While patients' bill of rights legislation is stalled in a Congressional conference committee, state legislatures are creeping toward passing healthcare protection legislation with some bite.
Thirty-three state legislatures had some form of insurer liability legislation -- bills that would allow patients to sue their HMOs -- on the 2000 agenda. Typically, these bills grant the right to sue a health plan if a patient believes harm was done when the health plan has denied a given benefit.
Many states have passed some type of patient protection legislation, but only seven states have given patients the right to sue their HMOs.
So far this year, Arizona, Oklahoma, Washington and Maine have joined Texas, California and Georgia in allowing patients to sue their managed care plans.
Few of the other 33 states where patient protection proposals are in play have made much progress. According to the National Conference of State Legislatures :
Other states have pigeonholed HMO liability proposals entirely. Colorado postponed its bill indefinitely. Virginia adjourned this year without dealing with its bill allowing patient litigation against HMOs. Connecticut's bill on the subject is dead.
The Supreme Court heard a case earlier this year, Pegram v. Herdrich, which questioned whether a patient can sue a health plan for putting cost concerns above proper care. While the Court has not yet ruled on the case, justices seemed to be leaning against allowing suits against HMOs under existing federal law.
Opponents of letting people sue their HMOs, including the insurance industry and most health plans, argue that allowing litigation would raise health care costs significantly and result in a loss of coverage for millions of people. Employers would drop coverage because of the increased price of supplying it, they say.
Even if the court rules in favor of a health plan in a given case, the health plan still has to litigate, which is costly, said Susan Pisano, vice president for communications for the American Association of Health Plans .
Pisano said health plans advocate using an external or third party review process to challenge HMO decisions.
"[External review] allows you to get an impartial decision at the time you need something that the health plan has denied," Pisano said.
While external or third party review is a process that can be accessed more quickly than litigation, no damages can be awarded through this type of review.
Most of the laws that allow HMOs to be sued require that a patient go through the external or third party appeals process before filing a lawsuit, according to Lee Dixon, director of the NCSL's Health Policy Tracking Service.
Supporters of the legislation argue that the only way managed care plans can be held accountable for their actions is the threat of being sued.
"Our view is that consumers should have the right to go after these insurance companies when they are making decisions more on financial reasons than medical reasons. We want people to get the care they need. But we also want the plan to be held accountable," said Michael A. Donio, director of projects for the People's Medical Society , a healthcare consumer advocacy group.
It remains to be seen if HMO liability laws really cause an influx of lawsuits as the health insurance industry fears. Texas is the only state where the right to sue has become effective. Since 1997, there have been fewer than a dozen lawsuits filed.