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MANAGING THE MANAGERS

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WASHINGTON-Asserting that broad federal rules are needed to govern managed care plans, two Democratic lawmakers have introduced a bill in both chambers of Congress that would regulate how HMOs and other networks treat patients.

Sen. Edward M. Kennedy, D-Mass., and Rep. John D. Dingell, D-Mich., last week submitted the Quality Assurance and Patient Protection Act, nicknaming it the "Health Insurance Bill of Rights Act." Both argued that an overly tenacious emphasis on cost-cutting among health plans and employers had created a worrisome lack of regard for quality issues and many discontented patients.

The bill, which the Democrats have not yet offered to their Republican counterparts for bipartisan sponsorship, includes rules on how managed care plans must grant medical care to patients and mandates on keeping track of patient treatment data.

The bill, H.R. 820 in the House and S. 353 in the Senate, specifies in some detail what rights patients would have in obtaining emergency and specialist care through their plans. Plans could not deny coverage for emergency room care if "a prudent lay person" would consider the symptoms an emergency, and it specifies that plans could not require prior authorization for such care.

In addition, plan enrollees would be guaranteed access to specialty care for serious conditions and access to outside, non-network specialists would be required at no extra cost if no in-network specialist is available.

The bill would mandate a host of quality assurance programs for each plan, including collection of basic performance and outcome data. It also would require that considerable plan information be released to state agencies and the public, including mortality rates, satisfaction surveys and plan drop-out rates.

The bill calls for a grievance procedure for patients denied care through a plan's utilization review process. A two-stage appeal process would be required, some of it involving a review panel of "non-involved" providers and consultants.

The bill also would require offices to be created in each state to help consumers choose coverage, file complaints and investigate subpar treatment. The offices would be federally funded.

The bill also would codify a goal President Clinton has applauded (BI, Feb. 24): a nationwide prohibition on physician "gag clauses."

The bill would ban health plans from denying coverage for medically necessary and appropriate care as determined by generally accepted principles of good medical practice-a provision its sponsors say would stop health plans from requiring mastectomies on an outpatient basis.

The bill moved to the House Commerce Committee and the Senate Labor and Human Resources Committee soon after being introduced.

"Whether everyone can agree on the parts of this bill remains to be seen," said a spokesman for Sen. Kennedy. Less comprehensive bills on managed care have attracted bipartisan support in the past. And some managed care companies have supported modest regulation, he said.

The bill's backers also are counting on grass-roots support from consumer groups and others.

"More and more Americans are having concern over this managed care issue," the spokesman said, noting the Senate Labor and Human Resources Committee, on which Sen. Kennedy sits, will take up the subject Thursday.

A spokesman for Rep. Dingell said the bill shouldn't be viewed in partisan terms, because health quality concerns transcend party lines.

Two large managed care systems reacted differently, one with guarded optimism and the other with skepticism.

Oakland, Calif.-based Kaiser Permanente supports greater consumer protections and would support national standards rather than state-by-state regulation, a spokesman said.

A spokesman for the Blue Cross & Blue Shield Assn., however, questioned if increased regulation will "tie the hands of the marketplace" and usher in federal micromanagement of health policy. Last month, the BC/BS system issued a list of fundamental goals that overlap several of the provisions the Kennedy-Dingell bill sets out.

The Washington-based American Assn. of Health Plans took a middle path on the new bill. Mindful that sentiment among its 1,000 member HMOs and other plans would be mixed, the AAHP was reviewing the proposal but was concerned it not "cause unintended consequences that could undermine plans' ability to continue to develop innovative, leading-edge practices that improve quality and affordability," AAHP President Karen Ignagni said in a statement.

Voluntary efforts to improve patient relations and research treatment outcomes are becoming effective, she said, adding that while the AAHP is willing to cooperate with Congress, it wants to avoid "inhibiting needed programs."

Analysts disagreed on whether the bill, or parts of it, would pass.

"Some of these provisions have a very good chance of passing," said Michael Millenson, a consultant specializing in quality of care issues for William M. Mercer Inc. in Chicago.

The bill does raise many questions, he said. Emergency care would be authorized based on what a "prudent layperson" would decide, but that standard may be too vague, he said. Access to obstetrician/gynecologists as primary physicians is guaranteed, but many physicians don't see Ob/gyns as suitable for general care, he said.

There may be other side effects if the bill passes. To the extent the provisions take away plan sponsors' ability to control costs, employers would be unhappy, he said. But if employees became more content with their managed care plans, employers would share in their happiness.

Several consultants said many health plans already have made progress in achieving the improvements the bill supposedly would induce.

"I think a lot of this has already been done by HMOs across the country-you know, the barn door has been closed after the horses have gotten out," said Barry Barnett, principal with The Kwasha Lipton Group of Coopers & Lybrand in Fort Lee, N.J.

If passed, the provisions would raise the cost of health care, and buyers inevitably would shoulder this, said Todd Richter, an analyst with Dean Witter Reynolds Inc. in New York.

Although the bill seems to have meritorious protections, the full effects are unknown, said Henry Saveth, a principal with A. Foster Higgins & Co. Inc. in New York. "They're stepping into almost 15% of the U.S. economy," he said. "I guess the question is, is there a dark lining in this silver cloud?"