[Congressional Record (Bound Edition), Volume 147 (2001), Part 8]
[House]
[Pages 11788-11791]
[From the U.S. Government Publishing Office, www.gpo.gov]



                        STRONG HMO REFORM NEEDED

  The SPEAKER pro tempore (Mr. Kennedy of Minnesota). Under the 
Speaker's announced policy of January 3, 2001, the gentleman from Texas 
(Mr. Green) is recognized for 60 minutes as the designee of the 
minority leader.
  Mr. GREEN of Texas. Mr. Speaker, I am glad to follow my colleague 
from Colorado. I appreciate his statements on Texas and our power 
success. Typically, we do have success in power because we build 
generation plants.
  But that is not what I am here tonight to talk about. I am really 
here to talk about managed care reform and the Patients' Bill of Rights 
and HMO reform, and give a Texas perspective, because we have had since 
1977 a very strong HMO reform bill that is in Texas law. Let me give 
the reasons why we need a Federal law to that effect.
  For one thing, last week the Senate kicked off their debate on 
legislation that is critical in importance to our Nation's health care 
system, which is a Patients' Bill of Rights. In the Senate it is the 
McCain-Kennedy-Edwards bill, and in the House it is the Ganske-Dingell-
Norwood Bipartisan Patient Protection Act. They both do the same thing, 
the Senate and House bills. They ensure patients and their doctors have 
control over the important medical decisions, and not HMO bureaucrats 
or someone else who may not know anything about medicine except what 
they may look at in files.
  America's health insurance system has changed dramatically over the 
last 25 years. When Congress passed the Employee Retirement Income 
Security Act in 1975, most Americans had some type of traditional 
insurance indemnity plan, an 80-20 plan like most of us used to have. 
They went to their doctor, they received the health care they needed, 
and the doctors were reimbursed by insurance companies.
  But all of that has changed with the advent of managed care, which 
has meant most patients first get preapproval for their health care 
from their insurance company. If the HMO does not approve the 
treatment, the patient cannot get it. If that patient is hurt because 
they are denied appropriate health care, that is just too bad under 
Federal law.
  Even worse, a patient cannot seek redress against that HMO for the 
damages in State court or even Federal Court, although there have been 
Federal cases filed recently; and some of them may sound better than 
others. But, again, typically Federal law does not allow a patient to 
sue under ERISA. ERISA exempts HMOs from being sued in State court, and 
requires them to be filed in Federal Court.
  Again, the Federal courts have not always been the place where you 
can get real redress for insurance-type lawsuits. Even if an HMO is 
found guilty of wrongdoing in Federal court, they are only responsible 
for the cost of the care they denied. So, in other words, if you are 
not given appropriate treatment for cancer, and 6 months or a year 
later that HMO is found to have wrongfully denied treatment, then they 
go back and give you that cancer treatment. But, again, 6 months or a 
year later health care delayed is health care denied, and your cancer 
may grow.
  So what does all that mean? Let us say an HMO denies bone marrow 
transplant to a cancer patient, even though it is medically necessary 
and the only way the patient will survive. That patient dies as a 
result of that bone marrow transplant being denied. The family of that 
cancer patient can now sue in Federal Court and only recover the cost 
of providing that bone marrow transplant. They cannot recover anything 
for that lost loved one, whether it be lost wages for that spouse or 
their children who may still be minors, and they cannot be compensated 
for their loss of that individual.
  Really what that means is that insurance company knows that the only 
thing they are going to have to do is provide that treatment, so why 
not deny your initial amount, when they know the only thing they are 
going to have to pay ultimately is that amount? So, in other words, 
they earn the interest while they are waiting for you to get to Federal 
Court, which, in most cases, can take months and years. That is hardly 
justice for anyone who has lost a loved one.
  With more than 160 million Americans receiving their health insurance 
through some kind of managed care, Congress needs to act. That is 
exactly what the Ganske-Dingell-Norwood Bipartisan Patients' Bill of 
Rights does. The legislation would hold insurance companies accountable 
for their decisions that hurt or kill patients, just like a doctor is 
held responsible for his or her medical decisions that hurt or kill a 
patient.
  Mr. Speaker, there are two entities in this country currently not 
held responsible in State courts: HMOs and diplomats from another 
country. It was never Congress' intent to provide HMOs with the blanket 
immunity part of the ERISA bill passed in 1975 before we even had 
managed care and HMOs. It is time we corrected that mistake and close 
the ERISA loophole and provide for all Americans a meaningful and 
enforceable Patients' Bill of Rights.
  Now, let me get to the point of why it is important to examine the 
Texas experience, because, again, States can pass laws, and those 
affect the insurance policies that are licensed and sold and regulated 
by that.
  For example, the State of Texas. That is why insurance policies that 
are licensed or come under ERISA are not covered by State law. So even 
though Texas passed a Patients' Bill of Rights in 1997 that is similar 
to the Ganske-Dingell-Norwood Bipartisan Patient Protection Act, it 
does not work unless it is under State law.
  Sixty percent of the people in my district in Houston, Texas, receive 
their insurance coverage under Federal law regulation and not State 
law. The State of Texas passed a Patients' Bill of Rights in 1997. It 
had a number of good things in it. One was access. Texans had direct 
access to specialists. Women could directly go to their OB-GYN, and 
children had direct access to their pediatrician. Communication. The 
Texas bill eliminates gag clauses which prohibited doctors from 
discussing treatment options with their patients, even though those 
treatment options were not part of or provided for in their plan.
  It provided for emergency room care for patients who reasonably 
believe they are suffering and went to an emergency room, an emergency 
medical condition.
  One of the important parts of Texas law is required for internal and 
external appeals. That ensures patients have access to independent 
objective panels to determine if treatments are medically necessary, so 
it is not just the HMO saying you are not eligible for that treatment. 
You can appeal to an independent and external panel and that decision 
is made.
  Accountability. That is why it is important that any Patients' Bill 
of Rights includes accountability, because all the other things I have 
listed are not important if you do not have accountability, 
accountability in health insurance plans. Denial of claims results in 
that injury or death to that patient, so you have to have 
accountability.
  In 1997 in Texas they originally passed, maybe it was 1995, they 
originally passed a Patients' Bill of Rights that then Governor Bush, 
now President Bush, vetoed. But in 1997 there were compromises made and 
the bill passed the legislature overwhelmingly. Governor Bush at that 
time did not sign the bill, but he let it become law without his 
signature.
  My concern is we are hearing some of the same arguments today that we

[[Page 11789]]

heard in 1997 about the cost and the increased number of lawsuits 
against doctors and other health care providers in Texas that they used 
in 1997. We are hearing that same argument today here 4 years later on 
the Federal level.
  But the exact opposite is true in Texas. Since Texas enacted that 
law, only 17 cases have been filed. Texas has a strong independent 
review organization, the external review. Insurance patients must 
exhaust all appeals processes before they can go to court.

                              {time}  2015

  Also, a patient can only sue their HMO if that HMO disregards that 
recommendation, that independent review organization. If a plan follows 
the independent review organization, then they cannot be held liable in 
State court for that. So we only have had 17 cases in 4 years.
  This process ensures that patients get their health care that they 
need in a timely fashion. They do not have to go to court and wait 2 or 
3 years like we do now under ERISA before we get any kind of justice on 
treatment. Despite cries that this would increase the cost of health 
care premiums in Texas, premiums have not climbed any faster in Texas 
than they have in the rest of the Nation, who may not enjoy a State 
Patients' Bill of Rights. Texas' Patients' Bill of Rights provided 
patient protections for many of its residents and many Texans, but many 
Texans cannot benefit from that Texas law because they receive their 
health insurance through their employer who is covered under ERISA. 
That is why we need to close the ERISA loophole and enact the Patients' 
Bill of Rights on a Federal level.
  Mr. Speaker, I see my colleague from San Antonio, Texas, who was in 
the legislature in 1997 and debated the Patients' Bill of Rights in 
Texas, so I would be glad to yield to my colleague from San Antonio to 
talk about a little bit of what went on in the Texas Legislature and 
what he sees that we need to do here on the Federal level now.
  Mr. RODRIGUEZ. Mr. Speaker, first of all, I want to congratulate the 
gentleman for being here tonight. I know it is kind of late, and it is 
difficult to be home during the weekend and then coming here and 
spending some late hours at night talking about an issue that is so 
important to all Americans, including Texans.
  Let me just say that the Patients' Bill of Rights is very 
straightforward. It allows the opportunity, first of all, to see the 
doctor of one's choice. It makes all the sense in the world. One of the 
basic principles is that one wants to be able to see the doctor of 
one's choice, and that is important.
  Secondly, what it also does is it allows an opportunity, especially 
in those cases, and I had some particular constituents of mine who had 
some difficulties with lupus and some of the serious illnesses that 
they needed to see specialists for, so that when one has a very serious 
problem and requires specialists, one does not have to find that they 
are not only fighting the disease, but also fighting the HMO because 
they are not being responsive. So it becomes really important that we 
allow that opportunity, that a physician should have the right to be 
able to determine whether one should see a specialist or not. We all 
recognize that they are the ones that are the most qualified to be able 
to do that, and that we should not depend on someone who is doing the 
accounting or some insurance company to make their decision based on 
economics, but it should be based on what is the best thing for that 
particular patient in terms of seeing a specialist.
  In addition, we also talk about the importance of independent review. 
The gentleman explained it pretty clearly. A lot of times we have a 
situation, and now, this is one of the areas that we need to correct 
back at home, where we have a decision that is made by a company that 
has their own doctor, and the company decides that they are not going 
to allow that particular doctor to refer or do certain things, and then 
it is detrimental to the patient, and then that patient has the right 
to sue.
  The guidelines right now in Texas are that if they choose not to go 
based on the independent review organization recommendations, and 
something drastically happens that is wrong and bad, then they should 
have that right to sue.
  But as the gentleman indicated, and I have seen some statistics, I 
just saw an article that showed only 10 lawsuits. There is one other 
that showed 17.
  Mr. GREEN of Texas. Mr. Speaker, there are 17, from my understanding. 
Again, in Texas, we do not have any hesitation at all about going to 
the courthouse when we feel aggrieved, and so after 4 years, only 17 
lawsuits. We have not had an overwhelming number of lawsuits filed 
under that law, but we have had people get the health care that they 
need.
  Mr. RODRIGUEZ. Mr. Speaker, as the gentleman indicated, also one of 
the things that we still have to do that we did not do in Texas, and 
that is with the businesses. We have a lot of businesses that have 
their own insurance where they have their own company doctor, and where 
they might have some other obligations besides the fact of what they 
are supposed to be doing in terms of access to health care where we 
need to make sure we hold them accountable.
  So this is a very straightforward piece of legislation that allows 
one to see the doctor of one's choice; that allows one to see a 
specialist if it is so determined by the physician, and not by an 
accountant or for financial reasons, and it allows for an external 
review group that is independent and makes the decision and decides 
whether one should have access to specialists or not, or whether one 
should have additional treatment or not. That is important.
  I think that it is funny to see right now the amount of money that is 
being expended by the insurance companies on ads that say that the cost 
is going to go up. That has not occurred in Texas. In fact, in 
California they just passed a similar piece of legislation in January; 
they have not seen any lawsuits as of yet.
  I think that with this piece of legislation, and I am really proud 
that we were able to pass it in a bipartisan effort in the House last 
year, and we have been able to do that, but it was killed in conference 
committee. So we are hoping that we can get that bipartisan effort, 
both in the Senate and the House, and get it out so that the President 
will sign it. I know that he did not sign our piece of legislation, 
although he talked about it very proudly in a debate that he had with 
Al Gore when he talked about the fact that he had done this in Texas, 
and so that because of that, I think if it is sent to him, I feel very 
optimistic that he will do the right thing and sign it and allow it to 
become law, because it is the right thing to do. It is something that 
has worked in Texas, and it is something that makes all the sense in 
the world.
  Mr. Speaker, once again I want to thank the gentleman from Texas (Mr. 
Green) for his hard work, not only in this area, but in other areas 
that help out all Texans and other Americans.
  Mr. GREEN of Texas. Mr. Speaker, reclaiming my time, I want to thank 
the gentleman from San Antonio, Texas (Mr. Rodriguez), my colleague. 
There are 200 miles, or really 199 miles separates Houston from San 
Antonio. San Antonio is a great city. The gentleman and I served in the 
legislature together before we came to Congress, and I enjoy serving 
with the gentleman, working on national issues, particularly his effort 
on national defense with veterans' issues and a number of military 
bases that we have in San Antonio. I tell people the only military 
base, outside of our Reserves in Houston, is our Coast Guard station, 
and they cannot take that away, because we have the highest foreign 
tonnage port in the country, so we have to have a Coast Guard station.
  Let me go back and talk a little bit about the employer liability 
sections, which is a big issue here in Washington, just like it was in 
Texas. Many opponents of the Patients' Bill of Rights argue that 
employers will be faced with a barrage of frivolous lawsuits if they 
pass the Ganske-Dingell-Norwood bill. That claim is untrue. The bill 
exempts employers from liability so long as they do not directly 
participate in medical decision-making,

[[Page 11790]]

and that is why I am following my colleague in saying that that is a 
divergence in Texas law. This provision encourages employers not to get 
involved in health care decisions.
  Some Members of Congress and Senators believe that all employers 
should be exempted from liability, even if they are involved in medical 
decisions. Well, at one time as a business manager, I never wanted to 
be involved in medical decisions. That is why we contracted that with 
insurance carriers. But it is bad public policy to create a blanket 
exemption for employers, even when they actually make medical 
decisions.
  I hope our employers out there are not making those medical 
decisions. If they buy a policy or they hire someone to administer a 
plan, that plan needs to be fairly plain, and that employer should not 
be the one who makes the decision about whether one receives a bone 
marrow transplant; again, something that is readily accepted all across 
the country for the treatment of cancer. It is worse policy to create 
an incentive that gets employers more involved in medicine.
  I have said this before, but I think it bears repeating: The Ganske-
Dingell-Norwood bill has very strong internal and external review 
provisions similar to Texas. Any insurer or employer who follows that 
process will be building a very strong evidentiary record that they had 
neither acted negligently or maliciously in dealing with a patient, and 
it would be virtually impossible for an enterprising trial lawyer to 
build a case for any damages. But one has to have accountability to be 
able to have a successful internal and external appeals process. 
Employers who are involved in medical decision-making will be protected 
from frivolous lawsuits and unlimited liability as long as they play by 
the rules.
  Again, as a former business manager, we have lots of rules we have to 
play by if one is a businessperson. But if employers are going to play 
doctor or medical provider, then they should be held accountable, just 
like doctors and medical providers should be.
  Let me talk a little bit about why we need to go to State court, 
because that is a concern, not only as a former business manager, but 
as someone who practiced law and enjoyed practicing in State courts 
instead of Federal courts, because you could get to trial quicker in 
State courts.
  Some proponents of the Patients' Bill of Rights argue that patients 
do not need access to State courts if they are injured by their plan. 
They think Federal courts are the appropriate venue to resolve health 
coverage disputes, but legal experts disagree. The American Bar 
Association, the National Judicial Conference, the State attorneys 
general, and numerous Federal judges take the position that medical 
injury cases belong in State and not Federal court. Even Chief Justice 
William Rehnquist stated that, ``I have criticized Congress and 
Presidents for their propensity to enact more and more legislation 
which brings more and more cases to the Federal court system. Matters 
that can be adequately handled by States should be left to them.''
  Well, the States clearly can adequately handle these types of cases. 
State courts have been the traditional forum for medical injury cases 
for more than 200 years and have vast experience in dealing with these 
types of matters. Federal courts, on the other hand, are not an 
appropriate place for all civil cases for several reasons. First, there 
are significantly fewer Federal courts than there are State courts. In 
my home State of Texas, there are 372 State courts available to hear 
these cases, but there are only 39 Federal courts.
  Geographical obstacles also prevent patients from accessing the 
Federal court. Families may have to travel significant distances to 
have their cases heard, when we think about the State of Texas with our 
long distances. Again, there are only 39 Federal courts and 372 State 
courts.
  That is why I say State courts are the best venue. One can get 
justice quicker for both the plaintiff and the defendant in State 
court. Keep in mind, in many of these cases an individual suffers from 
an injury or physical condition, forcing them to go to court in the 
first place, and this should not happen. Even if an individual gets to 
the Federal court, there may not be anyone to hear their case. There 
are currently more than 60 vacancies on the Federal bench.
  Mr. Speaker, the Speedy Trial Act of 1974 promised Federal courts to 
give priority to criminal cases. This means that patients have to wait 
at the back of the line while the Federal courts deal with all of their 
criminal cases, including drug cases. And with criminal cases growing 
into the double digits, this can mean even longer access for 
individuals with the health care they need.
  State courts have always been the appropriate venue for resolving 
personal injury cases. I know in the State of Texas we have certain 
criminal courts that handle criminal cases, but we have civil courts 
that handle our State civil cases. Personal injuries caused by 
negligent HMOs should not be any different than personal injuries 
caused by the negligence of a doctor. They should go to the State 
court.
  I hope my colleagues will consider these arguments and recognize that 
patients need access to the State courts if the Patients' Bill of 
Rights is to be effective.
  Let me talk a little bit about the frivolous lawsuits and independent 
review organizations. Mr. Speaker, the opponents of the Patients' Bill 
of Rights often claim that the passage of this legislation would cause 
a barrage of frivolous lawsuits. Well, my colleagues have heard about 
the situation in our State of Texas. We have not had that barrage of 
lawsuits; in fact, there have only been 17 of them since 1997, 
considering how many thousands have been filed in State court in Texas.
  This law provides nearly identical protections in the State of Texas 
that we would have in the Ganske-Dingell-Norwood legislation that 
resulted in the only 17 cases in the State of Texas. That is 
approximately 4 lawsuits per year, hardly the onslaught that we hear 
from the naysayers that they warn against.
  The reason is that in Texas we have a very strong independent review 
organization, or an IRO. If a health care plan denies treatment to a 
patient, he or she must appeal that decision to that independent review 
organization before proceeding to State court. The IRO is made up of 
experienced physicians who have the capability and authority to resolve 
the disputes and the cases involving medical judgment. Their decisions 
are binding on both the plans and the patients. If an IRO determines 
that a course of treatment is medically necessary, then an HMO must 
cover it. If a plan complies with the independent review organization 
decision, they cannot be held liable for punitive damages.
  They have worked well. Since 1997, we have had 1,000 patients and 
physicians who have challenged the decision of their plans. The process 
is fair. The independent review organizations do not favor patients or 
health plans. In fact, in only 55 percent of the cases, the independent 
review organization fully or partially reversed the HMO.

                              {time}  2030

  Although that shows me that the HMO was wrong more than half the 
time, but they were corrected without having to go to a courthouse. In 
fact, the process worked so well that despite the U.S. 5th Court of 
Appeals' ruling that external appeals are violations of ERISA, Aetna 
and other HMO agreed to voluntarily submit disputes to the Independent 
Review Organizations for resolution.
  Mr. Speaker, I stated earlier there have been only 17 lawsuits filed 
in Texas since we passed the Patients' Bill of Rights, and I believe 
the external appeals process has been instrumental in the success of 
our plan and is giving the patients what they really want, access to 
timely, quality medical care while protecting the insurers from the 
costs of litigation.
  I believe that the success of the Ganske-Dingell-Norwood bill 
provides that same process that we would have. Patients must exhaust 
all internal and external appeals process before they can proceed to 
the courts.

[[Page 11791]]

  They need to be swift appeals, and there is no doubt that any patient 
who is trying to get health care really does not want to sue their 
insurance plan. They really want to get their health care.
  Let me talk about the costs. We have heard the opponents of the 
Patients' Bill of Rights argue that it would increase costs so much 
that an employee would start dropping their coverage. In Texas, 
however, providing patients with the same kind of protections has not 
lead to an increase in costs.
  Like I said earlier, the costs of insureds, HMOs managed care 
insurance in Texas has not grown any more than in States that do not 
have the same protections. Texas premiums are growing at the same rate 
of insurance rates in other States that do not have a patients' bill of 
rights.
  Even if the costs do go up, as some estimates suggest, it will only 
rise 4 percent, that equals about $2 per month per patient. Let us face 
it, $2 a month is not a lot of money these days. It barely buys you 
anything, maybe a cup of coffee, no frills. If you want a cappuccino, 
you are going to have to pay $3; six first class stamps; two 20-ounce 
bottles of Coca Cola or Diet Coke, if you are like I am; for $2, a 30-
minute long distance call; and in some parts of the country, $2 will 
not even buy you a gallon of gas.
  But, for Mr. Speaker, $2 a month patients can have access to 
specialists and emergency room visits and their doctors are working for 
them and not against them. That is why I do not think it will even be 
$2; but even if it is, it is worth that amount of money.
  Mr. Speaker, I see my colleague here and there are a lot of issues 
that I know this House will be talking about that. We passed an HMO 
reform bill last year, the Ganske-Dingell-Norwood bill, and I would 
hope this House would again pass a strong HMO reform bill similar to 
what is passed in some of our States.
  Serving 20 years in the legislature, I have always said that States 
are a laboratory, if States can successfully pass legislation and it 
works, then we need to look at that on the national basis.
  We have had 4 years of experience in Texas, and I think we need to 
pass a similar law to what to Texas has on the national basis, but we 
also need to make sure that if employers are involved in medical 
decisions that they are also held liable just like doctors. Again, I do 
not want our employers involved in medical decisions because they have 
enough trouble producing their products and in trying to keep this 
country great.
  Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Speaker, as a Member of 
Congress from the great state of Texas and a former nurse. I am 
particularly concerned about this House's ability to pass a Patients' 
Bill of Rights. We have all heard the horror stories of patients denied 
treatment or hospitalization as a result of the assessment of an 
insurance company or HMO. We have all heard questions from our 
constituents about federal action on the Patients' Bill of Rights. We 
all know there is a desire and a need to have a system which allows 
patients a voice in their health care. Yet because of the fear that the 
cost of lawyers will drive up the cost of health care, we have failed 
to act. Mr. Speaker, it is time to replace fear with facts.
  In Texas, we passed a Patients' Bill of Rights in 1997. This bill was 
passed over the veto of then-Governor George Bush. Since that time, the 
Texas Patients' Bill of Rights has provided patient protection for many 
of the residents of my state. The bill of rights allows Texans with 
health insurance to have direct access to specialists. When a patient 
sees a doctor, the medical professional is allowed to discuss all 
treatment options, even those not covered by the plan. If there is a 
disagreement between patient and provider, there is a strong 
Independent Review Organization that ensures that patients have an 
appeal process that recommends solutions. All of these protections have 
been accomplished with only a slight increase in health care premiums. 
America deserves the kind of patient protections that Texans currently 
enjoy. Mr. Speaker, I hope that Members of this House can explain to 
their constituents, why they cannot have the standard of care currently 
enjoyed in Texas.

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