[Congressional Record Volume 147, Number 66 (Tuesday, May 15, 2001)]
[Senate]
[Pages S4951-S4953]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FRIST (for himself, Mr. Breaux, and Mr. Jeffords):
  S. 889. A bill to protect consumers in managed care plans and in 
other health coverage; to the Committee on Health, Education, Labor, 
and Pensions.
  Mr. FRIST. Mr. President, I rise today on behalf of my colleagues 
Senator Breaux and Senator Jeffords to introduce the Bipartisan 
Patients' Bill of Rights Act of 2001. This new, balanced patients' 
rights initiative truly represents a bipartisan breakthrough in this 
ongoing debate.
  For over 5 years, we have been engaged in debate about how best to 
protect patients in managed care plans. The time for debate and 
discussion is over. We need to act and to move forward to make progress 
on this issue in this Congress.
  The legislation we are introducing today is designed to do just that. 
It builds upon, incorporates, and refines the best ideas that have been 
put forth by both Republicans and Democrats over the past few years. 
I'd like to particularly acknowledge the work of Senator Nickles, 
Senator Kennedy, and Senator Jeffords. And of Representative Norwood, 
Representative Dingell, Representative Thomas, Representative Boehner, 
Representative Shadegg, and Speaker Hastert.
  Importantly, the legislation we are introducing today meets the 
principles the President outlined earlier this year, and can be signed 
into law. Patients have waited far too long for these needed 
protections.
  As a physician, I am particularly gratified that the legislation we 
are introducing is being supported by a wide range of groups 
representing physicians and providers, including the American College 
of Surgeons, the Society of Thoracic Surgeons, the American College of 
Cardiology, the American Society of Anesthesiologists, the American 
Society for Gastrointestinal Endoscopy, the American Society of 
Clinical Pathologists, the American Academy of Dermatology Association, 
the American Association of Orthopaedic Surgeons, the American 
Association of Neurological Surgeons, the American Urological 
Association, the American Society of Clinical Pathologists, the 
American College of Emergency Physicians, the American Society of 
Cataract and Refractive Surgery, the American Psychological 
Association, and the American Physical Therapy Association.
  As others review the details of this legislation, I hope and expect 
that support will continue to grow.
  Let me briefly outline the highlights of our legislation.
  The Bipartisan Patients' Bill of Rights Act of 2001 protects all 
Americans in private health plans. At the same time, it gives deference 
to the states by allowing state managed care laws to continue in force 
so long as they are consistent with our principles.
  The bill also includes a comprehensive set of patient protections. 
For example, it guarantees emergency coverage under a ``prudent 
layperson'' standard. It guarantees direct access for women to OB/GYNs, 
and allows patients to choose a pediatrician as their child's primary 
health care provider. The legislation also bans so-called ``gag 
clauses'' in health plan contracts; prohibits discrimination against 
health professionals based solely on their license, guarantees access 
to needed prescription drugs that are not part of a health plan's 
formulary; and contains many other important protections.
  Because one of the best ways to improve our health care system is to 
make sure consumers are fully informed, the Bipartisan Patients' Bill 
of Rights Act of 2001 also requires health plans to disclose to 
enrollees extensive information about their health coverage, including 
providing information about the new Federal rights they will be 
guaranteed as a result of this legislation.
  The heart of the legislation is a new, independent, impartial 
external medical review to make sure patients can get the care they 
need when they need it. The independent review in our bill will help 
ensure that qualified doctors, not health plans, will make medical 
decisions.
  Importantly, the legislation includes new, expanded remedies to hold 
health plans accountable in federal court. As I have often said, 
litigation should be a last resort. But when patients have been harmed 
by a health plan delay or denial of care, or where a plan refuses to 
comply with an external review decision, patients should be allowed to 
enforce those rights in Federal court.
  For the first time under our legislation, patients will be able to 
sue for monetary damages in federal court. Economic damages are 
unlimited. Noneconomic damages are capped at $500,000.
  In addition, patients can go to court at any time to get the health 
benefits they need through injunctive relief if going through the 
internal or external review process would cause them irreparable harm.
  While we provide important new federal legal rights, we do not 
preempt the progress states have made. Our bill expressly protects 
state HMO liability laws and state court jurisdiction over malpractice 
cases against HMOs where health plans are making ``treatment'' or 
``health care delivery'' decisions.
  During this time of rapidly rising health care costs, Congress must 
be extremely careful to protect employers who voluntarily sponsor 
health coverage for over one hundred million Americans from the 
increased risk of litigation simply for offering their employees 
coverage. Our bill accomplishes this by giving employers the statutory 
right to appoint insurance carriers or third-party administrators who 
are

[[Page S4952]]

making coverage decisions as ``designated decision makers'' who may be 
sued in federal court.
  Finally, the Bipartisan Patients' Bill of Rights Act of 2001 ensures 
that treating physicians and health professionals are not subject to 
new, expanded liability. We make clear that doctors who are providing 
care or treatment directly to patients cannot be ``designated decision 
makers'' unless they agree in writing to do so and meet the bill's 
strict solvency and financial requirements.
  Let me again thank my cosponsors, Senators Breaux and Jeffords, for 
their hard work on this legislation. And let me also express my 
gratitude to the patient and provider groups who have endorsed our 
legislation.
  I believe this legislation can gather even more support over time, 
and become a vehicle for breaking through the gridlock and partisan 
divisions that have prevented us from making progress during the past 5 
years on this issue. I look forward to working with my colleagues to 
ensure that we pass a bill that the President can sign into law to 
guarantee patients the protections they need.
  I ask unanimous consent that a summary of the legislation be printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

        Bipartisan Patients' Bill of Rights Act of 2001--Summary

       Today, Senators Bill Frist (R-TN), John Breaux (D-LA), and 
     James Jeffords (R-VT) introduced the first bipartisan managed 
     care reform legislation in the 107th Congress that meets the 
     patient protection principles outlined by President Bush in 
     February of this year.
       The ``Bipartisan Patients' Bill of Rights Act of 2001'' 
     guarantees that all Americans covered by private health plans 
     will be protected through a new comprehensive, common-sense 
     set of patient protections guaranteed by federal law. This 
     centrist proposal builds upon and incorporates the best 
     elements of the patients' rights legislation developed during 
     the past two Congresses by both Republicans and Democrats.
       The Bipartisan Patients' Bill of Rights Act will ensure 
     that all Americans covered by private health plans get the 
     care they need and deserve by guaranteeing access to medical 
     specialists, emergency care, needed prescription drugs, 
     point-of-service coverage, and coverage for clinical trials. 
     Patients will be guaranteed access to important information 
     about their health coverage. Doctors, not health plans, will 
     make medical decisions. And, for the first time, all 
     Americans will be able to appeal health plan coverage denials 
     to independent doctors to get rapid, unbiased decisions. 
     Unlike other managed care reform proposals before Congress 
     this year, the bipartisan Frist-Breaux-Jeffords bill will not 
     unnecessarily drive up consumers' health care costs, threaten 
     employers who do not make medical decisions with costly and 
     unnecessary lawsuits, or add significant bureaucratic red 
     tape to the private health care system.
       All the protections in the Frist-Breaux-Jeffords bipartisan 
     ``Patients' Bill of Rights Act'' apply to all 170 million 
     Americans covered by private-sector group health plans, and 
     fully-insured state and local government plans.
       At the same time, the legislation recognizes that the 
     federal government does not have all the answers. States will 
     play the primary role in enforcing the bill's requirements 
     with respect to health insurers and will have flexibility to 
     apply for certification from the Secretary of Health and 
     Human Services (HHS) that their laws are consistent with the 
     patient protection requirements in the bill. A federal 
     advisory board would evaluate state-passed consumer 
     protections under this standard and make recommendations to 
     the Secretary of HHS.
       If a state does not have a law, or adopt a law, consistent 
     with the new federal requirements, federal fall-back 
     legislation would apply. In this case, the U.S. Department of 
     Labor, DOL, would enforce the requirement for fully-insured 
     group health plans, about 75 million people, and HHS would 
     enforce the provision in the individual insurance market, 
     about 22 million people, and for fully-insured state and 
     local government plans, roughly 17 million people. DOL will 
     enforce all the Act's provisions with respect to self-insured 
     private group health plans (roughly 56 million people).
       The Bipartisan Patients' Bill of Rights Act of 2001 
     includes a comprehensive set of commonsense protections to 
     ensure that patients have access to the care, treatment, and 
     information they need.
       Patients can go the nearest hospital emergency room to get 
     the emergency care they need regardless of whether the 
     emergency room is in their health plan's network.
       Employers that offer only closed panel health plans will be 
     required to offer a point-of-service coverage options to 
     their workers.
       Health plans that offer obstetrician/gynecological services 
     must provide women with direct access to an OB/GYN specialist 
     for OB/GYN covered services.
       Health plans must allow patients to choose a pediatrician 
     as their child's primary health care provider.
       When a health care provider is terminated or leaves a 
     health plan's network, the plan must ensure that patients 
     with serious and complex illnesses, and those who are 
     receiving institutional care, may continue treatment with 
     their health care provider for up to 90 days. Health plans 
     also must guarantee that women can continue care with their 
     OB/GYN through post-pregnancy care, and for the remainder of 
     an individual's life in the case of a patient who is 
     terminally ill.
       Health plans that provide prescription drugs through a 
     formulary must ensure that physicians and pharmacists help 
     develop and review the formulary. They also must ensure that 
     patients have access to medically-necessary prescription 
     medications that are not part of the formulary.
       Health plans must ensure that patients receive timely 
     access to specialty medical care when needed. If a plan lacks 
     an appropriate specialist within its network, the plan must 
     guarantee access to a specialist outside the network at no 
     additional cost to the patient.
       Health plans are required to cover routine patient costs 
     associated with participation in approved clinical trials for 
     patients who have life-threatening or serious illnesses for 
     which no standard treatment is effective.
       Patients who need medical advice should not have to worry 
     that their doctor will be prohibited by a health plan 
     contract from discussing all possible treatment options. 
     Therefore, the legislation bans so-called ``gag rules'' in 
     providers' contracts and otherwise prevents health plans from 
     restricting health care professionals from communicating with 
     their patients about treatment options.
       Health plans may not exclude doctors and other health 
     professionals from providing services that are covered by the 
     plan based solely on a health professional's license or 
     certification.
       Health plans must ensure inpatient coverage for the 
     surgical treatment of breast cancer for a period of time 
     determined by a doctor, in consultation with the patient.
       Health plans must disclose the methods they use for 
     compensating health care professionals and providers. In 
     addition, a comprehensive study is authorized to determine 
     the range of provider compensation methods and evaluate the 
     effect of such methods on provider behavior.
       Health plans are required, on an annual basis, to provide a 
     wide range of information to enrollees about the plan's 
     coverage, including detailed descriptions of benefits and 
     cost-sharing requirements.
       To ensure that patients' health care claims are handled 
     fairly from the outset, the legislation contains new rules 
     governing health plans' timing and handling of initial and 
     internal claims. Plans are required to expedite 
     determinations where appropriate.
       The time frames are as follows: Routine Prior 
     Authorization: 14 business days; Expedited Prior 
     Authorization: 72 hours; Concurrent Review: 24 hours.
       When health plans deny patients coverage based on a 
     determination that the care is not medically necessary or 
     appropriate, or that the treatment is experimental or 
     investigational, or where a claim for coverage requires an 
     evaluation of medical facts, the Bipartisan Patients' Bill of 
     Rights Act guarantees patients access to timely independent 
     medical review.
       The legislation requires external medical review decisions 
     to be made by physicians and health care professionals 
     independent of the health plan who practice in a similar 
     specialty as the physician or professional who recommended 
     the care in the first place. In making a decision, 
     independent medical reviewers must take into account all 
     appropriate and available information, including scientific 
     and clinical evidence. Determinations are to be made without 
     deference to the plan's coverage decision and reviewers are 
     not bound by the plan's definitions of medical necessity or 
     experimental/investigational. Independent medical reviewers' 
     decisions are binding on health plans; plans must provide 
     coverage in accordance with the recommendations and time 
     frames established by the independent medical reviewer.
       If a plan fails to comply with the decision of an 
     independent medical reviewer and a patient is harmed, the 
     legislation provides new, expanded legal remedies to hold 
     health plans accountable in federal court.
       A new, exclusive federal legal remedy that provides 
     monetary damages will be available to participants and 
     beneficiaries in employer-sponsored health plans. This remedy 
     is available when an external medical reviewer overturns the 
     plan's decision and the patient is harmed because the plan 
     failed to exercise ordinary care in complying with the 
     external review decision. The new remedy also allows lawsuits 
     in federal court when health plans fail to exercise ordinary 
     care in denying coverage initially or upon internal review, 
     resulting in a harmful delay of coverage.
       Patients must exhaust the external review process before 
     seeking damages in federal court. However, they may go to 
     court at any time to receive injunctive relief, i.e., the 
     court can require the health plan to approve needed care, if 
     they demonstrate that exhausting internal or external review 
     would cause irreparable harm. Patients who are harmed by a 
     plan's failure to exercise ordinary care may receive 
     unlimited economic damages in federal court. They also may be 
     awarded non-economic damages up to $500,000.

[[Page S4953]]

       At the same time, the legislation retains the current law 
     distinction with respect to remedies in the areas that the 
     courts have determined are traditional areas of state 
     concern, such as the ``quality of health care'' and 
     ``treatment'' standards. The bill respects and reinforces 
     state court jurisdiction over quality of care and treatment 
     claims by expressly stating that any harm resulting from 
     treatment and health care delivery activities will continue 
     to be subject to state law remedies.
       When a patient files an appeal and the external reviewer 
     determines that the appeal is not subject to independent 
     medical review, a federal court may assess a civil penalty up 
     to $100,000 when the denial causes substantial harm to the 
     patient.
       The Frist-Breaux-Jeffords legislation protects employers 
     who do not make medical decisions from lawsuits. The 
     legislation gives employers statutory authority to designate 
     a party or parties, such as the insurance carrier or the 
     third-party administrator that will have clear and exclusive 
     authority to make determinations that give rise to legal 
     causes of action. In a fully insured group health plan, this 
     ``designated decision-maker'' is always the insurance 
     carrier, unless the employer expressly takes back 
     responsibility from the carrier. Designated decision-makers 
     must demonstrate that they can fulfill their 
     responsibilities, including financial obligations that stem 
     from liability, by obtaining liability insurance or by 
     meeting certain capital and surplus requirements.
       The Frist-Breaux-Jeffords legislation also helps protect 
     doctors and other health professionals from new, expanded 
     federal liability by expressly providing that health care 
     professionals who directly deliver care or treatment, or who 
     provide services to patients, can not be sued for coverage 
     decisions as designated decision-makers unless they expressly 
     agree in writing to be the designated decision-maker and meet 
     the bill's strict financial requirements. Further, insurance 
     companies may not appoint treating health professionals as 
     designated decision-makers under the bill.

  Mr. JEFFORDS. Mr. President, today, I am pleased to join with 
Senators Bill Frist and John Breaux in introducing the Bipartisan 
Patients' Bill of Rights Act of 2001, bipartisan managed care reform 
legislation that meets the patient protection principles outlined by 
President Bush for a bill he would sign into law. The President's 
strong support for our legislation is proof that he is providing the 
necessary leadership to bring Republicans and Democrats to the table to 
develop managed care protections for all Americans.
  Some believe that the answer to improving our Nation's health care 
quality is to allow greater access to the State's tort system. However, 
you simply cannot sue your way to better health. Rather, we believe 
that patients must get the care they need when they need it. Under the 
Bipartisan Patient Bill of Rights patients have access to an 
independent external medical review process for denials of care. 
Decisions are made by practicing physicians or professionals, 
independent of the plan. Prevention, not litigation, is the best 
medicine.
  A new Federal remedy that provides damages will be available to 
Americans in employer-sponsored health plans when an external review 
entity overturns the plan's decision and the patient is harmed. 
Employers who do not make medical decisions are protected from 
frivolous and unnecessary lawsuits by enabling them to legally 
designate a party that will have clear and exclusive authority to make 
coverage determinations.
  Our Bipartisan Patients' Bill of Rights Act of 2001 has much in 
common with the managed care legislation introduced by Senators McCain, 
Edwards and Kennedy. They share provisions that provide new patient 
protections. Each provides for information to assist consumers in 
navigating the health care system. Most importantly, the bills provide 
for an internal and external independent review process with strong new 
remedies when the external view process fails. Our primary area of 
disagreement lies in the degree that employers are protected from 
multiple causes of action in multiple venues and the provision of a 
reasonable cap on damages.
  Fortunately, I believe we can provide the key protections that 
consumers want at a minimal cost and without disruption of coverage, if 
we apply these protections responsibly and where they are needed, 
without adding significant new costs, increasing litigation, and micro-
managing health plans.
  Our goal is to give Americans the protections they want and need in a 
package that they can afford and that we can enact. This is why I 
believe the Bipartisan Patients' Bill of Rights Act of 2001 represents 
true managed care protections that can be signed into law.
                                 ______