[Congressional Record Volume 142, Number 48 (Tuesday, April 16, 1996)]
[Extensions of Remarks]
[Pages E535-E536]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         MEDICARE BENEFICIARY PROTECTION AMENDMENTS--H.R. 1707

                                 ______


                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                        Tuesday, April 16, 1996

  Mr. STARK. Mr. Speaker, last May, I introduced legislation designed 
to ensure that Medicare beneficiaries have access to quality care and 
fair treatment by their HMO's and managed care plans. Today, I 
reiterate the need for Medicare beneficiary protection and urge passage 
of the needed safeguards that H.R. 1707 provides.
  An important issue addressed by this measure is the serious abuse of 
marketing practices by HMO's. Abuses by sales agents are especially 
prevalent in geographic areas where people have little experience with 
managed care. The commission system in which many HMO agents work is an 
inappropriate financial incentive which leads to pressure sales to 
vulnerable beneficiaries. For example, when Geraldine Dallek of the 
Center for Health Care Rights provided testimony last year to the 
Senate Special Committee on Aging, she reported a story of a woman from 
Los Angeles who was a victim of these practices. The woman, Mrs. B, who 
has a fifth grade education, received an unsolicited visit from an HMO 
marketing agent. When Mrs. B refused to sign up for the plan, the 
representative persuaded her to sign an enrollment form by telling her 
that it would only be used to verify his visit.
  To remedy abusive HMO marketing practices, H.R. 1707 would prohibit 
door-to-door marketing and allow beneficiaries to enroll via mail. 
Also, it would limit the percentage of compensation received through 
commissions and require plans to recover commissions if the beneficiary 
disenrolled within 90 days.
  Most HMO enrollees give up their supplemental or MediGap coverage 
when they enroll in an HMO. Many fear that if they disenroll from an 
HMO, no insurance company will sell them a supplemental policy. This is 
a very serious issue for those who leave their HMO because they are ill 
and believe the HMO is not providing them adequate care. Under my bill, 
beneficiaries will be able to secure a supplemental plan after moving 
out of an HMO. H.R. 1707 requires Medicare-contracting plans and 
MediGap plans to participate in an open enrollment process. This 
provision allows for a beneficiary to enroll, disenroll, or change 
plans during this period without being subject to medical underwriting 
or preexisting exclusions.
  Also, the difficulty beneficiaries have making comparisons among 
Medicare coverage options would be dealt with by having the Secretary 
conduct annual open enrollment periods. During this period, Medicare 
beneficiaries could enroll in traditional Medicare coverage or any 
additional HMO-managed care options. Differences in plan benefits and 
costs would be presented in easy, comparative formats. A criticism of 
managed care plans has been the lack of readily available, 
understandable and comparable information of plans. This legislation 
works to correct this by requiring Medicare-contracting plans to 
provide descriptive information on plan utilization review 
requirements, plan standards for contracting with providers, provider 
credentials, and plan physician payment arrangements. This bill would 
standardize the basic benefit package for Medicare HMO's. Plans could 
not impose cost sharing other than nominal copayments for Medicare-
covered services. Also, limits on additional benefits must be fully 
explained and enrollees given reasonable notice that benefits are 
expiring.
  Managed care is a system that provides financial incentives to 
provide less care. A 1989 GAO report concluded that this system that 
puts providers at financial risk for expensive medical treatment 
inherently contains incentives to deny or delay needed care. The 
problem of inconsistent and delayed utilization review practices of 
managed care plans would be remedied in several ways by H.R. 1707.
  First, financial compensation could not be given to individuals 
performing the UR based upon the number of denials. Second, negative

[[Page E536]]

determinations about medical necessity or appropriateness will be 
required to be made by clinically qualified personnel. Also, final 
determination of coverage must be made within 24 hours.
  The amendments would also update HMO plans in the area of access to 
emergency medical services. Specifically, plans could not require 
preauthorization for true emergency medical care and could not deny a 
claim for a beneficiary who uses the ``911'' system to access services. 
Also, plans must define ``emergency medical care'' in terms easily 
understood by the average person. An example of why this is needed is 
given by the Center for Health Care Rights which reports a case of a 
San Diego woman who went to her HMO's urgent care center for treatment 
of an injury. She was told that the center had many people waiting and 
only one doctor on duty. The beneficiary was instructed to go to the 
nearest emergency room. The HMO later denied her claim because the 
emergency room treatment was not authorized.
  These requirements will also benefit physicians by mandating 
reimbursement by the plan to those physicians who provide emergency 
services in nonplan hospitals in order to fulfill the Federal 
antidumping law.
  An important protection standard in this legislation would benefit 
those who seek out-of-plan treatment: Providers plans would be 
prohibited from charging more than Medicare would have paid under fee-
for-service rules. Also, plans would be required to make arrangements 
for beneficiaries to have occasional dialysis service outside the plans 
area.
  Recognizing the special needs of individuals with disabilities and 
chronic-illness, the amendments guarantee enrollees access to 
designated centers of excellence. The standard for the designation of a 
center of excellence will be established by the Secretary. Factors that 
would be included in the Secretary's designation would 
include specialized education and training, participation in peer-
reviewed research, and treatment of patients from outside the 
facility's geographic area.

  To improve due process for providers in networks, public notices 
would be required as to when applications by participating providers 
are to be accepted. Notification of a decision to terminate or not 
renew a contract would be required not later than 45 days before it is 
to take effect.
  In order to ensure access to enrollees throughout a plan's service 
area, the Secretary may require plans to contract with certain clinics 
and other essential community providers in the service area. In 
general, the service area of a Medicare-contracting plan would be an 
entire metropolitan statistical area.
  To comply with this plan, Federal regulators would be given authority 
to impose intermediate sanctions. Currently, the Secretary has the 
authority to bar participation in Medicare. Under this plan, the 
Secretary could prohibit plans from enrolling beneficiaries until it 
meets all Federal requirements. A new review process would allow HMO's 
to submit a corrective action plan for violations. A civil money 
penalty up to $25,000 for each violation that adversely affects an 
individual enrolled in the plan would be authorized.
  The Medicare beneficiary protection amendments are a powerful step 
toward safeguarding the health of Medicare beneficiaries. Last year, an 
inspector general's survey found that 16 percent of enrollees planned 
to leave their HMO, but felt they could not. Even worse, 66 percent of 
disabled/ERSD enrollees wanted to leave their HMO's. These statistics 
and others indicate that HMO's are often failing to properly serve many 
Medicare beneficiaries. The remedies I propose will move us toward 
better quality and a fairer managed care system.

                          ____________________