[Congressional Record (Bound Edition), Volume 145 (1999), Part 2]
[House]
[Pages 1663-1665]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          MANAGED CARE REFORM

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 1999, the gentleman from Iowa (Mr. Ganske) is recognized for 
60 minutes as the designee of the majority leader.
  Mr. GANSKE. Mr. Speaker, I want to talk to my colleagues today about 
managed care reform, an issue that we must take from the drawing board 
to the signing ceremony this year.
  Last year I joined with my friend, the gentleman from Michigan (Mr. 
Dingell), and offered the Patients' Bill of Rights as an amendment on 
the House floor. While I regret that it did not pass, there may have 
been at least one good thing about that. In the last few weeks, many 
HMOs have announced double digit premium increases, because, in my 
opinion they have not done such a great job in cost containment and 
their premiums have been loss leaders for years. But you can be sure 
that if the Patients' Bill of Rights had passed last year, they would 
be blaming us now for their skyrocketing premiums.

                              {time}  1330

  And by the way, how many of their CEOs are taking pay cuts from their 
multimillion dollar salaries as they are raising their premiums this 
year?
  Mr. Speaker, before discussing how I think Congress will deal with 
this issue

[[Page 1664]]

this year, it is important to understand why passage of HMO reform 
legislation is so important. I will bet that every Member of Congress 
has heard from constituents describing their own HMO horror story.
  We have all seen headlines like: ``HMO's Cruel Rules Leave Her Dying 
for the Doc She Needs.'' Or: ``Ex-New Yorker is Told: Get Castrated So 
We Can Save Dollars.'' Or how about this headline: ``What His Parents 
Didn't Know About HMOs May Have Killed This Baby.''
  Consider the 29-year-old cancer patient whose HMO would not pay for 
his treatments. The HMO case manager told him instead to hold a fund-
raiser. A fund-raiser. Well, Mr. Speaker, I certainly hope that 
campaign finance reform will not stymie this man's efforts to get his 
cancer treatment.
  During congressional hearings two years ago before the Committee on 
Commerce, we heard testimony from Alan DeMeurers, who lost his wife, 
Christy, to breast cancer. When a specialist at UCLA recommended that 
she undergo a bone marrow transplant, her HMO leaned on UCLA to change 
its medical opinion. Who knows whether Christy would be with her two 
children today, had her HMO not interfered with her doctor-patient 
relationship.
  Other plans have placed ridiculous burdens on those seeking emergency 
care. Ask Jacqueline Lee how bad this can be. In the summer of 1996 she 
was hiking in the Shenandoah mountains when she fell off a 40-foot 
cliff. She fractured her skull, her arm, her pelvis; she was 
semicomatose. She was airlifted to the local hospital and treated. Now, 
my colleagues will not believe this. Her HMO refused to pay for the 
services because she had failed to get preauthorization.
  I want to ask my colleagues, what was she supposed to do, know that 
she was going to fall off a cliff? Or maybe as she was laying at the 
base of that 40-foot cliff, semicomatose, with her nonbroken arm she 
could pull a cellular phone out of her pocket and phone a 1-800 number 
saying, I need to get to the emergency room?
  Colleagues, there are countless other examples. How about the doctor 
who was treating a drowning victim, a little 6-year-old boy? This 
physician told me that this little boy had been in the ICU for just a 
few hours, was hooked up to a ventilator, they were doing everything 
they could to save his life, but it did not look very promising. As 
this physician and the little boy's parents were standing around the 
bedside, just a few hours after admission to the ICU, the phone rings. 
It is the HMO case manager.
  ``Well, how is this little boy's condition?'' It is pretty critical. 
``Well, if it is so dismal, have you thought about sending him home on 
home ventilation?'' Think about that. We are fighting to save this 
little boy's life, and a few hours after admission, the HMO is 
suggesting, send him home on home ventilation so that we can save a few 
dollars.
  How about the HMOs that refuse to cover cleft lip and cleft palate 
surgery, saying that these are cosmetic? How about plans that threaten 
action against doctors who tell their patients about all of their 
medical options, not just the cheap ones that the plan will provide? 
How about HMOs manipulating the term ``medically necessary'' to avoid 
covering costly procedures?
  Because our friends, our neighbors, our fellow workers, or our own 
families have had these types of experiences, countless polls show that 
people want Congress to pass managed care reform legislation this year. 
A recent Kaiser Family Foundation survey found that 78 percent of 
voters support managed care reform, and a similar percentage support 
allowing consumers to go to court to sue their health plans if their 
health plans are guilty of malpractice.
  But no public opinion poll can convey the depth of emotion on this 
issue, except the way movie audiences around the country spontaneously 
clapped and cheered Helen Hunt's obscenity-laced description of her HMO 
in the Oscar-winning movie, As Good As It Gets. Audiences across the 
country responded to her plight because they saw the same things 
happening to their families, their friends, their fellow workers.
  Now, the industry responds, well, these cases that you have talked 
about, they are all just anecdotes. Well, Mr. Speaker, to paraphrase 
Shakespeare, ``Hath not these anecdotes' '' these HMO victims, ``Hath 
not these anecdotes' hands, organs, senses, passions'' the same as a 
HMO apologist? And if you prick these anecdotes, do they not bleed? If 
you tickle those anecdotes, do they not laugh? And if you cut short 
their care for profits, might they not die?
  Last year I and some others crossed party lines to push for passage 
of the Patients' Bill of Rights. This is a good bill. It would have 
done a lot to deal with the end of the constant stream of HMO abuses 
similar to the ones I have talked about.
  It contained, for example, strong language ensuring that health plans 
pay for emergency care. Think of the plight of James Adams, age 6 
months. At 3:30 in the morning his mother, Lamona, found him hot, 
panting, moaning. His temperature was 104 degrees. Lamona phoned her 
HMO and was told to take little Jimmy to the Scottish Rite Hospital. 
Quote: ``That is the only hospital I can send you to,'' said the HMO 
reviewer. ``How do I get there?'' Lamona asked. ``I don't know,'' the 
nurse said. ``I'm not good at directions.''
  Well, about 20 miles into their ride, little Jimmy's parents passed 
Emory University Hospital, a renowned pediatric center. Then they 
passed Georgia Baptist and Grady Memorial, but they did not have 
permission to stop there, and so they drove on. They had 22 more miles 
to travel to get to Scottish Rite Hospital, and while searching for 
Scottish Rite, James' heart stopped.
  There is a scene in the recent movie, Civil Action, showing a mother 
and a father in a car on the side of the road administering CPR to 
their child. Think of little Jimmy Adams when you see that scene.
  Well, Lamona eventually got Jimmy to the hospital, but because he had 
had an arrest, it looked like he was going to die. Jimmy was a tough 
little guy, though, and despite his cardiac arrest due to the delay in 
treatment by his HMO, he survived. However, the doctors taking care of 
little Jimmy had to amputate both his hands and both his feet because 
of gangrene related to the arrest.
  All of this is documented in the book, Health Against Wealth. As the 
details of baby James' HMO's methods emerged, it became clear that the 
margins of safety in HMOs can be razor thin. Maybe as thin as the 
scalpel that amputated Jimmy's hands and feet.
  Think of the dilemma an HMO places on a mother struggling to make 
ends meet. In Lamona's situation, if she takes her child to the nearest 
emergency room, she could be at risk for hundreds or even thousands of 
dollars in uncovered charges. Or she could hope that her child's 
condition will not get worse as they drive past other hospitals that 
additional 22 miles to get to the nearest ER authorized by that HMO.
  A strong HMO reform bill would ensure that consumers do not have to 
make that type of potentially disastrous choice.
  Last year we had support from consumer groups and from a number of 
nonprofit health plans calling for Federal legislation. These health 
plans and consumer groups wrote, ``Together, we are seeking to address 
problems that have led to a decline in consumer confidence and trust in 
health plans. We believe that thoughtfully designed health plan 
standards will help to restore confidence and ensure needed 
protection.''
  And noting that they already made extensive efforts to improve the 
quality of their care, the chief executive officer of one of these 
plans said, ``We intend to insist on even higher standards of behavior 
within our own industry, and we are more than willing to see laws 
enacted to ensure that result.''
  Let me repeat that. The CEO of one of the country's largest HMOs 
said, ``We are more than willing to see laws enacted to ensure that 
result.''
  So in recognition of the problems in managed care, these three 
managed care plans, along with consumer groups, got together and 
endorsed nationally enforceable standards. Things

[[Page 1665]]

like guaranteeing access to appropriate services, providing people with 
a choice of health plans, ensuring the confidentiality of medical 
records, protecting the continuity of care, providing consumers with 
relevant information, covering emergency care, banning gag rules.
  Well, I am sad to say that despite strong public support to correct 
problems like these and the support of many responsible managed care 
plans, the legislation stalled in Washington last year. That is truly 
unfortunate, since the problem demands Federal action.
  Mr. Speaker, historically State insurance commissioners have done a 
good job of monitoring the performance of the health plans in their 
States. But Federal law puts most HMOs beyond the reach of State 
regulations.
  How is this possible? More than two decades ago Congress passed the 
Employee Retirement Income Security Act, which I will refer to as 
ERISA, in order to provide some uniformity for pension plans in dealing 
with different State laws. Health plans were included in ERISA almost 
as an afterthought. But the result has been a gaping regulatory 
loophole for self-insured plans under ERISA.
  And even more alarming is the fact that this lack of effective 
regulation is coupled with an immunity from liability for negligent 
actions.
  Now, Mr. Speaker, personal responsibility has been a watchword for 
this Republican Congress, and this issue should be no different. Health 
plans that recklessly deny needed medical service should be made to 
answer for their conduct. Laws that shield them from their 
responsibility only encourage HMOs to cut corners. Congress created 
this ERISA loophole, and, Mr. Speaker, Congress should fix it.
  Think for a moment about buying a car. Mr. Speaker, I often hear from 
opponents to this legislation, well, this managed care legislation, 
this could lead to socialized medicine. But think about buying a car. 
Federal laws ensure that cars have horns, brakes and headlights. Yet, 
despite these minimum standards, we do not have a nationalized auto 
industry. Instead, consumers have lots of choices. But they know that 
whatever car they buy, that car has to meet certain minimum safety 
standards. One does not buy safety ``a la carte''.
  The same notion of basic protections and standards should, in my 
opinion, apply to health plans. Consumer protections will not lead to 
socialized medicine any more than requiring seat belts has led to a 
nationalized auto industry.

                              {time}  1345

  In a free market, these minimum standards set a level playing field 
that allows competition to flourish.
  Mr. Speaker, let me share some thoughts on how I think this issue 
will evolve in the coming months. As we know, we came close to passing 
the Patients' Bill of Rights last year. Already, however, I see signs 
that a partisan fight could break out again this year.
  While I continue to support the Patients' Bill of Rights and I wish 
it had passed, I do not want us to get hung up on or let reform die on 
the alter of partisanship like the opponents to the legislation used 
last year.
  So I decided not to cosponsor the Patients' Bill of Rights this year 
when the gentleman from Michigan (Mr. Dingell) introduces it. Instead, 
I am going to introduce my own bill, probably next week. While my bill 
will keep the best features of the Patients' Bill of Rights, it will 
also eliminate some of the provisions that would add regulatory burdens 
on health plans without really adding much in the way of increased 
patient safety.
  In addition, my bill will have a new formulation on the issue of 
health plan liability. I continue to believe that health plans which 
make negligent medical decisions should be accountable for their 
actions, but Mr. Speaker, winning a lawsuit is little consolation to a 
family who has lost a loved one.
  The best HMO bill will ensure that health care is delivered when it 
is needed, and to encourage that, the bill which I will drop next week 
will provide for both an internal and an external appeals process. But 
unlike last year's Patient Protection Act, the external review will be 
binding on the plan. It could be requested by either the patient or the 
health plan. The review would be done by an independent panel of 
medical experts.
  Do external appeals work? A recent review in New York shows that half 
of all internal appeals are decided in favor of the patient. But that 
also means that half of the time the HMO's decisions are upheld. The 
important thing is to get the proper treatment for the patient in a 
timely way, not necessarily to end the post mortem in a court.
  So I will propose that where there is a dispute on denial of care, 
either the patient or the HMO can take this dispute to an independent 
peer panel for a binding decision. If the plan follows that decision, 
there could not be punitive damages against the HMO, since there can be 
no malice if they bind themselves to the decision of an independent 
panel of experts.
  I suspect that Aetna today wishes they had had an independent peer 
panel available, even with a binding decision on care, when it denied 
care to David Goodrich. Last week a California jury handed down a 
verdict with $116 million in punitive damages to David Goodrich's wife, 
Teresa. If Aetna or the Goodriches had had the ability to send that 
denial of care to an external review, they could have avoided the 
courtroom. But Mr. Speaker, more importantly, David Goodrich might be 
alive today.
  That is why my plan should be attractive to both sides of the aisle. 
Consumers get a reliable and quick external appeals process which will 
help them get the care they need. They can go to court to collect 
economic damages or lost wages, future medical care. But if the plan 
follows the external review's decision, the patient cannot sue for 
punitive damages.
  HMOs, whose greatest fear is of a $50 or a $100 million punitive 
damage award, can shield themselves from those astronomic awards, but 
only if they follow the recommendations of an independent review panel, 
which is free to make its own decision about what care is medically 
necessary, as long as there is not a specific exclusion of coverage of 
a benefit; i.e., a plan says up front to an enrollee, we do not cover 
liver transplants.
  I have shared this approach with a number of my colleagues as well as 
consumer groups, businesses, health plans. I have been encouraged by 
the positive responses that I have received. I think this could be the 
basis for the bipartisan solution to this problem.
  In fact, I recently spoke with the CEO of a large Blue Cross plan who 
confided to me that his organization is already implementing virtually 
all of the recommendations of the President's Health Care Quality 
Advisory Commission at little or no cost, probably no premium increase.
  But the one part of the health care debate that concerns him is the 
issue of liability. He indicated that shielding plans from punitive 
damages when they follow an external review body would strike an 
appropriate balance.
  Mr. Speaker, passage of real patient protection legislation is going 
to require a lot of hard work, dedication, and seeking a consensus and 
a compromise. My new bill represents an effort to break through the 
partisan gridlock that we saw last year, and to move this issue forward 
and get a solution signed into law.
  I hope that my colleagues will sign on as original cosponsors to the 
Managed Care Reform Act of 1999. If Members have any questions about 
parts of this bill or if they want to sign on, please give my office a 
phone call.

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