Patient Protection and Managed Care

Most Americans have health insurance plans that provide services through some kind of managed care arrangement.While financial incentives under fee-for-service insurance can lead to wasteful and possibly harmful excess services, incentives under managed care plans could lead to underutilization of necessary services.Congress is responding to this concern by proposing to regulate, at the federal level, various aspects of managed care and other types of health insurance.During the 106 th Congress, the House and Senate passed comprehensive patient protection bills but were unable to reconcile the differences and send a bill to the President.The 107 th Congress has revisited the patients rights debate.The Senate and the House have each passed a bill (S.1052 and H.R. 2563, respectively) that would establish federal standards mirroring various state laws as well as recommendations in the 1997 Consumer Bill of Rights as developed by former President Clinton's Advisory Commission on Consumer Rights and Quality in Health Care.However, as a conference committee has not yet been appointed to negotiate between House and Senate-passed versions of the bill, it is unlikely that agreement will be reached before adjournment of the 107 th Congress.This debate will most likely continue in the 108 th Congress.This document provides background information on the issues surrounding patient protection and reviews the major differences between the Senatepassed and House-passed bills.Both of the bills under consideration would apply federal patient protections to all insured Americans.The most significant differences between these bills are in the provisions expanding patients' legal remedies against their health plan providers when medical care is unjustly denied and the denial results in harm.Other differences include provisions applying the protections to federal health programs, prohibiting discrimination on the basis of genetic information, and encouraging health insurance coverage expansions.The health insurance industry and many employer groups are strongly opposed to increased federal regulation of managed health care.They argue that it is unnecessary because the market is responding to consumer concerns, and that more regulation will raise health care costs, increasing the number of uninsured Americans.On the other hand, supporters of increased federal regulation, including many provider and consumer advocacy groups, believe that such regulation is needed to restrain market excesses that could jeopardize health care quality and access and that such regulation would result in only small additional costs. 1 For more detailed descriptions of the provisions included in S. 1052 and H.R. 2563, see CRS Report RL30978, Patient Protection During the 107 th Congress: Side-by-Side Comparison of House and Senate Bills by Hinda Chaikind, Jean Hearne, Fran Larkins and Angie Wellborn. Patient Protection and Managed Care