American
Bar Association
2002 Legislative and Governmental Priorities
Background · Current
Status · ABA Policy · Key
Points · Links
Background
As a result of the Employee Retirement Income Security Act of 1974
(ERISA), enrollees in employer-sponsored health plans are generally
unable to pursue legal remedies for injuries resulting from actions
or decisions of their health plans under state law. They may seek
redress only in federal court under provisions of ERISA, which limit
any damages to the cost of the plan benefits under dispute, and
in certain cases, attorneys’ fees and court costs. In recent years,
some federal courts ruled that enrollees could sue their plans in
state courts for vicarious liability for the medical negligence
of the plan’s providers. But disputes over denial or delay of coverage
have largely been preempted by ERISA.
Legislation to remove the ERISA Shield and permit a cause of action against an HMO was given much attention in the 107th Congress. The Senate passed broad "Patients' Bill of Rights" legislation S. 1052, by a vote of 59-36. S. 1052 contains provisions to remove the ERISA shield and permit cases regarding medically reviewable issues to be brought in state court. A similar bill to S. 1052, H.R. 2563, was introduced by Reps. Greg Ganske (R-IA), John Dingell (D-MI), Charles Norwood (R-GA), and Marion Berry (D-AR). Legislation, H.R. 2315, not acceptable to the cosponsors of S. 1052 was introduced on and supported by President Bush. After much negotiation, President Bush and Rep. Norwood announced on that they had agreed to a compromise. The House of Representatives passed H.R. 2563, as amended, by a vote of 226-203. Prior to passing the legislation, the House amended H.R. 2563 to accept the Norwood amendment on liability by a vote of 218-213. As amended, the bill would permit an injured patient to bring a cause of action against a health plan in state court but would impose certain federal standards. For example, if an independent medical reviewer upholds a determination by a health plan to deny a benefit, it would create a presumption, refutable only by clear and convincing evidence, that the health plan exercised ordinary care in making the determination. H.R. 2563 would also impose a cap of $1.5 million dollars on non-economic damages. Representatives of Senators Kennedy (D-MA), McCain (R-AZ), and Edwards (D-NC) and President Bush met to try and develop a compromise proposal. The talks broke down. Senator Daschle (D-SD) attempted to appoint conferees but was not successful in doing so. Both pieces of legislation died at the end of the 107th Congress but are expected to be reintroduced and receive attention in this 108th Congress.
In addition to these ADR remedies, the House-passed version of
H.R. 2990 contained provisions to remove the ERISA shield and permit
cases to be brought in the state courts under state laws. The Senate-passed
version of H.R. 2990 did not contain provisions to remove the ERISA
shield. A House-Senate conference committee attempted but failed
to reconcile the two bills before the 106th Congress adjourned.
Current Status
Legislation similar to S. 1052 and H.R. 2563 is expected to be reintroduced in the 108th Congress.
ABA Policy
The ABA supports federal, state and territorial
legislation establishing ADR procedures as one remedy for resolving
disputes between patients and group health plans. In addition, the
ABA opposes preemption of state tort laws by enactment of federal
medical liability legislation and supports amending ERISA so that
it no longer would preempt various state health care liability laws.
The ABA believes that the regulation of medical professional liability
is a matter for state consideration and that the tradition of state-fashioned
tort principles remains fundamentally sound. The ABA also opposes
caps on pain and suffering damage awards.
Key Points
Health Care ADR
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The ABA supports legislation establishing a rigorous system of internal review and an independent system of external review to help resolve disputes between patients and group health plans, including HMOs.
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Certain types of ADR, including external review, complement internal review programs and can provide an efficient and effective next step for resolving unsettled claims between patients and HMOs. To be effective, it is essential that the external review entities remain truly independent and that neither the HMO nor the patient be able to unilaterally select the external review entity or unduly influence the outcome of the review process.
- In many cases, internal and external review, utilizing ADR processes, will result in patients receiving the care that they are entitled to without the necessity of pursuing costly and time-consuming legal action. It is essential, however, that such ADR programs be developed with due process safeguards for the rights of all participants in the process.
Removing the ERISA Shield
- Patients covered by ERISA plans should have the same right of redress as those patients covered by non-ERISA plans.
- ERISA is a 1974 federal law intended to protect working Americans from fraud and mismanagement in their pension benefit plans. ERISA was designed to govern private sector employer-employee benefit disputes. However, some managed care plans have taken advantage of ERISA to avoid accountability under state health care liability laws.
- Since ERISA was passed, traditional insurance, in which the doctor makes the decision about a patient's care, has given way to managed care. Because managed care plans with an emphasis on cost containment did not exist when Congress passed ERISA, the legislation was not written to address such plans.
- HMOs and other kinds of managed care companies should be held responsible if their decision to deny or delay medically necessary care that is covered under the insurance policy results in harm to a patient. They should be held to the same standards of accountability we expect of doctors, nurses, hospitals, and other health care professionals.
- On April 23, 2001, the Congressional Budget Office released cost estimates for legislation like S. 1052. It found that removing the ERISA shield and permitting a cause of action to be brought by injured patients against employer-sponsored health plans would raise premiums by eight-tenths of one percent for employer-sponsored health insurance premiums.
- A 1998 report by the Henry J. Kaiser Family Foundation studied the extent of litigation in certain insurance programs where consumers currently have the ability to sue health plans. The study found very low rates of litigation against the public insurance systems it researched, ranging from 0.3 to 1.4 cases per 100,000 enrollees per year (with estimated monthly costs from $0.03 to $0.13 per enrollee.)
- State courts have been handling health care liability claims for over 200 years. It makes no sense to add an additional burden to the federal courts when the state courts are perfectly capable of handling these cases. Allowing these disputes to be brought in state courts will promote judicial economy - and avoid wasteful duplicate proceedings in federal and state court - when there are multiple defendants.
- Proposals to cap liability for non-economic losses are ill-advised. Such proposals that arbitrarily limit non-economic damages would deprive individuals of compensation for the consequences of medical-malpractice injuries. No one states that such injuries are not real or severe. Such proposals would mean seriously injured persons who are in most need of compensation would receive less than full compensation. This outcome would be grossly unjust. Such proposals would result in seriously injured persons who are the least able to afford it receiving less than full compensation, while less seriously injured persons would be fully compensated.
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Last Updated: November
6, 2002
Background · Current
Status · ABA Policy · Key
Points · Links
|
2002
Priorities:
Application
of
State Ethical Codes
Gramm-Leach-Bliley
Health
Care Accountability: Medical Malpractice
Health Care Accountability: Patients' Bill of Rights
Immigration
Independence
of the Judiciary: Erosion of the Judicial Process
Independence
of the Judiciary: Judicial Compensation
Independence
of the Judiciary: Judicial Vacancies
Legal Remedies
to
Eliminate Discrimination
Legal Services
Corporation
Rule of
Law: International Organizations
Rule
of Law: International Treaties
Student Loan
Forgiveness
Tax Simplification
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