NU Online News Service, July 3, 12:10 p.m. – The National Association of Health Underwriters, Arlington, Va., says the health insurance industry has won some quiet victories in recent action on the Senate version of the Kennedy-McCain managed care bill.

If passed by the House and signed into law by President Bush, the bill would expand patients’ ability to sue health plans for actual damages and other damages in federal court. Patients could also sue some employers that manage self-funded health plans.

Health insurers, managed care companies and employers have lobbied hard against the bill, arguing it would drive up costs for managed care companies and give employers an incentive to drop health benefits.

The Senate approved the Kennedy-McCain bill 59-36, and it voted 57-43 against an amendment that would have completely shielded employers from health plan liability lawsuits, according to a NAHU policy analysis..

But the Senate voted 98-0 to approve an amendment that would require patients to exhaust all internal and external appeals before going to court, NAHU analysts write.

The Senate also limited employers’ exposure to health plan suits, by voting 96-4 to permit them to pass legal responsibility for health plan coverage decisions on to “designated decisionmakers” such as third-party administrators.

The amended language “although not perfect, is far more limiting than the ?direct participation’ standard used in the original bill,” the NAHU analysts write.

The analysts say the Senate voted 98-0 to approve a third amendment that will limit plaintiffs in future health plan class-action lawsuits to naming a single health plan as the defendant.

“In total, the amendments that passed lessened the liability provisions somewhat, but the bill is still bad legislation and the president has reiterated that he will veto it unless significant changes are made,” the NAHU analysts write. “The 36 senators who voted against the bill would be enough to sustain such a veto.”

NAHU analysts are expecting the House to begin debating its own managed care legislation sometime around July 15.