Texas Is the State of the Art for Law on Patients’ Rights

Lawmakers here are looking over their shoulders as many states enact laws giving consumers leverage when they disagree with their managed health care plans.

The unlikely leader is Texas, which is rarely thought of as a beacon of consumer-friendly policies. But its combination of prairie populism and a powerful medical lobby has made it a heavyweight in the struggle with insurers for control of health care decisions and dollars.

Texas’ 1997 law, pushed hard by the Texas Medical Assn. and consumer groups, established an independent panel to hear complaints by patients that their health plans had wrongly denied them treatment. Those who claim to have been harmed can sue their plans and recover substantial damages.

Georgia adopted a similar law this year, and Montana and North Dakota joined 14 other states that had enacted less far-reaching measures making it easier to recover damages from health plans, according to the National Conference of State Legislatures.

Now several states are setting out on the bolder course that Texas took. Consumer advocates expect California to enact a law this year that tracks closely the one in Texas.

The U.S. Senate will begin next week to wrestle with the question of whether to extend the principles of Texas’ law to all Americans. Lobbyists for the Texas Medical Assn. are to arrive in Washington on Sunday to backstop efforts by Senate Democrats and the handful of Republicans who want Congress to follow the Texas model.

GOP Senate leaders have responded with a measure that would grant more limited patient rights and extend them to fewer consumers.

The insurance industry predicts that if the Democratic bill becomes law, the consequences would include a torrent of patient challenges to health plans’ decisions, a blizzard of lawsuits and, ultimately, higher insurance costs for everyone.

Advocates of the legislation point out that the industry issued the same warnings about the Texas legislation, none of which has come to pass. For now, here is what the Texas law has wrought:

Costs. Premiums for most Texas plans were flat in 1999, and it appears that they will change little next year, according to data from the Texas Department of Insurance. Most insurers who cover state workers are holding rates level this year; by contrast, rates for federal workers and California state employees are expected to increase by close to 10%.

Appeals. Of the 10 million Texans in health plans offered by their employers, only 567 have appealed their health plans’ decisions. According to the Texas Department of Insurance, courts have upheld 47% of the HMO decisions, overturned 47% and partially overturned the other 6%.

Lawsuits. In the two years since the measure became law, fewer than half a dozen lawsuits have been filed, according to trial lawyers who track such cases.

Rose Ann Reeser, a senior associate Texas insurance commissioner, said there had been far fewer appeals and lawsuits than her office had expected. “We think one reason is that the plans are making decisions more carefully because they know there is this process.”

Jerry Patterson, executive director of the Texas Assn. of Health Plans, said it is too early to measure the effect of the legislation--the legality of which, under current federal statutes, is still being considered by the courts.

“For the first two years there were very few lawsuits filed,” he said, because plaintiffs’ lawyers were very disciplined about not filing any weak cases that would lose and set a bad precedent.

Marianne Fazen, executive director of the Dallas-Fort Worth Business Group on Health, which represents employers, admitted that “the fear that there would be this slew of lawsuits and it would make the trial lawyers rich has not been borne out.” But she added that she is unwilling to render judgment “until we get some verdicts.”

The first case set to go to trial was filed by the family of a 67-year-old man in a psychiatric ward who was diagnosed as depressed and suicidal.

The lawsuit says his health plan denied his request to remain in the hospital; he drank a half-gallon of antifreeze 18 hours after his discharge and died nine days later.

Despite Texas’ enactment of a strong patients’ rights law, its experience suggests that the proponents of a national measure have a rough road ahead.

The Texas Legislature needed two sessions, marked by a brutal lobbying campaign pitting doctors against insurers and employer groups, to pass the bill.

“The insurers waged a very intense, heavily funded campaign--direct mail, phone banks, and they hired every lobbyist in town with a pulse,” said Kim Ross, the vice president for public policy at the Texas Medical Assn. “Medical politics is a contact sport--no helmets, no pads.”

In response, Texas doctors ran advertisements inviting patients to call a toll-free number if they had any complaints about their managed care plan. Callers were immediately hooked into their state legislator’s office, creating a vast grass-roots campaign against managed care companies.

When state legislators heard from employers in their districts who were worried about the possible effect of the legislation on health care costs, the Texas Medical Assn. sent local doctors--in some cases even the employer’s family physician--to discuss the legislation in detail.

Doctors in the Dallas-Ft. Worth area threatened to quit Aetna when it proposed reducing their payments by 40%. Aetna subsequently made adjustments, and many of the doctors remain in the plan.

The legislation ultimately won broad support in both parties, in part because its chief sponsor in the Senate was David Sibley, a maxillo-facial surgeon and lawyer and a leading supporter of tort reform in the Legislature.

The first time the Legislature passed the bill in 1995, Gov. George W. Bush vetoed it. When lawmakers passed an even stronger version by a larger margin in 1997, he let it become law without his signature.

“The bill includes an independent review process yet also allows HMOs to be sued for medical decisions,” Bush said. “Given the choice between doing nothing and doing something to address a significant problem that impacts the health of thousands of Texans, I have concluded the potential for good outweighs the potential for harm.”