Loss of Insurance Could Lift HMO Liability in PBOR

June 27, 2001 (PLANSPONSOR.com) - A late afternoon amendment that would repeal the ability to sue HMOs from the patients' bill of rights passed the Senate by an overwhelming margin, despite the rejection of key amendments earlier in the day.

The measure, introduced by Senator Kit Bond (R-Missouri), called for a study by the Department of Health and Human Services not later than two years after the effective date of the bill, and each of the four years thereafter. If that study determined that a million or more Americans had lost health insurance coverage as a result of the increased costs generated by the bill, the ability to sue the HMO would be dropped from the bill ? 12 months after the report is submitted.

That amendment passed by a 93-6 margin, including the support of Senators McCain, Edwards and Kennedy, all co-sponsors of the bill under debate.

Rush to Judgment

Bond continued to remind the Senate, as he had the previous day, that despite the apparent haste to rush the bill into law, McCain-Kennedy (S. 1052) is not scheduled to go into effect for another fifteen months. This afforded the Senate time to produce a well-thought out bill, according to the Missouri senator.

Tuesday evening two additional amendments were introduced by Senators Ben Nelson (D-Nebraska), Jon Kyl (R-Arizona), and Don Nickles (R-Oklahoma) that would provide three safe-harbor definitions of medical necessity. Another amendment that would extend protections to small employers was also expected to be introduced.

Debate on those amendments is scheduled to begin this morning at 9:30 a.m.

Meanwhile, a number of senators are continuing to work on a liability compromise to protect employers by using the “designated decisionmaker” language from the Frist bill.

House Call

Earlier in the day Republican leaders in the House of Representatives unveiled their own version of patient protections. That version offered liability limits that would make the measure more palatable to those concerned about the increased costs ? and resulting lack of coverage ? that might emerge under the version under debate in the Senate.

According to the Congressmen, the House GOP plan would

  • require patients to exhaust an independent external review before going to court
  • cap noneconomic damages in federal court at $500,000, but would permit some actions in state court, subject to those damage limits, if a health plan failed to abide by the determination of the external review

In addition, lawsuits could be filed in federal and state court against a “designated decision-maker”

  • authorized to make the final coverage decision
  • that fails to exercise ordinary care in complying with the review decision, and
  • when that failure is the proximate cause of personal injury or wrongful death to the patient

New Life for MSAs?

The proposal would also expand Medical Savings Accounts (MSAs) through a series of measures, including:

  • allowing all individuals with a qualified high deductible health plan to participate in MSAs, rather than just those working in small businesses
  • lowering the minimum deductible to $1,000 for an individual plan and $2,000 for a family plan
  • expanding the annual contribution to an MSA to 100% of the deductible
  • allowing employers and employees to contribute to these accounts
  • repealing the current cap of 750,000 participants