Patients’ rights legislation continues to be one of the most critical, highly charged issues to confront business in decades, and it is more likely than ever that Congress will agree on some version of a Patients’ Bill of Rights (PBOR) this session. Ironically, patient protection is not the primary issue being debated. This is because most of the “patient protection” issues covered in the various PBOR bills have already been addressed by all of the major health plans. Because health care standards and practices have always been regulated at the state level, there are also innumerable state laws in place to protect patients and insure quality of care. Their provisions vary, of course, and some states are more regulated than others, but a majority of states, including California, already have legislation in place governing such issues as internal/external appeals, emergency medical care, access to specialists, continuity of care, utilization review activities, patient access to information, prompt payment of claims, prohibition on “gag” provisions, improper physician incentives, and provider nondiscrimination. The debate is focused on certain provisions in both Kennedy-McCain and the Ganske-Norwood-Dingell proposals related to the gross expansion of liability for health plans and employers. Currently, all employer-sponsored health care plans fall under the rules and regulations of the Employee Retirement Income Security Act of 1974 (ERISA). Although ERISA subjects employer-sponsored benefit plans to federal oversight, in the event of denied benefits, it also protects such plans from being sued, beyond reinstatement of those denied benefits, for emotional distress and punitive damages. Under Kennedy-McCain/Ganske-Norwood-Dingell, the liability provisions are a trial lawyer’s dream! Individuals may sue employers and/or health plans (whoever is deemed a decision-maker) for medically reviewable decisions (e.g., medical necessity, experimental/investigational denials) in state courts and for non-medically reviewable decisions in federal court. In general, employers could be sued if the individual alleges that the employer actually made or exercised control in making a decision. On the face of it, employers could insulate themselves from liability by appointing a “designated decision-maker” However, Kennedy-McCain/Ganske-Norwood-Dingell provide a complicated set of exceptions to the definition of “direct participation” in decision-making, including an employer’s decisions with respect to selecting a plan or insurance coverage, and modifying or terminating the plan or benefit. Also, even though the insurer would clearly be the designated decision-maker for a fully-insured group health plan that insurer may not necessarily have “exclusive authority. Over and above increasing the direct litigation costs for employers, the expanded liability provisions will significantly impact the cost of doing business for health plans, who will have to cover at least some of these costs through premium increases. The low-end cost estimate of Kennedy-McCain/Ganske-Norwood-Dingell provisions on employers and health plans is anywhere from $7.9 billion to $16.3 billion. Using current liability suit judgment awards and allowable attorney’s fees, plaintiff’s attorneys stand to receive $1.4 billion to $2.8 billion annually from new PBOR suits. At the same time, expansion of liability will not improve quality of care. Instead, it harms quality because judges, not science, will decide what treatments should be covered. Cal Lockett is staff vice president of public affairs for WellPoint Health Networks Inc. He also serves on the board of the VICA and co-chairs its health committee.
