NASW Supports a Fair and Principled Patients Bill of Rights

August 20, 2001

Patients' Bill of Rights and Managed Care

Consumers and health care practitioners are concerned about the lack of protections in managed care health plans, since 75 percent of privately insured people in the United States are enrolled in managed care health plans. NASW strongly supports a fair and principled Patients' Bill of Rights that facilitates health care decisions being made on the basis of what is deemed to be medically necessary and appropriate care for the patient-- not cost.

NASW holds that the Bipartisan Patient Protection Act of 2001, as passed by the Senate, offers the best set of protections for health and mental health practitioners as well as consumers.

Legislative Status

The Senate passed its version of the Bipartisan Patient Protection Act of 2001, S. 1052, on June 29, 2001 by a vote of 59 to 36. It was sponsored by Senators John McCain (N-AZ), John Edwards (D-NC), and Edward Kennedy (D-MA).

The House of Representatives passed its version of the Bipartisan Patient Protection Act of 2001, H.R. 2563, on August 2, 2001 by a vote of 226 to 203. . It was sponsored by Representatives Greg Ganske (R-IA), John Dingell (D-MI), Charlie Norwood (R-GA), and Marion Berry (D-AR).

As the versions of the bills passed by both houses of Congress are not identical, a conference committee will be convened to reconcile the differences. Members of both the House and the Senate will be appointed to serve on the committee. If an agreement is reached by the conference committee, the compromise legislation will be reported out and sent back to the House of Representatives and the Senate for an "up or down" vote, as no amendments are permitted on conference reports. If the compromise legislation is passed by both the House of Representatives and the Senate, the Bill will be sent to the President. The President has two options-- sign the Bill into law or veto it. If vetoed, the House of Representatives and the Senate may vote to override the presidential veto. In both bodies, a two-thirds majority is required to override the veto. If Congress can muster the votes necessary to override the veto, the measure becomes law.

Summaries

Senate Bill S. 1052 as passed

Protects all Americans. Applicable to every American enrolled in group, individual, church, state government, and local government health plans- roughly 190 million people. No one is left without rights because the state they live in has weaker protections. States are permitted to develop stronger patient protections over and above those contained in the bill.

Ensures a swift internal review process and a fair and independent external appeals process. Outlines reasonable criteria and time frames for initial claims review and internal appeals procedures. Creates a timely and independent external review process which provides individuals with a fair and unbiased decision. The review process can be expedited in the event of a medical emergency. Neither party can select the external review entity and nor can the parties involved unilaterally delay the review process by withholding needed information. Reviewers are free to make an independent determination about whether care is needed and are not bound by plan decisions or policies. Patients have legal recourse if the managed care plan does not comply with the decision of the external review entity. However, a reviewer cannot authorize benefits not covered by the plan in question.

Protects employers against liability. Employers cannot be held responsible for the actions of managed care companies, unless the employer actively participated in the decision to deny a health care service to a patient. It ensures that only those few companies (less than 5 percent nationwide) that act as health care insurers and directly participate in the decision to deny a health care benefit to a patient accept legal responsibility. A company has the ability to transfer all responsibility to a designated decisionmaker who will then assume all liability. Self-insured, self-administered plans employer plans from all federal liability. Members of employer plan boards are protected from individual liability.

Institutes plan accountability. Allows patients to hold their managed care plan accountable when plan decisions to withhold or limit care result in injury or death. This bipartisan compromise allows patients to seek redress in court for any wrong that causes an injury. The liability compromise in McCain-Edwards-Kennedy stems from recent Supreme Court decisions as well as concerns voiced by employers on the importance of federal uniformity when administering health plans. It tracks the Supreme Court decision in Pegram vs. Herdrich, which stated that cases concerning medical judgment should be heard in state court, but ensures that employers and insurers can uniformly administer their plans across the country by putting those cases concerning administrative decisions in federal court. Self-insured, self-administered plans are exempted from liability for the performance of non-medical duties or violations of the plan's requirements. Plans are not subject to federal liability for injuries caused by a failure to comply with the terms and conditions of a plan.

Exhaustion of appeals required. Patients must exhaust internal and external appeals before going to court. The sole exception is when death or irreparable injury has already occurred. Even in that case, either party can request that the appeals process continue; the results of the process are admissible in court. Unless a patient is seeking injunctive relief, all appeals must be exhausted and the court must admit as evidence and consider any external review decision.

Bans provider discrimination. Ensures that any health care provider who renders services in accordance with their state license/certification is protected from discrimination by insurers with regard to plan participation or indemnification. This provision is critical for social workers, as many plans deny claims for social

Caps Attorneys' Fees. Contingency fees are limited to one-third of damages awarded.

Guarantees access to necessary specialists. Allows patients access to non-participating providers if the plan's network is insufficient for the enrollee's needs. Under these limited circumstances the plan must provide this access at no greater cost than if the benefit were obtained from participating providers. This provision ensures access while maintaining the integrity of health plan networks. Patients with life-threatening, degenerative, and disabling conditions are permitted to receive standing referrals to specialists, so their primary care provider does not have to continue to authorize every individual specialty care visit. Plans are also required to allow such patients to designate a specialist as their primary care provider if desired

Provides unfettered access to emergency room care. Patients may receive critical emergency room care from any emergency department, in or out of the plan's network and without prior authorization under the "prudent layperson" standard. If a patient believes he or she needs immediate medical attention, he or she can go to any emergency room without worrying about excessive co-pays and are guaranteed a smooth transition between emergency care and follow-up treatment provided by the plan.

Ensures that women can easily access OB-GYN services, without unnecessary barriers. Women are given the opportunity to choose an OB-GYN as their primary care provider. It also allows women to obtain routine OB-GYN care from a participating OB-GYN without prior authorization or referral.

Ensures that children can access the specialty care they need, without unnecessary barriers. This bipartisan compromise ensures that pediatricians can be selected as primary care physicians for children.

Ensures access to prescription drugs. Plans must provide for exceptions from the formulary when medically indicated. This protection is critical for individuals who may have allergies to certain medicines or may have tried the formulary drug without any success. Formulary restrictions must be disclosed to enrollees and providers on request. Physicians and pharmacists must participate in formulary development.

Ensures access to clinical trials. Plans must cover routine costs (those costs of treatment that would normally be covered by the plan) of participation in certain clinical trials, including those run by the National Cancer Institute, if the patient has a life-threatening or serious illness for which no standard treatment is effective and participation in the trial offers meaningful potential for significant clinical benefit.

Ensures continuity of care. This bipartisan compromise legislation protects all patients who are in the middle of a course of treatment for a chronic or disabling condition, ensuring that they can keep their doctor even if they are forced to change plans or their doctor is dropped from their plan's network. It requires a transitional period in which they will continue to receive care from the treating provider.

Ensures full disclosure. Patients need to know about their health plan rules before they seek care. The detailed disclosure requirements that are part of this bipartisan compromise to assure patients understand their rights include: plan benefits, limitations and exclusions; disenrollment; how out-of-network services are covered; how to select and obtain referrals to providers; emergency medical care coverage and definitions; prior authorization rules; and grievance and appeals procedures.

Provides anti-gag rule protections. Health plans cannot preclude doctors and nurses from discussing all treatment options with their patients.

Limits improper incentive arrangements. Ensures that doctors will not face excessive financial incentives limiting necessary care.

Ensures protections for patient advocacy. This legislation protects health care providers from the threat of retaliation or firing when they advocate on behalf of their patients or report quality issues to the appropriate regulatory agencies.

House Bill, H.R. 2563, as passed

H.R. 2563, as passed by the House, differs from S. 1052 in how it handles liability; however, most of the patient protections are identical. H.R. 2563 is distinct in the following areas:

Scope. The House Bill only applies to Americans with private or employer-sponsored insurance plans. In contrast, the Senate Bill applies to Americans with private insurance or employer-sponsored plans. Medicare beneficiaries, Medicaid beneficiaries, and all other federal health insurance plan members are also included.

Non-Medically Reviewable Decisions. The House Bill permits the HMO to choose between state court and federal court as the arena in which to pursue civil action, whereas the Senate Bill limits civil actions to federal court. The House Bill requires a much higher burden of proof of the plaintiff than the Senate Bill.

Non-Economic Damages in State Court. The House Bill caps non-economic damages awarded in state courts to $1.5 million, or lower if there is a state statute limiting such damages. There is no such limit in the Senate Bill.

Non-Economic Damages in Federal Court. The House Bill caps non-economic damages awarded in federal court to $1.5 million. There is no such limit in the Senate Bill.

Punitive Damages in State Court. The House Bill caps punitive damages awarded in state courts to $1.5 million, or lower if there is a state statute limiting such damages. However, punitive damages may only be awarded if a denial of coverage is reversed by an independent medical review and the HMO refused to comply with the decision of the review.

Punitive Damages/Civil Assessments in Federal Court. The House Bill does not permit civil awards in federal court whereas the Senate Bill caps civil awards in federal court at $5 million.

Employer Liability. Unlike the Senate Bill, the employer has the choice of litigation venue- either state or federal court.

Class Actions. The House Bill prohibits class action lawsuits, in contrast to the Senate Bill, which has no such restriction.

Attorneys' Fees. The House Bill permits unlimited attorneys' fees, unlike the Senate Bill which caps them -- 1/3 of the amount recovered in state court and a variable formula in federal court.