The patient protection debate heats up
How Congress, states and even health plans are getting involved
From the September 1998 ACP-ASIM Observer, copyright © 1998 by the American College of Physicians-American Society of Internal Medicine.
By Janice Simmons
As the clock ticks down on the 105th Congress, patient protection legislation has emerged as one of the hottest issues in health care policy.
While Congress has been debating how to protect patients for much of the last year, the issue has gained momentum in the last few months as national elections near. State legislatures across the country are also exploring how to expand patient protections in the current health care climate; most have already enacted some protections. And even the managed care industry is getting involved, with several professional organizations urging health plans to voluntarily offer patient protections before legislators get involved.
Why the surge in interest in expanding patient protections? The issue has strong public support and could prompt any "audience in America to give a standing ovation," said Robert Blendon, professor of health policy at the Harvard School of Public Health. "Citizens have heard from friends, family and principally the media that if they're very sick, some of these plans will deny access to care. People are saying, 'We want protection in our insurance plans.' "
Earlier this spring, Luntz Research, an Arlington, Va.-based firm that conducts surveys for Republican candidates, found that 47% of Americans thought that the health care system was deteriorating, 34% percent thought it was improving and 15% believed it was the same.
Those kinds of results are fueling the debate among politicians at the federal level. In late July, the House narrowly passed the Republican leadership's patient protection bill before breaking for the summer. Senate Republicans introduced a similar bill, but it is not scheduled for debate until early September. Democrats in both the House and Senate have introduced alternative bills with somewhat different provisions.
Overall, the leading Congressional proposals agree on a number of provisions. All would eliminate gag clauses that prohibit physicians from discussing alternative treatments that a health plan will not pay for. All also promise to guarantee coverage of emergency room care if deemed necessary by a "prudent layperson" and to give women the right to direct access to ob/gyns without having to first see a primary care physician.
The bills differ, however, when it comes to patient protections that would represent "significant" changes in public policy, according to Mr. Blendon. Perhaps the biggest point of contention concerns whether patients in employer-sponsored plans should have the right to sue health plans for medical malpractice. While the Democrats' bills would give patients that right, the Senate GOP bill does not contain any such provision. The House Republicans would not allow patients to sue health plans but would impose government fines of up to $100,000 on health plans that wrongfully withhold coverage. The House GOP bill would also cap noneconomic damages, typically for pain and suffering, at $250,000.
In addition, all bills would require health plans to set up processes to allow patients to appeal a health plan's decision to withhold care, but the Republican proposals attach some strings. House Republicans, for example, would require patients to pay 10%, or up to $100, of the costs of some appeals. While Senate Republicans would not charge patients to appeal a health plan decision, they would allow external appeals only for cases involving services exceeding $1,000.
Many members of the House, who face re-election this fall, are anxious to take home consumer-friendly legislation, but analysts wonder if the Republicans and Democrats will be able to reach common ground and pass patient protections this year. President Clinton, who called for patient-bill-of-rights legislation earlier this year, has criticized the Republican bills, saying they are filled "with empty promises." In mid-August, he threatened to veto the Republican proposals, saying they would not "offer adequate protections" for the 160 million Americans enrolled in HMOs and other types of managed care plans. The GOP bills, he has said, deny patients the right to sue their managed care companies, fail to provide adequate emergency treatment safeguards and cover too few people.
A move toward compromise is expected to occur first in the Senate, where Sen. John Chafee (R-R.I.) has drafted a measure with several other Republican and Democratic senators. They claim their proposal takes the best features of both parties' plans but omits some of the "poison pills" that would likely lead to a Clinton veto.
The Chafee bill includes many of the patient protection provisions endorsed by Democrats in their bills, such as coverage of emergency care and better information about what plans cover. However, it does not include Democratic-supported provisions that would allow patients to sue health plans in state courts for unlimited damages when wrongly denied care. In addition, it would not allow patients to collect "noneconomic" pain and suffering awards, or punitive damages.
Regardless of what happens in Washington this fall, the issue of patient protections in managed care isn't going to fade away. Long before Congress got involved in the debate, almost every state has been busy debating and enacting many of the same reforms now embodied in the federal bills.
According to a report from national consumer organization Families USA, 45 states and the District of Columbia have passed a ban on gag rules, while 31 states and the District have passed laws requiring plans to pay for emergency room care. Last year, two states—Texas and Missouri—passed legislation allowing patients to sue their health plans for damages.
Texas legislators passed a series of items, loosely referred to as a "patient protection act," that addressed issues such as physician credentialing and the physician/patient relationship. One bill that is part of the legislation prohibits physicians from accepting financial incentives to limit care.
One of the most controversial bills, however, requires health plans in the state to establish a process by which patients can appeal decisions about their care. Carlos R. Hamilton Jr., FACP, a Houston internist and endocrinologist who is chair of the Texas Medical Association's political action commission, explained that the measure faced stiff resistance. Critics argued that it would drive up health costs and reduce the number of individuals with access to health care because employers would fail to insure their employees.
In the year after the measure went into effect, however, none of the predictions came true, according to Dr. Hamilton. Of the approximate 70 patient complaints that have gone to arbitration through the Texas law's review process, patients won in half the cases and managed care companies won the other half. Not a single lawsuit has been filed to appeal these decisions, Dr. Hamilton noted.
"We think the law protects the doctor/patient relationship," Dr. Hamilton added. "Patients have to really know that their physician is going to do the very best that they can for them, not for what benefits the managed care organization."
Despite such progress at the state level, analysts point out that a patchwork quilt of local patient protections is not nearly as effective as federal legislation. Judith Waxman, director of government affairs for Families USA, said that without any overall consistency in patient protection legislation, patients often find themselves unprotected.
A good example concerns patients' ability to sue their health plans. A number of states have passed legislation allowing patients to sue their health plans if they feel they were injured because their plans, not their physicians, denied service. The courts, however, have generally ruled that these state laws do not apply to patients who receive their health coverage from their employers because the federal Employee Retirement Income Security Act of 1974 (ERISA), which governs a wide range of employee-benefit plans that includes pensions and health insurance, preempts state law on these topics. In Texas, for example, patients cannot sue their health plan if they receive health benefits from their employer.
Other states have had similar bittersweet experiences with patient protection legislation. In Pennsylvania, for example, new patient protection legislation takes effect next year that will set up an appeals process so patients can dispute decisions by health plans. In addition, the law will bar health plans from using gag clauses and from deselecting physicians who voice objections about a plan. Critics, however, say that the part of the law that creates an appeals process did not go nearly far enough because it does not define medical necessity. Without such a definition, it is nearly impossible to hold a health plan liable for wrongfully withholding care.
Robert B. Sklaroff, ACP-ASIM Member, a Philadelphia-area medical oncologist and hematologist, and president of the Pennsylvania Society of Internal Medicine (PSIM), explained that managed care plans can continue to set their own guidelines—with approval of the state's Department of Health—to guide insurance coverage decisions for medical services.
Dr. Sklaroff said that as long as health plans are allowed to follow their own definition of medical necessity, then all they have to do on the appellate level is show that they followed their own rules because there is no standardization.
Pennsylvania's patient protection legislation has also raised some other troubling issues, according to Dr. Sklaroff. For example, the law now defines a primary care provider as "one who supervises, coordinates, prescribes, or otherwise provides or proposes health care services, initiates referrals for specialist care, and maintains continuity of care, within his scope of practice." This definition, he said, could lead plans to increase the use of nonphysicians to provide health care services.
Because the prospects for federal legislation are uncertain and since state legislation has made only limited gains, the drive to expand patient protections is moving onto other fronts.
Earlier this year, President Clinton ordered all federally sponsored health care plans to include a patient bill of rights. Then, in mid-August, he ordered all managed care companies that insure federal workers to expand their patient protections, in part by eliminating gag rules that restrict what a doctor can tell a patient about treatment options. In addition, the Medicare+Choice regulations that will establish new types of Medicare plans in January include a number of patient-protection clauses, including a ban on gag clauses. Because the programs that fall under these directives cover Medicare and Medicaid beneficiaries, federal employees, active military personnel and veterans, they account for nearly a third of all Americans with health care coverage.
The managed care industry recognizes that Americans strongly want these protections and, perhaps in an effort to head off any government attempts to impose these protections on health plans, it is trying to address these public concerns on its own. The American Association of Health Plans (AAHP), a managed care trade group, has created a "code of conduct" listing 11 patient care principles that its member health plans must follow. The principles address issues such as patient appeals, physician and quality assessment programs and patient choice of family and specialty physicians.
According to a survey conducted earlier this year, 95% of the AAHP's member plans reported that they were "fully" or "mainly" in compliance with at least six of the seven original principles—the other four were added after the survey was completed—and that all expect to come into compliance in the upcoming year. Health plans that want to join the group or renew their membership will have to be in compliance with the principles by Jan. 1.
Meanwhile, the National Committee for Quality Assurance (NCQA), a nonprofit organization that accredits half of the nation's managed care plans, has announced that next year it will begin incorporating consumer protection standards into its accreditation process. Specifically, the standards will prohibit plans from using financial incentives to limit care and will require that plans have a process to approve restrictions to drug formularies. In addition, NCQA will evaluate whether health plans limit access to emergency room care. While NCQA accreditation is voluntary on the part of health plans, many employers require the NCQA seal of approval.
In the long run, however, people may not be satisfied with such voluntary agreements. According to Mr. Blendon, "Enough Americans are anxious about the extremes of what these plans could possibly do ... and they desire to be protected in the future."
Janice Simmons is a freelance health care writer in Alexandria, Va.
How the College is getting involved in patient protection legislation
In the debate over what to include in a national patient bill of rights, ACP-ASIM has maintained a strong presence.
While some professional organizations have come out in favor of one plan—the AMA, for example, supports the Democrats' version of the legislation—the College has taken a more neutral approach. Officials have been urging Congress to enact whatever proposal that includes at least the following rights and protections:
- Allowing patients to choose the physicians, including specialists, most qualified to treat them within a health plan's network when indicated.
- Permitting patients to continue to see their physician for a reasonable period of time if that physician is forced to leave the health plan.
- Requiring a prudent layperson standard for emergency room coverage determinations.
- Holding all health plans, including those covered under ERISA, accountable in court for medical decisions that may result in a patient's death or injury.
- Holding health plans accountable for providing access to a timely internal review process, and providing an opportunity for independent review by a qualified physician when services are denied.
- Requiring health plans to offer all enrollees point-of-service options to obtain care outside the plan network.
- Providing enrollees with comparative plan information.
- Prohibiting gag rules.
- Requiring health plans to maintain ongoing continuous quality improvement.
"Clearly, we want something in the legislation that gives patients the right to see the best doctors qualified to care for them," said Harold C. Sox, FACP, the College's President. He also said that the passage of national legislation could help make a physician's life happier by making physicians less "involved in dealing with the rules of health plans that they feel infringe on the rights of patients."
To push Congress to pass meaningful patient protection legislation, the College has been encouraging members to contact their Congressional representatives.
In late July, the College wrote to the key bipartisan sponsors of a Senate measure, Sen. John Chafee (R-R.I.) and Sen. Joseph Liberman (D-Conn.), commending them for including most of the provisions that internists find important. In the letter, Dr. Sox praised the bill for addressing concerns about "making all health plans, including those exempt from state regulation under ERISA, accountable in a court of law for medical decisions that may result in death or injury to a patient."
The letter also pointed out, however, that the bill omits some rights and protections the College finds important, such as reforming the medical liability system by capping excessive noneconomic damage awards and requiring risk adjustment when data on morbidity and mortality rates experienced by health plans or by individual physicians are provided to patients.
Even as it enters a discussion about rights for insured patients, the College is still committed to keeping the issue of universal access to health care on the table. This includes a call for crafting legislative solutions that will reduce—and eventually eliminate—the growing numbers of uninsured citizens.
"We don't expect patient protection legislation to contain reforms to provide access for those currently uninsured," Dr. Sox said. "But the occasion of talking about the rights of patients is an opportunity for us to remind Congress that they've got a big piece of unfinished business: reducing the number of uninsured in America during a time of unprecedented accumulation of wealth."
For more information on the College's position, visit the "Where we Stand" section of ACP-ASIM Online at www.acponline.org/home/policy.htm.
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