Why HMO angst is a hard issue for Congress

In wake of court ruling this week, some lawmakers renew push for 'patients' rights.'

A Supreme Court ruling this week highlights the increasingly difficult bind Americans face over how to curb healthcare costs while getting the care they want.

The high court was unanimous: Employer-sponsored insurance plans are governed by federal law, so patients can't sue for big damages in state court when a health-maintenance organization refuses to pay for a doctor's recommended treatment.

But the ruling is hardly without controversy, or consequences. To some observers, it shows the failure of Congress to enact legislation to deal with growing strains in the healthcare system. The reasons go beyond party politics. Questions of who can sue whom, for how much, go to the heart of important debates over how to ensure both high-quality care and reasonable costs.

"The [Supreme Court] decision moves the bar of who can get redress toward the HMOs and away from consumers," says Gary Claxton, vice president of the Kaiser Family Foundation in Menlo Park, Calif. "It looks like something that the Congress will now have to deal with."

If a health plan makes a bad decision on coverage and you are harmed by it, you now have very little redress if the decision is negligent, in bad faith, or even intentional.

The ruling comes against a stark backdrop: Years in which Congress has considered, but failed to pass, patients' rights legislation, leaving states scrambling to pass such laws. Years of double-digit increases in healthcare costs. Malpractice-insurance premiums that are driving many doctors out of their practices.

This week's news calls fresh attention to all those challenges, and could put pressure on Congress to reconsider moves such as the patients bill of rights, limits on damages in malpractice suits, or even more comprehensive health insurance.

"At a time when the Bush administration is pushing millions of seniors on Medicare into HMOs, it is more important than ever to put healthcare decisions back in the hands of patients and their doctors," says Sen. John Edwards (D) of North Carolina, who led the fight in the Senate in 2001 for patients' rights. The bill passed the Senate in 2001 by a vote of 59 to 36, but failed in the House, after President Bush threatened to veto the bill.

Last November Senator Edwards, along with Sens. John McCain (R) of Arizona and Edward Kennedy (D) of Massachusetts, reintroduced the legislation, but they say they are still working on a legislative strategy in the wake of Monday's decision.

Senate Republican leaders "who have financial and political ties to the insurance industry" are blocking action on the bill, says Edwards.

On the House side, Rep. Charlie Norwood (R) of Georgia, an early sponsor of patients' rights reform, said that Monday's decision signals that Americans in 12 states have lost their right (under laws in those states) to hold their HMO accountable. "While we'd made much progress through the judicial body before today, I have always believed that the job of making public policy belonged to Congress - not the courts," he said.

But any move on this front is now running up against time constraints. There are not many legislative days remaining in the 108th Congress, and it's unclear what the vote count is. "This is becoming a very difficult year. But if it looks like something might pass, we might consider it," says Amy Call, a spokeswoman for Senate majority leader Bill Frist.

Moreoever, the political climate is shifting. The issue of patients' rights has receded since 2001, in favor of greater public concern over healthcare costs and access. In the last debate on this issue, GOP opponents said that such a bill would expose businesses to multimillion-dollar lawsuits, and prompt many to drop health insurance or lay off employees. Sen. Don Nickles (R) of Oklahoma called it a "knife at the throat of business all over America."

"The big political issue on healthcare today is rising health care costs and the impact on people of less access to care," says Robert Moffitt, director of domestic policy studies at the Heritage Foundation.

"Will it really make things better," he asks, "if a lot of people start suing each other?"

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