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House Republicans Release Draft of Their Version of Patients’ Rights Bill, Would Allow Limited Lawsuits in State Courts

House Republican leaders, "fearing defections" on the patients' rights issue, have drafted a bill that would allow patients to sue health plans in state court in limited cases, the New York Times reports. The provision "goes further than President Bush would like" in allowing lawsuits. Under the legislation, drafted by House Speaker Dennis Hastert and Reps. Ernie Fletcher (R-Ky.), Billy Tauzin (R-La.), Bill Thomas (R-Calif.) and John Boehner (R-Ohio), patients could sue health plans in state courts, a provision backed by Democrats, when the plans refused to abide by decisions made by outside appeals panels. The bill would also allow state courts to decide lawsuits for damages from personal injury, for wrongful death resulting from denial of claims and in some cases of "malpractice under group health plans" (Pear, New York Times, 6/21). In addition, the measure would establish tax-free medical savings accounts and include incentives for small businesses to establish larger insurance pools, provisions "anathema" to many Democrats (Goldstein/Eilperin, Washington Post, 6/21). Hastert said, "If the insurance company goes against the review board, you can go to court immediately. So it gives people the ability to get the health care they need when they need it, and not a prolonged court battle that helps lawyers but really doesn't help patients" ( Reuters/, 6/20). Hastert said last week that he hoped to introduce the bill before the July 4 recess, but a Hastert spokesperson said yesterday that he would not likely "bring up the measure that soon" (Washington Post, 6/20).

Capturing the Middle Ground
House GOP leaders "gave grudging approval" to the provision, hoping to "derail a more far-reaching" bill (HR 526) sponsored by Reps. Charlie Norwood (R-Ga.), John Dingell (D-Mich.) and Greg Ganske (R-Iowa). That bill is the House version of a Senate measure (S 283) sponsored by Sens. Edward Kennedy (D-Mass.), John McCain (R-Ariz.) and John Edwards (D-N.C.) (Espo, AP/Philadelphia Inquirer, 6/21). The legislation would allow patients to sue HMOs in state court for denial of benefits or quality of care issues and in federal court for non-quality of care issues. In addition, it would cap damages awarded in federal court at $5 million, but state courts could award as much money in damages as the state allows (Kaiser Daily Health Policy Report, 2/7). House Republican leaders, hinting that they may "lack enough support to prevail" against the Norwood-Dingell-Ganske bill, said that they hoped the new legislation would provide a "fresh compromise" and "win over" lawmakers who have been supporting the rival measure. "You've got to have something to rally around," Tauzin said (Washington Post, 2/7). Rep. Nancy Johnson (R-Conn.) predicted that the bill would "attract moderates" who support the Norwood-Dingell-Ganske measure, adding, "I think it will sell itself" (CongressDaily, 6/20). However, Dingell "promised a fight" when the bill reaches the House floor, concluding, "We'll raise hell, attack the rule ... and probably prevail" (Reuters/, 6/20).

No 'Second Guess' from Bush
Bush administration officials said that they "would not second guess the tactics" of House Republican leaders, adding that the new bill "comes much closer to meeting the president's criteria" than the Kennedy-Edwards-McCain measure (New York Times, 6/21). However, sources said that "it remained unclear" whether Bush will "accept" the new House GOP leadership bill (Washington Post, 6/21). Speaking yesterday, Bush urged Congress to pass patients' rights legislation this year, adding, "[B]efore this year is out, I want to sign into law a patients' bill of rights" (Chen/Miller, Los Angeles Times, 6/21). He also reiterated his support for legislation (S 889) sponsored by Sens. John Breaux (D-La.), Bill Frist (R-Tenn.) and Jim Jeffords (I-Vt.) (McQueen, AP/San Francisco Chronicle, 6/20). Under the Breaux-Frist-Jeffords bill, patients with private health insurance could sue health plans after exhausting an appeals process by an outside review panel. Patients could only sue health plans in federal court, not state court, with damage awards capped at $500,000 (Kaiser Daily Health Policy Report, 5/16). Bush also "took a slap" at the Kennedy-McCain-Edwards bill, which he has threatened to veto, saying, "The idea is to serve more patients, not create more lawsuits in America" (AP/Philadelphia Inquirer, 6/21).

'Procession' of Amendments in Senate
In the Senate, lawmakers are likely to begin debate on patients' rights legislation today with "a procession of amendments." Republicans yesterday "faced a decision" on the first amendment to introduce. Aides said that they may propose a "potentially divisive" amendment that would expand eligibility for medical savings accounts, as well as a provision that would offer tax deductions for self-employed people to purchase health insurance. The GOP amendment on medical savings accounts, "touted" by Republicans and some Democrats, has been criticized by some economists, who have called the provision a "tax shelter for the wealthy with potential to steer the healthy and the young away from the general insurance risk pool." Among Democrats, Sen. Ben Nelson (Neb.) hopes to offer an amendment to address concerns about the bill "overriding patient protections already implemented by the states," a Nelson spokesperson said (Rovner/Fulton, CongressDaily/AM, 6/21). Sen. Susan Collins (R-Maine) agreed, adding, "We should not pre-empt or supersede, but rather build upon, the good work that the states have done in the area of patients' rights." Under the Kennedy-McCain-Edwards bill, states could enforce their own patients' rights laws as long as they are "at least substantially equivalent to, and as effective as," the federal standards (New York Times, 6/21). Democrats Wednesday "continued to insist" that despite the "doubts" of Republicans, "there is no reason the bill cannot be finished before the July Fourth recess" (CongressDaily/AM, 6/21).

CBO Weighs In
The Breaux-Frist-Jeffords patients' rights bill "is more fiscally sound" than the Kennedy-McCain-Edwards measure, a Congressional Budget Office report released Tuesday states. The report said that new health care coverage requirements in the Breaux-Frist-Jeffords bill would cost taxpayers $14.6 billion in lost federal and state revenues over the next 10 years, while the Kennedy-McCain-Jeffords measure would cost $22.6 billion, including $6.9 billion in losses to the Social Security fund. The Breaux-Frist-Jeffords bill would only cost $4.5 billion in losses to the Social Security fund. The CBO found that Breaux-Frist-Jeffords would increase premiums for employer-sponsored health insurance by 2.9%, compared to 4.2% under Kennedy-McCain-Edwards (Archibald, Washington Times, 6/21).

Undermining Texas Law?
In Texas, the Dallas Morning News reports that several Democratic lawmakers say that the Breaux-Frist-Jeffords bill supported by Bush would "undermine key consumer protections that became law [in Texas] when he was governor." White House spokeperson Scott McClellan "strongly disagreed" with the lawmakers' charge, adding that Bush "continues to support" the 1997 Texas law, which allows patients to sue HMOs in state court for "providing poor quality care" (Ornstein, Dallas Morning News, 6/21). And the Los Angeles Times reports that when lawmakers passed the 1974 Employee Retirement Income Security Act, which limits state court actions against health plans, they "did not intend to take away the rights of ordinary employees to sue" insurance companies and HMOs, according to lawyers and scholars who worked on or have studied the law (Savage, Los Angeles Times, 6/21).

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