October 7, 1999
The Health Unit is a partnership with the Henry J. Kaiser Family Foundation.
SUSAN DENTZER: On Capitol Hill, today was D-day for the forces who want to reform managed care health plans and those who worry that the impact of reforms could be disastrous. Managed care plans, including HMO's and so-called preferred provider organizations, now enroll more than three-quarters of all Americans with private health insurance coverage.
REP. CHARLES NORWOOD, (R) Georgia: What this really is all about is about very two strong American principals: It is about the right to choose in this country and choose your own doctor, and it is about the right to ask people to be responsible for our own actions. We do that all the time, and it's time to ask the insurance industry to be responsible for its actions.
SUSAN DENTZER: On the table today in the House were four separate reform plans, one bipartisan measure along with three others sponsored and largely supported by Republicans. The different bills had much in common, including guaranteeing the rights of sick patients to see medical specialists and broadening coverage for emergency room care. But the big battle was over how these plans differed in expanding patients' rights to sue health plans and collect damages if they were denied needed health care.
REP. MERRILL COOK, (R) Utah: If Americans have the right to sue for a damaged fence or an unsafe toy, they should have the right to sue if their health or life has been endangered or lost. This is a constitutional right. Doctors already face liability, but too often their decisions are forced upon them by an insurance plan. It's only fair, it's only American that the insurance plans be held to the same accountability.
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SUSAN DENTZER: The four provisions came up for debate and vote one by one. First to go down to defeat was a plan sponsored by Republican John Boehner. Focused on the key patient protections similar to the other plans, it had no provision for expanding patients' rights to sue.
REP. JOHN BOEHNER, (R) Ohio: Expanding lawsuits against employer-based health plans means expanding lawsuits against employers. And if employers are exposed to lawsuits, they're going to stop providing coverage to their employees. It means millions of American workers are going to lose their health insurance at the very time Congress should be working on expanding access to coverage.
SUSAN DENTZER: After the members dispatched Boehner's bill, they turned to debate the three others and to home in on the specific issue of health plan liability. At the core of the debate was how much to expand patient's current rates to sue health plans, which are greatly curtailed by a provision of federal law.
REP. PATRICK KENNEDY, (D) Rhode Island: Do you realize that the only people in our society that are exempted from our laws and exempted from being sued are foreign diplomats and HMO bureaucrats? They're the only ones in our society who are held above the law.
SUSAN DENTZER: The first of these measures to be debated was sponsored by Republicans John Shadegg of Arizona and Tom Coburn of Oklahoma, a practicing physician. It was the plan ultimately endorsed by the Republican leadership after weeks of resisting any expansion of liability. The bill would have allowed patients to sue their health plans, but only in federal courts and only after they had appealed a denial of care through an external appeals process. The provision also would have capped the amount that could be awarded patients for punitive damages and other non-economic damages.
REP. MAX SANDLIN, (D) Texas: Mr. Speaker, do we need a new federal tort in this country? Do we want the federal courts preempting state law in this country? Do we want the federal courts taking over traditional role of regulating insurance that is assumed by the states in this country? I submit to you that the answer to those questions is no. But that is exactly what Coburn-Shadegg will do.
REP. JIM GREENWOOD, (R) Pennsylvania: This is obviously a balling act. It has been said over and over again this is a balancing act between too little liability and too much liability. The Goss-Coburn-Shadegg-Greenwood-Thomas, et cetera, coalition product is the middle ground. It is the exact right in my opinion balance between these two extremes.
SUSAN DENTZER: Republican leaders worked hard among their membership in recent days to attract votes for the Shadegg-Coburn Bill. But the plan was rejected handily, with 29 Republicans joining almost all of the Democrats in opposition.
SPOKESMAN: On this vote the are yeas 193. The nays are 238 and the amendment is not agreed to.
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SUSAN DENTZER: A similar bill sponsored by Republicans Lindsay Graham and Amo Houghton also would have allowed lawsuits in federal court but would have banned punitive damages.
REP. JAMES GIBBONS, (R) Nevada: What we're doing here, Mr. Chairman, is trying to give certainty to our employers, that they know what their exposure to liability is. We all know that punitive damages cannot be ensured, that this comes out of the pocket of the employer. That's why we take punitive damages off the table. That's why we give a uniform approach to liability and to the remedies that are here.
SUSAN DENTZER: But a solid majority of members rejected that argument as well.
REP. STEPHANIE TUBBS JONES, (D) Ohio: I keep hearing the only difference between Houghton and the Norwood-Dingell amendment -- it only changes liability; it only changes the liability. When a lawsuit is brought, the only thing that matters is liability; no liability, no lawsuit, no damages. Why penalize the American public by restricting their ability to get damages?
SUSAN DENTZER: The defeat of the previous three bills cleared the way for final action on the lone bipartisan measure sponsored by Georgia Republican Charles Norwood, a dentist by trade, and Michigan Democrat John Dingell. Under their bill, people injured as a result of a plan's denial of care would have the explicit right to sue the plan in a state court; they could also collect an unlimited amount in compensatory and punitive damages. Throughout the day, Republicans and Democrats alike spoke out in support of the bill.
REP. ANNA ESHOO, (D) California: We can cast a vote that is going to keep faith with the American people, and I believe that when they come back to judge us, that this will be the yardstick by which they will measure members of the 106th Congress.
REP. CHARLES NORWOOD: I'm asking you today, folks, don't vote for this because you are Republican. Don't vote for this because you're a Democrat. That is not what this is about. I want to you vote for this bill, I want every one of you to vote for this bill today as an American. And let's show this country that on issues of this high quality and importance to the American people we're going to come out of this House and we're going to produce a good bill.
SUSAN DENTZER: In the end, the Norwood- Dingell bill passed, drawing support from an overwhelming majority of Democrats and a solid number of Republicans.
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JIM LEHRER: And Susan Dentzer is with me now. Susan, this vote today, does it in fact constitute a major happening in the health care field?
SUSAN DENTZER: Yes, it does, Jim, because it marks really a high water mark of the growing backlash or the backlash that has been growing for two years against managed care. Frankly, the House and the Senate have both been debating these kinds of measures for two years. It did not seem possible until relatively a few weeks ago that a measure like the Norwood-Dingell could pass. But I think what happened, particularly in the House, is this members of both parties looked very closely at the current situation, came to understand that due to this quirk in federal law, HMO's and other managed care plans do have a shield against being sued, that almost no other entity in our society or economy has, and they decided that that was an issue that really had to be dealt with in addition to passing some other protections for patients.
JIM LEHRER: It had a kind of broad coalition of support. I mean, the American Medical Association, a lot of consumer organizations, some conservative Republicans, liberal Democrats, that is most unusual, is it not?
SUSAN DENTZER: Absolutely, right. Very unusual indeed was the fact that doctors in particular, were supporting this because it required them to get in bed with a lot of Democrats who they have traditionally not been in bed with and also particularly to come out in favor of lawsuits and other things that physicians have generally been known not to appreciate.
JIM LEHRER: Well, the president of the AMA was on our program last night. He essentially said, hey, they can sue us, why can't they sue the HMO's, that was basically their position?
SUSAN DENTZER: Absolutely right.
JIM LEHRER: Yes. Had this backlash that you talk about, had that just been miscalculated before now or has it been legitimately growing?
SUSAN DENTZER: I think that the Republican leadership in the House in particular had underestimated the degree to which it was growing and they had failed to read some of the handwriting on the wall, a number of suits have come forward not withstanding the shield in federal law where federal judges, for example, have said, look, this is crazy; there is a shield against these plans being held liable and I can't award any damages in this case but this is nuts. This is obviously not what Congress intended in 1974 when it wrote the law in question and were Congress to go back and revisit this today, in good conscience, it would not exempt those kinds of plans from the kinds of lawsuits that are brought in legitimate cases where people really are injured or in some cases go on to die.
JIM LEHRER: We need to point out that the fact that somebody sued -- there has to be a lawsuit and a verdict and all of that sort of stuff, appeals process, et cetera.
SUSAN DENTZER: Absolutely.
JIM LEHRER: Now, what happens next? The Senate has already passed a version of this.
SUSAN DENTZER: Yes, but a very different one, so that means what the great Congressional Cuisinart known as the Conference Committee gets going, two very different sets of ingredients will be poured into it. In the case of the Senate bill, for example, not only is there no provision for expanding liability which obviously was the most contentious thing on the House debate; also the Senate bill -- at least the patient protections for the most part in the Senate bill -- would apply to only 48 million Americans, whereas in the case of the House bill, 160 million Americans more or less are covered. The Senate in particular said, well, for certain plans that are covered under state law we'll let the states decide how to regulate those. We'll just focus on this particular pool of plans where employers pay the bills, where they self-insure. We'll regulate those and let the states regulate everybody else. In fact, in the case of the House they said that is nuts; we don't want 100 kinds of regulations applying depending on what state you are in. We want a much more uniform set of patient protections.
JIM LEHRER: Is there a timetable yet for the Conference Committee?
SUSAN DENTZER: No, and in fact at this point it is not even clear there will be a Conference. The Senate leadership in particular doesn't hold any great brief for expanded liability. It's possible that they could not hold a conference and just let the bills die.
JIM LEHRER: And let it become an issue in the 2000 election?
SUSAN DENTZER: Right, and at this point that is considered unlikely. It's probable there will be a conference but, again, what could come out of it, whether they could produce a bill that the President will sign since he has made it very clear he will only sign something like the Norwood-Dingell bill, all of that remains a major question.
JIM LEHRER: Susan Dentzer, thank you very much.
SUSAN DENTZER: Thanks, Jim.