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.
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.
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.
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.
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
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
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.
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
1052 circumvents the independent medical review process in favor
of litigation. The President believes that patients should
be given care first -- litigation should be the last resort. Patients
should exhaust the medical review process first, allowing doctors,
not trial lawyers, to make decisions about medical care.
1052 jeopardizes health care coverage for workers and their families
by failing to avoid costly litigation. S. 1052 overturns more
than 25 years of Federal law that provides uniformity and certainty
for employers who voluntarily offer health care benefits for millions
of Americans across the country. The liability provisions of S.
1052 would, for the first time, expose employers and unions to
at least 50 different, inconsistent State-law standards. The result
will inevitably be that employers and unions will be forced to
pay for different benefits from State to State, even within a
particular State, based on varying precedents set in State courts
and leading to inconsistent standards of care for patients. Further,
S. 1052 imposes no limitations on State court damages, and it
is not clear whether existing State-law caps would apply to the
broad, new causes of action in State courts that S. 1052 creates.
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.
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.
1052 fails to provide a fair and comprehensive remedy to all patients.
The President believes the new Federal law should establish a
comprehensive set of rights and remedies for patients. S. 1052
instead encourages costly litigation by providing no effective
limitations on frivolous class action suits and allows trial lawyers
to go on fishing expeditions to seek remedies under other Federal
1052 subjects physicians and all health care professionals to
greater liability risk. S. 1052 would expand liability for
physicians and all health care professionals in State courts well
beyond traditional medical malpractice by permitting new, undefined
causes of action in State courts for denials of medical benefits.
This expanded litigation against physicians and all health professionals
will create an opportunity to circumvent State medical malpractice
caps that may not apply to these new causes of action.
User Fee Provision. The Administration objects to inclusion
in S. 1052 of an extraneous revenue-raising provision (section
502), which extends for multiple years Customs charges on transportation,
passengers, and merchandise arriving in the country.
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