NU Online News Service, Aug. 3, 11:48 a.m. — Washington

The compromise patients’ bill of rights legislation approved by the House and endorsed by President Bush is drawing fire from all sides in the health care debate.

Health insurers and employers argue that the legislation, which the president negotiated with Rep. Charlie Norwood, R-Ga., goes too far and still subjects health plans and plan sponsors to excessive litigation.

Meanwhile, physician and consumer groups say the legislation favors insurers over patients and will not provide genuine protection.

Donald Young, interim president of the Health Insurance Association of America, Washington, says the legislation?which the House approved Thursday night by a 226-203 vote?remains deeply flawed.

The bill permits lawsuits in state courts with 50 different and inconsistent interpretations of federal law, he says, and does nothing to stem the tide of litigation that will drive up the cost of health coverage.

“And worst of all, this bill will result in more Americans, particularly the most vulnerable lower income workers and their families, joining the rolls of the uninsured,” Young says.

He called on an upcoming House-Senate Conference Committee?which will work out differences between the House and Senate versions of the legislation?to correct the “flaws.”

Earlier, the Senate approved a version of the legislation that would subject both health plans and plan sponsors to litigation in state courts with no caps on liability. President Bush said he would veto that bill if it reached his desk.

Similarly, a major employers’ group, the National Association of Manufacturers, Washington, says that while the House bill is better than the Senate bill, it is still more than NAM can support.

“This agreement was about making the best of a bad situation, but we remain greatly concerned that the legislation will move further to the left in the subsequent conference,” says Mike Baroody, executive vice president of NAM.

“What we need are reforms that ensure fairness and accountability,” he says. “What we don’t need is a bill that expands health care liability or allows health plan contracts to be disregarded.”

But the American Medical Association, Chicago, says it opposes the House bill because it does not go far enough.

“It helps HMOs more than it helps patients,” says AMA Chairman Timothy T. Flaherty. “It overrides strong patients’ rights laws already enacted in many states.”

The Washington-based consumers group Families USA calls the House bill “a huge step back for America’s consumers.”

Judy Waxman, deputy executive director of the group says the House bill allows HMOs to operate with impunity and leaves patients without a meaningful right to sue.

“HMOs will continue to improperly delay and deny care without the threat of accountability,” she says.

The primary difference between the House and Senate versions of patients’ bill of right legislation involves the liability provision.

Under the Senate bill, S. 1052, health plans and those plan sponsors that “directly participate” in coverage decisions would face liability for health-related issues under state law in the same manner as for medical malpractice.

In addition, the Senate bill imposes new federal liability on plan administrators for non-medical issues such as enrollment eligibility and cost-sharing.

In addition to facing liability for compensatory damages, plan administrators could be hit with civil penalties of up to $5 million.

By contrast, the House bill, H.R. 2315, divides jurisdiction between federal and state courts.

Federal courts would have jurisdiction over contractual issues and all actions against employers. State courts would have jurisdiction over medical disputes filed against health plans.

However, all lawsuits, whether filed in state or federal courts, would face caps on non-economic and punitive damages of $1.5 million each, for a total of $3 million.

In addition, the House bill bars class actions lawsuits filed under the Employee Retirement Income Security Act or the Racketeer Influenced and Corrupt Organizations Act.

The text of the Bush-Norwood compromise amendment is available on the Norwood Web site, at http://www.house.gov/norwood/