The House of Representatives last week sent a strong message in favor of expanded legal rights for HMO enrollees as it prepared to negotiate with the Senate on a compromise version of patient-protection legislation.
Although the focus of the House's action was clearly on protecting the rights of the nation's 160 million managed-care enrollees, several provisions of the bill would affect the day-to-day operations of hospitals and hospital-owned managed-care plans.
In the two days preceding the House's Oct. 7 vote, six hospital systems in three states announced that they were selling or closing managed-care businesses (See stories, p. 3 and p. 18).
On a 275-151 vote, the House voted in favor of bipartisan legislation sponsored by Reps. Charlie Norwood (R-Ga.) and John Dingell (D-Mich.) that would allow HMO enrollees to sue health plans in state courts for injuries or deaths that result from denials of covered benefits.
In passing the bill, the House tacked away from the Senate, which in July passed a managed-care reform bill that did not permit such suits.
The House bill also would apply to anyone in a managed-care plan. Many provisions in the Senate bill applied only to the 48 million enrollees in plans regulated by the Employee Retirement Income Security Act.
ERISA has been seen as a deterrent to patient lawsuits because of provisions in the statute that limit plaintiffs' recoveries to actual damages.
Whether the House-Senate negotiating conference can actually reach a compromise remains unclear, however. Election-year politics may dictate whether blocking passage of HMO reforms will put the GOP's slim, five-vote House majority at risk.
"The decisions at this time have 100% to do with electoral politics," said one healthcare lobbyist opposed to the legislation, who asked not to be identified. "There is not one iota of policy basis behind it."
But reaching a compromise may be just as perilous for Republican leaders. The House probably will not support any final bill that doesn't permit enrollee lawsuits. But the Senate may not have the votes to pass a bill that does.
"I assume that the Senate will want to appoint conferees quickly and proceed with due slowness," said Chip Kahn, president of the Health Insurance Association of America.
"We'll now see things slow down, and everybody will take a breath, and we'll see how the chemistry of the conference works out," Kahn said.
In the meantime, congressional leaders face other risks if the conference committee bogs down. Senate Democrats may use procedural means to choke bills that are a priority of the GOP leadership, which is similar to how they forced a Senate vote on managed-care legislation in July.
Among the items in the Norwood-Dingell legislation was a provision that would give job protection to healthcare workers who report legal violations by plans or providers. Hospitals have opposed such a "whistleblower" measure, saying it's a union-organizing issue and that employees could use it to avoid layoffs.
But that concern was far from the minds of most backers of the Norwood-Dingell bill, said Richard Pollack, executive vice president and director of government and public affairs for the American Hospital Association.
The vote is "more of a signal on the liability provision," Pollack said.
"Norwood-Dingell had a head of steam that was totally independent of whistleblower (protection)," said Thomas Scully, president and chief executive officer of the Federation of American Health Systems.
The measure also includes a provision that would require plans to pay hospitals for many claims within a month. And it requires health plans to provide a point-of-service option, which could force many provider-owned HMOs to take on insurance functions with which they are unfamiliar.
The bipartisan bill would allow enrollees to sue their health plans in state courts for the denials of covered benefits.
As the House began that debate, it was countered by three Republican bills, one of which did not include the right to sue. The other two included the right to sue but required all such suits to go to federal court and limited such suits.
The House leadership, which had all but conceded that a liability provision would pass, tried to block the Norwood-Dingell bill by using procedural rules. The leadership wrote rules of debate that allowed passage of only the first bill to gain a majority in the 435-member House, and then scheduled the vote on the Norwood-Dingell bill last. In other words, had the House passed one of the other two bills, it never would have voted on the bipartisan measure.