[Congressional Record Volume 144, Number 92 (Monday, July 13, 1998)]
[Senate]
[Pages S8050-S8052]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        PATIENTS' BILL OF RIGHTS

  Mr. KENNEDY. Mr. President, the time moves on on the issue of our 
Patients' Bill of Rights legislation. Just 43 days remain in this 
session. The time has come to end the abuses of the HMOs and managed 
care plans. Families across the country know that too many medical 
decisions today are being made by the insurance company accountants 
instead of doctors. They know the company profits too often get 
priority over patients' needs and, too often, managed care is 
mismanaged care.
  We have legislation--the Patients' Bill of Rights--to end these 
abuses. Included in the Patients' Bill of Rights is a section that 
allows ERISA-covered patients to hold their health plans accountable 
for abusive actions that result in injury or death.
  This provision seems to have drawn the strongest opposition from the 
Republican leadership and their special interest allies. But an article 
in last Saturday's New York Times paints a poignant picture of the need 
for reform.
  Judges throughout the Federal judicial system have written decisions 
in which they implore Congress to take action to correct ERISA's gross 
inadequacies.
  They have repeatedly ruled that their hands are tied--even in the 
most egregious cases--from providing the patients or their families 
with meaningful redress when an insurance company's actions result in 
injury or death.
  Mr. President, I will quote a few parts of this article.
  I ask the Chair to remind me when 2 minutes remain.

       . . . The United States Court of Appeals for the Fifth 
     Circuit, in New Orleans, reached a typical conclusion in a 
     lawsuit by a Louisiana woman whose fetus died after an 
     insurance company refused to approve her hospitalization for 
     a high-risk pregnancy. . . .
       In dismissing the suit, the court said, ``The Corcorans 
     have no remedy, state or Federal, for what may have been a 
     serious mistake.''
       The court said that the harsh result ``would seem to 
     warrant a re-evaluation of

[[Page S8051]]

     ERISA so that it can continue to serve its noble purpose of 
     safeguarding the interests of employees.''

  What they were pointing out is that there was no opportunity, after 
the negligence involved in this case, for the defendant to be able to 
receive any redress for the injuries they sustained, and the Federal 
judge was saying that Congress should act.
  In a second case, Judge William G. Young of the Federal District 
Court in Boston, and I point out that he is a Republican appointee, 
said--

       ``It is deeply troubling that, in the health insurance 
     context, ERISA has evolved into a shield of immunity which 
     thwarts the legitimate claims of the very people it was 
     designed to protect.''
       Judge Young said he was distressed by ``the failure of 
     Congress to amend the statute that, due to the changing 
     realities of the modern health care system, has gone 
     conspicuously awry,'' leaving many consumers ``without any 
     remedy'' for the wrongful denial of health benefits.

  Next

       . . . Judge John C. Porfilio of the United States Court of 
     Appeals for the 10th circuit, in Denver, said he was ``moved 
     by the tragic circumstances'' of a woman with leukemia who 
     died after her HMO refused approval for a bone marrow 
     transplant. But, he said, the 1974 law ``gives us no 
     choice,'' and the woman's husband, who had sued for damages, 
     is ``left without a remedy.''

  Again

       The United States Court of Appeals for the Eighth Circuit, 
     in St. Louis, said the law protected an HMO--against a suit 
     by the family of a Missouri man, Buddy Kuhl, who died after 
     being denied approval for heart surgery recommended by his 
     doctors. ``Modification of ERISA in light of the questionable 
     modern insurance practices must be the job of Congress, not 
     the courts,'' said Judge C. Arlen Beam.
       The United States Court of Appeals for the Sixth Circuit, 
     in Cincinnati, said that the Federal law barred claims 
     against a ``utilization review'' company that refused to 
     approve psychiatric care for a man who later committed 
     suicide. Because of ERISA, the court said, people who sue an 
     HMO or an insurer for wrongful death ``may be left without a 
     meaningful remedy.''
       Federal District Judge Nathaniel M. Gorton, in Worcester, 
     Mass., said that the husband of a woman who died of breast 
     cancer was ``left without any meaningful remedy'' against an 
     HMO that had refused to authorize treatment.
       Federal District Judge Marvin J. Garbis in Baltimore, said 
     . . . whether ERISA should be ``reexamined and reformed in 
     light of modern health care is an issue which must be 
     addressed and resolved by the legislature rather than the 
     courts.''

  The Ninth Circuit continues in another case, and it goes on and on 
and on.
  This is what we are seeing across the country in the Federal district 
courts, in the circuit courts, with judges that come from entirely 
different traditions, Republicans and Democrats alike.
  When they look at ERISA, they find out that there are grossly 
inadequate remedies for individuals who have suffered as a result of 
malpractice, or because that HMOs have denied coverage for health 
treatments recommended by their doctors.
  So, Mr. President, this isn't just those of us who are supporting 
this legislation that are saying it. Here we have the irrefutable 
presentations made by district court and circuit court judges across 
the country that are inviting Congress to act to protect families in 
the United States of America.
  There is only one bill that provides that protection, and it is the 
Patients' Bill of Rights. Every single day that we delay acting on it, 
the circumstances we have discussed here tonight will be repeated and 
repeated and repeated.
  The insurers and corporations who fear they have something to lose if 
patients are able to hold plans accountable have used ginned up 
estimates to try scare people into thinking that offering this 
protection would somehow result in dramatic premium increases. But tens 
of millions of patients--those who work for states and localities and 
those who purchase health insurance on their own--have this right, and 
a recent study confirmed that the cost associated with it is 
negligible.
  The independent and nonpartisan Kaiser Family Foundation hired 
Coopers and Lybrand to examine the costs of being able to hold plans 
accountable for their actions. And their study found that ensuring this 
right costs as little as three pennies per month. Three pennies per 
month to hold your plan accountable for its actions.
  Now, we know that the insurance industry does not support that 
particular proposal, and we know that the Republican leadership does 
not support that proposal. But we are asking, when in the world will 
the Republican leadership let us at least debate that issue here on the 
floor of the U.S. Senate? They have denied us the opportunity to mark 
the bill up in our committee. They have denied us the opportunity to 
have legislation on the calendar and the opportunity to get that 
measure scheduled so we can debate it. Mr. President, that is wrong.
  Now we listened to those on the floor of the U.S. Senate the other 
night speaking for the Republican leadership saying, ``The Republican 
leadership will decide when we will schedule this measure, and we in 
the majority are not going to schedule that measure until we are good 
and ready to do so.''
  Well, we are saying that we are going to offer this measure on every 
single appropriate measure that comes before the U.S. Senate, and maybe 
the leader does have the power to pull legislation down and stick it 
back on the calendar, but they are going to be really busy doing that 
because they are going to have to put every piece of legislation back 
on the calendar because we are going to continue to offer this 
commonsense proposal.
  The PRESIDING OFFICER. I advise the Senator that 2 minutes remain.
  Mr. KENNEDY. Mr. President, I want to finally point out that the 
President's own blue ribbon nonpartisan commission, made up of a wide 
variety of different personnel representing the industry--doctors, 
patients, nurses--looked at the issues around patients rights. They 
recommended virtually unanimously that all patients should have the 
kinds of protections included in our Patients' Bill of Rights 
legislation. That is the President's commission.
  Now, if our Republican friends do not want the American people to 
have these rights, let's get on the floor of the U.S. Senate and debate 
it. But they refuse to do so, Mr. President, and we will not be silent. 
We will continue to make every effort to bring this legislation up so 
that we can get about the business of protecting American consumers.
  Mr. President, I ask unanimous consent that this full article be 
printed in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                [From the New York Times, July 11, 1998]

        Hands Tied, Judges Rue Law That Limits H.M.O. Liability

                            (By Robert Pear)

       Washington, July 10--Federal judges around the country, 
     frustrated by cases in which patients denied medical benefits 
     have no right to sue, are urging Congress to consider changes 
     in a 1974 law that protects insurance companies and health 
     maintenance organizations against legal attacks.
       In their decisions, the judges do not offer detailed 
     solutions of the type being pushed in Congress by Democrats 
     and some Republicans. But they say their hands are tied by 
     the 1974 law, the Employee Retirement Income Security Act. 
     And they often lament the results, saying the law has not 
     kept pace with changes in health care and the workplace.
       The law, known as Erisa, was adopted mainly because of 
     Congressional concern that corrupt, incompetent pension 
     managers were looting or squandering the money entrusted to 
     them. The law, which also governs health plans covering 125 
     million Americans, sets stringent standards of conduct for 
     the people who run such plans, but severely limits the 
     remedies available to workers.
       In a lawsuit challenging the denial of benefits, a person 
     in an employer-sponsored health plan may recover the benefits 
     in question and can get an injunction clarifying the right to 
     future benefits. But judges have repeatedly held that the law 
     does not allow compensation for lost wages, death or 
     disability, pain and suffering, emotional distress or other 
     harm that a patient suffers as a result of the improper 
     denial of care.
       Congress wanted to encourage employers to provide benefits 
     to workers and therefore established uniform Federal 
     standards, so pension and health plans would not have to 
     comply with a multitude of conflicting state laws and 
     regulations.
       The United States Court of Appeals for the Fifth Circuit, 
     in New Orleans, reached a typical conclusion in a lawsuit by 
     a Louisiana woman whose fetus died after an insurance company 
     refused to approve her hospitalization for a high-risk 
     pregnancy. The woman, Florence B. Corcoran, and her husband 
     sought damages under state law.
       In dismissing the suit, the court said, ``The Corcorans 
     have no remedy, state or Federal, for what may have been a 
     serious mistake.''
       The court said that the harsh result ``would seem to 
     warrant a reevaluation of the Erisa so that it can continue 
     to serve its

[[Page S8052]]

     noble purpose of safeguarding the interests of employees.''
       In another case, Judge William G. Young, of the Federal 
     District Court in Boston said, ``It is deeply troubling that, 
     in the health insurance context, Erisa has evolved into a 
     shield of immunity which thwarts the legitimate claims of 
     the very people it was designed to protect.''
       Judge Young said he was distressed by ``the failure of 
     Congress to amend a statute that, due to the changing 
     realities of the modern health care system, has gone 
     conspicuously awry,'' leaving many consumers ``without any 
     remedy'' for the wrongful denial of health benefits.
       Disputes over benefits have become common as more employers 
     provide coverage to workers through H.M.O.'s and other types 
     of managed care, which try to rein in costs by controlling 
     the use of services.
       Here are some examples of the ways in which judges have 
     expressed concern:
       Judge John C. Portfolio of the United States Court of 
     Appeals for the 10th Circuit, in Denver, said he was ``moved 
     by the tragic circumstances'' of a woman with leukemia who 
     died after her H.M.O. refused approval for a bone marrow 
     transplant. But, he said, the 1974 law ``gives us no 
     choice,'' and the woman's husband, who had sued for damages, 
     is ``left without a remedy.''
       The United States Court of Appeals for the Eighth Circuit, 
     in St. Louis, said the law protected an H.M.O. against a suit 
     by the family of a Missouri man, Buddy Kuhl, who died after 
     being denied approval for heart surgery recommended by his 
     doctors. ``Modification of Erisa in light of questionable 
     modern insurance practices must be the job of Congress, not 
     the courts,'' said Judge C. Arlen Beam.
       The United States Court of Appeals for the Sixth Circuit, 
     in Cincinnati, said that Federal law barred claims against a 
     ``utilization review'' company that refused to approve 
     psychiatric care for a man who later committed suicide. 
     Because of Erisa, the court said, people who sue an H.M.O. 
     or an insurer for wrongful death ``may be left without a 
     meaningful remedy.''
       Federal District Judge Nathaniel M. Gorton, in Worcester, 
     Mass., said that the husband of a woman who died of breast 
     cancer was ``left without any meaningful remedy'' against an 
     H.M.O. that had refused to authorize treatment.
       Federal District Judge Marvin J. Garbis, in Baltimore, 
     acknowledged that a Maryland man may be left ``without an 
     adequate remedy'' for damages caused by his H.M.O.'s refusal 
     to pay for eye surgery and other necessary treatments. But, 
     Judge Garbis said, whether Erisa should be ``re-examined and 
     re-formed in light of modern health care is an issue which 
     must be addressed and resolved by the legislature rather than 
     the courts.''
       The United States Court of Appeals for the Ninth Circuit, 
     in San Francisco, ruled last month that an insurance company 
     did not have to surrender the money it saved by denying care 
     to a Seattle woman, Rhonda Bast, who later died of breast 
     cancer.
       ``This case presents a tragic set of facts,'' Judge David 
     R. Thompson said. But ``without action by Congress, there is 
     nothing we can do to help the Basts and others who may find 
     themselves in this same unfortunate situation.''
       Democrats and some Republicans in Congress are pushing 
     legislation that would make it easier for patients to sue 
     H.M.O.'s and insurance wrong decision, he or she can be sued, 
     said Representative Charlie Norwood, Republican of Georgia, 
     but ``H.M.O.'s are shielded from liability for their 
     decisions by Erisa.''
       Changes in Erisa will not come easily. The Supreme Court 
     has described it as ``an enormously complex and detailed 
     statute'' that carefully balances many powerful competing 
     interests. Few members of Congress understand the intricacies 
     of the law. Insurance companies, employers and Republican 
     leaders strenuously oppose changes, saying that any new 
     liability for H.M.O.'s would increase the cost of employee 
     health benefits.
       Senator Trent Lott of Mississippi, the Republican leader, 
     said today that he had agreed to schedule floor debate on 
     legislation to regulate managed care within the next two 
     weeks. Senator Tom Daschle of South Dakota, the Democratic 
     leader, who had been seeking such a debate, said Mr. Lott's 
     commitment could be ``a very consequential turning point'' if 
     Democrats have a true opportunity to offer their proposals.
       But Senator Don Nickles of Oklahoma, the assistant 
     Republican leader, said, ``Republicans believe that health 
     resources should be used for patient care, not to pay trial 
     lawyers.''
       Proposals to regulate managed care have become an issue in 
     this year's elections, and the hottest question of all is 
     whether patients should be able to sue their H.M.O.'s. The 
     denial of health benefits means something very different 
     today from what it meant in 1974, when Erisa was passed. At 
     that time, an insured worker would visit the doctor and then, 
     if a claim was disallowed, haggle with the insurance company 
     over who should pay. But now, in the era of managed care, 
     treatment itself may be delayed or denied, and this ``can 
     lead to damages far beyond the out-of-pocket cost of the 
     treatment at issue,'' Judge Young said.
       H.M.O.'s have been successfully sued. A California lawyer, 
     Mark O. Hiepler, won a multimillion-dollar jury verdict 
     against an H.M.O. that denied a bone marrow transplant to his 
     sister, Nelene Fox, who later died of breast cancer. But that 
     case was unusual. Mrs. Fox was insured through a local school 
     district, and such ``governmental plans'' are not generally 
     covered by Erisa.
       The primary goal of Erisa was to protect workers, and to 
     that end the law established procedures for settling claim 
     disputes.
       Erisa supersedes any state laws that may ``relate to'' an 
     employee benefit plan. Erisa does not allow damages for the 
     improper denial or processing of claims, and judges have held 
     that the Federal law, in effect, nullifies state laws that 
     allow such damages.

  Mrs. MURRAY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Washington.
  Mrs. MURRAY. Thank you Mr. President.

                          ____________________