[Congressional Record Volume 146, Number 98 (Tuesday, July 25, 2000)]
[Senate]
[Pages S7515-S7519]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
UNFINISHED BUSINESS ON SENATE AGENDA
Mr. DORGAN. Mr. President, I was listening to some of the discussion
this morning before the Senate broke for the party lunches. I was
especially interested in a couple of presentations about the progress
some think the Senate has made in this Congress, and about why they
believe the Senate is not making progress today or this week.
It reminds me of the story of the fly that landed on the nose of an
ox. The ox, with the fly on its nose, went out for the entire day and
plowed in the field. They came back to the village at night, and the
villagers began applauding. The fly, still on the nose of the ox, took
a deep bow and said to the villagers: We've been plowing.
That is sort of what I heard this morning--we've been plowing--when,
in fact, this Senate, as all of us know, has not done the work we
should have been doing for the American people.
I thought it would be interesting to describe what the agenda should
have been and what we have done.
I will talk about some of the issues with which most Americans
believe the Congress should be dealing: Common sense gun safety. For
those who might be listening, I'm not talking about gun control; this
is not in any way going to abridge people's Second Amendment right to
own guns. This legislation will, however, close a loophole in the law
that allows people to purchase guns at gun shows without having to get
an instant check.
If you buy a gun in this country in a gun store, you must have your
name run through an instant check system
[[Page S7516]]
to find out whether you are a felon. That makes good sense. We should
not sell guns to felons. The instant check system helps identify if
someone trying to buy a gun at a gun store has been previously
convicted of a felony and therefore should not be sold a weapon.
But guess what? Go to a gun show on a Saturday somewhere and you can
buy a gun without an instant check being done. This does not make any
sense. We want to close that loophole. We do not want to be selling
guns at a gun show to a convicted felon. Yet we cannot get this common
sense piece of legislation enacted in this Congress because it is
considered radical or extreme by some. It is a very simple proposition:
Close the gun show loophole to prevent felons from buying guns. We
should get that done.
Or what about the Patients' Bill of Rights? Every day 14,000 patients
are denied needed medicines; 10,000 are denied needed tests and
procedures in this country. But we cannot pass a decent Patients' Bill
of Rights because, in this Congress, we have people who stand with the
big insurance companies rather than standing with patients.
I know it is inconvenient to some to hear about specific patients who
have been denied needed care by their HMOs. I have talked about these
patients at great length in the past because these folks are what the
Patients' Bill of Rights is all about. It is about the woman who fell
off a 40-foot cliff while she was hiking in the Shenandoah Mountains.
She fell 40 feet, broke several bones and was hauled unconscious into a
hospital emergency room on a gurney. After surviving her life-
threatening injuries, she was told by her managed care organization
that it would not cover her medical care in the emergency room because
she didn't have prior approval to go to the emergency room. This is a
woman who was hauled into the emergency room unconscious. That is the
sort of thing people are confronting these days.
Senator Reid and I had a hearing in Nevada on this subject. At that
hearing, a woman stood up and talked about her son. Her son is dead
now. He died last October at 16 years of age. He was battling cancer
and needed a special kind of chemotherapy to give him a chance to save
his life. Unfortunately, his insurance company denied him this care. He
not only had to battle cancer, but he also had to battle the insurance
company that wouldn't cover the care he needed. His mother held up a
very large picture of her son at the hearing and, with tears in her
eyes, she cried as she told us: As my son lay dying, he looked up at me
and said, Mom, I just don't understand how they could do this to a kid.
Kids who are battling cancer ought not have to battle the insurance
companies or HMOs. Yet that is what is happening too often in this
country. We propose to pass a Patients' Bill of Rights that is very
simple. It says every patient in this country has a right to know all
of his or her options for medical treatment, not just the cheapest
option. It says that if you have an emergency and go to an emergency
room, you have a right to care in that emergency room. It says that if
you have cancer and your employer or your spouse's employer changes
health plans, you have a right to continue seeing the oncologist who
has been helping you to fight that cancer. But we can't get a Patients'
Bill of Rights enacted because when it comes time to say who you stand
with--the patients who ought to have certain rights or the big
insurance companies that in too many cases have denied those rights--
too many Senators say: We stand with the insurance companies.
The last time we debated this issue on the floor, about a month ago,
my colleague from Oklahoma, Senator Nickles, offered an amendment that
he called a Patients' Bill of Rights. He accomplished his purpose, I
suspect, because the next day the paper said the Senate passed a
Patients' Bill of Rights. However, what the Senate really passed was a
``patients' bill of goods,'' not a Patients' Bill of Rights.
I thought it interesting that Dr. Ganske, a Republican Congressman,
wrote this letter:
Heaven forbid that any member of Congress would ever vote
on a bill they haven't had time to read! Heaven really forbid
that a member would vote on a bill that their staff hasn't
seen!
Yet, that is exactly what happened two weeks ago on the
floor of the Senate when the Nickles HMO amendment was
brought up for a vote.
People are just now beginning to realize what was in that
legislation. To help you understand the fundamental flaws of
the Nickles bill, I am including a copy of an analysis of the
Senate's patient's bill of rights that was added to the FY
2001 Labor/HHS legislation.
This Senate legislation eliminates virtually any meaningful
remedy for most working Americans and their families against
death and injury caused by HMOs.
This is Dr. Ganske, a Republican Congressman, making this reference
to the Nickles bill. He then includes a rather lengthy analysis.
Mr. President, I ask unanimous consent to print Dr. Ganske's letter
and the analysis in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
July 13, 2000.
Hon. Byron Dorgan,
U.S. Senate, Hart Senate Office Building, Washington, DC.
Dear Senator Dorgan: Heaven forbid that any member of
Congress would ever vote on a bill they haven't had time to
read! Heaven really forbid that a member would vote on a bill
that their staff hasn't seen!
Yet, that is exactly what happened two weeks ago on the
floor of the Senate when the Nickles HMO amendment was
brought up for a vote. The Norwood-Dingell-Ganske bipartisan
Consensus Managed Care Reform Act of 1999 had been public for
months before the House voted. Not so with the Nickles HMO
bill.
People are just now beginning to realize what was in that
legislation. To help you understand the fundamental flaws of
the Nickles bill, I am enclosing a copy of an analysis of the
Senate patient's bill of rights that was added to the FY 2001
Labor/HHS legislation.
This Senate legislation eliminates virtually any meaningful
remedy for most working Americans and their families against
death and injury caused by HMOs. Please read the analysis by
Professors Rosenbaum, Frankford, and Rosenblatt as to why the
Nickles bill is worse than the status quo!
Sincerely,
Greg Ganske,
Member of Congress.
____
July 6, 2000.
House of Representatives,
Rayburn House Office Building,
Washington, DC.
Dear Sir: At your request we have reviewed the Senate
patients' bill of rights legislation that was inserted into
the FY 2001 Labor/HHS legislation last week.
Rather than expanding individual protections, the measure
would appear to undo state law remedies for medical injuries
caused by managed care companies' treatment decisions and
delays. In this regard, the bill runs directly contrary to
United States Supreme Court's reasoning in its recent
decision in Pegram v. Herdrich, which seems to reaffirm the
authority of states to determine medical liability policy,
and underscores the appropriateness of state courts as the
forum for medical liability cases.
The displacement of state medical liability law in favor of
a new federal medical liability remedy might have some policy
validity, were the new law fair and just. But the remedy set
forth in the Senate bill is compromised by an unprecedented
range of limitations, exceptions, and defenses and appears to
leave injured persons with no remedy at all.
In sum, in the name of patient protection, the Senate
legislation appears to eliminate virtually any meaningful
remedy for most working Americans and their families against
death and injury caused by managed care companies.
conclusion
The central purpose underlying the enactment of federal
patient protection legislation is to expand protections for
the vast majority of insured Americans whose health benefits
are derived from private, non-governmental employment, and
who thus come within the ambit of ERISA. Not only would the
Senate measure not accomplish this goal, but worse, it
appears to be little more than a vehicle for protecting
managed care companies from various forms of legal liability
* * *
* * * * *
By classifying medical treatment injuries as claims denials
and coverage decisions governed by ERISA, the Senate bill
insulates managed care companies from medical liability under
state law.
Section 231 of the Senate bill amends ERISA Sec. 502 to
create a new federal cause of action relating to a ``denial
of a claim for benefits'' in the context of prior
authorization. The bill defines the term ``claim for
benefits'' as a ``request * * * for benefits (including
requests for benefits that are subject to authorization of
coverage or utilization review) * * * or for payment in whole
or in part for an item or service under a group health plan
or health insurance coverage offered by a health insurance
issuer in connection with a group health plan.'' ERISA
Sec. 503B, as added. Thus, the bill would classify prior
authorization denials as ``claims for benefits'' that are in
turn covered by the new federal remedy. Federal remedies
under ERISA Sec. 502 preempt all state law remedies.
[[Page S7517]]
This classification would have profound effects,
particularly in light of the Supreme Court's recent decision
in Pegram v. Herdrich. As drafted, the Senate bill arguably
would preempt state medical liability law as applied to
medical injuries caused by the wrongful or negligent
withholding or necessary treatment by managed care companies.
The bill thus would reverse the trend in state law, which has
been to hold managed care companies accountable for the
medical injuries they cause, just as would be the case for
any other health provider.
In recent years courts that have considered the issue of
managed care-related injuries have applied medical liability
theory and law to managed care companies in a manner similar
to the approach taken in the case of hospitals. Thus, like
hospitals, managed care companies can be both directly and
vicariously liabile for medical injuries attributable to
their conduct. In a managed care context, the most common
type of situation in which medical liability arises tends to
involve injuries caused by the wrongful or negligent
withholding of necessary medical treatment (i.e., denials of
requests for care).
State legislatures also have begun to enact legislation to
expressly permit medical liability actions against managed
care companies. The best known of these laws is medical
liability legislation enacted in 1997 by the state of Texas
and recently upheld in relevant part against an ERISA
challenge by the United States Court of Appeals for the
Fifth Circuit.
In Pegram v. Herdrich, the Supreme Court implicitly
addressed this question of whether managed care state
liability law should cover companies for the medical injuries
they cause. The Court decided that liability issues do not
belong in federal courts and strongly indicated its view that
in its current form ERISA does not preclude state law
actions. It is this decision that the Senate bill would
appear to overturn.
In Pegram, the Court set up a new classification system for
the types of decisions made by managed care organizations
contracting with ERISA plans. The first type of decision
according to the Court is a ``pure'' eligibility decision
that, in an ERISA context, constitutes an act of plan
administration and thus represents an exercise of ERISA
fiduciary responsibilities. Remedies for injuries caused by
this type of determination would be addressed under ERISA
Sec. 502 (which of course currently provides for no remedy
other than the benefit itself).
The second type of decision is a ``mixed'' eligibility
decision. While the Court's classification system contains a
number of ambiguities, it appears that in the Court's view,
this second class of decision effectively occurs any time
that a managed care company, acting through its physicians,
exercises medical judgment regarding the appropriateness of
treatment. Such decisions, as medical decisions rather than
pure eligibility decisions, are not part of the
administration of an ERISA plan and thus not part of ERISA's
remedial scheme because, according to the Court, in enacting
ERISA, Congress did not intend to displace state medical
liability laws. The Court thus strongly indicated that these
claims are not preempted by ERISA and may be brought in state
court. In the Court's view, these mixed decisions represent a
``great many, if not most'' of the coverage decisions that
managed care companies make.
The Senate bill would appear to reverse Pegram by
effectively classifying all prior authorization
determinations as Sec. 502 decisions, without any regard to
whether they are ``pure'' or ``mixed''. As a result, state
medical liability laws that arguably now reach mixed
decisions apparently would be preempted, leaving individual
physicians, hospitals, and other health providers as the sole
defendants in state court. Under the complete preemption
theory of Sec. 502, remedies against managed care virtually
impossible standard to prove and particularly egregious in
light of the fact that plaintiffs cannot even bring such an
action unless they have gotten a reversal of the denial at
the external review stage. Even where they have proven that a
company wrongfully withheld treatment, plaintiffs can recover
nothing for their injuries without taking the level of proof
far beyond what is needed to win at the external review
stage. Virtually all injuries would go uncompensated.
A plaintiff will be forced to show ``substantial harm'',
defined in the law as loss of life, significant loss of limb
or bodily function, significant disfigurement or severe and
chronic pain. This definition arguably would exclude some of
the most insidious injuries, such as degeneration in health
and functional status, or loss of the possibility of
improvement, that a patient could face as a result of delayed
care, particularly a child with special health needs. In
Bedrick v. Travelers Insurance Co., the managed care company
cut off almost all physical and speech therapy for a toddler
with profound cerebral palsy. The Court of Appeals, in one of
the most searing decisions ever entered in a managed care
reversal case, found that the company had acted on the basis
of no evidence and with what could only be described as
outright prejudice against children with disabilities (the
managed care company's medical director concluded that care
for the baby never could be medically necessary because
children with cerebral palsy had no chance of being normal).
The consequences of facing years without therapy were
potentially profound for this child: the failure to develop
mobility, the loss of the small amount of motion that the
child might have had, and the enormous costs (both actual and
emotional) suffered by the parents. Arguably, however, none
of these injuries falls into any of the categories identified
in the Senate bill as constituting ``substantial harm.''
The maximum award permitted is $350,000, and even this
amount is subject to various types of reductions and offsets.
This limitation on recovery will make securing representation
extremely difficult.
No express provision is made for attorneys fees. Were the
new right of action to be interpreted not to include
attorneys fees this would be a radical change in the ERISA
statute, and one that would create a massive barrier to use
of the new purported ERISA remedy. To mount a case proving
bad faith denial of treatment that caused substantial injury
is an enormously expensive proposition. The limitations on is
enormous. In Humana v. Forsythe the United States Supreme
Court held RICO applicable to a managed care company that had
systematically defrauded thousands of health plan members out
of millions of dollars in benefits by systematically lying to
members about the proportional cost of the treatment they
were being required to bear (the policy was a typical 80/20
payment policy, but because of secret discounts that were not
disclosed to members, group policy holders in many cases were
paying for the majority of their care). This is racketeering,
pure and simple, and thus represents a classic type of RICO
claim. To use a patient protection bill potentially to
insulate managed care companies against these types of
practices is unwise at best.
conclusion
The central purpose underlying the enactment of federal
patient protection legislation is to expand protections for
the vast majority of insured Americans whose health benefits
are derived from private, nongovernmental employment, and who
thus come within the ambit of ERISA. Not only would the
Senate measure not accomplish this goal, but worse, it
appears to be little more than a vehicle for protecting
managed care companies from various forms of legal liability
under current law. Viewed in this light, Congressional
passage of the Senate bill would be far worse than were
Congress to enact no measure at all.
Mr. DORGAN. We cannot get a real Patients' Bill of Rights passed. How
about a Medicare prescription drug benefit? Well, we are not able to
get that done either. We have been busy providing tax cuts, an estate
tax repeal and a change in the marriage tax penalty. The head of OMB
said yesterday that, under the recent tax proposals passed by the
majority party, the top 1 percent of the income earners in this country
will get more tax cuts than the bottom 80 percent combined.
This explains why the upper income folks, those with the largest
estates and the highest incomes, rally around these tax cut proposals.
There should really be no difference between the parties on the estate
tax. Those of us in the minority believe we ought to repeal the estate
tax for family farms and small businesses and allow a reasonable
accumulation of wealth for a family. We said if you have up to $4
million, you should pay no estate tax. For a family farmer or small
business, you can have assets up to $8 million and pay no estate tax at
all. But that wasn't good enough for the majority. The majority party
said, we must also fight to eliminate the tax burden on the estates of
the Donald Trumps of America who will die with half a billion or a
billion or several billion dollars. At what price? What else could we
do with the money that the majority wants to use to relieve the tax
burden on the wealthiest estates in America?
Perhaps we could use it to reduce the Federal debt. It seems to me
that is probably a better priority than providing a tax cut for the
estates of billionaires. Or we could use the money for a prescription
drug benefit for Medicare, perhaps for school modernization, or to hire
more teachers to lower class sizes. There are a whole series of
proposals that might represent a better alternative than deciding we
must use this revenue to relieve the tax burden on the largest estates
in this country.
Is a prescription drug benefit in the Medicare program important? It
is quite clear that if we were creating the Medicare program today, we
would provide coverage for prescription drugs through Medicare. Senior
citizens make up twelve percent of our population, but they consume
one-third of all the prescription drugs used in this country. They
reach a period in their life where they need to maintain their health,
and miracle drugs that did not exist 30 years ago now exist to extend
their lives. In the 20th century, we increased the life expectancy in
America
[[Page S7518]]
by 30 years. A part of the reason for that is better nutrition, better
living conditions, better education about healthy living, but part of
the reason is also miracle drugs.
It is not unusual for a senior citizen to be taking two, four, five,
and in some cases, ten or twelve different prescription drugs to deal
with their health challenges. Those prescription drugs are enormously
costly. The price is increasing every year. Last year, spending on
prescription drugs in America increased 16 percent in 1 year. The year
before the increase was about the same. Many senior citizens just can't
afford these expenses.
I have held hearings through the Democratic Policy Committee in five
or six States on this subject. I have had senior citizen after senior
citizen tell me that, when going shopping, they first must go to the
pharmacy in the back of the grocery store to purchase their
prescription drugs. Only after they have bought their medications do
they know how much money they have left to purchase food. It is a
common story all across the country. So should we add a prescription
drug benefit to the Medicare program? Of course, we should. Will we? We
won't do it unless we get some cooperation from a majority party that
believes this is not a priority for the country.
We believe it is. We have a plan that will provide a prescription
drug benefit to Medicare beneficiaries in a way that is cost-effective,
in a way that will tend to push down the prices of prescription drugs
and provide an opportunity for coverage for senior citizens who elect
to have this benefit. That ought to be part of the agenda in this
Congress, but we can't get it done.
Or what about school modernization? This country has had such a
wonderful 20th century, especially the last half of the century
following the Second World War. Those who fought for America's freedom
in World War II came back to this country, and began careers, got
married, had children. They built schools all over America 50 years
ago. Many of those schools are now in disrepair. These schools need
renovation or replacement.
Not only are many of these schools desperately in need of
modernization and renovation, but there is also a need to reduce class
sizes from 28 or more, in some classes, down to 18 kids or fewer.
We know the quality of education is better when there are smaller
class sizes. We know it is better for kids' education when they are
going through the door of a modern schoolroom that all of us can be
proud of. As I have said many times--and if it is tiresome to people,
it doesn't matter to me--it is hard to go to the Cannon Ball Elementary
School in North Dakota and have a third grader such as Rosie Two Bears
say: Mr. Senator, will you build us a new school? That school has 150
students, one water fountain, and two bathrooms. Some of the classrooms
have to be evacuated periodically because of raw sewage seeping up
through the floors. Part of the building is 90 years old and has
largely been condemned.
Are we proud of sending that young girl through that classroom door?
I don't think so. We can do better. Perhaps that is more important than
providing relief from the estate tax burden of somebody who dies with
$1 billion. Instead of being able to leave only $600 million to their
heirs, they get to leave all of the $1 billion because the majority
party says that is their priority. Their priority is to give tax cuts
to the top 1 percent of the American income earners that are more than
the tax cuts we are going to give to all of the bottom 80 percent. That
is their priority. My point is that we ought to be focusing on other
priorities.
So this morning when we had people shuffle over to the floor of the
Senate and talk about what a wonderful job this Congress has done and
how we are stalled now because the Democrats somehow don't want to do
anything, I just had to come over here and correct the record. One of
the things hanging up work today is that there are people who have been
nominated as Federal judges whose nominations have been before the
Senate for 3 years without having been brought to the floor for a vote.
We would like that to happen. That is considered unreasonable.
I say to those who think this Congress has a wonderful record that
this is a Congress of underachievers. We have a little time left. We
have this week and September and the first week of October. This is
what we have to do. We have a Patients' Bill of Rights that we ought to
pass. We have gun safety legislation that we ought to pass. We ought to
close the gun show loophole. We ought to pass an increase in the
minimum wage. The fact is, those working at the bottom rung of the
economic ladder in this country have lost ground. Everybody here is so
worried about providing tax breaks to the top income earners. What
about providing some help to those at the bottom of the economic scale?
These people get up and get dressed and have breakfast in the morning
and go out and work hard, and they are trying to raise a family on a
minimum wage that has not kept pace with inflation. We ought to do
something about that.
We ought to provide a Medicare drug benefit. We can do that to
address the needs of our senior citizens who are now struggling with
health problems and just to make ends meet, only to discover that, in
their twilight years, the medicines they need to make life better are
financially out of reach for them.
Last week, we passed a piece of legislation that says maybe we ought
to be able to access the more reasonable prescription drug prices on
exactly the same prescription drugs that exist in Canada and elsewhere.
The same companies produce the same pill, put it in the same bottle,
and they sell it for a third of the price up in Winnipeg, Canada, or,
for that matter, in virtually any other country in which they sell
these drugs.
Last week, I suggested that I would like to see just one Senator
stand up--in fact, I renew the challenge to anybody who wants to come
to the floor--on the floor of the Senate and say that it is fair for
American consumers to pay significantly more for the same exact drug
than consumers in other countries. I will give any Senator who wants to
do this the pill bottles; I held up several last week. The bottle of
the prescription drug sold in the U.S. costs $3.82 a pill and the same
drug in the same bottle, made by the same company, in the same
manufacturing plant, sold in Canada costs only $1.82 a pill. The U.S.
consumer pays $3.82 and the Canadian consumer pays $1.82. I want to see
a Senator, just one Senator, stand up and hold these bottles and say,
yes, this is fair to my constituents and, yes, this price inequity is
something we ought to support. Of course, no one will because nobody
believes that is fair. That is another issue that we have to address.
We were able to get some legislation through the Senate and, of course,
the pharmaceutical industry has indicated that it fully intends to kill
that in conference. We will see.
So there is a lot left for this Senate to do. We have, at the end of
this week, a break for the two national conventions, and then in
September and October we will see the end of the 106th Congress. All
legislation introduced between January of last year and now will
eventually die, unless it is passed by this Congress, and we will have
to start over again next year. So the questions of whether this is an
effective Congress and whether this Congress creates a record any of us
can be proud of are going to be answered in the next few months. Are we
able to address the issues that the American people care about? Will
the majority party stop obstructing on these issues? Will they decide a
Patients' Bill of Rights should be passed by Congress? If so, let's do
it soon. Will we be able to address the issue of reasonable gun safety
measures, increasing the minimum wage, adding a drug benefit for
Medicare, and school modernization? Those and other issues, it seems to
me, are central to an agenda that will strengthen and improve this
country. We will see in the coming days exactly what the 106th Congress
decides it wants to leave as its legacy.
One of the great things about this democracy of ours is that the
majority rules. That is certainly true in the Senate. They control the
schedule. That is why we are now in morning business in the afternoon.
Only in the Senate can you be in morning business in the afternoon, I
guess. But we are not debating an appropriations bill, and we should
be. There aren't enough people wanting to bring judges to the floor for
confirmation and so on.
[[Page S7519]]
The point is this: The majority party has a choice to decide which of
these issues and how many of them they want this Congress to adopt. I
hope it will decide very soon that it chooses to join us and say these
are the issues that matter to the American people, and these are the
issues the 106th Congress shall embrace in the final weeks of this
Congress.
Mr. President, I yield the floor, and I suggest the absence of a
quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. HATCH. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________