FOR IMMEDIATE RELEASE

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February 4, 1999 - The Promoting Responsible Managed Care Act, introduced today by Senators Chafee, Graham, Lieberman, Specter, Baucus, Robb and Bayh is far left from the "middle-of-the-road" claims of its sponsors. Portrayed as a "centrist compromise" between Democratic and Republican health care bills, the proposal contains many extreme measures, including substantive, malpractice-like liability for health plans and nearly all of the most costly, burdensome and invasive mandates contained in the Democrat and Republican bills.

"With health care costs on the rise and the number of uninsured growing, Congress should not pass legislation that will only add to the burdens on American families and businesses," stated Dan Danner, chairman of the Health Benefits Coalition. "For these reasons alone, the Responsible Managed Care Act is anything but responsible."

U.S. employers face a predicted 7-10% rise in health care costs in 1999 - nearly 3 times as much as 1998 and the biggest increase in seven years, according to a new William Mercer, Inc. study. Federal mandates on top of this increase would return us to the days of double-digit increases in health care costs.

One costly provision contained in the Chafee bill expands the right to sue health plans and the employers who sponsor them. Exposing employers directly (or indirectly, through increased premiums) to open-ended economic damages is a strong incentive for employers of all sizes to reduce or terminate health care coverage. In the end, expanded liability provisions help trial lawyers, who pocket most of the money, but do nothing to help patients get proper care when needed.

This bill also contains a medically necessity provision which is estimated to increase costs 6.1% (Barents Group, LLC 1998). Employers and health plans have sought to both improve quality and control costs by paying for those procedures that are medically necessary according to best medical practices. The bill's medical necessity provision seeks to allow the physician or other health provider to determine which procedures are medically necessary (and reimbursable by the health plan) according to "generally accepted principles of professional medical practice." However, numerous studies show that an unacceptably high portion of health care considered "generally accepted" is either unnecessary, inappropriate, or potentially harmful to patients. Moreover, the provision opens the door for government regulators and the courts to define medical appropriateness, a move guaranteed to stifle innovation and increase costs.

"The Chafee bill is guaranteed to add millions more to the ranks of the uninsured," stated Danner. "Rather than offering a true alternative to other health care bills, the Chafee proposal contains some of the worst elements of all of them and merely punishes and burdens all employers who voluntarily provide health coverage to millions of Americans."