Senate OKs New Rights for Patients

The Senate on Friday overwhelmingly passed a landmark patients’ rights measure that would give Americans an array of new protections in their health plans, but the bill faces a veto threat from President Bush.

The 59-36 vote marked the latest turning point in the nation’s struggle to strike the right balance between controlling health care costs and providing patients with quality medicine.

The legislation, to be taken up later this summer by the House, would carve out sweeping protections for the more than 190 million Americans with private health insurance, including direct access to specialists, guaranteed emergency room coverage and the right to participate in clinical trials.

The measure also would greatly expand patients’ ability to sue health maintenance organizations and other insurers over denials or delays of treatment, a provision that Republicans argued will drive up health insurance premiums and perhaps cost millions of Americans their coverage.

Bush said Friday that he was “pleased” with some changes to the Senate bill. But, he added, “I could not in good conscience sign this bill because it puts the interests of trial lawyers before the interests of patients.”

He vowed to work with House Republicans to pass legislation that “discourages runaway litigation costs.”

After meeting with Republicans at the Capitol on Friday, Secretary of Health and Human Services Tommy G. Thompson complained that Democrats were more interested in securing a campaign issue than a viable bill. “What’s the sense of having a bill that [the president] is going to veto?” he asked. “What do we gain, except some finger-pointing and some partisan shots?”

Friday’s vote followed two weeks of intense Senate debate and one last-ditch push by Republicans to strip the measure of liability provisions that would enable patients to collect unlimited awards for pain and suffering, and punitive damages up to $5 million.

But Republicans were unable to significantly alter, much less derail, legislation fueled by Americans’ rising frustration with HMOs, which have rapidly become widespread over the last 15 years and rein in costs by restricting access to care.

The legislation “fundamentally changes the relationship between patients and the managed care industry,” said Peter Jacobson, associate professor at the University of Michigan School of Public Health. “Managed care was the right health care system to weed out cost excesses, but over time the industry overplayed its dominance, antagonized physicians, antagonized the public and did nothing to alleviate that anger. Eventually, the political system responds.”

The vote was a triumph for Democrats, who recently regained control of the Senate for the first time in six years and made the patients’ bill their legislative priority.

“Today’s vote brings us a giant step closer to guaranteeing that millions of Americans will no longer be powerless when their HMOs overrule their doctor and deny needed care,” said Sen. Edward M. Kennedy (D-Mass.), one of the leading sponsors of the bill.

But the outcome was also a reminder of how far Democrats have been forced to lower their sights since then-President Clinton sought to overhaul the nation’s health care system--providing universal coverage to all Americans--in the early 1990s. This year’s patients’ bill does nothing to extend coverage to the 43 million Americans currently uninsured.

The action now turns to the House, which is expected to take up the legislation sometime next month.

Earlier this week, House GOP leaders unveiled a patients’ bill that’s much closer to what Bush wants. It offers many of the same basic protections as the Senate measure but would limit noneconomic damages at $500,000 and would not allow punitive damages.

The White House threw its full weight behind the measure as Bush held meetings with dozens of House members in what the administration said will be an ongoing lobbying campaign by the president.

In the Senate, “we were pretty much stampeded into passing a bill,” said Sen. Bill Frist (R-Tenn.), a surgeon who led the GOP effort to alter the legislation. “The House of Representatives has a huge responsibility to pass a bill that does not drive people into the ranks of the uninsured.”

HMO industry groups said Friday that they plan to continue their multimillion-dollar advertising assault on the Senate bill in the coming weeks.

But House Republican leaders face the difficult task of siphoning votes away from a Democrat-backed patients’ bill that passed the chamber by a comfortable margin just two years ago. And House Minority Leader Richard A. Gephardt (D-Mo.) said Thursday that he believes legislation similar to this year’s Senate bill will be approved.

Friday night, as senators filed out of the chamber, several GOP lawmakers acknowledged that they are not counting on the House to make substantial changes and that Bush could be put in the uncomfortable position of vetoing legislation that polls show has strong public backing.

“No president ever wants to be in a situation where he’s vetoing a health bill,” said Sen. Charles Hagel (R-Neb.). “But the president laid out early on what he believed was acceptable.”

In fact, Republicans and Democrats were in broad agreement on the bulk of the patients’ bill, particularly basic protections that would likely have the most meaning for the vast majority of HMO members.

Among these are guarantees that patients have direct access to pediatricians, gynecologists and other specialists without having to go through a primary care physician or other gatekeeper.

The bill would prevent HMOs from second-guessing patients’ judgments about whether they need emergency room care or where they seek it. The legislation also requires health plans to cover certain breast cancer treatments and participation in clinical trials approved by the Food and Drug Administration.

The Senate also expanded the ranks of those who will be affected by the legislation by passing an amendment that would include about 100 million Americans who are covered by federally funded health insurance programs, including Medicare and Medicaid. But many in the federal programs would not be affected by the bill because they are in traditional fee-for-service plans, not HMOs.

The two political parties agreed that patients ought to be required to try to resolve disputes through independent review panels, but disagreed sharply over what legal recourse patients ought to have beyond those panels.

Currently, a 1974 law precludes most Americans from suing HMOs for anything more than the cost of treatment.

The Democrat-backed bill permits lawsuits in state and federal courts and allows unlimited damages, except for the $5-million cap on punitive awards. Democrats argued that the provisions were the only way to give patients leverage against companies that are often accused of basing decisions on money instead of medicine.

Republicans and industry groups argued that these provisions would cause costs to soar, citing Congressional Budget Office estimates that the legislation would increase annual insurance premiums by 4.2%.

“What the Senate is doing in voting for [the bill] is levying a trial lawyers’ tax on working families,” said Karen Ignagni, president of the American Assn. of Health Plans.

The bill would have a pronounced effect in California, widely regarded as the birthplace of managed care.

More than 90% of those with health insurance in the state are members of HMOs or other managed care plans, according to experts. And many of the nation’s leading managed care companies are based in California, including Kaiser Permanente, PacifiCare, WellPoint and Health Net.

The Senate bill passed with the support of all 50 Democrats, including California Sens. Barbara Boxer and Dianne Feinstein, and nine Republicans, most of them moderates who wield enormous clout in the narrowly divided Senate. Some suggested afterward that the vote reflects a new dynamic in Washington.

“What you’re seeing is an era of coalition government,” said Sen. John McCain (R-Ariz.), who joined Kennedy and Sen. John Edwards (D-N.C.) to co-sponsor the patients’ bill. “When you have an evenly divided country--and an evenly divided Senate and House--I think you will see shifting coalitions that will govern.”

The vote was also widely seen as a key win for new Senate Majority Leader Tom Daschle (D-S.D.), who made the bill the first item on the Democrats’ agenda.

Friday’s vote came after the Senate slogged through more than a dozen amendments, as Republicans launched their final legislative assault. But Democrats prevailed on every key vote, just as they had throughout the two weeks of debate.

The parties did reach a number of compromises, including a deal that would shield the vast majority of employers from lawsuits and also a provision that would cap attorney fees at 33% of any settlement.

The Senate voted unanimously to pass an amendment offered by Sen. Fred Thompson (R-Tenn.) that requires patients to exhaust an independent appeals process before being allowed to sue an HMO, unless that process exceeds 31 days.

On another unanimous vote, the Senate placed strict restrictions on class-action lawsuits that can be brought under the bill. The amendment, offered by Sen. Mike DeWine (R-Ohio), limits classes to employees of one company or members of one health care plan.

Republicans also attached an abortion-related measure to the bill that establishes that any newborn, including an infant who survives a botched abortion, would be entitled to the bill’s protections.

The measure passed 98 to 0 after Democrats, including Boxer, determined that it would not alter the legal status of a fetus, a key question in the abortion debate.