[Congressional Record (Bound Edition), Volume 146 (2000), Part 12]
[House]
[Pages 17864-17867]
[From the U.S. Government Publishing Office, www.gpo.gov]



  PATIENT PROTECTION LEGISLATION AS IT RELATES TO HEALTH MAINTENANCE 
                             ORGANIZATIONS

  The SPEAKER pro tempore (Mr. Scarborough). Under the Speaker's 
announced policy of January 6, 1999, the gentleman from Iowa (Mr. 
Ganske) is recognized for 60 minutes.
  Mr. GANSKE. Mr. Speaker, I thank the gentleman from Texas (Mr. 
Stenholm) for yielding a little earlier this evening. Just as a form of 
notice to the next speaker, I will probably speak somewhere between 20 
and 30 minutes.
  Mr. Speaker, I want to talk tonight about a topic that I have come to 
the floor many, many times in the last several years to speak about, 
and that is on the issue of patient protection legislation as it 
relates to health maintenance organizations, HMOs.
  Mr. Speaker, I remember a few years ago, it must be about 4 years, 
that my wife and I went to a movie called As Good as It Gets. We were 
in Des Moines, Iowa, at a theater and I saw something happen that I do 
not think I have ever seen at a theater. During that scene, when Helen 
Hunt talks to Jack Nicholson about the type of care that her son in the 
movie, with asthma, was getting from her HMO and she uses some rather 
spicy language that I cannot say here on the floor of the House of 
Representatives, people stood up and clapped and applauded in that 
movie theater. I do not think I have ever seen that before.

                              {time}  1900

  Mr. Speaker, that was an indication 4 years ago that there was a 
problem with the type of care that HMOs were delivering. Then, Mr. 
Speaker, we began to see the problems that patients were having with 
HMOs captured in political cartoons. Things like cartoons in the New 
Yorker Magazine. Here was one. This is pretty black humor. We have a 
secretary at an HMO, and she is saying ``Cuddly care HMO. My name is 
Bambi. How may I help you?''
  Next one, ``You are at the emergency room and your husband needs 
approval for treatment.'' Next one, ``Gasping, writhing, eyes rolled 
back in his head does not sound all that serious to me. Clutching his 
throat, turning purple. Um-hum?'' And she says here, ``Have you tried 
an inhaler?'' She is listening on the phone. ``He is dead. Then he 
certainly does not need treatment, does he?'' And the last picture 
there on the lower left shows the HMO bureaucrat saying ``People are 
always trying to rip us off.''
  For years now we have seen headlines like this one from the New York 
Post, ``What his parent did not know about HMOs may have killed this 
baby.''
  Here is another cartoon. This is the HMO claims department, HMO 
medical reviewer with the headphone set on is saying, ``No. We do not 
authorize that specialist. No. We do not cover that operation. No. We 
do not pay for that medication.'' Then apparently the patient must have 
said something, because all of a sudden the medical reviewer at that 
HMO kind of sits up and then angrily says, ``No. We do not consider 
this assisted suicide.''
  Or how about this headline from the New York Post, ``HMO's cruel 
rules leave her dying for the doc she needs.'' Pretty sensational 
headlines.
  And then we had this cartoonist's view of the operating room, where 
you have the doctor operating. You have an anesthesiologist at the head 
of the table and then you have an HMO bean counter. The doctor says, 
``Scalpel.'' The HMO bean counter says, ``Pocket knife.'' The doctor 
says, ``Suture.'' The HMO bean counter says, ``Band-Aid.'' The doctor 
says, ``Let us get him to the intensive care.'' The HMO bean counter 
says, ``Call a cab.''
  Some of these I think have passed the realm of being even humorous, 
because it has just been going on too long. You notice you do not see 
Jay Leno or David Letterman talking much any more about HMOs. It has 
just gone on too long. People are being hurt every day by capricious 
rules that deny people medically necessary care by HMOs; and patients 
have lost their lives because of it.
  Here are some real-life examples. This woman was hiking in the 
mountains west of Washington, D.C., in Virginia. She fell off a 40-foot 
cliff. She fractured her skull. She broke her arm. She had a broken 
pelvis. She is laying there at the bottom of this 40-foot cliff. 
Fortunately, her boyfriend had a cellular phone. So they flew in a 
helicopter. They strapped her on, flew her to the emergency room. She 
was in the ICU, there for weeks on intravenous morphine for the pain.

[[Page 17865]]

  And then a funny thing happened, when she finally got out of the 
hospital, she found out that her HMO refused to pay the bill. Why, you 
ask. Well, the HMO said that she did not phone ahead for prior 
authorization.
  Now, I ask you something, this lady's name is Jackie, how was Jackie 
supposed to know that she was going to fall off that cliff, then maybe 
when she is lying at the bottom of that cliff semicomatose she is 
supposed to have the presence of mind with her nonbroken arm to reach 
into her coat pocket and pull out a cellular phone and dial an 1-800 
HMO number and say I just fell off a 40-foot cliff, I need to go to an 
emergency room, is that okay? Maybe when she is in the ICU for a week 
on intravenous morphine, she is supposed to have the presence of mind 
to phone the HMO? Real life story.
  How about this woman in the center? This woman's case was profiled on 
a cover story on Time magazine 2 years ago, maybe it was 3 years ago 
now. Her HMO denied her medically necessary care, and she died. Now, 
her little boy and her little girl do not have a mother and her husband 
does not have a wife.
  Before coming to Congress, I was a reconstructive surgeon. I took 
care of babies that were born with this type of birth defect, a cleft 
lip and a cleft palate. Do you know that more than 50 percent of the 
surgeons who repair these types of birth defects have had HMOs deny 
operations for repairs related to this defect, because HMOs have said 
that that is a ``cosmetic defect''?
  Just imagine that you were the parents of a baby born with this 
defect, number one, the baby is not going to learn how to speak 
normally, because there is a hole in the roof of the mouth. Food is 
going to come out of the nose. Is that a cosmetic problem? Is speech a 
cosmetic problem? Not that I ever heard of. I happen to think it is a 
human right. It is a devine right to look human, and I think it is just 
absolutely wrong for HMOs to do what they do to kids who are born with 
birth defects, many times worse than this.
  Let me tell you about this little baby boy. His name is James. When 
he was 6 months old, about 3:00 in the morning, his mother found that 
he was really sick, and he had a temperature of about 105. She asked 
her husband what they should do, and they said well, we better phone 
that HMO that we belong to. They phoned the 1-800 number talked to a 
member a thousand miles away, explained how sick their baby was, and 
that voice at the end of the line, who never examined this baby to see 
how sick he was, said, well, I will authorize you to go to an emergency 
room, but we only have a contract with one, so we are only going to let 
you go to that one, that is it.
  Well, mom and dad are not medical professionals, so they hop in the 
car. Unfortunately, that authorized hospital was more than 60 miles 
away, 60 miles away, clear on the other side of metropolitan Atlanta, 
Georgia. En route mom and dad passed three emergency rooms that they 
could have stopped at.
  They knew Jimmy was sick. They were not medical professionals. They 
did not stop because they knew if they did it without authorization, 
they would be left with a bill. Unfortunately, before they got to the 
authorized hospital, Jimmy had a cardiac arrest. Imagine you holding 
little Jimmy trying to keep him alive while you are trying to find that 
distant emergency room. Finally, when they pull in to the hospital 
emergency room, mom throws open the door, leaps out, screaming, help my 
baby, help my baby, a nurse comes running out, resuscitated Jimmy.
  They put in lines. They give him medicines. They get him going. They 
save his life. Unfortunately, because of that delay in medically 
necessary treatment, they cannot save all of Jimmy because gangrene 
sets in in his hands and his feet, and little Jimmy's hands and his 
legs have to be amputated. That HMO made a medical decision, instead of 
saying it sounds like he is sick, take him to the nearest emergency 
room, it is okay with us, we will pay for it. They said, no, no, we 
only authorize you going to that far away hospital.
  Mr. Speaker, little Jimmy is going to live all the rest of his life 
with bilateral hooks for hands, with protheses for legs. He is about 7 
years old now. In fact, I brought him to the floor of this House of 
Representatives during our debate on patient protection legislation 
almost a year ago, and he is a great kid. He is doing good. He has got 
good folks, but I will tell you what, he is never going to play 
basketball, and he is never going to touch with his hand the cheek of 
the woman that he loves, and that HMO should be responsible for that 
decision.
  Unfortunately, there is a Federal law, a 25-year-old Federal law 
called the Employee Retirement Income Security Act. It was really 
written to be a pension law, but it was applied to health plans. And 
what it did was it took away oversight of health insurance from the 
States for people who get their insurance through their employer, and 
it did not institute any of the safeguards for quality control to 
prevent the types of problems like little Jimmy had, that your State 
insurance commissioners normally do. It left a vacuum.
  Furthermore, it said that the only liability that that health plan 
would have would be the cost of treatment denied, the cost of treatment 
denied. That means that if little Jimmy is in an employer-sponsored 
health plan, a self-insured plan, the only thing that that health plan 
is liable for is the costs of his amputations. What about all the rest 
of his life? Is that fair? Is that just? I do not think so. Neither 
does the Federal judicial, neither do the Federal judges whose hands 
are tied, because of this law called ERISA.
  Judge Gorton in Turner v. Fallon Community Health Plan said even more 
disturbing to this court is the failure of Congress to amend a statute 
that, due to the changing realities of the modern health care system, 
has gone conspicuously awry from its original intent.
  I have had Federal judges tell me, beg me to change that Federal law; 
number one, they think that these types of medical malpractice 
decisions should be handled in the State courts, like they are for 
anyone else. Number two, they realized that because of provisions in 
that law, they cannot even address the issue of the health plan 
defining medical necessity in any way they want to.
  What does that mean? Well, under the ERISA law, a health plan can 
write a contract for the employees that basically says we are not 
liable for anything if we follow our own definition of what we consider 
to be medically necessary. So they can write a provision in the 
contract for an employee, for you, that would basically say we define 
medical necessity as the cheapest, least expensive care, quote, 
unquote, as determined by us.
  That means that for this little boy who was born with a cleft lip and 
palate, instead of the traditional and optimal treatment of surgical 
correction utilizing the baby's own tissues to rebuild the defect, that 
HMO could say well, under our definition of the cheapest least 
expensive care, you know, just in the roof of his mouth, that big hole 
there, just put like an upper denture plate.

                              {time}  1915

  It is called an obturator, made of plastic. Of course, a baby like 
this, it might fall out, it might even be swallowed. So what? We can do 
that, because we defined it, medically necessary care, as the cheapest, 
least expensive care. I think that is wrong. That is why judges are 
saying, they are begging Congress, please, please, change that law. Our 
hands are tied.
  Well, here we are, as I said before, almost a year since we passed in 
this House a bipartisan vote, 275 to 151, the Norwood-Dingell-Ganske 
Bipartisan Consensus Managed Care Reform Act, a real patient protection 
act. It has been almost a year. And I will tell you what, the public's 
opinion has not changed one bit about HMOs.
  Today in USA Today they quote from a Gallop organization poll a list 
of occupations or organizations that people say they have a great deal 
of or quite a lot of confidence in those institutions. At the top of 
the list is the military; 64 percent of the public have a

[[Page 17866]]

great deal of confidence in the military. Organized religion, 5 percent 
of the public; the police, 54 percent; the Supreme Court, 47 percent.
  Then we get down toward the bottom of the institutions. Congress is 
down here at 24 percent. The criminal justice system, 24 percent. This 
probably reflects all of the news stories on the death penalty lately. 
But right at the very bottom of this, of institutions that the public 
respects, only 16 percent of the public thinks HMOs are deserving of 
respect, only 16 percent.
  In fact, overwhelmingly, the public thinks that Congress should pass 
and the President should sign a real patient protection law, one that 
would do many things: one that would cover all Americans; one that 
would allow doctors to make medical decisions; one that would hold 
those HMOs accountable for their decisions; one that would guarantee 
minimum health plan standards; one that would allow you to appeal a 
decision to an independent review panel if an HMO denies your care; and 
one that would have that independent panel make that determination of 
medical necessity, not some bogus definition by the health plan. These 
are all things that were in our bill, the Norwood-Dingell-Ganske bill, 
that we passed.
  Well, the Senate passed a bill too; and, unfortunately, to be honest, 
I would have to characterize that Senate-passed bill as an HMO 
protection bill, an HMO protection bill, because it actually, in my 
opinion, had provisions that were worse than the current situation, 
that gave additional protections to health maintenance organizations, 
rather than additional protections to patients.
  After the House passed its bill and the Senate passed its bill, it 
went to conference to iron out differences between the bills, and that 
conference has not met in months. It is a failed conference, nothing 
has come out of it, so it is time to move; it is time to try something 
different.
  In an effort to get patient protection legislation signed into law, 
the gentleman from Georgia (Mr. Norwood), the gentleman from Michigan 
(Mr. Dingell), myself, and Senator Kennedy have created a new 
discussion draft of the House-passed bill, the Norwood-Dingell-Ganske 
bill, that seeks compromise with Senator Nickles' amendment; and some 
of the ideas of the House substitute bills from last year that did not 
pass.
  We continue to think the original Norwood-Dingell-Ganske bill is just 
fine and should be signed into law, but we are willing to be flexible 
in order to get a law, in order to get action in the Senate. We and the 
American Medical Association and over 300 health care groups who 
supported last year's House-passed bill have developed this discussion 
draft to see if it would help bring some Republican Senators on board.
  We have had positive responses from a number of Republican Senators, 
including those who have previously voted against the Norwood-Dingell 
bill, as well as those who have voted for the Norwood-Dingell bill. We 
remain optimistic that we may soon have an opportunity to break this 
logjam.
  This discussion draft, which we have provided to the Speaker of the 
House along with the actual legislative language in detail, does many 
things. It includes many of the protections nearly all parties need to 
be addressed, including the right to choose your own doctor, 
protections against gag clauses, access to specialists, such as 
pediatricians and obstetricians and gynecologists, access to emergency 
care, so we can prevent something from happening like happened to poor 
little Jimmy, and access to information about the HMO's plan.
  This discussion draft applies the patient protections to all plans, 
including ERISA plans, non-Federal Governmental plans, and those 
covering individuals. So we cover over 190 million Americans. This new 
draft addresses the concerns of those who want to protect States' 
rights by allowing States to demonstrate that their insurance laws are 
at least substantially equivalent to the new Federal standards, thereby 
leaving the State law in effect. State officials could enforce the 
patient protections of State law. The Secretary of Labor and Health and 
Human Services can approve the State plan or challenge it on grounds 
that it is inadequate.
  Under the new draft, doctors will make medical decisions involving 
medical necessity. When a plan denies coverage, the patient has the 
ability to pursue an independent review of the decision from a panel 
independent of the HMO. This external review is composed of medical 
professionals totally independent of the plan and whose final medical 
necessity decision is legally binding on the plan.
  We took the lead from the Nation's courts with particular attention 
given to the Supreme Court's decision in Pegram v. Hedrick. The new 
draft reflects emerging judicial consensus. Recent court decisions have 
suggested injured patients can hold health plans accountable in State 
court in disputes over the quality of medical care, those involving 
medical necessity decisions. However, patients would have to hold 
health plans accountable in Federal court if they wanted to challenge 
an administrative decision to deny benefits or coverage or for any 
decision not involving medical necessity.
  In addition to specific legislative provisions, the discussion draft, 
this discussion draft, answers continuing questions about the original 
Norwood-Dingell-Ganske bill. For instance, the draft says employers may 
not be held liable unless they ``directly participate'' in a decision 
to deny benefits as a result of which a patient was injured or killed. 
Even then defendants could not be required to pay punitive damages 
unless they showed ``willful or wanton disregard for the rights or 
safety'' of patients.
  Another concern about the Norwood-Dingell-Ganske bill was whether it 
would affect the ability of health plans to maintain uniformity in 
different States. This new draft only subjects plans to State law when 
they make medical decisions that result in harm. This discussion draft 
will allow Republican Senators who have voted against the original 
Norwood-Dingell bill to vote for a real patient protection bill. Will 
they take up this opportunity? Stay tuned. But time is running out. 
People are waiting to see whether this Congress will actually deal with 
one of the major health concerns that the public has. Eighty-five 
percent-plus of the public thinks Congress should pass patient 
protection legislation to protect them from HMO abuses, 85 percent. 
About 75 percent think that that should include legal responsibility 
for the HMOs.
  If this bill, this discussion draft, is ignored, then I am sure we 
are going to see this as one of the major issues in the coming 
election, and we should, and we should. We have been working on this 
legislation now, the gentleman from Georgia (Mr. Norwood), the 
gentleman from Michigan (Mr. Dingell), Senator Kennedy and others, for 
about 4 years.
  When I am back home in the district people say, why is it taking you 
so long to get something passed that the public overwhelmingly wants? I 
tell them we are fighting a very, very powerful industry that has spent 
$100 million lobbying against this piece of legislation, some very, 
very powerful Washington special interests, who are seeking to, in my 
opinion, make sure that their bottom line profits come ahead of patient 
protections.
  Well, we will see whether we get this done. There are not too many 
more weeks when I will be able to come to the floor and speak about 
this issue, but as long as we are in session for the rest of this year, 
I will try to get an opportunity to inform my colleagues on where we 
stand. But I wanted my colleagues on both sides of the aisle to know 
that the Republicans and the Democrats who truly want a real patient 
protection piece of legislation are working together.
  We have never said, along with the 300-plus consumer groups and 
professional groups that think that this legislation should pass too, 
we have never said it has to be the Norwood-Dingell-Ganske bill word 
for word. That is why we have come up with this discussion draft. That 
is why the language for

[[Page 17867]]

many of these provisions is taken from the Nickles amendment, the 
Coburn-Shadegg amendment and others, at least half of the language. We 
have made some adjustments to correct some of the defects as we see it 
in some of those provisions, but we have been willing to work towards a 
compromise to finally get this signed into law. We are this close. It 
would be a shame for the leadership of Congress to hold this important 
piece of legislation up.
  As a physician who has taken care of patients who have had a lot of 
troubles with HMOs, I have been on the front line; and I have seen that 
we truly need this type of legislation.
  This is not a piece of legislation for physicians. In fact, there are 
provisions in our bill that could actually decrease physician income. 
Nevertheless, the professional groups support this. Why? Because their 
first and foremost job is to stand up for and to advocate for their 
patients. That is why they take that Hippocratic Oath.

                              {time}  1930

  The patient-doctor relationship is foremost. HMOs have interposed 
themselves between the doctor and the patient. Quite frankly, they have 
put a financial consideration rather than the patient's best care into 
that decisionmaking. Mr. Speaker, we need to swing that pendulum back.
  Now, this brings me, finally, and I just would like my colleagues 
from the other side to know that I only have a few more minutes in 
which to speak; this brings me to another health care issue, and that 
is that when we passed the Balanced Budget Act in 1997, we passed 
several provisions on reducing the rate of growth in Medicare. The 
implementation of those provisions has actually produced significantly 
more savings than we planned on, and those savings have had a 
significantly harmful effect on some of the provider groups.
  Mr. Speaker, I just finished a series of town hall meetings around my 
district. I represent Des Moines, which is a major metropolitan 
suburban area, but I also represent southwest rural Iowa. There are a 
lot of small town county hospitals in my district. Because of certain 
provisions from the Balanced Budget Act with reduced payments to those 
hospitals, those hospitals are having a real hard time and are right on 
the verge of financial insolvency.
  I grew up in a small town in northeast Iowa. I know how important it 
is that a small town have a hospital. It is important for a number of 
reasons. It is important for the people who live in that town or the 
farm families around it so that they do not have to travel 70 or 80 
miles if they have a heart attack or if they want to deliver a baby, 
but it is also very important to the financial survival of that small 
town. If we do not have a hospital in that small town, it is hard to 
keep doctors in the town. If we do not have a hospital and doctors in 
that town, it is hard to keep businesses in that town, and it is almost 
impossible to convince any other business development in that 
community. So we are talking about not only an issue of public health, 
but we are also talking about an issue of economic survival.
  My committee, the Committee on Commerce, is in the process, along 
with the Committee on Ways and Means, of drawing up a bill to bring 
some additional funds back into Medicare. I am working hard to ensure 
that we get some additional funding for those small towns and rural 
hospitals in Iowa and in other areas around the country. There will be 
discussion on whether we should provide additional payments to Medicare 
HMOs. I think we need to be careful on doing that.
  Mr. Speaker, I have here a Report to Congressional Requesters from 
the United States General Accounting Office on Medicare Plus Choice. It 
is Entitled Payments Exceed Cost of Fee-for-Service Benefits, Adding 
Billions to Spending, and it is dated August 2000, and it was requested 
by Senator Grassley, by Senator Roth, by the gentleman from Michigan 
(Mr. Dingell), and by the gentleman from California (Mr. Thomas). I 
think it is really important for me to read the summary, the results, 
in brief:
  ``Medicare Plus Choice,'' this is a quote from this GAO report:

       Like its predecessor managed care program, has not been 
     successful in achieving Medicare savings. Medicare Plus 
     Choice plans attracted a disproportionate selection of 
     healthier and less expensive beneficiaries relative to 
     traditional fee-for-service Medicare, a phenomenon known as 
     favorable selection, while payment rates largely continue to 
     reflect the expected fee-for-service costs of beneficiaries 
     in average health. Consequently, in 1998, we estimated that 
     the program spent about $3.2 billion or 13.2 percent more on 
     health plan enrollees than if they had received services 
     through traditional fee-for-service Medicare. This year, the 
     Health Care Financing Administration implemented a new 
     methodology to adjust payments for beneficiary health status. 
     However, our results suggest that this new methodology, which 
     will be phased in over several years, may ultimately remove 
     less than half of the excess payments caused by favorable 
     selection. In addition, the combination of spending forecast 
     errors built into the plan payment rates and the Balanced 
     Budget Act payment provisions cost an additional $2 billion, 
     or 8 percent in excess payments to plans instead of paying 
     less for health plan enrollees. We estimate that aggregate 
     payments to Medicare Plus Choice plans in 1998 were about 
     $5.2 billion, or approximately $1,000 per enrollees more than 
     if the plan's enrollees had received care in the traditional 
     fee-for-service program. It is largely these excess payments, 
     and not managed care efficiencies, that enable plans to 
     attract beneficiaries by offering a benefit package that is 
     more comprehensive than the one available to fee-for-service 
     beneficiaries while charging modest or no premiums.

  Mr. Speaker, this brings us directly to the issue of prescription 
drug coverage. Because what this is saying is that number one, the 
Medicare HMOs have been skimming off the healthier beneficiaries so 
that they would have lower costs. That way they make more money on 
covering those. They are getting paid more for those Medicare 
beneficiaries than if those beneficiaries were simply in the regular 
Medicare plan. With those excess profits, what they do is they can 
entice other healthier seniors into it by offering a prescription drug 
benefit. I think as we consider whether and how Congress should 
implement a prescription drug benefit, we need to take into account 
this GAO report that documents that we have actually lost money with 
our Medicare HMOs, rather than saved money with our Medicare HMOs.
  So when we look at this Medicare give-back bill that is coming along 
and will be signed into law, passed and signed into law, I am pretty 
sure, I think we ought to be very careful and judicious about providing 
more money to those Medicare HMOs. We ought to be looking, in my 
opinion, at ways to provide pharmaceutical coverage, a prescription 
drug benefit for Medicare beneficiaries, regardless of whether they 
live in New York or Los Angeles or Miami or Harlan, Iowa. That benefit 
I think should be equally available, regardless of where one lives in 
this country. If we dump additional billions into a failed HMO program 
called Medicare Plus Choice, then I think we will be throwing money 
down the drain.
  So clearly, this will be a package of provisions, and I absolutely 
feel that it is important to support provisions for additional coverage 
for our rural hospitals, for example, but I will also do my best to try 
to make sure that we do not go overboard with providing additional 
funds to Medicare HMOs, when this report from the GAO shows that even 
with the implementation of a new risk adjuster, we will still only take 
care of 50 percent of the excess payments.
  Well, Mr. Speaker, I very much appreciate the opportunity to speak 
tonight on health care issues, and I look forward to working with my 
leadership and with members on both sides of the aisle to try to get 
adjustments made for Medicare for our rural hospitals and to get 
finally signed into law a real patient protection bill modeled along 
the lines of what we passed here in the House almost a year ago, the 
Norwood-Dingell-Ganske bipartisan consensus Managed Care Reform Act.

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