[Congressional Record (Bound Edition), Volume 147 (2001), Part 9]
[Senate]
[Pages 11836-11863]
[From the U.S. Government Publishing Office, www.gpo.gov]



             BIPARTISAN PATIENTS PROTECTION ACT--Continued

  Mr. REID. Madam President, I ask unanimous consent that there be 45 
minutes for debate with respect to the McCain amendment No. 812, which 
is pending, with the time equally divided and controlled in the usual 
form with no second-degree amendments in order thereto; that upon the 
use or yielding back of time the amendment be temporarily laid aside, 
and Senator Gregg or his designee be recognized to offer the next 
amendment as under a previous order.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Who yields time?
  Mr. REID. Madam 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the quorum call be rescinded.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. Madam President, I ask unanimous consent that the time 
during the quorum call be equally divided.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Madam 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. KENNEDY. Madam President, I ask unanimous consent the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KENNEDY. I yield myself 7 minutes.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. KENNEDY. Madam President, the cornerstone of an effective patient 
protection program is the right to timely, fair and independent review 
of disputed medical decisions. This amendment reaffirms a critical 
element of that right--the right to an independent appeal process that 
is not stacked against patients by giving the HMO the right to select 
the judge and jury.
  This is a critical difference between our approach to that issue and 
the approach of the alternative legislation before the Senate. Under 
their bill, the HMO gets to select the so-called independent appeals 
organization. Under our bill, neither the HMO nor the patient selects 
the appeals organization. Instead, it must be selected by a neutral and 
fair appeals process. This amendment puts the Senate on record as 
supporting that fair and impartial appeal process.
  The approach of allowing one party to a dispute--in this case the 
HMO--to select the judge and jury to a dispute is so inherently unfair 
that it has been rejected out of hand by virtually every expert who has 
considered the issue. It flies in the face of every principle and 
precedent founded on fair play.
  We don't allow it in our civil court procedures. We don't allow it in 
our criminal procedures. Doesn't a child with cancer whose HMO has 
overruled her doctor deserve at least the same basic fairness we 
provide for rapists and murderers?
  The unfair approach of allowing one party to the dispute is not only 
alien to our court system, it is prohibited under the Federal 
Arbitration Act. It is unacceptable under the standards of the American 
Arbitration Association. It is rejected by the standards of the 
American Bar Association. Of the 39 States that have created 
independent review organizations, 33 do not allow it; neither should 
the Senate.
  Do we understand, in the 39 States that have created independent 
review organizations, 33 do not allow the HMO to select and pay the 
independent reviewer; and neither should the Senate.
  Under the fair external review approach we have in Medicare and in 
most States, the reviewer decides the plan is right about half the time 
and decides the patient is right about half the time. In the financial 
services industry, the industry gets to select the reviewer in 
disputes, and the industry wins 99.6 percent of the time. No wonder 
HMOs want that system: it makes a mockery of the whole idea of 
independent review. A vote for this amendment is a vote against making 
this bill a mockery of everything that a true Patients' Bill of Rights 
should stand for.
  And how ironic it is that the sponsors of the competing proposal are 
vociferous supporters of the President's principle that we should 
preserve good State laws. But under this amendment, the 39 State 
external appeals systems currently in place would be wiped out. Do we 
understand? There is one provision in the two major pieces of 
legislation before us; that is, the McCain-Edwards bill and the Breaux-
Frist bill. In the Breaux-Frist bill, their appeals provision 
effectively preempts all of those 39 States. They have to follow what 
is in their legislation. As I pointed out, that is the process by which 
the HMO selects the independent reviewer. They

[[Page 11837]]

would be null and void, even where they provide greater consumer 
protections than the Federal standard. In all of these instances, the 
consumer has greater protection than even under the underlying proposal 
of the McCain-Edwards bill.
  We have heard a lot of tragic examples of HMO abuse during the course 
of this debate and through the extensive discussions in the press over 
the last 5 years. We heard of children denied lifesaving cancer 
treatment by their HMO. It is wrong to let that same HMO choose the 
judge and jury that could decide whether those children live or die. 
And our amendment says it is wrong.
  We have heard of women with terminal breast and cervical cancer 
denied the opportunity to participate in clinical trials that could 
save or extend their life. It is wrong to give that same HMO that 
overruled the treating physician and denied the care the right to chose 
the judge and jury that could decide whether that woman has a real 
chance to live to see her children grow up or is guaranteed to be dead 
within 3 months.
  We have heard of a young man whose HMO decided that it was cost-
effective to amputate his injured hand instead of providing the surgery 
that could restore normal functioning. It is wrong to give the HMO that 
made that heartless decision the right to choose the judge and jury 
that could decide whether that young man goes through life with one 
hand or two.
  We have head of a policeman with a broken hip, whose HMO decided it 
was better to give him a wheelchair than to pay for the operation that 
would have restored his normal functioning. It is wrong to give the HMO 
that put its profits so far ahead of that patient's interests the right 
to choose the judge and jury that will decide whether that man ever 
walks again.
  Last week, in discussing the issue of access to specialty care, I 
mentioned what had happened to Carley Christie, a 9-year-old little 
girl who was diagnosed with Wilms Tumor, a rare and aggressive form of 
kidney cancer. Her family was frightened when they received the 
diagnosis, but they were relieved to learn that a facility close to 
their home in Woodside, CA, was world-renowned for its expertise and 
success in treating this type of cancer--the Lucille Packard Children's 
Hospital at Stanford University.
  The Christie family's relief turned to shock when their HMO told them 
it would not cover Carley's treatment by the children's hospital. 
Instead, they insisted that the treatment be provided by a doctor in 
their network--an adult urologist with no experience in treating this 
rare and dangerous childhood cancer. The Christies managed to scrape 
together the $50,000 they needed to pay for the operation themselves--
and today Carley is a cancer-free, healthy and happy teenager. If the 
Christies had been less tenacious or had been unable to come up with 
the $50,000, there is a good chance that Carley would be dead today.
  Under our opponents' plan, the HMO that passed a possible death 
sentence on little Carley Christie would have the right to choose the 
judge and jury to determine whether that possible death sentence should 
be upheld. No family should have to go through what the Christie's did.
  The PRESIDING OFFICER. The Senator has used 7 minutes.
  Mr. KENNEDY. I yield myself 5 more minutes, Madam President.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. No HMO should behave as the Carley's did. And that HMO 
should certainly not have the right to choose the external review 
organization to decide whether Carley should get the care she needed.
  Another case that I find particularly shocking is that of Melissa 
Yazman, right here in Washington. In May, 1997, Melissa Yazman was a 
second year law student at American University, going to school full-
time, living in suburban Virginia, working part-time for an attorney in 
D.C., and taking care of her two kids while her husband traveled with 
his job.
  In the past 4 years, much has changed for Melissa. Her dreams of law 
school and a career in the working world are gone, and her new career 
is focused on healing and living every day to enjoy the time she has 
with her husband and her two sons--Ben who is 11, and Josh who is 8.
  In the spring, in 1997, at the age of 36, she was diagnosed with 
stage IV pancreatic cancer at the age of 36. Pancreatic cancer is a 
fairly rare cancer, and, for the majority of patients like Melissa, 
diagnosis is not possible until the cancer is in an advanced stage.
  Melissa was told that she had 3 to 6 months to live. There are no 
curative treatments for pancreatic cancer. For most pancreatic cancer 
patients clinical trials are their only hope.
  Melissa was referred to a clinical trial at Georgetown University. 
Her insurer refused to cover the treatment. Melissa and her husband 
were forced to go through lengthy and time consuming negotiations with 
the insurer--negotiations that took her husband away from their 
children for 2 to 3 hours a day--negotiations that ultimately ended in 
failure. She and her husband ended up paying for these costs themselves 
because they ran out of time waiting for a decision from her insurer.
  Because she and her husband had enough money in their savings 
account, they were able to pay for her routine costs--costs that her 
insurer should have covered and would cover for a patient not enrolled 
in a lifesaving clinical trial.
  Because of the therapy she received in a clinical trial, Melissa has 
been able to have 4 extra years with her family and with her young 
boys. Without the clinical trial, she would have had 3-6 months. Every 
patient with incurable cancer hopes for enrollment in a clinical trial 
that can save or extend their life. No patient should have their hopes 
dashed because their insurer simply says no. And no patient like 
Melissa should have their right to a fair, impartial appeal voided 
because the HMO that said ``no'' gets to choose the organization that 
will decide the case.
  For cancer patients, for women, for children--indeed, for every 
patient whose HMO denies critically needed cars--the right to a speedy, 
fair, impartial appeal should be a fundamental right. This amendment 
will put the Senate on record as saying that this appeal should truly 
be fair and impartial, that it will not load the dice and stack the 
deck against patients. Every Senator knows that this amendment 
represents simple justice, and I urge every Senator to vote for what 
they know to be right.
  Madam 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.
  Ms. STABENOW. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           RECORDING OF VOTE

  Ms. STABENOW. Madam President, I want to indicate that on rollcall 
vote No. 197, I was present and voted ``no.'' The official record has 
me listed as absent. Therefore, I ask unanimous consent that the 
official record be corrected to accurately reflect my vote. This will 
in no way change the outcome of the vote.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. REID. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded. How much time is on both sides?
  The PRESIDING OFFICER. There is no time remaining on the proponents' 
side, and there are 14 minutes 44 seconds on the opponents' side.
  Mr. REID. I see nobody here of the opponents. If they require more 
time, I will be happy to give them whatever time I may use here. I ask 
unanimous consent that I be allowed to speak, and if the opponents of 
this sense-of-the-Senate amendment desire more time, they can have 
whatever time I use.

[[Page 11838]]

  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Did the Senator from New Hampshire hear the request?
  Mr. GREGG. No.
  Mr. REID. We have no more time left. You have 14 minutes. I said I 
would like to speak. If you want more time, whatever time I use, you 
can have that in addition to the 14 minutes.
  Mr. GREGG. I am not aware of any speakers. We are waiting for people 
to return from the White House before we get really started.
  Mr. REID. I want to direct a question to the Senator from 
Massachusetts. I say to my friend from Massachusetts, we heard a lot of 
talk about how this legislation has an adverse effect upon the business 
community. Has the Senator heard those comments?
  Mr. KENNEDY. Yes, I certainly have.
  Mr. REID. I received an e-mail from Michael Marcum of Reno, NV. Here 
is what he said. I would like the Senator to comment on this 
communication I received from one of my constituents:

       Dear Senator Reid, as a small business owner, and as a 
     citizen I urge you to support the upcoming bill commonly 
     known as the ``Patients' Bill of Rights.'' I also would like 
     to state that I support your and Senator McCain's version of 
     the bill. If the HMO's can afford to spend millions on 
     lobbyists and advertisements then they can afford to do their 
     job correctly, preventing the lawsuits in the first place . . 
     . .
       I am willing to pay to know that what I am purchasing from 
     my HMO will be delivered, not withheld until someone is dead 
     then approved post mortem (AKA a day late and a dollar 
     short). While a believer in the market and freedom, I feel 
     that we need a better national approach to health care. As 
     the richest nation in the world, as the only real super-
     power, why do so many Americans get third world levels of 
     health care, even when they have insurance.
       Thank you for your time--Michael Marcum (Reno, NV).

  Will the Senator acknowledge that Michael Marcum is one of the 
hundreds of thousands of small business people who do not have the 
money to run these fancy ads; that their only way of communicating with 
you and me is through e-mails and communicating through the standard 
means, not through these multimillion-dollar advertising campaigns? In 
short, will the Senator acknowledge there are a lot of Michael Marcums, 
small business people, in America who support this legislation?
  Mr. KENNEDY. I thank the Senator for bringing two matters to the 
attention of the membership. One is the example the Senator referred 
to, and the other point is the fact we have heard so much during the 
course of the debate that if these protections are put in place, it is 
going to mean millions of insured individuals as a result of this 
legislation will become uninsured.
  Yet it is apparent, as the Senator has pointed out, that the HMOs 
have millions of dollars to spend on these advertisements--millions of 
dollars that ought to be spent on either lowering premiums or giving 
patients the protections they need. Evidently, it is an open wallet for 
the HMOs because they have been on the national airways and have been 
distorting and misrepresenting the legislation, as the Senator has just 
pointed out, distorting what its impact would be on average families in 
this country.
  I am wondering if the Senator is familiar with the Texas Medical 
Association letter we just received. It confirms that the Texas law 
mirrors the letter and spirit of the McCain-Edwards-Kennedy bill. This 
is from the Texas Medical Association. They point out that the Texas 
Medical Association and President Bush agree that any entity making 
medical decisions should be held accountable for those decisions. This 
is not only the position of the Texas Medical Association but is 
exactly what President Bush called for in a Patients' Bill of Rights.
  We resolved that issue earlier today. The Texas Medical Association 
believes it is consistent with the intent of the Texas law to hold any 
entity, whether employer or insurer, accountable if they make a medical 
decision that harms a patient or results in death. We upheld that 
today.
  The Texas law was never designed to exempt from accountability 
businesses that made harmful medical decisions. It was suggested 
earlier, the Senator remembers, that it would be, rather, a 
clarification that the liability provisions did not apply to small- and 
medium-sized businesses that purchased traditional insurance.
  That is interesting to hear because we heard a great deal earlier 
about where the Texas Medical Association was. This is a clarification.
  The Senator is pointing out we spent a good deal of time trying to 
catch up with the distortions and misrepresentations, but as the 
Senator from Nevada knows, what this is really about is doctors and 
nurses making decisions on health care for their patients and not 
having them overridden by the HMOs or by employers who put themselves 
in the place of HMOs.
  That is what this legislation is about: letting our doctors and 
nurses practice their best in medicine. We have so many well-trained 
medical professionals. They are highly motivated, highly committed, and 
highly dedicated. What is happening in too many places, as the Senator 
has pointed out in this debate, too many times those medical decisions 
are being overrun and overturned by the HMOs, and that is plain wrong. 
That is what this battle is about. I thank the Senator for his comment.
  Mr. REID. I say to my friend from Massachusetts, yes, I am familiar 
with the letter from the President of the Texas State Medical 
Association. I believe that is his title.
  Mr. KENNEDY. That is correct.
  Mr. REID. I heard Senator McCain read the letter word for word. I was 
so impressed because what has happened the last few years is that 
doctors, who in the past have been totally nonpolitical, have been 
driven into the political field because they are losing their 
practices, they are losing their ability to practice medicine, their 
ability to take care of patients they were trained to take care of. 
They have come into the political field and have joined together with 
the American Medical Association--all the different specialists and 
subspecialists--they have joined together saying: We as physicians of 
America need some help. If you want us to be the people who take care 
of your sick children, your sick wife, husband, mother, father, 
neighbor, then we need to have the ability to treat patients and give 
them the medicine they need.
  The Senator from Massachusetts read part of this letter. Senator 
McCain read the full text of the letter earlier today. It confirms this 
legislation is not being driven by a small group of fanatics but, 
rather, by the entire medical community. When I say ``medical 
community,'' it is more than just doctors. It includes nurses. It 
includes all the people who help render care to patients.
  I say to my friend from Massachusetts, I commend him, Senator McCain, 
and Senator Edwards for their diligence in doing something the American 
people need. We all have had the experience of having sick people in 
our families and seeing if care can be rendered. We know how important 
a physician is. When a loved one of mine is sick, I want the doctor to 
have unfettered discretion to do whatever that doctor, he or she, 
believes is best for my loved one. That is what this Patients' Bill of 
Rights is all about. When a doctor takes care of a patient, let the 
doctor take care of the patient.
  Mr. KENNEDY. I thank the Senator. He has summarized the purpose of 
this legislation. As the Senator knows now, we are ensuring there will 
be remedies for those patients if the HMO is going to make a judgment 
and overturn that medical decision with internal and external appeals.
  Now the matter before the Senate is to make sure that appeal is truly 
independent and not controlled by the HMO, not paid for by the HMO. As 
I mentioned earlier in my presentation, 33 States at the present time 
do not permit the HMOs to make the determination and select the 
independent reviewer. That is our position. That is in the McCain 
amendment. We do not want to have an appeals provision that is rigged 
in favor of the HMO that may be making the wrong decision with regard 
to the patient's health in the first

[[Page 11839]]

place and then be able to select the judge and jury to get it to 
reaffirm an earlier decision which is clearly not in the interest of 
the patient.
  Mr. REID. I say to my friend from Massachusetts, the manager of this 
bill, before I came to Congress, I was a judge in the Nevada State 
Athletic Commission for prize fights. As the Senator knows, Nevada is 
the prize fight capital of the world. One thing they would not let the 
fighters do is pick the judges. They thought it would be best if some 
independent body selected the judges to determine who was going to sit 
in judgment of those two fighters.
  It is the same thing we have here. We simply do not want the 
participants picking who is going to make the decision. That should be 
made by an unbiased group of people who have nothing to gain or lose by 
the decision they make.
  This is very simple. This sense-of-the-Senate resolution says that if 
there are going to be people making a decision, they should be 
unbiased; they should be people who have nothing in the outcome of the 
case. Is that fair?
  Mr. KENNEDY. I agree. Senator, as you may know, the language in the 
alternative legislation not only permits the HMO to select the reviewer 
and to pay that, but also it preempts all the other States that have 
set up their own independent review, and 33 of the 39 that have set up 
their reviews have chosen a different way from this process, a truly 
independent review. They would effectively be usurped or wiped off the 
books.
  We hear a great deal about State rights and not all wisdom is in 
Washington. This is a clear preemption of all of the existing State 
appeals provisions. It is done in a way that permits the HMO to be the 
judge and jury. That is why the McCain amendment--which says there will 
be an independent selection of review, and we will not preempt the 
States--makes a good deal of sense.
  Mr. REID. If I could refer a question to the Senator from New 
Hampshire, our time under the agreement is just about out. Are you 
arriving at a point where you might offer the other amendment?
  Mr. GREGG. I hoped we would be. Some of the Senators involved in that 
amendment are at the White House, so we are waiting for them to return. 
When they return, we will be ready to proceed.
  Mr. REID. I have been told they probably won't return until about 
3:30.
  Mr. GREGG. I suggest we divide the time between now and 3:30 between 
the two sides equally.
  Mr. KENNEDY. I don't know at this time of other amendments on this 
side. We are making good progress dealing with this legislation. We are 
eager to address these other matters. There are continued conversations 
on some of the issues. We certainly welcome ideas that can protect the 
patients. Looking at this realistically, we have several Members who 
want to address the Senate and have spoken to me several times that 
they would like to make comments about the legislation. We can use the 
time productively, but we indicate we are ready to deal with amendments 
and we look forward to receiving them. We want to continue business.
  We thank the Senator from New Hampshire for his cooperation. I will 
notify my colleagues who might want to speak.
  Mr. REID. We have no objection to the request of the Senator from New 
Hampshire.
  Mr. GREGG. I ask that the time between now and 3:30 be equally 
divided between myself and Senator Kennedy, and any quorum calls be 
divided between each side.
  The PRESIDING OFFICER (Mr. Carper). Without objection, it is so 
ordered.
  Mr. REID. Mr. President, I have been reading into the Record names of 
organizations that support this legislation. I will read some of the 
names into the Record. If someone from either side desires to speak, I 
will cease.
  I have been through the A's, B's and C's of organizations supporting 
this legislation, hundreds of names. I begin with the D's:

       Daniel, Inc.; Denver Children's Home; DePelchin Children's 
     Center in TX; Developmental Disabilities; Digestive Disease 
     National Coalition; Dystonia Medical Research Foundation; 
     Easter Seals; Edgar County Children's Home; El Pueblo Boys' 
     and Girls' Ranch; Elon Homes for Children in Elon, College, 
     NC; Epilepsy Foundation; Ettie Lee Youth and Family Services; 
     Excelsior Youth Center in WA; Eye Bank Association of 
     America; Facing Our Risk of Cancer Empowered; Families First, 
     Inc.; Families USA; Family & Children's Center Counsel; 
     Family & Children's Center in WI; Family & Counseling Service 
     of Allentown, PA; Family Advocacy Services of Baltimore; 
     Family and Child Services of Washington; Family and 
     Children's Service in VA; Family and Children Services of San 
     Jose; Family and Children's Services in Tulsa, OK; Family and 
     Children's Agency Inc.; Family and Children's Association of 
     Mineola, NY; Family and Children's Center of Mishawaka; 
     Family and Children's Counseling of Louisville, KY; Family 
     and Children's Counseling of Indianapolis; Family and 
     Children's Service of Minneapolis, MN; Family and Children's 
     Service in TN; Family and Children's Service of Harrisburg, 
     PA; Family and Children's Service of Niagara Falls, NY; 
     Family and Children's Services in Elizabeth, NJ; Family and 
     Children's Services of Central, NJ; Family and Children's 
     Services of Chattanooga, Inc. in TN; Family and Children's 
     Services of Fort Wayne; Family and Children's Services of 
     Indiana; Family and Community Service of Delaware County, PA; 
     Family and Social Service Federation of Hackensack, NJ; 
     Family and Youth Counseling Agency of Lake Charles, LA; 
     Family Centers, Inc.; Family Connections in Orange, NJ; 
     Family Counseling & Shelter Service in Monroe, MI; Family 
     Counseling Agency; Family Counseling and Children's and 
     Children's Services; Family Counseling Center of Central 
     Georgia, Inc.; Family Counseling Center of Sarasota; Family 
     Counseling of Greater New Haven; Family Counseling Service in 
     Texas; Family Counseling Service of Greater Miami; Family 
     Counseling Service of Lexington; Family Counseling Service of 
     Northern Nevada; Family Counseling Service, Inc.; Family 
     Guidance Center in Hickory, NC; Family Guidance Center of 
     Alabama; Family Resources, Inc.; Family Service Agency of 
     Arizona; Family Service Agency of Arkansas; Family Service 
     Agency of Central Coast; Family Service Agency of Clark and 
     Champaign counties in OH; Family Service Agency of Davie in 
     CA; Family Service Agency of Genesse, MI; Family Service 
     Agency of Monterey in CA; Family Service Agency of San 
     Bernardino in CA; Family Service Agency of San Mateo in CA; 
     Family Service Agency of Santa Barbara in CA; Family Service 
     Agency of Santa Cruz in CA; Family Service Agency of 
     Youngstown, OH; Family Service and Children's Alliance of 
     Jackson, MI; Family Service Association Greater Boston; 
     Family Service Association in Egg Harbor, NJ; Family Service 
     Association of Beloit, WA; Family Service Association of 
     Bucks County in PA; Family Service Association of Central 
     Indiana; Family Service Association of Dayton, OH; Family 
     Service Association of Greater Tampa; Family Service 
     Association of Howard County, Inc. IN; Family Service 
     Association of New Jersey; Family Service Association of San 
     Antonio, TX; Family Service Association of Wabash Valley, IN; 
     Family Service Association of Wyoming Valley in PA; Family 
     Service Aurora, WI; Family Service Center in SC; Family 
     Service Center in TX; Family Service Center of Port Arthur, 
     TX; Family Service Centers of Pinell; Family Service Council 
     of California; Family Service Council of Ohio; Family Service 
     in Lancaster, PA; Family Service in Lincoln, NE; Family 
     Service in Omaha, NE; Family Service in WI; Family Service 
     Inc. in St. Paul, MN; Family Service of Burlington County in 
     Mount Holly, NJ; Family Service of Central Connecticut; 
     Family Service of Chester County in PA; Family Service of El 
     Paso, TX; Family Service of Gaston County in Gastonia, NC; 
     Family Service of Greater Baton Rouge; Family Service of 
     Greater Boston; Family Service of Greater New Orleans; Family 
     Service of Lackawanna County, in PA; Family Service of Morris 
     County in Morristown, NJ; Family Service of Norfolk County; 
     Family Service of Northwest, OH; Family Service of Racine, 
     WI; Family Service of Roanoke Valley in VA; Family Service of 
     the Cincinnati, OH; Family Service of Piedmont in High Point, 
     NC; Family Service of Waukesha County, WI; Family Service of 
     Westchester, NY; Family Service of York in PA; Family Service 
     Spokane in WA; Family Service, Inc. in SD; Family Service, 
     Inc. in TX; Family Service, Inc. of Detroit, MI; Family 
     Service, Inc. of Lawrence, MA; Family Services Association, 
     Inc. in Elkton, MD; Family Services Center; Family Services 
     in Canton, OH; Family Services of Cedar Rapids; Family 
     Service of Central Massachusetts; Family Service of Davidson 
     County in Lexington, NC; Family Service of Delaware Counsil; 
     Family Service of Elkhart County; Family Service of King 
     County in WA; Family Service of Montgomery County, PA; Family 
     Service of Northeast Wisconsin; Family Service of 
     Northwestern in Erie, PA; Family Service of Southeast Texas; 
     Family Service of Summit County in Akron, OH; Family Service 
     of the Lower Cape Fear in NC; Family Service of the Mid-South 
     in TN;

[[Page 11840]]

     Family Service of Tidewater, Inc. in VA; Family Service of 
     Western PA; Family Services Woodfield; Family Services, Inc. 
     in SC; Family Services, Inc. of Layfette; Family Services, 
     Inc. of Winston-Salem, NC; Family Solutions of Cuyahoga 
     Falls, OH; Family Support Services in TX; Family Tree 
     Information, Education & Counseling in LA; Family Violence 
     Prevention Fund; Family Means in Stillwater, MN; Federation 
     of Behavioral, Psychological & Cognitive Sciences; Federation 
     of Families for Children's Mental Health; FEI Behavioral 
     Health in WI; Florida Families First; Florida Sheriffs Youth 
     Ranches; and Friends Committee on National Legislation.

  Mr. President, this is a partial list of the hundreds of names of 
organizations that support this legislation.
  This is the fourth day that I have read into the Record names of 
hundreds of organizations supporting this legislation. This list was 
prepared for me more than a week ago. It has grown since.
  When I finish this list, I hope we will have completed this 
legislation. But if we haven't, I will come back and read the new 
names.
  This is legislation that is supported by virtually every organization 
in America. It is opposed by one umbrella group--the HMOs. They are the 
ones paying for these ads. They are the ones that are running the 
advertisements in newspapers and television and now even radio ads the 
reason being that they have made untold millions of dollars while we 
delay this legislation.
  Every day that goes by is a lost opportunity for physicians to tell a 
patient what that patient needs and not have to refer to someone in an 
office in Baltimore, MD, as to what a patient is going to get in Las 
Vegas, NV.
  When I have my income tax done, every year I have an accountant do 
that. When myself or a member of my family needs to be taken care of, I 
don't want an accountant doing that. I want a doctor to do that.
  That is what this legislation is all about. I am so happy that we 
have a bipartisan group that the HMOs are not going to be able to stop.
  We are going to pass this legislation, send it over to the House, the 
conference committee will meet, and we will send a bill to the 
President that he will sign.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DAYTON. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Minnesota is recognized.
  Mr. DAYTON. Thank you, Mr. President.
  Mr. President, I rise today in support of S. 1052, the McCain-
Kennedy-Edwards Patients' Bill of Rights legislation. Minnesota, my 
home State, has one of the largest concentrations of HMO providers in 
the country. In fact, 90 percent of Minnesotans who are covered by 
their employers also receive their health care services through HMOs. 
Also, historically, the HMO concept originated in Minnesota by a 
Minnesota physician who has now renounced what HMOs have become.
  Originally, HMOs were going to herald in a new age of health care, 
with greater emphasis on prevention, on primary care, more efficient 
referrals, coordinated and integrated medical care, all leading to a 
better quality of medical services for patients at lower overall costs 
to our health care system.
  Integral also to their arguments was their conceit that the private 
sector always does it better than the public sector, that the large 
public health systems of Medicare and Medicaid, and other public 
reimbursement programs, were largely the ones to blame for these 
skyrocketing health costs, and that private-sector HMOs and insurance 
companies could manage health care dollars so much better than 
Government and provide better quality for less quantity of dollars.
  However, once they got into the profession, they found that it was 
not quite that easy, that quality care costs money. There is always 
some con artist in this country who claims we can have something for 
nothing, or at least more for less. But the reality is, quality health 
care costs money. Well-qualified, highly trained, life-saving doctors, 
nurses, and attendants deserve to be well paid; and that costs money. 
Advanced lifesaving diagnostic equipment costs money. State-of-the-art, 
well-staffed hospitals and clinics cost money. And providing enough of 
all of the above, to take care of all the patients across this Nation, 
costs money, more money than most of these health care delivery or 
insurance systems wanted to spend.
  So HMOs became what I call them ``HNOs'': The way to save money 
became to say no; deny care; deny treatments; deny claims. Health care 
providers became health care deniers. As these HMOs became larger and 
larger, business operations--whether for-profit or nonprofit--their 
``no'' bureaucracies became bigger and more important. Stock prices, 
executive compensations, retained earnings all became dependent on 
their ability to grow and to say no, deny patient care to produce 
profits at cost savings, to grow to produce ever more profits.
  The PRESIDING OFFICER. The time of the majority has expired.
  Under a previous agreement, the time until 3:30 was to be equally 
divided between the majority and minority. The time of the minority has 
expired.
  Mr. GREGG. Mr. President, how much time does the Senator think he 
needs to make his statement?
  Mr. DAYTON. I say to the Senator from New Hampshire, another 10 
minutes. But I will return to speak another time.
  Mr. GREGG. No. We have no speakers at this time. I am happy to yield 
10 minutes to the Senator from Minnesota. And I ask unanimous consent 
for 10 minutes to be added to our time.
  The PRESIDING OFFICER. Is there objection?
  Mr. BYRD. Reserving the right to object.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. BYRD. I wonder if I might be able to have the floor to speak.
  Mr. GREGG. What amount of time does the Senator from West Virginia 
need?
  Mr. BYRD. Thirty minutes.
  Mr. GREGG. I have no problem with that on my side, as long as our 
side will receive an equal amount of time. So that would be 40 minutes; 
10 minutes to Senator from Minnesota, 30 minutes to the Senator from 
West Virginia; and then 40 additional minutes to be added to our side's 
time. And the Senator from West Virginia be recognized after the 
Senator from Minnesota.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The Senator from Minnesota.
  Mr. DAYTON. I would be happy to yield the floor to the Senator from 
West Virginia.
  The PRESIDING OFFICER. Does the Senator from Minnesota wish to 
conclude his remarks?
  Mr. DAYTON. I yield to the Senator from West Virginia.
  The PRESIDING OFFICER. The Senator from West Virginia is recognized 
for up to 30 minutes.
  Mr. BYRD. Mr. President, I thank both Senators.
  (The remarks of Mr. Byrd are located in today's Record under 
``Morning Business.'')
  Mr. DAYTON. Mr. President, I thank the great Senator from West 
Virginia for his erudite discourse on the trade agreement which gives 
me remarks as I shall present them to my constituents in Minnesota. I 
thank the distinguished Senator.
  Mr. BYRD. Mr. President, I thank my colleague. I thank him very much.
  Mr. DAYTON. Mr. President, to continue where I left off, a great 
American once said that a house divided against itself cannot stand. 
Our Nation's health care providers unfortunately are fundamentally 
divided against themselves. Their avowed purposes are to provide health 
care to their members, their clients, and their patients. Yet their 
financial success depends increasingly on not providing health care to 
their members, their clients, and their patients, and their members, 
clients, and patients are increasingly the victims of their own health 
care providers.

[[Page 11841]]

  Why do we even need a Patients' Bill of Rights to protect us from our 
own health care providers?
  The fact we even need this legislation, the fact we are debating it 
in the Senate today, says how badly our Nation's health care system has 
deteriorated. A Patients' Bill of Rights, even if necessary, should 
consist of two words: Doctors decide. Doctors decide what diagnostic 
procedures, what treatments, what surgeries, hospitalizations, and 
rehabilitation therapies are needed. The health care providers provide 
them, and the insurer pays for them. It is that simple. It is that 
sensible. It is that lawsuit free.
  Our distance from it today is a measure of our social insanity. It is 
the measure of our health care idiocy. But that is where we are today.
  There is a term used in sports these days, trash talking. There is a 
lot of trash being talked about this legislation: It will explode the 
costs of health care; it is going to cost employees their health care 
coverage; it will drive businesses into bankruptcy. Those are the same 
smears and scare tactics that were used against Social Security, 
against Medicare, against workers' compensation, against unemployment 
compensation, and against family leave. Is there anything that is good 
for the American people that is not bad for American business?
  I don't entirely blame them, because those business men and women 
have been talked trash to, as well, by their partners in these health 
care enterprises. Many businesses across this country are bedeviled by 
increasing costs of their health care. They want to do the right thing 
for their employees, but they are not in the business of administering 
health plans. I am sympathetic to this. But I say to those big leaders, 
if you want to get out of the business of providing health care 
coverage for your employees, then you need to actively support a better 
alternative, a separate system of true national health care which is 
devoted to providing care, not to avoiding costs.
  Last Saturday in Minnesota, along with my distinguished colleague 
from Minnesota, Senator Wellstone, and our majority leader, Senator 
Daschle, we heard from several families who expressed their support for 
their legislation and the critical need for it from their life 
experiences. There was a father who spoke eloquently and powerfully 
about his 4-year-old daughter named Hope. Hope was born with spina 
bifida. As part of her treatment, six doctors--six physicians--
including one at the Mayo Clinic, prescribed certain physical therapy 
treatments for her. Yet her HMO was unwilling to provide or pay for 
those prescribed treatments. It took 8 months of banging their heads 
against this bureaucratic wall, paying for the treatments that they 
could afford out of their own pockets, forgoing other treatments that 
they knew were in the best interests of her young life, until they 
finally were able to break through and get the care she needed.
  A mother spoke of her 21-year-old daughter who died of an eating 
disorder. As she so powerfully stated last Saturday in St. Paul, MN, 
young people aren't supposed to die of eating disorders. But her 
insurance company refused to pay for the necessary evaluation of her 
daughter's illness, it refused to refer her to a specialist who might 
have made the correct diagnosis, and that young woman is dead today. 
Her life has been snuffed out, taken away from her family. Her mother 
set up a foundation just for this purpose, to advocate for the care 
that should be provided for anyone else in that situation. What a 
horrible way for a parent to be pulled into this debate, by losing a 
daughter unnecessarily to a disease, an illness that should not have 
been fatal except for the lack of proper medical care, medical care 
that was available in our country and was not made available to her by 
her insurer.
  Finally, we heard from the wife of a husband and father of five 
children, a healthy, active, middle-aged man who suddenly, over the 
course of just a few months, was caught with some debilitating disease 
and confined to a wheelchair. For 8 months she and her husband tried to 
get their primary physician at an HMO to make a diagnosis that could 
lead to successful treatment. For 8 months this primary physician at 
the HMO was unable to make the diagnosis and refused to refer this man 
to a specialist elsewhere for that evaluation. He finally said to this 
patient, father of five, devoted husband: ``Maybe there is something 
you need to confess.''
  Can you believe the absurdity of that? ``Maybe there is something you 
need to confess''--as though there were some religious curse. This was 
a primary physician at an HMO. They could not escape the vice, the trap 
of that bureaucracy.
  Finally, on their own initiative, the wife was so desperate, they 
decided to risk their entire life savings and drove to the Mayo Clinic 
in Rochester, world renowned clinic, and signed papers saying they 
would pay personally for the costs of whatever treatments were 
necessary. The physician there made a diagnosis of a viral disease, an 
invasive disease, prescribed the necessary treatments, medications, and 
this man is now at least partially recovered. He tires easily and 
cannot stand for extended periods of time but is out of a wheelchair 
and hopefully back to a full recovery. It cost this family $25,000 out 
of their own pocket to get the medical care they needed. The HMO 
finally agreed to pay 80 percent of that cost.
  This legislation is not about lawsuits, it is about lives. It is not 
about trial lawyers but people, patients, mothers, fathers, children. I 
am not interested in lawsuits. I hope there is never a lawsuit as a 
result of this legislation because that would mean there would never be 
the need for them. It would mean all Americans were receiving the 
health care they need, the health care they deserve, the health care 
for which they paid.
  I support this legislation, and I strongly urge my colleagues to 
support this as well.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Johnson). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. KENNEDY. 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. KENNEDY. Mr. President, we encourage and invite colleagues who 
have amendments to come to the floor. Having talked with Senator Gregg 
and others, I anticipate we will have an amendment dealing with the 
issue of medical necessity. That is an issue which is of very 
considerable importance in the legislation. It was the subject of a 
good deal of debate the last time we debated this legislation. It was 
the subject of a good deal of debate when we were in the conference. It 
was actually one of the few issues that were resolved in the 
conference.
  At this time, we have language in the McCain-Edwards legislation, of 
which I am a cosponsor, as well as in the Breaux-Frist measure, which 
is virtually identical. There are some small differences in there, but 
they are effectively very much the same. There will be an amendment to 
alter and change that issue. I will take a few moments now to speak 
about the importance of what we have done with the underlying 
legislation, and hopefully the importance of the Senate supporting the 
construct we have achieved.
  It is my anticipation that the amendment will probably be offered at 
about 5 o'clock this evening. We will have debate through the evening 
on that measure. Hopefully, we will have a chance to address it. There 
are several other amendments dealing with the issue of the scope of the 
legislation, as well as on liability. I understand we may very well 
have the first amendments on liability a little later this evening as 
well.
  This issue on medical necessity is of very considerable importance. I 
want to outline where we are and the reasons for it for just a few 
minutes.
  The legislation before the Senate closes the door against one of the 
most serious abuses of the HMOs and other insurance plans, and the 
ability of a plan to use an unfair, arbitrary, and biased definition of 
medical necessity to deny patients the care their doctor recommends.

[[Page 11842]]

  My concern is that the amendment we are going to see before the 
Senate is going to open that possibility again. We closed it with 
McCain-Edwards and also with the Breaux-Frist measure.
  The issue before us is as clear as it was when we started the debate 
5 years ago; that is, who is going to make the critical medical 
decisions--the doctors, the patients, or HMO bureaucrats?
  It is important for every Member of the Senate to understand how we 
got where we are on this issue. We started out by placing a fair 
definition of medical necessity. The plan would have to abide by the 
Patients' Bill of Rights itself. It was a definition that was 
consistent with what most plans already did.
  Every Democratic Member of the Senate voted for that approach. I 
still think it has much to commend it. But we heard complaint after 
complaint from the other side that putting a definition into law would 
be a straightjacket for health plans, it would prevent them from 
keeping pace with medical progress, and so on.
  So Congressmen John Dingell and Charlie Norwood changed that 
provision. They removed the definition of medical necessity from the 
law. Instead, they said, let the plans choose the definition that works 
best for them. But if a dispute went to an independent medical review, 
the reviewers would need to consider that definition. But they would 
not be bound by it in cases involving medical necessity; that is, they 
would be able to use in the review their own judgment in terms of the 
medical necessity. They would make the decision based on the kind of 
factors all of us would want for ourselves and our families--the 
medical condition of the patient, and the valid, relevant, scientific 
and clinical evidence, including peer-reviewed medical literature, or 
findings, including expert opinion.
  Mr. GREGG. Mr. President, will the Senator yield for a question?
  Mr. KENNEDY. Yes.
  Mr. GREGG. I understand the Senator's time has expired. I ask 
unanimous consent that whatever time the Senator consumes, an equal 
amount of time be added to our time.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KENNEDY. Mr. President, at the time of these appeals, they would 
make the decision based on the kinds of factors all of us would want 
for ourselves and our families--the medical condition of the patient, 
and the valid, relevant, scientific and clinical evidence, including 
peer-reviewed medical literature, or findings, including expert 
opinion.
  Those factors essentially say that the independent medical reviewer 
should strive to make the same recommendation that the best doctor in 
the country for that particular condition should make. It is a fair 
standard. It is a standard all of us hope our health plan would follow.
  The Senate should understand that this was not only a bipartisan 
compromise between Congressmen John Dingell and Charlie Norwood, it was 
a compromise on which every member of our conference signed off in the 
last Congress, from Don Nickles and Phil Gramm to John Dingell and 
myself. In fact, this concept of letting the external reviewer consider 
but not be bound by the HMO's definition of medical necessity is also 
included in the Frist-Breaux bill endorsed by the President.
  On this issue, the legislation before the Senate is clearly the 
middle ground. It is the fair compromise. But my concern is that the 
amendment we will face will tilt us away from that compromise and more 
to the HMO's.
  Now the authors of this amendment claim that they have just provided 
a safe harbor for HMOs that want to be able to maintain a fair 
definition of medical necessity throughout the entire process. But our 
list of the factors that must guide the external reviewers' decision is 
already consistent with every fair definition of medical necessity. The 
fact is that this amendment may create a safe harbor for HMOs, but it 
tosses patients over the side into the storm-tossed seas. It would 
allow HMOs to adopt some of the most abusive definitions ever 
conceived. It ties the hands of the independent medical reviewers. It 
puts HMO bureaucrats in the driver's seat--and kicks patients and 
doctors all the way out of the automobile and is not in the interest of 
the patient.
  Our concern is that the amendment we anticipate will be offered will 
say that HMOs could adopt any definition used by a plan under the 
Federal Employees Health Benefits Program that insures Members of 
Congress and the President, by a State, or developed by a ``negotiated 
rulemaking process.'' Each of these approaches is fatally flawed, if 
our goal is to protect patients.
  The Federal Employees Health Benefits Program plans can change their 
definitions every year. An administration hostile to patient rights can 
accept any unfair definition it chooses. To be perfectly frank, even 
administrations that support a Patients' Bill of Rights have not paid 
much attention to these definitions, because they have so many other 
controls over the way the plans behave. And Senators and Congressmen 
can always get the medical care they want, regardless of the 
definitions in the plan's documents, but ordinary citizens cannot.
  So the Federal employees' plan can change these definitions. It is 
important that we establish the definitions so it is very clear to the 
patients about how their interests are going to be protected.
  States often provide good definitions of medical necessity, but 
sometimes they do not. Do we really want, after the tremendous struggle 
we have gone through to pass this legislation, for consumers to have to 
fight this battle over this definition again and again in every State 
in the country year after year? I do not believe so. Administrative 
rule-making is only as fair as the participants. An administration 
hostile to patients' rights and sympathetic to plans can appoint any 
unfairly stacked set of participants that it wants.
  And finally, under the amendment, the plan gets to choose any one of 
these options. That is what we anticipate of the format of the 
amendment. So it could seek out the worst of the worst. But consumers 
get no comparable rights to demand the best of the best.
  If we look at the options that would be immediately available to 
health plans under the amendment, it is obvious why the disability 
community, the cancer community, the American Medical Association, and 
other groups who understand this issue are so vehemently opposed to 
that as an alternative--and why it is supported by no one but the 
health plans.
  There are no health groups that support that option--none, zero. All 
of the health groups effectively support what was worked out in the 
compromise last year and has been included in the legislation before us 
which, as I mentioned, I think is the real compromise.
  One Federal plan defines ``medical necessity'' as ``Health care 
services and supplies which are determined by the plan to be medically 
appropriate.'' That is a great definition. If the plan determines the 
service your doctor says you need is not appropriate, you are out of 
luck. There is nothing to appeal, because the plan's definition of 
``medical necessity'' controls what the external reviewers can decide.
  Another plan uses different words to reach the same result. It says, 
medical necessity is ``Any service or supply for the prevention, 
diagnosis or treatment that is (1) consistent with illness, injury or 
condition of the member; (2) in accordance with the approved and 
generally accepted medical or surgical practice prevailing in the 
locality where, and at the time when, the service or supply is 
ordered.'' Doesn't sound so bad so far, but here is the kicker. 
``Determination of `generally accepted practice' is at the discretion 
of the Medical Director or the Medical Director's designee.'' In other 
words, what is medically necessary is what the HMO says is medically 
necessary.
  Among those who have been most victimized by unfair definitions of 
``medical necessity'' are the disabled. Definitions that are 
particularly harmful to them are those that allow treatment only to 
restore normal functioning or improve functioning, not

[[Page 11843]]

treatment to prevent or slow deterioration.
  That is a key element in terms of the disabled community. Most of 
these definitions, even for Federal employees, say that they will 
permit the treatment just to restore the normal functioning or to 
improve functioning. So many of those who have disabilities need this 
kind of treatment in order to stabilize their condition, in order to 
prevent a deterioration of their condition; or if there is going to be 
a slow deterioration, to slow that down as much as possible.
  The only definition that really deals with that is the one which is 
in the McCain-Edwards and the Breaux-Frist legislation, which was 
agreed to because it does address that. That is why the disability 
community is so concerned about this particular amendment.
  Every person with a degenerative disease--whether it is Parkinson's, 
Alzheimer's, or multiple sclerosis--can be out of luck with this kind 
of definition.
  For example, in the clinical trials, you have to be able to 
demonstrate that the possibilities, by participating in the clinical 
trial, are going to improve your condition. There are other kinds of 
standards as well, but that happens to be one of them: to improve your 
kind of condition. We find that the Federal Employees Health Benefits 
Program uses language that is very similar to that.
  As I mentioned, when we are talking about those that have some 
disability--when you are talking about Parkinson's disease, Alzheimer's 
disease, multiple sclerosis--you have the kind of continuing challenge 
that so many brave patients demonstrate in battling those diseases, but 
you want to make sure that your definition of ``medical necessity'' is 
going to mean that really the best medicine that can apply to those 
particular patients, based upon the current evolving development of 
medical information, is going to be available to those patients.
  Another issue which should be of concern to every patient, but 
especially to those with the most serious illnesses, is the allowing 
cost-effectiveness to be a criterion for deciding whether medical care 
should be provided. The question is always, cost-effectiveness for 
whom, the HMO, or the patient? It was cost-effective for one HMO to 
provide a man with a broken hip a wheelchair rather than an operation 
that would allow him to walk again. It was cost-effective for another 
HMO to amputate a young man's injured hand, instead of allowing him to 
have the more expensive surgery that would have made him physically 
whole. It may be cost-effective for the HMO to pay for the older, less 
effective medication that reduces the symptoms of schizophrenia but 
creates a variety of harmful side effects rather than for the newer, 
more expensive drug that produces better cures and less permanent 
damage--but is it cost-effective for the patient and her family? Is 
this really the criterion we want applied to our own medical care or 
the care of our loved ones?
  And on a practical level, how in the world is an independent review 
organization ever supposed to judge cost-effectiveness. Its members 
under all the bills are health professionals, not economists. They have 
the expertise to decide on the best treatment for a particular patient, 
but they cannot and should not be asked to evaluate its cost-
effectiveness. To paraphrase our opponents, when your child is sick, 
you want a doctor, not an accountant. But here we have one of the State 
plans saying, in its definition of medical necessity, ``cost-effective 
for the medical condition being treated compared to alternative health 
interventions, including no intervention.''
  I urge my colleagues to stay with us on this definition and to resist 
an amendment to alter and change it. The amendment that we anticipate 
will reverse a bipartisan compromise broadly supported by Members of 
both parties. It is included in the bill the President has endorsed. 
The anticipated amendment will stand the whole goal of this legislation 
on its head.
  I think this is very likely to be a litmus test on the whole issue 
for the Senate. What we want to do is to make sure ultimately that it 
is the doctors who are going to make the best medical decisions, based 
on the information that they have available to them. That is what this 
legislation does, the McCain-Edwards, as well as in the Breaux-Frist. 
We do not want to change that. That has been basically supported by the 
President. It was supported in the conference. It represents basically 
the mainstream of the views of the Members of this body. We should 
resist any alteration or change of that particular provision.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KERRY. Mr. President, I ask unanimous consent I be permitted to 
speak as in morning business on the time of the Republicans.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KERRY. Let me begin by thanking my colleague, the senior Senator 
from Massachusetts, for his extraordinary leadership on this critical 
issue for our country with respect to the Patients' Bill of Rights. 
That is without any question the most important business before the 
country and the most important business before the Senate. I will 
return to the floor of the Senate either later today or tomorrow to 
share some thoughts with respect to that.
  (The remarks of Mr. Kerry are located in today's Record under 
``Morning Business.'')
  Mr. KERRY. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. THOMAS. 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. THOMAS. Mr. President, we have some time to speak on the bill on 
this side; is that correct?
  The PRESIDING OFFICER. The minority controls the next 41\1/2\ 
minutes.
  Mr. THOMAS. I thank the Chair.
  Mr. President, we have been on this bill now, it seems, for a very 
long time. It is very important, and indeed we should be on it. On the 
other hand, we also ought to be making some progress. It appears we are 
not. We hear all this talk about how we can get together, let's put it 
together, and we can agree. But I see nothing of that nature happening. 
It seems to me we continue to hear the same things coming forth. I hear 
a recitation of a great many people who are opposed to the bill listed 
off name by name. I suppose we can do that for the rest of the day.
  Here is a list of people opposed to the Kennedy bill. There are over 
100 names of businesses and organizations. I could do that, but I don't 
know that there is great merit in doing that. We have talked about what 
we are for, and I think, indeed, we Republicans have certain 
principles, and we have talked about that: Medical decisions should be 
made by doctors; patients' rights legislation should make coverage more 
accessible, not less; coverage disputes should be settled quickly, 
without regard to excessive and protracted litigation.
  Most of us agree that employers that voluntarily provide health 
coverage to employees should not be exposed to lawsuits. That is 
reasonable. Congress should respect the traditional role of States in 
regulating health insurance. That is where we have been and what works. 
We intend to stand by those principles. I don't think that is hard to 
agree with. We have talked about the President's conversations with 
some of the people on the other side of the aisle who apparently say he 
wants a bill and they think we can get together. But I don't see any 
evidence of that.
  It seems to me if we are going to do that, we ought to do it. 
Instead, it seems we are in this kind of bait and switch sort of thing 
that we hear. I think the McCain-Edwards-Kennedy bill, as described by 
the sponsors, is a far cry from what is written. How many times have we 
been through that? The sponsors promise it would shield employers from 
lawsuits, that it would uphold the sanctity of employer health care 
contracts, and require going through appeals before going to

[[Page 11844]]

court. However, when you look at the language of the bill, that is not 
what is there.
  One of the sponsors says: We actually specifically protect employers; 
employers cannot be sued under the bill. Yet you find in the bill 
itself exclusions of employers and other plan sponsors, and it again 
goes into causes of action. And then, unfortunately, the next provision 
says certain causes of action are permitted, and then it goes forward 
with how in fact they can be sued. They say, first of all, we 
specifically protect employers from lawsuits. Then it says in the bill 
that certain causes of action are permitted to sue them.
  So we don't seem to be making progress and meeting the kinds of 
agreements we have talked about. What we simply do is continue to get 
this conversation on the one hand, which is endless, and it isn't the 
same as what is in the bill. I don't know how long we can continue to 
do that.
  I am hopeful we can come to some agreement. I think people would like 
to have a Patients' Bill of Rights that ensures that what is in the 
contract is provided for the patient. I think we can indeed do some of 
those things. However, I have to say it seems to me if we intend to do 
it, we need to get a little more dedicated to the proposition of 
saying, all right, here is where we need to be on liability and let's 
see if we can work out the language to do that. We have been talking 
about it now for a week and a half. It is not there. All right. We are 
talking about the opportunity for holding to the contract, not going 
outside the contract. We need to have that language.
  So I think most of us are in favor of getting something done here, 
but we are getting a little impatient at the idea of continuing to 
recite the same things over and over again when in fact the bill does 
not say that. We ought to be making some propositions to be able to 
make the changes that indeed need to be made if that is our goal.
  Frankly, Mr. President, I hope that it is.
  I see other Members in the Chamber. I will be happy to yield the 
floor.
  Mr. REID. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. GREGG. 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. GREGG. Mr. President, I yield back such time as I might have at 
this point.
  The PRESIDING OFFICER. The Senator's time is yielded back.
  Mr. REID. If the Senator will yield for a brief statement, there are 
efforts being made now to work out what some deem to be better language 
on the McCain amendment. If that is not possible, the Senator from New 
Hampshire and I have said we might be able to voice vote that anyway. I 
personally do not expect a recorded vote on that, but time will only 
tell.
  I ask unanimous consent that the McCain amendment be set aside and 
the Senator from Missouri be recognized to offer his amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Missouri.


                           Amendment No. 816

  Mr. BOND. Mr. President, I send an amendment to the desk and ask for 
its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Missouri [Mr. Bond] proposes an amendment 
     numbered 816.

  Mr. BOND. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

 (Purpose: to limit the application of the liability provisions of the 
Act if the General Accounting Office finds that the application of such 
     provisions has increased the number of uninsured individuals)

       On page 179, after line 14, add the following:

     SEC. __. ANNUAL REVIEW.

       (a) In General.--Not later than 24 months after the general 
     effective date referred to in section 401(a)(1), and annually 
     thereafter for each of the succeeding 4 calendar years (or 
     until a repeal is effective under subsection (b)), the 
     Secretary of Health and Human Services shall request that the 
     Institute of Medicine of the National Academy of Sciences 
     prepare and submit to the appropriate committees of Congress 
     a report concerning the impact of this Act, and the 
     amendments made by this Act, on the number of individuals in 
     the United States with health insurance coverage.
       (b) Limitation With Respect to Certain Plans.--If the 
     Secretary, in any report submitted under subsection (a), 
     determines that more than 1,000,000 individuals in the United 
     States have lost their health insurance coverage as a result 
     of the enactment of this Act, as compared to the number of 
     individuals with health insurance coverage in the 12-month 
     period preceding the date of enactment of this Act, section 
     302 of this Act shall be repealed effective on the date that 
     is 12 month after the date on which the report is submitted, 
     and the submission of any further reports under subsection 
     (a) shall not be required.
       (c) Funding.--From funds appropriated to the Department of 
     Health and Human Services for fiscal years 2003 and 2004, the 
     Secretary of Health and Human Services shall provide for such 
     funding as the Secretary determines necessary for the conduct 
     of the study of the National Academy of Sciences under this 
     section.

  Mr. BOND. Mr. President, it is clear that all of us agree that 
protection for patients of health care delivery systems is very 
important. Patients need to get quick, independent second opinions when 
their insurance company or their HMO denies care. Women need unimpeded 
access to obstetricians or gynecologists. Children need pediatric 
experts making decisions about their care and providing them care. 
Patients need to go to the closest emergency room and be confident that 
their insurance company or HMO will pay for the care.
  Those things ought to be understood as the basis on which we all 
agree. To say, as some have, that those of us on this side of the aisle 
are not concerned about patients is just flat wrong.
  I have spoken in the past about patients who are employees of small 
business, who are owners of small businesses, who are the families of 
small business owners. They do not get patient protection because they 
cannot afford insurance. They cannot even be patients because they do 
not have the care.
  We need to figure out how we can assure patient protections, get more 
people covered by health care insurance, health care plans, HMOs, and 
give them the protections they need within those plans.
  This bill is about balance. As we provide patient protections, we 
need to be concerned about how much we increase the cost of care 
because at some point these costs will start to bite. At some point, 
employers, particularly small business employers, will not be able to 
offer coverage to anyone so their employees cannot be patients. In 
addition, as prices go up, the employees or patients may not be able to 
afford their share of the insurance costs. The results: Fewer people 
with health care.
  It is generally understood that for every percent increase in the 
cost of health care, we lose about 300,000 people from health care 
coverage. It is a fact of life. No matter what we do here, no matter 
how much we expound and gesticulate and obfuscate, we cannot repeal the 
laws of economics. When something gets more expensive, you are going to 
get less of it. The question is, How far do you go? How much is too 
much?
  The folks on my side of the aisle have said we need to give patients 
basic, commonsense protections, such as the ones I mentioned in the 
beginning: Independent second opinions, access to emergency care, 
access to OB/GYN care, access to pediatric care, and many more. But 
that is not enough. Some of our friends on the other side have insisted 
on going forward. In addition to the consensus patient protections, 
they want to add an expensive new right to sue that poses a huge threat 
to runaway health care costs.
  There are some people who are very interested in the right to sue. 
Those people are called trial lawyers, and they do really well at 
bringing lawsuits. They get a lot of fees from winning those lawsuits, 
particularly if the

[[Page 11845]]

judgment is high and they have a good contingency fee contract. At the 
same time, those costs ultimately can deny people health care coverage 
because to pay these judgments, the companies involved have to raise 
costs.
  As we have debated this legislation, I have tried to focus on what 
patient protections are needed and on the other crucial questions: What 
will this bill do to employers' ability to offer health care insurance 
to their employees? How many health care patients might lose their 
coverage?
  I know proponents of this version of the bill do not want to talk 
about the people across America, the patients, who will lose their 
health insurance because this bill as a whole, including the new 
lawsuits, may cost more than a million people their health care 
coverage. We need to talk about it. We need to focus on it because over 
1 million people who have health insurance today--men and women who are 
getting their annual screenings, mothers-to-be who are receiving 
prenatal care, and parents whose children are getting well-baby care--
will be losing care because of this bill, and how many of them can we 
afford to lose?


  We will be losing health care coverage for seniors who are taking 
arthritis medicines, men and women who are being treated with 
chemotherapy or kidney dialysis, families waiting for a loved one to 
have heart bypass surgery. These are the lives that will be disrupted, 
even devastated, as a direct result of this bill. Whom will they have a 
chance to sue then? What good is the right to sue a health plan if I 
have lost my health plan in the first place? It does not do me much 
good.
  I have said in the past we know there are going to be people who lose 
their insurance coverage as a result of this bill. In the past several 
days, I have brought to the Chamber a chart that keeps a running total 
of the number of patients who will lose their health care coverage 
because their employers have told us that if the provisions of the 
current McCain-Kennedy bill with the right to sue employers are enacted 
into law, they will have no choice but to drop health care. They want 
to provide health benefits to their employees. They are important 
benefits, they are attractive benefits and ensure the employers get 
good work from employees, and they take care of the patients who are 
the employees and the families of the employees.
  These small businesses have told me if they are faced with lawsuits 
from one of their employees or dependents who do not get the right kind 
of health care, they cannot afford to take that risk. Health care costs 
are too much already. Health care costs are going up. They are seeing 
more and more of the costs burdening their ability to provide health 
care.
  In the past, I have read from letters from small businesses in 
Missouri that are fearful of losing health care coverage for their 
employees and their employees' dependents. These are real life examples 
of people who have written in, saying they are very worried about the 
provisions of the McCain-Kennedy bill.
  I read yesterday a letter from a fabricator company. Today I have a 
letter from an accounting group. They are a small business, currently 
insuring four employees at a cost of $1,935 a month; they pay 100 
percent of the premiums. Last year, their health care coverage costs 
went up 21 percent. They note there has been a steady increase over the 
past few years. They have had to pass these costs on to clients to 
cover the charges for their employees. At this rate, providing health 
insurance may become impossible. If the new Patients' Bill of Rights 
proposed by Senator Kennedy expands liability and results in employers 
being held responsible for medical court cases, they will certainly be 
forced to cancel this employee benefit.
  They go on to say:

       I do small business accounting every day.
       These are small mom-and-pop businesses that cannot exist if 
     they are treated in the same way as large businesses with 
     regard to employee benefits. Sometimes Congress forgets that 
     mom-and-pop businesses of America are simply people who are 
     working hard, day in and day out, just to maintain a moderate 
     lifestyle. While they are not poor, they are not employers in 
     the same sense as major corporations.
       Please help us keep our businesses and try to provide for 
     our employees.

  That is one thing we need to remember. As we look at things on a 
grand scale and look at large employers, we cannot forget the mom-and-
pop businesses providing a living for mom and pop, their families, 
their employees, and their employees' families. We want all of them to 
be able to get good health care coverage. We want them to have rights 
that they can exercise if the HMO or the insurance company denies them 
coverage. But we certainly don't want to throw them out of health care 
coverage.
  Here is another company in Missouri. They write:

       I have been doing business in Missouri for over 15 years 
     and have been providing health insurance to my employees 
     since November of 1993. At that time, counting myself, I 
     insured four employees at an average cost of $78.50 a month. 
     I now insure five at a monthly cost of $199.60, with the same 
     high deductible coverage. My cost has increased over 250 
     percent, way beyond the rate of inflation and way beyond the 
     growth of my business. I have just had to absorb this 
     increased cost in the bottom line. This bill Senator Kennedy 
     has now in committee looks like a disaster ready to happen. I 
     am not alone as a small business owner wondering if I might 
     be able to continue to offer this benefit to my employees in 
     view of the rising costs of the policies. If I would be 
     legally responsible for medical court cases, I might as well 
     just toss in the towel and close my business.

  Those are the mom-and-pop operations, the small businesses, the 
lifeblood of our economy, the dynamic, growing engine of our economy 
that provides the jobs and the well-being and meets our needs for 
services and goods that everybody wants to talk about and everybody 
loves as the small businesses. But we need to be sure we are not 
pricing them out of business or even costing them the ability to cover 
their employees' health care costs.
  Right now, our toll is 1,895 Missourians losing their health care 
coverage from what their employers have told us about the burdens they 
expect from the McCain-Kennedy bill. One can argue they may be wrong. I 
can make an argument based on reading the pages I have read before of 
exceptions under which an employer can be sued. But they would be well 
advised, if they cannot stand the costs of a lawsuit, to give up their 
health insurance. You can argue about it one way or the other, but 
1,895--almost 1,900--employees will be thrown out of work, according to 
their employers who have communicated directly to us, if this measure 
is unamended and goes into effect.
  What are we going to do about it? I hope we can work on the liability 
sections. I have heard people want to compromise. I haven't seen that 
compromise yet. So I will offer a very simple proposal. My amendment 
says one simple thing: At a certain point, enough is enough. If more 
than one million Americans lose health care coverage because of this 
bill, the most expensive part of this bill, the right to sue, should be 
reevaluated.
  The beautiful thing about this amendment is, all of the disagreements 
that exist about how much the McCain-Kennedy bill will increase costs 
and how many people will lose coverage won't matter. We will never get 
an agreement on this floor, I don't believe, on just how many people 
will be knocked out. So we won't rely on predictions. All that will 
matter is what actually happens.
  Health economists assure this analysis can be done, they say, over a 
2-year period, and we will look at employment patterns, inflation, 
health regulations, or policy measures other than patient protections 
and other factors that affect employers and employees' ability to 
purchase coverage. Economists can estimate how many people lose 
coverage due to a major piece of health legislation. The Institute of 
Medicine has more than enough expertise and brain power at its disposal 
to do this.
  The amendment I have proposed says not later that 24 months after the 
effective date, and thereafter for each of the 4 succeeding years, the 
Secretary of Health and Human Services shall ask the Institute of 
Medicine of the National Academy of Sciences to prepare and submit to 
the appropriate committees of Congress a report concerning the impact 
of the act on the number of

[[Page 11846]]

individuals in the United States with health care insurance.
  Then, if the Secretary, in any report submitted, determines more than 
one million individuals in the United States have lost their health 
insurance coverage as a result of the enactment of this act as compared 
to the number of individuals with health insurance coverage in the 12-
month period preceding the act, then the liability section shall be 
repealed, effective on the date 12 months after the date on which the 
report is submitted. The Department of Health and Human Services is 
authorized to get funding for the conduct of the study, the National 
Academy of Sciences.
  It is very simple. If it throws more than a million people out of 
health care coverage, then we repeal the liability section. Then 
Congress comes back and looks at it and says: Can we do a better job? 
We don't have to rely on any estimates or predictions. We can find out 
how many people have lost their coverage. I think a million people is a 
lot. But granted, anything we do is going to have a cost. What 
constitutes too much? I propose that as a starting point we say that 1 
million people losing coverage is too much.
  The two key issues in this debate are:
  First, access to care; second, access to coverage.
  Patients need access to care without undue managed care interference. 
Thus, we need a patient protection bill. That is the external appeal. 
That is the right to see certain specialists, and the very important 
provisions we have in it. But the patients also need access to 
coverage. Are we going to get more people covered? Are we going to 
knock more people out of coverage?
  The ability to sue HMOs sounds nice. But at what price? If the 
ability to sue HMOs and the ability to sue employers is too high, and 
if the price is 1 million Americans who lose coverage, then that price 
is too high.
  I urge my colleagues to accept this amendment. I believe it is one 
way to make sure that we have a fail-safe mechanism to make sure that 
we observe that basic principle of medicine: first do no harm. I think 
a million individuals losing health care coverage is harm. That is why 
I suggest that we should agree to the amendment.
  Mr. President, I yield the floor. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GREGG. 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. GREGG. Mr. President, I rise in support of the excellent idea of 
the Senator from Missouri.
  One of the big concerns that has been heard expressed throughout this 
entire debate has been the effect especially of the plethora of 
lawsuits which would be created under the present bill as it is 
structured on employers, especially small employers, and their 
willingness to continue to offer health insurance to their employees.
  The real issue for most people is, first, do they have health 
insurance. When someone goes to find a job, one of the key conditions 
that most people look at is if that job has a decent health insurance 
package that is coupled with it. This is an extraordinarily big problem 
for not only people working at high-level jobs but especially people 
who work at entry-level jobs and in between.
  You can take large employers in the retail industry or large 
employers in the manufacturing industry. In all of these areas, 
employees see as one of their primary benefits the pay they receive, 
obviously, but additionally the fact that they have good health 
insurance from their employers.
  Then with the smaller employers, people who run small restaurants or 
small gas stations, or small mom-and-pop manufacturing businesses, the 
people who work for those folks also appreciate greatly the fact that 
they might have a health insurance package that is coupled with their 
employment. This is especially true for families. I don't think there 
is anything a family fears more than having a child get sick and not 
having adequate coverage, and not being able to get that child into a 
situation where they can be taken care of, or alternatively having 
their savings wiped out by the need to do something to take care of 
that child who has been sick, or a member of the family.
  Quality insurance is absolutely critical.
  We should not do anything that undermines the willingness of 
manufacturers, of employers, of small businesspeople, of mom and pop 
operators to offer insurance to their employees. It should almost be a 
black letter rule for this bill that we do not do something that is 
going to take away insurance because, as I have said before in this 
Chamber, there is no Patients' Bill of Rights if a person does not have 
insurance. They have no rights at all because they do not have any 
insurance.
  So what the Senator from Missouri has suggested is a very reasonable 
approach. If this bill, as it has been proposed, is such an 
extraordinarily positive vehicle in the area of giving people rights 
for their insurance and is such a positive vehicle in the area of 
allowing people who interface with their health agencies to get fair 
and adequate treatment from their health agencies, then the authors of 
this bill should have no objection to the amendment offered by the 
Senator from Missouri.
  Because the Senator from Missouri isn't suggesting that the bill 
should be changed in any way. He is simply saying, if the effects of 
the bill are that people are thrown out of their insurance and no 
longer have the ability to hold insurance because their employer says, 
``We are not going to insure you anymore; we can't afford it because of 
the number of lawsuits that are going to be thrown at us as a result of 
this bill,'' if that is the case, and more than one million people in 
America--and that is a lot of people--lose their insurance, then the 
liability section of this bill will not be effective. It does not 
affect the underlying issues of access and does not affect the 
underlying issues of the ability to go to your own OB/GYN or your own 
specialist or the various other specific benefits which are afforded 
under this bill, most all of which there is unanimous agreement on in 
this Senate.
  All it simply says is, listen, if the liability language in the bill 
simply isn't going to work because it throws a million people out of 
their insurance and, therefore, a million people lose their rights 
versus gain rights under this bill, then we basically do not enforce 
liability provisions until that gets straightened out. The Congress can 
come back at that time and take another look at the liability 
provisions and correct them. At least nobody else will be thrown out of 
the works because of the liability provisions; they will essentially be 
put in a holding pattern by this amendment.
  That is an entirely reasonable approach. Instead of saying we are 
going to function in a vacuum in this Chamber, where essentially we 
throw out ideas that we think are good but don't know what is going to 
happen, this is essentially saying, all right, if we think we have 
ideas that are good, we are going to hold those ideas to 
accountability.
  We heard the Senator from Massachusetts talking about accountability 
in another section of this bill. He brought up the education bill, 
which we talked about for the last 7 weeks before we got to this bill. 
And the issue was accountability. Does it work? The education bill we 
passed has language in it that essentially took a look at what had 
happened in order to determine what would occur in the future. What 
Senator Bond has suggested is that we do that under this bill. It is a 
very practical suggestion. He is saying if a million people lose their 
insurance, then we will put the liability language in the bill on hold 
until we can straighten it out. Actually, it would be sunsetted.
  The practical effect of that is, I presume, Congress would come back 
and say, listen, we didn't intend to have a million people lose their 
insurance. Our purpose in this bill was to give people more rights, not 
to give them less rights. You give people less rights if they lose 
their ability to have insurance.

[[Page 11847]]

  So by taking this language we will be in a position of being sure 
that what we are doing in this Chamber, and what we are doing in the 
isolation of the legislative process--although we get input, we never 
really see the actual events--will have a positive impact. We will know 
that if it isn't having a positive impact, there will be a consequence. 
The consequence is that that part of the bill, which has created the 
negative impact--throwing people out of their insurance--will be held 
up or stopped or sunsetted until we can correct it.
  So the Senator's concept in this amendment makes a huge amount of 
common sense. It is truly a commonsense idea. I guess it comes from the 
``show me'' State. Nobody has used that term today on this amendment. I 
do not think they have described it that way. This is a classic ``show 
me'' amendment. This says: Show me how the bill works. If the bill does 
not work, OK, we are going to change it to the idea of having this 
trigger, which establishes whether or not the bill is positive or 
whether the bill is negative. If the bill is negative--``negative'' 
meaning over a million people losing their insurance as a result of the 
effects of this bill--then we sunset the liability language.
  I do think it is important to stress that this amendment does not 
sunset the whole bill. It just focuses on the liability sections within 
the bill, which sections I have severe reservations about and have 
referred to extensively in this Chamber, which I think are going to 
have unintended consequences which will be extraordinarily negative on 
employees in this country where a lot of people are going to lose their 
insurance.
  This amendment just goes to that section of the bill. It doesn't go 
to the positive sections of the bill that there is general agreement 
on. It does not even go to those sections of the bill where there isn't 
general agreement on, such as the scope issues of States' rights or the 
contract sanctity issue, for that matter.
  But it does go to this question of, if you have people losing their 
insurance because their employers are forced to drop that insurance 
because it has become so expensive as a result of the liability 
provisions of this bill, then, in that case, where that happens to a 
million people--a million people, by the way, is essentially the 
population of the State of New Hampshire. It is not the population of 
Missouri, but essentially we have 1,250,000 people in New Hampshire, so 
we are talking about not an inconsequential number of people; it is 
pretty much the whole State of New Hampshire. So it is a reasonable 
threshold.
  If a million people lose their insurance because employers cannot 
afford it, because the liability costs have driven them out of the 
ability to ensure their employees, then we should stop that; we should 
end that liability language and take another look at it as a Congress 
and correct it.
  So I congratulate the Senator from Missouri for offering this classic 
``show me'' amendment. It is very appropriate that it has been offered 
by the Senator from Missouri, from the ``show me'' State. It makes 
incredible common sense. I also would say it is a ``Yankee 
commonsense'' amendment. So we shall claim it for New England also. I 
join enthusiastically in supporting this amendment.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Dayton). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. SANTORUM. Mr. President, I ask unanimous consent the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SANTORUM. Mr. President, I rise in support of the Bond amendment. 
I commend the Senator for standing up and trying to mold patient 
protection legislation to comply with a fundamental principle that he 
has repeated many times today: The first order of business in medicine 
is to do no harm. And building on this principle, as I continue to 
iterate so many times when I come to this Chamber to speak, we cannot 
afford to ignore what I believe to be the No. 1 problem in health care 
today: the fact that we have anywhere between 42 and 44 million people 
who do not have health insurance.
  I will state again for the record--and I am happy for anyone to come 
forward and tell me differently--there is not one thing in this bill 
that increases the number of insured people in America, not one thing. 
This is a pretty good-sized bill. It has 179 pages to it. Not one page, 
not one paragraph, not one sentence, not one word will cover one 
additional person in America.
  For many of the people who are the greatest critics of the health 
care delivery system in this country, the paramount feature of which 
they are most critical is the number of uninsured in our society. If 
there is a criticism levied by people around the world against 
America's health care system, it does not have to do with quality of 
care. I think everyone will agree that America pretty much sets the 
gold standard in terms of the quality of care delivered to patients. I 
think most people say, yes, the best health care in the world is 
available here in the United States. But the critics around the world 
will say, it may be the best system but you have 42 to 44 million 
people in this country who are not insured.
  Do you think the first health care bill we are considering here in 
the Senate should consider what most people see as the greatest problem 
with America's health care system? Most people in this country would 
say, yes, that is what we should be considering. But this bill doesn't 
do that. Interestingly enough, what does this bill do? It provides 
patient protection. That is great. I am for that. There are a group of 
people in this country, people who have health insurance plans that are 
regulated solely by the Federal Government, who have very few patient 
protections afforded to them because they are not covered under State 
patient protection laws. So we should pass a Federal Patients' Bill of 
Rights to cover those people. I am all for that, and we should have 
adequate protection.
  But what this bill does, what the Senator from Missouri is trying to 
really focus on, is it does a whole lot of other things that will cause 
at least one million more Americans to become uninsured. Now, I am 
pleased that the President of the United States has vowed to veto this 
legislation should it come to his desk in its present form for 
signature. But if for some reason it is enacted into law, maybe over 
the President's objections, this will result in millions more being 
uninsured.
  You can put all the benefits aside. Let's assume this is the greatest 
patient protection bill in the history of the world, that as a result 
of this bill, patients will be supremely protected, a notion, of 
course, with which I take issue. I don't believe that will occur. But 
let's assume it does. The result of this bill will be millions more 
uninsured. In particular, if the liability provisions of this bill are 
enacted, which allow employers to be sued--and that is really the issue 
that is at heart of the Bond amendment, if it allows employers to be 
sued, to practically an unlimited extent--you won't have a million or 2 
million people who won't have insurance as a result of this bill. You 
will have tens of millions of people who will lose their insurance. 
Why? Do I say I am against employer liability because I love employers? 
No. Employers are nice people. Employees are nice people. They are all 
nice people. The question is, What is the effect of holding employers 
liable? The effect of holding employers liable is employers who 
voluntarily provide health insurance as a benefit, will simply stop 
providing that benefit because it will jeopardize their entire 
business. If they can be sued for a decision that is made with respect 
to a benefit they voluntarily provide one of their employees, the 
provision of which is not the core function of their business, they are 
simply going to stop providing that benefit.
  That is what the Senator from Missouri is trying to get at. If we 
cause, as a result of the employer liability provisions, and some of 
the general liability provisions, and some of the contract provisions, 
which basically allow outside entities to rewrite contracts in

[[Page 11848]]

litigation and in appeals, if we open up this Pandora's box of problems 
for employers to continue to provide insurance to their employees, 
employers will do what employers must do: first, protect the survival 
of their business. And this will be a direct threat to the survival of 
their business.
  What is now a pleasant benefit that you can provide to your employees 
and something that you can help to attract employees with by providing 
good health care insurance will become a serious liability risk that a 
business simply cannot afford to take.
  The Senator from Missouri is saying, very simply: We have a great 
patient protection bill here, but we have the very real potential of 
having a tremendous downside, in really hurting people.
  I am very sympathetic about all the cases being brought forward, 
about the need for patient protection. I think you will find fairly 
universal agreement on this side that we want to provide those 
protections. But the first protection should be to preserve the 
possession of insurance in the first place. If we deny them that 
protection, all these other protections don't matter, really, if they 
lose their insurance. This could be a great bill, but if you don't have 
insurance, then this bill doesn't help you. In fact, it can hurt you 
because it can cause the loss of your insurance.
  What the Senator from Missouri is saying is: Let's go through, and we 
will work on some more amendments. We will try to get this thing honed 
down until we have a good patient protection bill. If we can't fix the 
liability provisions, which I don't know whether we will be able to or 
not, at least let's say that if the liability provisions are what we 
believe they are, in other words, problematic to the point of causing 
devastation to millions or at least a million people in losing their 
insurance, then we should have a trigger.
  You are seeing all of these kinds of comments by folks who are 
supportive of this bill and supportive of the liability provisions in 
the bill saying: Hey, this isn't going to hurt anybody. We are not 
going to cause any problems with this. No, no, no, employers aren't 
going to drop their coverage. Health care costs are not going to go up. 
Millions more won't be uninsured.
  They will make that statement and have made that statement over and 
over again. Fine. They may be right.
  What happens if they are wrong? What happens? What happens if past 
experience is any guide, if we are right and millions do become 
uninsured? Should we have to wait for an act of Congress for this body 
generally to realize that we made a mistake and have to come back 
through this whole legislative process to repeal the problem here? 
Should we have to wait for that? Or should we just simply have a 
trigger that says, look, if we made a mistake, if we made a mistake, if 
we were wrong, then we are going to immediately cancel that portion of 
the bill that is causing the problem upon recognition that we have a 
problem of a million uninsured.
  As the Senator from New Hampshire said, a million people is a lot of 
folks, a lot of children, a lot of families. It is a lot of people who 
are going to go without health care. If what we really care about is 
providing good, quality health care, the first thing we should care 
about is to get them an insurance policy in the first place.
  One of the things that strikes me most about this bill is blithe 
references as to how we are going to go out and get the HMOs. These 
HMOs are a bunch of bean counters who don't care about people. There is 
all these horrible cases about HMOs.
  My understanding is that the liability provision that allows you to 
sue your employer, that allows you to sue your insurance company, does 
not just apply to HMOs. It applies to PPOs. It applies to all insurance 
contracts. Obviously, if it is a fee-for-service contract and there is 
no limitation on what provider you want to go to, that is one thing. 
But in most insurance plans today that are not HMOs, there is some 
limitation of some sort, certainly some limitation on procedures that 
are covered. But that is not what is talked about here, folks. What we 
talk about, when they talk about this liability provision, they are 
talking about these nasty HMOs.
  What they don't tell you is that it ain't just the nasty HMOs that 
can be sued under this bill, it is any insurance company who provides 
any insurance product and any employer that provides any insurance 
product.
  Oh, that is a different story, isn't it? You don't hear them up there 
railing against those nasty fee-for-service plans or those nasty PPO 
plans because they don't poll as well as going after those nasty HMOs. 
But this isn't just about nasty HMOs, this is about all insurance 
products. There is no way out of this liability provision unless, of 
course, you just want to say to your employees: We will cover 
everything. Doesn't matter what you want, where you want to go, we will 
just pay for everything you want. Of course, we all know what an 
exorbitant cost of that would entail, and so this is neither practical 
or realistic.
  The point is, this bill has serious consequences for millions of 
people who are on the edge, whose employers are sitting there right now 
saying: Well, I have a 13 to 20 percent increase in my premiums this 
year. The economy is flattening out a little bit. I am looking forward. 
I will tighten my belt a little bit more, and we will continue to 
provide health insurance to our employees. Then this bill comes along, 
which will increase costs more and potentially expose them to liability 
for doing what is right by their employees and providing insurance to 
them.
  I haven't talked to an employer yet, I have not talked to an employer 
yet who told me that if this bill passes and they are liable for 
lawsuits simply because they are providing a health benefit to their 
employees, I haven't talked to one employer who has told me that they 
will keep their insurance.
  They can't. How can they? In good conscience to their shareholders or 
the owners of the company, how can they keep providing a benefit that 
simply opens up a Pandora's box of liability, 200 causes of action, in 
State court, Federal court, unlimited damages, unlimited punitive 
damages, and allow clever lawyers to forum shop all over the country so 
as to find that good court down in Mississippi in a small county there 
that is used to handing out $40 million or $50 million jury awards.
  I ask you, whether you are an employer or employee, put yourself in 
the shoes of a small businessperson who has 20 employees, barely making 
ends meet, running a small business--maybe a family business--their 
employees are like members of the family. You have lots of businesses 
like that across America. They want to do well by their employees 
because they are like family. So they provide good benefits, good pay, 
and even before family and medical leave, they gave time off when their 
employees were sick or they needed to take care of their children who 
were sick at school.
  Now comes this bill that says if one person has a problem with the 
health care system and the insurance policy that employer offered 
didn't give them everything they wanted, and some savvy lawyer decides 
he or she can get you everything you want and more, and all of a sudden 
that family business that employs 20 or so people in the community all 
of a sudden that business is on the hook. And maybe they may even 
prevail against a lawsuit, but how many tens of thousands of dollars is 
it going to take, or hundreds of thousands, simply to defend the 
lawsuit? We are talking about big awards. I can tell you that a lot of 
companies are just going to be worried about fighting the lawsuit in 
the first place, about being dragged into court to prove positive 
against the liability ambiguities in this legislation?
  I am just telling you that what the Senator from Missouri has put 
forth is a reasonable amendment. We will have amendments on the floor 
dealing with employer liability. We must do something about it. I 
believe if we allow this employer liability provision to stand, we will 
destroy the private health care system in this country--the employer-
provided health care system. It will go away.
  I know there are some Members on the floor right now who are against 
the

[[Page 11849]]

private health care system, who want a Government-run, single-payer 
health care system. Fine.
  Mr. GREGG. If the Senator will yield, I advise Members that it is 
very possible we will have a vote around 6 o'clock. So Senators should 
be aware of that.
  Mr. SANTORUM. As I was saying, I know there are many people in this 
Chamber who believe a single-payer health care system is the best way, 
the most efficient way, the most compassionate way--to use these 
wonderful, glorious terms--to provide health insurance in this country. 
Obviously, I disagree, but it is a legitimate point of view. I think we 
should have that debate.
  We had that debate in 1994 with the Clinton health care proposal, and 
we had a good debate on the floor of the Senate about the kind of 
health care delivery system we should have. But it was a deliberate 
debate about how we can change the health care system by a direct act 
of the Congress. The problem with this legislation is that we are going 
to severely undermine one health care system, which is a health care 
system that is principally funded through employer contributions, and 
we are not going to replace it with anything.
  You see, as many of my colleagues well know, if employers stop 
providing health insurance, then people are going to have to go out 
with their aftertax dollars and buy health care, and the costs will be 
prohibitive. If you don't believe me, I would ask any of my colleagues 
to drop their federal health insurance plan today, and to endeavor to 
purchase health insurance with aftertax dollars. It is very difficult.
  One of the things I hope to accomplish--and maybe we can work on this 
in this bill--is to create refundable tax credits for those who do not 
have access to employer-provided health insurance, so they can get help 
from the Government equivalent to the subsidy that the government 
offers for employer-provided health insurance. We give a deduction for 
the business. In other words, if I am an employer and I provide health 
insurance to my employees, I get to deduct the cost of that off of my 
earnings, my income. We also subsidize it on the other end. If you are 
an employee and you have employer-provided health insurance, you don't 
have to pay taxes on the money that your employer uses to purchase that 
insurance. In other words, let's say it is a $5,000 family policy. That 
is a benefit to you. That is compensation to you. It is $5,000 of 
insurance costs that your employer pays for you, but you don't have to 
pay taxes on it. It is tax-free compensation to you. So, in that sense, 
we subsidize you by not taxing you on that benefit. So the employer 
gets subsidized and the employee gets subsidized.
  But if you are an individual who does not have access to employer-
provided health insurance, you have to take the money that is left 
after you pay all your taxes--after you pay Social Security taxes, 
income taxes, State taxes, local taxes, and Medicare taxes--and then 
you can take your money and try to buy health insurance.
  That is a pretty rotten system. If we are going to do anything about 
the problem with the millions of uninsured in this country, we are 
going to have to start treating people who don't have access to 
employer-provided insurance the at least as well as we do with those 
who do have it. None of that is in this bill, there is no tax equity.
  I will say it again. There isn't one paragraph in this bill that will 
increase the number of insured in this country. There are, 
unfortunately, pages and pages and pages and pages in this bill that 
will result in more and more and more people losing their insurance. 
But we can mitigate that--or at least a big part of it--if we adopt the 
Bond amendment.
  The Bond amendment says if we have a problem, let's not wait for an 
act of Congress to admit our mistake. I know those who are listening 
might find this hard to believe, but sometimes Congress is a little 
slow in admitting we made a mistake. Sometimes we don't own up to the 
fact that it was our fault. I know some within the sound of my voice 
will find that to be almost an incredible proposition on my part--that 
somehow Congress doesn't immediately come in and say, yes, we 
understand we made a mistake; we are sorry America, we blew it. 
Everything I said the year or two before about how this wasn't going to 
cause a problem, you are right; it did. My mistake; we are going to 
repeal this.
  I just ask my colleagues, when was the last time that happened? I 
know some in this room will remember the last time it happened. My 
recollection is that it happened back in 1988, when it came to Medicare 
catastrophic coverage. Congress tried to pass catastrophic prescription 
drug coverage for seniors, and quickly found out that seniors really 
didn't like what Congress did. Seniors rose up and screamed and 
hollered, and within a year or so--I wasn't there at the time, but I 
recall Congress repealed it. That was about 12 years ago. I can't think 
of any instance since and, frankly, I can't think of anything before 
that.
  So let's just assume--I think it is a pretty safe assumption--that 
the people who are saying that this liability provision will not cause 
a problem are wrong. They will be in very good company if they go on to 
insist that they aren't wrong in the future--that even though we may 
have evidence of millions more uninsured as a result of this provision, 
somehow or another they will avoid blame and will point to something 
else that caused this problem, not the liability provisions. So it will 
be some sort of contest here as to whether we even take up this issue 
again.
  The Bond amendment avoids all that. It says, look, if the GAO says 
this provision, the liability provision, has caused a problem of 
causing more than million additional uninsured, then that part of the 
bill sunsets, the rest of the bill stays in place. Patient protections 
stay in place.
  Patient protections stay in place. It affects just the liability 
provisions. The internal-external reviews stay in place so there is 
patient protection. What does not stay in place are the provisions that 
are causing massive damage to millions of American families.
  I am hopeful, No. 1, we can fix these liability provisions because we 
should not pass a bill that is going to cause this kind of severe 
dislocation, this kind of trouble for millions of American families. We 
should not consciously do harm to people, particularly when we 
understand it is the No. 1 problem facing our health care system today, 
which is the lack of insurance for 42 to 44 million people.
  We should not do this. We should not pass flawed liability 
provisions. I know the Senator from New Hampshire and Senators on both 
sides of the aisle are trying to see if we can get a good provision. 
But should we not get a good liability provision, the Bond amendment is 
a very prudent stopgap measure so as to ensure that we do not go down 
the road of making what is the worst problem facing health care today 
even worse.
  I thank the Chair. I yield the floor.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. BOND. Mr. President, I thank my friend from Pennsylvania for 
making a very compelling argument. I very much appreciate his support 
because we are talking about something that should be of concern to 
every American who wants to be sure that they and their families are 
covered by health insurance. If you price it out of range and lose your 
health care, it does not matter how many independent reviews might be 
provided in the law. If you do not have a plan, they do not do you any 
good.
  The basis for our trigger, our safety valve, is, let's just see if 
this bill has a cost. We say that the Institute of Medicine within the 
National Academy of Sciences can figure it out. It has been indicated 
they can rely on work that has already been done by the General 
Accounting Office, CBO, and other congressional bodies. But for 
constitutional purposes, the ultimate responsibility of this study has 
to be in the executive branch, and that is why it is in the Institute 
of Medicine. We know from our work with the GAO and CBO the kind of 
format, the kind of approach that can be taken. We move

[[Page 11850]]

that function into an executive branch area.
  We say if this bill throws more than 1 million people out of their 
workplace health care coverage or their own health care coverage, then 
we sunset the most expensive part, the liability part.
  I said earlier that the general rule of thumb is that 300,000 people 
will lose their health care coverage if health care costs go up 1 
percent. I ought to be a little more specific and explain something. As 
I understand it, when the costs of this bill are calculated, it is 
impossible to determine how many dollars will be added to the health 
care costs from the liability provisions themselves. Basically, the 
additional responsibilities that go into the bill--setting aside the 
liability questions--the Congressional Budget Office estimated a 
previous and substantially equivalent form of this bill would raise 
private health insurance premiums an average of 4.2 percent. That comes 
from the mandates in coverage, external review, and all those other 
things.
  This 4.2 percent would mean that over 1 million people will be thrown 
out of work. But that does not deal with the number of people who would 
lose their health care coverage because of the exposure to liability or 
because of the costs of liability judgments.
  We probably will not have liability judgments in the first couple of 
years. It will take some time for cases to work their way through the 
court system. But you can bet if a couple of juries come in with the 
billion-dollar judgments that some juries are coming in with now, those 
costs are going to have to be factored into the health care premiums 
for everybody, whether it is an employer, whether it is the employee-
paid provision of it, and there are going to be a lot of people who are 
not going to be patients because they are going to lose their health 
care coverage.
  Then there are those, such as the small businesses I have referenced 
from Missouri, who say: I cannot take the chance; I cannot put my 
business at risk of one of these multimillion-dollar judgments, a tort 
action or contract action--tort action most likely--brought against me 
as an employer because I provide health care insurance or health care 
coverage or a health care plan; I am going to drop the plan.
  We know what happens when they drop the plan. Most of the time the 
employee cannot pick up health insurance for her or his family and 
self. They are going to be out of business. They are going to be out of 
the health coverage that their employers provided. That is over and 
above the directly calculated costs CBO comes up with to say that a 
similar bill would increase health care costs by 4.2 percent.
  The cost of this bill is 4.2 percent plus whatever the impact of the 
liability exposure would be, and we think that is much more significant 
even than the costs of the mandates in the bill. That is why we say if 
1 million people are thrown out of health care coverage as a result of 
this bill--the National Academy of Sciences Institute of Medicine will 
make that report to the Secretary of Health and Human Services--then 
the liability provisions sunset in 12 months and Congress gets to 
review this measure and say: How can we make it work better?
  That is a reasonable approach. It does not require us to make 
judgments, but it does say if 1 million people are thrown out, we need 
to revisit our work.
  Mr. President, I yield the floor.
  Mr. REID. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The senior assistant bill clerk proceeded to call the roll.
  Mr. REID. I ask unanimous consent that the order for the quorum call 
be rescinded.
  The PRESIDING OFFICER (Ms. Cantwell). Without objection, it is so 
ordered.
  Mr. REID. Madam President, what is pending before the Senate?
  The PRESIDING OFFICER. The amendment of the Senator from Missouri, 
Mr. Bond.


                           Amendment No. 812

  Mr. REID. I ask unanimous consent that amendment be set aside and we 
turn to McCain amendment No. 812.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  If there is no further debate on McCain amendment No. 812, the 
question is on agreeing to the amendment.
  The amendment (No. 812) was agreed to.
  Mr. REID. I move to reconsider the vote by which the amendment was 
agreed to, and I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. REID. Madam President, I ask unanimous consent that at 6:05 p.m. 
this evening the Senate vote in relation to the Bond amendment numbered 
816, with no second-degree amendments in order prior to the vote; 
further, that following the vote, Senator Nelson of Nebraska be 
recognized to offer a Nelson-Kyl amendment regarding contract sanctity 
and there be 1 hour for debate this evening, with the time divided in 
the usual form; further, following the use or yielding back of time on 
the Nelson-Kyl amendment this evening, the amendment be laid aside and 
Senator Allard be recognized to offer an amendment regarding small 
employers, with 1 hour for debate this evening, equally divided in the 
usual form; further, that when the Senate resumes consideration of the 
bill at 9:30 a.m. on Wednesday, there be 60 minutes of debate in 
relation to the Allard amendment prior to a vote in relation to the 
amendment, with no second-degree amendments in order prior to the vote; 
further, following the vote in relation to the Allard amendment, there 
be 60 minutes for debate in relation to the Nelson of Nebraska-Kyl 
amendment, followed by a vote in relation to the amendment, with no 
second-degree amendments in order prior to the vote.
  Mr. GREGG. Reserving the right to object, it is my understanding 
there will be no additional amendments this evening other than these 
two.
  Mr. REID. I also say to my friend if any Member feels the necessity 
this evening to debate more, we have no objection.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GREGG. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. REID. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                       Vote on Amendment No. 816

  Mr. GREGG. I ask for the yeas and nays on the Bond amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to amendment No. 816. The clerk will call 
the roll.
  The assistant legislative clerk called the roll.
  Mr. REID. I announce that the Senator from New York (Mr. Schumer) is 
necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 93, nays 6, as follows:

                      [Rollcall Vote No. 198 Leg.]

                                YEAS--93

     Akaka
     Allard
     Allen
     Baucus
     Bayh
     Bennett
     Bingaman
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Byrd
     Campbell
     Cantwell
     Carnahan
     Carper
     Chafee
     Cleland
     Clinton
     Cochran
     Collins
     Conrad
     Craig
     Crapo
     Daschle
     Dayton
     DeWine
     Dodd
     Domenici
     Dorgan
     Durbin
     Edwards
     Ensign
     Enzi
     Feingold
     Feinstein
     Fitzgerald
     Frist
     Graham
     Gramm
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Kyl
     Landrieu
     Leahy
     Levin
     Lieberman
     Lincoln
     Lott
     Lugar
     McCain
     McConnell
     Mikulski
     Miller
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Nickles
     Reed
     Reid
     Roberts
     Rockefeller
     Santorum
     Sarbanes
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe

[[Page 11851]]


     Specter
     Stabenow
     Stevens
     Thomas
     Thompson
     Thurmond
     Torricelli
     Warner
     Wyden

                                NAYS--6

     Biden
     Boxer
     Corzine
     Hollings
     Voinovich
     Wellstone

                             NOT VOTING--1

       
     Schumer
       
  The amendment (No. 816) was agreed to.
  Mr. BOND. I move to reconsider the vote.
  Mr. HATCH. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mrs. BOXER. Mr. President, I voted against the Bond amendment. If 
this legislation is enacted, as I hope it will be, I believe we should 
review it periodically and make changes to ensure that it is working to 
protect Americans against the outrageous practices of some HMOs. An 
annual review, as required by the amendment, would be a good thing. It 
would give us insight into what is working and what may not be.
  However, this amendment goes beyond an annual review. If the number 
of uninsured individuals increases by more than 1 million, the Bond 
amendment gives the Secretary of Health and Human Services the 
authority to take away a person's right to sue an HMO.
  One unelected individual should not have the unilateral power to take 
away every American's right to hold an HMO accountable for its bad 
decisions. I am very supportive of efforts to increase the number of 
people with insurance. I think we need to address that issue. But this 
amendment does not do that. The problem of the uninsured will not be 
solved by allowing a single unelected government official to let HMOs 
off the hook for their actions.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Nebraska will be recognized.
  Mr. REID. 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. KYL. Madam President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 818

  Mr. KYL. Madam President, I have an amendment I send to the desk.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from Arizona (Mr. Kyl), for himself, Mr. Nelson 
     of Nebraska, and Mr. Nickles, proposes an amendment numbered 
     818.

  Mr. KYL. Madam President, I ask unanimous consent reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

(Purpose: To clarify that independent medical reviewers may not require 
 coverage for excluded benefits and to clarify provisions relating to 
            the independent determinations of the reviewer)

       Beginning on page 35, strike line 20 and all that follows 
     through line 8 on page 36, and insert the following:
       (C) No coverage for excluded benefits.--Nothing in this 
     subsection shall be construed to permit an independent 
     medical reviewer to require that a group health plan, or 
     health insurance issuer offering health insurance coverage in 
     connection with a group health plan, provide coverage for 
     items or services that are specifically excluded or expressly 
     limited under the plan or coverage and that are disclosed 
     under subparagraphs (C) and (D) of section 121(b)(1) and that 
     are not covered regardless of any determination relating to 
     medical necessity and appropriateness, experimental or 
     investigational nature of the treatment, or an evaluation of 
     the medical facts in the case involved.
       On page 37, line 16, strike ``and''.
       On page 37, line 25, strike the period and insert ``; 
     and''.
       On page 37, after line 25, add the following:
       ``(iii) notwithstanding clause (ii), adhere to the 
     definition used by the plan or issuer of `medically necessary 
     and appropriate', or `experimental or investigational' if 
     such definition is the same as either--

       ``(I) in the case of a plan or coverage that is offered in 
     a State that requires the plan or coverage to use a 
     definition of such term for purposes of health insurance 
     coverage offered to participants, beneficiaries and enrollees 
     in such State, the definition of such term that is required 
     by that State;
       ``(II) a definition that determines whether the provision 
     of services, drugs, supplies, or equipment--

       ``(aa) is appropriate to prevent, diagnose, or treat the 
     condition, illness, or injury;
       ``(bb) is consistent with standards of good medical 
     practice in the United States;
       ``(cc) is not primarily for the personal comfort or 
     convenience of the patient, the family, or the provider;
       ``(dd) is not part of or associated with scholastic 
     education or the vocational training of the patient; and
       ``(ee) in the case of inpatient care, cannot be provided 
     safely on an outpatient basis;

     except that this subclause shall not apply beginning on the 
     date that is 1 year after the date on which a definition is 
     promulgated based on a report that is published under 
     subsection (i)(6)(B); or
       ``(III) the definition of such term that is developed 
     through a negotiated rulemaking process pursuant to 
     subsection (i).

       On page 66, between lines 10 and 11, insert the following:
       ``(i) Establishment of Negotiated Rulemaking Safe Harbor.--
       ``(1) In general.--The Secretary shall establish, on an 
     expedited basis and using a negotiated rulemaking process 
     under subchapter III of chapter 5 of title 5, United States 
     Code, standards described in subsection (d)(3)(E)(iii)(IV) 
     (relating to the definition of `medically necessary and 
     appropriate' or `experimental or investigational') that group 
     health plans and health insurance issuers offering health 
     insurance coverage in connection with group health plans may 
     use when making a determination with respect to a claim for 
     benefits.
       ``(2) Publication of notice.--In carrying out the 
     rulemaking process under paragraph (1), the Secretary shall, 
     not later than November 30, 2002, publish a notice of the 
     establishment of a negotiated rulemaking committee, as 
     provided for under section 564(a) of title 5, United States 
     Code, to develop the standards described in paragraph (1). 
     Such notice shall include a solicitation for public comment 
     on the committee and description of--
       ``(A) the scope of the committee;
       ``(B) the interests that may be impacted by the standards;
       ``(C) the proposed membership of the committee;
       ``(D) the proposed meeting schedule of the committee; and
       ``(E) the procedure under which an individual may apply for 
     membership on the committee.
       ``(3) Target date for publication of rule.--As part of the 
     notice described in paragraph (2), and for purposes of this 
     subsection, the term `target date for publication' (as 
     referred to in section 564(a)(5) of title 5, United States 
     Code, means May 15, 2003.
       ``(4) Abbreviated period for submission of comments.--
     Notwithstanding section 564(c) of title 5, United States 
     Code, the Secretary shall provide for a period, beginning on 
     the date on which the notice is published under paragraph (2) 
     and ending on December 14, 2002, for the submission of public 
     comments on the committee under this subsection.
       ``(5) Appointment of negotiated rulemaking committee and 
     facilitator.--The Secretary shall carry out the following:
       ``(A) Appointment of committee.--Not later than January 10, 
     2003, appoint the members of the negotiated rulemaking 
     committee under this subsection.
       ``(B) Facilitator.--Not later than January 21, 2002, 
     provide for the nomination of a facilitator under section 
     566(c) of title 5, United States Code, to carry out the 
     activities described in subsection (d) of such section.
       ``(C) Membership.--Ensure that the membership of the 
     negotiated rulemaking committee includes at least one 
     individual representing--
       ``(i) health care consumers;
       ``(ii) small employers;
       ``(iii) large employers;
       ``(iv) physicians;
       ``(v) hospitals;
       ``(vi) other health care providers;
       ``(vii) health insurance issuers;
       ``(viii) State insurance regulators;
       ``(ix) health maintenance organizations;
       ``(x) third-party administrators;
       ``(xi) the medicare program under title XVIII of the Social 
     Security Act;
       ``(xii) the medicaid program under title XIX of the Social 
     Security Act;
       ``(xiii) the Federal Employees Health Benefits Program 
     under chapter 89 of title 5, United States Code;
       ``(xiv) the Department of Defense;
       ``(xv) the Department of Veterans' Affairs; and
       ``(xvi) the Agency for Healthcare Research and Quality.
       ``(6) Final committee report.--
       ``(A) In general.--Not later than 1 year after the general 
     effective date referred to in section 401, the committee 
     shall submit to the Secretary a report containing a proposed 
     rule.
       ``(B) Publication of rule.--If the Secretary receives a 
     report under subparagraph

[[Page 11852]]

     (A), the Secretary shall provide for the publication in the 
     Federal Register, by not later than the date that is 30 days 
     after the date on which such report is received, of the 
     proposed rule.
       ``(7) Failure to report.--If the committee fails to submit 
     a report as provided for in paragraph (6)(A), the Secretary 
     may promulgate a rule to establish the standards described in 
     subsection (d)(3)(E)(iii)(IV) (relating to the definition of 
     `medically necessary and appropriate' or `experimental or 
     investigational') that group health plans and health 
     insurance issuers offering health insurance coverage in 
     connection with group health plans may use when making a 
     determination with respect to a claim for benefits.

  Mr. KYL. Madam President, this amendment is offered on behalf of 
myself and Senator Nelson. It is an amendment that deals with the 
definition of ``medical necessity'' under the bill and is intended to 
provide a safe harbor for those who comply with certain requirements. I 
should also say this amendment is also offered on behalf of Senator 
Nickles. I apologize to my colleague from Oklahoma.
  First, let me offer some general views on S. 1052, the Kennedy-McCain 
Patient Protection Act, and then I will discuss this amendment.
  As you know, President Bush has reiterated his intention to veto this 
legislation because, in his view, it ``would encourage costly and 
unnecessary litigation that would seriously jeopardize the ability of 
many Americans to afford health care coverage.'' None of us wants that 
result. As a result, we are trying to do our best to work with the 
sponsors of the bill to make some changes that would make it palatable 
to both the President and to most of us in this Chamber.
  My concerns include the fact that it will undoubtedly raise premium 
costs due to new lawsuits and increased regulation, that it will 
undermine the States' traditional role of regulating the health 
insurance industry and make employers who voluntarily provide health 
care coverage to their employees vulnerable to frivolous lawsuits, and 
that it will violate the terms of the contract between the employer and 
the health plan. This latter issue is the one the Nelson-Kyl-Nickles 
amendment is intended to address.
  Under S. 1052, the external reviewer is ``not bound by'' the 
``medical necessity'' definition contained in the plan document. And 
there is no substitute definition provided, so there is really no 
standard for review.
  Let me put in context what this means. What we have provided for here 
is a method by which people will actually get the care they believe 
they have contracted for and deserve. The object is not to create a 
lawsuit to try to pay the money after the fact for some injury they 
suffered but, rather, to get the care for them upfront. That is what 
this should all be about.
  So we have a review process by which first somebody within the 
company, and then an external reviewer, takes a look at the case and 
says: All right, this is what the contract means. This is what medical 
care would require under this circumstance as called for under the 
contract, and therefore the patient is entitled, or is not entitled, to 
this particular procedure.
  That review process is supposed to occur quickly so that the patient 
receives the care he or she has contracted for and deserves under the 
circumstances.
  In order for an external reviewer to know whether or not a particular 
procedure or treatment is called for, there has to be some standard by 
which to judge that. The Presiding Officer and the other lawyers in 
this body will know that anytime you ask some reviewer to determine 
whether or not something has to be done, you need to provide some 
standard upon which that reviewer can base a decision.
  The bill right now contains no standard, and it needs such a 
standard. Our amendment supplies that standard. We believe it supplies 
a very fair and reasonable standard. The language in S. 1052 gives the 
external reviewer a free hand to disregard the definition of ``medical 
necessity'' contained in the contract and, as I say, supplies no 
substitute definition.
  As in all of the bills, this external review requirement is the last 
process prior to going to court. But, as I said, the external reviewer 
is ``not bound by'' the contract's key definition of ``medical 
necessity'' or ``experimental and investigational.'' As a result, the 
external reviewers can simply make up their own definition of ``medical 
necessity.''
  Private contracts negotiated between the parties--insurers and 
employees, or insurers and individual consumers--would become virtually 
meaningless in this circumstance, and the financial obligations of the 
health plan could become totally unpredictable.
  The plan or insurer could become obligated to pay for items or 
services based on definitions outside the contract, even potentially 
including contractually excluded items that were deemed to be medically 
necessary by the reviewer. The ``not bound by'' provision, therefore, 
would have the effect of eliminating the ability of the parties to 
negotiate the key terms and conditions of health insurance contract 
agreements.
  Madam President, in addition to vitiating legal contracts, the ``not 
bound by'' language would have the following negative effects.
  First, inconsistent standards: The standards used by reviewers would 
vary with each review panel and with each case within the same plan. We 
are trying to create some degree of uniformity with this legislation, 
but under the bill you could have the potential for a wide variety of 
very arbitrary decisions because of the lack of a standard.
  Second, quality of care: The mere threat of contract nullification 
could prompt some plans to pay for all claims regardless of the cost 
and the impact on the quality of patient care.
  Solvency and stability: The use of unpredictable outside definitions 
of medical necessity will impose costs for unanticipated treatments not 
reflected in actuarial data used to determine the amount of the health 
care premium.
  And finally, cost increases: Solvency concerns would result in 
increased cost for employers and increased premiums for employees.
  The net result of that, of course, will be to remove more people from 
the rolls of the insured.
  Under S. 1052 as written, these contracts, negotiated between the 
parties and often approved by State insurance regulators, will be 
voidable, not by a judge or a court of law but by an unrelated 
nonjudicial third-party reviewer. This will undermine the principles of 
the contract as well as due process.
  So, as I said, to address this problem we have sponsored an amendment 
that would allow the plan to adopt a widely accepted safe harbor 
definition of medical necessity as its contract definition. If a plan 
utilized this safe harbor definition, then the external reviewer would 
be bound by it when hearing a patient's appeal of denial of coverage.
  Safe harbor definitions contained in the amendment are basically at 
three different levels. First, we take the definition from the Federal 
Employee Health Benefits Plan that currently covers about 73 percent, 
as best we can calculate it, of the employees under the Federal 
Employee Health Benefits Plan. Over 6 million Federal employees and 
Members of Congress are covered by this definition.
  It is important to recognize--I think some of our friends on the 
other side misunderstood and thought we were offering an amendment that 
had been offered a couple years ago; I want to make it very clear--this 
definition is not the FEHBP or Office of Personnel Management 
definition for managed care plans, for HMO plans.
  This definition is the definition for the fee-for-service plans. As a 
result, it is a more strict definition. The insurance companies are 
going to have to provide a higher quality of care under this definition 
than they would under the HMOs that provide some coverage to roughly 
one-fourth of the people served under the FEHBP program.
  So, first of all, we have this definition. I will actually read it in 
just a moment.
  Secondly, there are going to be some States that already have a 
binding State statutory definition. There are 13 of them. Of course, a 
legally binding State definition of medical necessity would apply to 
claims filed in those

[[Page 11853]]

States. That would constitute a safe harbor for the companies that use 
that definition. Obviously, it would be only prospective, not an after-
the-claim adoption of the definition. So obviously that would have to 
apply.
  Third, if there is a question about whether this first FEHBP 
definition works or that people like it, we have established a 
negotiated rulemaking process under the bill which would involve all of 
the stakeholders involved--the plans, the employers, providers, and 
consumers--and they could arrive at a definition that is different if 
they felt that it could be improved.
  If the rulemaking failed to arrive at a definition, then, again, you 
either have a State definition or the FEHBP definition we provide. But 
if the rulemaking did achieve a definition that all agreed to, that 
then would supplant the FEHBP definition we have.
  I will ask staff to give me the actual language now since I gave the 
copy of my legislation to the clerk. I would like to read the elements 
of this definition now. This is the definition, as I say, that already 
applies to, we know, about 49 percent of the employees, and we think it 
applies to another 23 or 24 percent as well.
  First of all, the determination provides whether services, drugs, 
supplies, or equipment provided by a hospital or other covered provider 
are, No. 1, appropriate to prevent, diagnose, or treat your condition, 
illness, or injury--obviously, very straightforward and, No. 2, 
probably the most important point, consistent with standards of good 
medical practice in the United States. That is the key. If the employee 
argues that something is being denied in the way of treatment or care 
and good standards of good medical practice in the United States would 
call for that treatment, then that treatment will have to be provided 
under this definition. So standards of good medical practice is the 
same standard essentially that would be used in a court case. It is the 
same standard that is used for most of the Federal employees. It is 
obviously a good standard to use.
  There are three other aspects of it. I will read each of the three. 
They deal with very specific situations: Not primarily for the personal 
comfort or convenience of the patient, the family, or the provider; No. 
4, not part of or associated with scholastic education or vocational 
training of the patient; and No. 5, in the case of inpatient care, 
cannot be provided safely on an outpatient basis. That would enable the 
treatment to be provided on an outpatient basis if it could be done.
  It is a very straightforward definition. It is one that has been used 
literally hundreds of times. It covers a significant portion of the 6 
million people covered, and we think it is a good definition to be 
included in this legislation.
  We think it represents a reasonable compromise on the one hand 
between requiring an external reviewer to be bound by a too narrow 
definition in a ``rogue'' plan contract and, on the other hand, 
affording a majority of the plans that operate in good faith the 
opportunity to adopt a widely accepted safe harbor definition of 
medical necessity to which the external reviewer would be bound.
  Madam President, we think this is a good compromise. It is clearly 
important for us to include some kind of definition in the legislation. 
We had hoped that the sponsors of the legislation would be willing to 
work with us to include this definition. So far they have declined to 
do so. But I am hopeful that we can continue to talk with them, and 
perhaps we can reach some understanding that would enable us to 
substitute this definition for the lack of a definition in the 
legislation right now.
  At this point, I yield time to the cosponsor of the amendment, Ben 
Nelson, the Senator from Nebraska.
  The PRESIDING OFFICER. The Senator from Nebraska is recognized.
  Mr. NELSON of Nebraska. Madam President, I rise today to offer, along 
with my colleague and friend from Arizona, Senator Jon Kyl, an 
amendment to protect the sanctity of health insurance contracts, to 
provide certainty and clarity so that both the issuer and the insured 
can know what coverage they have.
  This amendment will preserve a patient's right to receive the health 
benefits that they paid for while keeping insurance premiums 
affordable. In more colloquial terms, this amendment is what is needed 
to see that the people who pay for health care coverage get it. It may 
sound extraneous, and this is anything but exciting language, but I 
know from my experience as a State insurance commissioner in Nebraska 
two decades ago that this amendment is essential for the preservation 
of what I believe is an extraordinarily fundamental patient right.
  Before I elaborate further on this point, let me state that I think a 
Patients' Bill of Rights is not only a good idea; it is an excellent 
idea. I believe Congress should be acting in the best interests of all 
Americans to enact such legislation.
  We need a Patients' Bill of Rights to ensure that doctors make 
medical decisions. We need a Patients' Bill of Rights to protect 
patients and federally regulated health care plans that are currently 
unprotected and have been unprotected for more than two decades. We 
need a Patients' Bill of Rights to guarantee patients' access to 
independent and external medical review and, only as a last resort, to 
guarantee them access to the courts.
  There is no shortage of reasons why this legislation merits passage.
  But before my support for a Patients' Bill of Rights is misconstrued 
as an ``anything goes'' approval, I want to be clear that while I 
believe the Senate should approve a Patients' Bill of Rights, I think 
that some improvements are justifiable. And right now, we have the 
opportunity to make those much-needed improvements which will 
ultimately increase the effectiveness of the Patients' Bill of Rights.
  I believe the bill needs to carefully consider matters such as the 
issue addressed by this amendment pertaining to the sanctity of health 
insurance contracts. And I hope that the sponsors of the legislation 
will look very favorably on this matter and that we will be able to 
work out an arrangement or agreement to get it included as part of the 
bill.
  First, this amendment would ensure that patients receive the care 
that they are entitled to under the plans to which they subscribe. 
External reviewers would be required to assess treatment options based 
on the contract that exists between the patient and the plan.
  Patients would be entitled to the care outlined as a provided benefit 
within the contract that exists. External reviews would not be able to 
circumvent the contract to force employers to expand coverage for any 
particular patient unless the patient was entitled to the care as 
specified by the care contract.
  This will help keep down the high cost of health care and, at the 
same time, will enable employers to continue to provide their employees 
with the best care possible.
  More importantly, this amendment will provide three safe harbors for 
employers with respect to protecting them against unnecessary 
litigation over treatment. While patients will have the right to sue 
under this bill, this amendment will more clearly define the parameters 
by which treatments can be determined as ``medically necessary'' and 
thus will provide a safeguard of medically necessary standards for 
employers that administer their own health plans.
  The McCain-Edwards-Kennedy bill contains something that I think would 
currently require external reviewers to abide by the standard for the 
determination of medical necessity included in the bill, but it doesn't 
bind the reviewers by the insurers' definitions for medical necessity. 
This is problematic as it relates to the existing contract between 
patient and provider and provides a great deal of unclarity and 
uncertainty.
  So to remedy this situation, this amendment proposes to identify 
three separate and distinct sources of definitions that employers could 
choose to use in the contract by which reviewers will be bound. The 
three options that we create for the plans are:

[[Page 11854]]

  One, a definition that plans are required to use by State law. This 
would protect the previously existing and any newly created State laws 
that require plans to use a definition put forward by the State.
  Second, any definition used by a plan which is codified by the 
language in the fee-for-service agreement that is currently covering 
maybe 50 to 75 percent of the Federal employees under the FEHBP, or the 
Federal Employees Health Benefit Program, would be used by the plans 
covering those who would be covered under these ERISA plans. What that 
means is, if it was good enough for Members of Congress and Federal 
employees, this certainly ought to be good enough for everyone else.
  Three, a definition that is to be developed through negotiated 
rulemaking. This option requires the Secretary of Labor to develop a 
rulemaking committee that will seek public comment to develop a 
definition of ``medical necessity.'' In other words, State laws will be 
recognized and respected. Secondly, there will be a definition that is 
now included as a fee-for-service definition in the current Federal 
Employees Health Benefit Program. And in the event that a rulemaking 
process is negotiated through the Department of Labor, the rulemaking 
committee will seek public comment to develop a definition of what is 
``medical necessity.''
  The negotiated rulemaking committee, the third item of this three-
pronged approach, will consist of at least one individual representing 
each of the following groups: Health care consumers, small employers, 
large employers, physicians, hospitals, other health care providers, 
health insurance issuers, State insurance regulators, health 
maintenance organizations, third party administrators, the Medicare 
Program, the Medicaid Program, the Federal Employees Health Benefits 
Program, the Department of Defense, the Department of Veterans Affairs, 
and the Agency For Health Care Research and Quality. That is quite a 
list of individuals for public comment and public input.
  This committee would have until 1 year after the general effective 
date of the bill's implementation to propose a rule to the Secretary. 
The Secretary, then, would be required to publish the rule within 30 
days of the receipt.
  Madam President, our goal is to ensure that all patients have access 
to all treatment options available under their plans. We need to 
provide this access without undermining the integrity of the contract 
between the patient and the provider. Without some standard for a 
definition on ``medical necessity,'' these objectives would be 
impossible to obtain. Both parties are entitled to certainty and 
predictability. This will provide it. Without passage of this 
amendment, there will be both uncertainty and a lack of predictability 
and neither party will be benefited.
  I ask my friends and colleagues to consider this amendment as one 
that will improve the McCain-Edwards-Kennedy HMO reform bill. I ask for 
their support.
  The PRESIDING OFFICER. Who yields time?
  Mr. KENNEDY. Madam President, I reluctantly have to rise in order to 
oppose the amendments of my good friends on the issue of medical 
necessity. I outlined earlier in the day the basic judgment and basic 
history of how we reached the language that we have included in our 
bill.
  First, let us look at what will be the standard that is in both the 
McCain-Edwards bill, as well as in the Frist-Breaux bill. Effectively, 
both treat this particular issue of medical necessity the same. This is 
a result of the fact that this issue had been debated 21/2 years ago 
when we considered the Patients' Bill of Rights here and in the House 
of Representatives. We tried to define the test on medical necessity 
during that period of time. What we resolved is to permit, at the time 
of the external review, the kind of test that we have included in our 
language here and in the Frist-Breaux language. This was actually the 
language which was agreed to in the conference last year, a conference 
that never resulted in an overall outcome of the legislation. 
Nonetheless, we had agreed on a handful of different areas of dispute. 
That was agreed to by my colleagues, Phil Gramm, Don Nickles, myself, 
and others, after a good deal of negotiation.
  It seems wise to continue that particular proposal because basically 
this is what we are doing. At the time of the appeal of any of these 
medical necessity issues, we are permitting for the standard of 
determination in our bill, on page 35: ``The condition shall be based 
on the medical condition of the participant.'' That is obvious. No. 1, 
what is wrong with the patient? And then it talks about ``valid, 
relevant, scientific evidence and clinical evidence, including peer-
reviewed medical literature and findings, including expert opinion.''
  Basically, the reason for that is to allow for the possibility that 
we find out there are new kinds of discoveries, new kinds of 
techniques, new kinds of treatments for various health conditions. In 
order to not use a stagnant kind of proposal, we included that 
language. This language which was agreed to is supported by the 
American Medical Association and other medical groups.
  So in the legislation that we have here in the McCain-Edwards 
proposal, which I support, and the Frist-Breaux proposal, which others 
including the President of the United States support, and in the 
agreement that was made by Republicans and Democrats alike, we agreed 
effectively to this language. This agreement occurred after considering 
all the different kinds of proposals. It raises questions of why we are 
today attempting to alter that particular proposal.
  The argument is, first of all, that we can offer three different 
options. One would be that the administration can propose an 
administrative group, a commission that can make some recommendations 
about what that standard would be.
  That may work out, but it may not work out very well if we have an 
administration that is not as sympathetic to the protection of 
patients' and doctors' decisions as we have tried to be in this 
undertaking. That is one way of doing it.
  Second, the results of State actions can be the criteria. In some 
States the protections have been very good, and other States have left 
a lot to be desired.
  I understand the basic thrust of this legislation is to establish 
minimum standards. If States want to have higher protections for 
consumers, they are welcome to do it. What we are trying to do is 
ensure that all Americans, all American families are protected.
  In the area of scope, all Americans being protected--actually, every 
Republican proposal that was considered in the House of Representatives 
included all Americans--we were attempting to ensure that there was 
going to be a minimum standard. However, we can use another standard, 
such as the good Federal employee standard to which the Senator just 
referred.
  It is interesting, though, that the Office of Personnel Management 
does not use the Federal employee standard on their reviews. What do 
they do? They do something very similar to what we have done. They 
permit the doctor to make the ultimate decision and not be bound by 
some definition. The reason for this is because they do not believe 
that that should to be the restrictive definition for all appeals.
  In turn, there is a Federal employee program of which all of us are a 
part. In our program if there is going to be an appeal, this is a 
different standard. Basically, it is a standard that permits the 
doctors to make the judgments and decisions.
  I find it difficult to be convinced at this hour. We waited a good 
deal of time. I know we were all pressed with the different proposals. 
I have had a chance to talk to my friend and colleague, Senator Nelson, 
on a number of different provisions. From personal experience, I can 
tell that this is a Senator who has spent a good deal of time on this 
legislation and has been willing to spend a great deal of time visiting

[[Page 11855]]

with me and with others, and also talking extensively with the House 
Members who are interested in various provisions. I know a good deal of 
thought has gone into this matter.
  My final point is the underlying commitment of this legislation to 
make sure that doctors are going to make the decisions. Trained medical 
personnel and families are going to make these judgments and decisions. 
It seems to me that when we have included in the legislation's 
language--in fact, insisted on--permitting the doctor to use the best 
medical information and judgment of this decision making and will 
permit them to also take advantage of the latest ideas, new 
conclusions, new consensus of the treatment of various medical 
conditions, this is the best way rather than a review being bound up in 
some process.
  We do not know tonight, for example, whether the board is going to be 
overly sensitive to the consumers and patients. There is a wide variety 
of interpretations in many of the States.
  This is unlike other parts of this legislation where there is a 
difference between what we have proposed, what is included in Breaux-
Frist, and what the President has recommended. In these areas, the 
McCain-Edwards proposal, the Breaux-Frist proposal, the conference 
committee by Republicans and Democrats alike, and the President have 
reached similar conclusions. This is one of the most important areas of 
the legislation. It seems to me what we have in the underlying 
legislation is completely consistent with what the President has 
indicated would be key to this legislation.
  Mr. President, I yield 10 minutes to my colleague.
  The PRESIDING OFFICER (Mr. Durbin). The Senator from North Carolina.
  Mr. EDWARDS. Mr. President, I start by thanking my two colleagues, 
the Senator from Arizona, my good, dear friend from Arizona, for his 
work on this issue, and now my friend from Nebraska, with whom I have 
had occasion on this specific bill to work many days and many hours. As 
the Senator from Massachusetts has suggested, he has great expertise in 
this area, both in his time as insurance commissioner and his time as 
Governor. He and I have worked together on a number of issues, such as 
employer liability which we will be offering an amendment on hopefully 
tomorrow. We have talked about a number of other issues, such as the 
scope of the legislation, and medical necessity is another issue in 
which the Senator has been actively involved.
  I specifically thank him for his work on this issue on behalf of the 
people of Nebraska whom he represents. He has been extraordinarily 
diligent and involved in this very important issue of the Patients' 
Bill of Rights and patient protections. I thank him very much for all 
of his work and will continue to work with him. He has had terrific 
ideas all the way through the discussion.
  As to this specific amendment, I announce to my colleagues that we 
have negotiated during the course of the day with other Senators 
besides the sponsors of this amendment and have reached an agreement on 
a compromise that we believe accurately and adequately reflects a 
balance between recognizing the sanctity of the contract language while 
at the same time giving medical reviewers the flexibility they need to 
order care in those cases where the care needs to be ordered.
  Tomorrow we anticipate an amendment being offered by Senators Bayh, 
Carper, and perhaps others, that will reflect the results of those 
negotiations. We feel very pleased we were able to resolve that issue 
with some of our colleagues.
  For that reason, we will not be able to support this particular 
amendment, but I believe our amendment goes a long way toward 
addressing the same issues that my colleagues are trying to address 
with this amendment. Their work is helpful and productive, and we 
appreciate it very much.
  Tomorrow morning we will be offering the results of the work we have 
done with Senators Bayh, Carper, and others which, as I indicated, 
properly reflects the balance between the importance of the language of 
the contract and showing deference to that language while at the same 
time recognizing that in some cases the medical reviewers will need 
some more flexibility to do what is necessary for a particular family 
or for a particular patient.
  Mr. KENNEDY. Will the Senator yield?
  Mr. EDWARDS. Yes.
  Mr. KENNEDY. Will the Presiding Officer let us know when we have 5 
minutes remaining?
  The PRESIDING OFFICER. The Chair will do so.
  Mr. KENNEDY. As I understand it, and I can be corrected, under one of 
the provisions, HHS establishes a board. At some time the board tries 
to work out the definition, but we do not know how that will work out, 
what the framework will be, or how many patients, consumers, and HMO 
personnel will be on the board. That board will have a meeting, and 
they will work out some definition of ``medical necessity'' which 
creates a degree of uncertainty.
  Second, we have questions about the States, some of which have 
adopted various criteria about what is medical necessity.
  Third, we have the Federal employees health program, which, as I 
mentioned, is not the standard which is used on review by the Office of 
Personnel Management. They don't use that. They use a standard much 
closer to what we have. Even on that standard, many cancer groups are 
very concerned about possible restrictions on palliative care, care 
which is enormously important to cancer patients. We have heard from a 
number of cancer organizations about their serious concern regarding 
this particular point. On the other hand, they are in support of the 
language we have included in the Edwards bill.
  First, we know we have something that the American Medical 
Association, the medical professionals, patients, the doctors, and the 
health care delivery system have said is a good standard. Our opponents 
offer a standard that may turn out to be fine in the future but we 
don't know. And secondly, as another standard which has serious 
problems with the cancer community because it raises questions, doesn't 
the Senator agree with me, we ought to use what is now agreed to by 
Republicans, by Democrats? Most importantly, ought we not use the 
standard endorsed by those within the medical profession? If this 
standard does not work, we will have an opportunity to take a look down 
the road in terms of altering and changing. Is that a preferable way to 
proceed?
  Mr. EDWARDS. I agree with the Senator.
  As the Senator knows, the legislation offered by the Senator, myself, 
and Senator McCain, this specific language is supported by the medical 
groups from around the country involved with this issue on a daily 
basis that have a first-hand understanding of what works and what 
doesn't work. We have been working with those groups to fashion this 
language. That is the reason that language exists. We know from the 
American Medical Association and all the health care groups around the 
country that they support the language we have in the bill.
  That having been said, I say to the Senator, in order to try to 
address some of the concerns raised, my colleagues who are the sponsors 
of this amendment have been working with a group of Senators today to 
fashion an alteration to this language that makes it clearer that the 
contract language will be respected but balances that against the need 
for flexibility with the review panel. I believe we will have an 
amendment tomorrow to offer on that subject.
  I end by thanking my colleagues from Arizona and Nebraska. While I 
will not be able to support their amendment, we understand the issue. 
We believe our bill is adequate on this issue, but we will have an 
alternative to propose tomorrow. Ultimately the point of this, of 
course, is to protect patients, make sure patients get the care they 
need. I think the language in our bill plus the language in the 
amendment will accomplish that purpose.
  I yield the floor.
  Mr. NICKLES. Mr. President, I rise in support of the amendment and I

[[Page 11856]]

urge my colleagues to support it. I will make a couple of comments 
about some of the statements that were made.
  I appreciate Senator Edwards' comments saying we are willing to have 
an amendment tomorrow to try to fix part of the problem. We heard that 
earlier today when we had an amendment to exempt employers.
  There were statements made by many proponents of the language, 
employers can't be sued under this bill. That is a direct quote. So 
earlier today we tried to make sure employers couldn't be sued, and 
people voted against the amendment. But we heard: Well, there is an 
amendment coming that will protect employers.
  We understand this bill language, and there is a section that deals 
with employers that says employers shall be excluded from liability, 
and then there is an exception. As a matter of fact, on page 144, 
causes of action against employers and plan sponsors are precluded, 
paragraph (A).
  Paragraph (B) says:

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

  We tried to make sure employers would be exempted, and unfortunately 
that amendment didn't pass. But we did hear assurances from some of the 
sponsors, we have an amendment and we will protect employers. But, yes, 
employers can be sued because obviously the Gramm amendment didn't 
pass. So I just mention that.
  We raised the point, and it was raised well by Senator Kyl from 
Arizona and Senator Nelson of Nebraska, that said we are not bound by 
contracts, and there is all kinds of language here dealing with 
contracts. You don't have to have coverage for excluded benefits. That 
sounds very good, but there is language ``except for,'' language that 
says you have to cover benefits that are excluded from a contract. Then 
I heard my colleague from North Carolina say we will have an amendment 
tomorrow to take care of that.
  There are several major provisions with this bill that are wrong, one 
of which is the liability is far too generous and one which says the 
contracts don't mean anything. So we are wrestling with the liability.
  We tried to exempt employers today and were not successful. Now we 
are working on contract sanctity. I hope all Democrats and Republicans 
will look at the language that is in the bill and realize how far it 
goes and think about what is getting ready to happen. I use for an 
example President Clinton's appointment of a bipartisan commission to 
make recommendations on this issue. They said in the report:

       The right to external appeals does not apply to denials, 
     reductions, or terminations of coverage or denials of payment 
     for services that are specifically excluded from the 
     consumer's coverage as established by contract.

  In other words, the report to the President by the Advisory 
Commission on Consumer Protection and Equality in Health Care says if 
it is excluded in the contract, you don't have the right to even have 
an appeal. That is not appealable. In other words, if the contract says 
don't cover it, it shouldn't be covered.
  Yet in the language in the bill, did we adhere to the President's 
commission? No. If you look at the language on page 35 of the bill:

       No Coverage for Excluded Benefits.--Nothing in this 
     subsection shall be construed to permit an independent 
     medical reviewer to require that a group health plan, or 
     health insurance issuer offering health insurance coverage, 
     provide coverage for items or services for which benefits are 
     specifically excluded or expressly limited under the plan or 
     coverage in the plain language of the plan document--

  If it stopped there, it would be great, but it doesn't stop there, if 
you read the additional language:

     and which are disclosed under section 121(b)(1)(C) except to 
     the extent that the application or interpretation of the 
     exclusion or limitation involves a determination described in 
     paragraph (2).

  In other words, you don't have to pay for an excluded benefit 
``except for.''
  Wait a minute, you have a contract, and a medical provider says, I 
will provide this list of contracts and I will charge so much per month 
to provide these contracts, and this bill says we are not going to 
overturn that exclusion. That is what the first part of the paragraph 
says. And the second part of the paragraph says ``except for,'' and you 
have to ask, well, what do you mean ``except for''? Start reading: 
except for medically reviewable decisions, and it turns out anything is 
a medically reviewable decision.
  So anyone can say it is medically reviewable if the denial is based 
on medical necessity and, appropriately, denial based on experimental 
or otherwise based on evaluation of medical facts. The net result is, 
bingo, anything is covered. You have a lottery.
  I heard my colleague from Massachusetts--and I have great respect for 
him--say we had an agreement last year and basically Senator Nickles in 
the conference committee agreed to this language.
  We did not. I will make a few comments to get specific on the 
language. We came close in a lot of areas. But I will refresh my 
colleagues on things we did agree to that do not appear in the bill 
today.
  I have a document, agreed-to elements of the external appeals 
section, dated April 13, 2000, 6 o'clock. We agreed to many items which 
were not in the underlying bill. I don't think you can say we agreed to 
one provision--whoops, we forget to say we agreed on a lot of other 
things.
  We agreed that a patient should have access to independent reviews 
for any denial of claim of benefits, No. 1, if the amount of such item 
or service exceeds a significant financial threshold or, No. 2, if 
there is a significant risk of placing the life, health, or development 
of the patient in jeopardy.
  I see in the bill we have before us there is no such thing as a 
financial threshold. This clearly violates the so-called agreement that 
was entered into last year.
  Further, the language regarding the ``denial creates a significant 
risk of placing the life health or development of the patient in 
jeopardy'' is not in the bill before us. It is not in the McCain-
Kennedy-Edwards bill.
  It is interesting; that language was in the original Senate bill, S. 
6. It was also in President Clinton's report on quality. But it is not 
in the bill that we have before us. It is not in the McCain-Kennedy-
Edwards bill. My point is, before we had included some language to try 
to make sure we would have some protections and that was disregarded.
  In addition, last year we agreed to a $50 filing fee to discourage 
frivolous filings. I see this particular agreement was also absent from 
today's version. The bill before us has a $25 filing fee. One of the 
reasons why we had a $50 filing fee was because we did not want 
frivolous filings. We didn't want people to say:
  I will appeal. Maybe I will get lucky; maybe I will have extra 
benefits, more coverage; maybe I can lay a predicate for lawsuits in 
the future. What do I have to lose? If you had a little more of a 
threshold, it may discourage frivolous suits.
  We also agreed at one time to consider expert opinion if it was by 
informed, valid, and relevant scientific and clinical evidence. The 
language we have before us on page 35 talks about the standard for 
determination. It says we are going to review:

       . . . valid relevant scientific evidence and clinical 
     evidence, including peer-reviewed medical literature and 
     findings including expert opinion.

  But it did not include everything we had agreed to in the past.
  What I do recall is last year we did agree that both sides maintained 
there was a goal to maintain the sanctity of the contract and not 
establish appeals which allowed for the coverage of any excluded 
benefit. In fact, the very basis for today's debate is ensuring that 
patients are not denied promised benefits. It is not a debate to create 
a process to resolve and order unpromised benefits.
  I think the language we have before us in the McCain-Kennedy-Edwards 
bill does just that. It is the legislative process that we would make 
where people could get unpromised benefits, to get items that in some 
cases are contractually prohibited to be covered benefits.

[[Page 11857]]

  That is a stretch. Federal employees do not have that; Medicare does 
not have that; Medicaid doesn't have it. There is a list of covered 
benefits and there is also a list of excluded benefits.
  I will give an example and I will put this in the Record. This is 
from CHAMPVA. It has a list of about 25 items that are excluded, 
specifically, from VA coverage. I will mention a couple of them: 
acupuncture, air conditioners, humidifiers, exercise equipment, 
eyeglasses, and contact lenses.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. NICKLES. I ask unanimous consent to proceed for another 6 
minutes.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered. The Senator may proceed.
  Mr. NICKLES. Health club memberships, hearings aids or hearing aid 
exams, homemaker services, hypnosis, massage therapy, physical therapy 
consisting of general exercise programs, plastic and other surgical 
procedures primarily for cosmetic purposes, smoking cessation programs, 
and several others.
  My point is, here is a Government plan for veterans that has 
specifically excluded items that should not be covered. I will venture 
to say every private health care plan has excluded items as well. Under 
the bill we have before us, it says you don't have to cover excluded 
items except for--and then it opens the door. That, to me, says do not 
pay any attention to the contract. Contracts do not mean anything.
  What is the net result of that? If people who have contracts are not 
bound by the contracts, then the cost of providing health care is going 
to go way up. There is no real definitive way of knowing how much the 
coverage is going to cost because it is not defined coverage. There is 
nothing you can bank on.
  I compliment my friends and colleagues from Arizona and Nebraska for 
their leadership in putting this amendment together. This amendment is 
equally as important--maybe not quite as easy to understand but very 
much as important--for containing the cost of health care as anything 
we have considered so far. Are we going to allow people to have 
contracts? Are we going to live by those contracts? Or are we going to 
take the language in this bill and say: Contracts? We don't care. Are 
we going to violate what the President's Commission on Health Care 
said? They said you should not cover items that are excluded from 
contracts. Are we just going to ignore it as does the underlying 
McCain-Kennedy-Edwards bill? Are we going to have a medical necessity 
definition that is the same thing Federal employees have on their fee-
for-service plans, which is a quality plan which most all of us are in 
and most all of us are happy with? Isn't that good enough? Can't we 
give some assurances that those are things that people can rely on?
  Again, I compliment my colleague from Nebraska, Senator Nelson, for 
his expertise. He brought this to my attention when I was discussing 
this legislation. He was exactly right. He said this has to be fixed. 
We are working to fix it. We can fix it.
  I urge my colleagues, let's not just be voting on remote control, on 
how some leaders tell us how to vote. Let's look at the language. Do 
you really want to have language that basically abrogates contracts, 
ignores contracts, no telling how much it can cost and also, 
incidentally, have liability?
  You could have, under the McCain-Kennedy bill, a situation where 
somebody doesn't provide a service that is contractually prohibited and 
they can be sued because some expert might determine it is medically 
necessary. This expert might be a acupuncture specialist and they might 
determine that what you need to solve your back problem is acupuncture 
and even though your contract, as VA's, says you do not have to cover 
it, you have to cover it because that is a solution and under the bill 
it says expert opinion. So maybe it should be covered.
  If you think that is a stretch, it is not a stretch. You can find 
experts to say almost anything in the medical field and sometimes in 
the legal field.
  My point is this bill undermines contracts in a way in which I think 
we should be very, very wary. We should not do this. My colleagues from 
Nebraska and Arizona have come up with a good fix, a good solution. I 
appreciate that the Senator from North Carolina said he is amenable to 
fixing this problem. The way to fix it is to pass the Kyl-Nelson 
amendment. I urge my colleagues to vote for this amendment tomorrow 
morning.
  I thank the indulgence of my colleagues I yield the floor, and ask 
unanimous consent the CHAMPVA list be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

            Other Medical Services . . . What Is Not Covered

              (Not all-inclusive--see Specific Exclusions)

       Acupuncture.
       Acupressure.
       Air conditioners, humidifiers, dehumidifiers, and 
     purifiers.
       Autopsy.
       Aversion therapy.
       Biofeedback equipment.
       Biofeedback treatment of ordinary muscle tension or 
     psychological conditions.
       Chiropractic service.
       Exercise equipment.
       Eyeglasses, contact lenses, and eye refraction exams--
     except under very limited circumstances, such as corneal lens 
     removal.
       Foot care services of a routine nature, such as removal of 
     corns, calluses, trimming of toenails, unless the patient is 
     diagnosed with a systemic medical disease.
       Health club memberships.
       Hearing aids or hearing aid exams.
       Homemaker services.
       Hypnosis.
       Medications that do not require a prescription (except for 
     insulin and other diabetic supplies which are covered).
       Massage therapy.
       Naturopathic services.
       Orthotic shoe devices, such as heel lifts, arch supports, 
     shoe inserts, etc., unless associated with diabetes.
       Physical therapy consisting of general exercise programs or 
     gait analysis.
       Plastic and other surgical procedures primarily for 
     cosmetic purposes.
       Radial Keratotomy.
       Sexual dysfunction/inadequacy treatment related to a non-
     organic cause.
       Smoking cessation programs.
       Transportation services other than what is described for 
     ambulance service under What Is Covered in this section.
       Weight control or weight reduction programs, except for 
     certain surgical procedures (contact HAC).

  The PRESIDING OFFICER. Who yields time?
  Mr. KENNEDY. Mr. President, how much time remains?
  The PRESIDING OFFICER. The Senator from Massachusetts has 121/2 
minutes remaining.
  Mr. KENNEDY. I yield myself 4 minutes.
  Mr. President, we have had a good discussion coming back, once again, 
to what I think is one of the fundamental aspects of this bill. We have 
gone through this. I have taken the time to go through this evening 
what the criteria were going to be for the medical officer at the time 
of the external appeal. Those criteria have been supported today by the 
overwhelming majority of the medical profession because they understand 
that, with those criteria, we are going to get a medical decision that 
will be in the best interests of the patient. That is really not 
challenged.
  What is being suggested are three different options that might be 
used. The one we offer has the support of the medical community. It has 
the overwhelming support of the medical community. That is the first 
point.
  With all respect to my friend and colleague from Oklahoma, regarding 
the provisions, when it comes down to what is and is not going to be 
permitted, clearly if there is an exclusion in the contract there will 
not be the right of the medical officer to alter and change that. Let 
me give an example on the issue of medical necessity under the criteria 
that we have, where it might very well be interpreted by a medical 
officer. Say a particular HMO excluded cosmetic surgery.
  The question came down to a child that had a cleft palate, and the 
medical officer said: Well, they are excluding cosmetic surgery, but a 
cleft palate for a child is a medical necessity. That medical officer, 
I believe, ought to be able to make that judgment. Under the language 
that we have, that medical officer would be able to do it.

[[Page 11858]]

  If, on the other hand, the HMO had put in the contract that they will 
not permit a medical procedure for a cleft palate, then clearly that 
would be outside of the medical judgment, and outside of medical 
necessity.
  That is the example that is really reflected in the language which we 
have included. But the fact is those are exceptional cases. They are 
not unimportant. But the most important aspect of the case is that the 
judgment that is going to be made by the medical officer is going to be 
based on the medical needs of the particular patient and the best 
medical information that is available.
  That is what has had the broad support. There may very well be a new 
commission established under HHS made up of a number of different 
stakeholders which may come up with some recommendation that may be a 
better one. That might be so. If that is the case down the road, maybe 
we can have the opportunity to consider it and bring some change to it. 
But as we have heard earlier, and as we have seen, the Federal 
employees standard that is used is not permitted to be used in terms of 
appeals procedure. The reason, evidently, is because they believe the 
medical officer ought to be able to use the criteria which brings into 
play the latest information and the latest scientific information that 
is available, and the best information that would be helpful to that 
medical profession.
  Finally, there is the question, What are we going to do? Are we 
really going to ultimately let their judgment and decision be made by 
the medical professional with enough flexibility so that they can bring 
to bear medical judgments on this, and also consider the best 
information that is available to them and apply that best medical 
information available to benefit the patient?
  I think we have a good process and a good way of proceeding. That is 
why I believe that we ought to stay the course with what is included in 
the legislation and resist the amendment.
  Mr. President, I know we have another amendment that we are going to 
debate this evening. If there are others who want to speak on this, we 
welcome them.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, if this side has run out of time, I ask 
unanimous consent to speak for what time I might consume. But I don't 
expect it will be over 10 or 12 minutes.
  The PRESIDING OFFICER. Is there objection?
  Mr. KENNEDY. I don't intend to object. Is this in favor of the 
amendment?
  Mr. GRASSLEY. Yes. I am sorry I didn't say that. I am in favor of the 
amendment.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  Mr. GRASSLEY. Mr. President, I want to address what I believe is a 
very fundamental, fatal flaw in the legislation before us. That flaw 
relates to how the bill treats health plan contracts, and the 
precedents that this treatment sets for all contracts, not just those 
between health plans and employers.
  As currently drafted, the bill states that specific definitions and 
terms in health plan contracts can be entirely thrown out in favor of 
another definition made up by a third party charged with reviewing a 
plan's decision to deny care.
  This basically invalidates all contracts between health plans and 
employers and makes them non-binding.
  Putting the terms of health plan contracts on the chopping block 
undercuts the very purpose of the health plan contract itself.
  If these contracts are not binding, the health plan will have no way 
of knowing what standard it should follow in making coverage decisions, 
the employer will have no way of knowing what its costs will be, and 
the patient will have no way of knowing what kinds of items and 
services are covered.
  In short, the contract won't be worth the paper its printed on.
  How do you do business without a contract? Quite frankly it's almost 
impossible to imagine doing business at all without a binding 
agreement.
  The Kennedy-McCain bill forces managed care plans to do business in a 
way that no other industry is forced to do--by that I mean without a 
binding and valid contract.
  Now, let me stop here for a minute and talk about these health plan 
contracts.
  First, contracts between health plans and employers are actually 
negotiated with all parties involved.
  Employers, usually with the help of unions and other worker 
representatives, bargain for specified coverage in order to meet the 
unique needs of different employees. Every contract is different.
  What's more, these contracts are typically reviewed and approved by 
state insurance regulators before they become effective. The whole 
process is deliberative, time consuming and, all told, is truly a 
``meeting of the minds.''
  The Kennedy-McCain bill says, in effect, to heck with that meeting of 
the minds. The bill gives unrelated third parties reviewing patient 
complaints unprecedented authority to take out contract terms that were 
bargained for in good faith and literally throw them in the trash.
  This authority to override contracts at any time and for any reason 
goes far beyond the authority given even to judges, who in all but the 
rarest instances are obliged to apply the terms of a contract.
  And where judges must explain their rationale in opinions and are 
generally accountable as public officials, these third party reviewers 
as outlined in the Kennedy-McCain legislation are private citizens and 
are not accountable to anyone at all.
  I do believe that every patient should have a right to an 
independent, external review of a health plan's decision to deny care. 
But that right cannot be without some rationality and accountability.
  Third parties charged with reviewing patient complaints should have 
broad discretion to thoroughly assess, and even overturn, a plan's 
decision so long as that authority is exercised within the four corners 
of the contract.
  Kennedy-McCain authorizes third parties to veer far, far away from 
those four corners, and to tear up the contract altogether.
  I encourage my colleagues to think about what it would be like if the 
contracts that they live by everyday contracts for life insurance, home 
mortgages, even car leases could be torn up and rewritten by an 
unaccountable third party at any time.
  Moreover, I encourage my colleagues who know small business owners or 
who were themselves small business owners, to think about doing 
business without the security of a binding contract.
  I believe that those of my colleagues who do think about this will 
come to understand that the consequences of allowing contract terms to 
be thrown out could be disastrous, and that all contracts, whether 
involving a health plan or not, deserve the deference that our laws 
traditionally give them.
  I urge my colleagues to reject the Kennedy-McCain approach to health 
plan contracts and to support the Kyl-Nelson amendment--which is an 
approach that honors both the integrity of the contract itself, as well 
as the intent of the parties to it. In the end, it is the patient who 
wins under this amendment.
  Thank you.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Colorado is to be recognized to offer an amendment.


                           Amendment No. 817

  Mr. ALLARD. Mr. President, I call up amendment No. 817.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from Colorado [Mr. Allard], for himself, Mr. 
     Bond, Mr. Santorum, and Mr. Nickles, proposes an amendment 
     numbered 817.

  Mr. ALLARD. Mr. President, I ask unanimous consent reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

  (Purpose: To exempt small employers from causes of action under the 
                                  Act)

       On page 148, between lines 23 and 24, insert the following:

[[Page 11859]]

       ``(D) Exclusion of small employers.--
       ``(i) In general.--Notwithstanding any other provision of 
     this paragraph, in addition to excluding certain physicians, 
     other health care professionals, and certain hospitals from 
     liability under paragraph (1), paragraph (1)(A) does not 
     create any liability on the part of a small employer (or on 
     the part of an employee of such an employer acting within the 
     scope of employment).
       ``(ii) Definition.--In clause (i), the term `small 
     employer' means an employer--

       ``(I) that, during the calendar year preceding the calendar 
     year for which a determination under this subparagraph is 
     being made, employed an average of at least 2 but not more 
     than 50 employees on business days; and
       ``(II) maintaining the plan involved that is acting, 
     serving, or functioning as a fiduciary, trustee or plan 
     administrator, including--

       ``(aa) a small employer described in section 3(16)(B)(i) 
     with respect to a plan maintained by a single employer; and
       ``(bb) one or more small employers or employee 
     organizations described in section 3(16)(B)(iii) in the case 
     of a multi-employer plan.
       ``(iii) Application of certain rules in determination of 
     employer size.--For purposes of this subparagraph:

       ``(I) Application of aggregation rule for employers.--All 
     persons treated as a single employer under subsection (b), 
     (c), (m), or (o) of section 414 of the Internal Revenue Code 
     of 1986 shall be treated as 1 employer.
       ``(II) Employers not in existence in preceding year.--In 
     the case of an employer which was not in existence throughout 
     the preceding calendar year, the determination of whether 
     such employer is a small employer shall be based on the 
     average number of employees that it is reasonably expected 
     such employer will employ on business days in the current 
     calendar year.
       ``(III) Predecessors.--Any reference in this paragraph to 
     an employer shall include a reference to any predecessor of 
     such employer.

       On page 165, between lines 14 and 15, insert the following:
       ``(D) Exclusion of small employers.--
       ``(i) In general.--Notwithstanding any other provision of 
     this paragraph, in addition to excluding certain physicians, 
     other health care professionals, and certain hospitals from 
     liability under paragraph (1), paragraph (1)(A) does not 
     create any liability on the part of a small employer (or on 
     the part of an employee of such an employer acting within the 
     scope of employment).
       ``(ii) Definition.--In clause (i), the term `small 
     employer' means an employer--

       ``(I) that, during the calendar year preceding the calendar 
     year for which a determination under this subparagraph is 
     being made, employed an average of at least 2 but not more 
     than 50 employees on business days; and
       ``(II) maintaining the plan involved that is acting, 
     serving, or functioning as a fiduciary, trustee or plan 
     administrator, including--

       ``(aa) a small employer described in section 3(16)(B)(i) 
     with respect to a plan maintained by a single employer; and
       ``(bb) one or more small employers or employee 
     organizations described in section 3(16)(B)(iii) in the case 
     of a multi-employer plan.
       ``(iii) Application of certain rules in determination of 
     employer size.--For purposes of this subparagraph:

       ``(I) Application of aggregation rule for employers.--All 
     persons treated as a single employer under subsection (b), 
     (c), (m), or (o) of section 414 of the Internal Revenue Code 
     of 1986 shall be treated as 1 employer.
       ``(II) Employers not in existence in preceding year.--In 
     the case of an employer which was not in existence throughout 
     the preceding calendar year, the determination of whether 
     such employer is a small employer shall be based on the 
     average number of employees that it is reasonably expected 
     such employer will employ on business days in the current 
     calendar year.
       ``(III) Predecessors.--Any reference in this paragraph to 
     an employer shall include a reference to any predecessor of 
     such employer.

  Mr. ALLARD. Mr. President, I am offering an amendment to S. 1052 that 
would prevent frivolous, unnecessary, and unwarranted lawsuits against 
small employers. That is what my amendment is all about. It exempts 
small employers that have 50 or fewer employees in their firm. I think 
this is an important provision. I plan on sharing with my colleagues in 
this Senate Chamber some of my experiences as a small businessman.
  I have had the experience of having to start my business from 
scratch. I worked with fewer than 50 employees. Believe me, from 
personal experience, I know what happens when you are a small employer 
and you have too many mandates on your business and you do not have all 
the staff and accountants and lawyers in your firm to help you along, 
and you have to go to an attorney or accountant outside your business. 
I know the impact it can have as far as cost is concerned.
  Believe you me, I know what it feels like to have taxes increased on 
you as a small businessman because you are in the dollar game; every 
dollar makes a difference on what your bottom line is going to be.
  Contrary to what many Members of the Senate are trying to argue, S. 
1052 does not exempt small employers from lawsuits. Under S. 1052, 
employees could sue their employers when an employer--and I quote--
``fails to exercise ordinary care in making a decision.'' That is from 
page 140 of the bill.
  Mr. President, 72 percent of small employers in the United States 
provide health care that Americans need. They do not have to provide 
that coverage, but they choose to on their own. The Senate should honor 
that. The Senate should respect that. S. 1052, however, undermines 
that.
  Allowing small employers to be liable for health care decisions would 
unduly burden a small employer. It would force them to drop health 
insurance coverage for millions of America's small business employees. 
At the very least, it adds a new burden to the businessperson who 
already spends too much time dealing with Government mandates and 
paperwork.
  Without our amendment, S. 1052 places medical treatment decisions in 
the hands of lawyers and judges and will trigger a plethora of lawsuits 
against small employers, in my view, creating a field day for trial 
lawyers. The Senate should not support legislation that allows 
unwarranted lawsuits that hurt small employers.
  This year, employers are trying to cope with a 12-percent increase in 
health care costs that employers experienced last year. Now, as we move 
forward into another year, they are looking at somewhere around a 13-
percent increase.
  I have a recent survey that was jointly put together with the 
consulting firm Deloitte & Touche and the industry of business and 
health that reveals that health premiums increased more than 12 percent 
last year and are expected to increase 13 percent in both 2001 and 
2002. So this is a burden with which small employers are faced.
  With the passage of this bill, the Congressional Budget Office has 
estimated it would increase premiums another 4 percent. That would have 
a very adverse impact on small employers. We have heard it is likely we 
will have an additional 1 million who are uninsured with the passage of 
this Patients' Bill of Rights. I suggest to the Members of the Senate, 
a large part of that million is going to come from the very small 
employers, those with 50 employees or fewer.
  S. 1052, as it is currently written, would cause further increases in 
health care costs for American families, workers, and businesses across 
the board. The Congressional Budget Office has estimated that the 
previous version of S. 1052, which is substantially identical to the 
current bill under consideration, would increase the Nation's health 
care costs, as I mentioned earlier, by more than 4 percent. This is 
above and beyond the additional 13-percent increase in health care 
costs employers will face this year. Moreover, this year's increase 
would be the seventh annual increase in a row.
  If S. 1052 passes, many small employers will stop providing health 
care for their employees and the number of uninsured Americans will 
increase. The country cannot afford this. The small businesses of 
America cannot afford this. The country cannot afford S. 1052 in its 
current form.
  I personally know the costs of providing health care to employees. As 
I mentioned earlier, for 20 years I practiced veterinarian medicine and 
provided health care insurance to my employees. I can speak from 
personal experience: Providing health care was costly. If I were still 
practicing veterinarian medicine as a private employer, I could not 
begin to imagine the burden S. 1052 would place on me, my employees, 
and everybody's families involved in that business.
  I believe we should pass a Patients' Bill of Rights, not a lawyers' 
right to sue. Our bill should focus on expanding access to affordable 
health care for the

[[Page 11860]]

Nation's 43 million uninsured, not on taking steps that will cause more 
Americans to lose their health insurance and further burden small 
business.
  I also bring up the point that in this particular piece of 
legislation there are four exemptions. There is an exemption for 
physicians, an exemption for hospitals, an exemption for a 
recordkeeping function in health care, as well as an exemption for some 
insurance providers.
  The point I make is that if you are beginning to provide an exception 
for certain businesses, then why not provide that exception for those 
people who are going to be most adversely impacted by this particular 
piece of legislation? Those 1 million or so that will be uninsured are 
going to come out of that small business sector because small employers 
will have to make the tough decision as to whether they can afford it 
or not, and many of them are going to say: We can't afford it, so we 
are going to have to make some adjustments.
  One of the major adjustments because of the threat of a lawsuit--and 
I point out to the Presiding Officer that not only is it the lawsuit 
itself when you happen to get a judgment against you that is such a 
problem; it is the threat of a lawsuit because your margin of profit is 
so narrow that you cannot afford to pay for the professional help, the 
attorneys to defend you. So small employers will make the decision not 
to provide health care insurance.
  My amendment to S. 1052 would exclude small business employers from 
being the victims of frivolous lawsuits. I urge my colleagues to 
consider the consequences of the small employer liability provisions in 
S. 1052 and to support this amendment.
  I think at a time when our economy in this country is struggling, and 
at a time when I think everybody in this Chamber understands how 
important it is to have a vital small employer sector--it is the small 
employers that have come up with new ideas; it is the small employers 
that are the backbone of economic growth in many of our small 
communities, particularly in rural areas; it is the small employers 
that so many of us look to, to be the leaders in our communities--I 
hope there remains a sensitivity to what the small employer contributes 
in the way of competition, in the way of developing new ideas, and in 
the way of making sure we have stronger family-oriented communities. It 
is a pool of leadership that not only strengthens our communities and 
our States and our Nation, but it is something around which our whole 
economy evolves because the importance of competition, and using the 
dollar and the marketplace to allow the consumer to predict the best 
services is an important concept in this country.
  I don't want to see us lose that by moving constantly towards larger 
businesses and a corporate-type of society. There is no doubt that 
small business is important to this country. I hope Members of the 
Senate will join me in making sure the small employer, those with 50 
employees or less, is exempted from the liability provisions in S. 
1052. I ask for their support of this amendment.
  The PRESIDING OFFICER. Who yields time? The Senator from 
Massachusetts.
  Mr. KENNEDY. Mr. President, I thank the good Senator for his 
amendment and his thoughtful explanation of it. I will oppose the 
amendment. I will state briefly why this evening.
  Basically, we have a number of definitions of small business. We are 
taking now the definition of 50 employees or less. That is about 40 
percent of the workforce. It might be as high as 43 percent. So with 
this amendment, effectively we are undermining 40 to 43 percent 
coverage for all those employees across the country. If we believe in 
the protections of this legislation, that is a major exclusion.
  What are those protections? Those protections are very simple. They 
are very basic and fundamental. For example, doctors ought to be making 
the decisions on medical care and not the HMOs. The employees who work 
in these businesses and where the HMOs are selling these policies are 
being hurt just as those who are above the 50. Excluding them from 
these kinds of protections is unacceptable.
  Their children are going to be hurt. Their children should be able to 
get the kind of specialty care that others can. The wives of those who 
work in those plants and factories ought to be able to get into 
clinical trials if they have breast cancer. They ought to be able to 
have an OB/GYN professional as a primary care physician, if that needs 
to be so. They ought to get the prescription drugs they need, if a drug 
is not on the formulary. They ought to be able to get the continuity of 
care they need. This care protects expectant mothers from losing a 
doctor during the time of their pregnancy, if the employer drops the 
coverage with an HMO. These are very important kinds of protections we 
are discussing.
  If we accept the Senator's amendment, we are effectively excluding 40 
percent of the population.
  The Senator makes a very good point about cost, particularly for 
small business. I am always amazed in my State of Massachusetts. You go 
down to 15, 20 employees and still the small businessmen are providing 
health care coverage. What is happening, they are paying anywhere from 
30 to 40 percent more in premiums every single year. This occurs 
because they are not able to get together with other kinds of groups 
and get the reductions that come from the ability to contract with 
large numbers of employers. They are getting shortchanged in those 
circumstances. Many of the firms they work with are in the business one 
year and out of the business a second year.
  The point the Senator makes about the particular challenge for small 
employers to offset health coverage for their employees is very real. 
We ought to help them. There have been a number of different proposals 
which I have supported and others have supported in terms of 
deductibility and helping those companies. That is an important way of 
trying to get about it. But the suggestion that is underlying the 
Senator's presentation is that the cost of this particular proposal is 
what is really going to be the straw that breaks the camel's back.
  He talks about a 4-percent increase in premiums. That is a percent a 
year, as we have learned. The alternative percent is around 3 percent. 
It is 3 percent over the period of 5 years. The CBO points out that the 
cost of the various appeals provisions and the liability provisions are 
eight-tenths of 1 percent over the 5 years. And in the alternative 
bill, it is four-tenths of 1 percent.
  I mentioned earlier in the day that the largest CEO salary of an HMO 
was $54 million a year, and $350 million in stock options. This 
constitutes a benefits package of $400 million. That adds $4.25 to 
every premium holder, small business premium holder, $4.25 a month. Our 
proposal adds $1.19 a month. That is just one individual. I am sure, in 
this case, he does a magnificent job. But when you are talking about 
the cost of this, we have also brought in the fact that the average 
income for the 10 highest salaried HMO CEOs is $10 million a year. 
Their stock options are in the tens of millions of dollars a year. The 
profits are 3.5 percent a year, $3.5 billion last year in profits. And 
still they ratcheted up their premiums 12 percent to maintain their 
profit margin. They made $3.5 billion.
  Yet they cannot make sure that we are going to be able to provide 
protections for their employees. They cannot make sure that they are 
not going to overrule doctors in local hospitals and community 
hospitals, in the urban hospitals, and in rural hospitals trying to 
give the best medical attention to the children and the women and their 
workers? We can't say that we want to provide that degree of protection 
for them?
  I just can't accept that. I would welcome the opportunity to work 
with the Senator in the area of small business. But that isn't what we 
are about this evening. The Senator's amendment, as I said, would 
effectively exclude 40 percent, 43 percent of all the employees. It 
makes the tacit assertion--more than tacit, explicit assertion--that 
the increased premiums that are going to be

[[Page 11861]]

included in this bill are just going to be unbearable. I suggest there 
are ways of getting cost savings on this.
  We have 50 million Americans now that have the kinds of protections 
that we are talking about. They have the liability protections. We 
don't see their premiums going up. We see the right to sue in the 
States of Texas and California, and the premiums aren't going up. There 
is very little distinction between the 50 million Americans now who 
have the liability provisions and those who do not.
  We are talking about a major assurance to families all over the 
country. When this bill passes and families go in and pay their 
premiums for health insurance, they will know they are getting coverage 
for the kinds of sickness, illness, and serious disease. Without this 
legislation, they may think they are covered. Then, at a time of great 
tension and pressure--they may have cancer for example--they are told 
by their primary care doctor that even though there is a specialist, an 
oncologist down the street who is the best in the country and is 
willing to treat that child, they are told they cannot have that 
specialty care.
  They are also told that they can't appeal that once the HMO makes 
that decision. They are being denied that, when we know what a 
difference it can make in terms of saving that child's life and in 
terms of that child's future.
  We want to make sure every parent knows that when they sign onto an 
HMO, they are going to be able to get the best care that is available 
for their child, for their wife, for their mother, for their son, for 
their grandparent, and not have these medical decisions overridden by 
the HMO.
  So it seems to me that those protections ought to be there for the 40 
percent of the workers, as well as to the other 60 percent. We ought to 
get to the business of paying attention to, helping, and assisting the 
smaller businesses. One of the best ways is for these major HMOs to 
stop spending the millions and millions of dollars they are spending 
every single night, right now, in distorting and misrepresenting the 
truth. Evidently, they are flooded with money because they are spending 
so much of it in order to defeat this legislation.
  This isn't an industry that is hard pressed. They are ready to open 
up all of their wallets and pocketbooks to distort and fight this 
legislation. And, they have the resources to be able to do it. They are 
not short on those resources. We do not see cutbacks on executive pay. 
We do not see cutbacks on stock options and the other hefty perks of 
being an HMO CEO. The idea that this particular legislation is going to 
be the straw that breaks the camel's back doesn't hold up. It is a 
smokescreen. It is not an accurate representation!
  I think that those 40 percent of American workers are entitled to 
coverage and protection.
  (Mr. CORZINE assumed the Chair.)
  Mr. DURBIN. Will the Senator yield for a question?
  Mr. KENNEDY. Yes.
  Mr. DURBIN. I listened to the Senator from Colorado present his 
amendment on behalf of small businesses and employers. I recall, before 
my election to Congress, running a law office and buying health 
insurance for myself and my employees. I recall the experience when I 
went to one of the larger health insurance companies to cover my 
employees. So the belief that small businesses only do business with 
small insurance companies I am not sure is an accurate description. I 
think that small businesses often do business with large insurance 
companies.
  If I understand the Senator from Massachusetts and the amendment of 
the Senator from Colorado, if one employer has 49 employees here and is 
doing business with a large insurance company, that large insurance 
company doesn't have to offer the same protections to the small 
business' employees that it might offer to the business next door with 
60 employees. So the people who are losing are not the small business 
owners but the small business employees who don't get the benefit of 
the same protections that we are trying to guarantee to all Americans. 
Is that how the Senator from Massachusetts sees it?
  Mr. KENNEDY. The Senator is quite correct on this. That, of course, 
raises competitive situations. You are going to have competition on the 
dumbing down of protections for employees, rather than establishing a 
standard in competition in terms of the quality of the product. It is a 
race to the bottom, so to speak.
  Mr. DURBIN. So this will, in fact, limit the protections for 
employees of small businesses across America so that if you go to work 
for a small business, you just won't have the right to specialty care, 
to the drugs your doctor thinks are necessary to cure your disease, the 
right to a specialist in a critical circumstance, access to emergency 
rooms--all the things we are trying to guarantee in this bill. What the 
Senator from Colorado does is say we are not going to provide those 
protections if you are one of the 40 percent who works for a small 
business in America. Is that what the Senator understands?
  Mr. KENNEDY. The Senator is correct. I will make the case tomorrow, 
but it is my judgment that you will find that there are greater abuses 
in the areas of these smaller companies, smaller HMOs, appealing to 
smaller companies, rather than some of the larger HMOs which are tried 
and tested and have the reputation within a community to try and 
defend. We have had many that do a credible job, but you are going to 
find, I believe--and I will get to this more tomorrow morning--that the 
workers who are the most vulnerable are going to be workers in these 
plants.
  Mr. DURBIN. May I ask another question of the Senator from 
Massachusetts?
  Mr. KENNEDY. Yes.
  Mr. DURBIN. While I listened to the Senator from Colorado explain the 
increase in premiums, he suggested premiums had gone up 12 percent last 
year, and they anticipated they would come up 13 percent nationwide 
this year and the following year, which suggests that in a 3-year 
period of time, the Senator from Colorado tells us, we are going to see 
a 38-percent increase in health insurance premiums.
  Going back to a point earlier, how much will the Kennedy-Edwards-
McCain bill increase premiums each year over the next 5 years if we are 
going to have 38 percent in 3 years, just the natural increase in 
health insurance; how much will this legislation we are debating add to 
that cost?
  Mr. KENNEDY. Well, according to the Congressional Budget Office and 
OMB it will be less than 1 percent a year over the next 5 years--much 
less, closer to 4 percent. So, effectively, it is 4 percent.
  As we pointed out earlier in the debate, under the alternative 
proposal that the President supports, it is effectively 3 percent over 
5 years. As the Senator is pointing out, it is somewhat less than 1 
percent a year against what the Senator from Colorado mentioned--12 
percent last year and 13 percent this year. That is what is happening 
already, without these kinds of protections.
  Mr. DURBIN. I think that really addresses the issues raised by the 
Senator from Colorado. First, we are saying to employees of small 
businesses that you are not going to receive the protection of others 
with health insurance. Secondly, even though the cost is less than 1 
percent a year to give these added protections, we are not going to ask 
the small businesses to accept this, even in the face of an increase in 
premiums, which the Senator from Colorado tells us was 38 percent over 
3 years.
  I thank the Senator from Massachusetts.
  Mr. KENNEDY. I thank the Senator for his helpful comments.
  Mr. REID. Will the Senator yield?
  Mr. KENNEDY. Yes.
  Mr. REID. I know the Senator is in a rush. I just want to make two 
brief comments. First of all, to make it plain English so somebody from 
Searchlight, NV, where I was born, understands it, the Congressional 
Budget Office says S. 1052 would result in a premium increase of only 
4.2 percent over 5 years. The cost of the average employee would be 
$1.19 per month.

[[Page 11862]]

This would be 37 cents per month more than the legislation that really 
gives no coverage at all on the other side.
  I want to say one last thing to my friend. We were here on the floor 
earlier today. We know one of the things that is trying to be injected 
into this is that this is a terrible thing for small business. That is 
what this amendment is all about--that the Kennedy-Edwards-McCain 
legislation is bad for small business. I read to the Senator earlier 
today--and I am going to take 1 minute to read a communication I got 
from a small businessman in Nevada today:

       As a small business owner--

  Less than 50 employees--

     and as a citizen, I urge you to support the upcoming bill 
     commonly known as the ``Patients' Bill of Rights.'' I also 
     would like to state that I support your and Senator McCain's 
     version of the bill. If the HMOs can afford to spend millions 
     on lobbyists and advertisements, then they can afford to do 
     their job correctly, preventing the lawsuits in the first 
     place . . .
       . . . I am willing to pay to know that what I am purchasing 
     from my HMO will be delivered, not withheld until someone is 
     dead, then approved postmortem. While a believer in the 
     market and freedom, I feel that we need a better national 
     approach to health care. As the richest nation in the world, 
     as the only real superpower, why do so many Americans get 
     Third World levels of health care, even when they have 
     insurance?
       Thank you for your time. Michael Marcum, Reno, NV.

  This is a small businessperson. He doesn't have millions of dollars 
to run TV ads, radio ads, and newspaper ads, but he has the ability to 
contact me, as hundreds of thousands of other small businesspeople can 
do. This legislation that you are supporting is good for small 
business, and this is only one of the other ploys to try to distract 
from the true merits of this legislation.
  Mr. KENNEDY. I thank the Senator because in his statement he has 
really summarized the importance of resisting this amendment. Those 40 
percent of workers deserve these kinds of protections. These are not 
very unique or special kinds of protections.
  They are the commonsense protections we have illustrated during the 
course of this debate--access to emergency room care based upon a 
prudent layperson standard, protections of speciality care, clinical 
trials, OB/GYN, continuity of care and point of service. So patients 
are able to get the best in specialty care and formulary, the new 
medicines, and making sure their doctors, American doctors, are the 
best trained in the world. These doctors have committed their lives to 
benefit patients, and they are trained to do so trained to make the 
medical judgments.
  That is what American families believe they are paying for when they 
pay the premiums, but we have a group of HMOs that feel they can put 
the financial bottom line ahead of patient interests and shortchange 
millions of Americans. We should not let the 40 percent that will be 
affected by this amendment be excluded.
  The PRESIDING OFFICER. The Senator from Colorado.
  Mr. ALLARD. Mr. President, I want to respond to some of the comments 
that were just made. The fact remains if you survey employers, half say 
they will drop employee coverage if exposed to lawsuits. I can 
understand that having been a small businessman, and I understand how 
one tries to deal with the bottom line of that business, usually a very 
marginal business.
  Again, I agree with the Senator from Massachusetts when he says we 
are talking about 40 to 45 percent of the workforce in this country. It 
points out how important that small business sector is. Those were 50 
employees or less. They are a vital part of our economy. We want to 
make sure they have an ability to attract employees into their 
business. We want to make sure they can meet the bottom line. We want 
to make sure they stay in business.
  I want to share a quote with the Members of the Senate made by 
William Spencer, who is with the Associated Builders and Contractors, 
Inc. We all know many times builders and contractors are small 
businesspeople, sometimes, at least in my State, frequently 4 and 5-man 
operations, rarely over 10, particularly in the subcontracting area:

       Many of the ABC's member companies are small businesses, 
     and thus the prospect of facing a $5 million liability cap on 
     civil assessments is daunting. Financial reality is that if 
     faced with such a large claim, many of our members could be 
     forced to drop employee health insurance coverage rather than 
     face the potential liability or possibly even shut their 
     business down.

  I think he is right on, and I agree with him. The question is, how do 
you respond as a small employer when you are faced with an untenable 
exposure from a lawsuit or costs or regulatory burden? You try to 
figure out a way you can move out of that liability you are facing. 
What I did, and I think many small employers will do, is go back to 
their employees and say: Look, there is no way we can cover your 
medical insurance. There is no way we can work with a program, whether 
it is an HMO or whatever, to provide you with medical insurance.
  If you are a small employer such as I was--I had part-time employees 
working for me. Many who came to work for me had never held a job in 
their life. They were just out of high school, in many instances, and 
going to college. I was going to give them their first experience in 
the workplace.
  I had to make a decision as to what we were going to do in a case 
where I had increasing costs in my small business. Many of them were as 
a result of insurance premiums. I decided that I was going to approach 
my employees and say: I would much rather pay you extra to work in my 
business and leave it up to you to line up your own health care 
coverage.
  Again, they were part-time employees who we expected, in many cases, 
to work for us for 3 months, sometimes 2, 3 years, and then they would 
be moving on.
  By taking this approach, I also gave them portability. In other 
words, when they left my business, they were not faced with the issue 
of what is going to happen with my insurance when I get to a new 
employer; what is going to happen, from the employee's perspective; 
what am I going to do when I am no longer working for my current 
employer as far as health coverage is concerned.
  That is how I decided to handle it. I think most small employers will 
view it the same way I did. When they see that untenable exposure, they 
are going to decide not to have coverage for their employees. In order 
to stay competitive, they might decide to pay them more or some other 
way to compensate them for that loss in health care coverage.
  The fact remains, from my own personal experience, it is not hard for 
me to believe that many small employers, as many as half, will elect 
not to provide health care coverage for their employees.
  We need to do everything we can to encourage the small business 
sector to survive. This is not the only place where we draw a bright 
line, where we recognize how important the small business sector is to 
us. In other places in the law, we have tried to define what a small 
business is. In some cases, we drew it at 150 employees or less; in 
some cases, 100 employees or less; or maybe, in some cases, 50 
employees or less. In fact, in some cases, they even tried to define 
the very small employer of 15 employees or less.
  It is not an unusual policy for the Senate in legislation to draw a 
bright line to define what a small employer would be. In this 
particular instance, it is entirely appropriate to make that at 50 
employees or less, and if you have 50 employees or less, you would be 
exempted from the provisions of the Senate bill that is before us.
  Small businesses are important for the economic growth of this 
country. Small businesses are important to generate new ideas. When an 
American has a great idea, many times they go into business for 
themselves, and they try to market that idea. If it works, it may 
eventually grow into a large business. If it does not work, they may 
eventually end up having to work for another employer. But many times 
they are contributors to their communities. They are contributors to 
the employee base. They are contributors to the leadership within that 
community and help make that community a better place in which to live.

[[Page 11863]]

  I believe we need to be sensitive to what small employers can 
contribute to our economy and the vital role they play. I believe this 
mandate, this bill will make it much more difficult to stay in 
business, and, consequently we will begin to lose that pool of talent 
that is so vital to the health of this country.
  The PRESIDING OFFICER. Who yields time?
  Mr. REID. Mr. President, under the order that is now before the 
Senate, if the Senator from Colorado yields back his time, we will do 
so and finish this debate in the morning under the time that is 
scheduled.
  Mr. ALLARD. Is the Senator from Nevada yielding back his time?
  Mr. REID. Yes.
  Mr. ALLARD. I will yield back the remainder of my time.
  Mr. REID. We will complete the debate in the morning. The Senator 
from Colorado will have an hour in the morning.
  Mr. ALLARD. That is my understanding, there will be an hour.
  Mr. REID. Evenly divided.
  I yield back our time and the minority has yielded back their time.
  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.

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