third-party administrator, or other service provider offering access to a network of providers.

(4) State grandfathering option

An applicable State authority may make a determination that the prohibitions under paragraph (1)(A) (relating to conditions that would direct or steer enrollees to, or offer incentives to encourage enrollees to use, other health care providers) will not apply in the State with respect to any specified agreement executed on June 19, 2019, and any agreements related to such specified agreement executed on or before December 31, 2020, for a maximum length of nonapplicability of up to 10 years from the date of execution of the contract if the applicable State authority determines that the contract is unlikely to significantly lessen competition. With respect to a specified agreement for which an applicable State authority has made a determination under the preceding sentence, an applicable State authority may determine whether renewal of the contract, within the applicable 10-year period, is allowed.

(5) Rule of construction

Except as provided in paragraph (1), nothing in this subsection shall be construed to limit network design or cost or quality initiatives by a group health plan or health insurance issuer, including accountable care organizations, exclusive provider organizations, networks that tier providers by cost or quality or steer enrollees to centers of excellence, or other pay-for-performance programs.

(i)

in the header, by striking by removing and all that follows through information and inserting ; prohibition on anticompetitive agreements;

(ii)

in subsection (a)(4), in the first sentence, by striking section and inserting subsection; and

(iii)

by adding at the end the following:

(b) Protecting health plans network design flexibility

(1) In general

A group health plan may not enter into an agreement with a covered entity if such agreement, directly or indirectly—

(A)

restricts (including by operation of any agreement in effect between such covered entity and another covered entity) the group health plan from—

(i)

directing or steering participants or beneficiaries to other health care providers who are not subject to such agreement; or

(ii)

offering incentives to encourage participants or beneficiaries to utilize specific health care providers;

(B)

requires the group health plan to enter into any additional agreement with an affiliate of the covered entity;

(C)

requires the group health plan to agree to payment rates or other terms for any affiliate of the covered entity not party to the agreement; or

(D)

restricts other group health plans not party to the agreement from paying a lower rate for items or services than the plan involved in the agreement pays for such items or services.

(2) Exceptions for certain provider group and value-based network designs

Paragraph (1)(A) shall not apply to a group health plan with respect to—

(A)

a health maintenance organization, if such health maintenance organization operates primarily through exclusive contracts with multi-specialty physician groups, nor to any arrangement between such a health maintenance organization and its affiliates; or

(B)

a value-based network arrangement, such as an exclusive provider network, accountable care organization, center of excellence, a provider sponsored health insurance issuer that operates primarily through aligned multi-specialty physician group practices or integrated health systems, or such other similar network arrangements as determined by the Secretary through guidance or rulemaking.

(3) Covered entity defined

For purposes of this subsection, the term covered entity means a health care provider, network or association of providers, third-party administrator, or other service provider offering access to a network of providers.

(4) State grandfathering option

An applicable State authority may make a determination that the prohibitions under paragraph (1)(A) (relating to conditions that would direct or steer enrollees to, or offer incentives to encourage enrollees to use, other health care providers) will not apply in the State with respect to any specified agreement executed on June 19, 2019, and any agreements related to such specified agreement executed on or before December 31, 2020, for a maximum length of nonapplicability of up to 10 years from the date of execution of the contract if the applicable State authority determines that the contract is unlikely to significantly lessen competition. With respect to a specified agreement for which an applicable State authority has made a determination under the preceding sentence, an applicable State authority may determine whether renewal of the contract, within the applicable 10-year period, is allowed.

(5) Rule of construction

Except as provided in paragraph (1), nothing in this subsection shall be construed to limit network design or cost or quality initiatives by a group health plan, including accountable care organizations, exclusive provider organizations, networks that tier providers by cost or quality or steer enrollees to centers of excellence, or other pay-for-performance programs.