|
|
|
The Responsibility in Managed Care Act of 1997
|
Business New Haven
3/9/1998
By: BNH
|
Employers who sponsor health-care plans are keeping a close eye on pending federal legislation to see whether they will be exposed to lawsuits resulting from health care disputes.
Presently, if a covered employee is dissatisfied with or harmed by a decision made by a managed-care organization, the employee cannot sue the employer or the employer's health plan for damages.
This relative freedom from lawsuits enjoyed by employer-sponsored plans may soon come to an end. On November 8, 1997, U.S. Rep. Charles W. Norwood Jr. (R-Ga.) introduced a bill entitled the “Responsibility in Managed Care Act of 1997” (H.R. 2960). The bill would allow consumers to sue employer-sponsored plans for damages resulting from denials of coverage.
Employers are concerned that if the bill is passed, they may become financially responsible for mistakes made by their health plans.
Most employer-sponsored plans are governed by the Employee Retirement Income Security Act of 1974 (ERISA), which preempts state laws relating to employee benefit programs. ERISA currently prevents employees who are denied health-care benefits from suing employer-sponsored plans in state court for damages. Plaintiffs may only sue plans in federal court for the dollar amount of the denied benefit.
Although the Responsibility in Managed Care Act would permit suits only against employers with discretionary authority over claims decisions, similar pending legislation does not contain the same restriction. For example, the previously introduced Patient Access to Responsible Care Act of 1997 (PARCA) includes a similar provision on ERISA preemption but does not limit employers' liability.
Proponents of the legislation believe Norwood's bill will motivate health plans to provide higher quality care because they could be sued by participants. Many health-care providers favor increasing plans' accountability to patients so that the providers will not be held liable for medical coverage decisions dictated by health care plans.
Opponents of the legislation argue that exposing health plans to further liability will significantly increase health-care costs. Not only is litigation expensive, but the mere threat of litigation may have a chilling effect on plans' efforts to deliver cost-effective care.
If the Responsibility in Managed Care bill is passed, consumers could sue “any person that provides insurance or administrative services to or for” an employer-sponsored health care plan to recover damages for personal or financial injury or wrongful death. Employers could be exposed to such suits if they were directly involved in claims decisions, such as through utilization review.
Carolyn Crink Brady is an associate in Wiggin & Dana's
Health Care Department. Wiggin & Dana has offices in New Haven, Hartford and Stamford and counsels local, national
and international clients.
A Week of in the Life of a Health Care Giant
Foundation Health Systems Inc. (FHS), a publicly held, for-profit HMO and the largest operating in Connecticut, has continued to make national industry headlines after its recent landmark acquisitions of two local HMOs: M.D. Health Plan and Physician Health Services.
Attacked at the state level while being fed fat government contracts by the feds, the Los Angeles-based behemoth is still up and running, while divesting itself of limbs it no longer values.
In mid-February, the company announced that as a result of its strategic reassessment it would sell off its workers compensation insurance business due to “various negative developments in the segment.” Having retained the investment baking firm of Salomon Smith Barney as advisor in the sale, FHS has not yet determined the current fair value of its workers comp operation. FHS' Business Insurance Company, with annual revenues of some $6 billion, had offered workers comp coverage in 43 states.
Two days later, a General Accounting Office (GAO) ruling handed FHS three additional regions in the nation's mid-section, representing thousands of qualified health plan members across eight states. The company currently serves 1.7 million eligible military dependents under the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS).
Says Malik M. Hasan, M.D., chairman and CEO, “FHS' government-contracts subsidiary is the nation's largest provider of managed-care programs for military families, and we feel strongly that on all fronts we are the most qualified contractor for these three regions.”
Meanwhile, back on the East Coast, FHS' First Option Health Plan has been charged with violating managed-care regulations by the New Jersey Department of Health. First Option/FHS faces fines of up to $500,000 for failure to give the mandated 30 days' notice to members that certain physicians were being “deselected,” or dropped from its provider network.
The controversy began with anesthesiologists who were attempting to negotiate with FHS over reimbursement cuts. While the dispute remained unresolved, First Option dropped the dissenting providers from its network. The result was that many scheduled surgeries were abruptly canceled. Other surgery patients arriving for admission were shuffled off to different hospitals and unfamiliar physicians still in the network.
Says FHS spokesperson Lisa Haines, “There were hundreds of surgeries that did take place, but where some members were caught in the middle, we are truly regretful.” Haines says that changes in procedures for notifying patients of providers who are no longer participating in the plan are being implemented.
Guide Available for
Comparing Health Plans
WASHINGTON, D.C. - A free kit of survey and report tools to help purchasers choose among health plans is available through the U.S. Department of Health and Human Services' Agency for Health Care Policy and Research. Developed by analysts at the Harvard Medical School, the Rand Corp. and the Research Triangle Institute, the handbook, Consumer Assessment of Health Plans (CAHPS), includes templates and detailed information that allow for easy comparative reviews of health-plan features. A computerized guide in HTML format is also available for downloading on the Internet. Order a copy of CAHPS by calling 800-358-9292 and refer to Publication No. 97-RO13, or find out more about it at the agency's Web site: www.ahcpr.gov/ and click on “Quality Assessment.”
CHA Expands Insurance Offerings
WALLINGFORD - The Connecticut Hospital Association (CHA) and the New Jersey-based Medical Inter-Insurance Exchange Group (MIIX) have formed a strategic alliance to provide property and casualty insurance services to CHA members and affiliates. Says CHA President Dennis P. May, “By forming this powerful partnership, CHA will be able to offer its members, associates and affiliates with an excellent opportunity to achieve savings and more efficiently administer their workers compensation, professional liability and ancillary property and casualty programs.” MIIX operates in 32 states and holds $1.1 billion in assets.
|
Go FirstGo PreviousGo
NextGo LastGo
to Index
|
|
