- The Washington Times - Wednesday, July 11, 2001

State laws that were models for the patients' bill of rights pending in Congress show that so far the crippling wave of litigation feared by business has not occurred, officials in several states say.

The patients' bill of rights is intended to give patients enrolled in health maintenance organizations (HMOs) greater choice in health care decisions. It would make it easier for them to challenge insurers' health care decisions in court, eliminate limits on damages in lawsuits against the HMOs, give patients greater access to specialists and allow doctors more discretion in treatment.

Insurers warn that expanding patients' control over HMOs will force increases in health insurance rates. President Bush has threatened to veto any legislation unless changes are made to reduce the risk of higher health care costs.

But in most of the 38 states that guarantee patients the right to challenge health care decisions, independent review boards resolve disputes without lawsuits, which state officials say keeps insurance costs from rising.

Maryland since 1999 has allowed patients to appeal HMO decisions to an independent review system overseen by the state insurance commissioner. A state official in Maryland said about three-fourths of the 255 complaints investigated last year were resolved quickly for patients without litigation.

Most of the remaining fourth of all cases in Maryland have been resolved in favor of health insurers without litigation.

"We have seen no evidence that either the Maryland patients' bill of rights or the external grievance process has increased the cost of health care or health insurance in Maryland," said Debbie Rosen-McKerrow, spokeswoman for the Maryland Insurance Administration.

Congress is also considering provisions requiring independent reviews of complaints before allowing patients to sue as part of compromise patients' bill of rights legislation.

Most of the state laws have taken effect only in the last four years. Some analysts say that makes it difficult to determine whether the independent reviews have prevented lawsuits or whether the legal action is still coming as more patients learn their rights.

"You really haven't had any time to get any really good data," said Rachel Morgan, a policy analyst with the National Conference of State Legislatures. "I do, however, feel that the independent review organizations will negate the need for most lawsuits. Most of the cases that do go to court will be catastrophic situations, where there was a death or loss of function of some sort."

Seven states, led by Mr. Bush's home state of Texas, let patients sue HMOs. Another 26 states are considering allowing lawsuits. The 1998 Texas law has resulted in 17 lawsuits against HMOs.

One Texas insurance company, Scott & White Health Plan, said it had to raise its insurance premiums 15 percent a year after the law took effect.

Jim Rohack, medical director for Scott & White, said the Texas law forced HMOs to practice "defensive medicine." The law makes HMOs liable for any "delay or denial" of medical treatment that harms a patient.

The law made Scott & White revamp its policy of controlling health care costs by monitoring whether doctors' treatments were medically necessary.

"Whereas in the past we would ask for additional information, we [now] would just let it go," Dr. Rohack said. "The subsequent year we saw our MRIs double at about $1,000 a pop."

Still, Scott & White, which has about 180,000 subscribers in central Texas, has never been sued, Dr. Rohack said. He credits the state's independent review organization with resolving most disputes.

Only about half of Americans fall into categories of employees who can benefit from the state laws. Most of those who are not covered work in the public sector or for large corporations that are self-insured and not covered by state law.

Except for Maine, whose law took effect in April 2000, all states with right-to-sue laws require patients to complete an independent review before going to court. Maine makes the reviews optional, which has resulted in 17 requests for the administrative decisions, according to the state Attorney General's Office. The reviews give patients an alternative to suing, and health care providers get an objective opinion before deciding whether to defend themselves in court.

The states typically use an independent review organization of specialists who make a decision within 15 to 30 days of hearing the claim, or 24 to 72 hours for urgent cases.

The independent review organizations seem to be splitting decisions evenly between health plans and patients. For example, the ratio has been 50-50 in both Texas and New York.

The new laws have not brought a flood of appeals. New York, the state with the most appeals, had 659 in 1999, the program's first year. In an additional 169 cases, the insurers gave in when patients filed complaints, according to state insurance records.

Like Texas, only a handful of lawsuits have been filed in the other six states that allow them.

So far, no one in California has taken advantage of the right to sue an HMO. The lack of litigation is partly because the California law has been in effect only since January. The state also processes complaints through a call center designed to resolve problems without resorting to the courts.

Like the bill passed by the U.S. Senate last month, the California reforms have no limits on legal damages.

The Massachusetts law that created an independent review organization took effect Jan. 1, so far prompting 52 requests for external review, according to the state's Office of Patient Protection. The state's independent reviews generally take between 10 and 45 days.

Washington's state Health Care Patient Bill of Rights will take effect next month, making it the eighth state that allows patients to sue HMOs in state court.

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