[Congressional Record Volume 143, Number 35 (Tuesday, March 18, 1997)]
[Senate]
[Pages S2484-S2486]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         PATIENT RIGHT TO KNOW

 Mr. WYDEN. Mr. President, this week my colleagues, Senators 
Kyl, Kennedy and Hutchinson, and I have introduced S. 449, the Patient 
Right to Know Act of 1997. This legislation outlaws so-called gags in 
contracts between managed care companies and their licensed 
practitioners which have limited what doctors can tell patients about 
their medical condition and all treatment appropriate to their care.
  Plain and simple, such gags have been used to limit appropriate 
medical care. While this is a dollars-and-cents issue for health care 
organizations and insurers, for patients and their doctors

[[Page S2485]]

such restrictions on the usual free flow of communication--held sacred 
since ancient times--literally may be a matter of life or death.
  I was pleased to join Mr. Kennedy in offering legislation on the 
floor last session which would have ended such restrictions. I also 
wish to thank Mr. Kyl for his support of our legislation last year, and 
for his diligent efforts in the intervening months to prepare this bill 
for re-introduction.
  I also wish to acknowledge support for this legislation from 
organizations including the Consumer's Union and the American Medical 
Association.
  We have this broad range of support because the need for this 
legislation is clear and documented. Three in four Americans now 
covered by private health insurance receive their care from managed 
care organizations. Increasingly, Medicaid enrollees and seniors in 
Medicare are covered by managed care plans through their respective 
Federal health insurance programs.
  Residents of my home State of Oregon boast the highest penetration of 
managed care in the Nation. The State's Medicaid Program for the most 
part is organized through private managed care companies. And in 
Portland, managed care plans service almost 60 percent of the Medicare 
population.
  In Oregon and elsewhere, the managed care presence has grown for 
reasons that are quite wholesome. Managed care helps enrollees stay 
healthy through illness prevention programs. They assure coordination 
of services for persons with multiple ailments. And through systematic, 
quality-conscious gate-keeping, they work to reduce unnecessary 
treatments which drive up health care costs.
  At the same time, however, some managed care providers have tried to 
enhance their profit margins by limiting what doctors may tell patients 
regarding all appropriate treatments, thereby reducing services 
patients may actually receive. These gags in my view are outrageous. 
The President through administrative order during the last few months 
has made such gags illegal in managed care plans operating under 
Medicare and Medicaid. He has pledged his support for legislation 
eliminating these restrictions in private health plans as well.
  Mr. President, while I am convinced that we need a single Federal 
standard on this matter to protect patients in managed care plans I am 
much encouraged by the voluntary efforts to end such gags recently 
announced by the managed care insurance industry. My long association 
with these companies has convinced me that coordinated care providers 
as a group often are on the cutting edge of developing both efficient 
and high-quality care for their enrollees. It is entirely appropriate 
for this provider group to try to police their members on the issue of 
gag provisions and the protection of doctor-patient communications.
  I ask that the text of the bill be printed in today's Record.
  The bill follows:

                                 S. 449

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; FINDINGS.

       (a) Short Title.--This Act may be cited as the ``Patient 
     Right to Know Act''.
       (b) Findings.--Congress finds the following:
       (1) Patients need access to all relevant information to 
     make appropriate decisions about their health care.
       (2) Open medical communications between health care 
     providers and their patients is a key to prevention and early 
     diagnosis and treatment, as well as to informed consent and 
     quality, cost-effective care.
       (3) Open medical communications are in the best interests 
     of patients.
       (4) Open medical communications must meet applicable legal 
     and ethical standards of care.
       (5) It is critical that health care providers continue to 
     exercise their best medical, ethical, and moral judgment in 
     advising patients without interference from health plans.
       (6) The offering and operation of health plans affect 
     commerce among the States.
       (c) Purpose.--It is the purpose of this Act to establish a 
     Federal standard that protects medical communications between 
     health care providers and patients.

     SEC. 2. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL 
                   COMMUNICATIONS.

       (a) Prohibition.--
       (1) General rule.--The provisions of any contract or 
     agreement, or the operation of any contract or agreement, 
     between an entity operating a health plan (including any 
     partnership, association, or other organization that enters 
     into or administers such a contract or agreement) and a 
     health care provider (or group of health care providers) 
     shall not prohibit or restrict the provider from engaging in 
     medical communications with his or her patient.
       (2) Nullification.--Any contract provision or agreement 
     described in paragraph (1) shall be null and void.
       (3) Prohibition on provisions.--Effective on the date 
     described in section 5, a contract or agreement described in 
     paragraph (1) shall not include a provision that violates 
     paragraph (1).
       (b) Rules of Construction.--Nothing in this Act shall be 
     construed--
       (1) to prohibit the enforcement, as part of a contract or 
     agreement to which a health care provider is a party, of any 
     mutually agreed upon terms and conditions, including terms 
     and conditions requiring a health care provider to 
     participate in, and cooperate with, all programs, policies, 
     and procedures developed or operated by a health plan to 
     assure, review, or improve the quality and effective 
     utilization of health care services (if such utilization is 
     according to guidelines or protocols that are based on 
     clinical or scientific evidence and the professional judgment 
     of the provider) but only if the guidelines or protocols 
     under such utilization do not prohibit or restrict medical 
     communications between providers and their patients; or
       (2) to permit a health care provider to misrepresent the 
     scope of benefits covered under a health plan or to otherwise 
     require the plan to reimburse providers for benefits not 
     covered under the plan.
       (c) Enforcement.--
       (1) State authority.--Except as otherwise provided in this 
     subsection, each State shall enforce the provisions of this 
     Act with respect to health insurance issuers that issue, 
     sell, renew, or offer health plans in the State.
       (2) Enforcement by secretary.--
       (A) In general.--Effective on January 1, 1998, if the 
     Secretary, after consultation with the chief executive 
     officer of a State and the insurance commissioner or chief 
     insurance regulatory official of the State, determines that 
     the State has failed to substantially enforce the 
     requirements of this Act with respect to health insurance 
     issuers in the State, the Secretary shall enforce the 
     requirements of this Act with respect to such State.
       (B) Enforcement through imposition of civil money 
     penalty.--
       (i) In general.--With respect to a State in which the 
     Secretary is enforcing the requirements of this Act, an 
     entity operating a health plan in that State that violates 
     subsection (a) shall be subject to a civil money penalty of 
     up to $25,000 for each such violation.
       (ii) Procedures.--For purposes of imposing a civil money 
     penalty under clause (i), the provisions of subparagraphs (C) 
     through (G) of section 2722(b)(2) of the Health Insurance 
     Portability and Accountability Act of 1996 (42 U.S.C. 300gg-
     22(b)(2)) shall apply except that the provisions of clause 
     (i) of subparagraph (C) of such section shall not apply.
       (3) Self-insured plans.--Effective on January 1, 1998, the 
     Secretary of Labor shall enforce the requirements of this 
     section in the case of a health plan not subject to State 
     regulation by reason of section 514(b) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1144(b)).
       (4) Rule of construction.--Nothing in this Act shall be 
     construed to affect or modify the provisions of section 514 
     of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1144).
       (d) No Preemption of More Protective Laws.--A State may 
     establish or enforce requirements with respect to the 
     protection of medical communications, but only if such 
     requirements are equal to or more protective of such 
     communications than the requirements established under this 
     section.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Health care provider.--The term ``health care 
     provider'' means anyone licensed or certified under State law 
     to provide health care services who is operating within the 
     scope of such license.
       (2) Health insurance issuer.--The term ``health insurance 
     issuer'' has the meaning given such term in section 
     2791(b)(2) of the Public Health Service Act (as added by the 
     Health Insurance Portability and Accountability Act of 1996).
       (3) Health plan.--The term ``health plan'' means a group 
     health plan (as defined in section 2791(a) of the Public 
     Health Service Act (as added by the Health Insurance 
     Portability and Accountability Act of 1996)) and any 
     individual health insurance (as defined in section 
     2791(b)(5)) operated by a health insurance issuer and 
     includes any other health care coverage provided through a 
     private or public entity. In the case of a health plan that 
     is an employee welfare benefit plan (as defined in section 
     3(1) of the Employee Retirement Income Security Act of 1974), 
     any third party administrator or other person with 
     responsibility for contracts with health care providers under 
     the plan shall be considered, for purposes of enforcement 
     under this section, to be a health insurance issuer operating 
     such health plan.
       (4) Medical communication.--
       (A) In general.--The term ``medical communication'' means 
     any communication made by a health care provider with a 
     patient of the health care provider (or the

[[Page S2486]]

     guardian or legal representative of such patient) with 
     respect to--
       (i) the patient's health status, medical care, or legal 
     treatment options;
       (ii) any utilization review requirements that may affect 
     treatment options for the patient; or
       (iii) any financial incentives that may affect the 
     treatment of the patient.
       (B) Misrepresentation.--The term ``medical communication'' 
     does not include a communication by a health care provider 
     with a patient of the health care provider (or the guardian 
     or legal representative of such patient) if the communication 
     involves a knowing or willful misrepresentation by such 
     provider.
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.

     SEC. 4. EFFECTIVE DATE.

       This Act shall take effect on the date of enactment of this 
     Act, except that section 2(a)(3) shall take effect 180 days 
     after such date of enactment.

  Mr. KENNEDY. Mr. President, I am pleased to join Senator Wyden in 
introducing this gag rule legislation and I commend him for his 
leadership. Last year, a majority of the Senate voted for similar 
legislation but it was defeated on a procedural technicality.
  Gag rules have no place in American medicine. Americans deserve 
straight talk from their physicians. Physicians deserve protection 
against insurance companies that abuse their economic power and compel 
doctors to pay more attention to the health of the company's bottom 
line than to the health of their patients.
  I am pleased that this legislation has strong support from both the 
American Medical Association and Consumer's Union--because it is a 
cause that unites the interests of patients and doctors.
  One of the most dramatic changes in the American health care system 
in recent years has been the growth of health maintenance 
organizations, preferred provider organizations, point of service 
plans, and other types of managed care. Today, 75 percent of all 
privately insured Americans are in managed care. Even conventional fee-
for-service plans have increasingly adopted features of managed care, 
such as ongoing medical review and case management.
  In many ways, this is a positive development. Managed care offers the 
opportunity to extend the best medical practice to all medical 
practice. It emphasizes helping people to stay healthy, rather than 
simply caring for them when they become sick. It helps provide more 
coordinated care and more effective care for people with multiple 
medical needs. It offers a needed antidote to incentives to provide 
unnecessary care--incentives that have contributed a great deal to the 
high cost of care in recent years.
  At its best, managed care fulfills these goals and improves the 
quality of care. Numerous studies have found that managed care compares 
favorably to fee for-service medicine on a variety of quality measures, 
including use of preventive care, early diagnosis of some conditions, 
and patient satisfaction. Many HMOs have made vigorous efforts to 
improve the quality of care, gather and use systematic data to improve 
clinical decision-making, and assure an appropriate mix of primary and 
specialty care.
  But the same financial incentives that enable HMOs and other managed 
care providers to practice more cost-effective medicine also can lead 
to under treatment or inappropriate restrictions on care, especially 
when expensive treatments or new treatments are involved.
  Too often, insurance companies have placed their bottom line ahead of 
their patient's well-being and have pressured physicians in their plans 
to do the same. These abuses include failure to inform patients of 
particular treatment options; barriers to reduce referrals to 
specialists for evaluation and treatment; unwillingness to order 
appropriate diagnostic tests; and reluctance to pay for potentially 
life-saving treatment. It is hard to talk to a physician these days 
without hearing a story about insurance company behavior that raises 
questions about quality of care. In some cases, insurance company 
behavior has had tragic consequences.
  In the long run, the most effective means of assuring quality care in 
HMOs is for the industry itself to make sure that quality is always a 
top priority. I am encouraged by the industry's development of ethical 
principles for its members, by the growing trend toward accreditation, 
and by the increasingly widespread use of standardized quality 
assessment measures. But I also believe that basic Federal regulations 
are necessary to assure that every plan meets at least minimum 
standards.
  Medicare has already implemented such a prohibition. All Americans 
are entitled to this same protection.
  A gag rule provision is also included in a more comprehensive managed 
care bill that I introduced earlier this session. That bill addresses a 
number of other issues as well. This prohibition of gag rules is such a 
simple need and cries out for immediate relief.
  This legislation targets the most abusive type of gag rule--the type 
that forbids physicians from discussing all treatment options with 
patients and makes the best possible professional recommendation, even 
if the recommendation is for a non-covered service or could be 
construed to disparage the plan for not covering it.
  This bill specifically forbids plans from prohibiting or restricting 
a provider from any medical communication with his or her patient.
  This is a basic rule which everyone endorses in theory, even though 
it has been violated in practice. The standards of the Joint Commission 
on Accreditation of Health Care Organizations require that ``Physicians 
cannot be restricted from sharing treatment options with their 
patients, whether or not the options are covered by the plan.''
  We need to act on this legislation promptly. The Senate has the 
opportunity to protect patients across the country from these abusive 
gag rules. Action on this legislation is truly a test of the Senate's 
commitment to the rights of patients and physicians across the 
country.

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