[Congressional Record Volume 145, Number 59 (Wednesday, April 28, 1999)]
[House]
[Pages H2464-H2466]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  2215
                          MANAGED CARE REFORM

  The SPEAKER pro tempore (Mr. Wamp). Under the Speaker's announced 
policy of January 6, 1999, 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 the entire 
hour this evening. I wanted to spend some time, though, talking about 
HMO reform, or managed care reform.
  One of the things that I want to really stress is that there is a 
major difference between the approach that the Democrats have been 
taking on the issue of HMO reform versus the approach of the Republican 
leadership. A lot of times I worry that Americans and our constituents 
think that what we are proposing on both sides of the aisle is 
essentially the same and that everyone is trying to do something to 
protect patients' rights during this managed care reform debate. But I 
just think it is important to stress the differences. I really feel 
very strongly that the Patients' Bill of Rights, the Democratic bill 
that has been put forward and is cosponsored by almost every Member on 
the Democratic side, really protects patients' rights, whereas the 
Republican leadership bills that have been put forward both in this 
Congress and in the previous Congress really do not do an adequate job 
of protecting patients and too often look towards the interests of the 
insurance industry instead.
  Mr. Speaker, in the last session of Congress, in the last 2 years, in 
1997 and 1998, there was some debate on the issue of HMO reform, but 
the issue was essentially left unfinished in the 105th Congress, in the 
last Congress. On the House side, the Democrats' Patients' Bill of 
Rights was defeated by just five votes when it came to the floor. It 
was considered on the floor as a substitute to the Republican 
leadership's managed care bill which did pass and which in my opinion 
was really not a good piece of legislation and did not do anything 
significant to protect patients. In fact, the Republican leadership in 
the House has reintroduced a bill in this session of Congress that is 
virtually identical to what it moved last year. On the Senate side, the 
Senate Republicans in the so-called HELP Committee approved a managed 
care bill which really in my opinion is a sham reform bill and does not 
allow patients to sue the insurance companies but does allow the 
insurance companies and not the doctors and patients to define what is 
medically necessary, what types of procedures, what length of stay, 
what kind of operations would be performed and would be acceptable 
under an individual insurance policy.
  I just wanted to, if I could, take a little time this evening to talk 
about why this Republican bill that passed the Senate, the Republican 
leadership bill in the Senate, really does not do an adequate job of 
trying to protect patients' rights. If you look at the bill that passed 
the Senate or that came out of committee, I should say, in the Senate 
this year, it leaves out more than 100 million Americans, two-thirds of 
those with private health insurance. It fails to grant key protections 
needed by children, women, persons with disabilities and others with 
chronic conditions or special health care needs. And it allows medical 
decisions to continue to be made by insurance company executives 
instead of by health care professionals and patients.
  Mr. Speaker, the main difference that I have tried to point out 
between the Democrats' Patients' Bill of Rights and the Republican 
leadership bills that have been sponsored in the House

[[Page H2465]]

or in the Senate really come down to two points, and, that is, that the 
Republican bills really leave it up to the insurance companies to 
decide what kind of treatment you are going to get, and with regard to 
enforcement they do not have adequate enforcement because if you want 
to appeal a decision about your treatment that you felt that you should 
have a particular operation, you should be able to stay an extra day or 
so in the hospital, if you try that appeal, there is really no process 
whereby you can appeal the decision of the insurance company and be 
successful; and certainly if you suffer damages, you cannot sue for 
those damages under the Republican bill.
  What the Democrats tried to do on the Senate side in committee, in 
the HELP Committee when this Republican HMO bill came up, they tried a 
number of times through amendments to improve the Republican bill. All 
those Democratic amendments were essentially defeated, but I wanted to 
give you a little idea, if I could, about the kinds of things that the 
Democrats were trying to do to improve what was essentially a bad bill 
that did not provide adequate protections for patients in HMOs.
  The committee Republicans in the Senate rejected on a 10-8 party line 
vote an amendment by Senator Ted Kennedy to extend the scope of the 
bill to all privately insured Americans. As I said, the Republican bill 
leaves more than 100 million people unprotected because most of its 
patient protections are narrowly applied to only one type of insurance 
and that is self-funded employer plans. The committee Republicans also 
rejected on the same 10-8 party line vote Senator Kennedy's amendment 
on external appeals. Again, as I mentioned before, the Republican bill 
does not create a truly independent external review of plan decisions. 
So if you feel that you are not getting covered adequately and you try 
to appeal, there really is no effective external appeal. Under the 
committee bill, the Republican bill, the so-called external review is 
controlled by the HMOs and contains loopholes to allow HMOs to delay or 
prevent patients from appealing a bad medical decision by an HMO 
bureaucrat. Many HMO decisions could not even be appealed under the 
Republican bill.
  Just to give you another idea of some of the examples, I talked about 
the issue of medical necessity and how it is defined. The committee 
Republicans in the Senate rejected, again on a party line vote, 10-8, 
an amendment offered by Senator Kennedy to define the term ``medical 
necessity'' and to prohibit HMOs from arbitrarily interfering with 
medical decisions. Again just to give you an example of how this 
operates, this amendment would have prevented insurers from arbitrarily 
interfering with the decisions of the treating physician on issues 
relating to the manner, in other words, the length of stay in the 
hospital, or the setting, inpatient versus outpatient care. It would 
have stopped HMOs from overruling doctors and going against accepted 
and best practices of medicine. The committee Republican-passed bill 
does nothing to protect patients when an insurance company bureaucrat 
tells them they must have a medical procedure on an outpatient basis or 
be discharged from the hospital prematurely. The Republican bill allows 
HMOs to continue to define what is medically necessary, giving them the 
ability to deny promised benefits.
  Another example, the issue of emergency room care. Many of my 
constituents have complained to me that their HMO policy does not allow 
them to go to the emergency room when they think it is necessary. Or 
they have to go to a different hospital that is pretty far away if they 
want to go to an emergency room. They cannot go to the hospital near 
where they live or where they work. Well, Senator Murray tried to put 
in an amendment that again was rejected on a party line vote, 10-8, to 
strengthen coverage for emergency care. Under the Republican bill, it 
is not clear whether a true prudent layperson standard applies to all 
of the plans covered. Prudent layperson says that if the average 
prudent person would think it was necessary to go to the emergency 
room, then you can go to whatever emergency room is close by and 
readily available. Well, many insurance policies, many HMOs do not 
allow that. And so the Democrats are saying, we want to have that 
prudent layperson standard put into the HMO reform bill. Instead, what 
happened is that in this case, again the ability to apply that prudent 
layperson standard was rejected by the committee and what that means is 
that under the Republican bill there still is no guarantee that you can 
go to the closest emergency room or that even if you go to the 
emergency room and later the HMO decides, well, you really should not 
have gone because it was not really an emergency, that they can just 
deny coverage and say, ``You shouldn't have gone to the emergency room; 
therefore, we're not going to pay for the emergency room care.''

  Another example that I think is important is with regard to 
specialists. Many of my constituents complain that their HMO reform 
bill does not provide them with access to specialists that they may 
need in a given circumstance. Senators Harkin and Reed had an amendment 
to this Republican bill that again was rejected along party lines that 
would ensure that patients have access to needed specialists. Under the 
Republican bill, patients could be charged more for out-of-network 
specialty care even if the plan is at fault for not having access to 
appropriate specialists within the plan. So if you decide that you want 
to go to a doctor, I will give you an example, perhaps you want to go 
see a pediatrician but as many people know today, that for children, 
there are pediatric specialists for different areas of pediatrics. 
Under the Republican bill if there is nobody that has that specialty 
and you decide that you want to see that kind of pediatrician for your 
child, then you can go out of the network but you have to pay for it. 
Again what we were saying with this Democratic amendment is that access 
to specialty care should be provided outside the HMO if there is no one 
within the HMO that has that specialty and is part of the network, but 
again that was an amendment that was rejected.
  I will only mention one more effort on the Democrats' part to try to 
improve this bad bill, if you will, and there are many others but I 
will only mention one other one, and that was Senator Kennedy's 
amendment, again rejected on a 10-8 party line vote with regard to 
liability. The Republican bill fails to hold HMOs accountable when 
their actions result in injury or death. I mentioned this before. You 
cannot sue. The Republican plan would protect most HMOs from liability 
even when someone becomes disabled or is killed. Senator Kennedy's 
amendment in the Democrats' Patients' Bill of Rights would allow 123 
million patients who receive coverage through private employers to hold 
their HMOs and health insurance plans accountable under State laws for 
their abuses. This is one of the loopholes, if you will, in the current 
law, and that is that if you are not covered by certain State laws and 
your health insurance comes from your private employer, oftentimes you 
cannot sue. We were trying to correct that as well.
  Mr. Speaker, if I could just say that basically what I am trying to 
point out tonight is that there are major differences here and that 
when we look at what is happening on the issue of HMO or managed care 
reform, it is obviously important that we have an opportunity in this 
session of Congress to get a vote on this issue. One of the criticisms 
that I have of the Republican leadership is that frankly it is now 
April, almost May, and they have not even allowed us to have any kind 
of a vote, there has not been any movement in subcommittee, in the 
Committee on Commerce that I am a member of or in the full committee to 
bring any kind of HMO or managed care reform to the floor. So we need 
to at least start the movement. But when that movement starts and when 
we do have an opportunity to vote on HMO reform, we have to understand 
that there is a major difference between the Patients' Bill of Rights 
which is being brought forth by the Democrats and the Republican 
leadership proposal.
  Now, you do not have to take my word for it. One of the things that I 
think is important is that we look at some of the commentators and what 
they are saying about the differences between the Democrats and the 
Republicans on this issue. But I wanted to read, if I could, all or 
some parts of an editorial that appeared in the New

[[Page H2466]]

York Times on Saturday, April 10, earlier this month, that talked about 
the differences between the Democrats and the Republicans on the issue 
of patient rights:
  ``Just about everyone on Capitol Hill professes interest in producing 
legislation that protects patients from unfair health insurance 
practices. But the prospect of actually passing meaningful protections 
as opposed to talking about it is uncertain. President Clinton tried to 
whip up support for Democratic proposals but the Republicans are 
balking at Democratic plans as too burdensome on the managed care 
industry. Yet it is the Democratic proposals that more fully reflect 
the recommendations of a presidential advisory commission to improve 
health plan quality. The Republican Senate bill, S. 326, sponsored by 
Senator Jeffords of Vermont, is too limited to accomplish that purpose. 
The bill, which was approved by the Senate HELP, or Health, Education, 
Labor and Pensions Committee on a straight party line vote of 10-8, 
contains some consumer protections but it is unacceptable because most 
of the provisions would apply only to 48 million individuals covered by 
plans in which large employers act as their own insurers, leaving 110 
million Americans in other plans unprotected. The Republican bill would 
grant appeal rights to an additional 75 million privately insured 
individuals but those rights would be quite restrictive. Appeals to an 
external reviewer would be allowed only when an insurer refused to pay 
for a procedure on the grounds that it was not medically necessary or 
was experimental. Critics say this would give health plans power to 
limit appeals by simply asserting that a denial is not based on medical 
necessity. It would exclude appeals where a plan unilaterally decided 
that the benefit was not covered under the contract, even if medical 
judgments were involved in that contract interpretation. The Republican 
bill does not adequately ensure access to specialty care by allowing a 
patient to see an out-of-network specialist if the plan has an 
insufficient number of specialists available. Both the Senate 
Democratic proposal, which has White House support, and a bipartisan 
bill sponsored by Senators John Chafee, Joseph Lieberman and others 
would be substantially stronger in allowing external review of coverage 
disputes and defining medical necessity and in giving enrollees greater 
rights to take health plans to court. The insurance lobby has already 
embarked on a media blitz to defeat any new regulations as too costly 
but consumer protections under the Democratic plan would increase 
health plan costs by only 2.8 percent, according to Congressional 
Budget Office estimates made last year.

                              {time}  2230

  ``Health plans should be made to deliver what they promise their 
enrollees and held accountable when they fail.''
  Mr. Speaker, I think that New York Times editorial really sums up 
what I am trying to say tonight which is the fact of the matter is that 
if the Patients' Bill of Rights, the Democratic Patients' Bill of 
Rights, would be substantially stronger in almost every aspect of 
managed care reform over the Republican proposal.
  Now I just wanted to briefly mention again the important areas where 
the Patients' Bill of Rights, a Democratic bill of rights, really 
provides for a very good protection for patients.
  Once again and most importantly, the Democratic Patients' Bill of 
Rights allows doctors and patients rather than insurance company 
bureaucrats to make medical decisions using the principles of good 
medicine.
  In addition, it would first guarantee access to needed health care 
specialists. The Democratic bill provides access to emergency room 
services when and where the need arises. The Democratic bill provides 
continuity of care protections to assure patient care if a patient's 
health care provider is dropped. The Democrats' Patients' Bill of 
Rights gives access to a timely, internal and independent external 
appeals process, and the Democratic Patients' Bill of Rights assures 
that doctors and patients can openly discuss treatment options and not 
be gagged because the insurance company says that you cannot talk about 
something that is not covered.
  The Patients' Bill of Rights would also assure that women have direct 
access to OB/GYN, and finally and almost as important really as the 
medical necessity issue is that the Democrats Patients' Bill of Rights 
provides an enforcement mechanism that ensures recourse for patients 
who have been maimed or die as a result of health plan actions.
  Mr. Speaker, I sound very partisan this evening, and I do not mean to 
suggest that there are not Republican Members on the other side of the 
aisle that are supportive of the Patients' Bill of Rights or the types 
of protections that I think that are needed in a comprehensive HMO 
reform bill. I know that there are Members on the other side that would 
like to see these types of protections provided under the law. But the 
bottom line is that the Republican leadership, which is in charge of 
the House, keeps producing legislation or keeps proposing legislation 
both in the House and in the Senate that does not adequately protect 
patients, and I think it is very important that we not only move ahead 
in this session of Congress and quickly on HMO reform, but that we move 
ahead with an HMO reform that adequately protects patients' rights, 
that is comprehensive and addresses what I consider the major issue 
that my constituents and most Americans seem to be concerned about at 
this time.

                          ____________________