February 6, 2001

The Bipartisan Patient Protection Act of 2001 is a bipartisan approach that strikes a much needed bipartisan compromise to provide comprehensive patient protections for all Americans while establishing new compromises on a number of contentious issues.

Patient Protections. The bipartisan, compromise legislation includes strong patient protections that will ensure timely access to high quality health care for the millions of Americans with private health insurance coverage either through their employer or through the individual market. The protections include: access to emergency care, access to specialty care, access to non-formulary drugs, access to clinical trials, direct access to pediatricians and ob-gyns, continuity of care for those with ongoing health care needs, and access to important health plan information. The bill also protects the doctor-patient relationship by ensuring health professionals are free to provide information about a patient’s medical treatment options.

Because it is so critical that disagreements regarding a patient’s medical treatment get resolved quickly and fairly, the bill outlines criteria and time frames for initial claims review and internal appeals procedures. The Bipartisan Patient Protection Act of 2001 also establishes an independent, speedy external review process for patients dissatisfied with the results of the internal review. External appeals will be resolved by independent medical experts who evaluate the individual patient’s medical situation, current scientific evidence, and plan documents to issue a recommendation on the right course of care which is binding on the plan.

Scope. The Bipartisan Patient Protection Act of 2001 protects every American with private insurance. The bill allows states to develop their own patient protection laws, and empowers the governors to certify that they are comparable to federal law. If the state law is comparable to those at the federal level, the state law will remain in effect. The Secretary of HHS has 90 days to approve or reject the certification request.

Liability. The liability compromise stems from consideration of the recent Supreme court decisions relating to suits against health plans for personal injury or wrongful death as well as concerns voiced by the employer community regarding the need to preserve the federal uniformity for contract interpretation. The Bipartisan bill’s liability language draws a bright line between cases of injury or death involving administrative decisions, which would be heard in federal court, and cases which involve medically reviewable decisions, which would be heard in state court. This design mirrors similar medical cases against hospitals and doctors. It also tracks the Supreme Court’s recent decision under Pegram, which stated that cases involving medical judgment properly are the purview of state courts, as they have been traditionally. It also addresses employers’ desire to preserve ERISA’s uniformity surrounding plan administration and benefits by keeping these cases in federal court.

Exhaustion Required. Patients must always exhaust internal and external appeals before going to court. The sole exception is when the death or irreparable injury has already occurred prior to completion of the appeals process. However, either party may request that the appeals process continue and the results of this process may be considered in court.

Employer Protections. Employers are protected against any liability, unless they directly participated in making the decision on a claim for benefits which resulted in personal injury or death. The bill specifically lists a number of areas that are not to be considered "direct participation" including: selecting a health plan, choosing which benefits to cover under the plan, or advocating with the health plan on behalf of a beneficiary for coverage.

Punitive Damages. For cases of personal injury or death pertaining to medically reviewable decisions (those heard in state court), state law would apply, including any caps on damages or other restrictions. Additionally, punitive damages are specifically prohibited in state court if the plan complies with the internal and external appeals process, unless clear and convincing evidence shows the plan acted with willful or wanton disregard for the rights and safety of others. However, in this instance, any state law caps on punitive damages would still apply. For cases of injury or death involving non-medically reviewable decisions (those heard in federal court), punitive damages are specifically prohibited. However, if a plan acts with bad faith and flagrant disregard to a patient’s rights, a court may assess a civil monetary penalty. This penalty can not exceed five million dollars.