United Press International

A bipartisan congressional group has proposed a new compromise on patients’ rights legislation, including a limited right to sue health plans, but President Bush has countered with a softer version.

The new version in Congress would allow patients who suffer harm as a result of “medically reviewable decisions” to sue in state court while others could take their case to federal court. Suits would be allowed, however, only after internal and external appeals have been exhausted. The right-to-sue issue has been the sticking point over the past five years of consideration of such legislation.

In reaction, the White House issued an outline of what the administration is considering for a “bipartisan patients’ bill of rights.” Such legislation, it said, should provide a right to appeal “through both internal review and independent, binding external review,” and only after that, “patients should be allowed to hold their health plans liable in federal court if they have been wrongly denied needed medical care.”

The White House proposal would apply only to health plans covered by the Employee Retirement Income Security Act (ERISA), which limits action to federal courts would apply only to 130 million employees and their families instead of all of the estimated 165 million Americans with health-care coverage.

In letters to the leaders of each house, Bush said, “I cannot support a plan that encourages unnecessary or frivolous litigation. Expensive litigation, and the resulting rise in health-care costs, would only make it more difficult for Americans to afford health-care coverage in the first place.”

Sen. John McCain, R-Ariz., sponsor of the bill in the Senate, responded that he was encouraged Bush, whom he opposed for the presidential nomination last year, recognizes the need for patient protections. “However, it isn’t clear how the president would protect existing state laws, such as those in Texas and Arizona, by insisting that all disputes be handled in federal court,” he said. The bipartisan proposal would not pre-empt state laws governing suits that could be brought.

McCain, Sen. Edward Kennedy, D-Mass., and other lawmakers note that their proposal tracked closely Texas managed care laws that Bush cited during his campaign as a model for federal patients’ rights legislation.

Organizations representing health plans announced their support for the Bush position, denouncing efforts to make them accountable through state courts.

The Foundation for Taxpayer and Consumer Rights accused Bush of “readying a new poison pill measure” to block patients’ rights legislation, but criticized the new proposal for placing a cap on punitive damages that could be awarded by any court.