[Congressional Record (Bound Edition), Volume 147 (2001), Part 9]
[Senate]
[Pages 11817-11833]
[From the U.S. Government Publishing Office, www.gpo.gov]



                   BIPARTISAN PATIENTS PROTECTION ACT

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will now resume consideration of S. 1052 which the clerk will 
report.

[[Page 11818]]

  The senior assistant bill clerk read as follows:

       A bill (S. 1052) to amend the Public Health Service Act and 
     the Employee Retirement Income Security Act of 1974 to 
     protect consumers in managed care plans and other health 
     coverage.

  Pending:

       Frist (for Grassley) motion to commit to the Committee on 
     Finance and the Committee on Health, Education, Labor, and 
     Pensions with instructions to report back not later than that 
     date that is 14 days after the date on which this motion is 
     adopted.
       Gramm amendment No. 810, to exempt employers from certain 
     causes of action.
       Edwards (for McCain/Edwards) amendment No. 812, to express 
     the sense of the Senate with regard to the selection of 
     independent review organizations.

  The ACTING PRESIDENT pro tempore. Under the previous order, there 
will now be 2 hours of debate in relation to the Grassley motion to 
commit and the Gramm amendment No. 810, the time to be equally divided 
in the usual form.
  The ACTING PRESIDENT pro tempore. The Senator from Nevada is 
recognized.


                                SCHEDULE

  Mr. REID. Mr. President, I just want to make a brief statement on 
behalf of Majority Leader Daschle. As has been indicated, the 
resumption of the Patients' Bill of Rights will be the order at hand 
today. As has been announced, there will be approximately 2 hours of 
closing debate in relation to the Grassley motion to commit--and I 
understand he wants to modify his motion.
  I ask Senator Grassley, it is my understanding the Senator wants to 
modify his motion to commit; is that right?
  Mr. GRASSLEY. Yes.
  Mr. REID. We would not object--and with respect to the Gramm 
amendment regarding employers. That debate will be ended shortly. There 
will be two rollcall votes at 11:30 a.m.
  I met with Senator Daschle early this morning, and he has indicated 
that without any question we are going to finish the Patients' Bill of 
Rights before the Fourth of July break.
  Now, I would say to everyone within the sound of my voice, I believe 
we have been on this bill a week. I think we have fairly well defined 
what the issues are, and I think it would be in everyone's best 
interests if today we would decide what those issues are and have 
amendments offered. If people want time agreements, fine. If they do 
not, debate them, complete what they want to say, and move on. Everyone 
has many things to do during the Fourth of July break. But this is 
important. This bill has been around for 5 years, and we are going to 
complete consideration of this legislation.
  There is also a need to complete the supplemental appropriations 
bill. As I have indicated before, I think Senator Byrd and Senator 
Stevens have done an excellent job in moving that bill along and I 
think we can do that very quickly. But there are going to be late 
nights tonight, tomorrow, and Thursday. We are going to do our best to 
make sure everyone is heard, but also in consideration of other 
people's schedules, we will do our best to complete action on this 
legislation as quickly as possible.
  I see Senator Gregg, the ranking manager of the bill, is here. I did 
not see him earlier.
  Mr. GREGG. Mr. President, I would like to ask unanimous consent that 
Senator Enzi be added as a cosponsor of the Gramm amendment which is 
pending.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. GREGG. I thank the Senator.
  The ACTING PRESIDENT pro tempore. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I hope you will call on the Senator from 
Texas.
  The ACTING PRESIDENT pro tempore. The Senator from Texas.
  Mr. GRAMM. Mr. President, I ask unanimous consent that following the 
vote on the Grassley amendment, each side have a total of 3 minutes to 
summarize the arguments on the amendment excluding employers from 
liability.
  Mr. REID. No objection.
  The ACTING PRESIDENT pro tempore. Is there objection?
  The Chair hears none, and it is so ordered.
  The Senator from Iowa.


                     Motion to Commit, as Modified

  Mr. GRASSLEY. Mr. President, before I speak on my motion, I ask 
unanimous consent that the pending motion to commit be modified to 
reflect the referral of the bill jointly to the Committee on the 
Judiciary and the same 14-day timeframe that affects the Finance 
Committee and the HELP Committee also apply to the Judiciary Committee.
  The ACTING PRESIDENT pro tempore. Is there objection?
  The Chair hears none, and it is so ordered.
  The motion to commit, as modified, is as follows:

                            Motion to Commit

       Mr. Grassley moves to commit the bill S. 1052, as amended, 
     to the Committee on Finance, the Committee on Health, 
     Education, Labor, and Pensions, and the Committee on the 
     Judiciary with instructions to report the same back to the 
     Senate not later than that date that is 14 (fourteen) days 
     after the date on which this motion is adopted.

  Mr. GRASSLEY. Mr. President, I thank the majority for permission to 
modify my motion.
  Mr. President, I rise to speak in favor of my motion to commit the 
Kennedy-McCain bill to the Health, Education, Labor, and Pensions, 
Judiciary, and Finance Committees with instructions that these 
committees report the bill out in 14 days.
  On a preliminary note, I thank the good counsel of Senators Thompson 
and Hatch. Yesterday, they reminded me that the Kennedy-McCain bill 
also includes a series of provisions on liability that fall under 
Judiciary's jurisdiction and have never been reviewed by that committee 
either. Thus, I have modified my motion to include the Judiciary 
Committee along with the HELP and Finance Committees.
  I am deeply troubled that the Kennedy-McCain bill has bypassed the 
relevant committees and has been brought directly to the floor--without 
one hearing, without one markup, and without public input into this 
particular bill.
  As I made very clear on the floor yesterday, I strongly believe that 
patient protections are critical to every hard-working American who 
relies on the managed care system. We need a strong and reliable 
patients' rights bill and I'm supportive of this effort 100 percent. 
What we do not need is a bill, like Kennedy-McCain, that exposes 
employers to unlimited liability, drives up the cost of health 
insurance, and ultimately increases the number of Americans without 
health coverage.
  Instead, I believe we should protect patients by ensuring access to 
needed treatments and specialists, by making sure each patient gets a 
review of any claim that may be denied, and above all by ensuring that 
Americans' who rely on their employers for health care can still get 
this coverage. I'm confident these goals can be reached.
  However, the very fact that our new leadership brought the Kennedy-
McCain legislation directly to the floor without proper committee 
action, violates the core of the Senate process.
  I know my colleagues on the other side will waste no time accusing me 
of delaying this bill, but the truth is, had the relevant committees 
been given the opportunity to consider the Kennedy-McCain legislation 
in the first place, I would not be raising these objections.
  By bringing this bill directly to the floor, the message seems to me 
to be loud and clear: that the new chairmen under the new Democratic 
leadership are merely speedbumps on the road to the floor.
  I guess, as a former chairman who hopes to be chairman again in the 
near future, I do not particularly enjoy being a speedbump. But there's 
something much more important at stake-- process. A flawed process, 
more often than not, will lead to a flawed legislative product. We are 
seeing that point in spades on this legislation.
  Does anyone really think that if we had followed regular order and 
gone through the committee process that the bill before us would be in 
worse

[[Page 11819]]

shape? Would we still be sitting around wondering where this bill is 
going? Or would it be necessary to define the employer liability 
exception with Senator Gramm's amendment?
  I guess I have more confidence in the committees of jurisdiction than 
the new leadership and sponsors of this bill do. The HELP, Judiciary, 
and Finance Committees have the experience and expertise to deal with 
the important issues this bill presents. My motion simply provides 
these fine committees with an opportunity to do their jobs.
  Now let me turn for a moment to my committee, the Finance Committee. 
The Kennedy-McCain legislation treads on the Finance Committee's 
jurisdiction in three ways that are by no means trivial--on trade, 
Medicare, and tax issues.
  In fact, approximately one-third of the nearly $23 billion in revenue 
loss caused by this bill, is offset by changes in programs within the 
jurisdiction of the Finance Committee.
  First, section 502 extends customs user fees, generating $7 billion 
in revenue over eight years. These fees were authorized by Congress to 
help finance the costs of Customs commercial operations.
  Most of my colleagues know first hand the financial pressures put on 
the Customs Service. From Montana, to Delaware, Massachusetts, Texas, 
and California, there is a dire need for funds to modernize the Customs 
service. Yet, the Kennedy-McCain legislation diverts money intended for 
Customs and uses it to pay for this bill. This is not what Congress 
intended.
  If these fees are to be extended--and I emphasize ``if''--they should 
be done so in the context of a Customs reauthorization bill in the 
Finance Committee. This gives the Finance Committee the opportunity to 
carefully review, analyze and debate the implications of any Customs 
changes on the future of the Customs service and Customs modernization.
  Second, section 503 of the Kennedy-McCain bill delays payments to 
Medicare providers, which generates $235 million to help offset the 
losses in the bill.
  It is ironic that while many of us are spending significant amounts 
of our time working to improve Medicare's effectiveness and 
efficiency--this bill actually takes steps to exacerbate the 
frustrations so many providers already experience today with delayed 
payments in Medicare.
  Any changes to Medicare need thorough evaluation and consideration in 
the Finance Committee--where the expertise exists to determine the 
implications of any changes to the program. For those who think we can 
just tinker with this program, they're wrong. It is much too important 
to our Nation's 40 million seniors and disabled that rely on it. Any 
change, large or small, can have a sweeping impact on seniors, 
providers, and taxpayers.
  Finally, let me turn to the third Finance Committee policy area 
implicated in this legislation. I'm talking about health care-related 
tax incentives.
  Now I know there are no tax code changes in this particular bill. 
However, in years past, tax incentives have been an important part of 
this legislation. There's good reason for this. As Senator McCain 
recognized, tax incentives provide balance to patients' rights 
legislation by making health care more affordable and therefore more 
accessible.
  I am a strong believer in health tax policy and have proposed a 
number of changes in the tax treatment of health care--including ways 
to reduce long-term care insurance and expenses, promote better use of 
medical savings accounts, and improve the affordability of health 
insurance through refundable tax credits.
  But while I might agree with these policies on a substantive level, I 
will continue to oppose health tax amendments to the Kennedy-McCain 
legislation simply because the Finance Committee has never been given 
the opportunity to analyze, review, or discuss the implications of 
these provisions on the internal revenue code--a code that is the 
responsibility of the Finance Committee.
  My motion provides the Finance Committee with its rightful 
opportunity to add health tax cut provisions to this legislation. There 
is no doubt that the Hutchinson-Bond amendment, along with a number of 
other good health care-related tax cuts, would be included in a package 
before the Finance Committee.
  On that point, I want to make clear that at my urging, Chairman 
Baucus has already agreed to consider a package of health care-related 
tax cuts in an upcoming Finance Committee markup. So I look forward to 
working through these very important issues in the committee.
  It is my responsibility to Iowans, my Finance Committee members, and 
all Senators to be vigilant on committee business. I cannot let these 
things just slip by. That would be easy to do, but it would also be 
irresponsible.
  During my tenure as Finance chairman, Senator after Senator urged 
that the committee process be upheld regarding tax legislation. I 
listened and I acted.
  I resisted strong pressures to bypass the Finance Committee as we 
considered the greatest tax relief bill in a generation. I forged a 
bipartisan coalition and consensus which I believe made it a better 
bill. Ultimately we were able to craft a bill that benefited from the 
support of a dozen members from the other side.
  So I stand before you as someone who has seen the importance of the 
committee process as well the success of this process.
  The new leadership and this bill's sponsors have simply tossed aside 
the committees of jurisdiction. As justification for these actions, the 
new leadership says Republicans did the same thing on their patients' 
rights bill in 1999, but this is simply not the case.
  In 1999, the patients' rights legislation underwent a series of 
hearings in the HELP committee, and ultimately there were 3 days of 
markup--let me repeat 3 days of markup--in that committee. And only 
after the bill was reported out of the committee was it then brought up 
for consideration by the full Senate.
  So let us hear no more discussion on this point. There is no 
justification for the conduct on this bill. It is a fact that the 
Kennedy-McCain bill before us today has never undergone the committee 
processes that the 1999 patients' rights legislation did.
  What our new leadership has done is violated the rights of the 
members of three important Senate committees from utilizing their 
expertise and experience to fully evaluate the Kennedy-McCain 
legislation--a job these committees were designed to do.
  Any members of the three committees that support this faulty process 
should beware. Supporting this process means that they support 
disenfranchising their own rights as committee members.
  What my motion does is correct this faulty process, a process that 
has ensnared a bill that could have otherwise moved through floor 
debate smoothly, if the committee process had been upheld.
  A vote for my motion to commit puts this bill on the right track. It 
lets members of the HELP, Judiciary, and Finance Committees do the jobs 
they were sent here to do.
  These committees have good track records in this Congress. They will 
continue to produce legislation that is important to our Nation. Taking 
this bill through the relevant committees will only improve this 
legislation and ultimately make it better law. That's what is in the 
best interests of the patients were trying to protect.
  I believe we are at a critical juncture in history. Through a very 
close election, the American people have instructed those of us who 
represent them in this town of Washington, DC, to get serious about 
legislative business.
  What the Iowans have told me, and Americans have told all of us, is 
to work together to produce results. They want less partisanship, more 
action, and more thoughtful debate.
  People in Iowa expect Republicans and Democrats to work together, 
with President Bush, to get things done. They expect us to refrain from 
playing

[[Page 11820]]

partisan politics and to be serious legislators.
  We have a responsibility to our constituents who have given us the 
opportunity to represent them. That responsibility is to legislate in a 
thorough, fair, and constructive fashion. That is not the way the 
Kennedy-McCain bill has been handled thus far.
  If we are to carry out the people's business in the manner the Senate 
set forth--through the committee process--then we must utilize this 
process to produce legislation that will help improve the lives of 
every American.
  After all, is that not what the people really want? A good law that 
is produced in the proper way.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, I yield such time as the Senator from 
Montana desires.
  Mr. BAUCUS. Mr. President, I commend my good friend from Iowa, 
Senator Grassley, and particularly applaud his continued effort to work 
in cooperation and in a bipartisan and frank manner to get results. It 
is an approach he has taken when he was at the helm of the Finance 
Committee and an approach he knows works. I commend him for it.
  I take this opportunity to address one of the amendments presently 
pending, the amendment offered by my colleague from Texas, Senator 
Gramm.
  While I will not vote for this amendment, I believe it is critical 
that we protect employers from unwarranted liability claims. But the 
Gramm amendment I believe goes too far. It protects employers from 
liability even when they are responsible for making medical decisions 
that result in injury or death.
  Let me be clear. I do not believe employers should be held liable for 
medical decisions made by others, nor do I believe they should be 
exempt from responsibility if they are making medical decisions 
themselves.
  This issue is very important to businesses in my State. It is very 
important to the people in my State. I must say it is very important to 
me. For that reason, I am working with my colleagues on a compromise. I 
have recently spoken with Senator Edwards. We are working together on a 
bipartisan compromise that will shield employers from liability when 
they are not involved in making decisions about medical care. It is a 
bipartisan compromise that will also protect patients. I believe there 
is a middle ground. I will be working with my colleagues to find it.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Cleland). The Senator from Massachusetts 
is recognized.
  Mr. KENNEDY. Mr. President, how much time remains?
  The PRESIDING OFFICER. The Senator from Massachusetts controls 51 
minutes on the motion and the amendment.
  Mr. KENNEDY. Mr. President, I yield myself 15 minutes.
  Mr. President, the Senate recently completed major education reform 
after six weeks of debate focused on accountability. We agreed that in 
order to persuade schools to live up to high standards, serious 
consequences were needed for schools that failed to improve. 
Republicans in particular emphasized the need for tough financial 
sanctions. The risk of losing funds, they argued, is an appropriate and 
necessary incentive to achieve high performance.
  This emphasis on accountability is not new. It was also the hallmark 
of welfare reform, and the Senate has applied the same principle to 
many other programs as well. Over and over, our Republican friends have 
argued that increased accountability is the way to produce responsible 
behavior.
  It is ironic that some of those who have called for accountability 
most vigorously in these other debates now oppose accountability for 
HMOs and health insurance companies when their misconduct seriously 
injures patients. It is irresponsible to suggest that HMOs and 
insurance companies should not face serious financial consequences when 
their misconduct causes serious injury or death. If ever there was a 
need for accountability, it is by those responsible for providing 
medical care.
  The consequences can be extremely serious when an HMO or an insurer 
denies or indefinitely delays access to essential medical treatment. It 
can literally be a matter of life and death. Yet there is overwhelming 
evidence that access to care is being denied in many cases for 
financial, not medical, reasons.
  And after five years of debating this issue, we've finally reached 
the point where very few Senators will come to the floor and openly 
claim that HMOs and health insurers should not be held accountable in 
court when they hurt people. These corporations desperately want to 
keep the immunity that they currently have, immunity that no other 
business in America enjoys. But the HMOs and insurers have behaved so 
irresponsibly and hurt so many people that they are finally in danger 
of losing it. Too many children have died, too many families have 
suffered, for even the HMOs' closest allies to stand here and say that 
they do not need to be held accountable.
  So instead, the HMOs' multi-million dollar lobbyists and their allies 
in Congress have devised a strategy for killing this legislation 
without directly questioning the need to hold HMOs accountable. Indeed, 
some of those who repeatedly called for accountability in other areas 
are the very same members who are searching for ways to enable these 
companies to escape accountability when their misconduct seriously 
injures people.
  The pending amendment by Senator Gramm is a perfect example of this 
strategy of collateral attack--an attempt to kill this legislation by 
distorting what it would actually do, and by seeking to turn the focus 
away from HMO misconduct. Those supporting the Gramm amendment claim 
that all employers are endangered by this legislation. Such claims are 
wrong. The vast majority of employers who provide health care merely 
pay for the benefit. They do not make medical judgments, they do not 
decide individual requests for medical treatment. Thus, under our 
legislation, they have no liability. The only employers who would be 
liable are the very few who step into the shoes of the doctor or the 
health care provider and make final medical decisions. Our legislation 
only allows employers to be held liable in court when they assume the 
role of the HMO or the health insurance company.
  By completely exempting employers from all liability no matter how 
closely tied the employer is to an HMO and no matter how severe the 
employer's misconduct, Senator Gramm's proposal aims to break the link 
of accountability in this bill.
  President Bush stated in the ``Principles'' for the Patients' Bill of 
Rights which he issued on February 7th: ``Only employers who retain 
responsibility for and make final medical decisions should be subject 
to suit.'' That is consistent with what our bill does. But Senator 
Gramm's amendment is directly at odds with the President's principle. 
The Gramm amendment would mean that ``employers who retain 
responsibility for and make final medical decisions'' could not be 
sued.
  I'm surprised that the Senators from Texas would propose such an 
extreme approach--eliminating all accountability for employers no 
matter what they do. Under their proposal, employers are never held 
accountable, period, even if an employer causes the death of a worker's 
child by interfering in medical decisions that should have been made by 
doctors.
  The Gramm amendment is a poison pill designed to kill this 
legislation. Not only does it absolve employers of liability regardless 
of how egregious their conduct, it also creates a loophole so enormous 
that every health plan in America would look for a way to reorganize in 
order to qualify for the absolute immunity provided by the Gramm 
amendment. Senator Gramm creates a safe harbor so broad that it will 
attract every boat in the fleet.
  We all know what would happen if this amendment became law. HMO 
lawyers would craft contracts that enable them to be treated as 
employees of the companies they serve, so HMOs could

[[Page 11821]]

take advantage of Senator Gramm's absolute immunity. Other employers 
would turn to self insurance as an obvious way to avoid accountability 
for the actions of their health plans.
  Health insurance companies would rework their contracts to give 
employers the final say on benefit determinations in order to take 
advantage of this shield from accountability.
  Today fewer than 5 percent of employers assume direct responsibility 
for medical decisions on behalf of their employees. But if the Gramm 
amendment became law, the share of employers taking on these decisions 
would grow enormously. By providing absolute immunity from 
accountability, the Gramm amendment creates a strong incentive for 
employers to intervene in medical decisions, despite the fact that most 
employers are not qualified to do so.
  Employers and HMOs are free to negotiate any relationship they want, 
and that relationship can be detailed in writing, or it can be detailed 
in informal ``understandings'' that workers never get to see. What the 
Gramm amendment does is leave families completely vulnerable to the 
most unscrupulous HMOs and employers.
  For example, an employer could demand that an HMO call it for 
approval before allowing any treatment that would cost over a certain 
amount, compromising the patient's privacy and enabling the employer to 
make medical decisions based on cost alone. The Gramm amendment would 
completely shield an employer who causes grave injury or death in this 
way, and the HMO might also escape liability because it could show that 
the employer alone made the final decision.
  Subtler employers could instruct their HMOs to delay or complicate 
the treatment approval process for certain kinds of medical care or for 
certain employees. The Gramm amendment would allow an employer to 
require its HMO to send it all requests for mammograms, and the 
employer would not be accountable if it chose to delay or deny a 
request for a mammogram that would have timely detected breast cancer. 
The same employer practice can interfere with many diagnostic and 
treatment decisions.
  As Judy Lerner discovered, there is no end to the irresponsible 
behavior of some unscrupulous employers. Ms. Lerner worked in Boston 
for over two decades as a consultant in a human resources firm that 
self insured, and she relied on the health benefits that the company 
provided. But when she broke her leg in several places and endured 
emergency surgery, the company simply stopped helping with her medical 
bills, agreeing only to pay for crutches. Despite her doctors' vigorous 
arguments for continued home medical care, the company abandoned her. 
The Gramm amendment would leave all employees like Ms. Lerner 
vulnerable after they have been told that their medical bills would be 
covered at the time they accepted employment and begin working hard. 
The Gramm amendment allows employers to deny necessary medical 
treatment any time it suddenly becomes too costly or inconvenient, 
regardless of how much the employee has relied on that coverage.
  Most employers, of course, would not find it morally acceptable to 
intervene in medical decisions against their employees. But if I were a 
small business owner, I wouldn't want to compete in the environment 
created by the Gramm amendment because it gives the worst employers an 
economic incentive to cut corners on employee health care and frees 
them from all accountability when they do so. It would create an uneven 
playing field, allowing unscrupulous employers to gain a business 
advantage over their honorable competitors.
  As the President says, ``employers who retain responsibility for and 
make final medical decisions should be subject to suit.'' That is what 
President Bush wants, and that is what we want to accomplish. I am 
confident that the McCain-Edwards language accomplishes this, but I 
remain open to other ideas for writing President Bush's principle into 
law.
  Under our language, employers have no liability as long as they do 
not make decisions about whether a specific beneficiary receives 
necessary medical care. The only employers who can be brought into 
court are the very few who step into the shoes of the doctor or the 
health care provider and make final medical decisions.
  Our bill does not authorize suit against an employer or other plan 
sponsor unless ``there was direct participation by the employer or 
other plan sponsor.'' ``Direct participation'' is defined as the 
``actual making of such decision or the actual exercise of control'' 
over the individual patient's claim for necessary medical treatment.
  Our bill directly protects employers from liability by stating: 
``Participation . . . in the selection of the group health plan or 
health insurance coverage involved or the third party administration'' 
will not give rise to liability; ``Engagement . . . in any cost-benefit 
analyses undertaken in connection with the selection of, or continued 
maintenance of, the plan or coverage'' will not give rise to liability; 
``Participation . . . in the design of any benefit under the plan, 
including the amount of co-payment and limits connected with such 
benefit'' will not give rise to liability. Our language is clear. As 
long as the employer does not become involved in individual cases it is 
immunized from suit.
  Employers are very well protected by our legislation as it is 
written. We are pleased to consider other strategies for accomplishing 
President Bush's principle on this issue, but the loophole that the 
Texas Senators propose fundamentally contradicts the President's 
principle and ours.
  Senator Snowe and others are working on language to codify that 
principle, and I am looking forward to seeing their ideas.
  The Gramm amendment is exactly the wrong medicine for America. It 
deserves to be soundly defeated for the sake of a level playing field 
for all employers, and for the good health of employees and their 
families.
  Mr. President, I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. BUNNING. Mr. President, I will take the time Senator Gramm has 
and yield myself as much time as I may consume.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BUNNING. Mr. President, I rise in strong support of the Gramm 
amendment and ask unanimous consent to be listed as a cosponsor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BUNNING. Today in the United States we do not mandate that any 
employer or business provide health insurance. We do not force them to 
buy it for themselves or their employees. We let the employer make this 
decision.
  And employers all across the United States do provide health care 
insurance that covers over 160 million people. These employers do not 
have to provide that health care. They do this voluntarily for a number 
of reasons. Some actually do it because they care about their 
employees, but most do it because it is good business--it helps attract 
employees to come to work for them. But regardless of why these 
employers offer health benefits, the important factor is that they do 
this voluntarily.
  There is no employer mandate in America. We had that debate in 1994 
during the argument about the Clinton health bill, and it was clear 
that everyone--the American people and American business--wanted to 
keep our voluntary system. But if the bill before us today becomes law, 
that could all change.
  In spite of what the Senator from Massachusetts said, businesses--big 
and small--all over America would stop offering health insurance 
benefits to their employees. And the reason they would stop can be 
summed up in one word--lawsuits.
  The simple fact is that the Kennedy-McCain bill would expose 
employers who provide health care insurance coverage to their employees 
to lawsuits. I have heard some supporters of this bill claim that 
employers are protected from lawsuits in this bill. We just heard the 
good Senator from Massachusetts say that. They say that this

[[Page 11822]]

bill protects our current system. They point out that on page 144 of 
the Kennedy-McCain bill that there is a section in bold headline that 
reads: ``Exclusion of Employers and Other Plan Sponsors.'' But what 
they don't tell you is that on the very next page the bill reads, as 
clear as day: ``. . . A Cause of Action May Rise Against an Employer . 
. . .'' After that there are four pages explaining when an employer can 
be sued.
  That means that while this bill does exclude suits against doctors 
and hospitals and other providers, it does not exempt suits against 
employers who purchase health insurance. In fact, the bill exposes 
employers who provide health care insurance to both State and Federal 
lawsuits. It exposes them to unlimited economic damages, unlimited 
noneconomic damages, unlimited punitive damages in State court, and $5 
million in damages in Federal court.
  Ladies and gentlemen, that is an awful lot of lawsuits.
  I believe that this exposure to liability in the Kennedy-McCain bill 
will scare employers away from providing health insurance. Instead of 
providing coverage, one of two things is going to happen if this bill 
becomes law. Employers are either going to drop their coverage 
altogether or they will give their employees cash or some sort of 
voucher and wish them well in searching for the best deal for 
themselves and their families they can find in health care. This would 
turn our entire health system on its head and would lead to serious 
problems.
  I don't believe anybody in this Chamber really wants that. Instead, I 
urge support for the Gramm amendment. This amendment would apply 
language from the current Texas State law to specifically protect 
employers that provide health benefits from facing lawsuits for doing 
so. It is clear cut. It is a simple solution, but it is very clear in 
its intent.
  For weeks some of my colleagues have been eager to point out that 
Texas has a Patients' Bill of Rights, and some of them even talk about 
this is a model for the Federal legislation. Now we have the 
opportunity to do just this and to ensure that employers cannot be sued 
for doing the right thing--for helping their employees. It is simple.
  We know the bill before us as written will not become law, and the 
expanded employer liability is one of the very tough sticking points. 
Now we have a chance to fix it, to improve the bill, and to make it 
signable.
  I want to vote for a Patients' Bill of Rights, a bill of rights that 
is going to become law. A vote today for the Gramm amendment is a 
critical step in that direction. A vote against the amendment means 
that we will probably just talk about these problems without doing 
anything to change them. I urge my colleagues to vote to protect 
employers and employees alike and support the Gramm amendment.
  We do not want single-payer health insurance in the United States. It 
was proposed in 1994 and soundly defeated. Even though the opponents of 
the Gramm amendment would like to think that this is the reason they 
are opposing it, that it prevents liability, the basic fact is that 
they may want no health care benefit at all and then force the United 
States to have a single-payer plan at the end. We will do anything in 
our power to defeat that.
  I urge a vote on the Gramm amendment and yield back my time.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Tennessee.
  Mr. THOMPSON. Mr. President, I would like to speak on the Gramm 
amendment. I see that neither Senators Gramm nor Grassley are present. 
I understand there is time remaining for Senators Grassley and Gramm. I 
suppose the appropriate thing to do would be to ask for 10 minutes of 
the time on the Gramm amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. THOMPSON. Mr. President, we are proceeding to clear the air on 
this issue, and that is important. It is a very important issue. One of 
the things Senator Grassley pointed out was that this did not go 
through the regular committee process. It is a very complicated bill, 
and we are just now seeing the complications of it; one of those being 
the extent to which employers are liable, employers can be sued.
  Unfortunately, we didn't have a chance to work all that out in 
committee. So now we are here in this Chamber arguing about the 
exposure of employers.
  We are making progress because, when we first started this debate, 
the supporters of the McCain-Kennedy-Edwards bill basically said: We 
were not attempting to go after employers. That is not what this is 
about. Then in the fine print, yes, well, under certain limited 
circumstances.
  I think we know now that there is, indeed, extreme exposure as far as 
employers are concerned and that it constitutes a significant part of 
the effect of this bill. We are making progress. Now we can talk about 
the extent to which employers should or should not have exposure and 
liability.
  We have heard statements today that there are a lot of employers out 
there that will do the wrong thing; that even though they are not 
required to have health insurance for their employees, apparently there 
are employers out there that will set up health care plans and then do 
everything they can to disadvantage their own employees, and that that 
consideration is driving this provision of the bill. So we are, indeed, 
refining the issue; the lines are being drawn.
  The response to the issue of suing employers has always been: Don't 
worry about that. The main thing is we are going after the big bad 
HMOs. You don't have to worry about anything else. When times get 
really tough, we bring out another picture of some poor individual who 
is used to demonstrate the evilness of managed care.
  Our hearts go out to these people. These are people in need. But the 
average observer in America must be watching this and asking 
themselves: Why doesn't the Government just require these people to be 
covered for anything all the time in unlimited amounts? Why doesn't the 
Federal Government just take care of it? Or if the Government doesn't 
want to do it, why don't we make some insurance company pay somebody 
for any claim they make, if it is a real need, at any time for any 
amount? In fact, why didn't we pass the Clinton health care bill a few 
years ago? The average person must be asking: If that is the only 
issue, taking care of sick folks, then why don't we nationalize this 
health care system of ours? That is the logical conclusion of all that 
we have been hearing.
  The answer, of course, is that in public policy matters, there are 
tradeoffs to be considered. There is never just one side of the coin.
  We know, for example, that we set up managed care in this country 
because health care prices were rising up to the point of almost 20 
percent a year. We knew that couldn't be sustained so we put in a 
managed care system. Some HMOs abused that and did some bad things. 
States passed laws. Thirty some States passed laws addressing some of 
these problems. The State of Tennessee has broader coverage than the 
bill we are considering today. It is not as though the States have been 
standing still. They are covered. Health care costs are going back up.
  So here we come and we are going to lay on another plan that, if 
passed in the current form, without question, will drive up health care 
costs again.
  My heart goes out to these poor people who are being used in this 
debate to demonstrate the necessity for the passage of this 
legislation. But I want to refer to a group of individuals myself. In 
fact, I want to refer to 1.2 million individuals. I don't have the 
space or the time or the resources to bring in pictures of the 1.2 
million people who, the most conservative estimates say, will be thrown 
off of insurance altogether if this bill passes.
  The Congressional Budget Office says that at a minimum--and there are 
other estimates, but that is the lowest one I have seen--1.2 million 
people will lose insurance altogether. Who is going

[[Page 11823]]

to bring their pictures in here to demonstrate to the American people 
that they are disadvantaged by the bill we might pass that will drive 
health care costs up so great that these small employers that some 
would like to demonize or large ones, for that matter, that some would 
like to demonize don't have to provide health care at all?
  What is going to keep them from just saying, as has been pointed out 
this morning, that the costs are too great, the liability is too great? 
We want to do the best we can. We are not perfect. We might make 
mistakes. But instead of setting up a system to rectify those mistakes, 
we will be opened up to unlimited lawsuits at any time, anywhere in the 
country, in any amount. Why should we have that aggravation? Why not 
just give the employees X number of dollars and say, you take care of
it--and they may or may not take care of it with that money--or if you 
are a small employer, to drop insurance coverage altogether. Who is 
going to speak for that 1.2 million people who they say will wind up 
without any insurance at all?
  There won't be any arguments with any HMOs because there won't be any 
insurance at all.
  So the lines have been drawn in this debate. We have people over here 
needing help, needing assistance. We have set up a review process to 
get independent people to look to determine whether or not these 
employers are taking advantage of people. So far so good.
  Then the proponents of this bill want to lay in a system of lawsuits 
on top of that. We draw the line in there and say that, yes, let's have 
an administrative process to see whether or not employers are taking 
advantage of folks. Let's have an independent doctor look at it. After 
that, let's not lay on unlimited lawsuits against employers who do not 
provide the health care and expose them to liability, when we say that 
what we are going after is the big bad HMOs. Why expose these people 
who are providing health insurance? They are not providing health care, 
so why expose them to liability?
  The question remains, Do we want to sue employers? Do we want to have 
the right to sue employers or not? The proponents of this bill say yes, 
but only with regard to when they directly participate in 
decisionmaking. This gets a little technical, but it is very important. 
There is a certain resonance of the proposition that if somebody does 
something wrong, they ought to be held accountable. I have tried a few 
cases myself, and I believe in that principle. I think that is right. 
But the problem in the context of this health care debate, which we 
nationalize to a certain extent with ERISA for a portion of the 
population, and now we are going to nationalize the rest of it with 
this bill, the problem is we are setting it up so that, by definition, 
a large group of employers are going to be considered to be directly 
participating because they are self-insured and they have employees who 
are on the front end of these claims processes. They tell me that these 
self-insured plans are some of the best plans that we have. They don't 
go out and hire an HMO. They try to do it themselves, in-house, with 
their own people, looking out for their own employees, who they don't 
have to insure if they don't want to, but they do. I am told that they 
provide more benefits than the other plans. They are some of our better 
plans. But by cutting out the middleman, so to speak, and doing it 
themselves, they are going to be subject to liability under this bill.
  The second point of exposure has to do simply with the fact that 
employers have settlement value. What lawyer worth his salt, if he is 
going to sue anybody along the line here in this process, would not 
include an employer as a part of this lawsuit? An employer has a chance 
of deciding whether or not to go to court and stand on principle 
because he is not liable and spend several thousand dollars defending 
himself or settle up front and pay the other side in order to get out 
of the lawsuit.
  The other side says they don't want to sue employers unless they have 
control. I mentioned direct participation. The other key words are ``or 
control''--to exercise control of the health care plan. The only 
problem with that is under ERISA law, by definition, employers are 
supposed to have control over these plans. So if you just look at the 
definitional sections of the applicable law, on day 1 you have a large 
number of employers that are subject to this lawsuit. So let's not kid 
ourselves about that.
  The first part of this debate was that most employers are not 
covered. Most employers are not covered. Now, we know that is not true. 
The issue now is whether or not they should be. You say, well, what if 
they do something wrong? That is a good point. Why should they be any 
different? Why should they have immunity? We could ask the same thing 
about treating doctors and about treating hospitals and about any 
number of entities around America, including U.S. Senators. Why do we 
have protection for anything we say in this Chamber under the speech 
and debate clause? Is it because we are better than anybody else or 
because we don't ever go over the line and do something wrong or maybe 
even outrageous? No. It is because of the tradeoffs of public policy 
because there are other considerations, just as there are other 
considerations when we lash out and follow our natural instinct to sue 
an employer.
  You are going to drive costs up; you are going to drive people out of 
the system; and you are going to cause more uninsured. Besides, there 
is accountability. There is a sense of the Senate pending today that 
talks about the importance of the independent evaluation that this bill 
creates. The employer doesn't get to make a decision to cut somebody 
off under this bill, and that is the end of it. It goes through an 
independent evaluation process. It goes through an external review 
process. Then, if it is a medical decision, it goes to an independent 
medical reviewer.
  This bill spends pages on pages in setting up these individual 
entities, protecting them, qualifying them, having the Federal 
Government look over their shoulders. They are the final word. If the 
employer is wrong, they are the final word, and they don't have 
anything to do with the employer. There might be some hypothetical 
cases where some evil employer might sneak through the cracks 
somewhere. All I am saying is it is our obligation to consider both 
sides of this coin. If in trying to do that, if in trying to reach that 
hypothetical extreme case we drive up health care costs and we drive 
small employers out of the health care business and we do wind up with 
over a million more people uninsured, we are making a bad bargain.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. KENNEDY. How much time remains?
  The PRESIDING OFFICER. The Senator controls 37\1/2\ minutes.
  Mr. KENNEDY. I will yield myself 2 minutes. I want to remind my good 
friend from Tennessee when he talks about the issues of cost, that we 
have heard this issue raised before by the Chamber of Commerce 
regarding family and medical leave. They estimated that its cost would 
be $27 billion a year. It has been a fraction of that. I don't hear 
Members wanting to repeal it. We heard about the issue of cost when we 
passed Kassebaum-Kennedy, which permits insurance portability, and is 
used particularly by the disabled. We heard that Kassebaum-Kennedy was 
estimated to cost tens of billions of dollars. That cost has not 
developed. Nobody is trying to repeal it.
  We heard about costs when we passed an increase in the minimum wage. 
We heard that it would lead to inflation and lost wages. We have 
responded to that. The cost issue has always been brought up.
  I will remind the Senator that we have put in the Record the pay for 
William McGuire and United Health Group, the largest HMO in the 
country. The total compensation is $54 million and $357 million in 
stock options for a total compensation of $411 million per year. That 
is $4.25 per premium holder. The best estimate of ours is $1.19, and 
you get the protections. We can go down the list of the top HMOs they 
are making well over $10 million a year

[[Page 11824]]

and are averaging $64 million in stock options. We could encourage some 
of those who want to do something in terms of the cost, to work on this 
issue, Mr. President.
  In the 1970s, we welcomed, as the principal author of the HMO 
legislation, the opportunity to try to change the financial incentives 
for decapitation, to keep people healthy. There would be greater 
profits for HMOs. It is a good concept. To treat people and families 
holistically is a valid concept and works in the best HMOs.
  What happened is that HMOs, and in many instances, employers, started 
to make decisions that failed to live up to the commitment they made to 
the patient when the patient signed on and started paying the premiums. 
That is what this is about. The patient signs on and says: I am going 
to have coverage if I am in a serious accident. Then we have the 
illustration of the person who broke their leg and the employer said: 
Absolutely not. We are cutting off all assistance. That person was left 
out in the cold.
  There is no reason to do that. The only people who have to fear these 
provisions are those employers that make adverse decisions with regard 
to an employee's health. It seems to me they should not be held free 
from accountability any more than anyone else should be.
  How much time remains? I yield 12 minutes to the Senator from North 
Carolina and that will leave me how much?
  The PRESIDING OFFICER. Twenty-two minutes.
  Mr. KENNEDY. I yield the Senator from North Carolina 15 minutes.
  The PRESIDING OFFICER. The Senator from North Carolina is recognized.
  Mrs. HUTCHISON. Mr. President, I ask unanimous consent to speak after 
the Senator from North Carolina.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. EDWARDS. Mr. President, I want to speak to some of the concerns 
and comments that have been made by my friend and colleague from 
Tennessee with whom I have been working over the course of the last few 
days on this issue. There are a couple of issues he raised that deserve 
a response.
  First is the general notion that an appeals process, before going to 
court, is adequate in and of itself. There are two fundamental problems 
with that logic. Remember, the way the system works under both pieces 
of legislation is if an HMO denies care to a patient, they can go 
through an internal appeal. If that is unsuccessful, they can go to an 
external appeal. If that does not resolve the issue and they are hurt, 
they can then go to court.
  There are two reasons the appeal by itself does not resolve the 
issue.
  An HMO says to a family: We are not going to allow your child to have 
this treatment. The child then suffers an injury as a result, and a 
week later, or however long it takes to complete the appeals process, 
the HMO's decision is reversed by an appeals board.
  An independent review board says: Wait a minute, HMO, you were wrong 
to start with. Unfortunately, the only thing that independent review 
board can do is give that child the test they should have had to start 
with, but the child has already suffered a serious permanent injury as 
a result. The treatment no longer helps.
  The problem is if the HMO decides on the front end they are not going 
to pay for some care that should be paid for, and the child is hurt as 
a result, and then 1 week or 2 weeks later the appeals board reverses 
that decision and says, yes, they are going to order the treatment, 
this child has nowhere to go and their family has nowhere to go.
  That is the point at which--and I think the Senator and I may agree 
on this--we believe the HMO should be held accountable. The independent 
review board cannot fix the problem where the child has been injured 
for life. The HMO that made the decision, just as every entity in this 
country, should be held responsible and accountable for what they did. 
That is what we believe. We believe in personal responsibility.
  The second reason the appeals process by itself does not solve the 
problem: If there is nothing beyond the appeal, it creates an incentive 
for the HMO, which is what I am talking about, to have a policy of when 
in doubt, deny the claim because the worst that is ever going to happen 
is they are going to finish this appeals process and some appeals board 
is going to order them to pay what they should have paid to start with. 
If they take 1,000 patients for a particular kind of treatment and deny 
care to those 1,000 patients, the majority of them are never going to 
go through an appeal, so they save money. Then they go through the 
appeal and the worst that can ever happen to them is with 30 or 40 of 
them, an appeals board orders them to go back and pay what they should 
have paid.
  The problem is fundamental. The appeals process alone does not create 
an incentive for the HMO to do the right thing.
  On the other hand, if the HMO knows if they make an arbitrary 
wrongful decision and somebody is hurt as a result, injured as a 
result--if that child suffers a permanent injury as a result--they can 
be held responsible for that as everybody else who is held responsible, 
then it creates an enormous incentive for the HMO to do the right 
thing.
  That is what this legislation is about. Senator McCain, Senator 
Kennedy, and I structured this legislation to avoid cases having to go 
to court, to create incentives for the HMO to do the right thing, 
something they are not doing in many cases around the country now.
  The problem is, without both the appeals and the possibility of being 
held responsible down the road, we do not create the incentive for the 
HMO to do the right thing. We know that today around the country many 
families are being denied care they ought to be provided by an HMO.
  There are fundamental reasons the system is set up the way it is. It 
is all designed not to get people to court and not even to get people 
into an appeals process but to get the patient the correct care, to get 
them the care for which they have been paying premiums.
  Mr. THOMPSON. Will the Senator yield for a question?
  Mr. EDWARDS. Yes.
  Mr. THOMPSON. I thank the Senator for addressing the issues I raised, 
and I ask this as a legitimate point of inquiry and not just a debating 
point.
  Mr. President, it occurs to me with regard to the Senator's first 
point, and that is coverage might be denied initially but later 
overruled, and in the interim--I think he used the example of a small 
child again--a child might be suffering damage, does not ERISA 
currently provide injunctive relief? It allows a person under those 
circumstances to go into Federal court for mandatory injunctive relief, 
and would that not address the concern the Senator has?
  Mr. EDWARDS. I thank the Senator for his question. It is a perfectly 
fair question. The problem, of course, is that many times it could be a 
situation where it would take entirely too long to go to court and get 
injunctive relief. When there is a situation where they have to make a 
decision about a family member, whether it be a child or an adult, and 
the HMO says they are not paying for the care, and they are in the 
hospital, the last thing they are going to be talking about is: I need 
to hire a lawyer, go to court, and get injunctive relief. What they 
need is care at that moment, and in many cases, as the Senator knows 
from his personal experience before coming to the Senate, during the 
interim, during that short period of time, that window of opportunity 
to provide the care to that patient who may be hospitalized or may not 
be hospitalized is the critical time.
  Mr. THOMPSON. If the Senator will----
  Mr. EDWARDS. Excuse me. It is impossible during that period of time 
to get injunctive relief against an HMO, and I might add, the last 
thing in the world a family is thinking about when they have a member 
of their family who is in trouble and needs health care is going to 
court to get an injunction. Now I yield.
  Mr. THOMPSON. I thank the Senator. I could not agree more with that

[[Page 11825]]

last point. However, my experience has been that injunctive relief is 
designed by nature for very rapid consideration. You can get very rapid 
consideration, but you do have to go to court to get it.
  My question is, If we are not going to avail ourselves or require 
claimants to avail themselves of the processes if they believe they 
have been wronged, does that not necessarily lead to the conclusion 
that we must grant all claims?
  How does a person considering a claim know which one--let's assume 
they are dealing in good faith. In every case where there is an injury 
or potential injury going to occur, is the logical conclusion that we 
should see to it that all claims are granted regardless of whether or 
not the person considering the claim thinks it is clearly not covered 
under the agreement?
  If we do not go through the processes that are in law for people to 
avail themselves and to show to an independent arbiter or judge that 
their claim is meritorious, if we say we do not have time for that, 
then doesn't that mean we have to grant all of them?
  Mr. EDWARDS. Reclaiming my time, my response to the Senator's 
question is simple and common sense. For a family in a bad situation 
needing medical care immediately, the last thing in the world they are 
thinking of is hiring a lawyer, going to court and trying to get an 
injunction. The Senator well knows that process by itself can take 
enough time for something serious to happen in the interim.
  As to the second issue the Senator raises, all we are saying in our 
legislation, in the structure of our system--internal appeal/external 
appeal--if that is unsuccessful and there has been a serious injury, 
they can be treated and taken to court the same as everyone else. We 
expect the HMO, which, by the way, is in the business of making these 
health care decisions, although of course not to cover absolutely 
everything, to make reasonable, thoughtful judgments about what is 
covered and what should not be covered.
  Now back to the issue of employer liability. First of all, the answer 
to the Gramm amendment is that it is inconsistent with what the 
Republican President of the United States has said regarding our bill 
and the President's principle: ``Only employers who retain 
responsibility for and make final medical decisions should be subject 
to suit.'' This is the President's written principle. That is the way 
our bill is designed, that only employers engaged in the business of 
making individual medical decisions can have any liability or any 
responsibility.
  With that said, we are working, as I speak, with colleagues, 
Republicans and Democrats across the aisle, to fashion language that 
accomplishes the goal of protecting employers while at the same time 
keeping in mind the interests of the patient.
  There are other legitimate issues raised. For example, one argument 
that has been made is that employers may be subjected to lawsuits they 
do not belong in, and there is a cost associated with being in those 
cases for too long. We are working as we speak to create better 
language, better protection for employers so there is no question that 
employers, No. 1, can be protected from liability, and No. 2, if they 
are named in a lawsuit improperly, they don't belong in the lawsuit and 
shouldn't be named, they have a procedural mechanism for getting out 
quickly.
  The truth is, the Gramm amendment is way outside the mainstream. All 
the work that has been done on this issue, including the work we are 
doing with our colleagues, both Republicans and Democrats, is a way to 
fashion a reasonable, middle of the road approach that provides real 
and meaningful protection to employers without completely eliminating 
the rights of patients. That is what we have been working on. We are 
working on it now and are optimistic we can resolve that issue.
  Mr. KENNEDY. Will the Senator yield?
  Mr. EDWARDS. Yes.
  Mr. KENNEDY. I yield another 2 minutes. Does not the Senator agree 
that the majority of employers now are doing a good job and are not 
interfering with these medical decisions?
  Mr. EDWARDS. Absolutely.
  Mr. KENNEDY. At the present time, a small number of employers are 
interfering with medical decisions. If the Gramm amendment is accepted, 
this will put the good employers at a serious disadvantage in 
competition with others, does he not agree? Would not the others be 
able to formulate a structure so they could effectively cut back on 
excessive costs for the health care system for their employees, while 
the good ones who are playing by the rules would be put at a rather 
important competitive disadvantage? Does the Senator not agree that for 
the employers working within the system and playing by the rules, this 
is an invitation to change their whole structure and to be tempted to 
shortchange the coverage and protection for their employees?
  Mr. EDWARDS. In response to the question, the answer is, of course we 
believe employers, the vast majority of employers, care about their 
employees and want to do the right thing. Our legislation is 
specifically designed to protect those employers, just as the President 
of the United States has suggested needs to be done.
  What we have done in this legislation, what the President has 
suggested, and in the work that continues as we speak on additional 
compromise language, all is aimed at the same principle and the same 
goal.
  This amendment is outside that mainstream--different from our 
legislation, different from the principle established by the President 
of the United States, and different from the compromise that is being 
worked on at this moment.
  I remain optimistic we will be able to reach a compromise that 
provides real and meaningful protection to the employers of this 
country we want to protect. We have said that from the outset. We stand 
by it. We want to protect them.
  If I may say a couple of things about the issue of costs which was 
raised a few moments ago, the CBO has not said anybody will become 
uninsured as a result of this legislation. What the CBO has said is 
there will be a 4.2-percent increase in premiums over 5 years because 
of our legislation and a 2.9-percent increase if the competing 
legislation passes, roughly 4 percent versus roughly 3 percent. The 
difference between these two pieces of legislation on cost is a very 
minuscule part related to litigation. I think the difference is less 
than half of 1 percent related to litigation. Rather, the differences 
are related to quality of care. If people get better access to clinical 
trials, better access to specialists, better emergency room care, a 
more enforceable and meaningful independent review process, if those 
things occur, there is a marginal cost associated with it.
  We have real models. We don't have to guess about what will happen. 
Those models are Texas, California, and Georgia. In those States, the 
number of uninsured, while the patient protection laws have been in 
place, has gone down, not up. We have some real, although short term, 
empirical evidence about what happens when this patient protection is 
enacted.
  We have to be careful. A lot of arguments being made are the same 
arguments that have been made by HMOs for years to avoid any kind of 
reform, to avoid any kind of patient protection. We are working in this 
legislation to give real protection to somewhere between 170 and 180 
million Americans who are having problems with their HMO. We want to 
put the law on the side of patients and doctors instead of having 
health care decisions made by insurance company bureaucrats.
  The PRESIDING OFFICER. The time yielded has expired.
  Mr. EDWARDS. I ask to be yielded another 5 minutes.
  Mr. KENNEDY. How much time remains?
  The PRESIDING OFFICER. The Senator from Massachusetts controls 17 
minutes.
  Mr. KENNEDY. I yield 5 minutes to the Senator from North Carolina and 
the Senator from Arizona the remaining time.

[[Page 11826]]

  The PRESIDING OFFICER. The Senator from North Carolina is recognized.
  Mr. EDWARDS. Mr. President, in summary, let me speak to the two 
amendments we will next be addressing. First, the Gramm amendment is 
outside the mainstream, outside what the President of the United States 
has suggested, outside of what we have in our legislation, and outside 
of what we are working on with Senators from across the aisle.
  Second, as to the Grassley motion to commit, the problem is it sends 
it back to a number of committees and slows down the process. We need 
to do something about this issue and quit talking about it. The 
American people expect us to do something about it. Thousands of 
Americans each day are losing access to the care they have, in fact, 
paid for while this process goes on. We need to get this legislation 
passed and do what we have a responsibility to do for the American 
people. This is an issue on which the Senate, the House, and the 
American people have reached a consensus. It is time to act. As to 
these two vehicles, I urge my colleagues to reject them.
  Finally, I will talk about the story of a young woman in North 
Carolina. Her name is Shoirdae Henderson, from Apex, NC. At the age of 
12 she was diagnosed with a rare hip condition. It made it difficult 
for her to walk. The Henderson family's HMO sent Shoirdae to a hospital 
to see specialists about her problem. The specialist in this HMO-
approved hospital said she needed surgery to keep her hip from fusing 
and having to walk with a limp. Even though the family had taken 
Shoirdae to the HMO specialist, the HMO refused to listen to her 
doctors. They came in with excuse after excuse to keep her from getting 
surgery. Every one of the HMO excuses proved over time to be 
groundless. It looked as if she would finally get the operation her 
doctors had recommended to begin with. Just 2 days before she was 
supposed to have surgery, the HMO told her family they wouldn't pay for 
it. They wanted her to try physical therapy instead. Shoirdae's father 
spent hours dealing with the HMO, as so many families have, trying to 
get his daughter the care the doctors said she needed. He made call 
after call and faxed them. He requested an appeal. He never got an 
answer. The hospital finally had to cancel her surgery as a result.
  After several sessions of physical therapy, another HMO doctor took 
one look at Shoirdae's x rays and sent her back to the hospital. She 
still needed the surgery. The therapy had not worked. In fact, 
Shoirdae's hip had gotten worse--so much worse during all of this time 
that now the doctors told her the surgery wouldn't work. If she had 
gotten the operation her doctors said she needed when they recommended 
it, her hip would not have fused. She might today be able to walk, run, 
and play without a limp. Instead, she walks with a severe limp today 
and she has to wear special shoes because the HMO refused to pay for 
what was obviously needed--the surgery. The HMO refused to do what the 
doctors recommended. In fact, they overruled what the doctors 
recommended.
  Her father wrote to me and said: This has been the most horrible 
experience of my life. Imagine what it has done to my daughter.
  This is what this debate is about. This debate is about the 170 
million to 180 million Americans who have health insurance--HMO 
coverage--but have no control over their health care.
  The HMOs have had the law on their side for too long. It is time for 
us to finally do something to put the law on the side of patients and 
doctors so that the Shoirdaes all over this country, when their doctor 
recommends that they have surgery, can have the surgery they need; when 
the doctor recommends a test, they can have the test they need.
  I yield the floor.
  The PRESIDING OFFICER (Mrs. Carnahan). Under the previous order, the 
Senator from Texas is recognized.
  Mrs. HUTCHISON. Madam President, how much time is remaining on the 
side of Senator Grassley and on the Gramm-Hutchison amendment?
  The PRESIDING OFFICER. The Senator from Texas has 9 minutes. Senator 
Gramm has 7\1/2\.
  Mrs. HUTCHISON. Thank you, Madam President.
  I ask unanimous consent that I have 6 minutes allocated--4 minutes 
from Senator Grassley's time and 2 minutes from Senator Gramm's time. 
It is my intention to yield 4 minutes to Senator Nickles of my 6 
minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. HUTCHISON. Will the Chair notify me at the end of 2 minutes?
  Madam President, I want to speak on behalf of the Grassley motion 
which would send this bill to committee so that it could be marked up 
and fully debated because while we have had great debate, bypassing the 
committee process I think has caused us to have to write the bill in 
this Chamber. I don't think that is a good way to pass legislation.
  I think we all want to have a Patients' Bill of Rights that is well 
vented and well debated and that we know will have the intended 
consequences because the last thing we want to do is have unintended 
consequences when we are talking about the health care of most 
Americans.
  I hope we can commit the bill to bring it back in a better form.
  Second, I hope people will support the Gramm-Hutchison amendment 
because this is the Texas law. Senator Harkin, on a news program this 
weekend, said: I would love to have just the Texas law for the entire 
Nation. The Gramm-Hutchison amendment is the Texas law verbatim when it 
applies to suing a person's employer because what we don't want to do 
is put the employer in the position of standing for the insurance 
company. The employer wants to be able to offer insurance coverage to 
their employees. But if they are going to be liable for a decision made 
by the insurance company and the doctors, then they are put in a 
position that is untenable. What we want is health care coverage where 
the decisions are made by the doctors and the patients.
  The Senator from North Carolina had a picture of a lovely young 
woman. He said: This is what the debate is about. It is what the debate 
is about.
  The Breaux-Frist plan would definitely address her concerns because 
it would give her the care she needs rather than going directly for a 
lawsuit and possibly delaying the health care she needs--and for other 
patients.
  Madam President, I ask my colleagues to support the Gramm-Hutchison 
amendment and support the Grassley motion. Let's get a good bill that 
will have the effect of increasing coverage in our country and not 
decreasing it.
  Thank you, Madam President. I yield 4 minutes to Senator Nickles.
  The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
  Mr. NICKLES. Madam President, I thank my friend and colleague from 
Texas, Senator Hutchison, for her comments. I also wish to thank the 
Senator from Texas, Mr. Gramm, for his leadership on the amendment, as 
well as Senator Thompson.
  I hope employers around the country have been watching this debate. I 
have heard some of the proponents of the underlying McCain-Kennedy-
Edwards measure say: It is not our intention to sue employers. We don't 
want to do that. No. We will try to fix it. I have even heard on 
national shows that: We don't go after employers under our bill. On the 
``Today Show,'' a nationally televised show, Senator Edwards on June 19 
said: Employers cannot be sued under our bill. That was made on June 
19. Senator Harkin yesterday said: I would love to have the Texas law 
for the entire Nation.
  The Texas law that Senators Gramm and Hutchison have quoted says: 
This chapter does not create any liability on the part of an employer 
or an employer group purchasing organization. There is no liability 
under Texas law. Senator Edwards said: We don't sue employers. But if 
you read the bill, employers beware; you are going to be sued.
  The only way to make sure employers aren't sued is to pass the Gramm 
amendment. To say we are not going to sue employers, but, wait a 
minute, if they had direct participation, and you

[[Page 11827]]

take several pages to define direct participation, what you really find 
is that if any employer meets their fiduciary responsibilities, they 
will have direct participation. In other words, employers can be sued 
for unlimited amounts, with no limit on economic damages and no limit 
on noneconomic damages. That means no limit on pain and suffering. That 
is where you get the large jury awards. You can be sued for that amount 
in Federal court. You can be sued for that amount in State court with 
no limits--with unlimited economic and noneconomic damages.
  Employers beware. If you want to protect employers, vote for the 
Gramm amendment.
  You always hear people say: Oh, we want to go after the HMOs; they 
are exempt from liability, and so on. But it is not our intention to go 
after employers.
  Employers are mentioned in this bill, and they are liable under this 
bill.
  There was action taken in the bill to protect physicians. There is a 
section exempting physicians. There is a section exempting hospitals 
and medical providers. We are exempting them but not employers.
  Senator Harkin said, We want to copy the Texas law nationwide. Texas 
exempted employers. We can do that today. You can avoid going back to 
your State and having your employer saying, Why did you pass a bill 
that makes me liable for unlimited damages? You can vote for this 
amendment and protect employers. You can vote for this amendment and 
not only protect employers but employees because when employers find 
out they are liable for unlimited pain and suffering and economic and 
noneconomic damages, the net result is, unfortunately, a lot of 
employees--not employers--will lose their coverage.
  I urge our colleagues to support the Gramm amendment.
  Mr. HATCH. Mr. President, I rise in favor of the Grassley motion to 
commit this legislation to the Finance Committee, the HELP Committee 
and the Judiciary Committee.
  The legislation before this body is one which will have an enormous 
impact on medical providers, the health insurance industry, employers 
and, most important, the patients. As the ranking Republican of the 
Senate Judiciary Committee, I have serious concerns with the liability 
provisions of this bill and how they will be impact employers, medical 
providers and patients. The McCain-Kennedy bill creates new causes of 
action, changes the careful balance of ERISA's uniformity rules, and 
has potential new adverse implications on our judicial system. 
Moreover, the liability provisions have been crafted without the 
benefit of appropriate and necessary review of the appropriate 
committees of jurisdiction. My colleagues, this is not the way to 
legislate. At the very least, the Judiciary Committee should be 
afforded the opportunity to review the liability provisions that will 
clearly have a major impact on our legal system.
  Just a few months ago, when the bankruptcy reform legislation was 
brought to the Senate floor under rule 14, the legislation had been 
considered by the Judiciary Committee, the entire Senate and a 
bipartisan conference committee over the last 6 years. However, 
Democrats raised objections then that the bill needed to be reviewed by 
the Judiciary Committee before consideration on the Senate floor. As a 
result, we followed regular order and the committee reviewed the bill 
after which it was sent to the Senate floor for consideration.
  Now the tactics of my friends on the other side is to bypass the 
committees altogether which is exactly what they vocally opposed on 
bankruptcy reform legislation just a few months ago. Moreover, we now 
have the third iteration of the liability provisions which is less than 
a week old. Clearly, the legal ramifications of these provisions are 
not well known, and I think it would be in the best interest of this 
legislation to craft language that is truly going to help patients 
which we all have been saying is our No. 1 priority.
  The provisions in the McCain-Kennedy legislation make sweeping 
changes that will affect our judicial system. This bill changes Federal 
law and permits various causes of action in both State and Federal 
courts. It also changes the rules governing class action lawsuits, as 
well as impacting punitive damages all the while exposing new classes 
of individuals to open-ended liability.
  I want to emphasize that these are all critical important, legal 
issues that must be considered carefully. The regular process of the 
Senate should not be circumvented for the political expediencies of my 
friends on the other side. Why rush this important bill through the 
Senate? According to the Congressional Budget Office, this legislation 
will cause premiums to increase by at least 4.2 percent. As a result, 
it is estimated that 1.3 million Americans will lose their health 
insurance because health premiums will become too expensive. Even 
worse, employers benefits altogether for fear of more expanded 
liability exposure under so-called bipartisan Democrat proposal.
  Shouldn't we hear from experts and other legal scholars in an open 
forum before passing such a monumental bill that impacts so many 
Americans? It is very apparent to everyone in this Chamber that the 
trial lawyers have been principally involved in drafting these 
liability provisions and they have done so with their own interest in 
mind. And believe me, as a former medical malpractice attorney, I know 
what their tricks are, and I know what they are trying to do. This 
provisions are simply not in the best interest of the American people.
  Accordingly, I urge my colleagues to support his motion to commit. It 
is incumbent upon us to do this right and to do this in the best 
interest of patients, not trial attorneys. I am confident that with a 
little extra time, we can make these provisions legally sound. We have 
spent far too many years on this issue not to do it right. We have a 
real opportunity to pass meaningful patients' rights legislation. Let 
us not squander this opportunity by acting expeditiously without the 
benefit of more careful and thoughtful review.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Texas.
  Mr. GRAMM. Madam President, could you tell me how much time the two 
sides have?
  The PRESIDING OFFICER. You have 4 minutes and a half. The Senator 
from Massachusetts has almost 12 minutes.
  Mr. GRAMM. Madam President, I would like my amendment to close out 
the debate.
  Does Senator Grassley have time?
  The PRESIDING OFFICER. He has 5 minutes. You have 9 minutes. The 
Senator from Massachusetts has 12 minutes.
  Mr. GRAMM. Let me just allow the majority to go ahead.
  Mr. McCAIN. I say to the Senator from Texas, I think it is perfectly 
reasonable for you to have the last 5 minutes.
  I ask the Presiding Officer that one of us be recognized so that the 
Senator from Texas has the final 5 minutes.
  The Senator from Iowa wants----
  Mr. GRASSLEY. Two minutes.
  The PRESIDING OFFICER (Mr. Reid). Did the Senator from Arizona 
propose a unanimous consent request that the Senator from Texas have 
the final 5 minutes?
  Mr. KENNEDY. And that the Senator from Iowa have 2 minutes.
  Mr. GRASSLEY. I thank my colleagues.
  The PRESIDING OFFICER. Without objection, it is so ordered. That will 
be the order.
  Mr. GRASSLEY. Mr. President, I have spoken twice on the issue of 
committing this legislation to the committees to express the point of 
view that there is a lot of turmoil in working out compromises on the 
floor of the Senate. That is not a very good way to draft a piece of 
legislation.
  If the leadership had not immediately brought this bill to the Senate 
Chamber, and the committees had done their work, this bill would have 
been handled in a much more expeditious way, but, more importantly, it 
would have been in a way in which we would have had a lot of confidence 
in the substance of the legislation, with a lot

[[Page 11828]]

fewer questions asked. I think when people see a product from the 
Senate, they want to make sure that product is done right.
  So I offer to my colleagues the motion and hope that they will vote 
yes on the motion to commit the legislation to the respective 
committees--Health, Education, Labor; Judiciary; and Finance--for the 
fair consideration of this legislation and a final, good product that 
we know serves the best interests of the people, which obviously is to 
make sure that everybody is protected with a Patients' Bill of Rights.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Arizona is now recognized.
  Mr. McCAIN. Mr. President, I think it is important, because of the 
issue of what is happening or not happening in the State of Texas and 
Texas State law, that I take a few minutes to quote from a letter I 
just received from the President of the Texas Medical Association, Dr. 
Tom Hancher, who also was a key player in the formulation of the 
language and the legislation that passed the State of Texas in 1997.
  I would like to quote from the letter that Mr. Hancher sent me:

       I have been watching the debate over the Patients' Bill of 
     Rights and can understand the confusion over many of the 
     issues. We, in Texas, debated managed care reforms for over 
     two years culminating in the passage of a package of managed 
     care reforms in Texas in 1997. Because Texas' laws have 
     become the basis for evaluating certain aspects of proposed 
     federal reforms, I hope I can help to clarify some areas for 
     you. As Texas Medical Association worked closely with the 
     sponsors of these reforms, including the managed care 
     accountability statute, I would like to offer our experiences 
     on this issue. . . . I will focus on the three areas of 
     primary disagreement--employer exemption, medical necessity 
     standards for independent review, and remedies under Texas' 
     managed care accountability law.
       Much as you are seeing in Washington, our lawmakers were 
     deluged with concerns about employers being legally 
     accountable for the actions of the managed care plan. We 
     believed that this was impossible given the construction of 
     our legislation. Both the definition of a managed care plan 
     and the action of that plan--making medical treatment 
     decisions--prevented such lawsuits from being brought. 
     Nevertheless, the insurers and employers continued to express 
     their concerns that our bill would cost hundreds of citizens 
     their medical coverage because of the fear of litigation.
       We agree with your approach that any entity making medical 
     treatment decisions should be held accountable for those 
     decisions. Texas took a different approach in 1997, however, 
     because we knew that no state law could achieve that goal. 
     ERISA law in 1997 was such that no state law could hold 
     employers of large self-funded plans accountable for actions 
     related to their benefit plans. . . .
       We were certain that small to medium sized employers in our 
     state were providing health benefits through fully insured, 
     state licensed products. Clearly, those employers were not 
     making medical treatment decisions. While it was the intent 
     of the Texas Legislature to hold accountable any entity 
     making medical treatment decisions, it was our belief that 
     because of ERISA, a blanket exemption for employers in a 
     state law would have no practical impact on the large, self-
     funded employers. Therefore, we provided a broad employer 
     exemption primarily to allay the fears of small and medium-
     sized, fully-insured businesses over exposure to legal 
     liability for medical decisions.

  The reason why I quote this is because that is basically the language 
we are using in this legislation.

       The Senate co-sponsor of the managed care accountability 
     bill said it best on the floor of the Texas Senate: ``If an 
     HMO stands in the shoes of the doctor in the treatment room, 
     and stands in the shoes of the doctor in the operating room 
     or the emergency room, then it should stand in the shoes of 
     the doctor in the courtroom.'' It is hard to argue why this 
     philosophy should not apply to anyone making those direct 
     medical decisions, HMOs or the very few employers who do 
     this. Any employer who decides not to make these decisions 
     very clearly is not subject to a lawsuit.
       Our goal in constructing the independent review (IRO) 
     provision of our bill was a simple one: use independent 
     physicians to evaluate disputes over proposed medical 
     treatment. We require these physicians to utilize the best 
     available science and clinical information, generally 
     accepted standards of medical care, and consideration for any 
     unique circumstances of the patient to determine whether 
     proposed care was medically necessary and appropriate. Our 
     standards are virtually identical with the independent review 
     provisions in the McCain/Edwards compromise currently pending 
     before the Senate.

  I repeat, the Texas Medical Association President says: Our standards 
are virtually identical with the independent review provisions in the 
McCain/Edwards compromise currently pending before the Senate.

       Review decisions were to be made without regard for any 
     definition of medical necessity in plan documents. The Texas 
     Department of Insurance reviews the plan contract for 
     specific exclusions or limitations (i.e., number of days or 
     treatments). If there is no specific contract provision to 
     exclude the eligibility for review, the case is submitted to 
     the independent review organization. Medical necessity is 
     often a judgment call. We wanted those judgments made without 
     any conflict of interest. Medical necessity definitions 
     created by plans will likely err in favor of the plan. An 
     IRO's decision should be a neutral one. Using a plan 
     definition would prevent that. Additionally, we do not define 
     ``medical necessity,'' but rather set forth broad standards 
     for reviewers to make an informed decision based upon all 
     available information. . . .
       Finally, there has been a great deal of confusion over 
     damages in personal injury or wrongful death cases in our 
     state. Currently, Texas has no caps on economic or non-
     economic damages. Punitive damages are calculated using the 
     following formula: two times the amount of economic damages, 
     plus an amount not to exceed $750,000 of any non-economic 
     damage award. We chose to treat managed care plans as any 
     other business. Therefore, they are accountable under general 
     tort law and not subject to the cap on damages in wrongful 
     death cases. The limitation on recovery in wrongful death 
     cases applies only to health care entities and is part of a 
     separate section of our law.
       The debate in Texas over patient protections was long, 
     sometimes contentious, and ultimately successful. With over 
     1300 independent reviews (48% upheld the plans' determination 
     and 52% overturned the plans' decision) and only 17 
     lawsuits--

  I want to emphasize: Only 17 lawsuits--

     I am proud of how our laws are working for the people of 
     Texas enrolled in managed care plans. On behalf of my 
     colleagues and our patients, I ask that you not take any 
     action that would undermine what we have done in our state. 
     Best wishes in your deliberations.

  It is signed: Tom Hancher, MD, President of the Texas Medical 
Association.
  I urge all of my colleagues to read this letter from Dr. Hancher. I 
think it lays out the issues surrounding this particular amendment and 
remaining areas of dispute that we might have.
  Mr. President, I cannot support the pending amendment because I 
believe that employers should be held accountable for medical decisions 
they have made if those decisions resulted in a patient's injury or 
death.
  I do not believe employers should be held liable for the decisions 
made by insurers or doctors. Nor do I believe this legislation would 
subject employers throughout the country to a tidal wave of litigation 
as our opponents claim.
  But if an employer acts like an insurance company and retains direct 
responsibility for making medical decisions about their employee's 
health care then they should be held accountable if their decisions 
harm or even kill someone.
  If an employer is not making medical decisions, and very few 
employers do, then they will not be held liable under our legislation.
  Let me repeat--employers will not be held liable or exposed to 
lawsuits if they do not retain responsibility for directly 
participating in medical decisions.
  I keep hearing from opponents of our bipartisan bill that our 
language is vague and would subject employers to frequent litigation in 
state and Federal court. I don't believe this is true.
  Our legislation specifically states that direct participation is 
defined as ``the actual making of [the] decision or the actual exercise 
of control in making [the] decision or in the [wrongful] conduct.'' 
This language clearly exempts businesses from liability for every type 
of action except specific actions that are the direct cause of harm to 
a patient.
  The sponsors of this legislation are willing, however, indeed we 
would welcome an amendment that helps further clarify the employer 
exemptions provided for in the bill. I know that Senators Snowe, DeWine 
and others are working on such an amendment.
  But we cannot, in the interest of greater clarity, give employers a 
kind

[[Page 11829]]

of blanket immunity when they assume the role of insurers and doctors 
by making life and death decisions for their employees. That is what 
the pending amendment would do.
  Let's just step back for a moment and reflect on how the employer 
based health care system is structured and works. An employer contracts 
with an insurer to provide health care coverage for their employees. 
The insurer is then responsible for making the medical decisions that 
go with managing health insurance. That is how the system typically 
works and how employers want it to work.
  Most businesses simply do not make medical decisions. Hank who runs a 
local plumbing company does not tell the HMO his company has contracted 
with, ``We have clogged drains and need Joe Smith back at work. We 
can't afford for him to be laid up waiting for surgery.'' And Hank 
would not be held liable under our bill because he is not practicing 
medicine--he is repairing plumbing.
  Now, I admit there are a small group, of mostly very large companies 
that have chosen to provide insurance to their employees themselves.
  In these small number of cases, employers have made the decision to 
sell plumbing and act as an insurer that makes medical decisions.
  And if the decisions they make harms or kills someone then why should 
they have a blanket exemption from liability as this pending amendment 
would provide them, a blanket exemption that we do not provide doctors 
or nurses or hospitals?
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. Senator McCain and Senator Kennedy have 3\1/2\ 
minutes.
  Mr. KENNEDY. Mr. President, let me yield myself the time. As I 
understand, the Senator from Texas is going to close.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, this legislation is very simple. The 
point of the overall Patients' Bill of Rights is to permit doctors to 
make the final, ultimate decision on what is in the best interest of 
the patient. Doctors, nurses, trained personnel, and the family should 
be making that judgment. However, we find that the HMOs are overriding 
them.
  Now we have put this into the legislation. If it is demonstrated with 
internal and external appeals that a HMO has overridden the doctors, 
they are going to have a responsibility towards the patient. They are 
going to have to give that person, who might have been irreparably 
hurt, or the patient's family, if the patient died, the opportunity to 
have some satisfaction.
  What the Gramm amendment says is, if that same judgment is made by 
the employers, they are somehow going to be free and clear. He can 
distort, misrepresent and misstate what is in this legislation, but we 
know what is in the legislation. What it does is hold the employer that 
is acting in the place of the HMO accountable. If the employer is 
making a medical decision that may harm an individual or patient, or 
may cause that patient's life or serious illness, they should bear 
responsibility. Under the Gramm amendment, they can be free and clear 
of any kind of responsibility no matter how badly hurt that patient is.
  That is absolutely wrong. I can see the case where the HMO is sued. 
The HMO says: Don't speak to me; it was the employer that did it. And 
then the employer says: Look, the Gramm amendment was passed. We are 
not responsible at all. This amendment is another loophole. It is a 
poison pill. It is a way to basically undermine the whole purpose of 
the legislation.
  Doctors and nurses should be making medical decisions and not the HMO 
bean counters who are looking out for the profits of the HMOs. 
Employers should not be making these medical decisions either. They may 
say, every time my employee has some medical procedure that is over 
$50,000, call me, HMO. I don't want to pay more than $50,000. Then the 
HMO calls them up and the employer says, no way, don't give that kind 
of medical treatment to my employee. The HMO listens to the employer, 
the patient does not get that treatment, and dies. Under the Gramm 
amendment, there will be no accountability.
  I hope his amendment is defeated.
  The PRESIDING OFFICER (Mrs. Carnahan). Under the previous order, the 
Senator from Iowa has 2 minutes, followed by the Senator from Texas.
  Mr. GRAMM. The Senator from Iowa has spoken. I assume if we add up 
the time, I have 7 minutes. I would like to take it.
  The PRESIDING OFFICER. The Senator is correct.
  Mr. GRAMM. Madam President, nothing in this amendment has anything to 
do with HMOs. Nothing in the amendment that I have offered would in any 
way exempt any HMO from any liability. Both Senator Kennedy and Senator 
McCain talked about HMO liability. Senator McCain talked about HMOs 
standing in the shoes of doctors. This amendment I have offered is not 
about HMOs.
  Senator Kennedy talks about HMOs escaping liability by blaming it on 
the employer. Nothing in the amendment I have offered in any way would 
allow that to happen.
  The amendment I have offered has to do with employers. Why is this an 
issue? It is an issue because, in America, employers are not required 
to provide health insurance. Employers, large and small, all over 
America provide health insurance because they care about their 
employees and because they want to attract and hold good employees. But 
every employer in America has the right under Federal law to drop their 
health insurance.
  I am concerned, and many are concerned, that employers would be 
forced to drop their health insurance given the liability provisions in 
the bill.
  I have here a number of letters from business organizations endorsing 
my amendment. I send to the desk and ask unanimous consent that these 
letters be printed in the Record: an NFIB letter designating this a 
small business vote; a letter from Advancing Business Technology 
representing the AEA; the National Association of Manufacturers; the 
National Council of Chain Restaurants; the National Restaurant 
Association; and the National Association of Wholesalers and 
Distributors, all letters endorsing the Gramm amendment; and finally, a 
wonderful letter from the Printing Industry of America talking about 
the dilemma they would face if this amendment did not pass.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                              National Association


                                   of Wholesaler-Distributors,

                                    Washington, DC, June 22, 2001.
     Hon. Phil Gramm,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Gramm: Thank you for offering an amendment to 
     S. 1052, the McCain-Kennedy ``Bipartisan Patient Protection 
     Act,'' to shield employers from liability lawsuits authorized 
     by the bill. We write on behalf of the 40,000 employers 
     affiliated with the National Association of Wholesaler-
     Distributors (NAW) to express our strong support for this 
     critically important amendment.
       The vast majority of NAW-affiliated employers voluntarily 
     offer health insurance as an employee benefit. Those employer 
     sponsors of group health insurance benefits are already 
     alarmed by repeated annual increases in health insurance 
     premiums and the growing pressure health insurance costs are 
     placing on their bottom lines. These employers are deeply 
     concerned about the additional premium cost increases with 
     which they will be confronted if the McCain-Kennedy bill 
     becomes law. It is quite clear that many will manage these 
     cost increases by terminating or, at a minimum scaling back, 
     their plans.
       NAW members are further concerned about the exposure to 
     costly lawsuits and liability they will face if the McCain-
     Kennedy bill becomes law and they continue to voluntarily 
     offer health insurance as an employee benefit. Many will 
     manage the newly-acquired risk by terminating their plans 
     altogether.
       The proponents of the McCain-Kennedy bill have repeatedly 
     claimed that S. 1052 shields employers from liability. As you 
     have so clearly demonstrated, it does not, and should S. 1052 
     become law in its current form, the consequence of its 
     failure in this regard will leave many Americans who today 
     benefit from employer-provided medical coverage, without 
     health insurance coverage in the future. This dramatic 
     undermining of our employer-based health insurance system is 
     clearly adverse to the interests of employers,

[[Page 11830]]

     their employees and their employees' families.
       There are other serious weaknesses in the McCain-Kennedy 
     bill with which NAW members are concerned; however, adoption 
     of your amendment will at least mitigate one of the worst 
     excesses of the McCain-Kennedy bill. Therefore, NAW is 
     pleased to support your amendment, and we thank you for your 
     leadership.
           Sincerely,
     Dirk Van Dongen,
                                                        President.
     James A. Anderson, Jr.,
     Vice President-Government Relations.
                                  ____



                              National Restaurant Association,

                                    Washington, DC, June 22, 2001.
     Hon. Phil Gramm,
     U.S. Senate,
     Washington, DC.
       Dear Senator Gramm: As debate continues on S. 1052, the 
     McCain-Kennedy-Edwards patients' rights bill, the National 
     Restaurant Association sincerely appreciates your amendment 
     to clarify the Senate's intent that employers will not be 
     subject to liability for voluntarily providing health 
     benefits to their employees. A vote in support of the Gramm 
     employer liability amendment will be considered a key vote by 
     the National Restaurant Association.
       The majority of America's 844,000 restaurants are small 
     businesses with average unit sales of $580,000. Rather than 
     risk frivolous lawsuits and unlimited damages authorized 
     under S. 1052, many businesses will be forced to stop 
     offering health benefits to their employees. Even without the 
     effect of litigation risk economists predict at least 4-6 
     million Americans could lose their employer-sponsored health 
     coverage as a result of the increased costs of S. 1052. We 
     urge you to avert this harmful situation.
       By taking language from the Texas patients' rights bill, 
     your amendment will clearly define that employers would not 
     be subject to liability. This amendment is critical given 
     that S. 1052 currently exposes employer sponsors of health 
     plans to liability and limitless damages in the following 
     ways:
       Lawsuits are authorized against any employer that has 
     ``actual exercise of control in making such decision.'' [p. 
     146] This broad phrase would generate lawsuits by allowing an 
     alleged action by the employer to constitute ``control'' over 
     how a claims decision was made. ERISA's fiduciary 
     responsibility obligates employers to exercise authority over 
     benefit determinations.
       Lawsuits are authorized for any alleged failure to 
     ``exercise ordinary care in the performance of a duty under 
     the terms and conditions of the plan.'' [p. 141]. Under 
     ``ordinary care,'' simple administrative errors could become 
     the basis of a lawsuit alleging harm. Because all provisions 
     of S. 1052 would be incorporated as new ``terms and 
     conditions'' of the plan upon enactment, these new statutory 
     requirements would further expand employer liability.
       Nothing in S. 1052 precludes a lawsuit against employers 
     who will be forced to defend themselves in state and federal 
     courts against allegations of ``direct participation'' in 
     decision making. [p. 145]
       Thank you for your effort to protect employees' health 
     benefits by correcting the vague and contradictory language 
     in S. 1052. We urge the Senate to support your amendment to 
     ensure that employers will not be sued for voluntarily 
     providing health coverage to 172 million workers. The Gramm 
     employer liability amendment will be a key vote for the 
     Association. Thank you for your leadership.
           Sincerely,
     Steven C. Anderson,
                            President and Chief Executive Officer.
     Lee Culpepper,
                                            Senior Vice President,
     Government Affairs and Public Policy.
                                  ____

                                              National Association


                                             of Manufacturers,

                                    Washington, DC, June 25, 2001.
     Hon. Phil Gramm,
     U.S. Senate, Senate Russell Office building, Washington, DC.
       Dear Senator Gramm: I write in strong support of the 
     amendment you have offered with your colleague from Texas, 
     Senator Kay Bailey Hutchison, to the McCain-Kennedy 
     ``Bipartisan Patient Protection Act.'' We hope that all 
     Senators who agree that employers who voluntarily sponsor 
     health-coverage should be protected from liability will 
     support your amendment.
       There should no longer be any dispute that the McCain-
     Kennedy bill exposes employers to direct and indirect 
     liability costs for adverse benefit determinations. Whether 
     or not employers actively intervene into a given benefit 
     determination, they are charged with responsibility for all 
     aspects of plan administration under ERISA's fiduciary 
     responsibility standard (including benefit determinations). 
     Thus, an employer can either actively or passively meet the 
     McCain-Kennedy bill's standard of ``direct participation'' 
     (the act of denying benefits or the actual exercise of 
     authority over the act).
       The Gramm-Hutchison Amendment is the Texas Health Care 
     Liability Act's unambiguous exemption of employers as adapted 
     to ERISA. We certainly hope a majority of senators will agree 
     on the need to protect employers from health care liability.
       The National Association of Manufacturers will continue to 
     oppose the underlying McCain-Kennedy bill as adding too much 
     additional cost to the existing double-digit (13 percent on 
     average) health-care inflation. The rising cost of health-
     coverage, together with the high cost of energy, is exerting 
     a significant drag on the economy. The Senate, however, 
     should be heard on the specific question of health-care 
     liability for employers.
       Again, we urgently ask your support for the Gramm-Hutchison 
     Amendment (Senate Amendment 810) which will be considered for 
     designation as a key manufacturing vote in the NAM Voting 
     Record for the 107th Congress.
           Sincerely,
                                            Michael Elias Baroody,
     Executive Vice President.
                                  ____



                                   National Retail Federation,

                                                    June 25, 2001.
     To the Members of the U.S. Senate:
       Tomorrow morning, you will have the opportunity to vote on 
     a critically important amendment offered by Senator Gramm to 
     the Kennedy-McCain ``Patient Protection Act of 2001'' that 
     will exempt employers from new lawsuits authorized by the 
     legislation. On behalf of the National Retail Federation 
     (NRF), I strongly urge you to support this amendment. The 
     vote on the Gramm amendment will be a key vote for NRF.
       At a time when retailers are struggling to deal with annual 
     double-digit increases in health costs, subjecting employers 
     to liability would be the breaking point for many businesses. 
     Many employers would be forced to terminate or significantly 
     scale back their health benefits programs rather than face a 
     lawsuit that could bankrupt their business--leaving many 
     working Americans without access to affordable insurance. The 
     Gramm amendment will unquestionably help to preserve the 
     ability of employers to provide valuable health benefits to 
     their employees and their families.
       Although passage of the Gramm amendment would address one 
     of the most serious flaws in S. 1052, it is important to note 
     that we remain concerned and strongly opposed to the broader 
     liability provisions in the bill. Although NRF supports the 
     goals of the legislation to ensure that individuals have the 
     ability to address their disputes through an independent 
     appeals process, allowing broad new causes of action in state 
     and federal court for virtually uncapped damages would have 
     dire consequences on the employer-based health care system. 
     The costs of open-ended liability on health plans will 
     ultimately be borne by employers and employees alike.
       As background, the National Retail Federation (NRF) is the 
     world's largest retail trade association with membership that 
     comprises all retail formats and channels of distribution 
     including department, specialty, discount, catalog, Internet 
     and independent stores. NRF members represent an industry 
     that encompasses more than 1.4 million U.S. retail 
     establishments, employs more than 20 million people--about 1 
     in 5 American workers--and registered 2000 sales of $3.1 
     trillion. NRF's international members operate stores in more 
     than 50 nations. In its role as the retail industry's 
     umbrella group, NRF also represents 32 national and 50 state 
     associations in the U.S. as well as 36 international 
     associations representing retailers abroad.
       Again, we urge you to support the Gramm amendment, and to 
     support future efforts to remedy the onerous liability 
     provisions in S. 1052.
           Sincerely,
                                                            ------
     Senior Vice President, Government Relations.
                                  ____

         National Council of Chain Restaurants of the National 
           Retail Federation,
                                    Washington, DC, June 25, 2001.
     Hon. Phil Gramm,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Gramm: On behalf of the National Council of 
     Chain Restaurants, I am writing to thank you for introducing 
     your amendment to protect employers from liability lawsuits 
     authorized by the Kennedy-McCain ``Patients' Bill of Rights'' 
     currently being debated by the Senate.
       The National Council of Chain Restaurants (``NCCR'') is a 
     national trade association representing forty of the nation's 
     largest multi-unit, multi-state chain restaurant companies. 
     These forty companies own and operate in excess of 50,000 
     restaurant facilities. Additionally, through franchise and 
     licensing agreements, another 70,000 facilities are operated 
     under their trademarks. In the aggregate, NCCR's member 
     companies and their franchises employ in excess of 2.8 
     million individuals.
       Although most of the nation's chain restaurant company 
     employers offer health care benefits to their employees, 
     these employers have become increasingly concerned with the 
     skyrocketing costs of providing such coverage. In fact, many 
     employers are already being forced to reevaluate whether they 
     can continue to afford providing health care insurance to 
     their employees. The Kennedy-McCain bill's imposition of 
     liability on

[[Page 11831]]

     health plans will exacerbate this problem even further, as 
     health insurers will simply pass on the costs to employers in 
     the form of higher premiums. As costs are driven ever upward, 
     many employers will assuredly be forced out of the market, 
     pushing even more working families into the ranks of the 43 
     million uninsured.
       But the Kennedy-McCain bill not only renders health plans 
     liable to suit, it also imposes liability on employers, 
     despite claims by bill proponents that employers are 
     shielded. The very notion that an employer could be sued for 
     generously and voluntarily providing health insurance to his 
     or her employees is outrageous. Indeed, if employers are 
     exposed to liability for their voluntary provision of health 
     insurance to their employees, in addition to the increased 
     premium costs resulting from health plan liability under the 
     Kennedy-McCain bill, many employers will have no choice but 
     to discontinue this important employee benefit.
       The Kennedy-McCain bill threatens to undermine the nation's 
     employer-sponsored health care system at a time when the 
     economy is softening and millions of Americans are currently 
     without coverage. Although serious problems with S. 1052 
     remain, your amendment would correct one of the numerous 
     excesses of this extreme legislation.
           Sincerely,
                                                  M. Scott Vinson,
     Director, Government Relations.
                                  ____

                                            Advancing the Business


                                                of Technology,

                                    Washington, DC, June 25, 2001.
     Hon. Phil Gramm,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Gramm: I am writing on behalf of AeA (American 
     Electronics Association), the nation's largest high-tech 
     trade association representing more than 3,500 of the 
     nation's leading U.S.-based technology companies, including 
     235 high-tech companies in Texas, to thank you for offering 
     your amendment to exempt employers from the liability 
     provisions contained in S. 1052, the Bipartisan Patient 
     Protection Act.
       An overwhelming majority of AeA member companies provide 
     their employees, their dependents, and retirees with quality 
     health care options. AeA and its member companies are 
     concerned that the liability provisions in S. 1052 would 
     threaten our member companies' ability to continue to offer 
     health insurance benefits. It only makes sense that exposing 
     employers who provide health insurance to their employees to 
     unlimited legal damages will result in fewer employers 
     offering their employees' health insurance. Unlimited damage 
     awards against insurance companies and employers will create 
     a powerful incentive for lawsuits against both. At a minimum, 
     companies that offer health insurance will see their 
     litigation costs increase. Health insurance premiums will 
     also increase, as litigation costs are passed through to both 
     employers and employees.
       Higher health insurance premiums will mean fewer health 
     insurance options for employees, and in some cases, the loss 
     of insurance coverage for employees as companies drop health 
     insurance. The liability provisions in S. 1052 will also put 
     pressure on companies to drop their health insurance 
     benefits, primarily from individuals and institutions that 
     own stock in these companies. Shareholders will be reluctant 
     to permit companies to assume liability for employer-provided 
     health insurance and they may pressure companies to drop 
     their health insurance in order to protect the value of their 
     stock.
       AeA and its members share Congress' concern about improving 
     the accessibility, affordability and quality of health care 
     services for all Americans. But AeA and its members believe 
     that S. 1052, especially the liability provisions in the 
     bill, will undermine that worthy objective, and ultimately 
     lead to more uninsured workers. AeA supports your amendment 
     to S. 1052, as the first in many needed steps to improve this 
     legislation.
           Sincerely,
                                                William T. Archey,
     President and CEO.
                                  ____

                                               National Federation


                                      of Independent Business,

                                    Washington, DC, June 25, 2001.
       Dear Senator: On behalf of the 600,000 members of the 
     National Federation of Independent Business (NFIB), I urge 
     you to support Sen. Phil Gramm's amendment exempting all 
     employers from liability who voluntarily offer health care to 
     their employees.
       The Kennedy/McCain version of the ``Patients' Bill of 
     Rights'' exposes small business owners to liability for 
     unlimited punitive and compensatory damages that will force 
     many small businesses to drop coverage. For most small 
     business owners, it only takes one lawsuit to force them to 
     close their doors. In fact, 57 percent of small businesses 
     said in a recent poll that they would drop coverage rather 
     than risk a lawsuit.
       Expanding liability in claims disputes could also increase 
     health care premiums by as much as 8.6 percent at a time when 
     small businesses are already experiencing annual cost 
     increases in excess of 15 percent. Such increases will only 
     force small businesses to drop coverage, adding many to the 
     ranks of the uninsured.
       Both Republicans and Democrats have said that the Texas law 
     works. Now is the time to put those words into action. 
     Support Senator Gramm's amendment to exempt employers from 
     unlimited lawsuits! This will be an NFIB Key Small Business 
     Vote for the 107th Congress.
           Sincerely,

                                                   Dan Danner,

                                            Senior Vice President,
     Federal Public Policy.
                                  ____

                                               Printing Industries


                                             of America, Inc.,

                                    Alexandria, VA, June 22, 2001.
     Senator Phil Gramm,
     Russell Senate Office Building,
     Washington, DC.
       Dear Senator Gramm: We are aware that the battle lines in 
     the Patients' Bill of Rights may be so sharply drawn that 
     there is little that can be done at this point to overcome 
     the political issues; however, I want to outline the real 
     world impact of passage of the Kennedy-McCain bill.
       Our association is 114 years old. For a good portion of our 
     recent history we have provided health benefits to our 
     employees through a self-funded trust. We chose this option 
     because we are a safe workplace and we have very good claims 
     experience as well as a solid balance sheet. We purchase 
     stop-loss insurance for protection of the assets of the 
     organization above a specified limit. We provide benefits to 
     70 active employees, their dependents, and 14 retirees. Until 
     1974, we provided a retiree medical program for all our 
     employees but rising costs forced us to drop that program, 
     grand-fathering the employees who were hired prior to that 
     time. We require only $50 contribution per month for our 
     employees to include their dependents in our health care 
     plan. We cover medical, dental and eye care through a PPO 
     network or, at the option of the employee, a fee for service 
     arrangement. Our prescription drug program requires an 
     employee to pay $3.00 per generic prescription and $5.00 for 
     brand name prescriptions. This is about the best plan 
     available to any employee in the Washington area.
       We are the ultimate decision maker in our plan. One of the 
     benefits to self-funding is that we can and do make decisions 
     affecting the health care of our employees. We have never 
     made a negative decision. We have made several very 
     significant positive decisions to help employees in very 
     difficult health situations.
       If the Kennedy-McCain bill is passed, we likely will be 
     forced to terminate our plan and move to a fully insured 
     plan. We currently pay almost $600,000 per year for our plan. 
     We cannot pay any more. Moving to a fully insured plan will 
     almost certainly reduce the benefits for our employees as we 
     will lose the advantage of not having to pay overhead for an 
     insurance company. We anticipate losing 25% of our benefits. 
     Here are some of the things we will lose:
       Our retiree program. When we renegotiated our plan this 
     past year, we received proposals from insurance companies for 
     our retiree program. We could not find one in the area who 
     would pick up the plan.
       Our prescription drug benefit. While we would not lose it, 
     we would have to more than triple the price to $10/$20. This 
     also is based on the proposals we received last year.
       Our ability to make decisions for our employees and their 
     dependents. We would have to be concerned that the ability to 
     make good decisions has the other side--turning down the next 
     employee. In other words, we could be sued for failing to 
     make a decision. Our organization cannot expose the assets of 
     the organization to that liability potential.
       Our very small employee contribution. Employees share of 
     the benefits will go up. The $50 per month family coverage 
     will likely be increased to $200 per month. Co-pays and 
     deductibles will also rise. Some coverage may have to be 
     dropped altogether.
       We have discussed this issue and other Patients' Bill of 
     Rights issues with our employees and member firms. Many 
     people do not understand the issues. They do not believe 
     Congress would do something like this. Our concern is that 
     you may not knowingly do something like this. But this is 
     real.
       We would be pleased to discuss this and other matters 
     related to this legislation with you. We are not alone in the 
     impact this bill would have on our employees. I am aware that 
     we have many self-insured, jointly trusteed union plans in 
     our industry that would also be affected in this manner but 
     they do not understand the legislation.
       Please feel free to contact me if you wish to discuss our 
     concerns.
           Sincerely,
                                               Benjamin Y. Cooper,
                                            Senior Vice President.

  Mr. GRAMM. Let me review very quickly where we are. Our colleagues 
who support the pending bill say that the bill does not allow employers 
to be sued. If you look at the language of their bill, it clearly says 
it on line 7 on page 144, ``Causes of action against employers and plan 
sponsors precluded.'' Then it says:

       Subject to subparagraph (B), paragraph (1)(A) does not 
     authorize a cause of action against an employer. . . .


[[Page 11832]]


  That has been pointed to over and over again to say that employers 
cannot be sued. The problem is that on line 15, the bill goes on and 
says:

       Certain causes of action permitted.--Notwithstanding 
     subparagraph (A), a cause of action may arise against an 
     employer or other plan sponsor. . . .

  Then the bill goes on for 7\1/2\ pages of ifs, ands, and buts about 
when employers can be sued. They can be sued if they have ``a 
connection with;'' they can be sued if they ``exercise control,'' which 
is very interesting because under ERISA, which is the Federal statute 
that governs employee benefits provided by the employer, every employer 
is deemed to exercise control over every employee benefit.
  The bottom line is, despite all the arguments to the contrary, in the 
bill before us, employers can be sued.
  The Texas Legislature faced exactly this same dilemma, and they 
concluded that they wanted an absolute carve-out of employers. Why? Not 
that they believed employers were perfect; not that they believed every 
employer was responsible, but because they couldn't figure out a way to 
get at potential employer misbehavior without creating massive 
loopholes which would produce a situation where employers, large and 
small, could be dragged into a courtroom and sued because they cared 
enough about their employees to help them buy health insurance.
  The Texas Legislature decided you ought not be able to sue an 
employer.
  Senator McCain read a letter from the Texas Medical Association 
president, but he did not read the one paragraph in the letter that I 
was going to read. It is a very important paragraph. Let me explain 
why. Opponents of this amendment say: You ought to be able to sue 
employers if employers are making medical decisions. The point is, this 
bill--and the Texas law and every Patients' Bill of Rights proposal 
made by Democrats and Republicans--has an external appeal process that 
a panel of physicians and specialists, totally independent of the 
health care plan and totally independent of the employer, that will 
exercise the final decisionmaking authority.
  How could an employer call up this professional panel, independent of 
the health insurance company or the HMO, and in any way intervene? They 
couldn't.
  The line from the letter from the Texas Medical Association addresses 
exactly this point. It points out that the State couldn't reach into 
ERISA. But another reason that it wasn't necessary or advisable to try 
to sue employers was, from the letter:

       Additionally, we believed that utilization review--

  And this is the review process--

     agents were making the decisions regarding appropriate 
     medical treatment for employees of these self-funded plans. 
     We contended that these state-licensed utilization review 
     agents would be subject to the managed care accountability 
     statute--

  Which is the Texas law.

  The same would be true under this bill. Under this bill, no employer 
can make a final decision. The final decision is made by this 
independent medical review.
  So what is this all about? It all boils down to the following facts: 
If we leave this provision in the bill, which says employers can be 
sued and has 7\1/2\ pages of ifs, ands, and buts about suing them, and 
then interestingly enough says you can't sue doctors, you can't sue 
hospitals, but you can sue employers in its conclusion, then what is 
going to happen is all over America businesses are going to call in 
their employees.
  The example I used yesterday, and I will close with it today--am I 
out of time?
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. GRAMM. Let me wrap up by saying, all over America, small 
businesses are going to call in their employees and say: I want to 
provide these benefits, but I cannot put my business at risk, which my 
father, my mother, my family have invested their hearts and souls in; 
therefore, I am going to have to cancel your health insurance.
  I urge my colleagues to vote for this amendment.
  I yield the floor.
  Mr. KENNEDY. Madam President, I am prepared to yield back the minute 
on the Grassley motion. As I understand it, Senator Grassley is going 
to yield back his time.
  I ask for the yeas and nays on both the Grassley motion and the Gramm 
amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to the motion.
  The clerk will call the roll.
  The senior assistant bill clerk called the roll.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 39, nays 61, as follows:

                      [Rollcall Vote No. 196 Leg.]

                                YEAS--39

     Allard
     Allen
     Baucus
     Bennett
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Campbell
     Cochran
     Craig
     Crapo
     Enzi
     Frist
     Gramm
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchison
     Inhofe
     Kyl
     Lott
     Lugar
     McConnell
     Murkowski
     Nickles
     Roberts
     Santorum
     Shelby
     Smith (NH)
     Stevens
     Thomas
     Thompson
     Thurmond
     Voinovich
     Warner

                                NAYS--61

     Akaka
     Bayh
     Biden
     Bingaman
     Boxer
     Byrd
     Cantwell
     Carnahan
     Carper
     Chafee
     Cleland
     Clinton
     Collins
     Conrad
     Corzine
     Daschle
     Dayton
     DeWine
     Dodd
     Domenici
     Dorgan
     Durbin
     Edwards
     Ensign
     Feingold
     Feinstein
     Fitzgerald
     Graham
     Harkin
     Hollings
     Hutchinson
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Leahy
     Levin
     Lieberman
     Lincoln
     McCain
     Mikulski
     Miller
     Murray
     Nelson (FL)
     Nelson (NE)
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Sessions
     Smith (OR)
     Snowe
     Specter
     Stabenow
     Torricelli
     Wellstone
     Wyden
  The motion was rejected.
  Mr. KENNEDY. I move to reconsider the vote.
  Mr. GREGG. I move to lay that motion on the table.
  The motion was agreed to.


                           Amendment No. 810

  The PRESIDING OFFICER. Under the previous order, there will now be 6 
minutes for closing debate, divided in the usual form, prior to a vote 
on or in relation to the Gramm amendment No. 810.
  Who yields time?
  Mr. KENNEDY. I understand there are 3 minutes to a side.
  The PRESIDING OFFICER. The Senator is correct.
  Mr. KENNEDY. I yield myself a minute and a half and a minute and a 
half to the Senator from North Carolina.
  Madam President, we have just finished the education legislation. In 
this legislation, we held students accountable, school districts 
accountable, teachers accountable, and children accountable. Now we are 
trying to hold the HMOs accountable if they override doctors, nurses 
and trained professionals regarding the care for injuries of 
individuals. That is the objective of this legislation.
  However, if employers interfere with medical judgments, they ought to 
be held accountable as well. The Gramm amendment says: No way; even if 
an employer makes a judgment and decision that seriously harms or 
injures the patient, there is no way that employer could be held 
accountable.
  We may not have the language right, but at least we are consistent 
with what the President of the United States has said. We may have 
differences with the President of the United States and we do on some 
provisions. However, the Gramm amendment is an extreme amendment that 
fails to protect the patients in this country and fails to provide that 
needed protection.
  Mr. GRAMM. Madam President, I make a point of order that the Senate 
is not in order. Senator Edwards deserves to be heard.
  The PRESIDING OFFICER. The Senate will be in order.

[[Page 11833]]

  The Senator from North Carolina is recognized.
  Mr. EDWARDS. Madam President, this is an issue on which we have 
consensus. The President of the United States said, ``Only employers 
who retain responsibility for and make vital medical decisions should 
be subject to suit.''
  Our bill provides exactly as the President describes. As Senator 
Kennedy has indicated, we have consensus not only with the President of 
the United States but in this body and in the House of Representatives 
based on the Norwood-Dingell bill which was voted on before. This is an 
issue about which there is consensus.
  We are continuing to work. Senator Snowe and others are leading that 
effort. We are working across party lines to get stronger and more 
appropriate language so that employers know that they are protected 
without completely leaving out the rights of the patients.
  I urge my colleagues to vote against the Gramm amendment, which is 
outside the mainstream, outside our bill, outside our position, outside 
Norwood-Dingell, and outside what the President of the United States 
has said.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. GRAMM. Madam President, throughout this debate, those who are in 
favor of this bill have said our bill is just like the Texas bill. Look 
at Texas. No employers have been sued, and there have been a minimum 
number of lawsuits. Yet when you look at this bill, it says employers 
can't be sued. Then it says they can be sued. And it has 7\1/2\ pages 
of ifs, ands and buts.
  Are employers connected with the decision? Do they exercise control? 
ERISA says that in any employee benefit the employer is deemed to 
exercise control, which would mean that every employer in America is 
covered. The Texas legislature did not assume that every employer was 
perfect. They were worried about unintended consequences.
  They also concluded that no employer can be the final decisionmaker 
because this bill, as in our bill, has an external review process that 
is run by independent physicians that are selected independently of the 
plan. They make the final decision, not an employer.
  The Texas legislature decided what we should decide here; that is, if 
you get into ifs, ands, and buts, what is going to happen all over 
America is businesses are going to drop their insurance.
  If we should pass the bill without this amendment in it, it is easy 
to envision that we could have a small business where the business 
owner calls in his employees and says, Look, we worked hard to provide 
good health benefits, but my father and my mother worked to build their 
business. I have worked. My wife has worked. We have invested our whole 
future in this business, and I cannot continue to provide benefits when 
I might be sued.
  Think about the unintended consequences. That is what the Texas 
legislature did. They concluded that employers should not be liable. 
They cannot make the final decision under this bill. They cannot make 
the final decision under Texas law because it is made by an external 
group of physicians. But when you make it possible to sue them, they 
are going to drop their health insurance, and you are going to have 
fancy reviews and stiff penalties, but people aren't going to have 
health insurance.
  I urge my colleagues to look at Texas. If you want to take all the 
claims of the benefits of Texas, do it the way they did it. They 
thought you created unintended consequences by letting employers be 
sued. They knew that employers could not make the final decision 
because they had external review, just as this bill and every other 
bill has. By doing an employer carve-out, they guaranteed that every 
small and large business in the State would know they cannot be sued.
  The PRESIDING OFFICER (Mr. Corzine). The question is on agreeing to 
amendment No. 810. The yeas and nays have been ordered, and the clerk 
will call the roll.
  The assistant legislative clerk called the roll.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 43, nays 57, as follows:

                      [Rollcall Vote No. 197 Leg.]

                                YEAS--43

     Allard
     Allen
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Campbell
     Cochran
     Collins
     Craig
     Crapo
     Domenici
     Ensign
     Enzi
     Frist
     Gramm
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Kyl
     Lott
     Lugar
     McConnell
     Murkowski
     Nickles
     Roberts
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Stevens
     Thomas
     Thompson
     Thurmond
     Voinovich
     Warner

                                NAYS--57

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Breaux
     Byrd
     Cantwell
     Carnahan
     Carper
     Chafee
     Cleland
     Clinton
     Conrad
     Corzine
     Daschle
     Dayton
     DeWine
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Fitzgerald
     Graham
     Harkin
     Hollings
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Leahy
     Levin
     Lieberman
     Lincoln
     McCain
     Mikulski
     Miller
     Murray
     Nelson (FL)
     Nelson (NE)
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Snowe
     Specter
     Stabenow
     Torricelli
     Wellstone
     Wyden
  Mr. REID. Mr. President, I move to reconsider the vote.
  Mr. KENNEDY. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. REID. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, we were in the process of trying to propound 
a unanimous consent request, but all the parties are not here. We will 
do that at 2:15.

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