All Americans enjoy new patient protections under the new PBOR including:
A STRONG APPEALS PROCESS FOR ALL CLAIMS
The new PBOR appeals process contains the following steps:
1. Utilization Review
2. Initial Claims
3. Internal Appeal
4. Independent External Appeal
Benefit denials will go to an independent external review entity which must have sufficient medical and legal expertise. The impartial entity will decide whether the case involves a medically-reviewable decision. If so, the case is sent to an independent panel of three practicing physicians which decide the merits of the claim. Plans are bound by the decision of the independent medical review panel.
For those cases that do not involve medical issues (e.g. cases involving non-medical questions such as whether a benefit is covered under the plan, whether the beneficiary is actually enrolled in the plan, and whether there is a stated limitation on the number of treatments an individual can receive for a particular medical condition), the current remedy of ERISA -- cost of care denied -- is available. An exception is provided if a beneficiary was substantially harmed and the plan's action was arbitrary and capricious. If so proved, the beneficiary would be entitled to economic and non-economic damages, but no punitives.
ALL AMERICANS ARE COVERED
All Americans have a right to information about their plans and the plans' coverage decisions as well as a right to an internal and independent external review. All Americans are covered by the new federal protections beginning on January 1, 2002.
STATES ARE EMPOWERED TO ENFORCE PATIENT PROTECTIONS
States are given the choice to certify that their existing state law on patient protections is consistent with the purposes of the new federal standards set forth in the legislation or pass ones that are. A new independent Patient Protection Certification Board will be charged with evaluating state certification regarding new and existing laws and giving deference to the states' laws unless there is clear and convincing evidence of substantial non-compliance.
States which do not enact their own set of patient protections may enforce the federal law if they choose to. States which choose not to enforce the new federal patient protections would not be required to pay for or administer enforcement. The Department of Health and Human Services would be required to assume that role.
NEW FEDERAL CAUSE OF ACTION FOR DENIAL OF CARE CREATED
The new version of PBOR creates a federal cause of action for a denial of a benefits claim. Earlier so-called "compromise" versions would have created multiple new opportunities to sue for minor errors such as failing to provide advanced notice of minor administrative changes in the health plan.
HEALTH CARE PLANS LIABLE FOR DAMAGES WHEN THEY INJURE OR KILL PATIENTS BY THEIR CONDUCT
Health care plans which act improperly in denying benefits to their enrollees will finally be subject to liability under ERISA. Until this new patients' bill of rights is signed into law, health plans will continue to be exempted from lawsuits even though they may be denying medically-necessary care. A new federal cause of action for denial of benefits is created under the new PBOR, ensuring that health plans will be held accountable.
PRESERVATION OF EXISTING STATE-BASED CAUSES OF ACTION
The new PBOR specifically recognizes and preserves existing state-based quality of care/medical malpractice suits in state courts. State courts increasingly have held health plans medically liable in state court despite ERISA's broad definition of claim for benefits, even with ERISA's preemption of state laws. These state-recognized claims are not affected by the new federal cause for denials of benefits.
IMPENETRABLE LIABILITY SHIELD FOR EMPLOYERS
There is overwhelming agreement, even amongst Democrats, that employers who provide their employees with health benefits should not be open to costly lawsuits. Under the new PBOR, large employers cannot be sued unless they choose to, doctors cannot be sued, and small employers can never be sued.
Suits are allowed only against "designated health care decision makers." Businesses who choose to self-fund or self-insure may designate a health care decision maker to inoculate themselves from liability. Designated health care decision makers are responsible for health care decisions and liable for any injuries they cause. Only those businesses that fail to name a designated health care decision maker can be sued.
Businesses that choose fully-insured plans are totally exempted from liability. Their insurance issuer is automatically deemed the "designated health care decision maker," responsible for health care decisions and liable for any injuries caused. In other words, small businesses can never be sued.
NON-MERITORIOUS/FRIVOLOUS LAWSUITS PREVENTED
Truly injured patients and their lawyers can recover substantial damages in federal court for the first time ever under ERISA, the law which governs 70 percent of all health care in America. But, no suit can be filed for a denial of medical benefits in the new PBOR until the claim has completed review by an independent, external appeals panel.
In order to ensure that only meritorious suits are brought under the new PBOR, patients are required to exhaust the independent external appeals process before they can file a suit. This requirement parallels the mandatory screening process already in place in 19 states for medical malpractice claims.
Claims involving a medical issue go to an "external review entity" to an "independent medical review panel" composed of three, independent practicing physicians. Under previous versions of so-called "compromise" patient protection legislation, trial lawyers would have been allowed to go straight to court by merely alleging that their clients had suffered injury.
QUALITY OF CARE IMPROVED
The requirement of independent external medical review has the ancillary benefit of driving improvements in medical care and putting doctors back in charge of health care. Instead of HMO bureaucrats setting the standard of care and telling doctors how to care for patients, doctors serving on the independent medical review panels will set the standard of care under any given set of circumstances. Plans that are reversed by the independent panel of doctors will be forced to change the way they deliver health care, the ultimate goal of any true patient protection legislation.
LEGAL REWARDS WHEN A PLAN WRONGS A PATIENT
Under the new PBOR, if a plan's decision to deny a claim for benefits is reversed by the independent external review panel, the patient may recover consequential damages for all injuries sustained from the date of the initial denial of claim forward, including:
In addition, if a plan's denial of benefits causes substantial harm to a patient and the plan acted arbitrarily and capriciously, the beneficiary would be entitled to all economic and noneconomic damages, but no punitives.
PLANS NOT REWARDED FOR DELAY IN DELIVERING CARE
Merely providing benefits after an appeal has been filed and while it is pending does not terminate the appeals process or preclude a patient's damage claim where an injury has been sustained and the patient chooses to proceed through external review.
PLANS THAT DO THE RIGHT THING DO NOT GET SUED
Health plans (or designated health care decision makers) may only be held liable for damages if the plan's decision is reversed by the independent panel of doctors in cases involving medical issues. In addition, plans that do not act arbitrarily or capriciously or cause substantial harm in denying benefits only can be sued for cost of care denied, the current remedy under ERISA.
CLASS ACTION LAWSUITS ARE PROHIBITED
All future class action lawsuits against plans are prohibited.
MSAs EXPANDED AND IMPROVED
Under the new PBOR, all individuals (not just those employed by small employers and the self-employed) can open up a Medical Savings Account (MSA). It also allows both employers and employees to contribute jointly to MSAs. Eligibility rules related to the minimum deductible amount are expanded so that more people can qualify, and the 750,000 account cap on taxpayer participation is repealed. MSAs would be made permanent.
SELF EMPLOYED HEALTH INSURANCE PREMIUM DEDUCTIBILITY
Beginning in 2001, the self employed will finally be able to deduct 100 percent of their health insurance premium expenses.