[Congressional Record Volume 143, Number 1 (Tuesday, January 7, 1997)]
[Extensions of Remarks]
[Pages E46-E48]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            THE MANAGED CARE CONSUMER PROTECTION ACT OF 1997

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                        Tuesday, January 7, 1997

  Mr. STARK. Mr. Speaker, along with Mr. John Lewis, Mr. Gejdenson, Mr. 
Serrano, Mr. Sanders, and Mr. Filner, I am pleased to introduce ``The 
Managed Care Consumer Protection Act of 1997,'' a bill that will 
provide critically needed consumer protections to millions of Americans 
in managed care health plans.
  Health care consumers who entrust their lives to managed care plans 
have consistently found that many plans are more interested in profits 
than in providing appropriate care. In the process of containing costs 
patients are often harmed. My constituent mail has been full of horror 
stories explaining the abuses that occur at the hands of HMOs and other 
forms of managed care.
  For example, David Ching of Fremont, California had a positive 
experience in a Kaiser Permanente plan and then joined an employer 
sponsored HMO expecting similar service. He

[[Page E47]]

soon learned that some plans would rather let patients die than 
authorize appropriate treatment. His wife developed colon cancer, but 
went undiagnosed for 3 months after the first symptoms. Her physician 
refused to make the appropriate specialist referral because of 
financial incentives and could not discuss proper treatment because of 
the health plan's policy. Mrs. Ching is now dead.
  In a similar case, Jennifer Pruitt of Oakland wrote to me about her 
father who also had cancer. He went to his gatekeeper primary care 
physician numerous times with pain in his jaw. The doctor, who later 
admitted that she had never treated a cancer patient, refused to refer 
Mr. Pruitt to a specialist. Eventually, after months of pain, a dentist 
sent Mr. Pruitt to a specialist outside of the HMO network. The cancer 
was finally diagnosed, but it had spread too rapidly during the months 
that the health plan delayed. Mr. Pruitt died from a cancer that is 
very treatable if detected early.
  These tragedies and others like them might have been avoided if the 
patients had known about the financial incentives not to treat, or if 
the physicians had not been gagged from discussing treatment options, 
or if there had been legislation forcing health plans to provide timely 
grievance procedures and timely access to care. It's too late for these 
victims, but it is not too late to provide these protections for the 
millions of people in managed care today.
  Consumer protections in managed care must be developed. Such 
unfavorable outcomes are not isolated events. They are widespread 
enough for industry studies to have noted a trend. Empirical evidence 
shows that restrictive practices pose special risks for people with 
chronic illnesses and poor health, and that primary care physicians in 
HMOs are less likely to diagnose or treat patients with depressive 
disorders appropriately. Another study concluded that the successes of 
prepaid care in relatively healthy populations are unlikely to be 
replicated among sicker patients. All this evidence indicates that 
managed care is not doing its job as well as it should. Those who are 
ill and most need health care are not getting it.
  A few years ago, Congress recognized a crisis in the health care 
industry. Expenditures were soaring and overutilization was the rule. 
At that time, I chose to address this problem with laws that prohibited 
physicians from making unnecessary referrals to health organizations or 
services that they owned.
  Others responded by pushing Americans into new managed care plans 
that switched the financial incentives from a system that overserves to 
a system that underserves. They got what they asked for. The current 
system rewards the most irresponsible plans with huge profits, 
outrageous executive salaries, and a license to escape accountability. 
Unfortunately, patients are dying unnecessarily in the wake of this 
health care delivery revolution. It must stop.
  Several states have already addressed the managed care crisis. In 
1996, more than 1,000 pieces of managed care legislation flooded state 
legislatures. As a result, HMO regulations were passed in 33 states 
addressing issues like coverage of emergency services, utilization 
review, post-delivery care and information disclosure. Unfortunately, 
many states did not pass these needed safeguards resulting in a 
piecemeal web of protections that lacks continuity. The states have 
spoken; now it's time for federal legislation to finish the job and 
provide consumer protections to all Americans in managed care.
  The bill I offer today is a revision of earlier bills, H.R. 1707 and 
H.R. 4220, the Medicare Consumer Protection Act of 1995 and 1996 
respectively. This legislation includes a comprehensive set of 
protections that will force managed care plans to be accountable to all 
of their patients and to provide the standard of care they deserve.
  This legislation includes measures to protect patients from the 
abuses of managed care on several fronts.
  My bill will put an end to pre-authorization of emergency medical 
care. Patients will not be denied coverage for care provided in 
emergency rooms. Current denials create obstacles for HMO patients and 
leave them with thousands of dollars in medical bills. According to 
HCFA, 40% of claim disputes between Medicare beneficiaries and 
participating Medicare HMOs involve emergency services. This bill 
establishes the prudent layperson definition of an emergency, so a 
reasonable layperson can anticipate claims that would be covered versus 
those that would be denied. It also prohibits plans from denying 
coverage for 911 emergencies.

  My bill includes provisions which will bring utilization review back 
to its intended function, ensuring that patients receive all medically 
necessary and appropriate care without overusing services. Utilization 
review boards will be standardized through accreditation by the 
Secretary of Health and Human Services. These review programs must 
update policies to ensure consistency and compliance with medical 
standards and treatment protocols.
  This legislation also establishes, for the first time, an ``Office of 
Medicare Advocacy'' whose sole function is to act on behalf of Medicare 
beneficiaries. The bill establishes a ``1-800'' number to facilitate 
better communication between the Health Care Financing Administration 
and the beneficiary. The office would develop a number of outreach 
programs to help inform Medicare beneficiaries concerning the Medicare 
program. Additionally, the office would have the authority to hear 
appeals in cases of an emergency or a life threatening event.
  Recent testimony by the ``Physician Payment Review Commission 
(PPRC)'' emphasized the need for increased information and appeals 
processes. Describing a recent survey of Medicare beneficiaries done by 
PPRC, the testimony reported:

       A significant percentage of these (Medicare) enrollees who 
     sought additional information about their plan had problems 
     getting their questions answered. Also, a third of enrollees 
     said they did not know they had the right to appeal a plan's 
     decision not to provide or pay for a service. Our study 
     suggests that plans may need to take additional steps to 
     inform consumers in these areas.

  The Office of Medicare Advocacy will do much to better inform 
Medicare beneficiaries, to advise beneficiaries of their rights and to 
facilitate comparative information concerning Medicare Managed Care 
plans.
  In the United States Congress, we have the ability to put an end to 
abuse in managed care and guarantee that Americans who choose managed 
care get the care for which they pay. We also have a responsibility to 
ensure that Americans are protected from companies who place more 
emphasis on their own financial interests than on patients' needs. It 
is irresponsible to do anything less.
  Following is a summary of the consumer protections provided for in 
this bill.

            ``Managed Care Consumer Protection Act of 1997''


                                summary

       I. MANAGED CARE ENROLLEE PROTECTIONS--APPLIES TO MEDICARE 
     MANAGED CARE AS WELL AS PRIVATE PLANS
       A. Utilization Review
       1. Any utilization review program that attempts to regulate 
     coverage or payment for services must first be accredited by 
     the Secretary of Health and Human Services or an independent, 
     non-profit accreditation entity;
       2. Plans would be required to provide enrollees and 
     physicians with a written description of utilization review 
     policies, clinical review criteria, and the process used to 
     review medical services under the program;
       3. Organizations must periodically review utilization 
     review policies to guarantee consistency and compliance with 
     current medical standards and protocols;
       4. Individuals performing utilization review could not 
     receive financial compensation based upon the number of 
     certification denials made;
       5. Negative determinations about the medical necessity or 
     appropriateness of services or the site of services would be 
     required to be made by clinically-qualified personnel of the 
     same branch of medicine or specialty as the recommending 
     physician;
       B. Assurance of Access
       1. Plans must have a sufficient number, distribution and 
     variety of qualified health care providers to ensure that all 
     enrollees may receive all covered services, including 
     specialty services, on a timely basis (including rural 
     areas);
       2. Patients with chronic health conditions must be provided 
     with a continuity of care and access to appropriate 
     specialists;
       3. Plans would be prohibited from requiring enrollees to 
     obtain a physician referral for obstetric and gynecological 
     services.
       4. Plans would demonstrate that enrollees with chronic 
     diseases or who otherwise require specialized services would 
     have access to designated Centers of Excellence;
       C. Access to Emergency Care Services
       1. Plans would be required to cover emergency services 
     provided by designated trauma centers;
       2. Plans could not require pre-authorization for emergency 
     medical care;
       3. A definition of emergency medical condition based upon a 
     prudent layperson definition would be established to protect 
     enrollees from retrospective denials of legitimate claims for 
     payment for out-of-plan services;
       4. Plans could not deny any claim for an enrollee using the 
     ``911'' system to summon emergency care.
       D. Due Process Protections for Providers
       1. Descriptive information regarding the plan standards for 
     contracting with participating providers would be required to 
     be disclosed;
       2. Notification to a participating provider of a decision 
     to terminate or not to renew a contract would be required to 
     include reasons for termination or non-renewal. Such 
     notification would be required not later than 45 days before 
     the decision would take effect, unless the failure to 
     terminate the contract would adversely affect the health or 
     safety of a patient;
       3. Plans would have to provide a mechanism for appeals of 
     termination or non-renewal decisions.
        E. Grievance procedures and deadlines for responding to 
     requests for coverage of services.

[[Page E48]]

       1. Plans would have to establish written procedures for 
     responding to complaints and grievances in a timely manner;
       2. Patients will have a right to a review by a grievance 
     panel and a second review by an independent panel in cases 
     where the plan decision negatively impacts their health 
     services;
       3. Plans must have expedited processes for review in 
     emergency cases.
       F. Non-discrimination and service area requirements
       1. In general, the service area of a plan serving an urban 
     area would be an entire Metropolitan Statistical Area (MSA). 
     This requirement could be waived only if the plan's proposed 
     service area boundaries do not result in favorable risk 
     selection.
       2. The Secretary could require some plans to contract with 
     Federally-qualified health centers (FQHCs), rural health 
     clinics, migrant health centers, or other essential community 
     providers located in the service area if the Secretary 
     determined that such contracts are needed in order to provide 
     reasonable access to enrollees throughout the service area.
       3. Plans could not discriminate in any activity (including 
     enrollment) against an individual on the basis of race, 
     national origin, gender, language, socioeconomic status, age, 
     disability, health status, or anticipated need for health 
     services.
       G. Disclosure of plan information
       1. Plans would provide to both prospective and current 
     enrollees information concerning; Credentials of health 
     service providers; Coverage provisions and benefits including 
     premiums, deductibles, and copayments; Loss ratios explaining 
     the percentage of premiums spent on health services; Prior 
     authorization requirements and other service review 
     procedures; Covered individual satisfaction statistics; 
     Advance directives and organ donation information; 
     Descriptions of financial arrangements and contractual 
     provisions with hospitals, utilization review organizations, 
     physicians, or any other health care service providers; 
     Quality indicators including immunization rates and health 
     outcomes statistics adjusted for case mix; An explanation of 
     the appeals process; Salaries and other compensation of key 
     executives in the organization; Physician ownership and 
     investment structure of the plan; A description of lawsuits 
     filed against the organization; Plans must provide each 
     enrollee annually with a disclosure statement regarding 
     whether the plan restricts the plans malpractice liability in 
     relation to liability of physicians operating under the plan.
       2. Information would be disclosed in a standardized format 
     specified by the Secretary so that enrollees could compare 
     the attributes of all plans within a coverage area.
       H. Protection of physician-patient communications
       1. Plans could not use any contractual agreements, written 
     statements, or oral communication to prohibit, restrict or 
     interfere with any medical communication between physicians, 
     patients, plans or state or federal authorities.
       I. Patient access to clinical studies
       1. Plans may not deny or limit coverage of services 
     furnished to an enrollee because the enrollee is 
     participating in an approved clinical study if the services 
     would otherwise have been covered outside of the study.
       J. Minimum Childbirth benefits
       1. Insurers or plans that cover childbirth benefits must 
     provide for a minimum inpatient stay of 48 hours following 
     vaginal delivery and 96 hours following a cesarean section.
       2. The mother and child could be discharged earlier than 
     the proposed limits if the attending provider, in 
     consultation with the mother, orders the discharge and 
     arrangements are made for follow-up post delivery care.
       II. AMENDMENTS TO THE MEDICARE PROGRAM, MEDICARE SELECT AND 
     MEDICARE SUPPLEMENTAL INSURANCE REGULATIONS.
       A. Orientation and Medical Profile Requirements
       1. When a Medicare beneficiary enrolls in a Medicare HMO, 
     the HMO must provide an orientation to their managed care 
     system before Medicare payment to the HMO may begin;
       2. Medicare HMOs must perform an introductory medical 
     profile as defined by the Secretary on every new enrollee 
     before payment to the HMO may begin.
       B. Requirements for Medicare Supplemental policies 
     (MediGap)
       1. All MediGap policies would be required to be community 
     rated;
       2. MediGap plans would be required to participate in 
     coordinated open enrollment;
       3. The loss ratio requirement for all plans would be 
     increased to 85 percent.
       C. Standards for Medicare Select policies
       1. Secretary would establish standards for Medicare Select 
     in regulations. To the extent practical, the standards would 
     be the same as the standards developed by the NAIC for 
     Medicare Select Plans. Any additional standards would be 
     developed in consultation with the NAIC.
       2. Medicare Select Plans would generally be required to 
     meet the same requirements in effect for Medicare risk 
     contractors under section 1876. Community Rating, Prior 
     approval of marketing materials, Intermediate sanctions and 
     civil money penalties.
       3. If the Secretary has determined that a State has an 
     effective program to enforce the standards for Medicare 
     Select plans established by the Secretary, the State would 
     certify Medicare Select plans.
       4. Fee-for-service Medicare Select plans would offer either 
     the MediGap ``E'' plan with payment for extra billing added 
     or the MediGap ``J'' plan.
       5. If an HMO or competitive medical plan (CMP) as defined 
     under section 1876 offers Medicare Select, then the benefits 
     would be required to be offered under the same rules as set 
     forth in the MediGap provisions above.
       D. Arrangements with out-of-area dialysis services.
       E. Coordinated open enrollment
       1. The Secretary would conduct an annual open enrollment 
     period during which Medicare beneficiaries could enroll in 
     any MediGap plan, Medicare Select, or an HMO contracting with 
     Medicare. Each plan would be required to participate.
       F. Comparative Information
       1. The Secretary must provide on an annual basis for 
     publication and use on the internet information in 
     comparative form and standard format describing the policies 
     offered, benefits and costs, disenrollment and complaint 
     rates, and summaries of the results of site monitoring 
     visits.
       G. Office of Medicare Advocacy
       1. Establishes Office of Medicare Advocacy within the 
     Health Care Financing Administration. The purpose of the 
     office is to act on behalf of Medicare recipients, especially 
     to address complaints and concerns. A toll free telephone 
     number would be established to facilitate communication. 
     Additional outreach programs such as town meetings would be 
     developed and an internet site would be established for 
     posting information.
       2. The office would have authority to provide for an 
     expedited review and resolution of complaints under emergency 
     circumstances as described in the bill.
       H. Exclusion from Medicare and Medicaid Program
       1. If plan submits information relating to the quality of 
     services provided that is material and false, the Secretary 
     shall exclude the plan from continuing to qualify for 
     Medicare and Medicaid payments.
       III. AMENDMENTS TO THE MEDICAID PROGRAM
       A. Orientation and Immunization Requirements
       1. When a Medicaid beneficiary enrolls in a Medicaid HMO, 
     the HMO must provide an orientation to their managed care 
     system before Medicaid payment to the HMO may begin;
       2. Medicaid HMOs must perform an introductory medical 
     profile as defined by the Secretary on every new enrollee 
     before payment to the HMO may begin.
       3. When children under the age of 18 are enrolled in a 
     Medicaid HMO, the immunization status of the child must be 
     determined and the proper immunization schedule begun before 
     payment to the HMO is made.

                          ____________________