[Congressional Record Volume 145, Number 134 (Wednesday, October 6, 1999)]
[House]
[Pages H9504-H9508]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     A RULE WHICH MAKES PASSING GOOD MANAGED CARE REFORM DIFFICULT

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 1999, the gentleman from New Jersey (Mr. Pallone) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. PALLONE. Mr. Speaker, in this Republican Congress, the special 
interests who write the big checks get the last word. The day before 
the House

[[Page H9505]]

began its debate on the Patients' Bill of Rights, the only bill that 
takes medical decision-making away from insurance company bureaucrats 
and returns it to doctors and patients, the gentleman from Illinois 
(Speaker Hastert) sat down with 15 health care lobbyists who paid 
$1,000 each for one last chance to make their case.
  The health care industry has cultivated the Republican leadership 
with strong-armed lobbying efforts and well-placed campaign 
contributions, over $1 million from the Health Benefits Coalition, a 
group of insurance groups alone.
  House Republicans, led by the majority whip, the gentleman from Texas 
(Mr. Delay) and the gentleman from Illinois (Speaker Hastert) are doing 
everything they can to kill reform to please their contributors in the 
health insurance industry. Mr. Speaker, that is why they put forward 
the rule today that was adopted on an almost exclusively partisan vote. 
Almost every or actually every Republican voted for the rule, and 
almost every Democrat except for one or a few voted against the rule.
  Mr. Speaker, I just want to talk a little bit, if I can, about this 
rule and why it is making the ultimate question of passage of good 
managed care reform difficult.
  The rule, instead of providing a fair and open rule for considering 
the Patients' Bill of Rights, basically stacks the deck by insisting on 
provisions that blend the managed care bill, the Patients' Bill of 
Rights, with a measure riddled with special interest poison pills 
designed to kill the Patients' Bill of Rights, the Norwood-Dingell 
bill, and that denies the gentleman from Michigan (Mr. Dingell) and the 
gentleman from Georgia (Mr. Norwood) the opportunity to offset any 
potential revenue losses from the measure.
  The Republican bill basically combines a so-called access bill, H.R. 
990, and the managed care bill, the Norwood-Dingell bill, together. The 
measure will combine essentially a meaningful managed care bill with a 
special interest-laden boondoggle of a bill that masquerades as a 
health access bill.
  There is no question that this rule which was adopted today, I would 
say again, on almost exclusively a partisan vote, is nothing more than 
a cynical, desperate, last-minute attempt to stave off a bipartisan 
Norwood-Dingell managed care bill that was on the verge of passage.
  I am very fearful, Mr. Speaker, about what kind of success we are 
ultimately going to have here tomorrow with regard to the Norwood-
Dingell bill because of the way that this rule provides for us to 
proceed, and because of the stark choices that many Members will have 
to make; had to make today on the so-called access bill, and will have 
to make tomorrow on some of the substitutes to Norwood-Dingell.
  I wanted to talk about this phony access bill that was voted on 
today, again, almost exclusively on a bipartisan basis. Most of the 
Republicans voted for the access bill and most of the Democrats voted 
against it.
  First of all, I would point out that it is designed, according to the 
Republican leadership, to try to improve access to health insurance for 
the over 40 million Americans that have no insurance, who are right now 
uninsured. But the phoniest aspect of this, if you will, is that the 
bill, this access bill, spends Federal dollars on tax breaks that do 
more to help the healthy and the wealthy than the uninsured.
  According to the General Accounting Office, nearly one-third of all 
uninsured Americans do not pay income taxes. These families would not 
be helped at all under the bill that was passed today. Instead, the 
greatest benefits under the bill would go to the 600,000 uninsured 
families that make almost $100,000 per year, because the value of 
shielding income from Federal tax is greater for those in the highest 
tax bracket.
  In addition to not helping the uninsured because so many of them 
essentially are not paying taxes, or are not paying that much to 
benefit from this bill, the bill expands medical savings accounts, a 
special tax break for the healthy and wealthy that threatens to 
increase health insurance premiums for everyone else.
  My point is, Mr. Speaker, that the so-called access bill today, which 
the Republican leadership claims is trying to get more people into 
insurance plans and out of the ranks of the uninsured, in fact will 
make it more difficult for those who are uninsured to buy insurance 
because the costs will go up. That is accomplished, first of all, by 
putting in the poison pill of the medical savings accounts, the SMA's, 
as well as new Federal regulations that would disrupt State health 
insurance markets.
  With the SMA's, and this is nothing new, this is something we have 
seen over and over again over the last couple years in an effort to try 
to defeat managed care reform, this poison pill, which was included in 
the 1996 bill, basically is a tax break for the wealthy.
  The new Federal regulations that would disrupt State health insurance 
markets that are in this bill, the access bill, basically are two 
proposals called association health plans and HealthMarts, both of 
which would offer cheaper, less comprehensive policies that bypass 
State consumer protection, insurance, and benefit requirements.
  Like medical savings accounts, these new plans and networks would be 
able to cherrypick the healthiest out of the State-regulated health 
insurance market, which could result in higher costs for those still in 
the State-regulated market.
  In addition, like medical savings accounts, the association health 
plans are supported by big contributors to Republican candidates.
  Mr. Speaker, my point is that this access, this so-called access bill 
that was adopted today, really is mucking up, if you will, the 
possibility of passing real managed care reform because it will travel 
now with whatever managed care reform bill that we adopt tomorrow and 
go over to the Senate together.

  It means that whatever managed care reform bill we pass tomorrow will 
now have these other provisions attached to them, attached to it, that 
basically are going to make it more difficult to pass in the Senate, 
more difficult to adopt in conference, if the Senate and the House ever 
get together to try to come up with a bill that both houses adopt, and 
undoubtedly will result in a veto by the President, because he could 
not possibly sign provisions like the SMA's, like the HealthMarts, that 
basically break the insurance pool and make the costs to buy insurance 
for those who do not have it even more costly than it is today.
  I would like to go on, though, and talk about what is going to happen 
tomorrow. The access bill is passed, the rule was passed. There is not 
much we can do about it tomorrow. But tomorrow we have more debate, 
which began tonight, on the Norwood-Dingell bill, and three substitutes 
that have been made in order under the rule which really, again, are 
nothing more than an effort to try to kill and water down the Norwood-
Dingell bill.
  I have said over and over again on the floor of this House and in 
this well that the two major advantages and overall goals, if you will, 
of the Norwood-Dingell bill are fairly simple, fairly easy for the 
average person to understand.
  First of all, the first principle, the first goal of Norwood-Dingell, 
says that on the one hand, right now most decisions about what kind of 
medical care we get, what type of operation we get, or what kind of 
equipment we can use, or how long we stay in the hospital, or all the 
other things that define adequate health care, the decision as to what 
type of care we get is essentially now made by the HMO, by the 
insurance company.
  That is not the way it should be. What should be and the way it used 
to be a few years ago was that the physician, the doctor, our doctor, 
and us, the patients, would determine what kind of care we were going 
to get.
  We want to turn that around. In the Norwood-Dingell bill, we want to 
go back to the old days, essentially, when decisions about the type of 
care that we as Americans receive are basically decisions made by the 
physician, the doctor, and us, the patient.
  The second thing we do in the Norwood-Dingell bill is to say that if 
we have been denied care that we and our physician think we should have 
had, then we have to have some adequate way to enforce our rights and 
overturn that denial of care. That is essentially done in two ways with 
the Norwood-Dingell bill.
  First of all, there is an independent review, so that we do not have 
to go to

[[Page H9506]]

the HMO and appeal their decision, and essentially appeal to them or 
someone who is within the HMO to decide the appeal. Rather, we go to an 
external, independent review board not controlled by the HMO, which has 
the ability to overturn that decision and provide us with the care that 
our physician and we say we need in a very quick, expedited way.
  Failing that, if for some reason this independent external review 
does not work and we are still denied care that we and the physician 
think we need, then we have the right to go to court and seek an action 
to overturn that denial of care. Or if the situation has resolved 
itself so that we were denied the care and we suffered damages, we were 
injured, we suffered, or God forbid, died, then we would be able to sue 
in the courts for damages as a result of that denial of care.

                              {time}  2130

  Now, all this makes perfect sense; and, frankly, I do not know what 
the big deal is. Any time people have a grievance and they suffer 
damages, they normally can go to some kind of review and take some kind 
of appeal and ultimately go to the courts.
  What we are told by our colleagues who support the Republican 
leadership on the other side is that that is not acceptable. In fact, 
the previous speaker made the point that it is not acceptable; that the 
Norwood-Dingell bill goes too far in providing enforcement actions.
  Well, let me just say, if I could, a few things about these 
substitutes that are going to be considered tomorrow and why they do 
not establish the two goals, they do not meet the two tests that I have 
already mentioned; and that is, who is going to decide what kind of 
care one gets; and, secondly, how one is going to enforce one's rights 
if one was denied care.
  We have three substitutes that will be considered tomorrow. I just 
want to basically go through some of the key concerns I have with these 
substitutes and why I ask my colleagues to vote no against them and to 
let us have, instead, the Norwood-Dingell bill as the base bill that we 
are voting on.
  Let me take first the Boehner amendment in the nature of a 
substitute. This bill does not include many important patient 
protections. Now, I have not spent the time this evening going into all 
the patient protections, all the specific patient protections that the 
Norwood-Dingell bill provides, and there are many. I have talked about 
them many times, so I am not going to go through them all this evening.
  But I did want to talk about the patients' protections that are in 
the Norwood-Dingell bill that are not in the Boehner substitute. The 
Boehner substitute does not apply to all Americans in privately insured 
plans. It fails to extend protection to millions of Americans who 
purchase insurance individually.
  Now, my colleagues have to understand that, in the other body, a 
managed care bill was passed in the Senate that basically covered very 
few people.
  The tremendous advantage of the Norwood-Dingell bill is that it 
covers everybody, anybody who has insurance. Well, if my colleagues 
were to adopt the Boehner substitute tomorrow instead of the Norwood-
Dingell bill, basically millions of Americans who purchase insurance 
individually would not be covered.
  The Boehner substitute also does not include a provision on 
accountability or liability. It, therefore, provides no meaningful 
remedies at all for individuals in employer plans. It takes away 
current remedies by placing restrictions on all health care liability 
claims, including those in State court.
  The bill also does not include access to specialists, an important 
aspect of the Norwood-Dingell bill, access to non-formulary drug, 
another important aspect in the Norwood-Dingell bill, protections for 
patient advocacy or limits on financial incentive arrangements that 
induce providers to withhold care.
  One of the things that is most abusive today and one of the biggest 
criticisms that I receive from my constituents is that, right now, HMOs 
provide financial incentives to physicians not to provide care. That is 
an awful thing. But that is the reality today in the managed care 
system for many people.
  The Boehner bill does not do anything to correct that, whereas the 
Norwood-Dingell bill does. The Boehner substitute's external appeals 
provision would require external reviews to use the plan's definition 
of medical necessity.
  When I talked before about how the Norwood-Dingell bill, one of its 
two major goals is to make sure that the physician and the patient 
decide what kind of care one gets, that is because, in the Norwood-
Dingell bill, the definition of medical necessity, what is medically 
necessary is made by physicians. It is a standard developed in the 
particular specialty by the doctors in that specialty area. So that, 
for example, for cardiology, the Board of Cardiologist standards would 
hold sway.
  Well, the Boehner substitute basically says that, in doing an 
external review, the plan's definition, the HMO insurance company's 
definition of medical necessity holds sway. So there again, the HMO is 
going to decide what kind of care one gets. Reviews would only decide 
if the plan followed its own guidelines, essentially rubber stamping 
the HMOs decisions.
  The Boehner bill also says that plans control, HMOs control what 
information patients have to submit to the reviewers. The patient does 
not have the right to submit his or her own evidence. There is no 
requirement that reviews be made in accordance with the patient's 
medical exigencies. A review panel could take up to 30 days.
  Again, the problem with these substitutes to the Norwood-Dingell bill 
is that, if one has been denied care, one is not going to be able to 
have an effective appeal in a timely manner. That is one of the biggest 
problems with the Boehner substitute.
  Now, let me talk about the Coburn-Shadegg-Thomas substitute. The 
gentleman from Arizona (Mr. Shadegg), just a few minutes before I 
spoke, talked about how wonderful this substitute was. I would point 
out that the Coburn-Shadegg-Thomas substitute, the second substitute 
that will be considered tomorrow in lieu of Norwood-Dingell falls short 
on many important patient protections.
  There is a $100 threshold to get to external review. A person who is 
denied a simple, yet life-saving, test would never get the review. 
There is no ability for patients to get access to off-formulary drugs 
when necessary.
  The Coburn-Shadegg bill only requires coverage of routine costs of 
cancer trials, leaving patients with other devastating diseases without 
any protections. Emergency coverage under the Coburn-Shadegg bill for 
newborns is judged by a prudent health professional standard. That 
could mean that plans could deny payment for a larger range of neonatal 
emergency care.
  But let me also talk about the enforcement aspects of the Coburn-
Shadegg bill. Again, if one is denied care, how does one enforce one's 
right to overturn that denial and have the care provided? Well, under 
the Coburn-Shadegg substitute, there is an entirely new Federal cause 
of action.

  HMOs can require an enrollee, a patient, to go to a certification 
panel that would decide whether the person was injured and whether this 
was caused by the HMO. If the panel finds for the HMO, the suit is 
dismissed.
  The bill basically caps the amount of noneconomic damages a person 
can receive. It also undermines existing remedies because it requires 
that a person go through the bill's Federal remedy before seeking any 
State remedies.
  What we are seeing here is a series of hoops. I have to be honest. I 
felt that the gentleman from Arizona (Mr. Shadegg) was actually being 
somewhat honest when he was saying that there were major limits on 
one's ability to sue in the substitute that he has co-authored. Well, 
why should that be? Why are all these limits placed on one's ability to 
sue if one has seriously suffered damage? I mean, this is not right.
  What we are trying to do here in the Norwood-Dingell bill is to 
basically make sure that one has a remedy, a right to enforce one's 
rights, and to make sure that one is not denied care. Any effort to 
basically water that down, to me, makes no sense and should be 
defeated.
  Mr. Speaker, let me lastly talk about the third substitute that the 
House will consider tomorrow, and that is the Houghton substitute or 
Houghton amendment.
  It strikes the liability provision from the Norwood-Dingell bill and 
replaces

[[Page H9507]]

it with a weak Federal remedy under ERISA. The Federal remedy would 
preempt a long history of allowing States to provide appropriate 
remedies for various harms suffered by their residents.
  All we are doing in the Norwood-Dingell bill is saying that one has a 
right in State court or under State law to sue in the same way that one 
would for any other damage that one suffered.
  Well, why should we go along with the Houghton amendment which 
basically strikes that liability provision in Norwood-Dingell and 
creates another Federal remedy under ERISA? ERISA is the Federal law 
that preempts the State law and then makes it so that, even in States 
like Texas or New Jersey, where we have patient protections on the 
State level, that one does not have any right to those protections 
because one's employer may be self-insured; and, therefore, one falls 
under the Federal ERISA law.
  Well, the Houghton amendment would basically strike the provisions 
from Norwood-Dingell and give one another Federal ERISA remedy rather 
than being able to sue under State law. This Federal remedy under the 
Houghton amendment is full of loopholes and would allow plans, HMOs to 
escape liability.
  The Houghton amendment provides bonding arbitration in place of 
external review and access to courts with minimal, if any, protections 
for consumers against bias.
  Once again, Mr. Speaker, I urge my colleagues to look carefully at 
these substitutes tomorrow, and they will find that, in every case, 
they limit the ability of an American, of our constituents to be able 
to get quality care and to enforce their rights to make sure that they 
get their quality care. That is why all those substitutes should be 
defeated, and we should simply pass the Norwood-Dingell bill.
  I wanted to mention a few other things tonight about some of the 
attacks that we are getting and that I am sure will intensify tomorrow 
against the Norwood-Dingell bill, which I think have been effectively 
refuted by those who support the Norwood-Dingell bill, but I want to 
mention them again because they continue unabated.
  We are told, of course, the old thing, that the Norwood-Dingell bill, 
the Patients' Bill of Rights, is going to allow for numerous lawsuits, 
and that that is going to increase the costs of premiums, and 
ultimately employers will drop coverage for their employees because the 
costs will be too high.
  Well, I think that that has been effectively refuted by the fact for 
the last 2 years that the State of Texas has had on its book a patient 
protection act very similar to the Norwood-Dingell bill. The reality is 
there have been only four lawsuits filed during that 2-year period in 
the State of Texas, and the cost of premiums have gone up less than 
they have in States that do not have those same kind of patient 
protections.
  I do not think anything more needs to be said on the issue of costs 
or the issue of suing the HMO and liability and excessive lawsuits than 
to look at the Texas example.
  But the other attack that we are getting again was made by the 
gentleman from Arizona (Mr. Shadegg) earlier this evening when he said 
that the Norwood-Dingell bill would allow for employers to be sued; and 
because employers would be sued, they would drop coverage because they 
would not want to be the subject of lawsuits.
  Well, again, that is not accurate. The Norwood-Dingell bill has very 
specific shield language that shields the employer from liability 
unless they are actually involved in the decision to deny one care.
  I would say that even the gentleman from Arizona (Mr. Shadegg) 
admitted that, if they are involved in a decision to deny one care, 
they should be sued.
  The bottom line is that it is only the Norwood-Dingell bill that 
provides this kind of a shield to make sure that employers cannot be 
sued. To suggest somehow that that shield will not work again is 
inaccurate.
  I just wanted to cite a reference that has been made again by some of 
my colleagues today and on other occasions, the myth that is being 
promulgated against Norwood-Dingell on this point is to say that 
employers would be subject to lawsuits simply because they offer health 
benefits to their employees under ERISA.
  Well, section 302(a) of the Norwood-Dingell bill specifically 
precludes any cause of action against an employer or other plan sponsor 
unless the employer or plan sponsor exercises discretionary authority 
to make a decision on a claim for covered benefits that results in 
personal injury or wrongful death.
  Now, how do we define exercise and discretionary authority? The myth 
again being promulgated by those against the Norwood-Dingell bill is 
that employers' decisions to provide health insurance for employees 
will be considered an exercise of discretionary authority. That is 
simply not true.

  Examples of the types of decisions that health plan administrators 
make that directly affect the care that patients receive and could be 
considered medical decisions include inappropriately limiting access to 
physicians through restricted networks, refusing to cover or delay 
needed medical services, drawing treatment protocols too narrowly, 
offering payment incentives, or creating deterrence to discourage the 
provision of necessary care, and discouraging physicians from fully 
discussing health plan treatment options, the so-called gag rules. 
These are not decisions that employers make.
  The Norwood-Dingell bill excludes from being construed as the 
exercise of discretionary authority decisions to, one, include or 
exclude from the health plan any specific benefit; two, any decision to 
provide extra contractual benefits; and, three, any decision not to 
consider the provision of the benefit while its internal or external 
review is being conducted.
  So the bottom line is the employer is shielded from liability. That 
is the simple truth. That is why the Norwood-Dingell bill should be 
adopted tomorrow and not some of these substitutes that claim to 
improve on the law.
  Now, let me just say one thing finally if I could, Mr. Speaker. It 
sounds kind of crazy, but I have heard some of my colleagues say, well, 
why do we need to pass the Norwood-Dingell bill? Why do we need Federal 
legislation to address the abuses of managed care, because, after all, 
the States are doing this, and even the courts are doing it?
  I mentioned the Texas law. I mentioned the other day, and some of my 
colleagues have talked about it, California really recently enacting a 
law which was signed by Governor Davis just a few days ago.
  We have also heard about court cases, a recent decision by the 
Illinois Supreme Court that ruled last Thursday that HMOs may be sued 
for medical malpractice.
  Just last week as well, the Supreme Court assigned itself an 
important role in the debate over managed care, the U.S. Supreme Court, 
by accepting a case on whether an Illinois health maintenance 
organization breached a legal duty to a patient whose appendix burst 
during an 8-day wait for a test to diagnose her abdominal pain.

                              {time}  2145

  So some of my colleagues are saying to me, we have some States that 
are passing laws, let them continue to do so. Or we have the court, 
this case Illinois or maybe even the Supreme Court of the United 
States, that will ultimately say that an individual has the right to 
sue the HMO, so why do we need the Norwood-Dingell bill? Well, the fact 
that many States have decided that they cannot wait for Federal action 
and have passed these measures to strengthen patient protection should 
not be an excuse to not have Federal action.
  The bottom line is, and if I could just read from an editorial that 
was in The New York Times the other day, it talks about why State laws 
are not sufficient, and it says and I quote, ``State initiatives do not 
replace the need for Federal legislation. For one thing, none of these 
State protections apply to people in self-insured plans created by 
large employers, which are exclusively federally regulated. More 
important, current Federal law has long been interpreted to bar 
patients covered by private employer-sponsored health plans from suing 
for damages caused by improper benefit denials, although the Supreme 
Court this week decided to hear a case that will review this issue. The 
California legislation tries to get around the legal hurdle by framing 
the new State-granted right to sue as based on the right to obtain 
quality care rather than the right to particular benefits. That 
approach will clearly be

[[Page H9508]]

challenged in court and may well be struck down unless Congress closes 
the loophole in Federal law that now shields health plans from 
meaningful liability.''
  Mr. Speaker, if I am one of the people, one of my constituents out 
there who has been denied care, I can assure Members that it is not 
going to make me feel good that I do not come under the patient 
protections because I happen to be in an ERISA federally-preempted 
plan, or that I have to wait for the courts, whether it be Federal or 
State courts, to find a loophole so that I can sue the HMO.
  Again, Mr. Speaker, I would say it has been an interesting debate 
today. I think it is very unfortunate that the rule passed. I think it 
is unfortunate that this access bill passed now, and that whatever we 
do pass tomorrow will have to be incorporated in this so-called access 
bill that I think provides a number of poison pills and will make it 
difficult for the Norwood-Dingell bill to move in the Senate or to be 
resolved in conference.
  But I would still urge that tomorrow is also an important day, and we 
want to make sure that the Norwood-Dingell bill passes and is not 
superceded by some of these other three substitutes that basically will 
water down the protection and the enforcement rights for our 
constituents that exist in the Norwood-Dingell bill.
  I urge my colleagues tomorrow to support the Norwood-Dingell bill and 
to vote ``no'' on all the substitutes.

                          ____________________