June 21, 2001
President strongly supports passage of a patients' bill of rights
this year and has been working with members of both parties since
the first week of the Administration to forge a compromise. Congress
has been divided on this issue for far too long at the expense of
patients and their families. The President strongly urges Congress
to pass a strong patients' bill of rights this year that provides
meaningful protections for patients, not a windfall for trial lawyers
or a threat to Americans' ability to obtain and afford quality health
care. On February 7, 2001, the President transmitted to Congress his
principles for a bipartisan patients' bill of rights and urged Congress
to move quickly on this important issue.
The President's principles called for passage of a patients' bill of rights that ensures all Americans enjoy strong patient protections, including: access to emergency room and specialty care; direct access to obstetricians, gynecologists, and pediatricians; access to needed prescription drugs and approved clinical trials; access to health plan information; a prohibition of "gag clauses"; consumer choice provisions; and continuity of care protections. The President also recognizes, however, that many States have passed strong patient protection laws already, some of which have been in force for over a decade. To the extent possible, a Federal patients' bill of rights should give deference to these effective State laws.
The President's principles emphasized the importance of providing patients who have been denied medical care with the right to a fair, prompt, and independent medical review, which will ensure that disputes are resolved quickly and inexpensively and that patients receive the quality care they deserve.
The President stated that only after this independent review decision is rendered should we resort to the costlier, time-consuming remedy of litigation in Federal courts to ensure that health plans are held liable for wrongful decisions.
The President's principles also reminded Congress of the necessity of avoiding unnecessary and frivolous lawsuits, which will only serve to drive up costs and leave more individuals without insurance coverage. S. 1052 will significantly increase health insurance premiums and the number of uninsured. According to the Congressional Budget Office, health insurance premiums under S. 1052 as originally drafted would increase by over 4%. If the effects of litigation risk on the practice of medicine and of the reduced ability of health plans to negotiate lower rates were included, CBO's estimated cost impact could be much higher, by 4-5% or more. This is in addition to the estimated 10-12% premium increases employers are already facing in 2001. Further, leading economists have predicted that employers drop coverage for approximately 500,000 individuals when health care premiums increase by 1%. According to these estimates, S. 1052 could cause at least 4-6 million Americans to lose health coverage provided by their employers.
The President is encouraged by efforts in the Senate, like those of Senators Frist, Breaux, and Jeffords, to develop a common sense compromise that forges a middle ground on this issue and meets the President's principles.
While the President strongly supports a comprehensive and enforceable patients' bill of rights and has been working with members of both parties to enact legislation this year, he believes that S. 1052 would encourage costly and unnecessary litigation that would seriously jeopardize the ability of many Americans to afford health care coverage.
The President objects to the liability provisions of S. 1052. The President will veto the bill unless significant changes are made to address his major concerns. In particular, the serious flaws in S. 1052 include:
S. 1052 also would allow causes of action in Federal court for a violation of any duty under the plan, creating open-ended and unpredictable lawsuits against employers for administrative errors. These new Federal claims do not have any limitations on the amount of noneconomic damages, creating virtually unrestrained damage awards that are limited only by an excessive $5 million cap on punitive damages.
Moreover, S. 1052 would subject employers and unions to frequent litigation in State and Federal court under a vague "direct participation" standard, which would require employers and unions to defend themselves in court in virtually every case against allegations that they "directly participated" in a denial of benefits decision. Because such determinations are inherently fact-specific, any such allegation will force a costly and time-consuming court process and result in varying State interpretations of "direct participation," forcing employers to adhere to different standards in every State.
S. 1052 would affect direct spending; therefore, it is subject to the pay-as-you-go requirement of the Omnibus Budget Reconciliation Act of 1990. OMB's preliminary scoring estimate of the bill is under development.