|A Plain Language Summary
All new health plan standards
apply to all plans, an estimated 191 million Americans. The
standards can be enforced by the states or the federal government, at the
discretion of the states. The states are further empowered to waive
specific federal standards in favor of substantially similar state
standards. The Department of Health and Human Services can challenge
the state position if HHS feels the state standards are inadequate, but
must do so within a maximum 150 days.
· State Remedy – Medically-reviewable decisions. If
an independent benefit review entity determines the patient and/or
requested benefit is included in the plan, legal remedy is in state
· Federal Remedy – If the benefit review panel
cannot determine that the requested patient and/or benefit is included
in the plan, suits for injury are federal court
· Damages –
· State Court: Economic, pain-and-suffering, and punitive
damages are available in state court. Punitive damages are
strictly limited to specific conditions. If the plan met the timelines,
and abided by the decisions of the external appeals panel, punitive
damages are prohibited.
· Federal Court: Economic
and pain-and-suffering damages are available without limit.
Punitive damages are not allowed. Statutory damages for “willful
and wanton” misconduct are available up to $5 million.
Exhaustion of Administrative Remedies - Once a patient suffers
“irrevocable” physical injury, they can sue regardless of their status
in the appeals process. However, if an external medical review is
requested by either party, the review must be
· Patient’s Right To Sue Without
Injury - If the plan refuses to abide by the external appeals
ruling, but the patient is not injured, the patient can still sue in
federal court for $1000 a day for every day that care was denied with no
limit, plus attorney fees and court costs.
of Justifiable ERISA Liability Shields
· Approved Treatments: If a plan or employer
approves a patient’s request, they remain shielded from
· Direct Participation:
If an employer does not directly participate in a dispute, they are
shielded from all liability.
· Choice of Plan Or
Benefits: Employers cannot be sued for their choice of health
plan, or benefits package. Insurers cannot be sued for excluding
specific benefits in their plan. Employers remain shielded from
all liability when offering defined contribution plans.
Class Actions: No class action suits may be brought under
these ERISA liability reform provisions.
3. The Appeals Process
· Up-Front Medical Review: Patients and their doctor
must be able to talk to a health plan doctor, not just an insurance
clerk, when a plan denies coverage.
· Benefit and
Medical Necessity Review Panels: If the plan still denies coverage,
the patient can demand an independent review. The dispute must be
initially referred to an independent benefit review entity, which will
determine whether the requested benefit, and the patient, is a part of
the plan. If the panel finds for the patient, the dispute is
referred to an independent medical review panel, whose final decision is
legally binding on the plan. Medical and contract review panels
must be certified as independent by the Secretary of Labor.
· Filing Fee: A $25 filing fee for external review. Fee
is waived if the patient is indigent. Further, the appeal must
move forward regardless of whether the patient pays.
· Timelines: Urgent Care: 72 hours. Non-urgent care a maximum
75 days from initial request to final external appeal panel decision,
unless the patient requires more time.
4. The Freedom To Choose A Doctor
American should be able to choose their doctor and hospital, and change
their decision on a regular basis if they feel the need. The
responsibility for providing a choice option lies with the insurance
company, not the employer.
Every American should be able to see a
specialist if their doctor thinks they need one.
6. Obstetricians, Gynecologists, and Pediatricians
should be able to see obstetricians and gynecologists without any
referral. Children should be able to see pediatricians, without any
referral, as their primary physician.
7. Continued Care
Patients should not be forced to change
doctors and hospitals while being treated for a problem.
8. Guaranteed Emergency Room Care
Patients should be
able to go to the nearest emergency room when they think they have an
emergency, and should pay no more out-of-pocket than they would have at
their health plan’s designated hospital. If the problem reasonably
appeared to be an emergency, but turned out not to be, the insurance plan
still has to pay.
9. Clinical Trials Reform
Patients should be able to
participate in clinical trials without undue interference from their
health plan. The health plan is not forced to pay more for
clinical trials than they would have paid for regular care.
10. Drug Formulary Reform
Patients should have the right to
insist on their doctor’s prescribed drug, if their doctor determines that
the specific drug is necessary over the health plan’s designated
11. Incentives To Deny Care
No health plan may provide
payment incentives for doctors or hospitals to deny care.
However, reasonable capitation plans are allowed, as defined under current
12. Readable Contracts
Every American should be able
to clearly understand what benefits are covered by their health plan,
before they agree to the coverage. Plans should provide specific
information in laymen’s terms, including information on the rights of
patients to challenge plan decisions.
13. Freedom Of Communication
Every doctor should be free to
discuss anything relative to a patient’s health with the patient, even if
the information may be negative towards the health plan. Health
plans should not fire or discipline doctors for talking freely with their
patients, or discriminate against doctors for past cooperation in patient
Plans cannot discriminate against
providers in allowing participation based on nothing more than the type of
license held by the provider, as long as the provider is licensed to
provide the service in the particular state. However, varying
reimbursement rates for different levels of training are not affected by
15. 100% Tax Deductibility of Health Premiums for the
Self-employed Americans will be afforded the same
100% tax deductibility of health premiums as is currently enjoyed by
businesses, beginning in 2001.
16. Medical Savings Accounts
The current sunset provision on
MSA’s for December 31 of this year is extended another four years.
The restriction of medical savings accounts to businesses with fewer than
50 employees is doubled, to include businesses with up to 100
workers. The overall cap of 750,000 policies is increased to
1,000,000 policies. The General Accounting Office would conduct
research to determine whether this expansion of MSA’s leads to adverse
selection or any skewing of the insurance risk pool.
17. Incentives for Small Businesses to Provide Health Care
The bill provides a tax credit for the purchase of health
insurance for small employers (2-50 employees) who have previously not
offered coverage. The basic credit would be equal to 20% of the
costs of providing insurance coverage, but would be 30% for coverage
purchased through a small business purchasing pool. The credit would
apply to individual coverage up to $2,000 and $5,000 for family
coverage. It would be available for the first 48 months that the
employer purchases insurance.
The bill provides for foundation grants to qualified health benefit
purchasing cooperatives would be treated as a grant or loan for charitable
purposes. Expenses covered would include all ordinary and necessary
expenses for the establishment of the cooperative within the first 24
months of its creation. Finally, the bill would provide $500 million
over 5 years in new federal grants for state health insurance coverage