House Approves Patients’ Rights Bill That Would Have ‘Mixed Impact’ on State Law

After a "long, tumultuous debate" yesterday, the House voted 226-203 to approve a patients' rights bill (HR 2563) sponsored by Reps. Greg Ganske (R-Iowa), John Dingell (D-Mich.) and Charlie Norwood (R-Ga.) that would offer Americans a host of protections against health plans, the New York Times reports (Pear, New York Times, 8/3). House members passed the legislation after adopting on a 218-213 "near party-line vote" an amendment to the bill that would limit patients' right to sue HMOs (Goldstein/Eilperin, Washington Post, 8/3). Under the amendment, part of an agreement reached Wednesday between Norwood and President Bush, patients could sue health plans in state court -- generally considered more hospitable to plaintiffs -- under a new set of federal rules that would cap non-economic damage awards at $1.5 million. Courts could also award patients up to $1.5 million in punitive damages, but only in cases where patients win complaints against health plans before an outside appeals panel and an HMO "still persists in refusing the care they need." In addition, patients could sue health plans after an outside review panel rejects their complaints, but lawsuits in those cases would "have a much higher burden of proof to overcome." The amendment would allow patients to sue large employers that administer their own health plans over health care disputes in federal court, not state courts (California Healthline, 8/2). The amendment also would restrict class action lawsuits against health plans (Washington Post, 8/3). The House also approved an amendment that would expand medical savings accounts and ease restrictions on association health plans (New York Times, 8/3). Bush said, "Today's action brings us an important step closer to ensuring that patients get the care they need and HMOs are held accountable" (Reinert/Masterson, Houston Chronicle, 8/3).

However, most Democrats and some Republicans "complained bitterly" that the bill would "leave patients with inadequate leverage" against health plans and insurance companies (Washington Post, 8/3). They said that the legislation would overturn many state patients' rights laws that "provided greater protection" for patients and would "give HMOs an unfair advantage" in court by establishing a "legal presumption in favor" of health plans when they win administrative appeals but not offering patients the "same presumption if they prevailed." House Minority Leader Dick Gephardt (D-Mo.) said, "This bill is better for HMOs than for patients. It ought to be called the HMO bill of rights" (New York Times, 8/3). According to the Los Angeles Times, legislation would have a "mixed effect" on California's patients' rights law. The bill would override a provision in the law that allows unlimited damage awards but also would offer the right to sue health plans to millions of California residents who can not sue under a 1974 federal statute (Miller, Los Angeles Times, 8/3). "I think we'd be better off with no bill than with the (House) bill. I am a firm believer that what will make HMOs change their practices is not the threat of widespread lawsuits, but a couple of big hits," Carol Jimenez, a Los Alamitos attorney, said, referring to the state's unlimited damage awards (Bunis/Wolfson, Orange County Register, 8/3).

According to analysts, the House vote yesterday "set up a fierce contest with the Democratic-controlled Senate," leaving negotiators to address differences between the House bill and patients' rights legislation that the Senate passed in June (Washington Post, 8/3). Some observers said that lawmakers may "harden positions" after yesterday's vote, "making it appear unlikely that reforms will come this year" (Bowman, Scripps-McClatchy Western Service/Memphis Commercial Appeal, 8/3). "We are not going to give up and we're not going to give in," Sen. Edward Kennedy (D-Mass.) said (Milligan, Boston Globe, 8/3). Democrats "insisted" that the Senate would "never accept" the House bill, although they did not "rule out the possibility" of a compromise (Washington Post, 8/3). In addition, Democrats said that they "can hold out for concessions" from Republicans, although GOP lawmakers could "portray them as obstructing progress" on the issue (New York Times, 8/3). Senate Democrats also may attach their version of the bill to a separate measure and send the legislation back to the House, "defying members to vote it down" (Boston Globe, 8/3). Meanwhile, House Speaker Dennis Hastert (R-Ill.) said that Bush will "remain engaged throughout the process" and urged Senate Democrats not to "torpedo this thing." Democrats worry, however, that Republicans hope to "bury the bill in endless negotiations" (Espo, AP/Bergen Record, 8/3).