[Pages S7253-S7255]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

PATIENTS' BILL OF RIGHTS

Mr. KENNEDY. Mr. President, upon our return in July, it is my hope
that the Senate will turn to full and open debate of patient protection
legislation at the earliest appropriate time. The American people are
concerned about the state of our health care system. Earlier this
month, a survey by the Pew Research Center showed HMO regulation at the
top of the list of issues important to individuals and the country.

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We have a proposal, the Patients' Bill of Rights (S. 1890), which
would restore confidence in our system. A critical provision in our
bill would allow patients who receive their benefits through their
employer to hold their plans accountable for medical or coverage
decisions that result in injury or death. Currently, approximately 123
million Americans are precluded from seeking any meaningful redress
when they are permanently disabled or when they lose a loved one
because of insurance company abuses that put profits ahead of patients.
Patients who purchase in the individual market can hold their plans
accountable. Patients enrolled in plans that serve state or local
employees can hold their plans accountable. But people insured through
ERISA covered plans cannot. No industry deserves to be exempt from
liability for their actions. Last week, William Welch, a reporter with
USA Today, wrote an article that eloquently outlines this issue and how
it affects families across the country. I ask unanimous consent that
this article be printed in the Record.
There being no objection, the article was ordered to be printed in
the Record, as follows:

[From the USA Today, June 19-21, 1998]

1974 Pensions Law Sparks Political Fire

(By William M. Welch)

Washington--When a doctor's mistake causes death or injury
to the patient, a malpractice suit frequently follows. But
what if fault lies with a managed care plan that denies
treatment?
Chances of a successful suit for damages are slim, many
Americans are finding, because a federal law makes it
practically impossible to collect from an employer-provided
health care plan.
As more people get into health maintenance organizations
and other types of managed-care plans, that 25-year old law
has become an election-year issue. Both parties propose
regulating managed-care plans and making HMOs more
accountable. Knocking down legal barriers to suits has
emerged as the most contentious issue in the debate.
``The American public doesn't realize that the managed-care
industry is the only industry in the country that has a
congressionally mandated shield from liability,'' says Rep.
Charlie Norwood, R-Ga, a dentist who is sponsoring one of
several bills that would open the door to suits against
health plans. ``I want these accountants to think twice
before they overrule the physician who says your child needs
to go to the hospital.''
Sen. Edward M. Kennedy, D-Mass., is sponsoring a similar
version in the Senate and vows to attach it to spending bills
or other must-pass legislation, perhaps as early as next
week. ``We will use whatever parliamentary means,'' he says,
``because the American people expect it.''
The bills would remove the barrier to suits by changing a
federal law that says decisions made by employer-provided
health plans in most cases cannot be the subject of suits in
state courts. It also greatly limits potential awards in
federal courts.
Norwood and Kennedy say the change would instantly make
healthcare plan managers more accountable for their decisions
about coverage and put authority for treatment decisions back
in the hands of doctors.
Opponents say it would bring a flood of expensive lawsuits
and lead to higher health insurance costs for average
Americans. In the House of Representatives, Majority Leader
Dick Armey, R-Texas, is a leading opponent. He says the
change would ``drive up premiums and drive down coverage by
letting trial lawyers sue health plans for malpractice.''

my child was cheated

Advocates of changing the federal law point to people like
Bill Beaver of Pollock Pines, Calif. Beaver, 52, says his HMO
misdiagnosed a brain tumor for two years, then told him his
condition was inoperable and hopeless. He cashed in a
retirement account to visit specialists at Johns Hopkins
University Hospital in Baltimore. They began radiation
treatment.
The tumor receded, and Beaver is alive three years later.
The HMO refused to pay for the treatment at Johns Hopkins. He
wanted to sue but was told federal law would make it
impossible for him to win.
``When I needed support, my HMO gave me the door,'' Beaver
says, ``Unless HMOs are forced to give quality care, they
will continue to deny costly treatments that can prolong or
in my case even save a life.''
Melody Louise Johnson of Norco, Calif., died at age 16 of
cystic fibrosis, a genetic disease that attacks the lungs.
Her mother, Terry Johnson, says the family's HMO delayed
their request for referral to specialists and overruled the
specialists once she saw them. The family has sued, and their
HMO is citing the federal law in seeking dismissal.
``I don't want another parent to have to go through what I
went through,'' she says. ``It is devastating enough to have
a child with this disease. . . . My child was cheated.''
Privacy laws prevent health-care companies from commenting
on individual cases, says Richard Smith, vice president of
the American Association of Health Plans, whose members
include the nation's major HMOs and managed-care plans.
``It is nearly impossible for the plans that are being
accused to respond,'' Smith says. ``I think that most people
understand there's often more than one side to a story.''

support for change

Armed with stories like these, supporters of change have
tapped strong chords of unhappiness with managed care among
voters.
More than half the House, including members in both
parties, has signed on as supporters of Norwood's bill. House
and Senate Democratic leaders have introduced similar bills.
President Clinton has called for passage of the legislation,
and Congress is expected to act this year.
A poll released this week by the Pew Research Center found
that 69% say the debate over HMO regulation is very
important, and 60% said it was very important to them
personally.
Senate GOP leaders and Armey in the House have blocked the
bills, although some Republicans are calling for action.
House Speaker Newt Gingrich, R-Ga., has named a task force of
GOP lawmakers to come up with a more limited bill. But he
rejected their initial attempt.
The issue is already being used by Democrats in House and
Senate campaigns in states as diverse as North Carolina and
Montana. Some GOP lawmakers worry that their leaders are
handing a powerful issue to Democrats that threatens their
11-vote House majority.
``In my opinion this will be one of the top two or three
issues in this fall campaign,'' says Rep. Greg Ganske, R-
Iowa, a physician. ``We will only see legislation passed when
it becomes apparent to the Republican leadership that they
could lose their majority based on this issue.''

why suits are barred

The obstacle to suits is a 1974 law, the Employee
Retirement Income Security Act, or ERISA. It was designed to
protect pensions and simplify rules for employers by
preempting state regulation of benefit plans and covering
them with a single federal law.
Many experts say the law was never intended to shield
health care decisions from malpractice suits, but court
interpretations and the changing nature of the U.S. health
care system have had that effect. Because of the law,
managed-care plans can argue that they are extensions of
employer-provided benefit plans and thus protected from state
laws and regulations on health insurance.
The law also makes it relatively futile to sue in federal
court. It prohibits plaintiffs from seeking punitive or
compensatory damages. They can sue only to recover the cost
of the procedure that was denied.
A decade ago, when HMOs and managed care covered relatively
few Americans, denial of coverage meant an insurance company
didn't pay a bill after treatment, and the law wasn't a big
issue. But there has been a revolution in the way health care
is provided, and now 138 million people, or three-quarters of
Americans with private health insurance, rely on managed-care
plans.
Those plans limit costs by tightly controlling access to
many types of care. Decisions authorizing or denying care may
be made by claims clerks and managers. For patients in those
plans, denial of coverage can mean they don't see the doctor
or specialist they want or don't get a medical procedure
their doctor recommended. They may not even be informed of
expensive treatments or clinical trials that hold promise for
life-threatening illnesses such as cancer. A health plan can
limit the options its doctors discuss with patients.
``In non-managed care, it's not an issue because the
physician makes the decision and is accountable,'' says Dr.
Thomas Reardon, president of the American Medical
Association. ``It's when you have a third party second-
guessing the physician that this becomes a problem.''
Jerry Cannon of Newcastle, Okla., learned about the limits
on accountability when his wife, Phyllis, contracted
leukemia. Her HMO denied the bone marrow transplant that her
doctor recommended until it was too late. She died in 1992 at
46. When Cannon sued, a federal court ruled that the federal
law prevented any award.
A three-judge panel of the 10th U.S. Circuit Court of
Appeals upheld the ruling and said the law was clear, however
wrong the result may seem. The Supreme Court refused the
case.
``Although moved by the tragic circumstances of this case
and the seemingly needless loss of life that resulted, we
conclude the law gives us no choice,'' the appeals court
said.
Cannon recalls taking the phone call and relaying word to
his wife that the HMO wasn't going to provide the transplant
she needed: ``It just devastated her. She gave up after that.
Oh, it was horrible. Once I got off the phone, I could see
all hope leave her.''

radical proposal

Concerned about growing calls for change, employers,
insurers and health care companies have begun an aggressive
advertising and lobbying campaign against the bills. They
contend that changing the law could open the door to
expensive lawsuits against employers as well as health plans,
drive up costs for consumers, and ultimately reduce the
quality of health care.
``This kind of radical proposal to expand the current
flawed medical liability system is not going to generate
better medical care. It's going to generate lower quality
medical care,'' says Smith, of the health plans association.

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Kennedy and Norwood dispute the industry view and say their
bills would not permit suits against employers unless they
actually participated in the decisions leading to injury.
But industry groups say higher costs and the potential for
suits could cause some big employers to stop offering health
plans for their workers.
``There is no question, we believe, that this would cause a
lot of employers to drop coverage. They just couldn't take
the risk,'' says Dan Danner, chairman of the Health Benefits
Coalition, made up of business groups organized to fight the
bills.
His group has run ads in selected congressional districts
attacking the bills as protecting ``fat cat trial lawyers''
rather than the sick. Danner says his group's spending is
approaching $2 million, and individual companies are spending
more.
Fighting for the bills are consumer groups and an unusual
alliance of doctors and trial lawyers, who are traditionally
adversaries in malpractice cases. The lawyers have let groups
with more sympathetic public images, such as doctors, wage
the visible campaign while the lawyers lobby aggressively
inside Congress.

there are problems

Industry officials say their decisions are protected
because they are not, strictly speaking, medical decisions.
Instead, they say the decisions revolve around what
treatments are or are not covered by a plan. Doctors, who are
liable to lawsuits for their decisions, dismiss that claim.
``That's absurd because they are making medical
decisions,'' says the AMA's Reardon. ``They're hiding behind
the facade that it is not medical, that it's a coverage
decision.
Some industry officials agree that some new regulation of
managed care plans is needed, short of dropping the
prohibition on suits.
``There are problems with managed care,'' says Danner.
``Hopefully the debate will focus on the best way to solve
those problems without significant unintended consequences.''
Advocates from Norwood to the AMA say that accountability
is at the heart of the issue. Making HMOs liable for their
decisions would bring dramatic change for all patients, not
just those inclined to sue, they say.
``If the plans are held as accountable as I am for the
medical decision-making,'' Reardon says, ``it will benefit
the patient.''
____

About the Managed-Care Bill

Here are key provisions in a managed-care regulation bill
proposed by Rep. Charlie Norwood, R-Ga.
A Democrat-sponsored bill is similar.
Gag rule. Plans may not restrict discussions between their
doctors and patients, including treatment options.
Legal liability. Eliminates federal law blocking
individuals from suing managed-care companies for
malpractice.
Emergency care. Requires plans to pay for emergency care in
most cases without prior authorization.
Information. Plans must provide information about policies
and appeals procedures in a uniform and understandable
manner.
Access. Plans must have enough doctors or other providers
to ensure that patients have timely access to benefits.
Choice. Patients can choose a doctor or other health
provider within the plan.
Appeals. An independent outside third-party appeals board
must be available to hear appeals of treatment denials.

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