Managed Care Will Receive an Overhaul with the 106th Congress

By E. Dale Burrus, J.D., LL.M. candidate

The debate over managed care reform has begun despite the fact that Congress is not yet in session. The insurance industry has been heralding a poll that it claims indicates that the public is not interested in managed care reform. Conversely, a patients’ rights group has declared that health reform was at the heart of the November 1998 elections. Even more recently, a telephone poll revealed that nine out of ten persons would vote for a supporter of health care reform. President Clinton and the Democratic leaders have proclaimed that managed care regulation will be at the top of the agenda in the 106th Congress.

The Health Insurance Association of America ("HIAA") released its post-election survey that it claims shows that Americans are not interested in health reform. Only 8% of voters who participated in the poll listed health care reform as the number one issue for selecting their congressional candidate, indicating clearly that American voters are more concerned with issues of education, the economy, and social security. Families USA, a patients’ rights group, countered by stating that Americans are interested in managed care reform, as illustrated by the number of elected candidates who included health reform in their election platforms. Democrats argue that HIAA’s poll ignored voters who considered managed care reform important though not necessarily the number one issue. Baylor College of Medicine and Texas Children’s Hospital funded a poll of citizens, doctors, corporate benefits experts, congressional staffers, and state legislators regarding their support for health reform. Its conclusion, published November 23, 1998, was that Americans strongly support reform of the health care system.

With the change in the Congress’ makeup resulting from the November election, in which Democrats captured more seats and Republicans shifted to the middle, President Clinton projected that the 106th Congress was primed to pass the Democrats’ "Patients Bill of Rights." This legislation failed to pass the House in the last session by only five votes, the number of seats gained by Democrats in the House in the election. A Republican bill passed the House during the 105th Congress, but the fight to pass managed care reform ended in a Senate stalemate.

Although the 105th Congress failed to pass health reform legislation, a review of the similarities of the three primary bills demonstrates the 105th Congress’ belief that managed care is not meeting beneficiaries’ demands appropriately or fairly. These three bills mandated that plans reimburse patients for emergency care without pre-authorization from the insurance companies. All three bills mandated that, for women and children, an obstetrician/gynecologist and a pediatrician, respectively, can be considered the primary "gatekeeper" physician. Also, these bills included an "anti-gag clause," allowing a physician, without threat of retaliation, to communicate all medical advice regarding their care and treatment regardless of plan coverage. These bills also increased confidentiality protections for patients.

Although the three major bills proposed very similar changes to the present managed care system, the differences among these bills is also very telling. The Republicans refused to force structural change upon managed care plans, which demonstrates the Republican values of free business enterprise and reduced governmental interference. On the other hand, the Democratic bill demanded extensive changes to managed care structure. These structural changes required plans to develop internal auditing standards, plan adequacy standards, standardization of data provisions, and professional selection provisions. The Democratic bill aggressively addressed the concern that the managed care system does not operate appropriately and attempted to hold managed care plans responsible by allowing beneficiaries to pursue legal remedies against their plans and denying plans the ability to shift responsibility to providers through indemnification procedures. While the debate will continue along partisan lines, particularly with regard to the divisive issue of whether consumers can sue managed care organizations, the new makeup of the 106th Congress brings consensus on managed care reform a step closer.