October 1998

Patient Bill of Rights: Federal Proposals and Michigan Law

by Lisa Baragar Katz, Consultant for Public Policy

The November elections are just over a week away, and political candidates are scurrying to identify for constituents exactly what Congress did and did not accomplish during this session. Among the items remaining on national policymakers’ "To Do" list is passage of a patient bill of rights (PBR).

Observers and the media list numerous reasons, including the following, why none of the four federal PBR bills—S. 2330 and S. 1890 (introduced by Senate Republicans and Democrats, respectively) and H.R.s 4250 and 3605 (introduced by House Republicans and Democrats, respectively)—has been adopted:

• Both Republicans and Democrats wanted election-year credit for passing a PBR, so neither party was willing to support the other’s legislation
• President Clinton, because of the Lewinsky investigation, lacks the political leverage to steer a PBR through a hostile, Republican-controlled Congress
• Senators, because of partisanship, cannot agree on rules governing debate on the issue
• Health plans, business, and other special interests are spending millions on a campaign to do in the bills

Federal Patient Bill of Rights

In addition to the political obstacles that block passage of a federal PBR, there also are many fundamental policy differences that legislators cannot resolve. For example, in August, President Clinton vowed to veto the Republican proposals because, he said, they do not cover all Americans: H.R. 4250 applies to only the 123 million in private employer-sponsored health plans but not the 15 million self-insured; S. 2330 applies to the self-insured but not those in employer-sponsored plans. Democrats’ bills cover both populations.

Democrats’ bills also include various provisions, particularly the following, that are not in the Republican legislation:

• Health plans must cover visits to health care providers outside their network if a patient’s doctor recommends it
• Health plans have to allow patients to designate specialists as their primary care providers; for example, patients with heart problems could ask their cardiologist to coordinate all their other care too
• Health plans must allow patients to obtain from their primary care provider a standing referral to a particular specialist
• Health plans must cover any drug a doctor prescribes, even if it is not on the plan’s coverage list
• States must ensure that consumers have access to an independent, external ombudsman who can help them through the managed-care system
• Doctors may not be offered financial incentives for denying certain care
• Health plans must cover, on a doctor’s recommendation, the cost of patients’ participation in a clinical trial
• Patients may sue health plans for damages resulting from a coverage decision

The Democrat and Republican bills also have some similarities. For example, all four allow women to see an obstetrician-gynecologist (ob-gyn) without first seeing a primary care doctor, but Democrats’ legislation allows a woman to designate an ob-gyn as her primary care doctor. Also, all four require an external appeals process allowing patients to challenge health plans’ coverage decisions, and each prohibits health plans from imposing "gag clauses," which proscribe doctors from discussing with patients all treatment options—even those not covered by the plan.

Democrats’ bills require health plans to cover a patient’s emergency room visit—without a doctor’s referral—if the patient reasonably believes there was an immediate threat to his/her health. Republican legislation limits the coverage only to certain hospitals, and House Republicans further stipulate that plans do not have to cover an E.R. visit if the only symptom is pain.

Finally, Democrats and Senate Republicans would allow patients undergoing care from a physician who is terminated from a health plan’s provider network to continue seeing that provider until the care is complete.

This language is not in the House Republican bill.

Michigan Patient Bill of Rights

Michigan consumers are protected in many respects by the state’s own Patient Bill of Rights. The package of laws (Public Acts 515–18 and 472 of 1996), which pertains to HMOs, prudent purchaser organizations, indemnity insurers, and Blue Cross and Blue Shield of Michigan, took effect October 1, 1997, and, among other things, accomplishes the following:

• Requires extensive disclosure of health plan and provider information to the public, including the plan’s financial relationships with providers, referral limitations, and responsibilities of the patients
• Prohibits preexisting-condition exclusion of people who move directly from one health plan to another and limits such exclusions to six months for people not previously covered by a group policy
• Guarantees access to an internal grievance process that allows patients to challenge a health plan’s coverage decisions and requires timely action on patient grievances

Subsequent to Michigan’s PBR, laws also have been enacted that prohibit gag rules on from being imposed on health care providers (P.A.s 66–8 of 1997) and require health plans to cover E.R. visits, even if a person wrongly but reasonably believes that his/her health is in jeopardy (P.A.s 124–5 of 1997 and 136 of 1998).

Sean Gehle, government liaison for the Michigan Health and Hospital Association (MHA), Greg Aronin, government affairs director for the Michigan State Medical Society (MSMS), and Susan Schwandt, public relations manager for Health Alliance Plan (HAP), point out that their organizations supported adoption of Michigan’s PBR. Aronin explains, "Managed care keeps costs down, but balance is needed to help protect patients, and the [Michigan] PBR provides it."

Schwandt adds that HAP supports the national drive to adopt a PBR, but she says, "The challenge is to find a balance between consumer protection and excessive government regulation of managed-care organizations."

Beverley McDonald, chair of the Consumer Health Care Coalition, joins the MHA, MSMS, and HAP spokespersons in making the point that despite Michigan’s having a PBR, there is an advantage to federal legislation: Michigan laws cannot help people whose health care coverage is offered through self-insured benefit plans—only federal legislation can.

Because Michigan’s PBR laws were adopted before two years ago, they exclude many protections now being discussed at the federal level. To keep Michigan at the policy forefront, state lawmakers have introduced numerous bills, including the following, that mirror portions of the federal proposals:

• HBs 6209–11 require health plans to ensure that patients have (1) continuity of care if their provider has been terminated from the plan’s network; (2) direct access to pediatricians; and (3) coverage for any medication that a doctor considers medically necessary even if it is not on the health plan’s coverage list
• HB 5221 and SB 777 hold health plans financially liable if they delay or deny ordinary covered treatment, thereby causing injury to a patient
• HBs 4779–81 and SBs 151–3 require health plans to allow women to access care directly from their ob-gyns
• SB 343, among its other provisions, creates within the Michigan Department of Community Health the Health Care Consumer Advocate, a managed-care ombudsman

Conclusion

According to the MSMS, Michigan Congressman John Dingell, a sponsor of H.R. 3605, intends to introduce new, compromise PBR language when federal lawmakers start the next session in January. Still, the fate of the PBR legislation will remain uncertain until the unless Republicans and Democrats temper their political and policy differences.

Michigan legislators also likely will resume discussion of these issues when their new session begins.