Patients’ Rights Bills: Which One Will You Be Better Off With?

CCH Provides Analysis of the House and Senate Bills and
Potential Impact on Patients

(RIVERWOODS, ILL., August 7, 2001) – After months of heated political debate and last-minute wrangling before Congress’ August recess, the House of Representatives passed a patients’ rights bill (H.R. 2563). But, there’s much to be worked out before Americans see a patients’ bill of rights enacted, according to CCH INCORPORATED (CCH), a leading provider of healthcare law information. Congress still needs to reconcile provisions of the House bill with the Senate’s "Bipartisan Patient Protection Act" (S. 1052), and agree on a single bill to send to President Bush.

"Patients’ rights is a political hot potato," said Paul Clark, a healthcare analyst for CCH. "The very term makes it appealing to Americans, whether or not they understand the specific details of the bills. As a result, many politicians would like to be able to support legislation: Who wants to go back to their constituents and say they voted against patients’ rights?"

But, while most of the provisions in the Senate and House bills are identical, there's a wide divide in key areas that must be resolved if a bill is to become law.

Below, CCH provides a comparison between the Senate and House patients’ rights bills.

Points of Contention

The biggest areas of disagreement between the Senate and House bills deal with the legal liabilities of health maintenance organizations (HMOs) and where, when and for how much patients can sue their healthcare providers.

"These provisions have gained the most attention. But, studies show that the majority of Americans are satisfied with their healthcare plans and that, among those who are not, most gain satisfaction through the existing appeals process. Therefore, you’re actually talking about a very small percentage of patients who will likely be affected by the proposed changes in damages and when and where HMOs can be taken to court," said Clark.

Currently, most employer-sponsored health plans are regulated by the federal 1974 Employee Retirement Income Security Act (ERISA), which limits a patient’s ability to pursue his or her claim in a state court.

Both the House and Senate bills would amend Title IV of ERISA, expanding patients’ rights to sue not only in federal but also state courts for denial of benefits or quality of care issues after exhausting all administrative appeals with an independent review board.

However, in addition to exhausting appeals, under the House bill, patients would be allowed to sue HMOs in state court only under the terms of proposed federal rules designed to establish uniformity, whereas the Senate bill would allow suits under existing state laws. The House bill also would require patients to meet a higher burden of proof, showing "clear and convincing" evidence, if they sue an HMO after an external review board ruled for the health plan decision to deny care. The Senate bill makes no such requirement.

The amount of damages is the other key area where the House and Senate bills differ. The Senate bill would allow patients to seek up to $5 million in federal courts for non-quality of care issues and damages up to the limits imposed by states for denial of benefits or quality of care issues such as pain and suffering.

The House bill seeks to set significantly lower damages. Damages for denial of benefits or quality of care would be capped at $1.5 million, with up to an additional $1.5 million for punitive, non-economic damages but only if the HMO failed to comply with a decision made by an external appeals court.

Neither bill places a cap on damages for economic losses, for example, lifetime earnings awarded to a patient if it were shown the health provider made incorrect medical decisions.

Responding to concerns of large employers, both bills also include an amendment to protect employers that have their own healthcare plans against liability. These self-insured employers would be exempt from suits if they appoint a "designated decision-maker" to make medical decisions related to administering the plans. Additionally, each bill extends patient protections to enrollees of federal health plans, including Medicare and Medicaid and healthcare under the Veterans Administration, allowing these individuals to sue for damages at the state level.

Meanwhile, the House bill also includes an amendment designed to help people obtain health insurance. The amendment expands access to tax-free medical savings accounts (MSAs) and makes it easier for trade groups or small employers to band together to buy health insurance.

"Despite the limited number of patients that actually sue their healthcare plans, these provisions are a significant point of contention from a political standpoint, and it’s hard to determine if the two sides will be able to come together and compromise on a single bill," said Clark. "A few years ago, the patients rights issue was in the same situation – where there was both a House and Senate bill. Due in large part to underlying political issues, the congressional committee never met to resolve the differences between those bills, leaving them to die."

These include provisions requiring the following:

Access without prior authorization to emergency care even if it’s not affiliated with a specific health plan.

Options to choose OB / GYNs or pediatricians as primary care providers, thereby not requiring a referral to see such doctors.

Timely access to specialists.

Coverage of patient costs associated with clinical trials.

Point-of-service options for group health plans with a closed panel of health care providers, for example, allowing patients willing to pay higher premiums access to specialists outside their plan.

Continuity of care for a limited period of time in case of plan/provider contract termination.

Disclosure of drug formularies, requiring health plans to make available the entire list of drugs for which they’ll provide reimbursement.

Provider non-discrimination based on licensure, requiring HMOs to seek alternative types of healthcare, for example through a chiropractor, if that type of healthcare is generally accepted in the patient’s area.

Disclosure of plan information including covered and excluded benefits, cost sharing requirements, and participating providers.

Additionally, in response to some physicians who felt pressured by their HMOs, both bills would prohibit health plans from restricting a healthcare provider from advising a patient about his or her condition or treatment options.

"Over the past several years, many HMOs have already enacted these protections," said Clark. "However, the legislation will standardize these protections across the industry and provide patients with legal recourse if their healthcare plans do not comply."

About CCH INCORPORATED

CCH INCORPORATED, headquartered in Riverwoods, Ill., was founded in 1913 and has served generations of business professionals and their clients. For more than 50 years, the company has regularly tracked, reported, explained and analyzed health and entitlement law for health care providers, insurers, attorneys and consumers. CCH is the premier provider of Medicare and Medicaid information and publishes the industry standards, the CCH Medicare and Medicaid Guide and the CCH Healthcare Compliance Portfolio, as well as offers ComplianceEdge™, the e-learning program for health care compliance. CCH is a wholly owned subsidiary of Wolters Kluwer North America. The CCH web site can be accessed at www.cch.com. The Health group site can be accessed at http://health.cch.com.

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