[Congressional Record Volume 144, Number 86 (Friday, June 26, 1998)]
[Senate]
[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.

[[Page S7254]]

  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.

[[Page S7255]]

       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.

                          ____________________