Wednesday, Jul 9, 2008
The right to sue may be tossed around for the next year.
Oct 11, 1999 | Were it not for the absence of horns, streamers and ugly foam hats, the jovial press conference that followed last week's vote by the House of Representatives to pass the so-called Patients' Bill of Rights could have easily been mistaken for a campaign victory party. But while the vote may have sent a significant message to the managed-care industry, consumer advocates haven't won anything yet.
With Senate Republican leaders opposing many of the provisions in the House bill, and House Democrats eager to use the Patients' Bill of Rights as a political football in the upcoming election year, nobody in Congress is dying to send the legislation to President Clinton any time soon. According to some congressional staffers, the very same public outcry that made the managed-care legislation a reality may make it more valuable to its own supporters as an "issue" than as a piece of signed legislation.
And when the Senate and House do sit down to draft a joint bill -- something that almost certainly will not happen until next year -- patient advocates fear that many of the more meaty patient protections included in the House bill will fall victim to the same political infighting that has marked the entire managed-care debate thus far.
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The HMO industry gained strength through the early part of this decade, credited with decreasing the runaway medical inflation rates that threatened to hamstring the nation's economy in the 1980s. From a purely economic standpoint, managed-care plans had brought physicians and hospitals in line, reducing the number of expensive, superfluous medical tests and treatments and drastically shortening the length of most hospitalizations.
But as HMO membership roles swelled and the number of employers offering traditional indemnity insurance options dwindled, disturbing reports surfaced about how HMOs did business. Because HMOs accepted full "risk" for their members' medical expenses in exchange for a flat, per member, per month premium, they had a de facto financial incentive to pay for only those procedures that they deemed medically necessary.
Enter the managed-care "horror story." Like gory urban myths but with better corroboration, scattered media reports about HMO abuses appealed to the public's most primal fears. What stories about the injustices of managed-care companies lacked in numbers, they made up for in sheer lurid detail. Tales of patients dying for want of experimental medical treatments, children horribly disfigured through callous administrative oversights and cancer victims fatally misdiagnosed as a result of miserly testing practices became regular staples of magazines and weekly news programs.
Compounding the understandable public outrage over widely reported managed-care abuses was a loophole in federal law that made it exceedingly difficult for patients to sue their HMOs. Protected by the Employee Retirement Income Security Act of 1974 (ERISA), managed-care companies operated with virtual impunity -- answering only to their shareholders and to a handful of industry-funded accreditation bodies.
In 1996, feeling mounting pressure from the public and hoping to forestall legislative action, the managed-care industry's largest trade group, the American Association of Health Plans (AAHP), unveiled a "Code of Conduct" for managed-care plans. While almost entirely unenforceable, the Code of Conduct called for managed-care plans to, among other things, provide patients with full and accurate information about their policies and procedures, offer internal appeals processes for patients who complained about coverage or treatment decisions and remove so-called gag rules barring certain physician-patient communications.
The Code of Conduct did little to ameliorate public concerns, but its proposed consumer protections did serve as a basis for the legislation that eventually came to be known as the Patients' Bill of Rights.
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