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American Health Line

As expected, Sens. John McCain (R-Ariz.), Edward Kennedy (D-
Mass.) and a coalition of Democrat and GOP lawmakers yesterday
unveiled the “Bipartisan Patient Protection Act of 2001” — new
patients’ rights legislation which would allow individuals to sue
their HMOs but would impose a cap of $5 million on any damages
awarded in federal court, the Washington Post reports. The bill,
however, could face opposition from the White House, as President Bush has publicly expressed concern over several of the bill’s provisions on punitive damages. The McCain-Kennedy bill would allow patients to sue HMOs in state court for denial of benefits or quality of care issues and in federal court for non-quality of care issues, such as those involving violations of their health plan’s contract. Damages awarded in federal court would be capped at $5 million, but state courts could award as much money in damages as the state allows (Goldstein/Dewar, Washington Post, 2/7). The new legislation also guarantees patient access to emergency and specialty care, and requires health plans to inform patients of how the plan is run, how to pay for out of network emergency room visits, how to access specialists and how to take disputes to independent appeals panels. Employers offering health insurance could only be sued if they were “directly involved” in making a medical decision that resulted in injury or harm (American Health Line, 2/6). States with existing patients’ rights laws can maintain their laws, and states without such laws can draft their own legislation, but these laws must be “comparable” to the federal version (Senate release, 2/6).

The McCain-Kennedy bill would cover approximately 160 million Americans who are privately insured (American Health Line, 2/6).

“For too long managed care decisions have been made by HMOs and doctors, not by the patients whose very lives are affected by these choices,” McCain said. He added, “Patients deserve basic rights and need to be given the tools to enforce their rights without promoting frivolous lawsuits. By not pre-empting state laws, covering all Americans and banning punitive and exemplary damages on the federal level, this bipartisan bill will achieve this goal and give Americans the health insurance coverage they deserve” (Senate release, 2/6). Other lawmakers lending their support to the proposal at the press conference included Sens. John Edwards (D-N.C), Arlen Specter (R-Pa.), Lincoln Chafee (R- R.I.) and Tom Harkin (D-Iowa), as well as Reps. John Dingell (D-Mich.), Greg Ganske (R-Iowa) and Robert Andrews (D-N.J.) (Meredith McGroarty, American Health Line, 2/7).


Dingell, who co-sponsored last year’s House-passed Norwood- Dingell patients’ rights bill, said that the new Senate bill “includes all of the important patient protections” necessary in patients’ rights legislation, including “anti-gag” protections and guaranteed access to emergency and specialty care. “Today, we are putting managed care organizations on notice — you will no longer have free rein where the health and well-being of Americans are concerned,” he said (Dingell release, 2/6).

Kennedy added, “Our proposal is just what the doctor ordered to end abuses by HMOs and managed care health plans. Prompt passage of this legislation is vital for the 161 million Americans with private health coverage” (Senate release, 2/6). Other lawmakers echoed the need for swift passage of patients’ rights legislation at yesterday’s press conference. “This bill will pass the Senate, the only question is when,” Andrews said. Harkin added, “I believe we’re going to see early and rapid action on this bill” (American Health Line, 2/7).


While senators supporting the McCain-Kennedy bill are optimistic about its reception in the Senate, President Bush could “quietly … torpedo” the legislation, the Washington Times reports. “We can’t have a patients’ bill of rights that encourages and invites all kinds of lawsuits, because the ultimate effect will be to run up the cost of business, particularly for small businesses,” Bush said (Hudson, Washington Times, 2/7). Bush criticized the McCain-Kennedy bill for “mak[ing] it too easy for patients to sue HMOs and insurance companies” and expressed concern over its potential to increase employers’ insurance premiums (Pear, New York Times, 2/7). Bush wants the bill to set “stricter limits” on punitive damages, with a $750,000 cap on damages, according to presidential aides. In addition, Bush wants legislation that would require most patient lawsuits to be heard in federal court, rather than in state courts, which often award higher damages (Keen/Hall, USA Today, 2/7).

The president also wants legislation that would shield employers offering coverage from litigation (VandeHei/Lueck, Wall Street Journal, 2/7). Bush does agree with some of the bill’s stipulations, however, including its provisions on access to emergency room and specialty care. He also supports the evaluation of patient cases by independent review panels before they go to court. Bush’s concerns about the bill were echoed by HHS Secretary Tommy Thompson, who also disagreed with several of the legislation’s provisions (Washington Post, 2/7). Bush said however that he agrees with McCain and Kennedy that Congress should pass patients’ rights legislation (New York Times, 2/7). And while White House officials said that the president will present Congress with “a sketch” of his ideas for a patients’ bill of rights this week, they added that the administration is “unlikely to draft its own, more precise proposal, preferring to reach a compromise based on legislation prepared on Capitol Hill.” Bush concluded, “I’m very hopeful that we can get a patients’ bill of rights on my desk pretty soon” (Washington Post, 2/7).


The new legislation’s sponsorship shifted yesterday when Rep. Charles Norwood (R-Ga.), co-sponsor of the House-passed Norwood-Dingell patients’ bill of rights, withdrew his support from the McCain-Kennedy bill after meeting with White House officials. Norwood said that he wanted the president to have more time to discuss his views on patients’ rights legislation. “President Bush has been in office 16 days, and I firmly believe they need a little more time than that to give us an indication of what he would like to see in patients’ rights legislation, before we launch an all-out effort to pass a final bill,” he said in a written statement. White House officials on Monday had asked “key Republicans” to “pull their names” from the bill (Ornstein, Dallas Morning News, 2/7).

Ganske, however, did not remove his name from the bill. “I think it’s time to put patient protection legislation on the president’s desk. We need to get past talking about principles,” he said (Kelley, Omaha World- Herald, 2/7). White House officials said that Bush called for the delay because he “wanted to put his stamp on the bill, to reflect his priorities and to ensure that he would receive some of the credit if it passed” (New York Times, 2/7). Sen. Don Nickles (R-Okla.) added, however, that Republican support in the Senate for the bill is “limited.” He said, “There may be three or four Republicans who like it, but there are 46 who don’t. We should be working with the Bush administration, not pressing Clinton’s past agenda” (Washington Times, 2/7).


Business groups and insurance companies immediately expressed disapproval of the new bill yesterday, stating that it would result in increased premiums for all health care consumers.

Neil Trautwein, director of employment policy at the National Association of Manufacturers, called the bill a “disappointment,” adding that it was “in many ways much worse” than the original Norwood-Dingell legislation. Trautwein added that the bill’s provisions on employer liability are one area of special concern for his organization and other businesses. “This bill creates the prospect that [businesses] might be sued in state and federal court,” he said. He added that the new legislation also would likely cause health plans to raise premiums for employers already facing double-digit premium hikes, thus prompting some employers to rethink their decisions to offer coverage to their employees.

Trautwein said that most of NAM’s members — 98% of which offer health coverage to their employees — have indicated that they would “immediately drop” or “seriously consider dropping” coverage if such legislation were enacted (McGroarty, American Health Line, 2/7). The Business Roundtable also doubted that the bill would have a positive impact on patient care. “Patients want cures, not lawsuits. You can’t sue your way to quality health care,” Roundtable President Samuel Maury said (Business Roundtable release, 2/6). Health insurance companies spoke out strongly against the bill. American Association of Health Plans President Karen Ignagni said that the McCain-Kennedy proposal “relies on the fundamental assumption that the courts are the best place to resolve health care disputes.” She added, “The McCain-Kennedy bill may help trial lawyers add to their business, but it would not help consumers get their health care when they need it. These lawsuits would lead to higher medical costs for consumers at a time when rising costs are already a topic of growing concern.” Ignagni called on lawmakers to make a “fresh start” with a new patient protection bill that would center around an external appeals process system, a procedure that is “overwhelmingly” supported by health care consumers, she noted (AAHP release, 2/6). Health Insurance Association of America President Chip Kahn added that the legislation “is the wrong bill at the wrong time” and would only “exacerbat[e] the nation’s uninsured crisis” (HIAA release, 2/6).

Trautwein said that despite the lawmakers’ optimism, the McCain-Kennedy bill was not likely to become law. “I think its chances [of being signed into law] are nil and the more members of Congress learn about the bill, the less support it will have,” he said. He added that he hoped to see legislation that would reflect the ideas of President Bush, who has expressed opposition to legislation that would allow individuals to collect large punitive damages from insurance firms. “Our hope is that members of Congress … would look to the president on what kind of bill he would sign,” Trautwein concluded (American Health Line, 2/7).


Despite opposition from the White House, business groups and health insurers, the bill has won support from physicians and patient’s rights advocates. Expressing “strong support” for the McCain-Kennedy bill, the American Medical Association “urged Congress to break through the gridlock and pass [patients’ rights bills] swiftly.” AMA Board Chair Ted Lewers said, “The legislation puts patients over big HMO profits and places medical decisions back into the hands of patients and their physicians, right where they belong. Millions of patients finally will be protected from managed care that is unnecessarily delayed or denied.” The AMA plans to launch a national campaign to support the McCain-Kennedy bill, starting with an ad in the Feb. 8 edition of Roll Call (AMA release, 2/6).


The Foundation for Taxpayer and Consumer Rights said that while the McCain-Kennedy legislation will allow patients to “have greater leverage” with their HMOs,” it also contains “troubling provisions.” FTCR Executive Director Jamie Court said that his group is concerned over the implementation of a cap on punitive damages.

“It’s troubling … that HMOs would still be the only industry in America with a federally imposed cap on punitive damages that can be recovered against them for malice. This trillion dollar industry should be fully liable for its acts” (FTCR release, 2/6).

Stating that the measure might be “Bushwhacked” once it reached the president, Court warned the White House against attempting to stall the bill’s passage.

“This type of divisive, cash-register politics will guarantee that this president lives up to the legacy of his father as a one-term executive” (FTCR release, 2/6).

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