Health Care Reform Top Issue in New Congress


Even before a new Congress takes office in January, many of its key members are paving the way for legislation to rein in managed health care plans.

Bolstered by this month’s congressional elections, they hope to join forces with President Clinton behind what the White House believes could be the most important health care legislation of Clinton’s final two years in office. Key administration and congressional leaders are already suggesting compromises to break a logjam on the issue.

Not only did the Democrats add to the number of the bill’s supporters in the House by cutting into the Republicans’ margin of control. More than that, the elections swept into power new Republican House leaders who look more favorably on managed care legislation than did their predecessors, who were responsible for the bill’s demise this year.

Speaker-elect Bob Livingston of Louisiana was a co-sponsor of a controversial bill that would have allowed patients to recover substantial monetary damages from health plans, and he has already named health care as a top priority for the new Congress.


“We want to make sure everyone has access to and choice of adequate health care facilities, physicians and doctors,” Livingston told reporters after Republicans chose him as speaker.

Legislation would almost surely guarantee coverage of emergency treatment even without authorization from a managed care plan. It would also provide that patients could appeal adverse treatment decisions to an independent review board.

Disagreement still rages, however, over the bill’s most controversial provision: to give patients the right to sue for damages when a managed care plan’s decision to withhold a test or treatment harms the patient.

Clinton and most congressional Democrats believe such a provision is necessary to give patients more leverage over their managed care plans.


Most Republicans, however, favor current practice, under which managed care plans are liable only for the cost of the denied care--the cost of a mammogram, for example, for a woman who died of breast cancer after having been turned down for that inexpensive test.

The Republicans argue that the appeals process should take care of such complaints with no need to resort to the courts. Their position echoes that of the insurance industry, which runs most managed care plans, and employer groups, which want to restrain health care costs.

“We believe that if everyone would take a deep breath and let the market forces take effect, then the legislative requirements would not be needed,” said Paul Dennett, vice president for health policy at the American Assn. of Pension and Welfare Benefit Plans, which represents hundreds of employers.

In a signal of possible compromise, White House officials have begun talking loosely about approaches that might be acceptable to some Republicans and the nonprofit managed care firms, the most flexible component of the managed care industry.

“There are options where you make sure people exhaust administrative appeals before they take it to court,” said a senior White House official who is following the issue closely. “People are going to be able to get to a compromise because they don’t want to deal with the issue again and again.”

While Congress spent the last two years debating managed care regulation, the states roared ahead with legislation of their own.

Texas gives patients many of the same rights that Congress is considering, including rights to appeal denials of coverage to an independent board of physicians and to recover substantial damages in malpractice lawsuits.

Since the law went into effect a year ago, the independent review board has ruled on 293 appeals, and in 49% of the cases it has sided with the patients. In only one case has a patient’s family gone to court.


California’s Legislature, where a patient protection bill fell short this year, is expected to try again next year, with the odds of enactment improved by the election of Democrat Gray Davis, a supporter, as governor. The managed care industry is already bracing for a fight over letting patients recover damages from managed health care plans.

“I think a reasonable amount of patient protections have been enacted and more is appropriate, especially on the issue of independent review,” said Walter Zelman, president of the California Assn. of Health Plans, which represents 40 insurers and managed care plans with more than 20 million patients.

Zelman said his organization, in a sharp departure from managed care plans in most states, was likely again to support creating an independent panel of physicians to review treatment decisions. Not so likely, Zelman said, is his organization’s support for enabling patients to recover substantial damages in court.

“The greatest concern of managed care plans in California,” he said, “is that if the door were to be open an inch, the lawyers would want to take a mile.”

None of the state patient rights laws affects the 48 million patients nationwide who are in self-insured health plans--those in which the employer rather than an outside agent provides the coverage. Federal law exempts self-insured plans from state regulation.

As a result, the outcome of the debate in Washington over managed care regulation will be particularly important to this group. Despite the continuing friction over some core issues, the debate’s tone has grown less political and more deliberative since the congressional elections.

“The fact that there isn’t an election looming on the horizon will change the atmosphere,” said Larry Leavitt, a senior health policy analyst at the Kaiser Family Foundation, a nonprofit health care policy think tank.

“The election results, with more Democrats in the House and a new speaker, make a big difference,” added Connie Barron, a lobbyist for the Texas Medical Assn.


In the Senate, John H. Chafee (R-R.I.) and Bob Graham (D-Fla.) are working again on their version of a bipartisan bill.

And in the House, key players in both parties--such as Greg Ganske (R-Iowa), a doctor and champion of patients’ rights, and John D. Dingell (D-Mich.)--are talking to each other about reintroducing a Democratic version of this year’s bill, possibly after adjusting it to make it more attractive to Republicans.

“I’ve already been approached by many of my Republican colleagues encouraging us to move ahead early,” Ganske said. He added that Livingston “understands very well there is more than a working majority in Congress that will vote for a patients’ bill of rights, and this should be a bipartisan effort. . . . The stars are coming into alignment.”