[Congressional Record Volume 145, Number 72 (Tuesday, May 18, 1999)]
[House]
[Pages H3277-H3282]
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 6, 1999, the gentleman from Iowa (Mr. Ganske) is recognized for 
60 minutes as the designee of the majority leader.
  Mr. GANSKE. Mr. Speaker, here it is, the middle of May, and no 
movement by the House leadership on fixing HMO abuses. Time is passing 
by quickly this year. Yet the chairmen of the committees of 
jurisdiction have done virtually nothing to move this forward.
  Mr. Speaker, I have worked on this problem along with many others in 
this House for over 4 years. We have had debates and debates and 
debates. The issues are laid out. They have been laid out in a debate 
last year. There is no excuse why we should not move managed care 
reform to the floor soon. There is a real reason for this. There are 
people that are being injured by HMO abuses today.
  Let me give my colleagues a couple of examples of people who have had 
problems with their HMOs. A few years ago, a young woman was hiking in 
the Shenandoah mountains just a little ways west of Washington, D.C. 
She fell off a 40 foot cliff. She was lucky she did not fall into the 
rocky pond where she might have drowned. But she fractured her skull, 
she broke her arm, and she broke her pelvis. She is laying there at the 
bottom of this 40 foot cliff semicomatose. Fortunately a hiking 
companion had a cellular phone and they airlifted her into the 
emergency room. She was treated in the hospital, in the intensive care 
unit for quite a while, was in the hospital I think for over a month. 
When she was discharged, she found that her HMO was not going to pay 
her bill.
  Why, Mr. Speaker? The HMO said this young woman, Jackie Lee is her 
name, did not phone ahead for prior authorization.

[[Page H3278]]

  Now, think about that. Was she supposed to know that she was going to 
fall off that 40 foot cliff? Or maybe when she was laying there, 
semicomatose at the bottom of the cliff with a broken skull, a broken 
arm, a broken pelvis, she was supposed to rouse herself, maybe with her 
nonbroken arm pull out of her pocket a cellular phone and dial a 1-800 
number to her HMO and say, ``Hey, you know, I just fell off a 40 foot 
cliff. I need to go to the hospital.''

                              {time}  2130

  Mr. Speaker, fortunately she was able to get some help from her State 
insurance commissioner, and she was able to get that HMO's decision 
reversed, but as my colleagues know, Mr. Speaker, a lot of people would 
not have that basic protection because most of the people in this 
country receive their insurance through their employer, and when they 
get their insurance through their employers, their State insurance 
commissioner does not have any jurisdiction because of a past Federal 
law.
  Now, if my colleagues think the case of Jackie Lee was bad, let me 
tell my colleagues about another case. This was about a little 6-month-
old boy named James Adams.
  A couple years ago, about 3:00 in the morning, James' mother, Lamona, 
was taking care of him. He was pretty sick. He had a temperature of 
over 104. He was crying, he was moaning. As a mother can tell, her 
little baby was really sick. So Lamona phones that 1-800 number for her 
HMO. She explains: ``My little baby is sick and needs to go to the 
emergency room soon.''
  She gets an authorization from this bureaucrat, but the authorizer 
says, ``I'm only going to allow you to take little Jimmy to the 
Shriner's Hospital.''
  Lamona says, ``Well, where is that?''
  This disembodied voice a thousand miles away says, ``Well, I don't 
know. Find a map.''
  Well, Lamona, the Adams family, lived way to the east of Atlanta, 
Georgia. The hospital that they were authorized to go to was on the 
other side of Atlanta, 70-some miles away.
  It is a stormy night, so Mr. And Mrs. Adams wrap up little Jimmy, get 
in the car and start their trek. About halfway there, as they are going 
through Atlanta, Georgia, they pass Baptist Hospital, Piedmont, Emory 
Hospital, all with world-renowned medical facilities and emergency 
rooms that could have taken care of little Jimmy Adams. But they do not 
have an authorization from their insurance company, from their HMO, and 
they know that if they stop, then they are going to be stuck with the 
bill which could be thousands of dollars.
  So, not being medical professionals, they think, ``Well, we can push 
on.'' About 23 miles from the Shriner's Hospital little Jimmy has a 
cardiac arrest in the car. Picture his dad driving along frantically 
trying to find the hospital, picture his mother trying to save her 
little baby's life.
  Turns out that little Jimmy is a pretty tough guy. They manage to 
eventually get him to the hospital alive. But because of that delay in 
treatment, that cardiac arrest, little Jimmy ends up with gangrene of 
both hands and both feet, and both hands and both feet have to be 
amputated, all because of the delay caused by that medical decision 
that that HMO made.
  I talked to Jimmy's mother about a month ago, asked her about how 
little Jimmy was coming along now. As my colleagues know, despite 
wonderful prostheses that we have now, it is safe to say that Jimmy is 
not going to be an athlete, and I know that when he grows up and gets 
married he is not going to be able to caress the check of the woman 
that he loves with his hand because he has bilateral hook prostheses. 
He is able to pull on his leg prostheses now with his arms' stumps, but 
he cannot get on both bilateral arm prostheses without a lot of help 
from his parents.
  Jimmy will live the rest of his life without his hands and his feet, 
and do you know that in a similar situation, if you receive your 
insurance through your employer and your HMO has made that type of 
medical decision that has resulted in the loss of the hands and feet of 
your little baby, that that HMO by prior Federal law is liable for 
nothing? Hard to believe?
  That is all the result of a law that Congress passed 20-some years 
ago that gives total immunity for liability to an HMO that makes that 
type of devastating medical decision that has resulted in loss of hands 
and feet or maybe even loss of life. The only thing under Federal law 
that that plan is responsible for is the cost of the treatment that 
would be rendered, and after all, Jimmy made it to the hospital, so he 
got his treatment.
  Turns out a Federal judge looked at the margin of safety for that 
HMO, and I will never forget the quote. The judge said the margin of 
safety for that HMO in this instance was razor thin, quote, unquote; I 
would say, Mr. Speaker, about as razor thin as the scalpel that had to 
cut off little Jimmy's hands and feet.
  Mr. Speaker, I am far from alone in holding that view that we need 
real HMO reform. Last week, for example, Paul Elwood gave a speech at 
Harvard University on health care quality, HMO quality. Now, Mr. 
Speaker, Paul Elwood is not exactly a household name, but he is 
considered the father of the HMO movement.
  Elwood told a surprised group of people that he did not think health 
care quality would improve without government imposed protections. 
Market forces, he told the group, quote, ``will never work to improve 
quality, nor will voluntary efforts by doctors and health plans.'' Nor 
will voluntary efforts by doctors and health plans.
  Elwood went on to say, and I quote: ``It doesn't make any difference 
how powerful you are or how much you know, patients get atrocious 
care.''
  Remember, this is the father of the HMO movement. He is saying 
patients get atrocious care and can do very little about it.
  He goes on: ``I have increasingly felt that we've got to shift the 
power to the patient. I am mad,'' he said, ``in part because I've 
learned that terrible care can happen to anyone.''
  Mr. Speaker, maybe Paul Elwood was thinking about Jackie Lee. Maybe 
he was thinking about little Jimmy Adams.
  Mr. Speaker, this is not the commentary of a mother whose child was 
injured by her HMO's refusal to give appropriate care. It is not the 
statement of a doctor who could not get requested treatment for a 
patient. Mr. Speaker, these words suggesting that consumers need real 
protections from HMO abuses come from the father of managed care.
  Now I am tempted to stop here and just let his words speak for 
themselves, but I think it is important to share with my colleagues an 
understanding of the flaws in the health system that led Paul Elwood to 
reach his conclusion.
  Cases involving patients who lose their limbs or even their life are 
not isolated examples. They are not just mere, quote, anecdotes, 
unquote. I mean those anecdotes, if they have a finger, and you prick 
it, they bleed.
  Mr. Speaker, on May 4 USA Today ran an excellent editorial on this 
very subject. It was entitled: ``Patients Face Big Bills as Insurers 
Deny Emergency Claims.'' After citing a similar case involving a 
Seattle woman, USA Today made some telling observations. Quote: 
``Patients facing emergencies might feel they have to choose between 
putting their health at risk and paying a huge bill they may not be 
able to afford.''
  That was exactly the situation that Mr. and Mrs. Adams were in as 
they were driving along the highway with a really sick infant. They 
were not trained medical professionals. They knew if they stopped, 
though, at that unauthorized emergency room, they were going to be 
stuck with the bill.

  The editorial goes on to say, quote: ``All patients are put at risk 
if hospitals facing uncertainty about payment are forced to cut back on 
medical care,'' and this is hardly an isolated problem. The Medicare 
Rights Center in New York reported that 10 percent of complaints for 
Medicare HMOs related to denials for emergency room bills.
  The editorial noted that about half the States have enacted a prudent 
lay person definition for emergency care in the last 10 years, and 
Congress has passed such protection in Medicare and in Medicaid, but 
nevertheless the USA Today editorial concludes that the current 
patchwork of laws would be much strengthened by passage of a national 
prudent lay person standard that applies to all Americans. And that is 
why

[[Page H3279]]

in my bill, the HMO Reform Act of 1999, and the bill of the gentleman 
from Michigan (Mr. Dingell), the Patient Bill of Rights, we have a 
provision in there that would have prevented the type of occurrence 
that we had with little Jimmy Adams, because it says if the average lay 
person would think that this is truly an emergency, you can take that 
patient or you can go yourself directly to the emergency room and the 
HMO has to pay the bill.
  The final sentence of that editorial from USA Today reads, quote: 
``Patients in distress should not have to worry about getting socked 
with big health bills by firms looking only at their bottom line.''
  Mr. Speaker, I ask that the full text of this editorial be included 
in the Record at this point:

                     [From USA Today, May 4, 1999]

       Patients Face Big Bills as Insurers Deny Emergency Claims

       Early last year, a Seattle woman began suffering chest 
     pains and numbness while driving. The pain was so severe that 
     she pulled into a fire station seeking help, only to be 
     whisked to the nearest hospital, where she was promptly 
     admitted.
       To most that would seem a prudent course of action. Not to 
     her health plan. It denied payment because she didn't call 
     the plan first to get ``pre-authorized,'' according to an 
     investigation by the Washington state insurance commissioner.
       The incident is typical of the innumerable bureaucratic 
     hassles patients confront as HMOs and other managed care 
     companies attempt to control costs. But denial of payment for 
     emergency care presents a particularly dangerous double 
     whammy:
       Patients facing emergencies might feel they have to choose 
     between putting their health at risk and paying a huge bill 
     they may not be able to afford.
       All patients are put at risk if hospitals, facing 
     uncertainty about payment, are forced to cut back on medical 
     care.
       Confronted with similar outrages a few years ago, the 
     industry promised to clean up its act voluntarily, and it 
     does by and large pay up for emergency care more readily than 
     it did a few years ago. In Pennsylvania, for instance, 
     denials dropped to 18.6% last year from 22% in 1996.
       That's progress, but not nearly enough. Several state 
     insurance commissioners have been hit with complaints about 
     health plans trying to weasel out of paying for emergency 
     room visits that most people would agree are reasonable--even 
     states that mandate such payments. Examples:
       Washington's insurance commissioner sampled claims in early 
     1998 and concluded in an April report that four top insurers 
     blatantly violated its law requiring plans to pay for ER 
     care. Two-thirds of the denials by the biggest carrier in the 
     state--Regence BlueShield--were illegal, the state charged, 
     as were the majority of three other plans' denials. The plans 
     say those figures are grossly inflated.
       The Maryland Insurance Administration is looking into 
     complaints that large portions of denials in that state are 
     illegal. In a case reported to the state, an insurance 
     company denied payment for a 67-year-old woman complaining of 
     chest pain and breathing problems because it was ``not an 
     emergency.''
       Florida recently began an extensive audit of the state's 35 
     HMOs after getting thousands of complaints, almost all 
     involving denials or delays in paying claims, including those 
     for emergency treatments.
       A report from the New York-based Medicare Rights Center 
     released last fall found that almost 10% of those who called 
     the center's hotline complained of HMO denials for emergency 
     room bills.
       ER doctors in California complain that Medicaid-sponsored 
     health plans routinely fail to pay for ER care, despite state 
     and federal requirements to do so. Other states have received 
     similar reports, and the California state Senate is 
     considering a measure to toughen rules against this practice.
       The industry has good reason to keep a close eye on 
     emergency room use. Too many patients use the ER for basic 
     health care when a much cheaper doctor's visit would suffice.
       But what's needed to address that is better patient 
     education about when ER visits are justified and better 
     access to primary care for those who've long and had no 
     choice other than the ER, not egregious denials for people 
     with a good reason to seek emergency care.
       Since the early 1990s, more than two dozen states have 
     tried to staunch that practice with ``prudent layperson'' 
     rules. The idea is that if a person has reason to think his 
     condition requires immediate medical attention, health plans 
     in the state are required to pay for the emergency care. 
     Those same rules now apply for health plans contracting with 
     Medicare and Medicaid.
       A national prudent layperson law covering all health plans 
     would help fill in the gaps left by this patchwork of state 
     and federal rules.
       At the very least, however, the industry should live up to 
     its own advertised standards on payments for emergency care. 
     Patients in distress should not have to worry about getting 
     socked with big health bills by firms looking only at their 
     own bottom line.

  Mr. Speaker, there are few people in this country who have not 
personally had a difficult time getting health care from an HMO. 
Whether we are talking about cases like little Jimmy Adams or Jackie 
Lee or we are talking about people that we work with or even members of 
our family, the HMO industry has earned a reputation with the public 
that is so bad that only tobacco companies are held in lower esteem.
  Let me give my colleagues a few statistics. By more than 2 to 1 
Americans support more government regulation of HMOs. Last month the 
Harris poll revealed that only 34 percent of Americans think managed 
care companies do a good job of serving their customers. That is down 
significantly from 45 percent of a year ago, but 45 percent is 
certainly no statistic that I would be proud of if I were the HMO 
industry.
  Even more amazing were the results when Americans were asked whether 
they trusted a company to do the right thing if they had a serious 
safety problem. Mr. Speaker, this is an amazing statistic. When 
Americans were asked whether they trusted HMOs to do the right thing if 
they had a serious problem, by 2 to 1 Americans would not trust HMOs in 
such a situation, and that level of confidence is far behind other 
industries such as hospitals, airlines, banks, even the automobile 
manufacturers.
  In fact, about the only industry that fared worse than HMOs was the 
tobacco industry, and anyone who still needs proof about what the 
public thinks about it just needs to go to that movie ``As Good As It 
Gets.'' Audiences clapped and cheered, when I went and saw that movie 
with my wife, when Academy Award winner Helen Hunt expressed a strong 
expletive about the lack of care her asthmatic son was getting from 
their HMOs. And no doubt the audience's reaction was fueled by dozens 
of articles and stories very critical of managed care, bolstered by 
real-life experiences.
  In September 1997 the Des Moines Register ran an op-ed piece 
entitled, quote, The Chilly Bedside Manner of HMOs, unquote, by Robert 
Reno, a Newsweek writer.
  The New York Post, and I see my colleague from New York (Mrs. 
McCarthy) sitting here waiting, she knows the New York Post ran a 
series, a week-long series of articles on managed care, and some of the 
headlines were: ``HMO's Cruel Rules Leave Her Dying for the Doc She 
Needs.''
  Another headline blared out: ``Ex New Yorker Is Told: Get Castrated 
So We Can Save Dollars.''
  Or how about this one: ``What His Parents Didn't Know About HMOs May 
Have Killed This Baby.''
  Or how about the 29-year-old cancer patient whose HMO would not pay 
for his treatments? Instead, the HMO bureaucrat reviewer told him to 
hold a fund-raiser. A fund-raiser? Mr. Speaker, I thought we were 
talking about patient protection legislation, not campaign finance 
reform.

                              {time}  2145

  To counteract this, some health plans have even taken to bashing 
their own colleagues. Here in Washington one ad declared, ``we do not 
put unreasonable restrictions on our doctors. We do not tell them that 
they cannot send you to a specialist.''
  In Chicago, Blue Cross ads proclaimed, ``we want to be your health 
plan, not your doctor.'' In Baltimore, an ad for Preferred Health 
Network assured customers, ``at your average health plan cost controls 
are regulated by administrators but at PHN doctors are responsible for 
controlling costs.''
  Mr. Speaker, advertisements like these demonstrate that even the HMOs 
know that there are more than a few rotten apples in the barrel. In 
trying to stave off Federal legislation to improve health care quality, 
many HMOs have insisted that the free market will help cure whatever 
ails managed care.
  Mr. Speaker, I am a firm believer in benefits to a free market, but 
the health care market is anything but a free market. Free markets are 
not dominated by third parties paying first dollar coverage. Free 
markets do not reward customers for giving less service. Is there any 
other industry in this country that gets paid for doing less? And free 
markets do not feature limited competition, either geographically or 
because an employer says here is

[[Page H3280]]

your health plan, take it or leave it. Some choice a consumer has in 
that situation, and that is about the way it is for about 50 percent of 
the people in this country who get their insurance through their 
employers.
  The Washington Business Group on Health recently released its fourth 
annual survey report on purchasing value in health care. Here are a few 
examples of how the market is working to improve quality care. Fifty-
one percent of employers believe cost pressures are hurting quality. 
This is not employees. These are the employers. In evaluating and 
selecting health plans, 89 percent of employers considered cost. Less 
than half consider accreditation status and only 39 percent consider 
consumer satisfaction reports. Employees are given limited information 
about their plans. Only 23 percent of companies tell employees about 
appeals and grievance processes. In the last 3 years, the percentage of 
businesses giving employees consumer satisfaction results has dropped 
from 37 percent to 15 percent. So much for the quality aspect. Over 
half of employers offer employees an incentive to select plans with 
lower costs, but just 15 percent of plans offer financial inducements 
to their employees to purchase a higher quality plan.
  Mr. Speaker, a recent Court of Appeals decision in the case Jones v. 
Kodak explains just how dangerous the ``free market'' is to patients. 
Mrs. Jones received health care through her employer Kodak. The plan 
denied her request for inpatient substance abuse treatment, finding she 
did not meet their protocols. The family took the case to an external 
reviewer, who agreed that Mrs. Jones did not meet the criteria for the 
benefits of the plan, but the reviewer observed, ``the criteria are too 
rigid and they do not allow for individualization of case management.'' 
In other words, the criteria were not appropriate.
  In denying Mrs. Jones' claims, the Tenth Circuit Court of Appeals 
held that the Employee Retirement Income Security Act, ERISA, does not 
require plans to state the criteria used to determine when a service is 
medically necessary. On top of that, the Court ruled that unpublished 
criteria are a matter of plan design and structure, rather than 
implementation. Therefore, they are not reviewable by the judiciary.
  Mr. Speaker, think about this for a minute. The implications of this 
decision, I think, are breathtaking. Jones v. Kodak provides a road map 
to health plans to deny any type of care they want. Under Jones v. 
Kodak, health plans do not need to disclose to potential or even to 
current enrollees the specific criteria they use to determine whether a 
patient will get treatment. There is no requirement that a health plan 
use guidelines that are applicable or appropriate to a particular 
patient's case.
  Most important to the plans, the decision ensures HMOs that if they 
are following their own criteria then they are shielded from court 
review.
  Mr. Speaker, this is why I so vigorously opposed the bill that passed 
this House last year because there was a provision in that bill that 
basically said the health plan can determine any definition of medical 
necessity that it wants. Because of this law that Congress passed 25 
years ago, ERISA, the Employee Retirement Income Security Act, the 
courts are holding that they can do that, they can totally disregard 
generally accepted prevailing standards of medical care. They can have 
their own secret protocols.
  As a reconstructive surgeon I have taken care of a lot of children 
with cleft lips and palates. In their own internal plan they can say, 
well, yes, we will cover cleft lip surgery but we are not going to 
allow it until the kid is 16 years old.
  There would be nothing under current law that could prevent them from 
doing that. It is totally contrary to generally accepted principles of 
medical care. If you were the parents, think about this. Here your baby 
is born with a great big hole in the middle of his face, his lip is 
separated that far, he has a hole in the roof of his mouth, he can't 
speak, but according to these court cases on the interpretation of 
ERISA those health plans can do anything they want to and they do not 
even need to share the information with the beneficiaries.
  Mr. Speaker, I have introduced legislation, H.R. 719, the Managed 
Care Reform Act, and it addresses these problems. It gives patients 
meaningful protections. It creates a strong and independent review 
process. It removes the shield of ERISA which health plans have used to 
prevent State court negligence actions.
  It has received a lot of support, Mr. Speaker. It has been endorsed 
by consumer groups like the Center for Patient Advocacy, the American 
Cancer Society, the National Association of Children's Hospitals, the 
National Multiple Sclerosis Society. It has also been supported by many 
health care provider groups such as the American Academy of Family 
Physicians whose members are on the frontlines. They are the 
gatekeepers. They have seen how faceless HMO bureaucrats thousands of 
miles away, bureaucrats who have never examined a patient, denied 
needed medical care because it does not fit their plan ``criteria.''
  I want to focus on one small aspect of my bill as it relates to 
liability. It has been a firm principle of this Republican Congress 
that people should be responsible for their actions. In the individual 
insurance market, if Blue Cross Blue Shield sells a plan to an 
individual and Blue Cross Blue Shield makes a medical decision that 
results in negligence, then they are liable. That is current law. That 
is the way it is in the States.
  According to this law that Congress passed 25 years ago, if that plan 
is a self-insured plan they skate free. They do not have that 
responsibility. That is wrong. Congress created that loophole and 
Congress needs to fix it.
  On the other hand, I do not want to see these cases simply end up ex 
post facto in the courts. It does not do Jimmy Adams any good. He 
cannot get his hands and his feet back after the fact.

  So what do we need? We need to have an internal and an external 
appeals process so that those disputes are resolved before someone ends 
up with the injury.
  I believe there is a reasonable compromise that should be supported 
on this issue, and it works like this and it is in my bill: If there is 
a dispute on a denial of coverage between the patient and his health 
plan, then go through an internal appeals process. If there is still a 
dispute, then either the patient or the health plan can take that 
dispute to an independent peer panel for a binding decision on the 
health plan.
  There is another difference from last year's GOP bill. One could go 
to that independent review panel but it was not binding on the plan, 
their decision. So in the end the HMO could end up doing what they 
want. That should be changed. It should be binding on the plan and 
there should not be a conflict, any conflict of interest, between that 
independent review panel. So the benefit to the patient of that is that 
they get to have a second opinion that is free of any taint of conflict 
of interest on the part of either the doctor or the health plan.
  The benefit to the plan is this, and when I talked about this with 
the CEO of my own Blue Cross Blue Shield plan in Iowa, he said, Greg, 
we are implementing the patient bill of rights. It is costing us almost 
nothing. We will see no premium increases from that. On that issue of 
liability, if there is a dispute on a denial of care, I could see going 
to an independent panel for an external review and I could see that 
panel determining medical necessity, and I could see it being binding 
on us, but if an independent panel has made that decision and it is 
binding on us, and we did not make that decision, i.e., the health plan 
did not make the decision, then we should be free of punitive damages 
liability. That is what I put into the bill.
  So there is a carrot to the patient to get that second opinion but 
there is also on a dispute an incentive for the health plan to take it 
to that independent panel.
  Let us say that a patient asks for apricot juice in order to treat 
cancer and the health plan very appropriately says, no scientific 
evidence for that, but that patient is still unhappy. The plan knows 
that they have an unhappy camper. In this situation, if my bill were 
law, the health plan could take that to the independent panel. They 
would know that they are going to get confirmation to support their 
decision, but in so doing they would also protect

[[Page H3281]]

themselves from any punitive damages liability. If they do not follow 
that independent panel's decision, then they are liable for punitive 
damages. I think that is the essence of the compromise that we should 
have on this bill.
  In fact, this was recently written about in the Hartford Courant by 
an editorialist named John MacDonald, and I would insert his editorial 
in the Congressional Record at this point:

                      [From the Hartford Courant]

                A Common-Sense Compromise On Health Care

                          (By John MacDonald)

       U.S. Rep. Greg Ganske is a common-sense lawmaker who 
     believes patients should have more rights in dealing with 
     their health plans. He has credibility because he is a doctor 
     who has seen the runaround patients sometimes experience when 
     they need care. And he's an Iowa Republican, not someone 
     likely to throw in with Congress' liberal left wing.
       For all those reasons, Ganske deserves to be heard when he 
     says he has found a way to give patients more rights without 
     exposing health plans to a flood of lawsuits that would drive 
     up costs.
       Ganske's proposal is included in a patients' bill of rights 
     he has introduced in the House. Like several other bills 
     awaiting action on Capitol Hill, Ganske's legislation would 
     set up a review panel outside each health plan where patients 
     could appeal if they were denied care. Patients could also 
     take their appeals to court if they did not agree with the 
     review panel.
       But Ganske added a key provision designed to appeal to 
     those concerned about an explosion of lawsuits. If a health 
     plan followed the review panel's recommendation, it would be 
     immune from punitive damage awards in disputes over a denial 
     of care. The health plan also could appeal to the review 
     panel if it thought a doctor was insisting on an untested or 
     exotic treatment. Again, health plans that followed the 
     review panel's decision would be shielded from punitive 
     damage awards.
       This seems like a reasonable compromise. Patients would 
     have the protection of an independent third-party review and 
     would maintain their right to go to court if that became 
     necessary. Health plans that followed well-established 
     standards of care--and they all insist they do--would be 
     protected from cases such as the one that recently resulted 
     in a $120.5 million verdict against an Aetna plan in 
     California. Ganske, incidentally, calls that award, 
     ``outrageous.''
       What is also outrageous is the reaction of the Health 
     Benefits Coalition, a group of business organizations and 
     health insurers that is lobbying against patients' rights in 
     Congress. No sooner had Ganske put out his thoughtful 
     proposal than the coalition issued a press release with the 
     headline: Ganske Managed Care Reform Act--A Kennedy-Dingell 
     Clone?
       The headline referred to Sen. Edward M. Kennedy, D-Mass., 
     and Rep. John D. Dingell, D-Mich., authors of a much tougher 
     patients' rights proposal that contains no punitive damage 
     protection for health plans.
       The press release said: ``Ganske describes his new bill as 
     an affordable, common sense approach to health care. In fact, 
     it is neither. It increases health care costs at a time when 
     families and businesses are facing the biggest hike in health 
     care costs in seven years.''
       There is no support in the press release for the claim of 
     higher costs. What's more, the charge is undercut by a press 
     release from the Business Roundtable, a key coalition member, 
     that reveals that the Congressional Budget Office has not 
     estimated the cost of Ganske's proposal. The budget office is 
     the independent reviewer in disputes over the impact of 
     legislative proposals.
       So what's going on? Take a look at the coalition's record. 
     Earlier this year, it is said it was disappointed when Rep. 
     Michael Bilirakis, R-Fla., introduced a modest patients' 
     rights proposal. It said Sen. John H. Chafee, R-R.I., and 
     several co-sponsors had introduced a ``far left'' proposal 
     that contains many extreme measures. John Chafee, leftist? 
     And, of course, it thinks the Kennedy-Dingell bill would be 
     the end of health care as we know it.
       The coalition is right to be concerned about costs. But the 
     persistent No-No-No chorus coming from the group indicates it 
     wants to pretend there is no problem when doctor-legislators 
     and others know better.
       This week, Ganske received an endorsement for his bill from 
     the 88,000 member American Academy of Family Physicians. 
     ``These are the doctors who have the most contact with 
     managed care,'' Ganske said. ``They know intimately what 
     needs to be done and what should not be done in 
     legislation.''
       Coalition members ought to take a second look. Ganske's 
     proposal may be the best deal they see in a long time.

  I want to address a couple of issues before finishing. The first is 
the opponents to this legislation say this is going to be too costly, 
this legislation would cause premiums to just go up, skyrocket and then 
people would lose their insurance. That is not true.
  Mr. Speaker, my bill will come in at a CBO estimate less than last 
year's patient bill of rights because I have removed some of the 
bureaucratic reporting requirements and also because of the punitive 
damages provision that I have in.
  Even last year's patient bill of rights was scored by the 
Congressional Budget Office, as an estimate, for an increase of 
premiums of 4 percent over 10 years. That is significantly different 
from the advertising campaign that we are seeing around the country now 
where the HMO industry is saying 4 percent per year. Wrong.
  Furthermore, Texas passed a bill, a strong patient bill of rights, 
that included a stronger liability law than in my bill.
  The Scott and White Health Plan asked their actuaries how much should 
we increase our premiums because of that liability provision? The 
answer, 34 cents per member per month.
  I would estimate that my bill will come in at a cost increase of 
somewhere around $3 per month for a family of four. That is about $36 a 
year for a family of four.
  A survey by the National Federation of Independent Business, members 
of small businesses, employers, found that more than 95 percent of 
those employers would continue to cover their employees with health 
insurance even if the premiums increased by double that amount. We are 
talking about a small cost in order for people to be secure in knowing 
that the large amount of money that they are spending on their health 
care premiums, when they get sick, will actually mean something.
  Mr. Speaker, we have talked about liability. We have talked about 
cost. Finally I want to say one thing about what my bill does not do. 
Recently I had a large employer from the upper Midwest come into my 
office and say we have businesses in every State. If your bill passes, 
then we would not be able to design a uniform medical benefits package 
for all of our companies' employees.
  I was flabbergasted, Mr. Speaker. That is not what my bill does. 
ERISA will continue. I only change ERISA in terms of when a health plan 
makes a medical decision, in terms of their liability, but there is 
nothing in my bill that would say a multistate business would have to 
follow the State mandates of every State that it was in.

                              {time}  2200

  They could continue, let me repeat, they could continue to design a 
uniform benefits package, and they would continue to be exempted from 
individual State benefit mandates.
  Now, there are some who are looking at this legislation now and they 
want to add some untested and untried, and, in my opinion, some 
dangerous ideas to this legislation to try to kill the legislation. 
Some of these ideas are things like health marts. Health marts are sort 
of geographic association health plans. They are very similar to what 
Hillary proposed, Mrs. Clinton proposed in 1993, called HIPCS, Health 
Insurance Purchasing Coops. That was not an idea that I thought was 
appropriate at that time, and I do not think it is appropriate now, and 
I will tell my colleagues why.
  Let me read from a letter to Congress from June 1997 by the American 
Academy of Actuaries. ``While the intent of the bill,'' and they are 
referring to the Republican bill, ``is to promote association health 
plans or health marts as a mechanism for improving small employers' 
access to affordable health care, it may succeed in doing so for 
employees with certain favorable risk characteristics. Furthermore, 
this bill contains features which may actually lead to higher insurance 
costs.''
  The Academy went on to explain how those plans could undermine State 
insurance reforms. Quote: ``The resulting segmentation'' that would 
result from ideas such as an association health plan or a health mart, 
``The resulting segmentation of the small employer group into higher 
and lower cost groups would be exactly the type of segmentation that 
many State reforms have been designed to avoid. In this way, exempting 
them from State mandates would defeat the public policy purposes 
intended by State legislatures.''
  Those concerns have been echoed by the National Governors 
Association, the National Conference on State Legislatures, the 
National Association of

[[Page H3282]]

Insurance Commissioners. They argue that AHPs, and I might add health 
marts, quote, ``substitute critical State oversight with inadequate 
Federal standards to protect consumers and to prevent health plan fraud 
and abuse,'' unquote.
  Mr. Speaker, on behalf of patients like Jimmy Adams who lost his 
hands and feet because an HMO would not let his parents take him to the 
nearest emergency room, I am going to continue to fight efforts to 
derail managed care reform by adding those sorts of untested and 
potentially harmful provisions to a clean managed care reform bill. I 
pledge to do whatever it takes to ensure that opponents of reform are 
not allowed to mingle those issues.
  Do I think that we could do something on the tax side to help improve 
access to care? You betcha. We could make available tomorrow 100 
percent deductibility for individuals to purchase their own health 
insurance, and we should. But, Mr. Speaker, adding these other issues 
into this mix, in my opinion, is a poison pill.
  Now, recently I and the gentleman from Oklahoma, (Mr. Coburn) and the 
gentleman from Georgia (Mr. Norwood) have given to the chairman of my 
committee a draft, a consensus draft on patient protection legislation, 
and the American Medical Association has written me a letter that 
contains high praise for that draft. Mr. Speaker, I submit at this time 
full text of that letter:

                                 American Medical Association,

                                        Chicago, IL, May 12, 1999.
     Hon. Greg Ganske,
     U.S. House of Representatives,
     Washington, DC.
       Dear Representative Ganske: On behalf of the 300,000 
     physician and student members of the American Medical 
     Association (AMA), I would like to thank you for your efforts 
     in drafting a compromise patient protection package for the 
     Commerce Committee. The draft proposal, developed by 
     Representatives Tom Coburn, MD (OK) and Charles Norwood, DDS 
     (GA), and you, is a significant milestone in the advancement 
     of real patient protections through the Congress. We look 
     forward to working with you to perfect the draft bill through 
     the committee process and to pass a comprehensive, bipartisan 
     patient protection bill this year.
       It is imperative that a patient protection bill be reported 
     out of committee and be considered on the floor prior to the 
     July 4th recess. The AMA stands ready to help further advance 
     these important patient protections through the committee 
     process, the House floor and final passage.
       The AMA applauds the inclusion of ``medical necessity'' 
     language that is fair to patients, plans and physicians 
     alike. We are particularly pleased with the non-binding list 
     of medical necessity considerations that you have 
     incorporated into the draft bill.
       The AMA is pleased with the incorporation of the ``state 
     flexibility'' provisions that allow patient protections 
     passed by various states to remain in force. Allowing 
     preexisting patient protection laws to remain in force is 
     critical to the success of federal patient protection 
     legislation such as the draft bill.
       The draft bill also offers patients a real choice by 
     incorporating a ``point of service'' option provision. The 
     AMA supports this important patient protection because it 
     puts the full power of the free market to work to protect 
     consumers.
       We applaud your inclusion of a comprehensive disclosure 
     provision that allows consumers to make educated decisions as 
     they comparison shop for health care coverage. The AMA also 
     notes with great appreciation the many improvements that the 
     draft bill makes over last year's Patient Protection Act.
       The draft bill expands consumer protections with a 
     perfected ``emergency services'' provision. By eliminating 
     the cost differential between network and out-of-network 
     emergency rooms, the draft bill offers expanded protection 
     for patients who are at their most vulnerable moments.
       We support the strides the draft bill takes in protecting 
     consumers with a comprehensive ban on gag practices. This is 
     an important consumer protection that the AMA has been 
     seeking for more than six years.
       We commend the improvements incorporated in the ``appeals 
     process'' provisions of the draft bill. The bill represents a 
     major step toward guaranteeing consumers the right to a truly 
     independent, binding and fair review of health care decisions 
     made by their HMO.
       The April 22nd draft copy of the bill makes a strong 
     beginning for the Commerce Committee and the 106th Congress 
     on the issue of patient protection and reaffirms the 
     leadership role that you have assumed in the process. While 
     you have raised some concerns about the process, the AMA 
     stands ready to assist in completion of this legislative 
     task. The AMA wishes to thank you for your efforts and work 
     with you and the minority to pass a comprehensive, bipartisan 
     patient protection bill this year. We look forward to working 
     with you toward this goal.
           Respectfully,
                                   E. Ratcliffe Anderson, Jr., MD.

  Mr. GANSKE. I sincerely hope, Mr. Speaker, that the chairmen of these 
committees of jurisdiction will not substantively change that draft and 
that they will keep it clean. We need to move this issue in a 
reasonable time frame. A strong patient protection bill should be 
debated under a fair rule on the floor soon; not in the fall, but in 
the next few months. There are an awful lot of people, our constituents 
out there, who today are being harmed by managed care decisions.
  Mr. Speaker, we need to fix this now, and I look forward to working 
with all of my colleagues to see that real HMO reform is signed into 
law this Congress.

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