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The Associated Press

WASHINGTON (AP) — Consumer friendly. Generous jury awards. That’s what state courts have become known for — and it’s why they have emerged as a battleground in Congress over how to hold health plans responsible for harm to people they insure.

Proposals offered by both parties would expand the medical treatments that health plans must offer their patients. Patients also would have more ways to appeal plans’ decisions to deny coverage.

Legislation favored mostly by Democrats would allow patients to pursue legal claims for injuries in either federal or state court.

GOP leaders have resisted attempts to push cases into state court. A 1974 federal pensions and benefits law confines most cases against HMOs and other employer-sponsored health plans to federal court.

For now, federal courts are the main venue to sue over denied care that results in injury or death. Advocates say patients are blocked from state courts, and therefore unable to seek damages for loss of income, suffering, or pursue punitive judgments.

“A family loses a loved one and gets turned away from state courts; another patient loses a limb and their case gets heard,” said Fort Worth attorney George Parker Young, who has sued plans under the Texas law. “Current law is just too vague. This is reason we need a good bill.”

Nine states have laws allowing patients to sue health maintenance organizations; several dozen more are considering it. Premiums have risen 4 percent to 6 percent in most of those states — an insignificant amount advocates say, but too much according to opponents.

While at least 38 states cap damages in certain cases, opponents worry about the instances where states allow unlimited jury awards against a single health plan or employer. Democrats say President Bush’s latest designs for patients’ rights would create a shield for employers looking to deny workers’ claims as a way to save money.

The president’s compromise would steer lawsuits involving HMO care to federal courts, but allow some cases to be heard in state courts — particularly if they apply to the local medical malpractice laws, said sources familiar with the plan, speaking on condition of anonymity.

Bush and other opponents want to let independent review panel resolve disputes, and worry that would not happen if the Democrats’ bill becomes law.

“The patient-protection discussion is no longer about what’s best for patients. It’s about how many ways can health plans be sued,” said Karen Ignagni, president of the American Association of Health Plans, a trade group for health plans.

Most state laws cannot affect patients in employee-sponsored health plans protected by the 1974 federal Employee Retirement Income Security Act. Other privately insured people enjoy the full force of the state laws.

Courts have allowed some patients to sue HMOs in state court for substandard medical care, such as naming a plan in a malpractice case against a doctor.

Yet the ERISA law prevents patients from suing in state court for coverage decisions; a plan’s stated policy not to pay for cosmetic surgery, for example. The bills in Congress would not change that.

Current law has complicated the issue of medical decisions.

Supporters

on the web The bills, H.R. 2563 and H.R. 2315, can be found at: thomas.loc.gov

of Texas’ patients’ rights law and the Democrat-backed plan in Congress argue that health plans that agree to cover a treatment in general but reject a doctor’s recommendation in a specific case are making medical decisions, not coverage decisions based on contracts. Patients in those disputes should have the right to go to state court.

“There is no point in giving patients rights and then pre-empting state laws designed to enforce those rights,” said Rep. John Dingell, D-Mich.

For a long time, federal courts largely sided with HMOs in liability cases. That seems to be changing: Recent rulings, for example, have said HMOs could not punish physicians who take the patients’ side in disputes over insurance claims.

But with major issues still unresolved by federal courts, supporters say it is time for Congress to act.

“We’ve been living with this confusion for far too long,” said Connie Britton, of the Texas Medical Association, which supported the state liability law.

Copyright 2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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