Battle Rages In Congress Over Patients' Rights
Washington
With President George W. Bush threatening to veto any legislation that subjects employers and health plans to extensive litigation, the debate over a patients bill of rights heated up both in the U.S. Senate and House of Representatives last week.
The main bone of contention remains the extent to which patients would be able to sue their employers and health plans over adverse coverage decisions that cause death or significant harm.
The Washington-based Health Insurance Association of America released a study last week arguing that S. 872–the legislation introduced by Sens. Edward Kennedy, D-Mass., and John McCain, R-Ariz.–amounts to a "pot of gold" for trial lawyers.
The legislation would subject insurers and employers to virtually unlimited damages, according to Mark A. Behrens, a Washington attorney with the firm of Shook, Hardy & Bacon, which produced the study for HIAA.
However, the Washington-based American Medical Association, which strongly supports S. 872, accused health insurers of spreading "myths" about the impact of the legislations liability provisions.
At a press briefing, Mr. Behrens argued that S. 872 contains no real limits on the amount of damages that could be assessed against insurers and employers.
Moreover, he said, even though the legislation says that employers will face liability only if they "directly participate" in health care decisions, this protection is illusory. Indeed, Mr. Behrens said, employers are not shielded from being sued, as the bill's language only provides them with a defense to raise in court.
To determine whether an employer directly participated in an adverse decision, he said, plaintiffs lawyers will file lawsuits against them and subject them to discovery.
Indeed, Mr. Behrens predicted that employers and other plan sponsors who bear no liability can expect to face a barrage of "nuisance" lawsuits intended to produce settlements.
Donald Young, interim president of HIAA, said that S. 872 would raise the cost of insurance and provide a "pot of gold" to trial lawyers, but do nothing to increase the quality of health care for patients.
"Its hard to justify raising coverage costs for patients and employers, and increasing the already burgeoning number of Americans without health coverage, simply to placate the cash-craving demands of the trial bar," Mr. Young said.
But Thomas Reardon, immediate past president of the AMA, accused health insurers of spreading "myths." He said that the Congressional Budget Office has estimated that the liability portion of S. 872 would raise health insurance premiums by less than 1 percent–about 42 cents a week.
As for cost, Mr. Reardon said that even without a patients bill of rights to blame, insurers increased premiums last year by 8.3 percent. That, he said, is 10-times the cost of the liability provisions in S. 872.
The Alliance of American Insurers, meanwhile, came out against S. 872, arguing that while it does not directly cover property-casualty insurers, it sets a bad precedent by allowing a private right of action against a health plan for treatment disputes.
Kenneth Schloman, Washington counsel for the Downers Grove, Ill.-based Alliance, said this would result in an increase in costs to p-c insurers that use managed care.
"This could have a significant impact on workers compensation insurers in the future as managed care costs are spread through the health care system," Mr. Schloman said.
The Independent Insurance Agents of America also opposes the legislation, even though the sponsors of the bill agreed to include a provision exempting insurance agents from the liability regime so long as the agent did not participate in the health care decision-making process.
"Insurance agents should not be dragged into the liability maze if they do not take part in the care decisions made by health plans and doctors," said William F. Hofmann III, president of the Alexandria, Va.-based IIAA.
Maria Berthoud, vice president of government affairs for IIAA, added, however, that S. 872 could still lead to large health insurance premium increases and force employers to drop coverage. Further changes in the legislation are needed before IIAA can support it, she said.
At press time, S. 872 was being considered on the floor of the Senate. Opponents of the bill are expected to try to advance an alternative proposal, S. 889, that is endorsed by President Bush. Under S. 889, patients could sue health plans only after exhausting certain administrative remedies. All such lawsuits would have to be filed in federal courts. Awards for non-economic damages would be capped at $500,000.
In the House, meanwhile, Republican leaders were trying to advance compromise legislation that would allow health plans to be sued in state courts, but only after the patient had exhausted all administrative remedies.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, June 29, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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