[Congressional Record Volume 145, Number 133 (Tuesday, October 5, 1999)]
[House]
[Pages H9387-H9391]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  2000
                           HEALTH CARE REFORM

  The SPEAKER pro tempore (Mr. Weldon of Florida). Under the Speaker's 
announced policy of January 6, 1999, the gentleman from Missouri (Mr. 
Talent) is recognized for 60 minutes as the designee of the majority 
leader.
  Mr. TALENT. Mr. Speaker, I want to talk about health care tonight, 
and I am going to get into some legislative language. I think it is 
important that we do that, because we are going to be voting tomorrow 
and the next day on pieces of legislation that will have as big an 
impact on the quality of life of the American people as anything that 
will be voted on this session. And I think sometimes it is important 
that before we vote on bills, we actually read them and take a look at 
what they say. I hope that comes clear in the course of my discussion 
this evening.
  Before I get into what may sound to some people, however, like a bit 
of a law school discourse or exercise, I want to talk about the real 
impact these bills are going to have on real people.
  There is nothing more important to the average American and his or 
her family than the quality of the health insurance that they have 
access to.
  We need health care reform in this country, and we have to keep in 
mind that it has two aspects. First and foremost, we have to help 
people who do not have access to good quality private health insurance 
get access to that health insurance.
  Then the second thing we have to do is ensure once they have access 
to that insurance, it delivers for them. When they get sick, they get 
the care their physician says that they need, when they need it, before 
they become seriously ill or before they die. But it is very important 
that we make certain that in providing for health care reform and 
providing for accountability of managed care plans, we do not increase 
the number of people who do not have health insurance in the first 
place.
  Health care reform of insurance is of no value to you if you do not 
have the insurance, and too many people in America today do not have 
health care insurance. Forty-four million people in the United States 
do not have health insurance. One out of every six Americans is without 
health insurance. They face the risk of illness, they and their 
families, without having health insurance.
  There is nothing more tragic than talking to individuals in this 
situation. Maybe they have been downsized by a company, they are 
working for a small employer who does not provide health insurance, 
they cannot afford it. Maybe they are 55, 60 years old, retired, but 
they are not old enough for Medicare. Maybe they have a history of 
illness and they do not work for a large employer and they cannot buy 
health insurance on the individual market.
  These are our friends and neighbors, and we need to help them. Eleven 
million of them are children, and 75 percent of the people who are 
uninsured work for small businesses or own small

[[Page H9388]]

businesses, or are the dependents of people who work for or own small 
businesses.
  That is the first thing that we need to do with health care reform. 
We are going to have an opportunity to do that tomorrow. We are going 
to have an opportunity to pass an accessibility bill that will open up 
health insurance to millions of people who currently do not have it, 
and we are going to do that with a number of things in the bill. Some 
of them provide tax relief to people so they can better afford health 
insurance on the individual market.
  One important provision that I cosponsored allows small employers to 
pool together in associations, the Chamber of Commerce, the Farm 
Bureau, the Psychologist Association. They can pool together in an 
association. The association can sponsor health care plans. Then the 
small employers can buy those plans for their employees and they can 
have health care, the same way big employers offer health insurance to 
their employees today. We are going to have an opportunity to vote on 
that bill tomorrow.
  We are also going to have an opportunity, Mr. Speaker, to vote on the 
whole issue of accountability, so that, again, when people get health 
insurance, and that is the number one thing, we ensure that they get 
the care their physician prescribes when they need it, before they get 
seriously ill, before they die, and we do that without big government, 
without increasing costs in a way that increases the number of 
uninsured. We will have an opportunity to do that also in the next 
couple of days.
  Now, in considering how we can hold HMOs accountable, the problem is 
this, and most Americans are familiar with it. The concern is maybe 
less what their insurance covers than the fact that when they get sick, 
their HMO may not provide the coverage they are supposed to provide. A 
lot of people have been in that situation. Other people are afraid of 
being in that situation.
  The best thing to do about that is to give individuals and their 
physicians access to speedy, low cost, internal and external review 
before independent physicians when the plan has denied their care. So 
here would be an example, and I am going to use this example several 
times throughout this discussion, Mr. Speaker.
  Let us suppose you belong to a managed care plan or you are a 
participant in it. You have a heart problem. Your cardiologist 
recommends beta blockers. That is a drug that will help clear up the 
arteries if they are blocked. The health care plan says no, you do not 
need beta blockers. More conservative treatment is appropriate.
  We need to make certain that people can have access to external 
review procedures under those circumstances. They can appeal, in a low 
cost, quick, timely way, to a panel of independent specialists, 
cardiologists who are not controlled by the health care plan, and those 
cardiologists decide whether or not that treatment is medically 
necessary under those circumstances.
  Professionals in any field should be reviewed by other professionals 
and specialists in that field. We can do that. We are going to have the 
opportunity to vote for legislation that does that.
  It may be appropriate to back that up with liability, limited kinds 
of liability against the health care plan, to reinforce that external 
review procedure. So it the plan does not go along with the decision of 
the independent physicians, they can be sued and they can be hammered 
with punitive damages under those circumstances.
  What we want to avoid, Mr. Speaker, is open-ended liability against 
employers in particular and against labor unions, in addition to 
against health care plans, that will jack up the cost of health 
insurance by billions of dollars, moving that money out of health care 
and into litigation; moving people out of treatment rooms and into 
courtrooms.
  If we pass a bill that does that, Mr. Speaker, we are going to make 
the problem worse instead of better, because we are going to vastly 
increase the number of people in the United States who are uninsured.
  It is my concern that the bill being offered by my colleagues, Mr. 
Norwood and Mr. Dingell, would do exactly that. I say this with the 
sincerest of respect for their passion and their dedication on this 
issue, but I am concerned that their bill, the Norwood-Dingell bill, 
opens up precisely the kind of liability that will jack up the number 
of uninsured in the country by moving people again out of treatment 
rooms and into courtrooms.
  The Norwood-Dingell liability provision is open-ended liability in 
hundreds of State courts around the country for any result that someone 
claims to be negative in a health care case, if that result can be 
connected in any way to any aspect of the operation of any health plan, 
with unlimited damages, including punitive damages, for the employer, 
for a labor union if it is a labor-management plan, and for the 
employees of the employer and the labor union, and, in fact, for 
contractors or accountants or people associated with the employer or 
the labor union if they assisted in any way in setting up the health 
care plan. Again, it would move billions of dollars out of treatment, 
out of health care, into litigation. That is not good for anybody.
  So much for my preface, Mr. Speaker. I want to get to the language in 
the Norwood-Dingell bill. It would be kind of hard to read it this way, 
so let me turn it around.
  The Norwood-Dingell bill allows any cause of action, there it is in 
bold, against any person, it does not define ``person,'' so that means 
the employer, it means the health care plan, it means employees of the 
employer or the health care plan, for any personal injury, and they 
define that to mean a physical injury or a mental injury, so it cannot 
be an economic injury, but allows a cause of action against any person 
for any physical injury that is connected to or arises from, in 
connection with or that arises out of, the provision of insurance, the 
administrative services, or medical services, or the arrangement 
thereof.
  This is not just a cause of action for the denial of a benefit. It is 
not just a cause of action when a health care plan goes against the 
treating physician or the external reviewer. It is much more broadly 
written than that. It could not be more broadly written. It is a cause 
of action for any injury arising out of or in connection with in any 
way the operation or arrangement of a health care plan.
  Now, Mr. Speaker, I am a lawyer. When I read this language, I put my 
lawyer's hat on and I thought, now, what kind of lawsuits are we going 
to see in response to that kind of language?
  Well, just a couple of what we lawyers call hypotheticals. They are 
hypotheticals in the sense that they have not actually happened because 
we have not actually passed this bill, but they are the kinds of cases 
that will be brought if we do pass this bill.
  First the classic case. Let me go back to my beta blocker example. 
When physicians treat clogged arteries, they have to choose whether to 
use beta blockers, which is a drug or a cardiac cath, a minor surgery 
or some more aggressive kinds of surgery or treatment.
  So, let us suppose that somebody goes to their cardiologist in a 
managed care plan, and the cardiologist decides to grant a cardiac 
cath, to prescribe a cardiac cath, and the plan reviews that decision 
by the treating physician and denies the cardiac cath and, as a result, 
some kind of injury arises.
  Well, that is a physical injury arising out of the provision of 
medical services, so clearly a cause of action would be warranted. But 
let us suppose that the plan grants the treating physician's decision 
and allows the cardiac cath and an injury results. That too is a 
physical injury in connection with or arising out of the operation of a 
health plan and you can sue the health care plan for that.
  Or let us assume the health care plan says look, we do not even want 
to review this. We are going to let the physicians prescribe whatever 
they want, and go along with that, and a bad result occurs. Then you 
could sue the plan for not reviewing what the physician does, and that 
would be a physical injury arising out of or in connection with the 
arrangement of a health care plan and a cause of action would lie under 
the Norwood-Dingell bill.
  That cause of action, remember, is against any person. Not just the 
plan, but the employer who purchased the plan, the restaurant owner, 
the small restaurant owner who went out and decided he was going to try 
to provide

[[Page H9389]]

health insurance to his people and linked up with a managed care 
network, or a big employer with a big HR department and tries to 
operate these plans in a conscientious way. You could sue them. You 
could sue the employees of the big employer who helped set up the plan. 
You could sue a contractor or consultant that you relied on. All of 
these people would be open to lawsuits for punitive damages in State 
courts around the country.
  That is a pretty obvious case. Let us take a different case, again 
with the beta blocker example. Let us suppose that a plan has a quality 
assurance plan. Many managed care plans do. So they go out and they try 
to make sure their physicians are up-to-date in all the latest kinds of 
medical developments. So they go out and give seminars on when you use 
beta blockers and when you use a cardiac cath or more kinds of 
aggressive treatment, and the physicians go to these seminars.
  Then a patient is going to one of these physicians, and the physician 
recommends beta blockers in a particular case and you get a bad result 
or what somebody alleges is a bad result or a physical injury. Now you 
can sue the plan because they were not aggressive enough in 
recommending cardiac caths.
  But let us suppose the physician recommends the cardiac cath. Now you 
could sue the plan because in the way it operated its quality assurance 
plan they were not aggressive enough in recommending beta blockers. Or 
if they did not have a quality insurance plan you could sue them for 
that. Or if they did not have enough seminars in their quality 
assurance plan, you could sue them for that. Or if they did not require 
that the physicians attend all the seminars, you could sue them for 
that. And what would constitute an adequately and properly run quality 
assurance plan would be determined in State courts in jurisdictions all 
around this country, even though many of these plans are national 
plans.
  So what a plan that was hired by a big employer would have to do with 
regard to quality assurance plans would differ from one circuit court 
in one State to another circuit court in another State. And if they got 
it wrong, if a jury believed they got it wrong, they would be open to 
unlimited damages, including punitive damages, and you could sue the 
employer and the employer's employee as well, although I will get to 
that language in a minute.
  Let me give one more example, and I could give hypotheticals with my 
lawyer's hat on all night long. Let us assume a situation where 
somebody is having some heart pain or chest pain. They belong to a 
managed care network. They try and make an appointment with the 
cardiologist. They do not get in for a week or so, and, as a result, 
their condition worsens.
  Now they say well, you do not have enough cardiologists who are close 
enough to me so I could get an appointment. So, again, you sue the 
plan. You say you have to have more cardiologists than this within a 
certain number of miles from me, and all the other plan participants as 
well.
  Again you have the same kind of lawsuit, and again you have the 
standards for what is quality care being determined for national plans 
in State courts after the fact in jury deliberations in circuit courts 
all around this country. If you get it wrong, why, you owe punitive 
damages.
  By the way, you can, of course, sue the people who consulted with you 
in determining how much cardiologists you had to have and the employees 
you hired to determine how many cardiologists you had to have, and all 
resulting in billions of dollars being transferred out of the health 
care system, out of the treatment room, into the court room.
  Moreover, Mr. Speaker, not only would the plan and the employer in 
these circumstances be subject to punitive damages, they would not be 
able to avail themselves of any malpractice limits that had been passed 
in State statutes, because these actions are not for malpractice, these 
are actions for negligence or whatever the State statute provided in 
the operation of the health care plan.

                              {time}  2015

  So it would not sound, as we lawyers call it, it would not arise out 
of a malpractice action. Therefore, you would not be allowed the limits 
that you would have in a malpractice action.
  Let us go to the liability of the employer under these circumstances. 
I want to say, the bill contains, in a different provision, and I did 
not have it all here, a shield for employers from lawsuits. So the bill 
does have a defense. It says you cannot sue employers, except in 
certain circumstances.
  These are the circumstances under which you can sue the employer or 
other plan sponsor, and that, of course, would include labor unions, in 
the event of a labor-management plan. You can sue the employer or the 
labor union for the exercise of discretionary authority to make a 
decision on a claim for benefits; not deny a claim for benefits, but 
whenever the employer or the labor union makes a decision on a claim 
for benefits.
  So let us go back to the first hypothetical and put a lawyer's hat 
back on again. The case was where the question was whether the 
cardiologist would recommend beta blockers or whether the cardiologist 
would recommend a cardiac cath or some more aggressive treatment.
  If the employer exercises his discretionary authority to deny the 
care recommended by the cardiologist, he has obviously made a decision 
on claim for benefits on the exercise of his discretionary authority, 
and if injury results, the employer would be open to lawsuits.
  Remember, this includes small employers, not just big employers. It 
does include the big employers, the big national plans, whose employees 
by and large are satisfied with their health care.
  Suppose the employer grants or sustains the benefits and a bad result 
occurs. Now you can sue the employer saying, you were negligent in the 
exercise of your discretionary authority in sustaining the benefits. 
You should have overruled them.
  But let us say the employer says, I do not want to get in this kind 
of liability. I am not going to do anything. I am not going to be 
involved in this process.
  In the first place, they could be liable under ERISA. Under ERISA, 
the basic network of laws under which all this operates, the plan 
sponsor is supposed to be a fiduciary. They are supposed to operate the 
trust for the benefit of the participants.
  If you explicitly refuse to exercise your discretionary authority on 
behalf of the participants, you have violated ERISA. But if you say, I 
am not going to exercise my discretionary authority, I am going to let 
the plan do everything, Mr. Speaker, you have exercised your 
discretionary authority not to exercise your discretionary authority, 
and you could be sued for that.
  If I was counsel for the employer, I would say that is the most 
dangerous thing of all, because when you get before a jury, and I am 
going to bring this home to real life and real lawsuits in just a 
minute, when you get before a jury, you are going to have to explain to 
the jury why you did not care enough to try and oversee in any way the 
operation of your health care plan when somebody was injured as a 
result of that.
  That kind of lawsuit is the least in the liability that the employer 
faces. And remember, there are punitive damages for this. There is no 
shield in this bill for the employer against punitive damages under any 
circumstances. Remember, you could sue the employees of the employer or 
the labor union under these circumstances.
  I think you might be able to defeat this defense in other ways. 
Again, I don't want to get too exotic here with my hypotheticals, but I 
think you could say if an employer hires a health care plan and does 
not engage in adequate due diligence, does not look into enough whether 
that health care plan was a good plan, maybe willfully neglects doing 
that, that is the exercise of the discretionary authority to hire a bad 
plan when you should have known it was a bad plan, and you should have 
known it would result in affecting decisions made on claims of 
benefits, and as a result, the entire shield is removed.
  Those are the kinds of hard cases when there is a serious injury to 
somebody that makes bad law. Those will be pushed in every courtroom in 
the country.
  Let me go over again, and I am going to wrap this up in a minute, Mr. 
Speaker, but let me go over again what we

[[Page H9390]]

are talking about here, and the dangers that we are talking about: 
again, open-ended liability for employers, labor unions, health care 
plans, their employees, contractors, associations, for any physical 
injury that arises or is connected in any way with the operation or 
administration of any health care plan.
  This is going to result in billions of dollars being spent in 
litigation, in avoiding litigation, in settling litigation that is not 
going to go to health care. It is going to result in a diminution, a 
lessening, Mr. Speaker, of benefits for individuals who have insurance, 
and a vast increase in the number of people who do not.

  The final points. Again, the Norwood-Dingell bill does not define 
``person.'' So again, anybody can be sued: the health care plan, the 
employer, any of their employees. Employers are going to have to have 
directors and officers liability insurance for their employees who run 
human resources operations. They are going to have to have insurance on 
their employees, in order to get health insurance for the employees.
  Winning is not everything. This is very important to understand. If I 
am a lawyer and I am representing somebody who has been hurt, and I do 
not criticize lawyers in saying this, they have an absolute obligation 
to zealously represent their client in an attempt to recover whatever 
they can recover for them if they have been physically injured. You are 
going to sue everybody. You are going to name everybody, including the 
employer.
  Now, this defense is what we lawyers call an affirmative defense. So 
you are going to be sued in State court, you are going to raise this 
affirmative defense in the answer. When you file your original papers, 
you going to say, no, I was not exercising my discretionary authority, 
so under Federal law you cannot sue me.
  Okay, immediately what is called the interrogatories go out. 
Immediately they ask you for every document relating to how you 
developed your health care plan or how you were involved in this 
particular decision. After that they begin the depositions. They will 
depose whoever it was, anybody who was involved in any way or should 
have been involved with choosing the health care plan. Meanwhile, of 
course, the legal bills are adding up, because of course you are having 
your lawyers write memos to try and determine what exactly this means, 
because these terms in here are not defined, so thousands and thousands 
and thousands of dollars in legal fees are adding up.
  Then after the interrogatories and after the depositions, you file 
what is called a motion for summary judgment. In other words, you say 
to the court, look, it is evident from the information we have gathered 
so far that you cannot sue me under this bill. Now you are up to 
$40,000, $50,000, spent in legal fees, even if there is not a basis for 
claiming that you exercised your discretionary authority to make a 
decision on benefits.
  How is anybody going to know, because this is entirely new law? We 
are making it up in this bill. Many of these terms are undefined. Then, 
if you lose at that point, and very often a judge will exercise his 
discretion not to grant a motion for summary judgment and let the case 
go to a jury, now you are before a jury, and a jury is making a 
judgment about whether you exercised discretionary authority. So this 
legal term here, this aspect of Federal law, is going to be defined by 
juries all over the country.
  Mr. Speaker, I talked to some people who came into my office who 
owned restaurants. I am the chairman of the Committee on Small 
Business, so I talk a lot to small business people. Small business 
people by and large want good employees, so they want to shape 
compensation packages to get good employees. They are by and large very 
distressed that they usually cannot offer as good health care as the 
big employers can because they cannot fashion big pools.
  I asked them what would happen, what they would do if they were faced 
with this kind of liability. These were restaurant owners. The 
restaurant business is a business where many people who work in that 
business do not have health insurance. Many restaurant owners do not 
offer health insurance. I asked them what they do. They said, we will 
drop the health insurance. We cannot open ourselves to this kind of 
liability. These are not wealthy people.
  If we talk to people who run big companies, who want their health 
plans to be good so people are satisfied because they have to compete 
for good employees, what are they going to do when their costs start 
going up? I hope none of them drop their coverage. At least the cost of 
the coverage is going to have to go up. They are going to have to 
reduce the number of benefits. They are going to have to increase the 
number of employees. They are going to have to pass along costs to 
their employees, and they are going to have access to poorer quality 
health insurance.
  That is unprecedented liability for employers. I just reviewed that. 
External review is useless. The Norwood-Dingell bill requires resort to 
external review in the event of a denial of a claim. Well, most of the 
actions I have just talked about do not involve denying a claim, so the 
external review that I talked about in the beginning that is the answer 
to the problem of accountability would not even be available. We cannot 
go to external review on the issue of whether a quality assurance plan 
was adequate or not.
  Also, the bill permits people to avoid external review when there is 
injury suffered before the external review panel can meet. So if the 
heart condition gets worse in the week while you are waiting for 
external review, you can get around it and you can sue.
  We ought not to be getting people out of external review. That is the 
right answer. We ought to be encouraging people to go into external 
review so that physicians are reviewing the decisions of physicians, 
not juries or courtrooms reviewing the decisions of physicians.
  Finally, Mr. Speaker, the liability provisions in the Norwood-Dingell 
bill would apply to private sector employees, but would not apply to 
Federal employees. They would not apply to Congressmen. This is a 
liability provision which is supposedly good for people, but once 
again, Congress would exempt itself from the operation of this 
procedure.
  Now, I have talked with some Members today. They indicated to me 
that, no, they thought well, maybe you could not sue if you were a 
Federal employee. Maybe today you could not sue the Federal Government, 
and right there you have a difference, because the Norwood-Dingell bill 
allows you to sue employers. Under current law, you cannot sue the 
Federal Government.
  But they have told me, but you can at least sue the health care plan 
or the carrier with whom the Federal Government contracts. So they say, 
well, no, the Federal employees are excluded from the Norwood-Dingell 
bill. That is true, but that is because they can already sue their 
health plans or their health carriers.
  Here is what title V, section 890 107(C) of the Federal regulations 
say with regard to actions by employees of the Federal Government.
  It says, ``A legal action to review final action by the OPM,'' the 
Office of Personnel Management, and you must go first to the Office of 
Personnel Management if you have a claim, ``involving such denial of 
health benefits must be brought against OPM and not against the carrier 
or the carrier's subcontractors. The recovery in such a suit shall be 
limited to a court order directing OPM to require the carrier to pay 
the amount of benefits in dispute.''
  So under current law, which would not be changed by the Norwood-
Dingell bill, Federal employees cannot sue their carriers, Federal 
employees cannot sue the Federal Government, but under this provision, 
employers, private employers, would be subject to actions.
  Mr. Speaker, this does not have to be all or nothing at all. We do 
not have to go on with the current system, where people have rights, 
supposedly, under health care contracts, but no effective way of 
enforcing those rights. We can have accountability. We can do it 
through tightly-written, low-cost, easily accessible external review 
procedures where physicians are reviewing the decisions of other 
physicians. We can back that up with liability, in cases where the 
external review process is ignored or where it is fraudulent or where 
it is frustrated.
  The least we need to do with the Norwood-Dingell bill is to make 
clear that

[[Page H9391]]

liability against the employer is strictly limited to cases where the 
employer directly participated in the denial of benefits. We need to 
make clear that punitive damages are strictly limited or not allowed. 
We need to require exhaustion of external review.
  We need to be certain that where we allow quality of care actions, we 
make clear in the law what quality of care is, so that people know what 
the law is and can set up their health care plans accordingly, and we 
do not have that judgment being made in State courts around the 
country.
  The reason, again, is because all of this makes a difference to real 
people who are really confronted with illness and the threat of 
illness. There are too many people in the United States today, Mr. 
Speaker, who do not have health insurance, and most of them do not have 
health insurance because it costs too much. Every time we increase the 
cost of health insurance, it means more and more people are not 
covered. Patient protections do not help you if you do not have 
insurance.
  We have the chance in the next couple of days to pass good bills to 
increase accessibility, to increase the availability of private health 
insurance to people who do not have it, good private health insurance 
to these employees of small employers. We have the chance to hold HMOs 
accountable to get people in treatment rooms where they ought to be, 
not at home ill and untreated, and not in courtrooms afterwards, after 
they become seriously ill.
  We can do these things. We have that opportunity. I want to close by 
saying that I welcome the fact that the bills have come this far. There 
are many competing factions in this House, and it is because of the 
passion and the energy of those factions that we have a bill and we 
have the opportunity to vote on it.
  I have been working intensively on this for 2 years. I have wanted to 
see this day come. I am glad we have this opportunity. But let us not 
do something that will hurt the very people that we are trying to help. 
Let us not punish the employers and the small employers in this country 
and their employees by driving up the cost of health insurance to them 
in a way that is not necessary to ensure the kind of accountability 
that we all seek in the health care system.

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