HMO Lawsuit Bill Advances

HMO Lawsuit Bill Advances

NewsMax.com Wires
Wednesday, June 27, 2001

WASHINGTON - Sponsors of an HMO lawsuit bill Tuesday fought off two reform attempts by Republicans as negotiators pushed ahead the measure, which even its supporters admit will make health insurance more expensive.

The first effort was a proposal to send the so-called "patients' bill of rights," supported by Democrats and a few Republicans, back to committee for additional deliberations. Had the motion to recommit succeeded, the attempt to stop the bill would have been helped.

The second amendment, sponsored by Sen. Phil Gramm, R-Texas, would have exempted employers from liability, even if they contributed to a decision to deny coverage to a patient. Opponents of the lawsuit bill fear that fewer employers will offer health insurance because of the defeat of this measure.

Employer liability continues to dog the legislation. Republicans say employers should not be held liable for health insurance decisions, even if they contributed to a decision to improperly deny coverage. Supporters of the bill - including Sens. John McCain, R-Ariz., and Edward Kennedy, D-Mass. - say the bill must include a provision holding "a few" employers liable for such decisions.

This issue continues to be the subject of negotiations between the opponents, with Maine Republican Sen. Olympia Snowe heading the compromise talks. The legislation now would allow lawsuits against only those employers who administer part or all of the health coverage for their employees. It would not apply to companies that insure employees through programs completely administered by the insurance company. Supporters of the bill claim that only a small percentage of employers would be vulnerable to lawsuits and remain open to tightening requirements to protect most employers.

Besides allowing patients to sue HMOs and insurers over unfavorable benefits decisions, which most states do not allow, S.283, the so-called Bipartisan Patient Protection Act of 2001 - sponsored by Sens. Kennedy, McCain, and trial lawyer John Edwards, D-N.C. - codifies the right of patients to immediate emergency care, increases access to information about health plans, and establishes a procedure for dispute resolution between patients and the HMO.

Opponents, including President Bush, say this law would radically increase costs for every customer because of a flood of litigation, the costs of which will be passed on to consumers by the companies.

Defenders claim that in states such as Texas, where patients are already allowed to sue HMOs, litigation has been a trickle rather a flood. But they admit that the nonpartisan Congressional Budget Office has estimated the increased costs to be $1.20 a month or more for each policyholder.

The president has expressed a preference for an alternative proposal introduced by Sens. Bill Frist, R-Tenn., and John Breaux, D-La., which would make federal courts the venue for benefit suits and would limit damages in such cases.

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