February 1999 Bulletin

Legislative outlook cloudy

Managed care reform is back, but will it get top priority?

When Congress finally gets down to business, will managed care reform be at the top of the priority issues as it was last year?

It's clear that managed care reform legislation will be in the hopper and the opposition will be there, too. But as this was being written, the Senate is wrestling with impeachment of President Clinton, and Senate Majority Leader Trent Lott (R-Miss.) has not listed his major policy goals.

The new House Speaker, J. Dennis Hastert (R-Ill.) has vowed there will be a vote on managed care legislation this year, but has not provided details of a bill. Last year, Rep. Hastert chaired a group which produced the Republican leadership bill that was approved by the House.

Some observers see the major focus of Congress on Social Security reform to avert a long-term bankruptcy of the retirement system; Medicare reform to squeeze out more fraud and waste; and tax relief.

House and Senate Republicans have reserved H.R. 1 and S. 1 for Social Security bills. Senate Republicans' next four bills would give communities more power over schools, cut income taxes by 10 percent, boost military salaries and pensions and increase anti-drug efforts. Senate Democrats' top five bills would expand the rights of patients in HMOs, beef up resources for hiring and training teachers, boost minimum wage taxes for many couples, move against crime and illegal drugs and expand access to Medicare for many older Americans.

Rep. Charles Norwood (R-Ga.) wasted no time getting the ball rolling on managed care reform when he introduced legislation similar to the bill he abandoned last year. His 1998 bill had more than 200 co-sponsors, including nearly 100 Republicans, but it was bottled up by the Republican leadership who wanted to draft their own legislation. Rep. Norwood's bill allowed patients to choose their own doctors and gave patients the right to sue health insurance companies. The latter was bitterly opposed by businessmen and insurance companies.

Rep. Norwood eventually backed the Republican leadership bill as a political expediency to get managed care reform legislation approved in the House. But Senate Republican legislation failed to be approved.

Rep. Norwood vowed not to make the same mistake this year with his retitled bill, Access to Quality Care Act of 1999, which again gives patients the right to sue their health insurance companies. However, the opposition also is still there, as vocal as ever. Karen Ignagni, president and CEO of the American Association of Health Plans, was first out of the box opposing Rep. Norwood, stating he "will need more than an army of special interest groups to revive his health care agenda in 1999. He'll need Lazarus."

Sen. Tom Daschle (D-S.D.), Sen. Edward Kennedy (D-Mass.), Rep. John Dingell (D-Mich.) and others also have managed care reform bills this year.

Another bill "revisiting" the House this year will be legislation to allow doctors to negotiate jointly with HMOs and other insurers while enjoying the same antitrust exemption that labor unions currently have. The bill was introduced last year by Rep. Thomas Campbell (D-Calif.) as the "Quality Health Care Coalition Act of 1998." The House Judiciary Committee held hearings in July.

Rep. Henry Hyde (R-Ill.) committee chairman, said, "The doctors contend that the HMOs and insurers exercise too much control over health care decisions and thereby lower the quality of care. I certainly agree that the doctor-patient relationship must be preserved, and I am concerned that it is eroding. On the other hand, those who propose any exemption from antitrust laws start with a heavy presumption against them. They must make a compelling case to justify an exemption. There are concerns that this exemption might lead to price-fixing and group boycotts by doctors."

During the hearing, Robert Pitofsky, chairman of the Federal Trade Commission, opposed the bill.

Medicare will get the attention from several quarters this year. The National Bipartisan Commission on the Future of Medicare is scheduled to give its recommendations in March on how to avoid bankruptcy when the baby boomers begin to retire in 2008. Last month, commission members talked about raising the eligibility to 67 years from 65 years and changing the payment system to draw more people into managed care. Instead of setting the rates it pays private health plans, Medicare would subsidize patients' purchase of HMOs and other plans from insurers that bid to take care of elderly patients.

Lobbyists will be on Capitol Hill trying to alter the 1997 budget law that reduced Medicare spending by $115 billion over five years. On the other side of town, the Clinton Administration is hinting at further trims.

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