Berry Spurns GOP Patients’ Rights Bill in Radio Address

During the Democrats' weekly radio address Saturday, Rep. Marion Berry (D-Ark.) "slammed" the House-passed version of the patients' rights bill, calling the legislation an "HMO and insurance company protection act," the AP/Bergen Record reports. The House-passed bill, a "compromise" drafted by Norwood with President Bush's "blessing," provides a more limited right to sue than the Senate-passed version. Berry said that Norwood's version "gut[s]" provisions supported by Democrats (AP/Bergen Record, 8/12). The House bill would allow patients to sue health plans in state courts under a new set of federal rules that would cap non-economic damage awards at $1.5 million. In addition, courts could award patients up to $1.5 million in punitive damages, but only in cases where patients win complaints against health plans before an outside appeals panel and an HMO "still persists in refusing the care they need" ( Kaiser Daily Health Policy Report, 8/2). Berry said, "A compromise is not an agreement reached behind closed doors between two members of the same party, especially when it contradicts the principles so fundamental to one side," Berry said. In June, the Senate passed a patients' rights bill (S 1052) (similar to the original House bill before the amendment was added) that President Bush threatened to veto, maintaining that the legislation would promote "frivolous" lawsuits and drive up health insurance premiums. Berry said that Republicans, in adding the amendment to the House bill, hope to "create an impasse" between House and Senate negotiators to "prevent any managed care reform package from becoming law" (AP/Bergen Record, 8/12).

Overriding State Laws?
Meanwhile, the New York Times reports that state officials have expressed "grave doubts" about the House patients' rights bill, warning that the legislation would "override" state patients' rights laws, which often provide "greater protection" to millions of residents. For example, Michigan Insurance Commissioner Frank Fitzgerald (R) said that he "opposed a provision of the House bill that overrides state laws establishing procedures for the review of decisions by HMOs." Fitzgerald said, "The House bill appears to preempt all state internal and external review laws." According to California Gov. Gray Davis (D), the House bill would "diminish" the "health care rights of Californians. Congress should adopt minimum standards and allow states to exceed them." Both the Senate and House patients' rights bills would allow insurance companies to charge patients a $25 fee for external reviews. Gray said, "Those fees are really a patients' rights tax, which I find wholly unacceptable." Under California law, HMOs pay for the cost of reviews. In addition, the House bill would cap non-economic damage awards at $1.5 million and punitive damages at $1.5 million, while some states have no limits on damages. "A curve ball is being thrown at us by people who generally advocate states' rights. They are saying now, in effect, that they don't trust the states," Washington state Insurance Commissioner Mike Kreidler (D) said.

Association Health Plans
State officials also complain that a provision in the House bill that would allow small businesses to establish association health plans to purchase health insurance for employees through trade associations and chambers of commerce would "exempt" them from most state insurance standards. In a letter to Congress, the National Governors Association, the National Association of Insurance Commissioners and the National Conference of State Legislatures expressed "strong opposition" to the provision, pointing out that small businesses with older employees "would be left behind in the regular insurance market" and face higher premiums. "Association health plans are a recipe for anarchy," Kreidler said (Pear, New York Times, 8/3). However, the association health plans provision represents a "significant" victory for small business lobbyists, the Washington Post reports. "It makes sense to a lot of small business owners to buy in bulk," John Emling of the National Federation of Independent Business said. In addition, the House bill would "greatly expand the reach" of medical savings accounts. Small businesses have criticized current MSA restrictions -- which limit the number of accounts and prevent businesses with 50 or more employees from using the accounts -- as "too restrictive" (Crenshaw, Washington Post, 8/13).