Copyright 1999 Federal News Service, Inc.
Federal News Service
MARCH 24, 1999, WEDNESDAY
SECTION: IN THE NEWS
LENGTH:
4912 words
HEADLINE: PREPARED TESTIMONY OF
THOMAS
R. REARDON, MD
PRESIDENT-ELECT, AMERICAN MEDICAL ASSOCIATION
BEFORE THE
HOUSE COMMERCE COMMITTEE
HEALTH AND THE ENVIRONMENT
SUBCOMMITTEE
SUBJECT - PATIENT ACCESS TO HEALTH CARE INFORMATION
BODY:
Introduction
Mr. Chairman and members
of the Committee, my name is Thomas R. Reardon, MD. I am the President-Elect of
the American Medical Association (AMA). I am also a general practice physician
from Portland, Oregon. On behalf of the three hundred thousand physician and
medical student members of the AMA, we appreciate the opportunity to testify on
these important patient protection issues - "information disclosure" and "gag
practices." The AMA has always been a strong advocate for patient rights, and in
the midst of a rapidly evolving managed care marketplace, the vigilance of all
of us becomes even more critical.
At the outset, we want to emphasize that
virtually all patient protections are interrelated. Ensuring that patients have
information about accessible grievance and appeals procedures, for instance,
will mean little if the standards that the review entities would apply are
arbitrarily defined by the plans. Similarly, guaranteeing that patients have
access to specialty care, would be virtually meaningless if plans could
arbitrarily determine that the specialty treatment was not medically necessary.
And even though we may discuss only one or two patients' fights in a particular
forum, we should realize that it would be inappropriate to barter or trade one
set of patient rights at the expense of other legitimate patient rights.
Patients deserve to have protected all of the rights which fairness and justice
require.
While discussing these two patients' fights - information
disclosure and anti-gag practices, we must realize that there is currently no
issue more pressing than the question of who determines the "medical necessity"
of patient care. Nearly all other patient protections that have been discussed
in recent years - and these two fights in particular - in some way turn on this
single, critical issue. In the AMA's view, properly handling "medical necessity"
is the linchpin to ensuring the promise of the full range of needed patient
protections, including proper information disclosure and anti-gag clause and
practice provisions.
Information Disclosure
When a person purchases a
product, he or she wants to know what is being purchased. Similarly, when
patients contract with health plans, they should receive all material
information about covered benefits and plan procedures. Patients have a right to
know what their money is buying them.
The AMA believes that legislation
ensuring that plans properly disclosure all pertinent and material information
to prospective and current enrollees should be enacted to help restore the
nation's trust in the health care system and allay the public's fear. Plans need
to disclose information on covered benefits, service areas, physician and
provider access (including access to specialists), plan costs, cost- sharing,
financial incentives, restrictions that may limit services, and any requirements
for enrollees. In selecting plans, individuals need information to understand
how the plan operates, the benefits to which they are entitled, what they must
do to ensure that services are covered, and where and from whom they can obtain
services.
Prospective enrollees also need to know how plans compare on items
such as specific coverage exclusions, patient cost information, patient
satisfaction, cost control programs, loss or medical expense ratios, number and
mix of physicians and other providers, disenrollment rates and grievance and
appeals procedures. When patients are given the ability to choose among plans,
as they should be, they can make informed decisions only when they have the
necessary information. People compare plans based on all of this critical
information. Consequently, plans must provide this information to prospective
enrollees in an easily understandable, standard format, allowing enough time for
the prospective enrollees to review the information and have any questions they
may have answered promptly and thoroughly.
When considering information
disclosure requirements, we urge Congress to reflect on the concerns of all
enrollees, prospective enrollees, and most especially, enrollees as patients. We
believe that Congress must act to require plans to actually provide and
distribute essential information, rather than simply make it accessible. For
prospective and actual enrollees, inconvenience and inability to locate the
source of information can frequently make "accessible" information, in effect
unobtainable. As a result, patients many times cannot exercise rights to which
they are legitimately entitled. Moreover, when plans distribute information to
enrollees and prospective enrollees, that information functions as a convenient
resource to provide ready answers to patients' pressing questions.
Some
proposed patient protection legislation for instance would require that plans
provide only "summaries of" or "statements regarding" or general "descriptions
of' patient benefits and benefit exclusions. Some legislation would also permit
plans to "make available," rather than actually distribute, information that
most patients would consider essential in comparing plans and benefits
effectively. For prospective enrollees to make fully informed decisions when
selecting plans, they must have all the necessary facts - not the plans'
summaries of facts. Plans have all of the requisite information easily
available; requiring disclosure of this information would not burden them.
Patients have a right to receive this information, particularly as a
prerequisite to enrollment and once enrolled - at least annually thereafter, so
they can provide an informed acceptance of the plans' proposed coverage terms.
Gag Clauses and Practices
Patients not only have a right to receive
pertinent and material information regarding health benefits from their plan,
they also have a right to be informed about their own health and all treatment
options by their physicians. As an essential prerequisite, patients and their
physicians must be able to communicate openly with each other, without
unreasonable interference from the health plans.
Frequently health plans,
however, have incorporated clauses in their contracts with participating
physicians which prohibit or restrict the physicians from discussing certain
noncovered treatment options with patients. Even if the plans do not include
these explicit clauses - so-called "gag clauses," many plans maintain policies
or practices that function to restrict open communications between physicians
and patients - so-called "gag practices." The AMA has historically been on
record as vehemently opposing both gag clauses and gag practices, because they
create an inherent ethical conflict of interest and strike at the heart of the
patient-physician relationship.
The AMA's Code of Medical Ethics, which lays
out guiding principles for the entire medical profession, is very specific on
this point. In it we find a very important section entitled Fundamental Elements
of the Patient-Physician Relationship.
The very first "Fundamental
Element" is as follows:
"The patient has the right to receive information
from physicians and to discuss the benefits, risks, and costs of appropriate
treatment alternatives. Patients should receive guidance from their physicians
as to the optimal course of action."
In addition, the AMA's Council on
Ethical and Judicial Affairs, the AMA entity responsible for maintaining the
Code of Medical Ethics and providing authoritative interpretations of its
contents, has stated that:
"The physician's obligation to disclose treatment
alternatives to patients is not altered by any limitations in the coverage
provided by the patient' s managed care plan .... Patients cannot be subject to
making decisions with inadequate information. That would be an absolute
violation of the informed consent requirements. If these clauses are carried out
and the physicians are subject to sanction, a reduction of patient quality of
care will result."The AMA staunchly believes that patients must be able to trust
and rely on the information their physicians provide to them regarding
appropriate medical treatment and care. In short, physicians have an ethical and
legal duty to ensure that their patients are fully informed of their options
regardless of cost or potential treatment limitations. Unfortunately for
patients, "gag clauses" create a real or perceived potential conflict of
interest for physicians by placing a wedge between them and their physician.
"Gag clauses" and "gag practices" undermine two fundamental elements of the
healing process - trust and confidence.
Continued Use of Gag Clauses and Gag
Practices
Gag provisions are typically designed and implemented with the
intent to control physician behavior and to limit a patient's access to the full
range of information that is needed to make informed decisions and provide
informed consent about the proper course of medical treatment. While the AMA
acknowledges a legitimate business interest in addressing cost issues and
avoiding unjustified disparagement of a plan's operations, we firmly believe
that such efforts should not undermine the quality of care received by patients.
We also readily acknowledge that not all health plan contracts contain written
"gag clauses." Nevertheless, some health plan contracts still do contain these
insidious provisions. More typically, though, health plans have subtle,
unwritten, plan policies and procedures that effectively impede physicians from
discussing treatment options if the plan does not cover those treatments.
The AMA is aware that the U.S. General Accounting Office (GAO) last year
reported that based on its own study, it did not find explicit gag clauses in
HMO contracts. When conducting its survey, though, the GAO asked 622 HMOs to
forward to it copies of contracts they use for primary care physicians and
specialists. In response, the HMOs voluntarily and perhaps selectively submitted
1,150 contracts. Of those submitted contracts, the GAO found that none of them
contained "clauses that specifically restricted physicians from discussing all
appropriate medical options with their patients," according to the report.
Commenting on its own survey results, the GAO admitted, however, that "the
contracts sent to us (the GAO) may not be representative; (unsubmitted ones) may
contain gag clauses." Consequently, the GAO survey results do not accurately
reflect the types of contracts that physicians are currently being asked to sign
or may be asked to sign in the future.
Recent lawsuits further suggest that
the GAO's findings may not be entirely accurate. Just a few months ago, the
State of Texas sued six HMOs, and in the complaints against two of them (Aetna
and Humana), alleged that their physician contracts "contain gag clauses that
penalize physicians for candidly discussing the coverage provided by these
HMOs.1 Humana imposes $1,000 $2,000 penalties on physicians who counsel patients
to disenroll from a Humana plan, according to the state.2 In all of the
complaints, the state claimed that the HMO contracts include illegal incentives
to limit medical care to HMO patients.
Appearing to con firm some of the HMO
behavior patterns alleged in the Texas suits, GAO stated in its prior report
that 60 percent of the contracts which HMOs did send included "business
clauses." Business clauses are contractual provisions that purport to protect
the business interests of the contract drafters - the HMOs. They generally come
in one of three types: non-disparagement (restricts the physician from speaking
negatively about the HMO); non-solicitation (restricts the physician from
encouraging patients to consider joining other HMOs); or confidentiality
(prohibiting physicians from mentioning or discussing HMOs' financial
arrangements with the physicians or HMOs' corporate policies).
All of these
"business clauses," though not explicitly gag clauses, would likely have a
dramatically chilling effect on patient-physician communications, particularly
as they relate to physicians discussing legitimate non-covered treatment options
for their patients. The non- disparagement provisions would especially act to
silence physicians. In fact, in response to the GAO survey, 64 percent of
attorneys who represent physicians, 46 percent of those who represent both
managed care organizations and physicians, and 25 percent of those who represent
HMOs responded that nondisparagement "stipulations 'could have a moderate to
great effect on a physician's discussion of patient treatment options."3
In
the past, the AMA has found various other examples of"gag practices" that also
do not rely on explicit contract provisions. Some of our physician members, for
instance, have told us that certain health plans were informing their
participating physicians that "effective immediately, all referrals from Primary
Care Physicians to Specialists may be for only one visit," and then threatening
to terminate "the contracts of physicians and affiliates who fail to meet the
performance patterns for their specialty." As another example, a health plan
bulletin regarding preadmission review guidelines stated that "effective
immediately, all (health plan) participating providers must telephone the
Preadmission Review Department...before an admission occurs and before conveying
the possibility of admission to the plan member." Although a follow-up
memorandum blamed "poor wording" in the original announcement for any
"misinterpretation" of the bulletin as a restriction of communication between
physicians and patients, the AMA maintains that the original effect of the
announcement was clearly chilling.
The GAO report also indicated that the
vast majority - 72 percent- of the contracts they reviewed incorporated a
"without cause" or "at- will" termination clause. The GAO concluded from this
that "(i)t is the contractual relationship itself- its short duration and
provision for termination without cause - that may make physicians feel
constrained from speaking openly with their patients." The AMA has opposed
"without cause" termination clauses, for the very reason that plans can use them
to unduly pressure physicians to comply with unethical managed care policies or
practices.
In general, the AMA believes that the term "gag clause" should
not be viewed in an overly narrow, legalistic or restrictive manner. The AMA
maintains that a more common sense approach to this issue should prevail because
of the fact that "gag clauses" often go beyond the mere elements of contract law
and include a pattern of practice that restricts physician-patient
communications. We encourage the Congress therefore to resist the urge to adopt
a narrow provision protecting solely against explicit "gag clauses." The AMA
believes that narrowing the important anti-gag provisions of any patient
protection bill would allow plans to neglect those concerns reported by
patients, physicians and others who treat and care for patients.
The AMA
further believes that if patients are to be truly flee to make informed medical
decisions, any patient protection legislation should be drafted to include at a
minimum the following concerns:
"GAG" CONTRACTS AND PRACTICES SHOULD BE
BANNED.
Legislation should ensure that health plans would no longer be
allowed to "gag" physicians through policies and other unwritten conduct, which
intimidate physicians and interfere with a patient's right to receive essential
medical information. Patients need to be protected from plans retaliating
against its participating physicians for advocating on their behalf and
following ethical medical practices.
THE DEFINITION OF "MEDICAL
COMMUNICATIONS" SHOULD NOT BE UNNECESSARILY LIMITED.
Legislation should
ensure that physicians are free to openly communicate with their patients. Any
clauses that expressly or impliedly prohibit or restrict physician-patient
communications should be deemed as contrary to public policy and unenforceable.
Moreover, legislation should prohibit plans from in any manner censuring
physicians for medical communications or for functioning as patient advocates.
To properly treat patients, physicians must be able to discuss the
patients' health status, medical care and all treatment options, as well as any
factors, such as financial incentives or utilization review procedures, that may
affect the patient's treatment options. Patients have a right to receive this
information from their physicians without undue interference from their health
plans.In response to the GAO report, some legislators have suggested that the
federal government should not move "forward pre-empting state law or regulatory
authority on any issue - and most especially on issues as crucial as health care
- without full consideration of sound science, thorough research and data." In
general, the AMA would agree with this statement, although we believe that the
science and data more than adequately show the urgent need to pass federal
legislation that would prohibit gag clauses and practices. We especially agree
that federal patient protection legislation should NOT function to pre-empt
state laws or regulatory authority which are more protective of patient rights.
This protection, like all other federal patient protections, should act as a
floor and not a ceiling.
Federal Legislation is Necessary To Correct "Gag"
Problems
In reaction to the loud public outcry caused by local cases where
physicians have been "gagged," thereby threatening patients, a number of states
have begun enacting "anti-gag clause" legislation. For example, legislatures in
forty-six states have already passed laws banning "gag clauses." Some states
have also chosen to address this issue through regulation. The National
Association of Insurance Commissioners (NAIC) adopted a non-binding model bill
more than a year ago that would, in part, ban plans from contracting to limit or
prohibit a participating physician from discussing treatment options with
patients regardless of the health carrier's position on the treatment options,
or from advocating on behalf of patients within a utilization review or
grievance process.
Given the number of states that have moved forward with
legislation, the NAIC's model bill and various private sector activities to
educate the public about these provisions and practices, we expect some people
may pose the question, "is federal anti-gag clause legislation necessary?" The
AMA believes the answer is clearly "yes!" Even if all the states enacted similar
"anti-gag clause" measures, not all health plans can, or will, be reached by
state law. Similarly, not all of the state legislation will effectively prevent
"gag practices" from continuing. Consequently, federal legislation is absolutely
essential to eliminate "gag practices" and "gag clauses" from all health plans,
in both private and public sectors, and ensure that every patient is adequately
protected.
Information Disclosure and Anti-gag Provisions Affected by
Medical Necessity Determinations
Information disclosure requirements can
also be adversely influenced by how "medical necessity" is determined and by
whom. For instance, many plans in their information disclosure statements
indicate that the plan will provide coverage for all "medically necessary"
treatment. As a result, patients and prospective enrollees believe that they are
covered for all medical treatment which is clinically appropriate and reasonably
necessary to treat their illnesses, conditions, or injuries, in accordance with
generally accepted standards of medical practice. When the patient suffers an
illness, however, plans that have arbitrarily defined the term "medical
necessity" can deny coverage for a wide range of accepted treatments that do not
fall within their own arbitrary definition of medically necessary treatment.
Or consider the importance of "medical necessity" determinations in light of
anti-gag clause and anti-gag practice legislation. If managed care
reform legislation were to protect patient physician relationships by
prohibiting gag clauses and gag practices, to what avail would open
communications be to patients if they could still be arbitrarily denied the
medical treatment they reasonably believe to be covered by the plan simply
because the plan deems it "not medically necessary?" A ban on health plan gag
clauses and practices admittedly would help to ensure that plans could not keep
patients in the dark about their medical treatment options. But if the plan
could still refuse treatment for any covered treatment option because of the
arbitrary application of a plan's "medically necessary" definition, the patient
would in fact have little real protection.
As In Gag Practices, Financial
Considerations Affect Medical Necessity Decisions Historically, most private
insurers and third-party payers have viewed medical necessity as those health
care products or services provided in accordance with generally accepted
standards of medical practice. Accordingly, medical necessity decisions were
typically made using specific review criteria and processes that applied
generally accepted standards of medical practice and afforded clinical
peer-to-peer review. Today, however, this long-standing process is being
challenged on a daily basis by health plans that determine medical necessity
primarily in terms of financial considerations.
Health plans have the
ability to exercise tremendous leverage over physicians while influencing the
care that they can render. When health plans contract with physicians, for
instance, the physicians have to agree to the plan's standard contract terms,
which typically require that the physicians comply with the plan's medical
management program - usually termed a "utilization management" (UM) program.
While the AMA does not oppose UM programs that are conducted properly, many
plans have not established UM programs which adequately involve physicians or
place as their top priority improving health care quality for patients. Within
the UM programs, some plans have even instituted guidelines that describe or
define"medical necessity" using "lowest cost" criteria. Because of gag
practices, physicians are frequently prohibited from discussing with patients
these criteria.
Health plan contracts and some information disclosure
packets describe the terms "medically necessary" or "medically appropriate" in
ways that leave most of the medical decision-making discretion with the health
plan, as opposed to the patient's physician. A common plan practice is to
overlap the definitions of "covered services" and "services that are medically
necessary," as noted above, such that they essentially become one and the same.
Then, the plan can include language in the contract granting itself final
discretion over the determination of what is medically necessary. In this
manner, the plan can always make the final decision of what is "medically
necessary" and thereby always limit its own covered services.
In other
situations, managed care plans simply incorporate financial or cost
considerations into the determination of "medical necessity." Reviews of managed
care contracts last year revealed that language imposing "lowest cost" criteria
had been included in many contracts' definitions of medical necessity. Health
plans' concern about their profits remains the driving force behind these
definitions which emphasize cost and resource utilization over quality and
clinical effectiveness. To say the least, this is alarming both to patients and
to physicians.
The AMA believes that health plans should not be allowed to
unfairly deny medical care based on the application of such unfair and arbitrary
medical necessity definitions. If health plans are able to define medical
necessity in a review, the appeals process will be seriously undermined, if not
rendered meaningless. The AMA does not oppose the ability of health plans and
employers to establish health benefits packages, however, health plans must
allow prudent physicians, not health plan bureaucrats, to make individual
medical care decisions. Plan enrollees must know up-front what services are
covered and not covered by their health plans. If publishing lists of"covered"
services is too onerous, as some plans claim, then at a minimum, enrollees must
know what is not covered. This is also why information disclosure requirements
are so critical for patients and physicians.
The AMA believes that "medical
necessity" or "medical appropriateness" decisions are ultimately medical
decisions and must continue to be treated as such. Permitting health plans to
decide "medical necessity" according to financial or cost considerations creates
a dangerous precedent. This concern led the AMA in December of 1998 to refine
its policy on "medical necessity" at its Interim House of Delegates meeting. The
AMA believes that "medically necessity" means: "Health care services or products
that a prudent physician would provide to a patient for the purpose of
preventing, diagnosing or treating an illness, injury, disease or its symptoms
in a manner that is: 1) in accordance with generally accepted standards of
medical practice; 2) clinically appropriate in terms of type, frequency, extent,
site, and duration; and 3) not primarily for the convenience of the patient,
physician, or other health care provider."
As indicated, this policy uses a
"prudent physician" standard, which both medically and legally is an objective
standard. It also requires that the treatment be "clinically appropriate" and
consistent with "generally accepted standards of medical practice," which is how
it has traditionally been determined.
To mute allegations that
physicians would recommend treatment for their patients' or their own
convenience, this definition expressly prohibits such a practice.We realize that
some plans and insurers might express concern that allowing anyone other than
themselves to make medical necessity decisions will eventually lead to such
abuses as health club memberships being deemed "medically necessary." This
"slippery slope" argument, however, is nothing more than a red herring. As the
AMA has always recommended, the external appeals process must permit physicians
- independent of both the plan and the treating physician - to review the
treating physician's medical necessity determination. We are not advocating that
the treating physician be the ultimate decision maker, rather, we are advocating
that independent, properly qualified and licensed prudent physicians make final
and binding decisions. We challenge the health plans to adhere to such an
equitable solution.
Because "medical necessity" decisions are in fact
medical decisions, the AMA firmly believes that only physicians who are properly
qualified - that is, of the same specialty, actively practicing medicine in the
same state as the patient or the treating physician, and having significant
familiarity with the condition in question - must review other physicians'
treatment decisions. In other words, the reviewer of medical treatment decisions
must be knowledgeable and properly qualified - so that patients are not
mistakenly or arbitrarily denied medical treatment to which they are entitled.
Additionally, the reviewer must be independent of any health care professional
who participated in the initial adverse benefit determination, and should not be
affiliated with or employed by the same organization.
Patients are also
concerned that plans and insurers frequently deny coverage for medically
necessary treatment based on information they have obtained after the tests and
treatment were rendered. Determinations of medical necessity, however, must be
based solely on information that was available at the time that health care
services or products were provided. A physician may have to admit a patient for
further observation, diagnosis, and treatment, and may only be able to complete
his/her diagnosis upon receiving the patient's test results. Denying coverage of
the initial treatment or diagnostic tests because the plan retrospectively
alleges that they were not "medically necessary" is patently unfair and not good
medicine.
Conclusion
In conclusion, the AMA maintains that virtually all
patient protections are integrally related, with each dramatically effecting
several others. Legislation prohibiting gag clauses and practices, must also
address medical necessity, for instance. Toward this end, we support legislation
that would require plans to provide enrollees and prospective enrollees with
essential information about the plan and its benefits, and that would prohibit
plans from improperly interfering with patient physician communications and
medical decision making.
Thank you again for the opportunity to testify
today on these important patient rights issues. On behalf of the AMA, I offer
you our services in working further with the Congress to effectively address
these important and pressing matters. The AMA would be pleased to work with the
sponsors of any patient protection legislation to protect these critical
patients' rights.
1 "Texas Alleges HMOs Engaged in Illegal Incentives,
Deceptive Marketing Practices," Health Law Litigation Reporter, January 1999,
Vol. 6, No. 6, p. 3.
2 Id.
3 "How HMOs Still Gag Doctors; Health
Maintenance Organizations," Medical Economics, March 9, 1998, Vol. 75, No. 5, p.
42.
END
LOAD-DATE: March 25, 1999