CBO Says Patients’ Rights Bill Would Boost Premiums 4.2%

A new Congressional Budget Office study found that a patients' rights bill (S 283) sponsored by Sens. John McCain (R-Ariz.), Ted Kennedy (D-Mass.) and John Edwards (D-N.C.) would raise health insurance premiums by 4.2%, a number "slightly higher" than the Norwood-Dingell patients' rights bill passed by the House in 1999, CongressDaily reports. A spokesperson for Sen. Don Nickles (R-Okla.), who requested the study, called the McCain-Kennedy-Edwards bill a "non-starter," maintaining that the legislation would "raise premiums and push people out of the insurance market." However, a Kennedy spokesman said that the number would not "cause a significant ripple" in the health insurance market, adding, "It's still less than the cost of one Big Mac and fries a month for the average worker." The CBO estimates that the "availability of civil remedies alone" -- such as the bill's provision allowing patients to sue health plans -- would raise the cost of insurance by 0.8%. In a letter to Nickles, CBO said that the study included an assumption that health plans would have to cover "routine" patient costs in clinical trials approved by the FDA, adding that the estimate reflects recent court decisions that "decrease the likelihood that state laws regulating the appeals processes of health plans are preempted by current federal law" (CongressDaily, 4/24).

'Discord' Abounds
Meanwhile, despite "continued claims that Congress is closer than ever" to agreement on patients' rights legislation, "much discord was on display" April 24 during a House Ways and Means health subcommittee hearing, CongressDaily/A.M. reports. The "question of liability" still stands as the "biggest remaining stumbling block," with debate "hing[ing]" on where lawmakers should allow patients to sue HMOs -- federal or state court -- and whether they should cap punitive damages. Testifying on behalf of the National Association of Manufacturers, Michael Toohey said that new liability provisions would "threaten" employer-based health care coverage. "Manufacturers and workers alike will bear the aggregate cost of expanded health care liability -- a cost we believe has been greatly underestimated in the past -- which is of great concern in an environment of double-digit health care inflation," he said, adding that in addition to dropping health insurance for employees, employers could reduce coverage or shift costs. Rep. Jim McCrery (R-La.) proposed a "potential compromise" -- allowing some new liability but with caps on damages, a plan backed by President Bush. "Unlimited caps on damages is bad for the entire health care system," McCrery said. However, testifying on behalf of the Association of Trial Lawyers of America, Sharon Arkin said that caps on damages "actually would harm patients who need help the most." She said, "Caps on non-economic damages punish those with the most severe, devastating injuries and do nothing to address concerns of frivolous claims," adding, "Caps on damages reward the person or company which caused the injury by limiting liability, while further harming the injured patient by denying full compensation determined by a citizen jury." Arkin also dismissed "external appeals" proposed by business groups as "skewed" in favor of HMOs, which have "more lawyers and medical experts." She said, "Where death or injury has already occurred, where damage is imminent or has already happened, external review provides no remedies. All it can do is ... tell the HMO to provide the care it should have provided to begin with" (Rovner, CongressDaily/A.M., 4/25). To view a Healthcast of the hearing, click here.

Norwood Back in Action
In related news, aides for Rep. Charlie Norwood (R-Ga.), who co-sponsored 1999's House-passed Norwood-Dingell patients' rights bill, said that Norwood, after "stepp[ing] out of the spotlight" earlier this year to allow the White House "room to negotiate" a new bill, will not "wait past Wednesday to retake the stage," CongressDaily reports. Aides said that Norwood, "frustrated by what he perceives as a lack of progress on the issue," may rejoin his "old coalition." While "it is unclear what specific action Norwood will take," aides said that he has discussed the idea of legislation that includes patient protections and an independent review "but is silent on employer and HMO liability." The bill -- a "major departure" from last year's legislation, which called for both federal and state liability with some caps on damages -- could "clear the way for a White House signature, if members of Congress can back away from their entrenched positions," sources said. According to a spokesperson for Rep. John Dingell (D-Mich.), co-sponsor of last year's Norwood-Dingell bill, Dingell has "not had any discussions on this issue" of a bill without liability, a proposal "not in synch with our position." A Kennedy spokesperson said that Norwood's proposal "has not been discussed with Democrats," but "key" Republican sources said that a no-liability bill could help Democrats and supporters of broader legislation "escape a sharp criticism of their previous proposals: that they would hold employers liable." Sources also said that Bush "might be willing to sign" the legislation to "move onto other issues." CongressDaily reports that Norwood's potential decision to back a no-liability bill could "signal an acceptance that new legislation is not needed for claims" -- the "driving force for a bill all along" -- or that Norwood "feels he must take what he can get from a Republican White House and Congress," sources said. Business groups, concerned about potential class-action lawsuits, said that they would "closely" study a no-liability bill. "We would give greater scrutiny ... regarding the patient protections and external review sections of the bill for their impact on restricting employers ability to offer benefits," Paul Zurawski of the Business Roundtable said.

'Making a Comeback'?
Sen. Susan Collins (R-Maine) had "pushed" last October for a bill without liability, a move that "garnered strong criticism" from Democrats, but the "idea now seems to be making a comeback." Collins said, "There is no doubt in my mind that consumers would have been far better off had Congress enacted the compromise on the patients' bill of rights that Sen. (John) Breaux (D-La.) and I proposed at the end of last session." Hoping to pass patients' rights legislation this year, Collins has joined a "working group" led by Sen. Bill Frist (R-Tenn.) to craft new legislation. "It's unclear to me whether we'd be able to do a bill that commands a majority of support," she said, adding, "We've not agreed among ourselves." The legislation would likely "reflect President Bush's priorities," allowing only a limited federal right to sue after "exhaustion of an appeals process" and including caps on punitive damages (Fulton, CongressDaily, 4/24). For additional information regarding patients' rights, including links to ads, press releases, reports, current legislation and some other resources, go to http://www.kaisernetwork.org/adwatch/adwatch_index.cfm?display=deil&aw=243.