Negotiations Fail on Bill of Rights for HMO Patients

Another major health bill ran aground in Congress on Thursday, one day after legislation to expand Medicare to cover prescription drugs died in the Senate.

Prospects dimmed for a bill that would give new protections for patients of managed health-care plans, as Senate Democrats announced that negotiations with the White House on the issue had collapsed.

“I regret that we continue to be unable to reach an agreement on [a] patients’ bill of rights,” said Sen. Edward M. Kennedy (D-Mass.), a leader on the issue.

The talks between Senate Democrats and the administration had been considered the best hope for resolving differences between versions of the bill approved last year by the House and Senate. Both sides said the talks collapsed because they could not bridge differences over the extent of rights that patients should be given to sue their health maintenance organizations.

Rep. Charlie Norwood of Georgia, a leading Republican proponent of passing a patients’ rights bill, said he believes the collapse of the talks effectively killed the measure for the year.

Democratic leaders said they would seek to convene a House-Senate conference committee to continue negotiations. But Norwood and others close to the process called that a futile gesture.

“If negotiations between the White House and Sen. Kennedy could not succeed, adding a dozen more voices isn’t going to make things any better,” Norwood said.

Democrats hung their hopes for breaking the impasse on the current anti-corporate climate. They hope that will put pressure on their Republican colleagues to make concessions on the bill rather than continue to defend the interests of HMOs, which oppose the more stringent bill passed by the Senate.

At issue is an effort to make it harder for HMOs to deny patients coverage for needed care. There is agreement on several provisions. Both the House and Senate versions would, for example, guarantee patient access to certain specialists and emergency room services.

But the bill passed by the GOP-controlled House would impose stricter limits on patient lawsuits than the Senate measure, including a cap on pain-and-suffering and punitive damages.

President Bush and other Republicans argue that the limits on damages would discourage frivolous lawsuits and the big jury awards that they say drive up health insurance premiums. Democrats said that more robust legal rights are needed to give teeth to patient protections.

The policy dispute has strong political overtones because Republicans receive considerable financial support from HMOs and Democrats are strongly allied with trial lawyers who oppose limiting damages.

Approval of a patients’ rights bill was ranked by Democrats as their first priority when they won control of the Senate in mid-2001 after Sen. James M. Jeffords of Vermont left the GOP to become an independent.

The White House has been conducting negotiations on a compromise since last winter with Kennedy and others, including Sens. John Edwards (D-N.C.) and John McCain (R-Ariz.).

Last week, the three senators wrote to Bush urging him to get more involved in breaking the impasse. After receiving no response, Kennedy called Nicholas E. Calio, the White House’s chief congressional lobbyist, to tell him he thought the talks were stalled.

Calio said he agreed. “The president still would like a bill, and both sides tried to be very creative. But we can’t bridge the liability gap,” he said in an interview.

Each side was left accusing the other of being pawns of special interests.

“In the end, the administration was more committed to maintaining special preferences for HMOs and big insurance companies than passing legislation that would protect patients,” Kennedy said.

White House spokesman Scott McClellan responded in kind: “The issue appears to be whether or not the interest of powerful personal-injury trial lawyers will prevail over the health-care needs of the American people.”