Congress Debates Patients's Bill of Rights
June 21, 2001
After years of debate and political wrangling on capital hill, lawmakers appear to be making significant progress on passing the so-called "patients' bill of rights." The exact form of the legislation remains to be seen. The battle has pit powerful special interest groups against one another.
As the law currently stands, a patient can sue his insurance company if the patient is harmed due to the insurer's denial of a commonly accepted and medically necessary procedure. However, if the patient's insurance is paid for by his employer, as nearly three quarters of all insurance is, then the patient's right to sue is severely limited.
The Employee Retirement Security Act of 1974, also known as "ERISA," is a Federal law which restricts lawsuits against employer supplied medical insurance programs. Under ERISA, the harmed patient must sue in Federal court and can seek no more than the cost of the service that was denied. Such curtailment of damages has emboldened insurers and other managed care companies, leading to frequent denials of medical procedure requests, as the cost of a procedure is typically only a "drop in the bucket" when compared to damages awarded in other types of lawsuits (pain & suffering, lost wages, etc.).
Under the legislation that is currently being debated, many new rights may be granted to patients who feel they have been denied necessary medical care. For instance, under a bill sponsored by Senators Kennedy, McCain, and Edwards, patients could sue employer provided insurance programs in state court (where damage awards are typically higher) and could request compensation for pain & suffering, lost wages, and punitive damages. The bill's sponsors claim that its more permissive litigation standards will deter insurers from denying otherwise appropriate care. Under the current system of restricted damages, such insurers can afford to deny necessary care as the monetary punishment is minimal.
President Bush, while generally supportive of new litigation rights for patients, has expressed concern over the Kennedy - McCain - Edwards bill. The President feels the bill goes too far and may lead to frivolous lawsuits. He has threatened a veto. However, Senators Breaux, Jeffords, and Frist have offered an alternative to the Kennedy bill. Under their version, damages for an unreasonable denial of care by an employer provided insurance plan would be capped at $500,000 and lawsuits would be restricted to Federal court. In addition, before the disgruntled patient could file a Federal lawsuit, he would have to participate in an independent review process which investigates the insurer's denial.
Any version that passes Congress and is signed into law by the President will likely result in an increase in insurance premiums for employers who supply coverage to their employees. Many observers are concerned that such an increase will cause many employers to stop providing such insurance as a job benefit. Studies have shown that for every 1% increase in insurance premiums, 300,000 employees lose employer sponsored coverage. Based on those numbers, the passage of either of these bills could leave somewhere between 900,000 and 1.2 million employees without insurance.
-- Article Courtesy of InjuryBoard.com
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