House Negotiators Craft Consensus on Managed Care

A bipartisan group of House lawmakers announced agreement Thursday on a managed care bill that includes strong patients’ rights provisions, setting the stage for a showdown on the issue when Congress returns to Washington in September.

The consensus bill was crafted by Rep. John Dingell (D-Mich.), a senior member of the Democratic caucus, and Rep. Charlie Norwood (R-Ga.), a dentist and leader of a sizable splinter group of Republicans who are eager to put stricter regulations on HMOs and other managed health care companies.

The legislation, which is expected to have the support of a broad array of medical and consumer groups, would guarantee all privately insured patients access to specialists. It would also promise coverage when they go to emergency rooms believing they need emergency care but without authorization from their health plans.

It would give patients the right to appeal health plans’ denials of coverage to independent external review boards of health professionals with expertise in their illnesses. The independent boards’ decisions would be binding. A health plan that fails to comply could be fined up to $250,000.

But the provision that provoked an immediate onslaught from health plans and the business community was one that would give patients the right to sue health plans under existing state negligence laws for denials of treatment that result in injuries or deaths.

It appears likely that virtually all House Democrats would support the bill as they did similar legislation last year. Republican backing is harder to gauge since the House Republican leadership, which opposes the bill’s stringent approach to managed care regulation, is likely to put heavy pressure on GOP lawmakers.

Business and health insurance groups vowed to mount a major grass-roots lobbying campaign against the bill over the summer. Still, 10 Republicans already have agreed to the bipartisan measure, including both conservatives and moderate members of the GOP conference, suggesting that the bill could gather significant support. If all Democrats supported the bill, it would take only six Republican defectors for it to win a majority.

Two California lawmakers, Rep. Stephen Horn (R-Long Beach) and Rep. Lois Capps (D-Santa Barbara), were among the proposal’s initial supporters.

Under current law, the health plans that cover 125 million Americans generally have not been liable under state malpractice or negligence laws. The most that a patient can recover is the cost of the denied benefit. For example, if a plan denies a patient coverage for a mammogram and it later turns out that the patient has breast cancer, the patient can recover only the cost of the mammogram.

In deference to concerns that earlier versions of the bill would have encouraged lawsuits and perhaps allowed employers as well as health plans to be sued, the bill’s authors stipulated that state dollar limits on damages would apply to lawsuits brought under the bill. Additionally, plans could not be held liable for punitive damages if they complied with the findings of external review panels.

A provision also was added to ensure that employers who provide health care to their workers could not be sued for a plan’s treatment decision.

“All of us have no desire for employers to be sued for frivolous suits or otherwise,” Norwood said. “We’re interested in consumers getting the care from their insurance that they paid for.”

The Senate passed a bill regulating managed health care plans in July, but it won only GOP support. President Clinton threatened to veto the measure because, he said, it did too little to protect patients.

The president said that he strongly supports Thursday’s bipartisan measure and urged House Speaker J. Dennis Hastert (R-Ill.) to allow it to come to a vote in September.

The bill’s authors promoted the measure as the only one that has a chance of becoming law because it has support from both parties.

“A Republican bill will never be signed by the president. . . . A Democratic bill can’t survive a [House-Senate] conference,” Norwood said. “We need a law that protects patients.”

But health plans and business groups assailed the proposal.

“This legislation is built on the premise . . . that trial lawyers are the guardians of good medical care,” said Karen Ignagni, president of the American Assn. of Health Plans, which represents 1,000 managed care plans nationwide. “The experience of malpractice has demonstrated how false that is.”

A coalition of business and insurance groups quickly derided the bill as “the health insurance elimination act of 1999.”

The bill’s sponsors said that they expect a tough fight from business and the health insurance industry.

“This is not the end; it is not even the beginning of the end,” said Dingell, who has worked for more than two years to craft a bipartisan bill. “But it’s a good bill, it covers everyone and it’s bipartisan.”