Reasons elusive as debate continues on rights bill
The Dallas Morning News
President Bush is warning Congress that he will veto the Senate version of proposed patient protection legislation, predicting it will result in a dramatic increase in civil litigation that could increase health care costs and the ranks of the uninsured.
Shades of 1997. Then, as governor of Texas, Mr. Bush issued a similar prediction about patient protection legislation approved by the state Legislature but allowed it to become law without his signature.
The result: In four years, roughly 1,350 people have appealed their
health insurers’ decisions and 17 have filed lawsuits in a state of 20.9 million residents.
The prediction for Texas has so far fallen flat. Similar measures in California and several other states have also received subdued responses.
Although patient protection proposals have received a good deal of
attention from politicians and the media, only a tiny fraction of consumers have actually used them when given the opportunity.
The perception of discontent with health maintenance organizations – evidenced by potshots from comedians on late-night talk shows and compelling tales in such movies as 1997’s As Good As It Gets – hasn’t translated into legions of angry consumers seeking case reviews or filing suits.
No one can say definitively why the number of appeals or lawsuits has been so low.
Officials in the state Department of Insurance say the appeals process has kept people out of the courts. Yet they are hard-pressed to explain why so few appeals have been filed.
“It’s just a fact. We don’t know what causes a person to fill out an application for an appeal,” said Lee Jones, an agency spokesman.
Trial lawyers, on the other hand, cite the cost of litigation as a
deterrent to lawsuits, and they assert that the appeals option will languish as long as consumers aren’t properly educated.
But lawmakers and doctors see the numbers as a measure of the laws’ success.
They note that the mere presence of patient protection legislation has forced insurers to modify their behavior.
“Just the fact that they are accountable has made them change the way they conduct their affairs,” said state Rep. John Smithee, an Amarillo Republican who sponsored patient protection legislation.
Insurers backed off
Insurers aren’t as pushy with doctors about releasing patients from the hospitals and more readily accept recommendations on hospital admissions and tests, said Dr. David Vanderpool, a general surgeon in Dallas. “I’ve had to go to the mat much less for patients, and that’s better for their care,” he said.
An insurance industry representative said she also sees companies defensively acceding to doctors’ decisions in the gray area of medical necessity and increasing medical costs.
They’ve raised premiums by 5 percent, noted Leah Rummel, executive director of the Texas Association of Health Plans, an insurance industry group.
“It costs more whenever there are more provisions,” she explained. “I won’t say [a patient bill of rights is] not needed, but I wonder if it’s worth the amount of money it costs to have it.”
In 1997, the Department of Insurance estimated that about 4,000 people would appeal insurer decisions annually through the independent review process.
Only two appeals were logged in the first year, and the department quickly dropped its estimate.
In California, where patient protection legislation was approved in January, the response has been similar to that in Texas. State representatives say no lawsuits have been filed and only 165 appeals have been made.
Consumer advocates in California echo responses from some doctors and lawmakers in Texas.
“HMOs are deferring to patients more because they can see the corridor to the courtroom, and they don’t want to go there,” said Jamie Court, executive director of the Foundation for Taxpayer and Consumer Rights in Santa Monica, Calif.
George Parker Young, an attorney who’s filed the majority of lawsuits under the Texas law, said he’s not a bit surprised that the number of lawsuits is so low.
“No one, I trust, took as credible the industry’s threat that there would be a flood of lawsuits,” Mr. Young said.Medical cases are expensive to try because lawyers spend hundreds of hours slogging through papers, he noted.
On average, he added, he only accepts one of every 20 cases.
Cost is not the only deterrent for lawyers, Mr. Young said, noting that many attorneys held off on accepting cases until Aetna‘s challenge to the 1997 law was partially defeated.
In June 2000, the 5th Circuit Court of Appeals ruled that patients are allowed to sue insurers in state court. Aetna has not appealed the decision. To date, none of the Texas lawsuits have been argued in state court. Six have been settled for undisclosed amounts, and five have been removed to federal court. Six cases remain active.
Ironically, Aetna‘s challenge of Texas patient protection laws has had far worse implications for a portion of the law it says it supports – independent review – than for the right to sue.
A Houston federal judge struck down independent review and the 5th Circuit upheld the decision.
For now, insurers are voluntarily complying with the review process while the state appeals the decision to the U.S. Supreme Court.
By the end of May, 1,349 people had appealed decisions from their health insurers. The decisions have been overturned 50 percent of the time, upheld in 42 percent of the cases and resulted in split decisions for 8 percent of people.
Not much interest
The number of appeals and lawsuits pales in comparison with the response to some other legislation.
For instance, more than 210,000 Texas residents have applied for permits since the concealed handgun law passed in 1996, according to the Department of Public Safety.
Mr. Young said consumers might use independent review even more often if insurers did a better job explaining it to them. HMOs make it seem as though the independent review is another form of internal appeal, he said.
The two processes are completely separate, but in order to qualify for independent review, a patient must first appeal a decision through the insurer’s internal appeals process and receive a denial. Despite the low numbers, patient protection remains a hotly debated issue.
Mr. Bush is urging the U.S. House to take up the issue this month before Congress adjourns for the summer.
The president wants representatives to set a cap on punitive damages of $500,000, close to the $ 750,000 limit set by the Texas law. The U.S. Senate approved a patient bill of rights that caps punitive damages at $ 5 million. The American Medical Association, consumer advocates, insurance trade groups, trial lawyers and other interest groups are implementing massive lobbying campaigns.
But the jury is out on whether federal legislation, if passed, would
generate much consumer response.