August 03, 2001 - House Passes Patients' Bill With Compromise On HMO Liability

Yesterday the U.S. House passed a patients' rights bill that included a compromise between the White House and Rep. Charles Norwood, and some liability guidelines for Health Maintenance Organizations (HMOs).

Karen Ignagni, the president of the American Association of Health Plans, said that although the bill "moves away from the reckless litigation binge that the Senate-approved bill would encourage," it still has some problems. "Provisions allowing new lawsuits even when health plans are upheld by independent-review panels violate common sense and need to be changed," she added.

The White House-Norwood compromise reflected the key principles Bush said any patients' rights bill would have to include for him to sign it into law. The House bill allowed patients to hold their health plans accountable when they have been injured by a wrongful denial or delay of medical care.

Cases against HMOs would be heard in state court, subject to the new federal law. Patients in all 50 states would have a federal right to sue their HMOs in state court. The scope of insurers' liability would be defined by federal law. Patients could still sue an HMO, even if an independent medical reviewer found no cause for the claim. However, In those cases, the patient would have a higher burden of proof.

Economic damages awards would be unlimited. Non-economic damages would be capped at $1.5 million. Punitive damages also would be capped at $1.5 million and would be available only when the designated decision-maker went against the independent medical reviewer's decision that the claim for benefits should be granted.

Opponents of the bill said the fight is not over, and only the venue is changing. The conference committee presents a different set of political and policy issues from the House, which in turn was different from the Senate.

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