HOUSE GOP BILL – A BILL TO PROTECT HMO’S, NOT PATIENTS

Two years ago, the House passed the Norwood-Dingell Patients’ Bill of Rights with overwhelming bipartisan support, defeating three weaker, partisan alternatives. The House again has strong bipartisan support for a patients’ bill of rights -- the Ganske-Dingell-Norwood-Berry bill (H.R. 2563) -- which is a further compromise from the bill passed last Congress.

The House GOP bill purports to represent a new compromise, but in reality it is an attempt to sell the American public a false promise. The bill fails to provide meaningful patient protections for consumers, stacks the deck against patients in the appeals process, and completely avoids providing any meaningful remedy to individuals who are injured or killed by a negligent HMO. In short, the House GOP bill is a bill that only an HMO could love.

HOUSE GOP BILL REMEDY IS NO REMEDY AT ALL

• House GOP bill takes away existing legal rights. The bill places all cases involving denials of care in Federal court, including cases that are currently heard in state courts. The bill would prevent further evolution of case law in favor of consumers. It is a drastic departure from the Supreme Court’s current interpretation of ERISA today which permits actions involving medical treatment to be subject to state law.

• Patients harmed by their health plan have little, if any redress. It appears that state remedies would only be available to enforce external appeals when the HMO fails to comply with the external review decision or fails to provide access to a timely external review. It does not help patients who have been injured as a result of a wrongful denial of treatment. Patients cannot access the extremely limited federal remedy unless the case involved no medical issues or external review sided in their favor. In addition, HMOs can protect themselves in court by arguing that the patient failed to provide all necessary information or failed to request a rapid review.

• Loopholes allow HMOs to avoid responsibility for their actions. Under the new federal cause of action in the House GOP bill, it is unclear exactly who would be held responsible and under what circumstances that would ever happen. As drafted, the measure leaves patients who are injured or killed by medical decisions at risk for no remedy in the event of medical injuries flowing from the medical judgments made by their health plans. The provision permits unscrupulous HMO's to set up a designated decision-maker, while continuing to make the decisions themselves, and get off scot free. Additionally, having multiple decision-makers, each liable for only a portion of what happened, would make it a legal nightmare to sort out any liability. This provision is nothing more than a shell game that leaves consumers out-of-luck.

• House GOP bill strikes down current state laws. Some states, like Georgia, Arizona, Texas, and California have already passed laws that hold HMO’s accountable for medical malpractice including denial or delay in providing care. The House GOP Bill legislation preempts these state laws.

• Limited damages hurt those most in need. The bill caps non-economic damages at $500,000 and prohibits punitive damages for suits involving injury or death in federal court. Non-economic damages compensate injured patients for very real injuries such as the loss of limb or sight, permanent and severe disfigurement, the loss of a child or spouse. Caps on non-economic damages disproportionately hurt those who are least able to bear the losses -- stay-at-home parents, the elderly, children, and the chronically ill or disabled.

• Sets higher standards to get equitable relief. Currently under ERISA law, a patient can go directly to court to pursue a claim for equitable relief -- that is, a remedy ordering an insurer to provide a treatment or service rather than compensation for injuries. Under the House GOP bill, a patient will have to go through a two-step process to get this relief. First, he must bring one action in court to show harm would occur if the process is completed. Then, he must bring a civil action to get relief.

• Creates more legal confusion and lawsuits instead of fewer. Rather than providing a clear road map for courts to follow in sorting out complicated issues, it will invite more legal wrangling and court actions. The House GOP bill is truly a lawyers’ right to bill. For example, the bill creates a federal civil penalty and a state cause of action for the very same violation (failure to provide access to review or failure to provide benefits in violation of review). It is unclear why the patient would go to two different courts to get a remedy. Further, the designated decision-maker provision will result in a legal morass requiring multiple lawyers and court time to sort out who was truly responsible for an injury.

• Places inappropriate limits on class actions and RICO cases. The House GOP bill prohibits the ability of a judge to consolidate cases into a class action across plans prospectively and retrospectively, eliminating multi-district litigation. Each group of patients would have to file separate suits in order to bring their claim creating more lawsuits not less. It also shuts down all pending and future RICO (cases that include criminal intent to defraud) actions for ERISA claims, eliminating current rights.
  

HOUSE GOP BILL APPEALS PROCESS STACKED AGAINST PATIENTS

• Creates unnecessary barriers to court and review. If a patient dies, the estate must still go through external review and win in order to go to court.  This turns the reviewers into courtrooms and mini-trials.  This is contrary to existing case law requirements for exhaustion in ERISA and elsewhere. The patient is prohibited from requesting a review of care previously asked to be reviewed, even if the patient’s circumstances have changed and would merit another review.

• Time frames for appeals leave patients in the lurch. HMO’s do not have to make a decision in accordance with the patient’s medical circumstances and may take the maximum time allowed, even if the patient would be jeopardized as a result. For patients undergoing treatment, the HMO could stop care before it answered the appeal (including inpatient care). Time frames for a patient to appeal a plan’s decisions are overly short and may cause people to miss the window to appeal (90 days from denial) leaving patients with no choice but to go to court. Furthermore, the patient is expected to know if his condition requires expedited review -- if the patient doesn’t ask for it and gets injured, the plan can assert that the patient should have known as a defense against liability.

• The bill creates unfriendly barriers to patients to access external review. First, HMO's do not have to give patients notice of decisions in a manner calculated to be understood by the average person, which is a long standing requirement in ERISA. The HMO only has to tell the patient where to go in order to get a plain English explanation of the denial. Second, the HMO is not required to automatically forward the patient’s case to review, which can further delay a decision about critical care. Third, there is not a similar protection to Ganske-Dingell that an oral request is sufficient to begin an external review, again further delaying access to critical decisions about care. Fourth, the bill does not allow the reviewer to consider other relevant information or important facts about the case submitted by the doctor or patient. Finally, the review process includes other barriers, including a $100 threshold to get a review or a written request by a doctor.

• The independent reviewers are not free of deference to and influence by the HMO. The bill only requires the reviewers not to give deference to the HMO’s internal review decision, but there are many other decisions a HMO could make about a patient’s care -- including the use of medically inappropriate guidelines -- that could bind the reviewer. Additionally, if a plan used a different term than "medically necessary and appropriate" to deny care, a patient could be denied review, because the review process does not allow the reviewers to review denials based on "substantially equivalent" terms. (The Medicare standard, for example, is "reasonable and necessary.")

• The bill would give plans free rein to deny any care and would bind the reviewers to bad medicine. First, the bill forces reviewers to make decisions based on scientific and clinical evidence. Unfortunately, for the entire realm of medical practice, there is very little evidence in existence. The reviewer would never be able to overturn the HMO unless it had such evidence. For children or patients with rare diseases or disabilities, this would be an impossible standard to meet. For many health conditions that affect children, there are no clinical trials or studies. Additionally, the reviewers could still reverse or uphold the HMO’s decision. There is no ability for the reviewer to modify the decision. Thus, if a doctor recommended 10 days of hospital care, and the plan denied any hospital care, but the right amount of care was 5 days, the reviewer could not allow for that. The reviewer would either have to provide 10 or none, forcing the patient and doctor to appeal again and again.

• Protection allowing patients to get care outside of the network if the plan refuses to comply with the external review decision are meaningless. The bill allows the patient to go out-of-network to get care ordered by the reviewer if the HMO doesn’t comply in the necessary time frame. However, the HMO only has to pay for such care if the care "would have been covered under the contract." This is circular, because if the HMO refuses to provide care ordered by the reviewer, it will most likely be because the HMO disputes whether or not they should cover it. Also, if a plan does not comply with external review, a patient must go to court to force compliance and may only receive the benefit ordered, no damages for non-compliance or later injury are permitted.
  

HOUSE GOP BILL FALLS SHORT ON PATIENT PROTECTIONS

• Omits key patient protections. The House GOP bill omits critical patient protections like prohibitions against improper incentives for doctors to deny or limit care and protections for doctors and nurses to advocate on behalf of their patients or report quality concerns without fear of retaliation. It also omits protections for breast cancer patients needing a mastectomy and protections for patients who need a second opinion on a cancer diagnosis.