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Office of the Press Secretary

For Immediate Release February 20, 1998
                           PRESS BRIEFING BY 
                            CHRIS JENNINGS

The Briefing Room

1:26 P.M. EST

MR. TOIV: Good afternoon, everybody. For those of you who heard the President's speech today, you heard him mention Chris Jennings as a person who worked very hard on the health care proposal and on just about every one of the President's health care proposals. Chris is here to brief on the President's announcements today and the Vice President's report and answer any questions you have on it. Chris is Deputy Assistant to the President for Health Policy.

MR. JENNINGS: Thank you, Barry. Hello. I'll just give you a quick summary of what's happened today and then I'll open up for any questions.

Back on November 20th of last year, when the President's Advisory Commission on Quality and Consumer Protection reported its recommendations in response to the President's charge to develop a Consumer Bill of Rights, the President, as you know, endorsed that bill of rights and suggested there should be federal standards. But as he did that, he also released an executive memorandum directive to all the departments and agencies that have jurisdiction over federal health care programs, asking them to report back by today -- or yesterday, February 19th, to the extent to which they came into compliance with the Consumer Bill of Rights, and also in so doing to say what other actions they have the authority to take to come into compliance and what other legislative burdens or hurdles for them to come into compliance.

Just yesterday we got the final report; it was released to the Vice President. He had been working on it for quite a while coordinating these departments' reports. He conveyed it in this report that some of you may have seen, that the President and the Vice President -- I'll hold up, The Report to the President from the Vice President. And it's on the consumer protections.

And he conveyed it, and the President received it, and in so doing he released another executive memorandum reviewing all the recommendations and instructing all the various agencies -- and by all agencies, I mean Department of Health and Human Services, which administers Medicare, Medicaid, Indian Health Services; the Department of Labor; the Department of Defense; the Department of Veterans Affairs; and the Office of Personnel Management that administers the FEHBP and 9 million people there -- to come into compliance with the authority that the various departments had said that they had but had not come into compliance.

In fact, as a result of the President's action today, all federal programs -- health care programs -- will come into compliance by no later than the end of next year, consistent with the recommendations of the Consumer Bill of Rights.

The report did say that we are largely in compliance, or we have made great inroads. There are a number of examples where we have not, in various fields. In Medicare and Medicaid we do not have the explicit authority or the directive or protections on the disability requirement. The disability requirement is access to -- access to specialist requirement. And we are going to be moving on that by regulation. Donna Shalala has indicated today that she will move as quickly as she can and work very closely with states for the Medicaid program to do that.

In VA, in DOD, there are other areas -- grievance appeals process that they are not in compliance with. In FEHBP they are not in compliance with anti-gag. Today, as a matter of fact, on the Medicaid side, we are releasing a letter -- a directive from the Department of Health and Human Services to make sure that we come in compliance with the access to emergency services protections that are included in the Consumer Bill of Rights. So today's action by the President, again, will ensure that everyone comes in compliance.

I think the other newsworthy note about this in this whole report, pointed out by the Vice President, is since we are largely in compliance today and are moving to come into full compliance, the charge that the Consumer Bill of Rights is going to increase costs significantly really doesn't compute with our own experience in the Medicare-Medicaid programs. As you know, in the last couple of years we have been growing at the lowest growth rates in a number of years, and I think that that gives us great confidence in suggesting that we can provide these protections to all Americans.

First we have to start with the federal health care programs, and now, as you know, the President reissued his challenge to the Congress to pass bipartisan legislation this year to extend those protections, not just to the over 85 million people who are in federal health care programs, but the 225 million Americans who have health insurance.

So I'll conclude with that and open it up for any questions you may have.

Q Does the AMA and hospital association and these others, are they in support of it?

MR. JENNINGS: The AMA has indicated a great deal of support for the consumer protections under the President's advisory board. They are very actively working on the Hill to develop compromise legislation. We've actually worked, interestingly enough, collaboratively on this front. I think that they will actually be a partner as we go forward.

There have been some insurers and some in the business community who have concerns, not so much with the Consumer Bill of Rights advocated by the President's advisory commission, but by some of the issues they think go beyond that that they fear will come from the Hill. And they're a little bit nervous about that legislative process.

But the fact of the matter remains that if we are going to provide these protections to all Americans, we are going to have to require federal legislation to do that and our hope is that we can do that this year.

Q The President said it wasn't going to necessarily be a burden, but what's the price tag --

MR. JENNINGS: Well, we don't have cost-by-cost breakdowns of all these things. But when the Quality Commission released its report the business members on the commission asked for a study by the Lewin Group to give them a sense of how much cost the quality protection provisions that they were most concerned about would cost in terms of increased premiums. And they basically said between, like, I think 60 cents and $1.50 per month more for those particular protections related to appeals rights and other related issues.

It really depends on how many protections you're going to be putting on this to determine how much it's going to cost. But, again, these particular provisions don't cost a lot. These are structural reforms that ensure access to protections. Our feeling is -- and there's no evidence to conclude otherwise, that it would increase costs significantly, that's why we think they're so important; not just because they'll improve quality, but they actually will improve the public's confidence in a very rapidly changing health care delivery system which we think is critically important.

And there's one last point I want to point out to you. This is not, in the President's mind, an issue of managed care bashing. This is an issue of increasing the public confidence in a very significantly changing health care delivery system so that they're more comfortable with where were going into the future, because obviously we need to constrain costs as we have in the last several years and into the future while we balance the needs to protect quality consumer protection.

Q But, Chris, just to follow up, for these particular -- what was announced today, there is no exact estimate -- there is no estimate of what the costs would be for the people -- for what was instituted today.

MR. JENNINGS: In terms of the federal programs, we don't see any federal costs. In terms of, for example, OPM, who administers 350 different health plans across the country, there may be some premium increases to come into compliance. We don't know the exact cost.

If you ask most of these health plans, the major health plans, they'll tell you that they are largely in compliance today, with some exceptions. But I can tell you this, none of them, based on my experience and my discussions with them on the specific recommendations in the Quality Commission, say that those particular provisions are cost prohibitive, in their mind.

I think that they're concerned about other areas, which they call and label provider protections rather than consumer protections. And they're concerned about other related issues related to enforcement mechanisms.

But as to the basic, core, structural recommendations in the President's commission advisory -- excuse me, the President's quality and consumer protections recommendations, we have not seen any evidence to in any way suggest that it's a big cost, by anyone.

Q But this was prompted, wasn't it, by managed care failures? It may not be bashing, but it sure --

MR. JENNINGS: Well, I have to say that where there is wrongdoings in managed care or any other health plan, we have to go after them and go after them very strong and forcefully. And we think that one way to ensure that those abuses don't occur is to ensure those rights are in place. There have been abuses in managed care and in other areas as well that have undermined, or certainly call into question, the level of quality provided to both beneficiaries of the public program and enrollees in private plans. That's why we have to have these basic protections.

Q Well, the private plans then, how many are under compliance? I mean, you said that most of the federal programs are under compliance or moving along that way?

MR. JENNINGS: They're moving.

Q Private plans are already as well, people that aren't insured through federal programs?

MR. JENNINGS: Well, it varies dramatically. In some states, the insured plans have to come into compliance with very similar recommendations. In some -- but in, obviously, most -- most Americans are in self-insured plans that aren't regulated in any way in that regard. Some have voluntarily come into compliance in many of these areas, but probably not entirely.

For example, there is not a lot of evidence to suggest that every plan in this country have an external appeals process. So that they may provide you an internal appeals process that you go to in that internal -- in that plan's appeals process, where they go to their people that you appeal to, and if you're not happy with it you have no place to go.

But what the Quality Commission recommended is not only to have an internal appeals process, but also to have an external third-party review process. And I would suggest that there are many plans in this country that do not have those protections. Many do, and where they do we laud them and praise them, and the President did when he released the report last November.

Q Wouldn't that be expensive to have a third-party appeals process?

MR. JENNINGS: Well, actually, again, GTE and others who do have third party-processes in place, they have found that it has not been that expense; that rarely is it used; but it increases the confidence of their enrollees in their plans that there is a place to go if they have a concern. And that is the fundamental commitment that the President's commission made when it made its Consumer Bill of Rights recommendation.

Q Can I try once more on cost, so I don't misunderstand. I take it there are at least a million people covered by the understanding that he signed today?

MR. JENNINGS: There's actually probably 88 million people who would come under protections.

Q And this is mandating that these plans meet the bill of rights?

MR. JENNINGS: By no later than the end of next year that all the plans -- whether they be Medicare, Medicaid, Indian Health Services, DOD, DVA, or Federal Employees Health Benefits -- that they meet those criteria.

Q So you're mandating something for 88 million Americans. You don't know whether it's going to cost a lot more, but the one way to make up that cost you cited was premium increases for the 88 million that could be up, what, a dollar a month or so. Is that --

MR. JENNINGS: Where these protections are in place, in private plans and in public plans, there have not been significant cost increases. So we don't have any evidence to suggest that these are significant costs. Where there are any cost increases, generally you'll see them on the premium side. But I'll tell you, most people would suggest that to the extent that a dollar or $1.50 a month would ensure that they have protections in place, that they know that they have an appeals process, that they know that they have access to the specialists they need when they need it, that they know they have emergency care services -- I think most people would say that's worth it to the extent it even costs that much.

Q But I just want to confirm that this is being mandated. You don't really know exactly what it costs, but the cost will be borne by the people who pay the premiums.

MR. JENNINGS: Well, we do know -- well, we do know that it doesn't cost that much because we've had the experience of most of the federal health care programs that have these in place today. And I must say again, look at the cost -- a lot of these protections have been put in place in '95, '96, '97 under the President's leadership, and that has occurred at the same time that we've had the lowest increases in cost in Medicare-Medicaid. The baseline growth rates have been very, very significantly reduced during that same period that people suggest that these types of protection will increase costs.

So let's not kid anyone, it could cost some money. But based on our experience, it is not going to cost much, and in terms of the peace of mind and the security it provides to Americans about they know they have those protections, we think it's more than worth that amount. But again, we have no evidence to suggest that this is very significant at all.

Q Do you anticipate then that the 350 carriers that are currently in the program, the federal health plan, will come into compliance and stay --

MR. JENNINGS: We've talked to OPM; they feel that there are a number of areas that they have to move to come into compliance. It includes, in terms of complete compliance, anti-gag rules; they need to have regulations, disclosure that they're committing to -- and the President directed them to release in short order -- disclosure of financial incentives, access to emergency room services. All those provisions we anticipate they'll move very quickly to amend in there what they call their call letters next month, to the extent they possibly can for next year's health plans.

If they don't, then they'll do it in the next year's cycle. But by the end of 1999 they are committing to, through the President's directive to come into complete compliance, complete contractual compliance with those commission's recommendations.

Q Chris, has the White House made a decision about whether or not it can support the Norwood bill and, if not, are you working with Democrats on an alternative bill? What's the status of what you do support on the Hill?

MR. JENNINGS: Well, the Norwood -- first, I think we should say about Mr. Norwood that he has, along I think with the President and the Vice President, have really raised this issue in a way that we think makes it inevitable that there is going to be bipartisan legislation in this Congress. He deserves a great deal of credit in that regard.

We haven't endorsed the legislation because as it was drafted we weren't completely comfortable with it. There were some provisions that tended to be a little bit more oriented to provider protections as opposed to consumer protections. But he has thoughtfully included a great deal of many consumer protections as well. As you may know, he's redrafting some of those provisions to address some of the concerns that have been raised. We haven't seen where that is. But obviously we can't endorse the bill as it currently is constructed.

As for the Democrats' legislation, they are finalizing it. As I understand it, they are hoping to introduce it sometime within the next couple of weeks. That legislation is something that we're very encouraged by, we have not taken a formal position on because they have not relayed the final legislation to us. But we're encouraged and we look forward to working with them, obviously. We think it's a constructive effort and will lead to a collaboration with Republicans to pass bipartisan legislation this year.

Q What about one of the provisions that Norwood has, the right of patients to sue managed care plans? The White House hasn't formulated a position on that.

MR. JENNINGS: No, the President believes that there should be enforcement mechanisms, and we are evaluating options in that regard. You may know that the Quality Commission, which is due to release its final report at the end of March, is meeting next week and beyond to begin to discuss some of those options. We will want to hear from them how best they think we should enforce these provisions. They have one way -- they have a remedies provision that involves litigation. That certainly is one viable option. But again, as you say, the President hasn't made a final determination and wants to hear from his commission.

Q Thank you.

MR. JENNINGS: Thank you all so much.

END 1:44 P.M. EST