The stage is set for a heated debate next year over the federal government’s role in setting quality standards for patients. The recent flurry of activities surrounding “managed care” issues is a response to concerns over health plan restrictions and prohibitive practices. The proliferation of managed care entities and other cost-containment mechanisms that limit the type and extent of care available to patients has generated concerns across the country. Proponents of federal standards believe legislation is necessary to ensure basic rights for health care consumers. Opponents of federal standards, including most insurance and employer groups, hold that the industry can monitor itself without federal intervention.
The Players
A wide variety of organizations from physician and consumer groups to trade unions advocate some form of quality standards for patients. However, there is a diversity of opinion on precisely what federal protections are necessary. The trade unions and consumer groups, while supporting provisions advocated by physician organizations, generally envision a broader scope of protections. On the other side, powerful insurance and employer interests resist any quality of care mandates, regardless of how basic they may be. Some in the managed care industry, however, believe that minimum patient protections are a good idea because they legitimize cost-containment mechanisms espoused by managed care. In fact, three large HMOs (Kaiser Permanente, Group Health Cooperative of Puget Sound and HIP) joined two consumer groups (Families USA and the American Association of Retired Persons) in creating and developing a “patient bill of rights” in September.
Recent polls conducted by the Kaiser Family Foundation suggest that a majority of citizens support minimal regulation of managed care plans. While Americans are not supportive of sweeping government regulation of the health care industry, there is extensive support for certain protections. These include ensuring that treatment options are not influenced by financial considerations as well as the right to appeal medical decisions made by insurance plans.
Action on the Hill
Congress is concerned over public reaction to the changing health care environment. Recent stories in print and television media regarding the abuses of managed care entities have created an atmosphere ripe for reform. Illustrative of the impact of public reaction are the more than seventy bills seeking limits on health plans that have been introduced this year. Following are several of the proposals likely to be debated in the upcoming Congressional session.
“Gag-clauses”
Introduced in February by Congressman Greg Ganske, MD (R-IA) and Edward Markey (D-MA), the Patient Right to Know Act of 1997 (H.R. 586) currently has 296 cosponsors in the House of Representatives. This bill bans the use of “gag clauses,” which prohibit physicians from discussing certain treatment options with their patients because of financial considerations. Although many health plans have voluntarily eliminated these types of clauses from physician contracts, it is imperative that legislation be enacted to ensure communications between physicians and their patients remain open and protected. Patients should never have to question whether their physician may be withholding significant information due to contractual obligations with health plans. Significantly, a provision in the Balanced Budget Act (BBA) of 1997 bans the use of “gag clauses” in all Medicare managed care contracts. The Ganske/Markey bill applies to all health plans, and has broad bipartisan support. Senators John Kyl (R-AZ) and Ron Wyden (D-OR) introduced companion legislation in the Senate (S. 449).
The AANS, CNS and Council of State Neurosurgical Societies have endorsed Dr. Ganske’s bill.
Quality Assurance
Another bill likely to receive attention will be introduced early next year by Senator James Jeffords (R-VT), chair of the Senate Labor Committee. Senator Jeffords is working with Edward Kennedy (D-MA) to draft bipartisan legislation addressing quality assurance in health care. Senator Jeffords’ bill utilizes uniform guidelines and performance standards as an approach to ensuring quality care, rather than step by step mandates for health plans.
ERISA Reform
A loophole that shields managed care companies from lawsuits is particularly vexing to Congressman Charles Norwood, DDS (R-GA). The Employee Retirement Income Security Act (ERISA) of 1974 preempts state laws that allow individuals to sue for wrongful death or injury resulting from the medical decisions of insurance companies. The evolution of managed care has created egregious instances where lawsuits have been dismissed, even though a medical director’s decision, based on financial considerations, resulted in the death of a patient.
Representative Norwood is the sponsor of H.R. 1415 — the Patient Access to Responsible Care Act (PARCA) of 1997 — that strikes the federal preemption responsible for this loophole. The bill has 211 cosponsors and has gained widespread bipartisan support. Senator Alfonse D’Amato (R-NY) has introduced similar legislation in the Senate (S. 644). Other provisions in the PARCA bill require direct access to specialists, point of service options at the time of enrollment and continuity of care for chronic conditions. The bill prohibits prior authorization for emergency care in cases where a “prudent lay-person” would deem the situation an emergency, termination of physicians without cause and limitations on certain benefits.
Fearing that PARCA holds employers liable for decisions made by their health plans, employer groups opposed the bill. To allay these fears, Representative Norwood modified his proposal to specifically exempt employers from liability, as long as they are not making medical decisions. The modified proposal clarifies that insurance companies, if sued for malpractice, cannot file secondary suits against employers.
The AANS and CNS recently endorsed Dr. Norwood’s bill.
A Declaration of War on Patient Protections
While a majority of rank and file Republicans support limited managed care reform, the Republican Leadership has declared a “war” on patient protections. In a memo leaked to the New York Times, a Health Insurance Association of America (HIAA) lobbyist describes a meeting with staff for Senate Majority Leader Trent Lott (R-MS): The message we are getting from the House and Senate Leadership is that we are in a war and need to start fighting like we’re in a war. Republican Leadership is now engaged on this issue and is issuing strong directives to all players in the insurance and employer community to get activated…Lott told Senator Jeffords that he could not introduce his “Quality Bill” this session…Sen. Lott also said that Senate Republicans need a lot of help from their friends on the outside, “Get off your butts, get off your wallets.”
The memo also referenced a directive from the Republican leadership that managed care and business interests should “write a definitive piece of paper trashing all these bills.” In another leaked memo written by House Majority Leader Richard Armey (R-TX), Republicans are encouraged to resist any and all managed care reform provisions.
In response, Congressman Greg Ganske, MD (R-IA) sent a letter to his Republican colleagues describing abuses of managed care that have resulted in the deaths of patients. He also referred to testimony given before the House Commerce Committee by Linda Peeno, a former HMO claims reviewer, describing the focus of HMOs on financial profit over patient care. Ganske accused the Republican leadership of “being in the pocket of the HMOs,” and pointed to the number of reform supporters from both parties as indicating popular support for patient protections.
The primary argument of those opposing reform is that these protections will drastically increase insurance premiums. Increased premiums would lead to large numbers of uninsured Americans (as employers no longer offer insurance to their employees), and thus government-run health care. It is important to note that the AANS and CNS did not endorse the Clinton Health Plan. What we do support is legitimate protections for access to specialty care and for the rights of the patients we serve. As Congress debates these issues, the key question will be the cost of the various provisions in these bills.
In a widely publicized actuarial analysis of the PARCA legislation, private-sector premiums were estimated in the range of 7-39 percent. However, a closer look at this analysis reveals that many of the protections sought by the AANS and CNS are of negligible impact on insurance premiums. The mandatory point of service option, elimination of prior authorization for specialty referrals and limits on prior authorization for emergency services each raise premiums less than half a percent.
A Bill of Rights for Health Care Consumers
The Clinton Administration has also entered the debate over health care quality. In March, President Clinton appointed an Advisory Commission on Consumer Protection and Quality in the Health Care Industry. The President charged the Commission with reviewing the rapidly changing healthcare market, and making recommendations regarding consumer protections. The 34-member advisory commission is composed of health care providers, representatives from the business community, representatives from labor, consumers and health plan representatives.
This diverse group worked on a consensus basis to draft a “Health Care Consumer Bill of Rights.” Completed in November, the Bill of Rights espouses the following principles: disclosure of health plan information on benefits and restrictions, access to networks with adequate numbers and types of providers, direct access to specialists for patients with chronic conditions, access to emergency treatment, the right to be told of all treatment options regardless of their expense, confidentiality of medical records, and the right to an external appeals mechanism for denials of care or reimbursement.
President Clinton subsequently issued a directive that all federal health plans adopt these policies immediately. He then instructed the Department of Health and Human Services (HHS) and the Department of Labor to review the document to determine which rights are enforceable under current law. Rights that are not enforceable under existing law will be included in a legislative package the President will submit to Congress.
The AANS and CNS, along with over 100 other organizations, sent a letter to President Clinton calling for federal standards to ensure access to quality care. The letter noted concerns regarding barriers to care patients face because of health plan restrictions, and pointed to the Health Care Consumer Bill of Rights as a framework for standards that will ensure access to quality care and all available treatment options.
What is Organized Neurosurgery doing?
To address many of these issues, the AANS and CNS are working with the American Medical Association (AMA), the American College of Surgeons (ACS), and the Patient Access to Specialty Care Coalition (PASCC). We are founding members of the PASCC, which will serve as our primary mechanism for addressing access to specialty care issues. The coalition seeks minimum protections to ensure that care will not be arbitrarily denied, and that physicians will not be required to withhold information regarding various treatment options because of financial considerations.
Most recently, the coalition supported the Medicare Patient Choice and Access Act of 1997, H.R. 66. The bill, sponsored by Tom Coburn, MD (R-OK) and Sherrod Brown (D-OH), includes patient protections that ensure Medicare beneficiaries have access to specialty care in Medicare managed care plans. Specifically, the bill allows a point-of-service option so that Medicare beneficiaries can select a plan with coverage for out-of-network services, ensures timely and appropriate in-network access to specialists, prohibits the use of financial schemes that reward providers for not referring patients to specialists, and ensures a timely and objective appeals process for disputes between patients and health plans. A similar bill (S. 701) was introduced in the Senate by Charles Grassley (R-IA) and Kent Conrad (D-ND).
Many of these provisions were incorporated in the Balanced Budget Act (BBA) of 1997. The PASCC will now turn its attention to the private insurance market, and will draft a bill similar to H.R. 66 that applies to all health plans.
A Call to Action
As a primary point of contact with patients, it is important that you communicate your concerns regarding health plan practices to your members of Congress. Please point out that these issues are real, and not merely “a few horror stories” portrayed in the media. Please remember to report any contacts with members of Congress to the Washington office so that we may follow up on your efforts. You may do so by contacting Lori Shoaf at (202) 628-2072, via fax at (202) 628-5264, or via E-mail at [email protected]. If you have questions or concerns regarding managed care or other federal government issues, please contact Katie Oricco or Lori Shoaf in the Washington office at (202) 628-2072.