Reform issue heats up

November 1, 1999

Pharmaceutical Representative

Reps. John Shadegg (R-AZ) and Tom Coburn (R-OK) added their Health Care Quality and Choice Act to the growing list of managed care bills being considered by Congress.

The debate in Congress over managed care reform grew hotter in September as Reps. John Shadegg (R-AZ) and Tom Coburn (R-OK) added their Health Care Quality and Choice Act to the growing list of managed care bills being considered by Congress.

As with the bipartisan bill introduced in August by Reps. Charlie Norwood (R-GA) and John Dingell (D-MI), the Shadegg-Coburn bill would set up an external review process to appeal coverage denials and would give patients the right to sue health plans for punitive damages if denial or delay of coverage results in injury.

A new bill

"The [Shadegg-Coburn] bill will give individuals the right to appeal decisions, the right to choose their own doctors, and the right to hold health plans accountable for adverse decisions that cause injuries or death," said Coburn, who also co-authored the Norwood-Dingell bill.

Unlike the Norwood-Dingell bill, the Shadegg-Coburn bill requires a certificate of injury to occur as part of the litigation process. The bill also requires that plaintiffs fully exhaust the independent external review process before taking the matter to court.

"We have crafted language that emphasizes health care solutions rather than courtroom remedies," said Coburn. "We worked tirelessly to give all parties – patients, doctors, employers and insurers – a sound piece of legislation that will increase health care quality, not health care costs."

Opposition

Despite these reassurances, the American Association of Health Plans is vigorously opposed to any bill that allows patients to sue health plans. "The liability levels pose the most extremist policy problems for our industry because they will unquestionably drive up costs and drive up the number of uninsured, and we think that's the wrong direction for any bill," said John Murray, director of public affairs for the AAHP.

According to Murray, the AAHP does support the idea of an external review process that would solve patient concerns so that litigation would not be necessary. "Instead of looking to trial lawyers to be the arbiters of good quality care in the health system, which no one in their right mind believes is the right direction to go, let's build in a component that strengthens consumer confidence, that answers questions, that resolves problems and then provides patients with the comfort of moving forward with their care or moving forward in the system," said Murray.

California moves ahead

Unwilling to wait for the federal government, California Gov. Gray Davis signed two bills into law that would reform managed care in his state. The first guarantees California patients the right to an external review of health care coverage decisions by an independent group of medical experts; the second guarantees patients the right to sue health maintenance organizations for punitive damages in cases where claim denial causes them injury.

"We are strongly in support of the external review bills," said Cory Black, director of community relations for the California Association of Health Plans. "We have supported them most of the way through the legislative cycle as well as urged the governor to sign them."

"External review is quick, it deals with delivery of care and it is cost effective, as opposed to liability, which usually takes years, is after the fact and awards monetary awards - mainly to one or two plaintiffs and their trial attorneys," added Black. "External review will quickly have a group of experts - not a judge or a jury - determine whether [a procedure] is medically necessary."

However, the CAHP is exasperated with the fact that the law allows patients to begin the litigation process simultaneous with the external review process. "We think that's not the correct way to go because, in most cases, external review should resolve the matter," said Black. "That's the downside of the California system where there are hundreds of bills that come in piecemeal, as opposed to federally, where they take the ideas and they synthesize them." PR