- The Washington Times - Saturday, April 8, 2000

The Clinton administration and the presumptive presidential nominees Al Gore and George W. Bush favor giving medical plan members the right to sue health-care providers if they "withhold services and injury results." Today, only a few states allow suits against health coverage providers and, while the candidates differ in their criteria for allowing law suits, the net effect will be about the same when the courts, as they often do, expand legislative intent.

This can hardly be called a "patients' bill of rights," as it is often referred to in campaign speeches, when more than one-third of large employers surveyed recently said they would probably cut off health-care benefits if Congress passed a law allowing patients to sue managed-care providers under these conditions.

With thousands of medical procedures every day, the potential for unhappiness with outcomes is endless. Without question, a number could have been prevented by having a provision for timely and independent medical review of critical insurer decisions and this is an appropriate legislative remedy.

But legislation currently before the Congress goes well beyond that. Health maintenance organizations are an easy target for the kind of legislative bashing of managed care that caused a bipartisan group in the House to pass relief recently under their "The Patients' Bill of Rights Act" a bill complete with lawsuits, including punitive damages when the HMOs misbehave. As usual in laws proposing expanded legal liability, there is logic abuses needed correction and as usual there is enormous potential for abuse in the name of correction. But with all the negative HMO vignettes that are repeated endlessly, what we haven't heard much of so far from the president or the candidates is "heartless employer" stories "companies who withhold necessary services and therefore cause harm and need punishing by lawsuits and punitive damages awards." Be assured that those stories are coming if provisions of the House-passed Norwood-Dingle Bill are enacted into law after Senate conference.

Norwood-Dingle provides for suing employers as plan sponsors if "employers … exercise discretionary authority to make a decision on a claim … and such … authority resulted in personal injury or death."

With only a few deep-pocket HMOs to go after, the trial lawyers will inevitably bring the employers into the suits by arguing that any action by the HMO or other managed-care provider is imputed to be an action of the employer because of a fiduciary relationship. They will argue: "The employers funded the plan and knew its limitations and are therefore accountable for the result just as if they had personally denied care."

Sympathetic juries hearing cases will receive the time-honored and familiar barrage of trial lawyer allegations simply adjusted to the new law: "We've got to send a message to this big out-of-state corporation that they can't abuse employees in our city with their wanton, heartless acts, denying this new treatment that might just might have worked, and my unfortunate client as you can see … etc., etc."

The corporation will be depicted as having had its agent, the HMO or other managed-care provider, withhold the treatment for cost and profit reasons.

The outcome of this new liability for corporations is predictable. A few plaintiffs will hit Big Casino. The real losers will be the employees hit with higher co-pays, lowered coverage, or no coverage at all if companies drop health-care benefits because of the liability passed back to them from HMOs. When the employers say to the trial lawyers, "You win, we quit, we're out of here," the true effect of "The Patients' Bill of Rights" will be felt the patients will have the right to foot the bill themselves.

Let's hope the Senate will see through the trial lawyers' plan to bash HMOs for public effect as they actually go after their real targets, the corporations who provide the coverage. At least for now they provide the coverage.



Richard J. Mahoney is former CEO of Monsanto Co. and distinguished executive in residence at the Center for the Study of American Business at Washington University in St. Louis.

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