By Martha Priddy Patterson
Rhetoric on so-called "patients bill of rights" legislation has reached epidemic proportions as a few selected members of the House of Representatives and members of the Senate come together to attempt to produce final law from two sometimes very different versions of this complex legislation. The first conference meeting to resolve the differences between the House and Senate versions of patients' rights, H.R. 2990 and S. 1344, began March 2. These bills address how and when individuals would be permitted to sue health plans – whether provided through the employer or individually, as well as addressing procedures and rights to appeal denial of treatment and what benefits must be provided under health plans.
While many provisions are similar in both bills, there are a few very profound differences between the bills. For a detailed comparison, click here.
Most observers believe resolving the differences between the two bills will be difficult. Some observers believe resolving the differences is impossible, and the bill will die at the end of the session. Unlike flu shots, a rhetoric immunization probably isn't possible, but knowing what's in the bills at least may offer an analgesic – and put the arguments in perspective.
Scope of the Bills – What Is the Fight About?
The Senate bill generally applies only to employer-provided plans that are insured, which are generally plans covered by ERISA. The House bill, by contrast, would apply most of its provisions to both ERISA plans and insured plans. This is a significant difference because insured plans generally are governed by state law. Consequently, the House bill would override conflicting state health insurance laws, unless such laws provided greater protections for patients. Under the House bill health insurers would be subject to an entirely new set of laws, and in many cases, both the federal law and state law.
The Big Battle – Can Employees Sue?
As currently applied, ERISA's preemption provisions generally prohibit the application of state law to employer-provided health, retirement and most other benefit plans. As a consequence state medical malpractice laws generally have not been applied when the medical care involved was provided under an employer provided plan. Under ERISA as it is currently written, plan participants may sue benefit plans only if promised benefits are not delivered. If the employee wins, the only award granted is the benefit that was originally denied. Attorneys' fees may be granted only at the court's discretion.
Under the House bill, ERISA would not preempt state law causes of action in state court for personal injury or death in connection with insurance or medical or administrative services from a group health plan. Additionally, employers and other plan sponsors would be subject to suit if the injury grew out of the employer's discretionary denial of benefits covered by the plan. Punitive damages would be not be permitted under such suits if the employer undertook external review of its decision. Suits could not be brought as class actions. Under the Senate bill, employees could sue as individuals under ERISA for reimbursement of benefits and legal costs, if plan or insurance issuer does not pay reimbursements determined to be required by an independent external reviewer.
Other Major Provisions
Both the bills generally would give patients greater rights to access care for emergency, obstetric and gynecological, pediatric and other specialists. External reviews could not exceed 30 days in the Senate bill or 21 days in the House bill for nonemergencies and 72 hours for emergencies. Internal reviews of benefit denials would have to be conducted by a party who was not part of the original denial. Appeals procedures would be shortened and "qualified external appeals entities" would be required to hear the appeals.
Martha Priddy Patterson is Director, Employee Benefits Policy Analysis,
Deloitte & Touche LLP Human Capital Advisory Services.