AMA refutes HMO
industry's misinformation regarding HR 2723 (the Norwood-Dingell bill)
Bipartisan Consensus Managed
Care Improvement Act of 1999, H.R. 2723
DON'T BE FOOLED BY HMO LOBBY
The Washington, D.C. HMO lobby has
spent $100 million to block federal patient protection legislation. They say that
assuring quality patient care costs too much, increases the uninsured, and exposes
employers to law suits. These claims are simply untrue.
HEALTH CARE COSTS
|HMO MYTH: Patient protection
legislation, such as the Norwood-Dingell bill, would cause health care premiums to
FACT: According to a
September 28, 1999, Washington Post article, the American Association of Health
Plans (AAHP) and the Health Insurance Association of America (HIAA) surveyed their HMO
members in Texas and "could not find one example" where the Texas patient
protection law forced Texas HMOs to raise their premiums or provide unneeded and expensive
FACT: The two-year-old Texas law
that allows HMOs to be sued for their negligent medical decisions has prompted little
litigationonly five lawsuits out of the 4 million Texans in HMOs. Texas State
Senator David Sibley, a Republican, stated in a September 28, 1999, Washington Post
article, that "those horror stories" raised by the HMO industry "just did
not transpire." A spokesman for Texas Governor George Bush stated that Governor Bush
thinks the new law has "worked well."
FACT: Representatives of the
insurance industry have publicly admitted that holding plans accountable will not
significantly drive up health care premiums. Jeff Emerson, the former CEO of NYLCare,
stated in a July 11, 1999, Washington Post article that he is ". . . not going
to make the argument that it's going to be a lot of money." Aetna/USHealthcare
spokesman, Walter Cherniak, stated in the same Washington Post article that "we
would charge the same premium to a customer with the ability to sue as we do those who do
not have the ability to sue." Why? "Those judgments to date have been a very
small component of overall health care costs," according to Cherniak.
|HMO MYTH: Patient protection
legislation would increase the number of uninsured.|
FACT: No evidence
has been found to conclusively link patient protection laws to the number of uninsured.
(see, GAO Report T-HEHS-99-147).
FACT: The independent
nonpartisan Congressional Budget Office wrote a letter suggesting that the insurance lobby
misinterpreted their analysis of the patient protection cost impact on the uninsured.
|HMO MYTH: HMOs support small
business' effort to create affordable health insurance.|
FACT: In a September
29, 1999, press release, HIAA President Chip Kahn stated that the "HIAA opposes [Rep.
Jim Talent's] call for Association Health Plans and HealthMarts because they would hurt
many small employers who provide coverage to their employees. This, in turn, will cause
many of these employers to drop their coverage because it will become too costly." Perhaps
the HIAA forgot that it was the small employers who asked Congress to create Association
Health Plans and HealthMarts to help make health plans more affordable so more employees
could be insured.
|HMO MYTH: Employers would be subject
to lawsuits simply because they offer health benefits to their employees under ERISA.|
FACT: Senior attorneys in the
Employee Benefits Department and the Health Law Department at the law firm of Gardner,
Carton and Douglas concluded in their September 27, 1999, legal review of the
Norwood-Dingell bill that this claim is simply incorrect.
FACT: Section 302(a) of the
Norwood-Dingell bill specifically precludes "any cause of action" against an
employer or other plan sponsor unless the employer or plan sponsor "exercises
discretionary authority" to make a "decision" on a claim for covered
benefits that results in personal injury or wrongful death. (see, p. 99, line 4-p.
100, line 10).
|HMO MYTH: An employer's decision to
provide health insurance for employees would be considered an exercise of discretionary
employer's decision to provide health insurance benefits to employees is not the same as
making a decision to deny or delay a patient's claim for the benefits covered by a
group health plan. Decisions on claims for covered benefits are almost always made by the
administrator of a group health plan, not the employer.
Examples of the types of decisions
health plan administrators make that directly affect the care that patients receive,
and which could be considered "medical decisions," include: inappropriately
limiting access to physicians through restricted networks (blocking patient access to
specialists); refusing to cover or delaying needed medical services (transplants,
transfusions, therapies); drawing treatment protocols too narrowly (patients
discharged from a hospital prematurely); offering payment incentives or creating
deterrents to discourage the provision of necessary care (disciplining physicians who
refer patients for necessary medical care); and discouraging physicians from fully
discussing health plan treatment options (gag rules and gag practices). These
are not decision employers make.
FACT: The Norwood-Dingell bill explicitly
excludes from being construed as the exercise of discretionary authority decisions to
1) include or exclude from the health plan any specific benefit, 2) any decision to
provide extra-contractual benefits, and 3) any decision not to consider the provision of a
benefit while internal or external review is being conducted. (see, p. 100, lines
HMO REFORM IS WHAT VOTERS
|HMO MYTH: Voters do not consider
patient protection legislation a priority.|
FACT: Public opinion polls show
overwhelmingly that voters want protections against HMO abusesand they are
willing to put their vote behind it. According to a recent ABC News/Washington Post
poll, 91% said that protecting patients' rights will be important to them in deciding how
to vote in the next election.
FACT: Most states have already
heard the plight of their voters and took action to pass laws that include the same
patient protections voters are now asking Congress to pass. These protections include
disclosure of plan information, access to specialists, grievance procedures, access to
emergency services, preserving the patient-physician relationship, and plan
The American Medical Association
(AMA) strongly supports the Bipartisan Consensus Managed Care Improvement Act of 1999
(Norwood-Dingell), H.R. 2723, and urges Congress to pass this legislation without
amendments that weaken the patient protection and HMO accountability provisions.