Managed care organizations are an increasingly common feature of the American health care landscape. Today, more than 70 percent of the U.S. population and close to 80 percent of insured employees are covered by some form of managed care. As the number of Americans in HMOs and managed care plans has grown dramatically over the past decade, so have concerns about limits on access to care and delays in providing services.

In response to overwhelming public support for responsible patient protections and strong HMO accountability, a broad coalition of consumer, health care provider, and patient-advocacy organizations have joined a bipartisan group of legislators to author a meaningful, comprehensive Patients’ Bill of Rights. The Ganske-Dingell-Norwood-Berry Bipartisan Patient Protection Act (H.R. 2563) reflects the high standard of patient protection and HMO accountability that American families have told Congress they want.

Employers are protected. As important as the Patients’ Bill of Rights is to American families, it is equally important to stress what the Patients’ Bill of Rights is not - the Patients’ Bill of Rights is not a trap for unwary employers. Opponents have used the risk of employer liability to scare consumers and to mislead business owners. We think it is time for the facts.

FACT: Employers are explicitly protected from liability.

First, the new bill maintains employer protections that were in the original bill, H.R. 526. The Ganske-Dingell-Norwood-Berry compromise bill states that "[the new law] does not authorize a cause of action against an employer... [unless] there was direct participation by the employer in the decision of the plan... ." What does "direct participation" mean? Just what it sounds like - "the actual making of [the] decision or the actual exercise of control in making [the] decision or in the [wrongful] conduct." Only when an employer actively intervenes in the care decision that harms a patient could it be held accountable.

Opponents of this legislation have implied that by keeping this standard in we are causing confusion. However, we believe it is essential to include the direct participation language to ensure that employers are fully protected. In the event that an employer, for whatever reason, chooses not to use the designated decision maker model, it would still have the "direct participation" protection available. The direct participation language also makes sure that employers who have self-insured, self-administered plans would be protected, since in these instances there may not be another party like a third party administrator or insurer to be a designated decision maker. The Fletcher bill does not provide this protection for employers.

Second, H.R. 2563 includes the additional employer protections added in the Senate bill, allowing employers to appoint a designated decision maker to be liable for all injuries. The HMO is automatically the designated decision maker, unless the employer affirmatively acts to change this. Unlike the Fletcher bill, the Ganske-Dingell-Norwood-Berry bill designated decision maker provision completely immunizes employers without providing loopholes for unscrupulous HMOs.

FACT: Designated decision maker works for small businesses.

The Ganske-Dingell-Norwood-Berry bill allows small businesses and other employers to insulate themselves against liability by naming a designated decision maker. The designated decision maker, not the small business owner, would be responsible for all health benefit decisions. The bill specifically provides that if an employee were injured by a bad decision, the designated decision maker, not the small business owner, would be held liable. In cases where small business owners contract with a health insurance issuer to provide benefits for their employees – as is the case in the overwhelming majority of small businesses – the health insurance issuer would automatically be named as the designated decision maker. The health insurance issuer would be liable for all health benefit decisions unless the small business owner affirmatively entered into a contract that prevented the issuer from acting in this capacity.

FACT: There is no unlimited liability under Ganske-Dingell-
Norwood-Berry.

The Ganske-Dingell-Norwood-Berry compromise does not expose anyone to unlimited liability. First, self-insured, self-administered employer health plans are exempt from any liability arising from contract or administrative decisions under the federal cause of action. Second, changes made to the bill in the Senate narrowed the federal cause of action. Patients can no longer sue for any violation of the "terms and conditions" of the plan that causes injury, but only for limited, circumscribed violations that result in harm. Third, the bill eliminates punitive damages in the federal cause of action, and applies state limits for medical injury cases. Fourth, for medically reviewable decisions that cause injury, any state caps or restrictions on damages would apply in state court.

FACT: The designated decision maker model in Ganske-Dingell-
Norwood-Berry works.

Opponents of the bill have said that employers will not be able to find designated decision makers, especially if they are subject to 50 different state laws. This is just not true. First, the insurance company is automatically the designated decision maker. So, if the insurers want to stay in business, they must accept responsibility for the medical decisions they make.

Second, subjecting insurers to 50 different state laws will not make them less likely to accept responsibility. Insurance companies are subject to 50 different state laws today relating to bad medical decisions in the individual market -- they have not stopped selling insurance. Third, opponents of the bill argue employers will wind up paying for the liability burden because insurers will raise their rates. Employers are already paying for the burden of liability in terms of workers who are injured by HMOs, getting inferior care from HMOs, or who are having to spend hours stuck in insurance company red tape trying to get benefits. The only reason costs should increase is if insurance companies are denying care improperly and will now have to provide it.

FACT: The designated decision maker model in Ganske-Dingell-
Norwood-Berry is iron-clad protection for employers and patients.

Under the Fletcher bill, there can be multiple designated decision makers, and decision makers can designate additional decision makers creating an endless maze and giant loophole. And, one designated decision maker can always point the finger at another one. Even with an arsenal of attorneys, a patient may never be able to decipher who was responsible for a decision that caused harm. This is not good for patients. The Ganske-Dingell-Norwood-Berry bill provides that the designated decision maker is the insurance company. No convoluted loopholes, no layers of finger pointing. Patients and employers will know who is responsible when something goes wrong.

The designated decision maker provision under the Fletcher bill is also a threat to employers. Under Fletcher, the only person who can be held liable is the designated decision maker. But, insurers are not required to be designated decision makers. What happens if they refuse? If there is no designated decision maker, the employer is, by default, liable -- even if it was the insurance company’s fault. Why would any employer ever offer health insurance if they will be liable for the actions of the insurance company, even when they were not involved in the decisions?

FACT: Employers are still free to oversee the plan and advocate on behalf of employees.

Read the bill. Employers are completely protected if they use a designated decision maker, even if they actively intervene in decisions about care. Also, the direct participation provision specifies that selecting a plan, doing a cost-benefit analysis on the plan, modifying or terminating the plan, or designing or modifying any benefit under the plan, can never be described as direct participation. So, even employers who may opt not to use a designated decision maker would still be protected in these instances. Moreover, employers can advocate on behalf of an employee to receive a specific benefit, or authorize specific benefits for one or more employees, without ever running afoul of the direct participation provision. Employers are extraordinarily well protected under the Bipartisan Patient Protection Act. The Fletcher bill does not include these important protections for employers.

FACT: Indirect costs to employers will be minimal.

The premiums that business owners pay for employee health insurance will largely be unaffected by new patient protection and HMO accountability. According to the Congressional Budget Office, the total effect on employer premiums of the Ganske-Dingell-Norwood-Berry bipartisan legislation will be an overall increase of only 4.0 percent over five years. When the bill is fully implemented, that increased cost will be less than $1.20 per month for the average employee share, less than $7.30 per employee for the employer share.

Opponents make much of the fact that the House GOP bill favored by the President increases premium costs by only 2.6 percent. We think it’s important to emphasize that the House GOP bill authors got a lower CBO score by giving patients fewer protections - real access to speciality care is a great example.

FACT: Employers benefit from healthy workers whose health plan is responsible and accountable.

Few would seriously doubt that businesses benefit when their employees are healthy, or when their employees’ health care needs are addressed by responsive and accountable health plans. It may be hard to quantify the monetary value to business owners of employee satisfaction, but any manager who has ever tried to retain and motivate their employees knows the importance of good health benefits. An employee who gets sick - or whose child is sick - should not have to fight an HMO for treatment.

Even long-time Patients’ Bill of Rights foe Caterpillar, Inc., acknowledges the importance of worker satisfaction and health benefits: "For the company to remain the industry leader, we have to attract and retain the best employees, and a comprehensive benefit package is part of that strategy."

Like employees, business owners need a health plan that works for - not against - the interests of the employee. Many business owners know that the bipartisan Patients’ Bill of Rights helps them too.