By George G. Olsen, JD
And the Debate Goes On A comparison of the two pieces of Patients' Bill of Rights legislation passed by the House and the Senate. Prior to September 11, 2001, one of the hottest issues in Washington, DC, was the Patients' Bill of Rights. In the preceding few months, after exhaustive and often acrimonious debate, both the House and Senate passed different versions of this legislation. With the proposals headed to a conference committee to work out differences between the two bills, many observers believed that final action on a Patients' Bill of Rights was closer than it had been since the issue began raging nearly 6 years ago. The horrific terrorist attacks abruptly changed Congressional priorities-pass legislation to provide disaster relief, empower the President to pursue the terrorists, fund the war effort, improve the country's antiterrorist capabilities, and stimulate the flagging economy have and will continue to dominate Congressional and administration agendas. While the President has said that he would like Congress to complete action on this legislation before it recesses for the year, it is far from clear that it will happen. Comparison of Proposals The Senate passed the "Bipartisan Patient Protection Act of 2001" on June 29, 2001, by a vote of 59 to 36. This bill, S 1052, was sponsored by Senator Kennedy (D-Mass), Senator Edwards (D-NC), and Senator McCain (R-Ariz). On August 2, 2001, the House of Representatives enacted the "Bipartisan Patient Protection Act" by a vote of 226 to 203. HR 2563 was sponsored by Representatives Ganske (R-Iowa), Dingell (D-Mich), Berry (D-Ark), and Norwood (R-Ga). A comparison of key issues follows: Scope. The requirements of the Senate bill apply to group health plans, including insured and self-insured plans; state and local government employee plans; and federal health benefit programs. Health insurance issuers that offer coverage in the group and individual markets are also subject to the bill's dictates. The scope of the House-passed bill is very similar to the Senate legislation except that it does not expressly cover federal health benefit programs. However, the House bill includes a Sense of Congress resolution stating that it should apply to federal programs. Preemption of state laws. One of the central issues in the Patients' Bill of Rights debate is the extent to which federal legislation should preempt managed care laws enacted by state governments. S 1052 permits a state to certify that its laws "substantially comply with" the patient protections in the Senate bill. If the certification is approved, the state law prevails and governs health insurance issuers and managed care plans. If a state does not request certification or if the certification is disapproved, both state law and the federal requirements would apply concurrently. The House bill is similar but the claims process set out in the federal law would always preempt state law. There is no certification process under HR 2563. Access to specialists. S 1052 and HR 2563 have access to specialist provisions that are substantially alike. The bills require health plans to ensure that individuals have timely access to appropriate specialists when such care is otherwise covered by the plan. If no participating specialist is available to provide necessary care to an individual, the plan must provide coverage for such care by a nonparticipating specialist at no additional cost to the beneficiary beyond what would have been paid for a participating specialist. Furthermore, the proposals mandate that health plans permit a person with an "ongoing special condition" to receive a referral to a specialist for the treatment of that condition. Specialists are also empowered to authorize referrals or other procedures subject to a plan of treatment. Choice of provider. The Senate-passed bill provides that if a health plan permits the designation of a "primary care provider," it must accept the designation made by the individual enrollee. The bill also directs plans to permit individuals to receive medically necessary and appropriate specialty care, pursuant to appropriate referral procedures, from any qualified participating health care professional available to accept them, unless the health plan informs enrollees of limitations on selecting a specialist. The House bill is very similar in effect to the Senate version. Continuity of care. The House and Senate bills have similar provisions governing continuity of care requirements. Health plans are required to cover up to 90 days of care from a "terminated" provider for persons undergoing an active course of treatment from the provider for a "serious and complex" condition and for institutional care. Persons scheduled for surgery, pregnant women, and terminally ill patients have special time frames. For the purpose of this rule, "terminated" includes the expiration or nonrenewal of a provider's contract but does not include the termination of a provider for fraud or for the failure to meet applicable quality standards. Plans must notify their enrollees of the termination and permit the person to elect to continue coverage during the transitional period. Emergency care. Both bills mandate that health plans provide coverage for emergency medical care and emergency ambulance services without prior authorization for such services based on a prudent layperson standard and provided by participating and nonparticipating providers. Health plans that do not cover emergency care and ambulance services are not required to furnish such coverage. Health plans must also cover poststabilization care without prior authorization furnished by nonparticipating physicians until the plan arranges for transfer or discharge if the plan fails to respond to a prior authorization request within 1 hour or if the plan could not be contacted by the provider. Gag rules. The House and Senate proposals prohibit plans from "prohibiting or otherwise restricting" communications about health status, medical care, or treatment between health care professionals and their patients, as long as the health care professional is acting within the lawful scope of their practice. Plan information. S 1052 requires health plans to provide individuals with information concerning covered benefits, cost-sharing, disenrollment, access to physicians, preauthorization procedures, service areas, emergency care, clinical trials, designated decision-makers, and grievance and appeal procedures. Upon request, health plans must supply information regarding provider compensation methods, qualifications of providers and facilities, utilization review procedures, drug formularies, and external appeals. The House bill has comparable provisions. Provider discrimination. The bills passed by both houses of Congress prohibit plans from discriminating against providers with respect to participation in a plan based solely on licensure or certification. Also, both bills expressly permit plans to include providers in the plans only to the extent necessary to meet the needs of enrollees. The plans are also free to establish quality and cost control standards consistent with the plan's responsibilities. Initial coverage determinations. The two pieces of legislation set time frames for initial coverage determinations by health plans. As a general rule, such determinations must be made "as soon as possible in accordance with the medical exigencies of the case." In any event, such determinations must be made no later than 72 hours in the case of expedited prior authorizations; 14 days after receipt of all necessary information but no later than 28 days for routine prior authorizations; 30 days after receipt of all needed data but not longer than 60 days for retrospective determinations; and oral or concurrent determinations must be made within 24 hours. Treating professionals must provide the health plan with access to information necessary to make an initial coverage determination within 5 days of filing a claim. Internal appeals. Pursuant to both the House and Senate bills, an individual must initiate an internal appeal to the health plan within 180 days and, conversely, the plans must afford such a time period to enrollees. Internal appeal decisions must be rendered within the following times: 72 hours for expedited prior authorization determinations, 14 to 28 days for routine prior authorization determinations, 30 to 60 days for retrospective determinations, and 24 hours for oral or concurrent determinations. External review. Health plans must provide access to independent medical review for denials for which the item or service would be a covered benefit under the terms and conditions of the plan but for one of the following findings: (1) the item or service is not medically necessary and appropriate; (2) the item or service is investigational or experimental; (3) the coverage denial requires an evaluation of medical facts by a health care professional; or (4) the plan failed to meet time periods for internal appeals. The independent medical reviewer must make a determination to uphold, reverse, or modify the health plan's denial. The decision must be predicated on the medical condition of the patient and valid, relevant scientific evidence and clinical experience, including peer-reviewed medical literature and expert opinion. The independent reviewers are not required to give any deference to the plan's determination or to the provider's recommendation. The plan's definitions of medical necessity, experimental or investigational services, and other key terms are not binding on the independent reviewer. The decision of the independent reviewer is binding on the health plan. If the plan ignores the decision, an enrollee or provider may initiate a civil action against the plan to recover the costs of obtaining the health care services from another provider. Civil penalties may also be levied against a plan that fails to abide by the independent reviewer's ruling. HR 2563 requires that independent reviews be conducted by review panels comprised of three independent medical reviewers. Also under the House version, a review panel may only uphold or reverse a plan's internal review decision; it may not modify the plan's decision. Liability. Far and away, the greatest difference between the two bills lies in the liability provisions. These provisions are the most controversial aspects of the Patients' Bill of Rights legislation and are proving to be the most intractable. The Senate-passed bill establishes a new federal cause of action under the Employee Retirement Income Security Act (ERISA) for a health plan's failure to exercise ordinary care in making a claims decision that is not medically reviewable such as eligibility decisions, cost-sharing determinations, and contract exclusions or limitations. Economic and noneconomic damages may be awarded under the new federal cause of action and are uncapped. There is a limit of $5 million on punitive damages. By contrast, the House bill creates three new federal actions under ERISA. Economic damages may be awarded and they are not subject to any cap. Noneconomic damages are capped at $1.5 million. Punitive damages, capped at $1.5 million, are available only when a health plan fails to comply with an independent review decision. Pursuant to the House bill, an individual or provider must exhaust the internal and external review processes before filing a lawsuit under the new causes of action. The Senate bill does not require exhaustion of remedies in all circumstances. The Senate bill exposes plan fiduciaries, issuers, and agents to liability. The House bill assigns liability to "designated decision-makers" that are specifically defined in the legislation. Access to health insurance. The House bill contains provisions governing the creation and operation of association health insurance plans while the Senate proposal has no corresponding provisions. Similarly, HR 2563 expands the availability of medical savings accounts (MSAs) by increasing the number of permitted account participants, increasing the size of eligible employers, expanding employee eligibility to participate in MSAs, and increasing the contribution limit to 100% of the annual deductible. The Senate bill has no provisions concerning MSAs. The House bill, but not the Senate, allows a federal tax deduction for 100% of health insurance costs of self-employed individuals. George G. Olsen, JD, is a partner of the firm Williams & Jensen, PC, Washington, DC. He is also legal counsel for the National Association of Rehabilitation Agencies and Providers.
