A national debate has been raging in nearly every corner and sector of American society for years about patient rights in various health benefit plan arrangements—particularly HMOs. All levels and branches of our government are engaged—federal and state legislatures, courts, and administrative agencies. Some news media and political candidates seized the issue to advance their own interests.
Recently, the U.S. Department of Labor adopted regulations to govern the times and manner in which health benefit claims must be administered by virtually all private employer-sponsored plans in America, both insured and self-funded. The U.S. Supreme Court agreed to decide a major case on HMO legal liability; fierce litigation is raging in federal court in Florida in class action lawsuits brought against the nation’s largest health insurers; and both houses of Congress passed patient rights bills which will now go to conference committee in the Fall.
What is all the shouting about? Don’t patients already have rights? Don’t they already have the right to sue? The answers are "yes" and "no" to both questions. Participants in group health plans sponsored by most employers have had the right to sue under federal law for nearly 30 years if the plan denies or fails to pay a benefit. However, the participant can only recover the amount of the benefit owed under the plan plus court costs and attorney’s fees. No recovery for pain and suffering or other non-economic damages is allowed.
This arrangement was enacted by Congress in 1974 to encourage employers to offer employee benefit plans. After all, employers aren’t required to offer health benefits or most other benefits, and why should they do so if their reward will be to face numerous lawsuits in courts all over the country where they are exposed to unlimited damages?
Most states, including Illinois, enacted legislation to give more rights to individuals covered under health insurance policies—particularly those insured under HMO policies. Members in an insured HMO in Illinois have more rights than anyone else in the state regarding health benefits, including the right to have any denial based on lack of "medical necessity" reviewed by an independent physician (the selection of which must be approved by both the individual and the HMO) in the same or similar specialty as the treating physician.
In urgent cases, this independent review must be completed within 24 hours from the time you furnish the information needed for the review, even if that period falls on a weekend or a holiday.
So, what is this raging debate all about, and what are the real choices? We must start with the economic reality that all goods and services are allocated or rationed in some manner. This reality is no less true in health care since we do not and cannot have unlimited supplies of physicians, nurses, hospitals, equipment, drugs, or any of the other things required to furnish care.
In health care, there are only three ways to allocate these limited resources: price rationing, government rationing, or private managed care.
There is no option under which everyone can have all of the health care desired while "somebody else" has to pay for it.
The patient rights debate now rages because Americans don’t like the private managed care option for allocation of health care resources. They don’t like anybody telling them they can’t have health care services they want or think they need. That’s fine. However, if America discards the private managed care option by enacting punitive patient rights legislation, it must settle for one of the other two options—price rationing or government rationing. Under the first option, you can have the desired service if and only if you can afford to pay for it—just like buying a luxury car or an expensive home. Under the second option, you’re entitled to receive the service, and just as soon as your turn arrives, you’ll get it.
If you want to eliminate the private managed care option—even given the right to prompt independent physician review of any denial—please contact your members of Congress and tell them which of the other two options you want. Otherwise, another option will be selected for you. If you’re in Medicare, government rationing is on the way. If you’re in an employer sponsored benefit plan, increased price rationing is on the way with reduced benefits and higher employee premiums.
You can decide this—but only if you know your choices. IBI