House Passes Bush-Favored Patients' Rights Bill.

The House decides consumers should be able to sue their health maintenance organizations; receive financial advice at work.

The U.S. House passed a patients' rights bill Aug. 2 that included a compromise between the White House and Rep. Charles Norwood, R-Ga., as well as liability for health maintenance organizations.

Karen Ignagni, president of the American Association of Health Plans, said that although the bill "moves away from the reckless litigation binge that the Senate-approved bill would encourage," it still has some problems. "Provisions allowing new lawsuits even when health plans are upheld by independent review panels violate common sense and need to be changed," she said in a statement.

The original Norwood bill was passed with two amendments. Along with the White House agreement, the other amendment adds association health plans to the bill and expands medical savings accounts. A third amendment, which would have reformed the medical malpractice laws for health-care providers by placing time limits on lawsuits and capping damages, and would have protected against lawsuits over products that meet Food and Drug Administration standards, wasn't approved.

The liability question for HMOs and employers has been the big dividing issue with the bill. President Bush and Norwood met several times to work out a bill that Bush would sign. Bush said he would veto the Senate-passed patients' rights bill. Norwood's original House bill was nearly identical, and Bush had said he would veto Norwood's bill if it looked like the Senate bill after final passage. Now that the House has passed a bill that differs from the Senate version, the two chambers will have to meet in a conference committee after Labor Day to come up with one bill.

The White House-Norwood compromise reflects the key principles Bush said any patients' rights bill would have to include for him to sign it into law. It allows patients to hold their health plans accountable when they have been injured by a wrongful denial or delay of medical care. Cases against HMOs would be heard in state court, subject to the new federal law.

Patients in all 50 states would have a federal right to sue their health maintenance organizations in state court. The scope of insurers' liability would be defined by federal law. They also would have the right to independent medical review for denials of medical care by their health plans, but they would have to exhaust the independent medical-review process before going to court. However, patients could still sue an HMO, even if an independent medical reviewer found no cause for the claim. The patient would just have a higher burden of proof in those cases.

Economic damages would be unlimited. Noneconomic damages would be capped at $1.5 million. Punitive damages also would be capped at $1.5 million and would be available only when the designated decision-maker went against the independent medical reviewer's decision that the claim for benefits should be granted, the White House said.

The designated decision-maker is the entity that would be liable in these health-care lawsuits. It's a provision designed to protect employers from lawsuits, supporters say.

But employer groups disagree and have mounted media and lobbying campaigns against Norwood's bill, arguing that any entity assuming liability would charge those costs back to the employer, making health care more expensive and leading to an increasing number of employers that would no longer offer coverage, resulting in more people uninsured.

"The numbers of the uninsured are likely to rise," said Tom Bruderle, director of congressional affairs for the National Association of Health Underwriters. "In the middle of the House debate on this bill, the uninsured concern was not addressed, and that's been the underlying concern for our association."

House OKs Retirement Advice at Work

Legislation that would allow insurers and other financial services companies to provide retirement investment advice at the worksite cleared its first hurdle in the U.S. House. A House subcommittee approved the Retirement Security Advice Act of 2001 on Aug. 2 without any changes to the bill, which was introduced by Rep. John Boehner, R-Ohio. The next step is a hearing before the full House Education and the Workforce Committee, which is likely to occur in September, said Jack Dolan, a spokesman for the American Council of Life Insurers. Life insurers can provide their retirement-savings products, but rules under the Employee Retirement Income Security Act, enacted in 1974, prevent employers and investment intermediaries from offering investment advice at a work site.

Boehner's bill would change that, opening the door to a new business for life insurers and financial-services companies, Dolan said. "It would be a new area, but it certainly is one that fits very well with our experience," he said. "We're already there at the workplace providing plans and offering educational materials. This is a logical next step." During the Aug. 2 hearing, Rep. Bob Andrews, D-N.J., raised four concerns about the legislation, said Dolan, who was at the hearing. Under the bill, employers would be allowed to provide workers access to professional investment advice, as long as the advisers fully disclose their fees and any potential conflicts. Andrews wants to make sure the disclosure is easy to understand. "He recognizes disclosure is a centerpiece of the bill," Dolan said.

Dennis Kelly is Washington bureau manager