THIS SEARCH THIS DOCUMENT THIS CR ISSUE GO TO
Next Hit Forward Next Document New CR Search
Prev Hit Back Prev Document HomePage
Hit List Best Sections Daily Digest Help
Doc Contents
[Page: S7515] GPO's PDF---
Mr. DORGAN. Mr. President, I was listening to some of the discussion this morning before the Senate broke for the party lunches. I was especially interested in a couple of presentations about the progress some think the Senate has made in this Congress, and about why they believe the Senate is not making progress today or this week.
It reminds me of the story of the fly that landed on the nose of an ox. The ox, with the fly on its nose, went out for the entire day and plowed in the field. They came back to the village at night, and the villagers began applauding. The fly, still on the nose of the ox, took a deep bow and said to the villagers: We've been plowing.
That is sort of what I heard this morning--we've been plowing--when, in fact, this Senate, as all of us know, has not done the work we should have been doing for the American people.
I thought it would be interesting to describe what the agenda should have been and what we have done.
I will talk about some of the issues with which most Americans believe the Congress should be dealing: Common sense gun safety. For those who might be listening, I'm not talking about gun control; this is not in any way going to abridge people's Second Amendment right to own guns. This legislation will, however, close a loophole in the law that allows people to purchase guns at gun shows without having to get an instant check.
If you buy a gun in this country in a gun store, you must have your name run through an instant check system
[Page: S7516] GPO's PDF
But guess what? Go to a gun show on a Saturday somewhere and you can buy a gun without an instant check being done. This does not make any sense. We want to close that loophole. We do not want to be selling guns at a gun show to a convicted felon. Yet we cannot get this common sense piece of legislation enacted in this Congress because it is considered radical or extreme by some. It is a very simple proposition: Close the gun show loophole to prevent felons from buying guns. We should get that done.
Or what about the Patients' Bill of Rights? Every day 14,000 patients are denied needed medicines; 10,000 are denied needed tests and procedures in this country. But we cannot pass a decent Patients' Bill of Rights because, in this Congress, we have people who stand with the big insurance companies rather than standing with patients.
I know it is inconvenient to some to hear about specific patients who have been denied needed care by their HMOs. I have talked about these patients at great length in the past because these folks are what the Patients' Bill of Rights is all about. It is about the woman who fell off a 40-foot cliff while she was hiking in the Shenandoah Mountains. She fell 40 feet, broke several bones and was hauled unconscious into a hospital emergency room on a gurney. After surviving her life-threatening injuries, she was told by her managed care organization that it would not cover her medical care in the emergency room because she didn't have prior approval to go to the emergency room. This is a woman who was hauled into the emergency room unconscious. That is the sort of thing people are confronting these days.
Senator REID and I had a hearing in Nevada on this subject. At that hearing, a woman stood up and talked about her son. Her son is dead now. He died last October at 16 years of age. He was battling cancer and needed a special kind of chemotherapy to give him a chance to save his life. Unfortunately, his insurance company denied him this care. He not only had to battle cancer, but he also had to battle the insurance company that wouldn't cover the care he needed. His mother held up a very large picture of her son at the hearing and, with tears in her eyes, she cried as she told us: As my son lay dying, he looked up at me and said, Mom, I just don't understand how they could do this to a kid.
Kids who are battling cancer ought not have to battle the insurance companies or HMOs. Yet that is what is happening too often in this country. We propose to pass a Patients' Bill of Rights that is very simple. It says every patient in this country has a right to know all of his or her options for medical treatment, not just the cheapest option. It says that if you have an emergency and go to an emergency room, you have a right to care in that emergency room. It says that if you have cancer and your employer or your spouse's employer changes health plans, you have a right to continue seeing the oncologist who has been helping you to fight that cancer. But we can't get a Patients' Bill of Rights enacted because when it comes time to say who you stand with--the patients who ought to have certain rights or the big insurance companies that in too many cases have denied those rights--too many Senators say: We stand with the insurance companies.
The last time we debated this issue on the floor, about a month ago, my colleague from Oklahoma, Senator NICKLES, offered an amendment that he called a Patients' Bill of Rights. He accomplished his purpose, I suspect, because the next day the paper said the Senate passed a Patients' Bill of Rights. However, what the Senate really passed was a ``patients' bill of goods,'' not a Patients' Bill of Rights.
I thought it interesting that Dr. GANSKE, a Republican Congressman, wrote this letter:
Heaven forbid that any member of Congress would ever vote on a bill they haven't had time to read! Heaven really forbid that a member would vote on a bill that their staff hasn't seen!
Yet, that is exactly what happened two weeks ago on the floor of the Senate when the Nickles HMO amendment was brought up for a vote.
People are just now beginning to realize what was in that legislation. To help you understand the fundamental flaws of the Nickles bill, I am including a copy of an analysis of the Senate's patient's bill of rights that was added to the FY 2001 Labor/HHS legislation.
This Senate legislation eliminates virtually any meaningful remedy for most working Americans and their families against death and injury caused by HMOs.
This is Dr. GANSKE, a Republican Congressman, making this reference to the Nickles bill. He then includes a rather lengthy analysis.
Mr. President, I ask unanimous consent to print Dr. GANSKE's letter and the analysis in the RECORD.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
July 13, 2000.
Hon. BYRON DORGAN,
U.S. Senate, Hart Senate Office Building, Washington, DC.
DEAR SENATOR DORGAN: Heaven forbid that any member of Congress would ever vote on a bill they haven't had time to read! Heaven really forbid that a member would vote on a bill that their staff hasn't seen!
Yet, that is exactly what happened two weeks ago on the floor of the Senate when the Nickles HMO amendment was brought up for a vote. The Norwood-Dingell-Ganske bipartisan Consensus Managed Care Reform Act of 1999 had been public for months before the House voted. Not so with the Nickles HMO bill.
People are just now beginning to realize what was in that legislation. To help you understand the fundamental flaws of the Nickles bill, I am enclosing a copy of an analysis of the Senate patient's bill of rights that was added to the FY 2001 Labor/HHS legislation.
This Senate legislation eliminates virtually any meaningful remedy for most working Americans and their families against death and injury caused by HMOs. Please read the analysis by Professors Rosenbaum, Frankford, and Rosenblatt as to why the Nickles bill is worse than the status quo!
Sincerely,
Greg Ganske,
Member of Congress.
--
July 6, 2000.
HOUSE OF REPRESENTATIVES,
Rayburn House Office Building,
Washington, DC.
DEAR SIR: At your request we have reviewed the Senate patients' bill of rights legislation that was inserted into the FY 2001 Labor/HHS legislation last week.
Rather than expanding individual protections, the measure would appear to undo state law remedies for medical injuries caused by managed care companies' treatment decisions and delays. In this regard, the bill runs directly contrary to United States Supreme Court's reasoning in its recent decision in Pegram v. Herdrich, which seems to reaffirm the authority of states to determine medical liability policy, and underscores the appropriateness of state courts as the forum for medical liability cases.
The displacement of state medical liability law in favor of a new federal medical liability remedy might have some policy validity, were the new law fair and just. But the remedy set forth in the Senate bill is compromised by an unprecedented range of limitations, exceptions, and defenses and appears to leave injured persons with no remedy at all.
In sum, in the name of patient protection, the Senate legislation appears to eliminate virtually any meaningful remedy for most working Americans and their families against death and injury caused by managed care companies.
CONCLUSION
The central purpose underlying the enactment of federal
patient protection legislation is to expand protections for the vast majority of
insured Americans whose health benefits are derived from private,
non-governmental employment, and who thus come within the ambit of ERISA. Not
only would the Senate measure not accomplish this goal, but worse, it appears to
be little more than a vehicle for protecting managed care companies from various
forms of legal liability *.*.*
* * * * *
By classifying medical treatment injuries as claims denials and coverage decisions governed by ERISA, the Senate bill insulates managed care companies from medical liability under state law.
Section 231 of the Senate bill amends ERISA §502 to create a new federal cause of action relating to a ``denial of a claim for benefits'' in the context of prior authorization. The bill defines the term ``claim for benefits'' as a ``request *.*.* for benefits (including requests for benefits that are subject to authorization of coverage or utilization review) *.*.* or for payment in whole or in part for an item or service under a group health plan or health insurance coverage offered by a health insurance issuer in connection with a group health plan.'' ERISA §503B, as added. Thus, the bill would classify prior authorization denials as ``claims for benefits'' that are in turn covered by the new federal remedy. Federal remedies under ERISA §502 preempt all state law remedies.
[Page: S7517] GPO's PDF
This classification would have profound effects, particularly in light of the Supreme Court's recent decision in Pegram v. Herdrich. As drafted, the Senate bill arguably would preempt state medical liability law as applied to medical injuries caused by the wrongful or negligent withholding or necessary treatment by managed care companies. The bill thus would reverse the trend in state law, which has been to hold managed care companies accountable for the medical injuries they cause, just as would be the case for any other health provider.
In recent years courts that have considered the issue of managed care-related injuries have applied medical liability theory and law to managed care companies in a manner similar to the approach taken in the case of hospitals. Thus, like hospitals, managed care companies can be both directly and vicariously liabile for medical injuries attributable to their conduct. In a managed care context, the most common type of situation in which medical liability arises tends to involve injuries caused by the wrongful or negligent withholding of necessary medical treatment (i.e., denials of requests for care).
State legislatures also have begun to enact legislation to expressly permit medical liability actions against managed care companies. The best known of these laws is medical liability legislation enacted in 1997 by the state of Texas and recently upheld in relevant part against an ERISA challenge by the United States Court of Appeals for the Fifth Circuit.
In Pegram v. Herdrich, the Supreme Court implicitly addressed this question of whether managed care state liability law should cover companies for the medical injuries they cause. The Court decided that liability issues do not belong in federal courts and strongly indicated its view that in its current form ERISA does not preclude state law actions. It is this decision that the Senate bill would appear to overturn.
In Pegram, the Court set up a new classification system for the types of decisions made by managed care organizations contracting with ERISA plans. The first type of decision according to the Court is a ``pure'' eligibility decision that, in an ERISA context, constitutes an act of plan administration and thus represents an exercise of ERISA fiduciary responsibilities. Remedies for injuries caused by this type of determination would be addressed under ERISA §502 (which of course currently provides for no remedy other than the benefit itself).
The second type of decision is a ``mixed'' eligibility decision. While the Court's classification system contains a number of ambiguities, it appears that in the Court's view, this second class of decision effectively occurs any time that a managed care company, acting through its physicians, exercises medical judgment regarding the appropriateness of treatment. Such decisions, as medical decisions rather than pure eligibility decisions, are not part of the administration of an ERISA plan and thus not part of ERISA's remedial scheme because, according to the Court, in enacting ERISA, Congress did not intend to displace state medical liability laws. The Court thus strongly indicated that these claims are not preempted by ERISA and may be brought in state court. In the Court's view, these mixed decisions represent a ``great many, if not most'' of the coverage decisions that managed care companies make.
The Senate bill would appear to reverse Pegram by effectively classifying all prior authorization determinations as §502 decisions, without any regard to whether they are ``pure'' or ``mixed''. As a result, state medical liability laws that arguably now reach mixed decisions apparently would be preempted, leaving individual physicians, hospitals, and other health providers as the sole defendants in state court. Under the complete preemption theory of §502, remedies against managed care virtually impossible standard to prove and particularly egregious in light of the fact that plaintiffs cannot even bring such an action unless they have gotten a reversal of the denial at the external review stage. Even where they have proven that a company wrongfully withheld treatment, plaintiffs can recover nothing for their injuries without taking the level of proof far beyond what is needed to win at the external review stage. Virtually all injuries would go uncompensated.
A plaintiff will be forced to show ``substantial harm'', defined in the law as loss of life, significant loss of limb or bodily function, significant disfigurement or severe and chronic pain. This definition arguably would exclude some of the most insidious injuries, such as degeneration in health and functional status, or loss of the possibility of improvement, that a patient could face as a result of delayed care, particularly a child with special health needs. In Bedrick v. Travelers Insurance Co., the managed care company cut off almost all physical and speech therapy for a toddler with profound cerebral palsy. The Court of Appeals, in one of the most searing decisions ever entered in a managed care reversal case, found that the company had acted on the basis of no evidence and with what could only be described as outright prejudice against children with disabilities (the managed care company's medical director concluded that care for the baby never could be medically necessary because children with cerebral palsy had no chance of being normal).
The consequences of facing years without therapy were potentially profound for this child: the failure to develop mobility, the loss of the small amount of motion that the child might have had, and the enormous costs (both actual and emotional) suffered by the parents. Arguably, however, none of these injuries falls into any of the categories identified in the Senate bill as constituting ``substantial harm.''
The maximum award permitted is $350,000, and even this amount is subject to various types of reductions and offsets. This limitation on recovery will make securing representation extremely difficult.
No express provision is made for attorneys fees. Were the new right of action to be interpreted not to include attorneys fees this would be a radical change in the ERISA statute, and one that would create a massive barrier to use of the new purported ERISA remedy. To mount a case proving bad faith denial of treatment that caused substantial injury is an enormously expensive proposition. The limitations on is enormous. In Humana v. Forsythe the United States Supreme Court held RICO applicable to a managed care company that had systematically defrauded thousands of health plan members out of millions of dollars in benefits by systematically lying to members about the proportional cost of the treatment they were being required to bear (the policy was a typical 80/20 payment policy, but because of secret discounts that were not disclosed to members, group policy holders in many cases were paying for the majority of their care). This is racketeering, pure and simple, and thus represents a classic type of RICO claim. To use a patient protection bill potentially to insulate managed care companies against these types of practices is unwise at best.
CONCLUSION
The central purpose underlying the enactment of federal patient protection legislation is to expand protections for the vast majority of insured Americans whose health benefits are derived from private, nongovernmental employment, and who thus come within the ambit of ERISA. Not only would the Senate measure not accomplish this goal, but worse, it appears to be little more than a vehicle for protecting managed care companies from various forms of legal liability under current law. Viewed in this light, Congressional passage of the Senate bill would be far worse than were Congress to enact no measure at all.
Mr. DORGAN. We cannot get a real Patients' Bill of Rights passed. How about a Medicare prescription drug benefit ? Well, we are not able to get that done either. We have been busy providing tax cuts, an estate tax repeal and a change in the marriage tax penalty. The head of OMB said yesterday that, under the recent tax proposals passed by the majority party, the top 1 percent of the income earners in this country will get more tax cuts than the bottom 80 percent combined.
THIS SEARCH THIS DOCUMENT THIS CR ISSUE GO TO
Next Hit Forward Next Document New CR Search
Prev Hit Back Prev Document HomePage
Hit List Best Sections Daily Digest Help
Doc Contents