By Catherine Hubbard, Brendan Frost and Paula Cruickshank, CCH Washington Staff Writers, and John L. Duoba, Staff Writer, CCH Business Owner's Toolkit

The House on October 7 approved by a vote of 275-151 the Democrat-supported Norwood-Dingell patients' rights bill, and then combined it with Republican-supported health care access legislation passed on October 6 that contains several tax breaks to enable more people to purchase health care insurance.

Previously, the Senate passed an HMO reform bill much smaller in scope. The differences between the two bills would have to be rectified before a final version could be sent to President Clinton. The president has said he will veto the bill if it is not paid for.

The Bipartisan Consensus Managed Care Improvement Bill of 1999 (HR 2723) was combined with the Quality Care for the Uninsured Bill of 1999 (HR 2990), which the House passed the day before. Democrats support the patients' rights provisions of the legislation, but not the parts related to improved access and new tax breaks. Republicans feel oppositely, thereby resulting in a bill that both sides of the aisle simultaneously like and dislike.

This legislation is the result of years and months of partisan fighting, culminating in a series of unusual parliamentary actions over the last two days of the debate--such as linking different bills and limiting amendments designed to pay for the cost of the legislation. At this point, both sides have inserted "poison pill" provisions into the bill, guaranteeing that both sides will get their way or neither at all.

Patients' Rights Bill
HR 2723, proposed by Rep. Charlie Norwood (R-Ga.) and Commerce Committee ranking member John D. Dingell (D-Mich.), "provides a comprehensive, enforceable set of consumer rights that is long overdue," according to a summary provided by Democratic Whip David E. Bonior of Michigan.

The access to care provisions include a requirement that covered individuals have access to emergency care without prior authorization based on a "prudent layperson" standard; a provision allowing referrals to go out of plan for specialist care if there is no appropriate in-network provider; a requirement that plans set up a process to allow specialists to be gatekeepers for chronically ill individuals; direct access to ob/gyn care and services for women; allowing covered children to have pediatricians as their primary care providers; a limited continuity-of-care provision in cases of changes in plans or providers' network status; requiring plans to allow certain enrollees to participate in clinical trials; required access to non-formulary medications when prescribed; and a point-of-service option when health insurance plans do not offer access to non-network providers.

In addition, the bill's grievance and appeals provisions include criteria for proper utilization review, including physician participation in development of review criteria, administration by appropriately qualified professionals, timely decisions, and appeal rights; a timely internal appeals requirement; and a requirement for access to external appeals, with potential penalties against plans for non-compliance of $750 per day up to $250,000. The bill also outlaws gag-clauses and inappropriate provider incentives to limit medically necessary services; requires the industry to develop a standard form for providers to use in submitting a claim; and forbids discrimination against providers based on license, location or patient base, while allowing plans to limit the number and mix of providers as needed to serve enrollees for covered benefits.

Finally, the bill would remove Employee Retirement Income Security Act (ERISA) preemption and allow patients to sue plans for damages in state courts for decisions that result in injury or death. The bill protects employers from liability if they are uninvolved in the treatment decision, stating that discretionary authority does not include a decision about benefits included in a plan, a decision not to address a case while an external appeal is pending or a decision to provide an extra-contractual benefit.

The House defeated three Republican alternative patients' rights bills that would limit the right to sue or not allow it at all, including one by Reps. Tom Coburn (R-Okla.) and John Shadegg (R-Ariz.) (later rewritten by Rep. Porter Goss, R-Fla.), which Democrats said would have weakened enforcement provisions. The vote against the Coburn-Shadegg substitute, which was endorsed on October 6 as a separate bill by House Speaker Dennis Hastert after his long refusal to support any erosion whatsoever of the ERISA preemption, was 238-193.

The patients' rights bill had contained $7 billion in offsets over 10 years, half of which would have come from corporate tax loophole closings. Yet before the bill headed to the floor, the GOP ruled that the House may not consider the tax increases.

House Minority Leader Richard A. Gephardt (D-Mo.) said during an October 7 press briefing that the bill "is not paid for." He noted that Clinton said in a letter sent that morning that he will not sign it if it dips into the Social Security surplus.

"The president is saying he is not going to sign the bill that is not paid for. So even though you are worried about voting for a bill that is not paid for--that arguably invades Social Security--you don't need to worry about it ever coming out like that in the end. It will be paid for. The president has said he will not sign it unless it is." Gephardt added, however, that he otherwise supports the legislation.

Quality Care for the Uninsured Bill
This portion of the bill contains several tax breaks aimed at expanding health care coverage. It would expand health tax breaks and allow small businesses and other groups to pool resources to buy insurance from so-called Health Marts. It also includes a number of tax relief measures to make health care and long-term care more affordable and accessible.

Several of the tax provisions, including a 100-percent above-the-line deduction for health care insurance and long-term care insurance premiums if the taxpayer pays more than 50 percent of the premiums, were also in the Taxpayer Refund and Relief Act of 1999, the $792 billion, 10-year GOP tax cut package vetoed by Clinton last month.

The bill also would provide an additional exemption (currently $2,750) for individuals who care for elderly family members at home and would increase the deduction for health insurance premiums of self-employed individuals to 100 percent in 2001--two years sooner than under current law. Currently, the self-employed may only deduct 60 percent of their premiums, gradually increasing to 100 percent by 2003.

In addition to allowing employers to include long-term care insurance as part of cafeteria benefit plans, HR 2990 also would:

The entire bill is expected to cost $48 billion over 10 years, and offsets or revenue-raisers were not included to pay for the bill. This fact, combined with the need for House-Senate conference committee passage as well as the Clinton administration's objections to MSAs and Health Marts, leaves much to be done before this bill ever becomes law.

Mixed Reactions
Clinton on October 7 said the House vote "shows that America is no longer willing to allow unfeeling practices of some health plans to add to the pain of injury or disease." He cautioned, however, that "we still have a lot of work to do before this bill becomes the law of the land," noting that the final bill that comes out of House and Senate negotiations must be paid for.

"While I endorse this legislation (the Norwood-Dingell bill) without reservation, I want to assure you that I will not sign it unless its costs are fully offset by the conference committee," Clinton wrote in an Oct. 7 letter to Gephardt.

Even though Clinton acknowledged that the battle is not yet won on enacting a strong, enforceable patients' rights bill, White House Press Secretary Joe Lockhart told reporters he was optimistic that the public will for a strong bill would ultimately prevail. Lockhart maintained that there is no reason why the health care access bill, which Clinton has promised to veto, could not be decoupled from the patients bill of rights package in the House-Senate conference.

Elsewhere, reaction to the passage was mixed. The Health Insurance Association of America said that the legislation contains more than twice the number of mandates as "last year's discredited PARCA legislation," and warned that the additional burdens on plans would inevitably raise costs and cause drops in coverage.

On the consumer group side, Ron Pollack of Families USA stated that the bill was a victory for the American public, but that it "may be a hollow one because the House leadership has stacked the deck against ultimate passage" through the inclusion of the access provisions. "By forcing these two bills together, the House leadership is giving the insurance industry exactly what it wants—a patients' bill of rights that will never be enacted into law," he said.

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