[Congressional Record Volume 145, Number 91 (Thursday, June 24, 1999)]
[House]
[Pages H4885-H4888]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              HEALTH CARE

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 1999, the gentleman from Iowa (Mr. Ganske) is recognized for 
the balance of the majority leader's hour.
  Mr. GANSKE. Mr. Speaker, I plan to talk about three things concerning 
health care, the status of managed care reform legislation, the problem 
of the uninsured and access to health care, and briefly, some problems 
with the Medicare Reform Act of 1997.
  Mr. Speaker, another week has gone by without health care reform 
reaching the floor of the House of Representatives. As Yogi Berra would 
say, it is deja vu all over again. Why do I say that? Last year we 
debated an HMO reform bill on this floor that was drafted in the middle 
of the night by the HMO lobbyists and should have been labeled ``the 
HMO Protection Act of 1998.''
  Last week in the Committee on Education and the Workforce components 
of last year's sadly deficient HMO bill were debated again. Members 
would think that since we passed decent HMO legislation for Medicare in 
1997 dealing with HMO gag rules that prevent doctors from telling 
patients all their treatment options, that it would not be too 
difficult to duplicate that for everyone.
  No, on the Committee on Education and Workforce, the subcommittee 
bill's rules of construction suggested that a plan's own guidelines can 
still be enforced, even if they have the effect of preventing full and 
open communication between patients and their health care providers.
  Members would think that the subcommittee bill's provisions on 
emergency care could simply mirror what we passed for Medicare in 1997. 
After all, if it is good enough for seniors, it should be good enough 
for the rest of us, right? Well, not according to the K Street 
lobbyists who wrote this provision, too.
  The subcommittee bill, as passed last week, narrows the prudent 
layperson definition so that patients would only be covered for an 
initial but undefined appropriate screening examination. For all other 
services, including potentially lifesaving treatments, emergency 
physicians would have to certify in writing that the patient needed 
immediate emergency medical care.

                              {time}  1745

  Now, think of that for a moment. In the middle of saving a patient's 
life, an ER doc is supposed to write a letter to an HMO. Just how long 
would it take for the HMO to get that letter? I would not recommend 
holding one's breath.
  This new HMO protection bill would then make the plan cover such care 
only if retrospectively the plan itself agreed to. Furthermore, 
patients in severe pain would not be fully protected under the 
Committee on Education and the Workforce subcommittee bills.
  What about a man or a woman whose only symptom of a heart attack is 
crushing chest pain? This type of patient protection is a joke. This is 
just another example, and on a simple issue at that, of trying to look 
like one is for patient protection when one is really only looking for 
a fig leaf.
  But the bills that passed the subcommittee last week are not just bad 
bills, they would actually make it harder for patients to fight HMO 
abuses under ERISA, the Employee Retirement Income Security Act. For 
instance, one of the Committee on Education and the Workforce bills, 
the Group Health Plan Review Standards Act of 1999, requires that group 
health plan's arbitrary definitions and guidelines be followed 
throughout the review process when determining medical necessity.
  Thus, the bills fail to address what we would call the smart bomb of 
HMOs, and that is their ability under ERISA to justify any decision 
they want in denying care, even if that care is well within prevailing 
standards of medical care.
  Now, Mr. Speaker, I have spoken many times on this floor about how 
important it is for patients to have care that fits prevailing 
standards of medical care. Let me give my colleagues an example. One 
particularly aggressive HMO defines medically necessary as the 
cheapest, least expensive care, quote-unquote. So what is wrong with 
that, my colleagues say?
  Well, take a look at this child. Prior to coming to Congress, I cared 
for children with this defect, cleft lip and palate. The prevailing 
standard of care for this defect, this birth defect is surgery. But 
according to that HMO's definition to give the cheapest, least 
expensive care, he could use his own definition under current Federal 
law to justify using a piece of plastic to fill in the roof of this 
child's mouth. After all, that would be the cheapest, least expensive 
treatment.
  Of course, the child would not speak as well. If the plastic 
obturator fell out, he would get food and his drink coming out of his 
nose. But of what difference is that to the HMO since they are 
providing the cheapest, least expensive care?
  This Committee on Education and the Workforce bill would, not only 
fail to correct that travesty, but it would move in the opposite 
direction by permanently stopping the development of ERISA case law 
that has slowly been forcing plans to account for negligent decisions.
  This bill violates the dictum that all who treat patients learn early 
in their training, ``primum non nocere'', first do not harm. I urge my 
colleagues on the Committee on Education and the Workforce to remember 
that dictum. I urge the Committee on Education and the Workforce 
chairman to work with the gentlewoman from New Jersey (Mrs. Roukema) 
and the gentleman from Georgia (Mr. Norwood) to adopt real patient 
protections.
  Fortunately, enough of my Republican colleagues on the Committee on 
Education and the Workforce have joined their Democratic committee 
members and have forced the chairman to delay the full committee markup 
of those HMO industry bills. Maybe if the Members of that committee 
hear from enough of their concerned consumers back home, they may yet 
come up with some legislation worthy of the name ``patient 
protection.''
  Mr. Speaker, common sense proposals to regulate managed care plans do 
not constitute a rejection of the market model for health care. In 
fact, they are just as likely to have the opposite effect, to preserve 
the market model by saving it from its most destructive tendencies.
  Surveys show that there is a significant public concern about the 
quality of HMO care. If these concerns are not addressed, I think that 
it is likely that the public will ultimately reject the market model. 
However, if we can enact true managed care reform such as that embodied 
in my own Managed

[[Page H4886]]

Care Reform Act of 1999, or the bill of the gentleman from Michigan 
(Mr. Dingell) or the bill of the gentleman from Georgia (Mr. Norwood), 
then consumer rejection of a market model is less likely.
  Mr. Speaker, this is not a novel situation. Congress has stepped in 
to correct abuses in many industries. That is why we have child labor 
laws and food and drug safety laws. That is why Teddy Roosevelt broke 
up the trusts. Those laws, in my opinion, helped preserve a free market 
system. Congress would not be dealing with this issue were it not for 
past law enacted by Congress.
  For a long time, Congress had left insurance regulation to the 
States. By and large, the States have done a pretty good job. But 
Congress passed a law called the Employee Retirement Income Security 
Act, known as ERISA, some 25 years ago to simplify pension management.
  Almost as an afterthought, employer health plans were included in the 
exemption from State law. Unfortunately, nothing was substituted for 
effective oversight in terms of quality, marketing, or other functions 
that State insurance commissioners or legislatures have effectively 
done.
  That lack of oversight, coupled with lack of responsibility for 
medical decisions that they make, has led to many tragedies. Let me 
tell my colleagues about just one example.
  This is little Jimmy Adams tugging on his sister's shirt sleeve 
before his HMO health care. About 3 weeks or so after this picture was 
taken, at 3:30 in the morning, Lamona Adams, Jimmy's mother, found 
Jimmy sweating, panting, moaning. He had a temperature of over 104. So 
she phoned her HMO to ask for permission to go to the emergency room.
  The voice at the other end of the 1-800 number told her to go to 
Scottish Rite Hospital. Where is it, asked Lamona. I do not know; find 
a map, came the reply. It turns out that the Adams family lived south 
of Atlanta, Georgia, and Scottish Rite was an hour away on the other 
side of the Atlanta metro area.
  Lamona held little Jimmy in her arms while dad drove as fast as he 
could. Twenty miles into the trip, Mr. and Mrs. Adams passed Emory 
University Hospital's emergency room. They passed the emergency room at 
Georgia Baptist. They passed Grady Memorial's emergency room. But they 
pushed on to Scottish Rite Medical Center, still 22 miles away, because 
they knew that, if they stopped at one of those unauthorized hospitals, 
they would get stuck with the bill.
  They also knew that Jimmy was sick. They just did not know how sick 
he was. I mean, after all, they were not trained medical professionals.
  With miles yet to go, Jimmy's eyes fell shut, and they would not 
open. Lamona franticly called out to him, but he did not awaken. His 
heart had stopped. Imagine Jimmy's dad driving as fast as he could 
while Lamona is trying to keep her little 6-month-old baby alive.
  They finally pulled into the emergency room. Lamona leaped out of the 
car screaming, ``help my baby, help my baby.'' A nurse rushed out, gave 
him mouth-to-mouth resuscitation. They brought out the crash cart. They 
started the lines. They intubated him. They gave him medicines. They 
did everything that modern medicine could do to save this little 
infant.

  Well, Jimmy was a tough little guy. He survived despite the delay in 
his emergency care caused by that medical decision by his HMO which 
told him to go a long ways and not go to the nearest emergency room. 
But he did not end up whole.
  Because of that cardiac arrest caused by that HMO's decision, Jimmy 
ended up with gangrene in both hands and both feet. The doctors had to 
amputate both of Jimmy's hands and both of Jimmy's feet. This is Jimmy 
after his HMO health care.
  Well, today, Jimmy is learning to put on his leg prostheses with his 
arm stumps. But it is tough for him to get on his bilateral arm hooks 
by himself.
  The HMO industry calls victims like this ``anecdotes.'' Well, this 
little anecdote will never play basketball. He will never be able to 
caress the cheek of the woman that he loves with his hand. I will tell 
my colleagues this little anecdote, if he had a finger, and one pricked 
it, it would bleed.
  Jimmy's mom and dad tried to get care for him. They followed their 
HMO's instructions. They phoned their gatekeeper. The problem was they 
were dealing with a managed care system that emphasizes cost over 
quality.
  Lamona never spoke to a doctor when she called at 3:30 in the 
morning. They were not allowed to speak to a doctor, nor were they 
allowed to go to the nearest ER with what a layperson would have said 
surely was a true emergency.
  A judge looked at the case of James Adams and said this HMOs margin 
of safety was ``razor thin'', and I would add to that about as razor 
thin as the scalpel that had to amputate little Jimmy's hands and feet.
  Well, under current Federal law, this funny law called ERISA, if one 
receives one's insurance from one's employer, and one has a tragedy 
happen to one's family like happened to little Jimmy Adams, one's HMO 
that has made that decision is liable for nothing. That is right, 
nothing. Congress created this law, ERISA, with a loophole that 
prevents health plans from being responsible for the tragedies that 
they create like that that happened to little Jimmy Adams.
  The Ganske Managed Care Reform Act of 1999 would help prevent a case 
like this. It would also make health plans responsible for their 
actions. So to my Republican colleagues, I call out, we Republicans 
talk about people being responsible for their actions. I have heard on 
this floor many times that we think we Republicans think that a 
murderer or a rapist should be responsible for his actions. We think an 
able-bodied person should be responsible for providing for his 
children. Well, my fellow Republicans, HMOs should be responsible for 
their actions, too. Let us walk the walk on responsibility when it 
comes to HMOs, just as we do for criminals, and deadbeat fathers.
  Mr. Speaker, opponents to real managed care reform always try to 
inflate fears that this legislation will cause premiums to go up, that 
people will be priced out of coverage. Not so. Studies have shown that 
the price of managed care reform would be minimal, probably less than 
$35 a year for a family of four.
  In fact, the CEO of Iowa's Blue Cross Wellmark told me that they are 
implementing HMO reforms, and they do not expect to see any premium 
increases from those changes.
  Now, the HMO industry last year spent more than $100,000 per 
Congressman lobbying on this issue and has been running ads all around 
the country claiming larger costs for this legislation. I advise my 
colleagues to take their numbers with a grain of salt.
  The industry took an estimate of last year's Patients' Bill of 
Rights, which was scored by the Congressional Budget Office at 4 
percent cumulative increase over 10 years, but the industry reported 
the increase as if it were 4 percent annually.
  The HMO industry also conveniently ignored page 2 of the 
Congressional Budget Office summary, which said that only about two-
thirds of that 4 percent over 10 years would be in the form of raised 
premiums. Yes, the HMOs predict dire consequences if Congress passes a 
bill like my Managed Care Reform Act of 1999. They say lawsuits will 
run rampant. They say costs will skyrocket, that managed care will 
shrink.
  Well, Mr. Speaker, these Chicken Littles remind me of the opponents 
years ago to legislation to clean water, to clean air a decade ago. At 
that time, they said the sky will fall, the sky will fall if that 
legislation is passed. Instead, what do we have today, Mr. Speaker? We 
have clean air, and we have clean water at a reasonable cost.
  So let us look at the facts as they relate to this HMO legislation. 
In Texas, after a series of highly publicized hearings during which 
numerous Texans told of injury or death resulting from denial of 
treatment by their HMOs, the Texas Senate passed a strong HMO reform 
bill, making HMOs liable for their medical decisions by a vote of 25 to 
5.

                              {time}  1800

  The Texas House passed that bill unanimously. And under Governor 
George W. Bush, that bill became law in May 1997.
  Yesterday, in the House Committee on Commerce, we heard testimony

[[Page H4887]]

from Texans that refutes those dire predictions by the HMOs. A deluge 
of lawsuits? There has been one lawsuit in the 2 years since passage of 
the Texas Managed Care Liability Act. That lawsuit, Plocica v. NYLCare, 
is a case in which the managed care company did not obey the law and a 
man died because of that. This case exemplifies why we need 
accountability at the end of external review.
  Mr. Plocica was discharged from the hospital suffering from severe 
clinical depression. His treating psychiatrist informed the HMO that he 
was suicidal and that he needed additional hospitalization until he 
could be stabilized. Texas law requires an expedited review by an 
independent review organization prior to discharge. Such a review was 
not offered by the plan. Mr. Plocica's wife took him home. During the 
night he went to his garage, he drank antifreeze, and he died a 
horrible, painful death.
  That case shows that external review and liability go hand in hand, 
Mr. Speaker. Without the threat of legal accountability, HMO abuses, 
like those that happened to little Jimmy Adams or to Mr. Plocica, will 
go unchecked. But a lesson from Texas also is that lawsuits will not go 
crazy. In fact, when HMOs know that they will be held accountable, 
there will be fewer tragedies like these.
  And just as there has not been a vast increase in litigation, neither 
has there been skyrocketing increases in premiums in Texas. The 
national average for overall health care costs increased 3.7 percent in 
1998, while the Dallas and Houston markets were well below average at 
2.8 percent and 2.4 percent respectively. Other national surveys show 
Texas premium increases to be consistent with those of States that do 
not have the extensive patient protections passed by the Texas 
Legislature.
  And the managed care market in Texas certainly has not shrunk. In 
1994, the year prior to the Texas managed care reforms, there were 30 
HMOs in Texas. Today there are 51. In a recent newspaper article, 
Aetna's CEO Richard Huber referred to Texas as the filet mignon when 
asked about Aetna's plans to acquire Prudential. None of these facts 
support the HMOs' accusations that the Texas patient protection laws 
would negatively impact on the desires of HMOs to do business in Texas.
  Perhaps all of the above is why Governor George W. Bush personally 
told me that he thinks that Texas patient protection laws are working 
``pretty good'' in his State.
  It is time for this Congress to get off its duff, to fix this problem 
which it created when it took health insurance oversight away from 
States two decades ago. I call on my Republican colleagues to bombard 
our leadership with demands that this legislation be brought to the 
floor in the next 4 weeks for a fair debate. A fair debate is already 
long overdue.
  I would tell my colleagues that just half an hour ago I had a talk 
with the Speaker of the House, the gentleman from Illinois (Mr. 
Hastert). I begged him to bring this legislation to the floor, and he 
assured me that we will have a debate on the floor here in Congress, in 
the House of Representatives, by the middle of July. That is his 
intent. So, Mr. Speaker, I am anxiously awaiting.
  Now, Mr. Speaker, let me talk for a minute about the uninsured, 
because I think Congress should address this issue, and I have some 
thoughts on this important issue.
  First of all, who are the uninsured? Well, there are about 43 million 
people without any form of health insurance coverage. About 25 percent 
of the uninsured are under the age of 19, 25 percent are Hispanic, 25 
percent are legal noncitizens, 25 percent are poor, which is noteworthy 
because 46 percent of the poor do not have Medicaid even though they 
qualify. These groups overlap so that if someone is below the age of 
19, Hispanic, poor and a legal noncitizen, the chances of being 
uninsured are very high. A significant proportion, however, are not 
poor and have incomes more than two times the poverty level, but these 
people tend to be aged 19 to 25. Fewer than 15 percent of those older 
than 25 do not have health insurance.
  Well, knowing these facts, a few solutions to help solve the problem 
of the uninsured should be obvious. First, there are 11 million 
uninsured children living in this country, one-quarter of the 
uninsured. About 5 million of those children qualify for Medicaid or 
for the Children's Health Insurance Program, known as CHIP, but they 
are not enrolled. They are not enrolled.
  Hispanic Americans represent 12 percent of the under-65 population, 
but 24 percent of the uninsured. The income of many Hispanics qualifies 
them for Medicaid, but they, too, are frequently not getting health 
coverage they are qualified to receive. Why? Because the government 
bureaucracy has made it difficult for families to access the system.
  In my own State of Iowa, the application is not only long, but a 
Medicaid recipient must report his income each month in order to get 
Medicaid. I encourage my colleagues back in the State of Iowa to 
correct this.
  In Texas, to be eligible for Medicaid, the uninsured must first apply 
in person at the Department of Human Services, usually located way off 
the beaten track and out of range of public transportation. And if even 
one of the receipts to prove eligibility is forgotten, the applicant 
then has to spend another day traveling and waiting in line.
  In California, the uninsured person who is poor must first fill out a 
25-page application for Medicaid, often in a language the applicant can 
barely read. In fact, English is frequently a second language.
  So the first thing we can do to reduce the number of the uninsured is 
to make sure that the poor who qualify for Medicaid are, in fact, 
receiving Medicaid. Simplify forms, reach out to the Hispanic and other 
ethnic communities and oversee the CHIP program to see why more people 
who qualify are not taking advantage of that program. In many cases it 
is as simple as the uninsured not knowing about the programs.
  What about those aged 19 through 23? Many are in college. This is a 
healthy group. They should be inexpensive to cover. Some colleges say 
they can cover these people for only $500 a year for a catastrophic 
insurance plan. That is a small price to pay compared to tuition. I 
know, I have a daughter in college. So why have we not made a 
commitment to health care coverage for that group? Maybe we should look 
at tying student loans to health coverage.
  I do believe that tax policy also determines to some extent whether 
an individual has health insurance. Businesses get 100 percent 
deductibility for providing health care to employees. Individuals 
purchasing their own insurance should get the same treatment. This 
would lower the cost of insurance for many.
  But, Mr. Speaker, in trying to address the uninsured, Congress should 
be very careful not to pass legislation that could actually increase 
the number of uninsured through unintended consequences of potentially 
harmful ideas such as health marts and association health plans.
  Let me explain my concern. Under court interpretations of the 
Employee Retirement Income Security Act, ERISA, State insurance 
officials cannot regulate health coverage by self-insured employers. 
This regulatory loophole created many problems with the association 
health plans. The benefit of being able to create a favorable risk pool 
motivated many to self-insure, but without the discipline of State 
insurance oversight, many of the association health plans became 
insolvent during the 1970s and the early 1980s, and they left hundreds 
of thousands of people stranded without coverage.

  Some of those plans went under because of bad management and 
financial miscalculations. Remember, they did not have insurance 
regulatory oversight. Others were started by unscrupulous people whose 
only goal was to make a quick buck and to get out without any concern 
about the plight of those covered in those ``association plans.'' I 
would encourage my colleagues to read Karl Polzer's article 
``Preempting State Authority to Regulate Association Plans: Where Might 
It Take Us.'' It is in National Health Policy Forum, October 1997.
  My colleagues, those who do not know history are bound to repeat it. 
The rash of failures led Congress in 1983 to amend ERISA, to give back 
to the States some of that authority to regulate self-insured, 
multiple-employer welfare associations or AHPs, association health 
plans. Only self-insured plans established or maintained by a

[[Page H4888]]

union or a single employer remained exempt from insurance regulation.
  Unfortunately, there are now those who want to ignore the hard 
lessons of the past. They want to repeat the mistakes of pre-1983. If 
anything, some mismanaged and fraudulent associations continue to 
operate. Some associations try to escape State regulation by setting up 
a sham union or sham employer associations. Then they self-insure, and 
then they claim they are not an MEWA, a multiple-employer welfare 
association.
  To quote an article by Wicks and Meyer in an article called ``Small 
Employer Health Insurance Purchasing Arrangement: Can They Expand 
Coverage?": ``The consequences are sometimes disastrous for people 
covered by these bogus schemes.'' If anything, Mr. Speaker, Congress 
should crack down on these fraudulent activities, not promote them.
  Wicks and Meyer summarized the two big problems with expanding ERISA 
exemption to association health plans. First, if they bring together 
people who have below-average risk, and they exclude others, and they 
are not subject to small group rating rules, then they draw off people 
from the larger insurance pool, thereby raising premiums for those who 
remain in the pool.
  Second, if they are not subject to appropriate insurance regulation 
to prevent fraud and to ensure solvency and long-run financial 
viability, they may leave enrollees with unpaid medical claims and no 
coverage for future medical expenses. Mr. Speaker, that certainly would 
not help the problem of the uninsured.
  I recently asked a panel that appeared before the Committee on 
Commerce if they agreed with those concerns that I just mentioned about 
association health plans, and they unanimously did. And that panel even 
included proponents of association health plans.
  Mr. Speaker, let us pass real HMO reform legislation. Let us learn 
from States like Texas. After all, is it not Republicans who say that 
the States are the laboratories of democracy? Let us address the 
uninsured by making sure that those who qualify for the safety net are 
actually enrolled. And, yes, let us have equity in health insurance tax 
incentives, but let us also be wary of repeating past mistakes with 
ERISA.
  And, finally, Mr. Speaker, I want to talk briefly about Medicare as 
it relates to access to health care for all of us. In 1997, Congress 
passed and the President signed the Balanced Budget Act. In that bill 
were provisions to slow the growth of Medicare expenditures in order to 
extend the solvency of that trust fund.

                              {time}  1815

  But Mr. Speaker, the effect of that bill on our rural and teaching 
hospitals is more profound than what was anticipated. We are not seeing 
just slowed growth rates for our rural and teaching hospitals. We are 
seeing real and significant cuts.
  A survey in Iowa found that Medicare's lower reimbursement will cost 
small rural Iowa hospitals on the average to lose $1 million each in 
the next 5 years. Larger rural hospitals will lose between $2 million 
and $5 million. And urban teaching hospitals will lose between $10 
million and $40 million.
  The University of Iowa hospitals and clinics is projected to lose $64 
million over 5 years. And this is in Iowa, with one of the lowest 
reimbursement rates in the country.
  Let me give my colleagues some specific examples for hospitals in 
Iowa. Current payment to Iowa rural hospitals for cataract operations 
is about $1,300. The proposed payment will be $980, a 30-percent 
reduction, not just a ``reduced rate of growth.''
  A rural hospital in Iowa today receives about $500 for a colonoscopy. 
The proposed payment will be $300, a 40-percent reduction. Medicare 
today pays about $45 for a mammogram to rural hospitals. The future 
payment will be $30. And this is happening in rural and teaching 
hospitals everywhere in this country.
  The Washington Post just published an article that Georgetown 
University Hospital is projected to lose $75 million because of the 
1997 Balanced Budget Act. This hemorrhage in our rural and teaching 
hospital will cause some to fail. This will certainly not help people's 
access to care.
  If a county seat town in Iowa loses its hospital, it will lose its 
doctors and the town itself will start to fade away. And I am sure that 
my colleague from Vermont would say the same thing about Vermont.
  Mr. Speaker, I took a lot of heat from my colleagues back in 1995 
when I pointed out that $250 billion in Medicare reduced payments would 
severely hurt health care. Fortunately, arguments like mine were able 
to scale back the cuts. However, it is now clear that Congress needs to 
restriction adjust that bill. There are reports that the savings from 
that legislation are significantly greater than anticipated.
  Now, I am not talking about a wholesale rewrite of the Medicare bill, 
because a lot of it is working well. Reducing payments to HMOs was a 
positive. In fact, a recent GAO report shows that HMOs are still being 
overpaid because they select healthy seniors and they shed the sick. 
However, we ought to be able to afford some adjustments for our rural 
and teaching hospitals.
  After all, Mr. Speaker, what good does it do to have insurance, 
whether private or Medicare, if we do not have a hospital to go to if 
we are sick?
  Let us not bury our heads in the sand about either HMO abuses or this 
Medicare problem, or I will guarantee my colleagues, Mr. Speaker, the 
people in the next election will remember.
  I am anxiously awaiting a fair and a complete debate on this floor. 
We owe it to the Jimmy Adamses in our country.

                          ____________________