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Fairer HMO Treatment ...

June 24, 2002

It seems perfectly ridiculous that the Supreme Court had to decide last week that some HMO patients may seek outside reviews if they believe they were wrongly denied surgery or other treatment. The ruling--that states may require an independent review to decide whether an HMO is denying a patient medically necessary care--was no more than common sense. But it won't apply to almost half of workers who have company-sponsored insurance.

At least 56 million U.S. workers have health coverage through large employers that directly pay for and design employee health benefits. Congress in 1974 exempted them from state insurance laws, accepting the argument that variation in state laws would create havoc in company benefit plans. The result was to deny patients any recourse when HMOs put cost-cutting ahead of accepted medical practices.

In his majority ruling, Justice David H. Souter scolded Congress for the 1974 law, known as ERISA. Unraveling it, Souter wrote, has come to "occupy a substantial share of this court's time" because its terms "seem simultaneously to preempt everything and hardly anything."

Ideally, the high court's ruling will inspire Congress to fix what it created in ERISA, by passing a national patients' bill of rights and establishing a uniform medical review system to keep health-care appeals from turning into another crazy quilt of conflicting state regulations.

A patients' bill of rights, even though most Democrats and Republicans favor it, has languished in Congress for months. That's because Senate Democrats side with a demand by the trial lawyer lobby for the right to unlimited damages if an HMO decision is overturned by reviewers.

House Republicans are sympathetic to the health plan/employer argument that such damage awards would put them out of business. The two versions of the bill sit stubbornly apart.

Only the Bush administration has the clout to forge agreement.

The logical compromise would require HMOs to abide by the reviewers' decisions (some states, including California, already have such a requirement) but put a cap on damages for pain and suffering. Without White House arm-twisting, the patients' bill of rights and any other broad health-care reform will die in the cross-fire of election politics.

If Congress builds the patients' bill of rights around a moderate independent review process, it can help HMOs control costs by establishing an informal body of case law that would prevent future lawsuits. Patients also would get what Daniel Zingale, director of California's Department of Managed Care, says they want most: the right "to see a doctor, not a lawyer. They want the care before the damage is done, rather than suing after the fact."

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