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Chairman Jeffords, Senator Kennedy, and Distinguished Members of the Committee:
It is an honor to testify before you today. I commend the members of this committee for their extensive efforts to address the critical issues of consumer protection and health care quality. While I am testifying today in my individual capacity, I was a member of the President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry and chaired the Subcommittee on Consumer Rights, Protections, and Responsibilities, which drafted the Commission's Patients Bill of Rights. As Congress considers legislation in this area, I am grateful to have been invited to participate in this hearing and provide input into this process.
As a user of two artificial legs since the age often, I can attest to a long history with the American health care system. I have had five surgical operations and extensive medical rehabilitation from rehabilitation hospitals and other providers over the past 25 years. I have consulted numerous medical specialists and have had ten sets of prosthetic limbs provided by seven different prosthetists in five different states. I have been given the opportunity to access the health care that meets my needs. With high quality care, I have been able to live completely independently, working in a good job and raising a family.
However, many consumers, particularly people with disabilities and chronic illnesses, are not able to access the health care that meets their needs. For example, the past decade has brought pressures in the health care system to limit important benefits and restrict access to specialists. These restrictions in the health care system are now commonplace and are having a profound impact on people's lives, especially people with disabilities and chronic conditions. These pressures manifest themselves in the continuing erosion of public confidence in our health care system.
My intent is not to discredit managed care, for managed care that is managed well can lead to major improvements in quality. My intent is to stress the importance of making sure that managed care plans serve all users of care at comparable levels of quality, regardless of the frequency or complexity of services a particular enrollee needs. Above all, health plans, particularly managed care plans, must not sacrifice sound medical decisions to considerations of the plan's bottom line.
I would like to focus my remarks on the Patients Bill of Rights and Responsibilities that was developed by the President's Commission. As you know, Mr. Chairman, the Commission's Bill of Rights was translated into legislative language and now forms the basis for the Patients Bill of Rights Act, S.6. This legislation represents the most effective set of patient protections that exist in any bill currently pending before Congress. I am also aware of the legislation you have introduced, S. 326, which applies certain protections to patients covered by ERISA health plans. While a number of the provisions of S. 326 will benefit consumers, it is my view that the Patients Bill of Rights Act, S.6, is clearly the legislation that is most beneficial to all health care consumers, particularly people with disabilities and chronic conditions. I urge the Committee and Congress as a whole to act this year to establish federal consumer protection standards that apply to all patients in all health plans.
The Need for Federal Legislation
Other than several federal health care programs, the American health care system is largely a market-based system. The hallmark of a well- functioning marketplace is the concept of competition, and optimally, improvements in quality and consumer satisfaction that come from this competition. But the federal government often establishes certain ground rules within which the American marketplace must function. The antitrust and securities laws are good examples of federal rules that provide structure to a well-functioning competitive market. The market in health care also requires structure in order to function well. Without the establishment of basic ground rules that will prompt the health care market to compete on quality and consumer satisfaction, the health care market will compete based on the avoidance of risky patients.
I am not an advocate of micro managing the health care marketplace or stifling some of the progress the health care industry has made in improving quality while reducing the rate of health care inflation. I am an advocate for the creation of a basic set of consumer protections at the federal level that all health plans must meet, including self- funded ERISA plans. Without federal legislation, health plans that operate under the Employee Retirement Income Security Act (ERISA) will be free to deny consumers basic rights that health plans subject to state laws may be required to provide.
Unless all health plans are subject to the same set of consumer protection standards, plans that do not adhere to such standards will be at a distinct competitive advantage in the marketplace. Without federal standards to level the playing field, there is actually a disincentive to improve the quality of care, because those plans that develop a reputation for high quality and good outcomes will be adversely selected by individuals who need health services the most. Competition within a framework that protects consumers, I believe, will have a significant impact on the quality of care and the confidence that Americans have in their health care system.
The Commission's Recommendations
This is the underpinning behind the Patients Bill of Rights and Responsibilities recommended to the President by the Commission. The Patients Bill of Rights was drafted after months-long negotiations between a very diverse panel of representatives, including consumers, patients, providers, health insurers, health plans, large and small businesses, labor, state and local governments, and health quality experts. Virtually every major sector of health care was actively engaged in the Commission's efforts. The Commission operated under a rule of consensus, which had the practical effect of requiring unanimous support for any recommendation before it went forward.
While the Commission was able to reach consensus as to the substance of the Patients Bill of Rights, it was not able to reach consensus as to the implementation and enforcement of these rights; whether they should be enacted into law or implemented on a voluntary basis. This was not surprising, however, due to the diversity of the Commission's members and the rule of consensus, or more accurately, unanimity. It is unfortunate, though, that some of the same constituencies that were at the table, engaged in the Commission's process, and in agreement with the final version of the Patients Bill of Rights are now actively opposing the creation of these very standards for all consumers.
To suggest, as some organizations opposed to legislation have, that the Commission specifically recommended against legislating the Patients Bill of Rights into law is a clear mischaracterization of the Commission's position on this issue.

In fact, the preamble to the Patients Bill of Rights suggests that these rights may be implemented in a variety of ways, including federal legislation, and stresses that the rights should apply to all health care consumers.
How the Process Impacted the Substance
The seven rights on which the Commission was able to reach consensus derive from common elements included in the previous work of numerous organizations representing the entire health care spectrum, from the American Association of Health Plans to the National Committee for Quality Assurance to Families USA. The Commission's Subcommittee on Consumer Rights met in open session on seven occasions over a six- month period, heard from numerous witnesses, and considered background papers on each subject. The Subcommittee reviewed two or three drafts of each chapter and conferred with the full Commission until refinements were made and consensus was achieved on the overall document.
The process of reaching virtual unanimity on a set of patient rights that the Commission members agreed should apply to all consumers was a difficult one. All of the major health care constituencies were engaged in the process and many compromises were made during the course of debating and drafting the substance of each patient right. Many wanted to go much farther, establishing a patient right to certain mandated benefits. This and other proposals either found their way into the preamble of the Bill of Rights or were taken off the table due to considerations of cost, lack of time for full debate, or claims of micro-managing the health care system.
The point is that the final Patients Bill of Rights that emerged from the Commission represents a consensus set of patient protections, a moderate approach to ensuring that all health care consumers have the tools they need to access the health care they require. Each of the seven rights is integral to truly protecting consumers and improving the health care system and each fight is diminished when one of the other rights is not present. In my view, any legislation that purports to adequately protect patients must include these elements.
The Bill of Rights Should Apply to Everyone
Since the announcement of the Patients Bill of Rights in November 1997, the Clinton Administration has implemented these fights across each of the federal agencies that administer federal health programs, including Medicare, Medicaid, the FEHBP, the VA health system, the Department of Defense programs, the Indian Health Service, and the Department of Labor. In total, by the end of 1999, one third of the American people will be covered by the Patients Bill of Rights. It is now in the hands of Congress to extend these basic consumer protections to the rest of the American population.
While the creation of the Advisory Commission was largely spurred by consumers' problems with managed care plans, as already stated, the Commission felt strongly that these protections should apply to all health care consumers in all health plans receiving care in all health care sett will discuss each aspect of the Patients Bill of Rights in the order they were recommended by the Commission as well as a number of provisions that did not achieve consensus, but are vitally important to a health care system that works for all consumers.
Information Disclosure
This protection requires that health plans, providers, and facilities provide patients with accurate, easily understood information to be used in making informed health care decisions. Plans would be required to provide information such as covered benefits and exclusions, specialty referral rules, and cost-sharing requirements. Professionals and other providers would be required to provide information on their level of education and board certification status. Facilities would be required to provide information on their experience in performing specific procedures and accreditation status.
In a health care system that is primarily market-based, accurate and easily understood information is critical to effective consumer decision-making. Many states have already enacted laws requiring the disclosure of health care information to consumers. As consumers become more familiar with the often-complex information provided to them, they will be able to demand higher performance from providers and make decisions based on the quality of care and demonstrated outcomes.
Access to Specialists
This provision in the Patients Bill of Rights derives from one of the principal complaints of consumers in managed care plans; restricted access to specialty care providers. The Commission heard testimony from a woman with epilepsy whose long term relationship with her neurologist was interrupted when she joined a network plan, even though the plan initially stated that she could continue seeing her current providers. The Commission effectively rejected the "any willing provider" approach to ensure adequate choice of provider, but established a number of provisions that assist consumers in accessing appropriate specialty care.
The Commission's choice-of-provider provisions have three aspects that are directly relevant to improving health care quality: network adequacy; standing referrals; and transitional care. The network adequacy requirement ensures that enrollees in a health plan which utilizes a network of providers will have adequate in-network access to the specialty providers and professionals necessary to provide enrollees with the full range of benefits offered by the plan. To meet this requirement, plans would have to offer in-network providers with an appropriate degree of specialization and within a reasonable proximity to enrollees. If a plan could not provide adequate in- network access to specialty care, it would be obligated to provide referrals to out-of-network specialists, but at no more than the in- network reimbursement rate.
The standing referral requirement would permit enrollees with chronic or disabling conditions to have access to specialists without needing repeated referrals from primary care providers. In addition, women would have direct access to women's health services. The transitional care provision would allow patients who are undergoing a course of treatment for a chronic or disabling condition (or who are pregnant) to continue seeing their current primary and specialty care providers for up to 90 days in the event of a disruption in care. For instance, if a health plan were to become insolvent, transfer ownership, or stop serving enrollees within a state, or if a provider were to be dropped from a plan's network for any reason other than "cause," the enrollee would be able to continue seeing his or her same providers for up to 90 days while suitable alternative providers are contacted.
These policies would improve the quality of care by ensuring that managed care enrollees get all the necessary and appropriate care covered by their health plan, including specialty care. It will also be cost-effective by guaranteeing that patients with disabilities and chronic conditions will be able to access specialty providers without first being required to make an unnecessary visit to a primary care provider. Finally, quality will be enhanced by ensuring that patient care is not disrupted after involuntary changes in insurance coverage occur.
Access to Emergency Services
To build confidence among the American people that emergency care will be covered by health plans when and where an emergency arises, the Commission included provisions on access to emergency services in the Patients Bill of Rights. The Commission agreed that health plans should provide payment when a consumer presents to an emergency department with acute symptoms of sufficient severity--including severe pain--such that a "prudent layperson" could reasonably expect the need for emergency care. Similar provisions were enacted as part of the Balanced Budget Act of 1997 for Medicare and Medicaid patients.
The Commission also recommended that health plans should not impose prior authorization requirements for either in-network or out-of- network emergency care, but that reimbursement for out-of-network emergency services should be limited to the in plan rate. These provisions will improve the quality of care by striking a balance between unnecessary use of emergency services and encouraging people who believe they are experiencing an emergency medical condition to seek treatment immediately without fear that the services may not be covered by the health plan.
Participation in Treatment Decisions
Concern that the sanctity of the doctor-patient relationship was being eroded prompted the Commission to act to protect open communication between providers and patients, which is necessary for effective treatment.

The Commission decided that all consumers have the right and the responsibility to participate in all decisions related to their health care. Among other items, providers should disclose factors--such as methods of compensation--that could influence advice or treatment decisions and should ensure that contracts with health plans do not contain so-called "gag clauses." Patients should also be told about the risks and benefits of all treatment options, regardless of the cost or coverage of the service, and should be allowed to refuse treatment.
Full participation in health care decisions by informed, knowledgeable consumers is a key to improving the quality of health care. The Commission reviewed numerous studies that demonstrated that when people are active participants in their treatment regimen, outcomes are improved.
The Commission recognized the significant disparities in the quality of care and outcomes between people with different races, sexes, and other characteristics. The Patients Bill of Rights includes a non- discrimination provision that applies to the delivery, marketing and enrollment of health care in order to attempt to address these disparities. The specific provision applies to discrimination based on race, ethnicity, national origin, religion, sex, age, mental or physical disability, sexual orientation, genetic information or source of payment. The specific recommended language, however, is limited in terms of the phrase "mental or physical disability," in that it does not mandate benefits or guarantee issue in the individual health insurance market.
Consumer protection against discrimination in the delivery, marketing and enrollment of health care is critical if health plans are to compete in the marketplace based on quality and consumer satisfaction, not based on the avoidance of risk. Nondiscrimination provisions are essential so that disincentives to improve care do not exist in the market. The Commission's non-discrimination language will not solve all of the problems of discrimination in the health care system, but it is a significant step forward.
Confidentiality of Health Care Information
One of the key aspects of effective communication between patients and providers is the bedrock understanding that one's medical records and doctor-patient communications will be kept confidential. Due to many cases of breaches or nearbreaches of confidentiality in the recent past, the public's confidence that such information is fully protected has been seriously eroded. This issue has become so important that stand-alone medical privacy legislation is currently being considered by Congress. The Commission's provision limits the number of instances where individually identifiable health care information may be used without written consent and creates a presumption that nonidentifiable health care information should be used to the maximum extent feasible.
Ensuring that medical records and other confidential information is kept private, and making sure that patients understand and believe their information is safe, is key to improving the quality of care. If patients do not have these assurances, they may limit their candor with health care providers which, of course, has a direct negative impact on quality.
Complaints and Appeals
This recommendation alone has the potential to restore a great deal of confidence in the health care system. The concern of many Americans that health care plans may be making coverage decisions based on the bottom line rather than on the patient's best interests prompted the Commission to recommend that all health plans make available to enrollees a fair and efficient grievance and appeals process. The specific recommendation is to provide every consumer with an internal appeals process (which includes expedited review for urgent care) and, once exhausted, an independent external review of the dispute. The Commission's language would permit external review for claims involving experimental or investigational treatments as well as denials of benefits based on medical necessity that exceed a significant threshold.
The Commission's recommendation would be strengthened if enrollees were permitted to challenge denials of access to specialists as well as certain drug formularies through internal and external appeals processes. In addition, the appeals system should be available for challenges of denials based on the fact that a particular benefit is not considered a covered service under the plan's benefit package. I am not suggesting that the appeals mechanism be converted into a process where a plan's benefit package is subject to constant revision. However, many people with disabilities are denied benefits because the plan makes an arbitrary decision that the claimed medical service or device is not considered a defined benefit, when in fact the policy language is ambiguous or even contrary to the stated position of the plan. In this instance, claimants should be afforded the opportunity to use the plan's appeals process to resolve these disputes.
Additional Consumer Protections Not Included in the Bill of Rights
The diversity of the Commission's members and the rule of consensus forced a negotiation that, I believe, created a strong, centrist document. Many consumer and disability organizations would have liked the Patients Bill of Rights to have gone significantly farther in protecting health care consumers. There were several critical areas that simply could not attain unanimous support, but are nonetheless fundamental patient protections. Some of these provisions are discussed briefly below.
Medical Necessity
Regardless of the breadth of a plan's benefit package, a restrictive definition of "medical necessity" will lead to significant denials of benefits, and ultimately, compromised access to care. Establishing a consistent definition of the term "medically necessary" will lead to more rational decision-making when making benefit determinations. The medical necessity of a particular item or service should be made by the patient's treating physician or health professional and should not be arbitrarily limited or altered in manner or setting by the health plan. Plans, providers, and utilization reviewers should use generally accepted principles of medical practice to determine medical necessity. With respect to patients with low prevalence diseases and difficult-to treat illnesses, care should be taken to not apply the generic definition of medical necessity in a manner that fails to take into consideration the unique circumstances of the patient's condition.Health Plan Liability
Perhaps the most controversial aspect of the consumer protection debate is the proposal to impose liability on health plans, including employer-sponsored, self-insured plans. Despite the potential for increased costs to employers and plans, I believe it would be inequitable to leave unaddressed this key aspect of accountability in the system. A "right" is only truly meaningful if a remedy exists for its violation. Just as others are held accountable in the health care system, if a health plan makes a medical decision that results in harm to a consumer, accountability should follow the decision-maker.
Point-of-Service Option for Managed Care Enrollees
The point-of-service option is a critical patient protection when a closed panel HMO or network plan is the consumer's only option in obtaining health coverage. The point of service provision would require closed panel plans to permit enrollees to elect to purchase an option at the time of enrollment to access out-of-network providers, at an additional premium and/or co-payment to the enrollee. The option could be structured to create minimal costs for the health plan or employer sponsor and tremendous benefits for enrollees who develop the need or desire to obtain care from providers and/or specialists of the enrollee's choice who are not within the plan's network of providers. The point of service option is an important element of effective access to specialists and maximizes patient choice of provider.
Clinical Trials The preamble of the Patients Bill of Rights addresses the issue of access to clinical trials. Limited time for debate and the complexity of this issue prevented the Commission from reaching consensus on the question of whether all patients should have a right to access federally-approved clinical trials. At a minimum, health plans should be obligated to cover the related health care expenses that may result from a patient's participation in a clinical trial, assuming the health services at issue are otherwise covered by the plan.
Lifetime Caps on Health Insurance Benefits
Although many proposals on health care benefits involve costs, the cost efficiencies of any proposal must also be weighed. The raising or elimination of lifetime benefit maximums in private insurance plans would enable approximately 1500 Americans who lose their coverage annually to keep their private insurance at the time they need it most. A consumer protection such as this would also relieve pressure on the Medicaid program, which is inevitably forced to enroll persons with a history of high use of health care services once a lifetime maximum is breached. With this small number of people affected on an annual basis, the cost of raising or eliminating lifetime benefit caps is truly miniscule when spread throughout the system.
Consumer Assistance/Health Care Ombudsperson Programs
The complexity of our health care system makes its navigation extremely difficult for many consumers, particularly for persons with little education, low incomes, and little experience with the health care system. All the information disclosure in the world simply will not be useful to a significant portion of the population without the availability of some form of consumer assistance. The Commission expressed the importance of consumer assistance programs for some consumers within the context of the right to information disclosure but stopped short of establishing consumer assistance as a right of all Americans.
In order to provide a network of independent consumer assistance or ombudsperson programs throughout the country, a stable funding source would have to be identified that would not be dependent on health plans in a way that compromised the independence of the consumer assistance. Such programs would have to be carefully structured and offer a variety of resources, including knowledgeable customer service representatives to assist patients in making informed health care decisions. These efforts could facilitate cooperation between health plans, providers, payers and consumers and would increase confidence in the health care system to a substantial degree. Consumer assistance programs would improve the quality of care by ensuring that the most vulnerable patients are able to negotiate the health care system and access the benefits, services and providers included in their health plan, without resorting to an after-the-fact appeals process.
Conclusion The consumer protection standards described in this testimony represent a reasonable step toward protecting consumers in the health care marketplace while improving the quality of care. Now is the time for Congress to act to ensure that all Americans receive the benefit that these basic standards offer. I again thank the Committee for this opportunity to testify and will answer any questions you may have at this time.

LOAD-DATE: March 13, 1999

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