CONGRESS WEIGHS MORE REGULATION FOR HMOS.

Byline: Robert Pear The New York Times

Congress has begun a great debate on the proper role of government in regulating health care and seems quite likely to set standards for health maintenance organizations as Democrats and Republicans scramble to outdo each other in protecting consumers.

Managed-care companies denounce the prospect of new federal regulation but find themselves in an awkward position because they also say they want to protect consumers. Employers strenuously oppose new regulation, fearing that it would hamper their ability to control the cost of employees' health benefits through managed care.

Since Congress convened two months ago, lawmakers, often with encouragement from President Clinton, have rushed to introduce bills setting standards for health insurance plans, and HMOs in particular. Lawmakers say they are not motivated by political ideology but responding to constituents. The frustration with managed care, among consumers and health care providers, is extremely high, they say.

``I am not against profits,'' said Sen. Alfonse D'Amato, R-N.Y., who introduced a bill to prevent health plans from arbitrarily limiting hospital stays for mastectomy patients. ``But if you are going to make profits by denying adequate basic medical treatment, then that is wrong. That is immoral, and we in Congress have a business to do something about it.''

Sen. Edward M. Kennedy, D-Mass., echoed that sentiment when he and Rep. John D. Dingell, D-Mich., proposed a comprehensive plan to regulate managed care and protect patients' rights. HMOs have great potential to expand access to care and control costs, Kennedy said, but ``in too many cases, the priority has become higher profits, not better health.''

Lawmakers say the need for federal standards has grown with enrollment in managed care. The number of people in HMOs has doubled in eight years, to 64 million in 1996. Nearly three-fourths of American workers with health insurance receive that coverage in HMOs or other managed-care plans.

The states have historically regulated insurance. But members of Congress say federal standards are essential now because millions of Americans, many in HMOs, are in employer-sponsored plans that are exempt from state regulation, and the number is growing.

Although Congress is keen to set standards for managed care, it has not decided how comprehensive to make them or how to enforce them. If HMOs block systematic federal regulation, lawmakers say, Congress is likely to set standards for specific services like emergency care and mastectomies. Kennedy said Congress was ``virtually certain'' to pass piecemeal legislation if it did not set comprehensive standards for the quality of care.

It is not clear how much HMOs will fight federal standards.

``Many of the proposed mandates would have the unintended effect of driving up costs by requiring plans to alter coverage and operations, thus potentially jeopardizing consumers' access to coverage,'' said Dr. William L. Roper, senior vice president of Prudential Health Care, part of the Prudential Insurance Company of America.

In resisting new federal regulation, managed-care plans make several arguments, including one that complaints about HMOs are merely ``anecdotal evidence.''

There is no proof that any health plan in America is forcing new mothers out of hospitals too soon, denying payment for emergency care or limiting what doctors can tell patients about costly treatment options. But in case there is a problem, the industry has voluntarily adopted standards to prevent such abuses. In any event, HMOs are extensively regulated by the states. So, the companies say, there is no need for new federal laws.