The Bipartisan Patient Protection Act of 2001, H.R. 2563, strikes a much needed compromise to provide comprehensive patient protections for all Americans. This bill builds from the bipartisan Ganske-Dingell-Norwood-Berry bill (H.R. 526) and incorporates the amendments made to the McCain-Edwards bill in the Senate as well as a few additional technical clarifications.

Patient Protections. The bipartisan compromise legislation includes strong patient protections that will ensure timely access to high quality health care for the millions of Americans with private health insurance coverage either through their employer or through the individual market. The protections include: access to emergency care, access to specialty care, access to non-formulary drugs, access to clinical trials, direct access to pediatricians and ob-gyns, continuity of care for those with ongoing health care needs, and access to important health plan information. The Bipartisan Patient Protection Act also protects the doctor-patient relationship by ensuring health professionals are free to provide information about a patient’s medical treatment options. Added in the Senate, and included in this bill is a grant program to help States establish consumer health care assistance programs. The new bill also clarifies that the point-of-service provision applies to pathology services. The Bipartisan Patient Protection Act does not, however, include the provision on genetic discrimination which was added in the Senate, because that provision is moving on a separate legislative track.

Because it is so critical that disagreements regarding a patient’s medical treatment get resolved quickly and fairly, the Bipartisan Patient Protection Act outlines criteria and time frames for initial claims review and internal appeals procedures. The Bipartisan Patient Protection Act also establishes an independent, speedy external review process for patients dissatisfied with the results of the internal review. External appeals will be resolved by independent medical experts who evaluate the individual patient’s medical situation, current scientific evidence, and plan documents to issue a recommendation on the right course of care which is binding on the plan. The new bill includes clarifying language added in the Senate to ensure that reviewers do not override plan contracts.

Scope. The Bipartisan Patient Protection Act protects every American with private insurance. The bill allows States to develop their own patient protection laws, and empowers the governors to certify that they are comparable to Federal law. If the state law is comparable to those at the Federal level, the state law will remain in effect. The Secretary of the Department of Health and Human Services has 90 days to approve or reject the certification request. The bill includes modifications made in the Senate that give deference to State interpretations of their own patient protection laws and allows States to enter into agreements with the Secretary to enforce the requirements of the bill. The new bill also explicitly directs Federal health insurance programs to comply with the standards in the bill and requires the General Accounting Office to report on where there are deficiencies.

Liability. The liability compromise stems from consideration of the recent Supreme Court decisions relating to suits against health plans for personal injury or wrongful death as well as concerns voiced by the employer community regarding the need to preserve Federal uniformity for contract interpretations. The Bipartisan bill’s liability language draws a bright line between cases of injury or death involving administrative decisions, which would be heard in Federal court, and cases that involve medically reviewable decisions, which would be heard in State court. This design mirrors similar medical cases against hospitals and doctors. It also tracks the Supreme Court’s recent decision under Pegram, which stated that cases involving medical judgment properly are the purview of State courts, as they traditionally have been heard. It also addresses employers’ desire to preserve ERISA’s uniformity surrounding plan administration by keeping these cases in Federal court.

The Bipartisan Patient Protection Act also includes all of the bipartisan amendments on liability that were adopted in the Senate. The bill limits the Federal cause of action only to instances of decisions over coverage, eligibility or cost-sharing which result in personal injury or death. Previously, the Federal cause of action applied to any violation of the terms and conditions of the plan which cause injury or death. The new bill also clarifies that the liability provisions become effective at the same time as the other provisions of the bill.

Exhaustion Required. The new Bipartisan Patient Protection Act adopts the more stringent Senate-passed provision on exhaustion. Patients must always exhaust internal and external appeals before going to court unless the patient is seeking injunctive relief (or if the reviewer is delinquent in returning a decision). The external reviewer’s decision must be considered by the court.

Employer Protections. Employers are protected against any liability, unless they directly participate in making the decision on a claim for benefits that result in personal injury or death. The bill specifically lists a number of areas that are not to be considered "direct participation," including: selecting a health plan, choosing which benefits to cover under the plan, or advocating on behalf of a beneficiary for coverage.

Additionally, the new bill adds the ability for employers to choose a "designated decision maker" who assumes all liability of the employer for both medical and non-medical decisions. The Bipartisan Patient Protection Act also exempts self-insured, self-administered employer plans from any Federal liability and clarifies that individual board members of employer plans are protected from liability.

Restrictions on Damages. For cases of personal injury or death pertaining to medically reviewable decisions (those heard in State court), state law would apply, including any caps on damages or other restrictions. Additionally, punitive damages are specifically prohibited in State court if the plan complies with the internal and external appeals process, unless clear and convincing evidence shows the plan acted with willful or wanton disregard for the rights and safety of others. However, in this instance, any State law caps on punitive damages would still apply. For cases of injury or death involving non-medically reviewable decisions (those heard in Federal court), punitive damages are specifically prohibited. However, if a plan acts with bad faith and flagrant disregard to a patient’s rights, a court may assess a civil monetary penalty. This penalty can not exceed five million dollars.

The bill also adopts changes made in the Senate clarifying limits on attorneys’ fees and prospectively limiting class actions so they can only be filed against one plan or plan sponsor. The bill includes a provision which revokes the liability provisions if the Institute of Medicine finds these provisions increase the number of uninsured by more than one million individuals. The bill includes a new provision which clarifies that HMOs cannot require individuals to waive their rights under the Bipartisan Patient Protection Act, for example, by requiring mandatory arbitration as a condition of enrollment.