October 8, 1999
Web posted at: 8:26 p.m. EDT (0026 GMT)

In this story: Punitive damages at issue States move ahead on own RELATED STORIES, SITES

From Senior Washington Correspondent Charles Bierbauer

WASHINGTON (CNN) -- The patients' bill of rights passed by the House this week still has a number of hurdles to clear before becoming law -- not least of which will be a continuing lively debate over whether the rights of patients to sue their managed health plans should be expanded.

No, say health plans and insurers, who see the provision as a sop to trial lawyers that will drive up the cost of coverage.

"Clearly, it will increase the cost to consumers, and it will lead to more uninsurance because, as costs go up, employers are going to say, 'Can I afford this?'" says Charles Kahn of the Health Insurance Association of America.

But on the other side, trial lawyers, doctors and consumer advocates point out that health plans can avoid the costs of lawsuits by treating people fairly.

"Litigation costs will never need to increase premiums as long as HMOs provide the kind of care they are supposed to provide," says trial lawyer Sharon Arkin. "They won't be sued."

Punitive damages at issue

HMOs can already be sued by patients -- but only in federal court and only to recover the cost of denied treatment. Punitive damages cannot be sought.

The bill passed by the House would change that, allowing potentially larger damage suits. However, a separate version passed by the Senate does not allow punitive damages. Both the House and Senate versions require an independent review of decisions to deny coverage before a patient may sue.

Earlier this year, the Congressional Budget Office calculated that a so-called "right-to-sue" provision would add 1.4 percent to insurance costs over five years, about 10 cents per month on an average policy.

States move ahead on own

Some states are not waiting for Congress to act. California and Texas, for instance, have expanded the rights of patients to sue HMOs. And supporters of the federal right-to-sue provision point out that there have been only five suits in two years.

"When the doctors request the case for their patients, they are getting approvals now, instead of denials," Arkin says.

The Senate and House will now have to work out differences between their versions of the patients' bill of rights. The measure will also have to be approved by President Clinton, who supports expanded lawsuit rights.

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