Insurance

by Bob Propst

The battle is heating up. Federal lawmakers are facing a legislative battle over consumer protection measures for HMO and other managed care patients.

At the heart of the fight for managed care reform is a list of provisions known as the Patient's Bill of Rights. The Democrats have their version in the House and Senate (HR 3605, S 1890) and the Republicans have theirs (HR 4250, S 2330).

The bills consist primarily of six key provisions:

?Patients have the right to appeal to a third party the denial of benefits by an HMO.

?Health plans must guarantee access to specialists and medical researchers when needed, even if the specialists are not a part of the HMO network.

?A "point of service" option would be required of all HMOs. "Point of service" allows HMO patients to use doctors and other providers outside the HMO. However, the HMO patients must pay any additional fees above whatever the costs would be for the same services from the HMO doctors.

?The definition of emergency services under an HMO would be based on what a "prudent person" would believe to be an emergency, rather than allowing "emergency" to be defined by the HMO.

?HMOs must provide easy-to-understand information specifying the health benefits provided and the proper procedures to follow to acquire such benefits.

?Patients have the right to sue an employer-sponsored health plan for pain and suffering and other damages.

The controversy is brewing over provision No. 6 the right to sue an HMO.

To clarify this provision, patients currently can sue their doctors for pain and suffering in malpractice cases. Yet a provision in the 1974 Federal Employee Retirement Income Security Act (ERISA) overrules state laws regarding patients' lawsuits.

Most patients cannot sue their HMOs, except in federal court, and then only to recover the cost of the service they should have received not for pain and suffering.

The proposed provision No. 6 is strongly opposed by many health plans and employer groups. Two major HMOs, HIP Health Plans and the Kaiser Permanente group, along with the American Association of Retired Persons, will back the Patient's Bill of Rights except for the lawsuit provision.

Health plan providers and the employers who offer the plans fear they could face high settlement costs. Some also contend that, if passed, provision No. 6 could cause HMOs and doctors to practice costly "defensive medicine." They fear doctors would order unnecessary procedures and tests solely to protect themselves against legal action.

Employer groups further argue that the current federal ERISA laws were enacted because Congress feared states would establish such high levels of punitive damages that employers would be discouraged from offering health benefits for their employees.

The American Association of Health Plans (AAHP) wants no new legislation whatsoever. They fear HMOs will lose their ability to design low-cost health plans due to government requirements for specific services, and that more extensive government management of health care would evolve.

AAHP issued a study in April stating the liability (lawsuit) provision alone could increase premiums as much as 8.6 percent. When combined with the other provisions, increases could double or triple this figure.

Bill Gradison, president of the Health Association of America, states that the whole push for patient's rights legislation is not necessary because the plan providers and new state legislation are adjusting rapidly to include many of the provisions that federal lawmakers are proposing.

In Missouri, many of the provisions in the Patient's Bill of Rights passed into legislation last year and are currently being implemented. However, the lawsuit provision has not passed any legislative action.

In 1980 there were 9.1 million people in HMOs. Now, more than 60 million people are in HMOs across the country. Millions are enrolled in less rigorous plans that combine fee-for-service and managed-care features. With such numbers, the possibility of exaggerating problems with HMOs could create a political platform for both the Democrats and the Republicans.

In the journal Health Affairs (1997 fall issue), health policy analysts Robert Miller and Harold Luft concluded that "the evidence shows no pattern of worse HMO quality of care than other types of health plans," despite the public assumption that HMOs have more restrictions.

Those that strongly endorse passage of the Patient's Bill of Rights believe that the proposed federal provisions provide the only means of holding plans accountable for providing quality care to all managed care patients.

Two long-time opponents on health issues, the American Medical Association and the Association of Trial Lawyers of America, have joined to support the lawsuit provision. ATLA asserts that if a health plan is responsible for denial of some benefits to the patient, then the health plan should be liable, and that doctors should not be the lone targets of lawsuits, as is the current status.

No matter what side of this issue one is on, there is certainly no denying the fact that the Patient's Bill of Rights is a political hot potato that will be in the news for some time to come.

Early in August, President Clinton vowed to veto Republican patient-protection bills if they pass Congress. His administration complains that the measures are "empty promises" that would do more harm than good.

Some political analysts interpret Clinton's threat of a veto as a calculated strategy to keep the Republicans from seizing control of the managed care reform agenda prior to the November election.

Reacting to the president's statement, Rep. Charles Norwood (R-Georgia) charged that the president is seeking to eliminate the GOP-backed bills strictly for political reasons.

Norwood contends the veto threat is made at the expense of "meaningful reforms" that benefit all patients under managed care plans.

By some GOP calculations, the voters could perceive that the GOP-controlled Congress acted affirmatively in addressing the managed-care problem. Therefore, Clinton could risk a backlash of voter discontent if he were to veto the GOP bills as he has recently promised.

For more information, call your state representative or your local independent agent/broker.

(Bob Propst is vice president of life and employee benefits at BPJ Insurance.)

[[In-content Ad]]