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She continued, ``Instead of using a clumsy, bloody weapon, I used the cleanest, simplest of tools: My words. This man died because I denied him a

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necessary operation to save his heart. I felt little pain or remorse at the time. The man's faceless distance soothed my conscience. Like a skilled soldier, I was trained for the moment. When any moral qualms arose, I was to remember, I am not denying care, I am only denying payment.''

   She continued: ``At that time, that helped me avoid any sense of responsibility for my decisions. Now I am no longer willing to accept the escapist reasoning that allowed me to rationalize that action.''


[Time: 22:15]

   I accept my responsibility now for that man's death as well as for the immeasurable pain and suffering many other decisions of mine caused.

   Well, at that point Ms. Peeno described many ways managed care plans deny care, but she emphasized one in particular: The right to decide what care is medically necessary. She said, quote, ``There is one last activity that I think deserves a special place on this list, and this is what I call the ``smart bomb'' of cost containment, and that is medical necessity denials. Even when medical criteria is used, it is rarely developed in any kind of standard traditional clinical process. It is rarely standardized across the field. The criteria are rarely available for prior review by the physicians or the members of the plan. And we have enough experience from history to demonstrate the consequences of secretive unregulated systems that go awry.''

   Well, Mr. Speaker, the room was stone quiet. The chairman of the committee mumbled ``thank you.'' This medical reviewer could have rationalized her decisions as so many have done. She could have said, ``I was just working within guidelines'' or ``I was just following orders.'' We have heard that one before. Or, ``We have to save resources.'' Or, ``Well, this is not about treatment, it is really about benefits.''

   But this HMO reviewer refused to continue this type of psychological denial and she will do penance for her sins the rest of her life. And to atone for that she is exposing the dirty little secret of HMOs determining medical necessity.

   Mr. Speaker, if there is only one thing my colleagues learn before voting on patient protection legislation, I beg them to listen to the following: before voting on any patient protection legislation, keep in mind the fact that no amount of procedural protection or schemes of external review can help patients if insurers are legislatively given broad powers to determine what standards will be used to make decisions about coverage. As Ms. Peeno so poignantly observed, insurers now routinely make treatment decisions by determining what goods or services they will pay for.

   Let me give an example of how they can arbitrarily determine medical necessity. There is a health plan out there that determines medical necessity by defining it as: The cheapest, least expensive care as determined by us. So well, what could be wrong with that? What is wrong with the cheapest, least expensive care?

   Well, before I came to Congress and in some surgical trips that I make abroad I still do this, I took care of a lot of children with cleft lips and palates. Let me show the birth defect of one of these children. This is a little baby born with a complete cleft lip and palate. This occurs about one in 500 births, so it is pretty frequent. A huge hole right in the middle of the face. Imagine being a mom or dad and giving birth to a little baby with this birth defect, and then think of that HMO that defines medical necessity as the cheapest, least expensive care.

   Mr. Speaker, the prevailing standard of care, a standard that we have used in this country for over 200 years, would say the prevailing standard of care to fix this defect in the roof of this child's mouth is a surgical operation to fix that. I have done hundreds of those operations. That is the standard care everywhere in the world. However, that HMO, by its contractual language, can say but the cheapest, least expensive care would be to use what is called a plastic obturator. It would be like an upper denture plate. That way the food will not go up into the roof of the mouth, up into the nasal passages so much.

   Of course, with that little plastic device which would be the cheapest, least expensive care, the child will probably never speak as good as if the child had a surgical correction of this birth defect. But so what does the HMO care? They are increasing their bottom line, their profits. And furthermore, under Federal law they can define it any way they want to by their contractual language if one happens to get their insurance from an employer.

   Mr. Speaker, I think that is a tragedy. I think that is a travesty. Congress created that law 25 years ago never expecting that this type of behavior would be done by HMOs. Yet 50 percent of the reconstructive surgeons who take care of children with this birth defect have had HMOs deny operations to surgically correct this condition by calling them, quote, ``cosmetic operations.''

   This is not a cosmetic operation. Cosmetic operations are repairing baggy eyelids or a face lift. This is a birth defect. Prevailing standards of care would say surgical correction, not a piece of plastic shoved up into the roof of a patient's mouth with food and fluid coming out of their nose.

   Who would do that, some would ask? Well, it happens. And we need to fix the Federal law that keeps that happening. What else about that Federal law needs to be fixed? Well, over the last few days I have watched the debate up here on the Hill in the other body. There was an amendment that dealt with who would be covered by patient protection legislation. The GOP bill would only cover about one quarter of the people in this country. There was an amendment to make it cover everyone in this country, these patient protections. Getting up and arguing against it were my GOP colleagues by saying, hey, we should not interfere with the States's ability, States's rights , let the States decide this. The only problem with this is that it is Federal law that has exempted State regulation and State oversight.

   I want to see in a few days if my colleagues will talk the same tune when we are talking about liability. It was Federal law that gave a liability shield to HMOs so that if they do negligent, malicious behavior that results in injury, loss of limb, or death that they are not responsible.

   Let me give an example of what I am talking about in terms of what HMOs have done. This is the case of a little 6-month-old boy. A little 6-month-old boy in Atlanta, Georgia, actually lives south of Atlanta, Georgia, woke up one night crying about 3:00 in the morning and had a temperature of 104 and looked really sick. His mother thought he needed to go to the emergency room. This is this little boy tugging on his sister's sleeve before his HMO health care. So his mother phoned the 1-800 number and she is told, ``We will authorize you to go to an emergency room, but we will only let you go to this one hospital a long ways away. And if you go to a nearer one, we will not cover it.''

   So Dad gets in the car, Mom wraps up little Jimmy and they start on their trek. About halfway through the trip, they pass three hospital emergency rooms. Mom and Dad are not health professionals. They know Jimmy is sick but they do not know how sick, but they do know if they stop without an authorization, they could get stuck with thousands of dollars of bills because their HMO will not pay for it. So they push on to that one authorized hospital.

   What happens? En route, little Jimmy's eyes roll back in his head, he stops breathing, he has a cardiac arrest. Picture Mom and Dad, Dad driving like crazy, Mom trying to keep her little infant alive to get to the emergency room. Somehow or other they manage to get to the emergency room. Mom holding little Jimmy leaps out the car screaming, ``Help my baby, help my baby.'' A nurse comes out and starts to give mouth-to-mouth resuscitation. They bring out the crash cart and get him intubated and get the lines going and give him medicines and somehow or other this little baby lives. But he does not live whole.

   Because he has had that cardiac arrest en route to the hospital, the only one authorized by that HMO which has made that medical decision, he ends up with gangrene of both hands and both feet and both hands and both feet have to be amputated.

   Here is little Jimmy today. I talked to his mom about 6 weeks ago. Jimmy

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is learning to put on his leg prostheses with his arm stumps. He still cannot get on his bilateral hook prostheses for his hands by himself. Jimmy will never play basketball. He will certainly never wrestle. And some day when he gets married, he will never be able to caress the face of the woman that he loves with his hand.

   Mr. Speaker, under Federal law if one's little baby had this happen to them and their insurance was from their employer who had a self-insured plan and their plan had made that decision, that negligent decision which had resulted in this disaster, under Federal law that plan would be liable for nothing other than the cost of the amputations.

   Is that fair? Is that the way it is if one buys insurance as an individual from a plan that is covered by State regulation? No. So, Mr. Speaker, I would say to my colleagues, my colleagues in the other body and my colleagues in this body, when we get a chance to vote on whether health plans ought to be liable for decisions that they make that result in this type of negligence, a judge reviewed this case. A judge looked at the case. He said that the margins of safety by this HMO were, quote, ``razor thin.'' I would add to that, about as razor thin as the scalpels that had to remove little Jimmy's hands and feet.

   Mr. Speaker, I say to my friends on both sides of the aisle and in the other body, when we get a chance to vote on whether a health plan should be responsible for their actions that result in this type of injury, think, especially my fellow Republicans, think about how we always say as Republicans, hey, people should be responsible for their actions. Do not we say that? If somebody is able-bodied and they can work, they ought to be responsible for providing for their family? Do not we say that if somebody kills somebody or is a rapist that they ought to be responsible for their criminal behavior?

   How can we then say that an HMO which makes this type of decision that results in this type of injury should not also be responsible? There is no other entity, no other business, no other individual in this country that has that type of legal protection. It is wrong. It should be fixed.

   The State of Texas fixed this 2 years ago. They made their health plans liable. Now, of course this is being challenged because of the ERISA law. But since that time there has not been an explosion of lawsuits. There has only been one. I will read about it in a few minutes. But why has there not been? Because health plans suddenly realized that they cannot cut corners like they did with this little boy or they are going to be liable. They are going to be responsible.


[Time: 22:30]

   Did it significantly increase premiums in Texas? No. Premiums in Texas have not gone up any higher than they have anywhere else in the country. Did it mean that managed care would die out in Texas? No. Several years ago, there were 30 HMOs in Texas. Today, there are 51. That law is working. It did not result in a huge number of lawsuits, and it has not resulted in a big increase in premiums like all the HMOs would have us believe.

   Let me read today an editorial from USA Today. The title of this is, ``Why should law protect HMOs that injure patients ?''

   Last July, Joseph Plocica's health plan discharged him from a hospital, against the advice of his psychiatrist, who said the Fort Worth resident had suicidal depression requiring continued help, according to a lawsuit. That night, Plocica proved his doctor right and his health plan wrong. He drank a half-gallon of antifreeze and died 8 days later.

   As terrible as this story is, at least Plocica's bereaved family has more rights than most. A sweeping 1997 Texas law let them sue Plocica's health plan for malpractice.

   That's a right denied to the roughly 120 million other Americans who receive their health care through work. This week, the federal law that protects those health plans from lawsuits is the focus of a contentious Senate debate over patients' rights .

   The central question: Should HMOs, which often make life and death decisions about treatments, be legally accountable when their decisions go tragically wrong?

   Like Mr. Plocica who drank antifreeze or little Jimmy here who lost his hands and feet.

   ``Right now'', the USA Today editorial continues,

   the answer is no, although that is a luxury no doctor, and no other business, enjoy.

   The provision might have made sense when it was passed by Congress in 1974 as part of a law designed to protect workers' pensions. Most employees were covered by old-style fee-for-service insurance plans and payment disputes took place after health care had been delivered. So a law limiting recovery to the cost of care did not hurt anybody. But today, more than 80 percent of workers are in managed care plans that actively direct what treatments parents received.

   Unfortunately, despite efforts in Texas and a few other states to find ways around this law, the gaping liability loophole is not likely to be closed nationwide any time soon

   unless Congress acts.

   Insurance and business groups have mounted an aggressive fight against a version of the Patients' Bill of Rights that allows patients to sue. They say opening up HMOs to lawsuits will result in a flood of litigation and kill cost control by doing little too improve quality care.

   But in Texas, where these same groups made all the same arguments, the reality is far from different.

   No flood of lawsuits. Only a handful of cases have been filed against HMO plans in Texas since the challenge to the law was overturned last fall. This is due, in part, to another feature of that 1997 law, which requires swift independent review of disputes.

   Rates have not shot up. In the two years since the law was passed, HMO premiums in the state are almost exactly where they stood in 1995. Cost increases in Dallas and Houston were below the national average last year.

   Quality may be improving. News accounts from Texas suggests that HMOs, now accountable for their decisions, are more careful making

   those decisions.

   Doctors report health plans are less likely to drag their feet, for instance, and less likely to deny treatments doctors believe are needed.

   There's no reason to believe a national law would produce any different results,

   continues this editorial.

   Studies by the Congressional Budget Office and the nonprofit Kaiser Family Foundation find HMO liability would produce negligible premium hikes. Only industry-sponsored studies find otherwise.

   Lawmakers would do well to look at the facts before leaving this critical patient right on the cutting room floor.

   Mr. Speaker, I do not think we should hesitate about having HMOs be responsible, despite the fact that the HMO industry has spent more than $100,000 per Congressman lobbying against a strong Patients' Bill of Rights . Surveys show that, despite all that advertising, that money spent on advertising by the insurance and HMO industry for the last 2 years, there has been no significant change in public opinion about the quality of HMO care.

   Despite tens of millions of dollars of advertising, a recent Kaiser survey shows no change in public opinion: 77 percent favor access to specialists, 83 percent favor independent review, 76 percent favor emergency room coverage, 70 percent favor the right to sue one's HMO. Other surveys show that 85 percent of the public think Congress should fix these HMO abuses.

   If these concerns are not addressed, I think the public will see examples like this, and they will ultimately reject the market model as it now exists. However, if we can enact true managed care reform such as that embodied by my own Managed Care Reform Act of 1999 or the Dingell or the Norwood bills, then consumer rejection of a market model will be less likely.

   Common sense, responsible proposals to regulate managed care plans are not a rejection of the market model of health care. In fact, they are just as likely to have the opposite effect. They will preserve the market model by saving it from its own most irresponsible and destructive tendencies.

   Mr. Speaker, let us pass real HMO reform. Let us learn from States like Texas. After all, is it not Republicans who often say that the States are the laboratories of democracy? Yes, let us have some insurance tax incentives. But let us be very careful about repeating some mistakes that have been made with ERISA in the past that led to fraud in regards to association health plans.

   Finally, the Speaker of the House told me before the July 4th recess that it was his intent to have HMO reform legislation on the floor by the middle of July. Well, Mr. Speaker, here we are. According to my watch, it is now the middle of July, and we have no date yet even for a full committee mark-up

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in the House of Representatives. Why? Well because it is not clear that another HMO protection bill could make it through committee. Too many Republicans and Democrats of each committee want to see some real reform to prevent this type of tragedy, real reform, not a fig-leaf piece of legislation.

   I think there are even majority votes in both the Committee on Education and the Workforce and the Committee on Commerce for strong medical necessity and enforcement measures. Maybe that is the reason why the committee chairmen are not moving ahead. Maybe that is why the leadership of this House is not telling them to get their act in order, get this to the floor.

   Well, the Senate is debating HMO reform this week. So let us see what happens there.

   I think today the Washington Post called it about right when it referenced the GOP Senate bill . It said, ``The Republican bill professes to provide many of the same protections, but the fine print often belies its claims. Among much else, it turns out to apply only to

   some plans and to only about one-fourth as many people as the Democratic bill would cover.''

   The Post then talked about the GOP criticisms of the Democratic bill , ``Critics say that the Democratic bill , by weakening the cost-containment industry, would drive up costs.'' The Post continues, ``Our contrary sense is that, in the long run, it would strengthen cost containment by requiring that it be done in a balanced way'', exactly the sentiments that I expressed a few minutes ago.

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