February 6, 2001

Accomplishes Four Critical Goals of Managed Care Reform

1. Gives every American the right to choose their own doctor;

2. Covers all Americans with employer-based health insurance;

3. Ensures that all external reviews of medical decisions are conducted by independent and qualified physicians; and

4. Holds a plan accountable when the plan makes a decision that harms or kills someone.

The bipartisan 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 bill provides a federal cause of action for negligent plan administration, which will provide uniformity for how the health plans are administered. Only when a plan makes a medical decision, will it be subject to state law.

Protects Businesses From Lawsuits

This compromise contains stronger provisions to protect businesses from frivolous lawsuits and wild jury verdicts. The Bipartisan bill protects employers from liability unless they directly participate in making a medical decision. Punitive and exemplary damages are prohibited at the federal level.

Holds Insurers Accountable

When a patient is injured by the decision of an insurer, the patient should be able to hold the insurer accountable. This bipartisan bill strikes a solid compromise, recognizing that employers should expect uniform, federal standards for administrative processes, but any "medically reviewable decisions" should be subject to state law with regard to medical decisions. If the dispute is an administrative benefit decision, the patient will be able to seek limited damages in federal court. Punitive and exemplary damages are prohibited at the federal level. A civil assessment up to $5 million could be available if clear and convincing evidence of bad faith and flagrant disregard for a patient's safety is proven meeting the highest legal threshold.

If the dispute involves medical judgment, the patient will be able to seek redress in state court under applicable state law subject to state damage caps (currently, 33 states have implemented some level of caps on damage awards).

The Bipartisan Patient Protection Bill Is Truly Bipartisan