John McCain

Mr. McCAIN

Mr. McCAIN. I say to the Senator, I will get it to you right away. Why don't we do that.

Mr. McCAIN. That would be agreeable. But I think we can do it in a shorter time than that, depending on the view of the Senator from New Hampshire on the amendment.

Mr. McCAIN. Mr. President, I move to table amendment No. 818 and ask for the yeas and nays.

Mr. McCAIN. I note the presence of the Senator from New Hampshire on the floor. We really have an issue of scope, an amendment we need to bring up, and of course the so-called Snowe compromise amendment as well. I hope we will be able to put both of those in some kind of order in some way today.

Mr. McCAIN. If the Senator will yield?

Mr. McCAIN. Mr. President, I have major concerns about the Kyl-Nelson amendment and unfortunately, must oppose it. While I certainly respect the intentions of my dear friend and follow Arizonian, Jon Kyl, I respectfully disagree with him regarding this proposal. I simply can't support mandating a Federal statutory definition of ``medical necessity'' that is vague and creates further confusion and barriers for patients attempting to get the medical care their doctor deems appropriate, and is covered by their HMO plan. This amendment would put into statutory language a vague definition that allows health plans to determine whether services, drugs, supplies, or equipment are appropriate or necessary to prevent, diagnose, or treat a patient's condition, illness, or injury. While this appears reasonable, it simply is not. One of the major hurdles currently facing patients is the repeated denial of their medical care on the basis that it is not medically necessary based on a vague or constraining definition. The health plans are intentionally denying care to constrain costs by hiding behind cleverly crafted definitions. This amendment would allow this practice to continue. For example, part of the definition allows a plan to determine whether the recommended medical care is, ``primarily for the personal comfort or convenience of the patient, the family or the provider . . .'' It sounds reasonable, but it is not. This is already being used to prevent patients from receiving palliative care for managing the intensive pain they encounter while battling cancer or other serious illnesses. Another portion of the proposed definitions reads, ``Consistent with standards of good medical practice in the United States'' . . . Again, appears harmless, but it isn't. Who establishes the standards of good medical practice? What basis is used for developing them? How current, considering the pace of new technology and medical research will these standards be? Another portion of the proposed Kyl-Nelson Federal definition reads, ``In the case of inpatient care, [the care] cannot be provided safely on an outpatient basis . . .'' Legally, this creates an opportunity for retrospective reviews by HMOs thereby leaving the patient and/or medical provider responsible with the incurred costs from the inpatient care that the HMO determines should have been provided on an outpatient basis. These are just a few of the problems facing patients if this amendment is adopted. I wholeheartedly agree with my colleagues that we can't create a method that obviates health plan contracts and that is not what our bill does. Our bill does not empower the independent medical reviewer to override existing health plan contracts or force HMOs to cover anything and everything despite a service being specifically excluded in the contract. Our bill relies on the independent medical reviewer to give patients a second medical opinion when such a medical opinion is necessary to interpret the plan's coverage, but it does not empower them to disregard the plan's specific coverage exclusions and limitations. I will be offering an amendment after the scheduled vote on the Kyl- Nelson amendment that will further clarify this and protect the sanctity of the plan's contract with a patient. I urge my colleagues to reject the Kyl-Nelson amendment and allow patients to have their medical decisions made by doctors and nurses and not by HMO lawyers or bureaucrats.

Mr. McCAIN. I thank the Senator from Massachusetts, and also the Senator from North Dakota. I would be glad to wait until after the Senator from North Dakota speaks, if he prefers.

Mr. McCAIN. How much time?

Mr. McCAIN. Will the Senator allow me a couple minutes of time?

Mr. McCAIN

Mr. McCAIN. Mr. President, I think it is important, because of the issue of what is happening or not happening in the State of Texas and Texas State law, that I take a few minutes to quote from a letter I just received from the President of the Texas Medical Association, Dr. Tom Hancher, who also was a key player in the formulation of the language and the legislation that passed the State of Texas in 1997. I would like to quote from the letter that Mr. Hancher sent me: I have been watching the debate over the Patients' Bill of Rights and can understand the confusion over many of the issues. We, in Texas, debated managed care reforms for over two years culminating in the passage of a package of managed care reforms in Texas in 1997. Because Texas' laws have become the basis for evaluating certain aspects of proposed federal reforms, I hope I can help to clarify some areas for you. As Texas Medical Association worked closely with the sponsors of these reforms, including the managed care accountability statute, I would like to offer our experiences on this issue. . . . I will focus on the three areas of primary disagreement--employer exemption, medical necessity standards for independent review, and remedies under Texas' managed care accountability law. Much as you are seeing in Washington, our lawmakers were deluged with concerns about employers being legally accountable for the actions of the managed care plan. We believed that this was impossible given the construction of our legislation. Both the definition of a managed care plan and the action of that plan--making medical treatment decisions--prevented such lawsuits from being brought. Nevertheless, the insurers and employers continued to express their concerns that our bill would cost hundreds of citizens their medical coverage because of the fear of litigation. We agree with your approach that any entity making medical treatment decisions should be held accountable for those decisions. Texas took a different approach in 1997, however, because we knew that no state law could achieve that goal. ERISA law in 1997 was such that no state law could hold employers of large self-funded plans accountable for actions related to their benefit plans. . . . We were certain that small to medium sized employers in our state were providing health benefits through fully insured, state licensed products. Clearly, those employers were not making medical treatment decisions. While it was the intent of the Texas Legislature to hold accountable any entity making medical treatment decisions, it was our belief that because of ERISA, a blanket exemption for employers in a state law would have no practical impact on the large, self- funded employers. Therefore, we provided a broad employer exemption primarily to allay the fears of small and medium- sized, fully-insured businesses over exposure to legal liability for medical decisions. The reason why I quote this is because that is basically the language we are using in this legislation. The Senate co-sponsor of the managed care accountability bill said it best on the floor of the Texas Senate: ``If an HMO stands in the shoes of the doctor in the treatment room, and stands in the shoes of the doctor in the operating room or the emergency room, then it should stand in the shoes of the doctor in the courtroom.'' It is hard to argue why this philosophy should not apply to anyone making those direct medical decisions, HMOs or the very few employers who do this. Any employer who decides not to make these decisions very clearly is not subject to a lawsuit. Our goal in constructing the independent review (IRO) provision of our bill was a simple one: use independent physicians to evaluate disputes over proposed medical treatment. We require these physicians to utilize the best available science and clinical information, generally accepted standards of medical care, and consideration for any unique circumstances of the patient to determine whether proposed care was medically necessary and appropriate. Our standards are virtually identical with the independent review provisions in the McCain/Edwards compromise currently pending before the Senate. I repeat, the Texas Medical Association President says: Our standards are virtually identical with the independent review provisions in the McCain/Edwards compromise currently pending before the Senate. Review decisions were to be made without regard for any definition of medical necessity in plan documents. The Texas Department of Insurance reviews the plan contract for specific exclusions or limitations (i.e., number of days or treatments). If there is no specific contract provision to exclude the eligibility for review, the case is submitted to the independent review organization. Medical necessity is often a judgment call. We wanted those judgments made without any conflict of interest. Medical necessity definitions created by plans will likely err in favor of the plan. An IRO's decision should be a neutral one. Using a plan definition would prevent that. Additionally, we do not define ``medical necessity,'' but rather set forth broad standards for reviewers to make an informed decision based upon all available information. . . . Finally, there has been a great deal of confusion over damages in personal injury or wrongful death cases in our state. Currently, Texas has no caps on economic or non- economic damages. Punitive damages are calculated using the following formula: two times the amount of economic damages, plus an amount not to exceed $750,000 of any non-economic damage award. We chose to treat managed care plans as any other business. Therefore, they are accountable under general tort law and not subject to the cap on damages in wrongful death cases. The limitation on recovery in wrongful death cases applies only to health care entities and is part of a separate section of our law. The debate in Texas over patient protections was long, sometimes contentious, and ultimately successful. With over 1300 independent reviews (48% upheld the plans' determination and 52% overturned the plans' decision) and only 17 lawsuits-- I want to emphasize: Only 17 lawsuits-- I am proud of how our laws are working for the people of Texas enrolled in managed care plans. On behalf of my colleagues and our patients, I ask that you not take any action that would undermine what we have done in our state. Best wishes in your deliberations. It is signed: Tom Hancher, MD, President of the Texas Medical Association. I urge all of my colleagues to read this letter from Dr. Hancher. I think it lays out the issues surrounding this particular amendment and remaining areas of dispute that we might have. Mr. President, I cannot support the pending amendment because I believe that employers should be held accountable for medical decisions they have made if those decisions resulted in a patient's injury or death. I do not believe employers should be held liable for the decisions made by insurers or doctors. Nor do I believe this legislation would subject employers throughout the country to a tidal wave of litigation as our opponents claim. But if an employer acts like an insurance company and retains direct responsibility for making medical decisions about their employee's health care then they should be held accountable if their decisions harm or even kill someone. If an employer is not making medical decisions, and very few employers do, then they will not be held liable under our legislation. Let me repeat--employers will not be held liable or exposed to lawsuits if they do not retain responsibility for directly participating in medical decisions. I keep hearing from opponents of our bipartisan bill that our language is vague and would subject employers to frequent litigation in state and Federal court. I don't believe this is true. Our legislation specifically states that direct participation is defined as ``the actual making of [the] decision or the actual exercise of control in making [the] decision or in the [wrongful] conduct.'' This language clearly exempts businesses from liability for every type of action except specific actions that are the direct cause of harm to a patient. The sponsors of this legislation are willing, however, indeed we would welcome an amendment that helps further clarify the employer exemptions provided for in the bill. I know that Senators Snowe, DeWine and others are working on such an amendment. But we cannot, in the interest of greater clarity, give employers a kind of blanket immunity when they assume the role of insurers and doctors by making life and death decisions for their employees. That is what the pending amendment would do. Let's just step back for a moment and reflect on how the employer based health care system is structured and works. An employer contracts with an insurer to provide health care coverage for their employees. The insurer is then responsible for making the medical decisions that go with managing health insurance. That is how the system typically works and how employers want it to work. Most businesses simply do not make medical decisions. Hank who runs a local plumbing company does not tell the HMO his company has contracted with, ``We have clogged drains and need Joe Smith back at work. We can't afford for him to be laid up waiting for surgery.'' And Hank would not be held liable under our bill because he is not practicing medicine--he is repairing plumbing. Now, I admit there are a small group, of mostly very large companies that have chosen to provide insurance to their employees themselves. In these small number of cases, employers have made the decision to sell plumbing and act as an insurer that makes medical decisions. And if the decisions they make harms or kills someone then why should they have a blanket exemption from liability as this pending amendment would provide them, a blanket exemption that we do not provide doctors or nurses or hospitals? Mr. President, I yield the floor.

Mr. McCAIN. I say to the Senator from Texas, I think it is perfectly reasonable for you to have the last 5 minutes. I ask the Presiding Officer that one of us be recognized so that the Senator from Texas has the final 5 minutes. The Senator from Iowa wants----

Mr. McCAIN

Mr. McCAIN. Madam President, I intend to speak again shortly before the vote, but I would like to discuss the President's threat to veto the Patients' Bill of Rights, the letter that was sent over yesterday. I am disappointed that the President issued a veto threat yesterday regarding our bipartisan bill protecting America's patients. However, I continue to pledge my cooperation in any sincere effort to reach fair compromises on the outstanding issues that still divide us. Negotiations continue. We will continue over the weekend, and into next week, in the continued hopes we can reach agreement. I repeat, we are in agreement on the vast majority of issues. It would be a terrible shame for us to not be able to resolve those remaining differences. But we cannot compromise on our resolve to return control of health care to medical professionals, and to hold insurers to the same standard of accountability to which doctors and nurses are held. That is all we are seeking and all that the American people expect from us, a fair and effective remedy to a grave national problem. Following are some concerns that were raised in the veto threat regarding our bipartisan bill that do not accurately represent our legislation. In the President's threatened veto message, he said that the legislation will only serve to drive up costs and leave more individuals without health insurance coverage. The reality is, the year after Texas passed its liability protections, premiums actually decreased; and last year the number of people with insurance increased by over 200,000. In their annual report, the Census Bureau attributed a large portion of the increase in the number of insured Americans to the increase in employer-sponsored coverage. As the Congressional Budget Office has stated: [A] reliable estimate of the coverage declines associated with a mandate can only be determined by analyzing the specific legislative proposal. No such analysis on the bill before the Senate has been produced. In the Presidential statement, it said that our legislation circumvents the independent medical review process in favor of litigation. The reality is, no patient and no physician wants to go to court just to seek the care they need or to avoid being harmed. Under our legislation, patients must exhaust internal and external appeals before going to court. That is why the legislation requires that all appeals be exhausted. The sole exception is when death or irreparable injury is incurred as a result of the denial. Even in that case, either party can request the appeals process continue and the results of the process be considered in court. In the Presidential statement, it said this legislation overturns more than 25 years of Federal law, and in so doing, would not ensure that ``existing state law caps would apply to the broad, new causes of action in state courts.'' The reality is, the legislation corrects the unintended consequences of the 25-year-old loophole contained in ERISA, the Employee Retirement Income Security Act, which gives HMOs special legal protections--not enjoyed by any other industry--from legal recourse if they make medical decisions that result in injury or death. Our legislation merely accepts Chief Justice Rehnquist's recommendation adopting the policy of the Federal Judicial Conference that ``in any managed care legislation, the state courts be the primary forum for the resolution of personal injury claims arising from the denial of health care benefits, should Congress determine that such legal recourse is warranted.'' I hope my friends on this side of the aisle will pay attention to Chief Justice Rehnquist's words. In so doing, this legislation simply returns to how this Nation has overseen disputes in the courts over the last 200 years and applied the same standards with which all other industries comply. Finally, by deferring explicitly to State courts on medical decision disputes, this legislation specifically accepts tort reform and caps that States have adopted, all of which exceed any Federal tort reform currently in place. The President's statement goes on to say this legislation would allow causes of action in Federal court for violation of any duty under the plan, creating open-ended and unpredictable lawsuits against employers for administrative errors. In reality, there would be no open-ended, unpredictable lawsuits as a consequence of this legislation. Plans would be free of any liability if they followed their own plan rules and did not make decisions that explicitly caused injury or death. Moreover, if they follow the internal appeals process provided for in this legislation, it is extremely unlikely that any business or plan would be exposed to any liability risk at the Federal level. The President's statement said that the legislation would subject employers and unions to frequent litigation in State and Federal court under a vague standard of direct participation. The reality is, this legislation related to direct participation is neither vague nor would it subject employers to frequent litigation in State and Federal court. The bill language specifically states that direct participation is defined as ``the actual working of [the] decision or the actual exercise of control in making [the] decision or in the [wrongful] conduct.'' This legislation specifically exempts businesses from liability of every type of action except specific actions that are the direct cause of harm to a patient. We are having continuing negotiations to try to tighten further language to prevent employer liability. Finally, the President's statement says this legislation subjects physicians and all health care professionals to greater liability risk. My only answer to that: Read the bill. Section 302(a)(1) states that physicians, other health care professionals, insurance agents, and health care record keepers have explicitly been exempted from any new liability exposure. In fact, by extending accountability provisions to HMOs, this legislation will actually serve to protect physicians and other health care professionals from unwarranted, unnecessary liability exposure. Once again, the critics need to read the bill before inaccurate charges are made. Madam President, there is either a misunderstanding or a failure to comprehend what this legislation is all about in the message that was sent over and the threatened veto. Again, I urge all of our friends and adversaries of this bill to continue to negotiate, to continue to resolve the issues that exist between us so that we can come to closure on this. I repeat, we cannot sacrifice the principles upon which this legislation is based, but we certainly can discuss and perfect this legislation. That is something we want to continue to do. As we speak, there are groups who are discussing ways of improving the legislation. We are open to it. I yield the floor.

Mr. McCAIN. Could you yield 2 minutes so we could have 3 minutes at the end?

Mr. McCAIN. I say to the Senator from New York, she is absolutely right. That is the intent of this legislation. I appreciate the fact she is bringing it to the attention of the Senate to make clear the sense-of-the-Senate resolution.

Mr. McCAIN. Madam President, I have a modification at the desk. I ask unanimous consent that it be made a part of the sense-of-the-Senate resolution.

Mr. McCAIN. Madam President, I ask unanimous consent to be allowed to speak for 2 minutes on my modification.

Mr. McCAIN. Madam President, in discussions with the Senator from Tennessee on the issue of clinical trials, the Senator from Tennessee brought forward some legitimate concerns, in our view, about increased liability or increased costs associated with clinical trials. He has asked, and we have agreed, to additional language in the findings section of this sense-of-the-Senate resolution which basically states that research still carries the risk of fatal results and future efforts should be taken to protect the health and safety of adults and children, and, also, while employers and health plans should be responsible for covering routine costs associated with federally approved or funded clinical trials, such employers and health plans should not be held legally responsible for the design, implementation, or outcome of such clinical trials consistent with any applicable State or Federal liability statutes. I appreciate the input of the Senator from Tennessee. I am glad we are able to come to agreement on this. I hope we can all support the sense-of-the-Senate resolution.

Mr. McCAIN

Mr. McCAIN. I thank the Senators. I guess the Senator from New Hampshire had also a reservation.

Mr. McCAIN. Mr. President, I thank my friends from Texas as well as from Oklahoma and New Hampshire. We would like to sit down and see if we can work this out. Whether the Senator from Texas intends there to be a problem or not, there is a problem on passage of this amendment. So I appreciate the intentions of all involved here, but the fact is, there will be a technical problem because of raising revenue. I would like to work that out, and we will sit down and begin conversations about it.

Mr. McCAIN. I am glad to yield.

Mr. McCAIN. I understand. I yield the floor.

Mr. McCAIN. Will the Senator yield?

Mr. McCAIN. Mr. President, according to an article in Business Week on February 19, 2001: So far, though, Texans have filed only about 15 suits under the new law, and few are predicting a barrage of cases, according to the State Attorney General John Cornyn, a Republican. Similarly, experts say that at most only a couple of suits have been filed in the other six states with such laws. The reason: Appeals procedures settle most cases before they get to the lawsuit stage. Except for Maine, all states with right-to-sue laws require patients to complete an external review before going to court. That is exactly what this legislation calls for. We heard from a number of people, not about the pending amendment, which is unfortunate, but with a lot of very strong allegations. Senator Zell Miller is a former and rather successful Governor of the State of Georgia where the law was passed. According to a media report: Miller took the Senate floor and quoted from the president's ``principles'' for patients rights, released in February. ``Only employers who retain responsibility for and make final medical decisions should be subject to suit,'' Miller read from the White House letter to Congress which became a favorite quotation during the day. Miller also said that a Georgia patients' protection law passed two years ago should answer any concerns about a flood of lawsuits. ``When the Georgia Legislature debated this law, there were critics, critics who made the same arguments we're hearing in Washington today,'' Miller said. ``In Georgia, they paid for ads saying the law would drive up premiums and cause more people to lose coverage,'' he said. ``The critics paid for ads claiming employers would be held liable for HMO mistakes. Sound familiar, Mr. President? They paid for ads predicting-- I love this alliteration-- a flurry of frivolous lawsuits. Oh, there was hissing and moaning. But you know what? None of those dire predictions has come true.'' Miller said that the law is ``working well'' and that no patient has filed a lawsuit yet. That comes from the former Governor of the State of Georgia who strongly supports this legislation. Mr. President, I have tried very hard--how much time remains?

Mr. McCAIN. Mr. President, I have tried very hard to negotiate a unanimous consent agreement concerning this pending amendment. I think it is a good amendment. Yes, it was passed before and it was dropped in conference by the Republican leadership as they negotiated the tax bill out. That is a fact. But it is still a good amendment and it is still a good thing to have deductibility for people who have to pay for health care insurance. I think it is a good one. So in my negotiations with the opponents of this bill, I asked that we go ahead and accept this, and maybe even two others, as long as it stayed under the window of money that is available under this legislation, which is called for in order to pay for the cost of this legislation. Unfortunately, we were unable to get an agreement. I am very disappointed because I think we could have included this. But we had to do it in a constitutional fashion. In other words, I called for an agreement that we would accept the amendment, and perhaps even two others, and then we would, under unanimous consent, call up a revenue bill that would be pending at the desk from the other body so as to satisfy the blue slip concerns. Look, if this amendment is passed and it goes to the House, the bill is immediately killed. That may be the intent of the opponents of our legislation; I don't know. But let the Record be clear that I want this amendment accepted, and I want us to accept even others that could reduce the cost of health care to American citizens. But we have to do it in a constitutional fashion because we all know that a revenue- raising amendment can only originate in the other body. So I will repeat my unanimous consent request as follows: I ask unanimous consent that at 5:30 today the amendment be agreed to and that there be no further revenue or blue slip material amendments in order to this bill; further, that when S. 1052 is read a third time, it be laid aside and the Senate immediately turn to the consideration of Calendar No. 69, H.R. 10; that all after the enacting clause be stricken and the text of S. 1052 be substituted in lieu thereof, the bill be read the third time, and the Senate proceed to vote on final passage of the bill; and that the Senate request a conference with the House and the Chair be authorized to appoint conferees.

Mr. McCAIN. I ask unanimous consent that my time not be used by this reservation.