Court Denies State Law Claims
Against HMOs,
Passage of Patients’ Bill of Rights Again
Sought
Michael Scott, J.D., Director
Governmental and Legal Affairs
n
late June, the Supreme Court unanimously decided
that the terms of the Employment Retirement Income
Security Act (ERISA) bars health maintenance organization
(HMO) subscribers from suing in state court to recover
damages flowing from refusal by the HMO to cover
medical services deemed appropriate by their physicians.
The court said that such suits could, under ERISA’s
terms, be brought only in federal court where damages
are limited to the cost of the denied care, not
for other compensatory or punitive damages.
The court said that when a state suit is solely
based on denial of coverage under the terms of an
ERISA-regulated employee benefit plan and no violation
of the plan is alleged, then the terms of ERISA
clearly indicate the congressional intent to pre-empt
state remedies in favor of a suit in federal court.
Under the ruling, a plan subscriber who believes
benefits have been improperly denied by the HMO
can bring federal suit for a mandatory injunction
requiring the HMO to cover the treatment or pay
for the treatment and subsequently sue to obtain
reimbursement.
Immediately after issuance of the decision, several
Democratic legislators announced the intention to
reintroduce the Patients’ Bill of Rights legislation
that foundered in the 107th Congress. Both congressional
bodies passed such legislation, but differences
in the two bills were never resolved in conference.
There is virtually no likelihood that such a bill
would reach the floor of either body before adjournment
of the 108th Congress, but depending on the outcome
of the November elections, the matter could receive
significant congressional attention next year.
Medicine
Seeks Senate Action on Patient Protection Bill
SA joined more than 100 other state and national
medical specialty associations in sending a June
12 letter urging members of the Senate to advance
the Patient Safety and Quality Improvement Act (S.
720), pursuant to which a system would be created
by which health professionals could share in confidence
and analyze information about medical errors. A
similar bill (H.R. 663) passed the House by a wide
margin early in the 108th Congress. The Senate bill
has been ready for floor action for several months
but has been held up by concerns from Democrats
that its provisions could unnecessarily impair the
obtaining of records and information sought by patients
seeking redress for alleged professional malpractice.
On July 14, Senator Judd Gregg (R-NH), Chairman
of the Health, Education, Labor and Pensions Committee,
once again failed in an attempt to obtain unanimous
consent to bring the bill to the Senate floor. ASA
has actively supported both the Senate and House
bills throughout the 108th Congress, but with few
legislative days remaining in this Congress, the
chances of passage are becoming more and more bleak.
Majority Leader Frist also has not followed through
on plans, announced several weeks ago, to seek floor
action on a third professional liability bill, the
coverage of which would be limited only to certain
specialties or locales. Supporters of these bills
have fallen far short of the votes required for
cloture, and doubt currently exists whether the
Senate leadership will try again in the current
session.
Not-for-Profit
Hospital Billing Rates Questioned
t
hearings before the health subcommittees of the
House committees on Ways and Means and Energy and
Commerce, Republican legislators raised questions
in late June as to whether tax-exempt hospitals
were providing a level of charitable services commensurate
with the tax benefits they enjoy in contrast to
for-profit hospitals. These benefits are substantial:
as reported by the Ways and Means Committee staff,
although hospitals represent less than 2 percent
of the total number of tax-exempt organizations,
they account for about 41 percent of total expenditures
of these bodies.
Specific attention was focused at these hearings
on the fact that some tax-exempt hospital billing
rates to the uninsured are higher than those charged
to insured patients. This state of affairs has led
to the introduction of a number of class action
lawsuits against not-for-profit hospitals, alleging
that these hospitals are not sufficiently fulfilling
their statutory mandate to provide charitable care
in exchange for tax exemption.
Member
Comments Sought on D.C. Office’s Services
s
members of the ASA House of Delegates are already
aware, I will be retiring as Director of Governmental
and Legal Affairs at the end of the year. The officers
are in the process of conducting a search for my
successor, and their intention is that the successful
candidate will have been selected by the time of
the ASA 2004 Annual Meeting in late October.
My decision to retire from my current position stemmed
from my conviction that after 11 years on the job
(and 25 years as ASA legal counsel before that),
it was time for the Society to benefit from new
approaches and new ideas in terms of service by
this office to the membership. In this context,
I seek your assistance.
You are invited to write me with suggestions on
how the Washington Office can improve its services
to the membership. Currently we are responsible
for presenting the Society’s position on legislative
or regulatory issues to federal and state officials
(the latter in cooperation with the various state
component societies), keeping the membership abreast
of important legislative and regulatory developments,
providing legal advice to the Society in tandem
with outside counsel and assisting those who are
charged with anesthesiology practice management.
Much of our work focuses around the Medicare program,
but we are involved with other insurance programs
as well. For many years, we have been active with
respect to scope-of-practice issues. A principal
current concern is, of course, passage of federal
legislation that would assure the availability of
professional liability insurance at affordable rates.
Please do not feel confined in your comments to
our current undertakings, however. This is a good
time for the ASA leadership and my successor to
evaluate whether we should be moving in a different
direction or pursuing different priorities.
Most of you can conveniently reach me via e-mail
at <m.scott@ASAwash.org>,
but some may wish to write me at 1101 Vermont Ave.,
N.W., Suite 606, Washington D.C. 20005. If you prefer,
comments may be sent to ASA Executive Director Ronald
A. Bruns at <r.bruns@ASAhq.org>.
All communications will be passed on both to the
principal ASA officers and, with their concurrence,
to my successor. If you are moved to comment favorably
or unfavorably on my personal performance in the
job, I urge you instead to send a contribution to
one of the foundations supported by ASA; this is
not about what I have or have not done, but what
this office might do better under new stewardship.
In any event, no comment will be published in the
NEWSLETTER without the express permission
of the communicating author.
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