HMO Bill Endures First Test in Senate

WASHINGTON – The patients’ bill of rights survived its first test in the Senate on Tuesday, despite opposition from conservative Republicans, managed care companies, business groups and President Bush.

Texas emerged center stage in the debate as a Democrat-led effort defeated a key amendment by Sen. Phil Gramm, R-Texas, that would have exempted employers from lawsuits.

And both sides invoked the Lone Star State’s law providing patient protections while President Bush, who was Texas’ governor when it was passed in 1997, stepped in, attempting to broker a compromise on the issue of employer liability.

Gramm, whose amendment was defeated, 57-43, warned that employers would react to the threat of being sued by employees unhappy with health care decisions by dropping health insurance altogether. He was supported by a broad group of business interests.

The legislation would force health maintenance organizations and insurers to offer a host of basic medical services, including access to specialists, emergency room care and experimental treatments. It would also create an important new legal right for patients to sue HMOs and insurers in state courts for up to $5 million in punitive damages for decisions that cause injury or death.

Bush has threatened to veto the Senate bill over the lawsuit provision, which he says would lead to frivolous suits by personal injury lawyers.

Senators turned a deaf ear to such concerns Tuesday, voting 61-39 against sending the bill back to committee for further study before the vote against shielding employers.

“It’s very helpful,” said Sen. John McCain, R-Ariz., a co-sponsor of the legislation with Sens. Edward M. Kennedy, D-Mass., and John Edwards, D-N.C. “But there are still tough issues remaining.”

The issue has become intensely politicized since the Democrats took control of the Senate earlier this month and immediately made passage of the bill their top priority.

Gramm and Texas’ other senator, Republican Kay Bailey Hutchison, appeared at a news conference later in the afternoon to press for limits to liability. The event, sponsored by Citizens for a Sound Economy, featured a man dressed as a shark – representing “greedy” trial lawyers, the group said – who handed out fake dollar bills with a picture of Kennedy.

“The point is, all the proponents of this bill in defending it said, ‘Well, look at Texas.’ Where has the employer been sued in Texas?” Gramm said. “In Texas, you can’t sue an employer.”

Instead, Texas law provides for an independent review that gives patients denied medical treatment a hearing before they can go to court. Since 1997, about 1,200 appeals have been filed by patients, according to the Texas Medical Association; approximately half were decided in favor of the patient, and 42 percent in favor of the health plan. The remaining cases resolved with a compromise.

Hutchison warned that without the Texas model, costs would increase and the number of uninsured would rise. “The idea that we would pass a law that would increase costs is irresponsible.”

Business interests also expressed concern.

“Anyone who sponsors health care insurance would be vulnerable,” said Neil Trautwein, a lobbyist for the National Association of Manufacturers. “And the trial lawyers will target the largest employers with the deepest pockets.”

Supporters of the legislation argued that it explicitly protects employers who take no part in medical decisions. The measure exempts from lawsuits the vast majority of businesses, which merely contract with insurance companies to provide health coverage.

But the legislation’s sponsors conceded that they would have to do more to protect employers from lawsuits to win Bush’s signature.

Democrats were cheered by the developments.

“Clearly the momentum is moving in our direction,” Kennedy said. Edwards said, “The HMOs have had the law on their side for too long.”

Senate Majority Leader Tom Daschle, D-S.D., has threatened to keep the Senate in session through the Fourth of July recess if final action has not been taken, but Edwards said Tuesday night that such a vote could be held Thursday.

Meanwhile, House Republican leaders released details of a bill that would require that patients use an independent medical review process before going to court and limit damages in federal court at $500,000.