[Congressional Record Volume 144, Number 118 (Wednesday, September 9, 1998)]
[House]
[Pages H7473-H7476]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          MANAGED CARE REFORM

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 7, 1997, the gentleman from New Jersey (Mr. Pallone) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. PALLONE. Mr. Speaker, it is not my intention to use all the time 
this evening, but I did want to spend some time this evening to talk 
about managed care reform.
  Today, after having spent the last month in their districts, Members 
of the House returned from Congress' annual August recess. And the 
month of August always provides Members with an extended opportunity to 
hear what is on their constituents' minds. And I just wanted to assure 
my colleagues that the number one issue on people's minds, at least in 
my district, continues to be managed care reform.
  I think over the last 4 weeks I held about 20 town meetings or forums 
in

[[Page H7474]]

various municipalities in my district, and it was the issue people were 
most concerned about before we left in August and it continues to be 
the one that I hear most about at town hall meetings and the open 
houses that I have had in my district offices. And I think it will be 
the major issue that people worry about in terms of legislative action 
in this Congress and that we need to address the issue before this 
Congress adjourns sometime in October.
  One of the things that a lot of people ask me is exactly what type of 
reform we have in mind. And I talk specifically about the Patients' 
Bill of Rights, which is the legislation that myself and other 
Democrats put forth before the House before the August break.
  The Patients' Bill of Rights, the Democratic Patients' Bill of 
Rights, basically provides a number of patient protections, if you 
will, for Americans that are in a managed care organization, or HMO.
  And just to give an example of some of the patient protections that 
we do provide in the Democratic bill, most important is the return of 
medical decision-making to patients and health care professionals, not 
insurance company bureaucrats.
  Most of the people who have attended my town meetings or come to my 
district office complain to me about the fact that a decision about 
what kind of procedure or operation they might have or whether they are 
able to stay in the hospital after a particular operation or particular 
care that they need that that decision is increasingly made by the 
insurance company and not by the doctor.

  The doctor may say to them, ``Well, I really think you should be 
staying in the hospital a few more days,'' or the doctor may recommend 
a particular medical procedure or operation and the insurance company 
decides that they will not pay for it because they do not deem that 
operation medically necessary.
  Well, it should not be the insurance company that makes that 
decision. It should be the physician in consultation with the patient. 
And that is what the Democrats are trying to do with our Patients' Bill 
of Rights, bring that decision about what is medically necessary back 
to the physician and the patient, to the health care professionals, not 
the insurance company bureaucrats.
  The other major patient protection that we provide in our Democratic 
bill relates to access to specialists, including access to pediatric 
specialists for children. Many people have complained to me that if 
they need a specialist, sometimes a specialist is not available within 
the managed care network or that they do not feel that the person that 
they are referred to within the managed care HMO network really has the 
expertise that is necessary with regard to the care that they need.
  And what we say in our Democratic bill is that they have to be 
guaranteed access to a specialist. If in fact these specialists within 
the HMO network are not adequate, for example, if the HMO decides that 
they can see a pediatrician but not a pediatrician that has a specific 
type of expertise, then they have the right under the Democratic bill 
to go outside the network and the insurance company would have to pay 
for that specialist that is necessary even though it is not a doctor 
that operates within the HMO.
  The other major issue that I hear constantly from constituents, 
probably even more so than any other, is coverage for emergency room 
care. Many insurance policies now that come under managed care, or 
HMOs, would say that in a given circumstance they might have to go to 
an emergency room, to a hospital, that is further away from where they 
are located, or if they do go to the emergency room, they may decide 
afterwards that it really was not an emergency, and therefore, they are 
not going to cover the care and they have to pay for it out of their 
own pocket.
  Well, what the Democratic bill says is that if the average person, it 
is a standard we call a ``prudent layperson'' standard, if the average 
person, the average citizen, would feel that at a particular time they 
need to go to an emergency room because they have a particular type of 
pain or they have suffered a particular kind of injury, then they have 
the ability to go to the closest emergency room and the insurance 
company has to pay the bill.
  It really is common sense. Most of these patient protections, Mr. 
Speaker, are nothing more than common-sense proposals that I think most 
Americans would feel that we already have. But we do not; we do not 
have these guarantees, and we need to make these patient protections, 
these guarantees, we need to make them the law of the land.
  The other issue that comes up and another patient protection in the 
Democratic bill is the right to talk freely with doctors and nurses 
about every medical option. What we have found is that many of the HMOs 
now will simply tell the doctor that they cannot talk to the patient 
about a particular medical option, say, a particular procedure or 
operation, if they do not cover it. It is called a ``gag rule.'' They 
basically implement a gag rule and limit what the doctor or the nurse 
can say.
  That is not right. We live in a country where we value freedom of 
speech, and certainly we would expect that our physician would be able 
to tell us freely whether we need a particular procedure and what kinds 
of procedures or care are available.
  The Democratic bill basically guarantees that there would be no gag 
rule and that the physician or the nurse would have the right to talk 
freely with the patient about medical options that might be necessary.
  Also, in our Democratic bill we have an appeals process and real 
legal accountability for insurance company decisions.
  Now, let me talk a little bit about that. What I find is a lot of 
people will come to my office or they will testify at some of the 
hearings that we have had in Congress, and they will say that if the 
insurance company or the HMO denied them care and said that they could 
not have a particular procedure or said that they had to leave the 
hospital, and they tried to appeal it, they either filed a grievance or 
they called up the insurance company and said they did not agree with 
their decision and would like to have it reviewed, that right now, for 
most people, that is not really an option because the review, if there 
is one, is done internally by the HMO, by the insurance company, and 
they simply review their own decision and decide that they are wrong 
and that is the way that it is going to be.
  Well, what we do in the Democratic bill is, we say that there will be 
an external review procedure, that it will not be the insurance company 
that they go to if they have a grievance or they want to appeal the 
denial of care. They get to go to an outside board that they do not 
appoint and they cannot influence that will decide whether or not that 
decision was accurate; and if it was not, they have the power to 
overturn the insurance company and guarantee that the care is provided 
or that the care is reimbursed for and paid for.
  In addition to that, for many people now, if they are in what we call 
an ERISA plan, which is a plan where their company that is helping pay 
for the insurance is self-insured and, therefore, it comes under the 
Federal Government's review, that they may not have a right to sue the 
HMO or the managed care organization for damages that are inflicted 
because they denied them care. They cannot go to court and recover for 
the damages that occurred because they were denied a particular type of 
care.
  Well, that is not right. People should be free, in my opinion, to be 
able to go to court and sue the HMO, sue the managed care organization, 
if they have been denied care and they suffered damages. And that is 
what we also say in the Democratic bill, that they will have that 
right.
  Again, we are not talking about anything that anyone should be 
surprised about. It only makes sense that if someone injures them that 
they should be able to go to court and recover for their injuries.
  And finally, there are a number of patient protections, but I wanted 
to talk about one more that I consider particularly important, and that 
is an end to financial incentives for doctors and nurses to limit the 
care that they can provide.
  What we find now is that many insurance companies, many HMOs, many 
managed care organizations basically, give a financial incentive to the 
doctor

[[Page H7475]]

if they limit the care that is provided, so that, in a sense, they have 
an incentive because they are getting paid more, for example, if they 
do not do as much and if they can show over a period of time that they 
have not prescribed or recommended certain procedures that may be 
costly.

                              {time}  1845

  Well, again, that is just the opposite of the type of incentive that 
we should have. People should feel free, if their doctor thinks that 
they need care, that the doctor will recommend that the care be 
provided and not have a financial incentive not to provide it. Again, 
our Democratic bill makes it clear that that type of financial 
incentive to limit care is not allowed and is essentially made illegal.
  Now, I wanted to talk about what happened here in the House before 
the break, before the August break. The House, of course, hastily 
considered a Republican managed care bill and the Democrat's Patients' 
Bill of Rights, which I have talked about this evening, was essentially 
defeated by about 5 votes, very narrowly, and I believe that the 
Republican leadership was anxious to get something passed so that the 
Republicans would have something to point to when voters raised the 
issue of managed care reform at town meetings and other opportunities 
back in our districts.
  So what I want to stress tonight is that the Republican alternative 
to this Democratic Patients' Bill of Rights that I talked about this 
evening really is not going to do the trick. It is not going to be 
effective in providing patients with adequate protections.
  I just wanted to spend a little time, if I could, talking about why 
this Republican plan that was passed in the House, and was basically 
passed and the Democratic plan was defeated, why this Republican plan 
will not work effectively to protect patients' rights and to reform 
HMOs and managed care. I do not do this in an effort to suggest that I 
am not open to alternatives that would come from the other side and 
come from the Republican leadership but I am concerned that if the 
Republican bill is the one that ultimately were to pass the Senate and 
go to the President's desk that it really would not do anything to 
improve the situation for health care for those in HMOs and, in fact, 
might make it a lot worse in terms of the kind of protections that 
people have.
  I talked a little bit about access to specialists under the 
Democratic proposal. The Republican bill does not ensure access to 
specialty care. For example, if a child with cancer needed to see a 
pediatric oncologist, there is no requirement that he or she would have 
access to that specialist. If the HMO said, okay, we will provide a 
pediatrician for children but we are not going to provide any 
specialists for children beyond the basic pediatrician, then you would 
not have the ability under the Republican plan to see a pediatric 
specialist or certainly to have the insurance company pay for it.
  Protection of doctor/patient relationship, I talked about how one of 
the most important things that people bring up to me is the need to 
have the decision about what is medically necessary and what care is 
provided, that that decision be made by the doctor and the patient and 
not by the insurance company. Well, under the Republican bill, 
basically the insurance companies decide what is medically necessary. 
The health plan can define medical necessity any way it wants and if 
there is a review of a decision to deny care, then the review only goes 
back to what the plan originally provided in terms of what is medically 
necessary.
  So, for example, if you want a particular type of operation and the 
HMO decides that they are not going to pay for it, well, they decide 
what is medically necessary, and if you go out and try to appeal that, 
the court or the appeal board would have to say, well, that decision 
about what is medically necessary is made by the insurance company. We 
cannot review it.
  So, again, this is a major flaw. If the decision about what is 
medically necessary is decided by the insurance company essentially the 
patient has effectively no protection.
  The other thing that I have not discussed tonight but I want to 
discuss, and I think is very important, is the whole idea of choice of 
doctors. Now, we know that the basic idea with an HMO or a managed care 
plan is that the plan is limited to a network of doctors that sign up 
and that you are allowed to choose from, but what we say in the 
Democratic plan is that we will do initially, when a patient decides 
what kind of health insurance to sign up for, that they must have the 
option of being able to sign up for an HMO that allows point of 
service; that allows them to go outside the plan and see another doctor 
even if it means they have to pay a little more. So that what we are 
saying is that you will have a choice in the beginning when you decide 
what kind of health insurance to buy, you will have a choice, other 
than a closed panel HMO.
  Right now, many employers only provide what we call a closed panel 
HMO. In other words, you can take the HMO and they have their network 
of doctors and if you do not want to see one of those doctors, that is 
it. Those are the only choices you have. What we are saying in the 
Democratic bill is that initially you should be able to decide to have 
the point of service option so that you can go outside the network at 
your own option if you want to pay a little more for a physician that 
is not a part of the network.
  Now, again, contrasting that Democratic proposal with the 
Republicans, what the Republicans put forward, they have a point of 
service option, if you will, but it is so full of loopholes as to make 
it essentially meaningless. There are exemptions for Health-Marts. 
There are exemptions if the employer does not want to contract with the 
plan to do it; exemptions if premiums increase 1 percent. Basically, 
they are saying if the cost of premiums go up or if the employer 
doesn't want to have an option where you can go outside the network, 
then you do not get this point of service option where you can choose 
your doctor. So essentially they have not provided for a point of 
service where you can choose your doctor.
  Again, talking to many of my constituents during the August break, 
this was a very important point, that they wanted to have that option 
if they wanted to go outside of the network and choose a doctor, even 
if it meant that they had to pay a little more.
  The other thing that I wanted to mention is, again, with regard to 
specialists, there are a few things that the Democratic bill does that 
the Republican bill does not do. First of all, we allow women to choose 
their obstetrician or the gynecologist as a primary care doctor. That 
is not allowed under the Republican plan. Again, this is important, 
because if your OBGYN is your primary care doctor then that person can 
make referrals to other specialists. If they are not, then you are 
dependent upon the general practitioner essentially to make those kinds 
of referrals.
  Let me also talk about emergency care again and how the bills differ, 
how the Republican and the Democratic plan differ. In the Democratic 
plan, we specifically say that severe pain is a basis for going to the 
emergency room. Like, for example, if you have severe chest pains and 
the average person would think well, that is a good enough reason to be 
able to go to the emergency room that is closest to me, well, the 
Republican bill does not include that so that essentially, again, it is 
up to the insurance company to decide whether or not there was 
justification for you to go to the emergency room. To me, that is very 
important.

  I do not want to have to second-guess, when I have severe chest 
pains, whether or not it is strong enough for me to have to go to the 
emergency room. I would think that the average person would think if 
they have severe chest pains that they go to the emergency room and 
they get care and it is going to be covered. That is the way it should 
be. Unfortunately, that is not the way it is under the plan that the 
Republican leadership brought forward here a few weeks ago before we 
had the August break.
  Now, I just wanted to talk about a few other things that the 
Republican bill does that I think ultimately cause the situation even 
to be worse in terms of patient protections and health care. The 
Democratic bill is pure in the sense that it seeks to address the issue 
of managed care reform and HMO reform directly without adding a lot of 
other things. When we talk about

[[Page H7476]]

health care in the House of Representatives amongst our colleagues, 
Democratic and Republican, we know that there are a lot of issues that 
need to be addressed. For example, one of the biggest concerns I have 
is the fact that so many people are uninsured and have no insurance. 
The number keeps growing.
  Others want to address the issue of malpractice reform, because they 
think that physicians in many cases are too liable for malpractice and 
that we need to address that issue. Others feel that there needs to be 
ways to expand and experiment with other kinds of health insurance that 
many people do not have right now. Well, all that makes sense and 
certainly are things that we should look into, but what the Republican 
bill has done, and I think it is purposeful, is to throw a lot of these 
things that are unrelated to managed care reform into their 
legislation, which will make it very difficult for the legislation to 
move forward.
  Now, again, we only have about a month here from today until we are 
scheduled to adjourn. It is going to be very difficult in that month to 
get anything passed. So if you overlay legislation dealing with managed 
care reform with all these other concerns, you are pretty much 
guaranteeing that we are not going to address the issue.
  Well, what the Republican leadership has done is they put in their 
legislation medical malpractice reform. They have also said that if 
companies right now that are self-insured and come under the Federal 
law, under the ERISA, if a group of companies want to get together and 
start their own self-insurance pool, that they also will be exempt from 
State laws and come under Federal law and be under ERISA and also, 
therefore, there would not be the ability to sue.
  Well, throwing that in, throwing in, again, an expansion of self-
insurance and bringing it under ERISA is another sort of poison pill 
that takes away from the real issue at hand, which is managed care 
reform.
  So we have the medical malpractice reform, we have the expansion of 
ERISA, and a third thing that we also have is expansion of medical 
savings accounts. Medical savings accounts were started on an 
experimental basis last year when we passed the Balanced Budget Act and 
it is a very controversial way of basically allowing people to take 
money, for example, in the case of Medicare, if you had a medical 
savings account under Medicare, if you decide to have a very high 
deductible and pay out-of-pocket for most of your every day health care 
expenses, then the Federal Government would give you money in a savings 
account from Medicare, from Medicare funds, rather than pay for your 
health insurance for most of the normal daily occurrences that might 
result in your need to have health care. So you basically get an 
account coming from the Federal Treasury for you to save money as 
opposed to getting your health insurance paid for. You have to pay out-
of-pocket from that account.
  Well, it is an idea that some people think needs to be looked into 
and we do have it on an experimental basis, but what the Republicans 
have done in their bill is to allow this to be expanded to cover a lot 
more people in the context of the managed care reform that I have been 
talking about this evening.
  Well, once again, that is a poison pill. That is a controversial 
issue, along with the medical malpractice reform and the expansion of 
ERISA, that needs to be debated, needs to be discussed a lot more by 
the House of Representatives and by the Senate. If we throw that into 
managed care reform, we are basically going to kill managed care reform 
and not allow it to come to the floor and really be passed and 
considered in the month or so that we have left here before we adjourn.
  So what I am asking tonight, and I will be saying it many more times 
over the next month while we are in session, is that we put 
partisanship aside, we put all of these other issues aside that really 
do not relate to managed care reform, and we try to get to the heart of 
the matter. Americans from all walks of life, no matter how poor, no 
matter how rich, no matter how young, no matter how old, that I have 
talked to in my district and even from other parts of the country feel 
that this issue of HMO reform needs to be addressed and needs to be 
addressed now. We need to address it before we adjourn. We should get 
together and pass something, pass the Patients' Bill of Rights with the 
patient protections that I outlined or at least something very similar 
to it.

                              {time}  1900

  I am just hopeful that on this first day when we are back, and, of 
course, there are a lot of other things on our mind here in Congress, 
that we pay attention to this and try to get HMO reform approved before 
we adjourn sometime in October.

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