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July 26, 2001 at 08:00 PM
Health Plans Contend Patient Protection Bill Will Cause Millions To Lose Coverage
By
Washington
The House of Representatives began consideration of patient protection legislation last week that health insurance plans say will cause 6.5 million people to lose their employer-based coverage.
Reps. Charlie Norwood, R-Ga., John Dingell, D-Mich., Greg Ganske, R-Iowa, and Marion Berry, D-Ark., on Thursday jointly introduced in the House the identical patient protection bill that was previously approved by the Senate.
Meanwhile, House Republican leaders are advocating an alternative bill, H.R. 2315, introduced by Reps. Ernest Fletcher R-Ky., and Collin Peterson, D-Minn., that is similar to the Senate bill, although with a less severe liability regime.
Under the Norwood-Dingell bill, which at this writing did not have a House bill number, health plans and those employers who “directly participate” in coverage decisions would face liability under state law in the same manner as medical malpractice.
But in an effort to shield employers from some liability, the legislation contains language deeming an insurance company or third-party administrator as the designated decision-maker.
Moreover, the bill imposes new federal liability on plan administrators for certain nonmedical issues such as enrollment eligibility and cost sharing. In addition to facing liability for damages, plan administrators could be hit with a civil penalty of up to $5 million.
By contrast, the Fletcher-Peterson bill establishes an independent administrative procedure to review adverse coverage decisions. A health plan could be sued in state court only if it refused to follow an independent reviewers decision to reverse the denial.
Health plans could also face federal liability for wrongful delays in making a benefit claim decision, although liability for non-economic damages would be capped at $500,000.
At a press briefing last week, the Washington-based Health Insurance Association of America released an actuarial study of the Norwood-Dingell bill, which said that the increased costs imposed by the legislations liability regime would cause many people to lose their health insurance.
