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THE WHITE HOUSE

Office of the Press Secretary

For Immediate Release August 29, 1998

            PRESIDENT CLINTON ANNOUNCES NEW REQUIREMENT FOR 
         PATIENTS' APPEALS PROCESS IN PRIVATE HEALTH PLANS AND 
      CALLS ON CONGRESS TO PASS A STRONG PATIENTS' BILL OF RIGHTS

                             August 29, 1998

Today, in his weekly radio address, President Clinton announced a new regulation that requires all private employment-based health plans, covering over 120 million Americans, to implement an internal appeals process that, for the first time, gives enrollees a fair, timely process to address all grievances with their health plans. This new proposed regulation, released by the Department of Labor, is part of the President's ongoing efforts to institute a patients' bill of rights for all health plans under Federal oversight.

In releasing this regulation, the President emphasized that the Administration does not have the statutory authority to ensure other critical protections for patients in private employment-based health plans, such as access to specialists, emergency care protections, and independent external appeals. Only Congress can achieve this result by passing a strong, enforceable patients' bill of rights. The President urged the Senate to take up the patients' bill of rights as its first order of business when they return next week, but explained why he could not sign the Republican Leadership proposals as currently drafted.

ANNOUNCED A NEW INTERNAL APPEALS REGULATION FOR MORE THAN 120 MILLION AMERICANS IN PRIVATE EMPLOYMENT-BASED HEALTH PLANS. While the Republican Leadership has delayed passing a patients' bill of rights, the President has directed Federal agencies to implement these patient protections whenever possible. The Department of Labor is releasing a new proposed regulation that will ensure that patients receive a timely, fair internal review when they have a grievance against their health plan -- and, for the first time, that they receive an expedited review for urgent claims. The proposed regulation:

Requires plans to provide enrollees with better disclosure regarding their appeal rights;
Cuts the maximum time health plans have to respond to non-urgent appeals from 90 to 30 days, and requires plans to respond to urgent appeals within 72 hours; and
Gives enrollees greater access to records relevant to any denial of benefit claims.

HIGHLIGHTED NEED FOR STRONG LEGISLATION AND URGED CONGRESS TO MAKE IT THE FIRST ORDER OF BUSINESS. The Labor Department proposed regulation the President unveiled today does virtually all the Administration can do to require private employment-based plans to comply with the patients' bill of rights. Congress must act to ensure that Americans in private health plans receive most of the other consumer protections outlined in the bill of rights, including access to specialists, emergency care protections, and an external appeals mechanism. The President accordingly urged the Republican Leadership to make the passage of a strong patients' bill of rights its first order of business when Congress returns.

REITERATED WHY THE ADMINISTRATION CANNOT SUPPORT THE REPUBLICAN LEADERSHIP PATIENTS' BILL OF RIGHTS. The President also reiterated his serious concerns about the shortcomings of the current Republican Leadership bills which:

Let HMOs, not informed health professionals, define medical necessity. The Republican Leadership proposals provide for an external appeals process, but make this process meaningless by allowing the HMOs themselves, rather than informed health professionals, to define what services are medically necessary. This loophole will make it very difficult for patients to prevail on appeals to get the treatment doctors believe they need.

Fail to guarantee direct access to specialists. The Republican Leadership proposals fail to ensure that patients with serious health problems have direct access to the specialists they need. We believe that patients with cancer or heart disease should not be denied access to the doctors they need to treat their conditions.

Reverse course on emergency room protections. The Republican Leadership proposals back away from the emergency room protections that Congress implemented in a bipartisan manner for Medicare and Medicaid beneficiaries in the Balanced Budget Act of 1997. The bills include a watered-down provisions that do not require health plans to cover patients who go to an emergency room outside their network and do not ensure coverage for any treatment beyond an initial screening. These provisions put patients at risk for the huge costs associated with critical emergency treatment.

Fail to protect patients from abrupt health care changes. The Republican Leadership bills fail to assure continuity of care when an employer changes health plans. These deficiencies mean that pregnant women or individuals undergoing care for a chronic illness may have their care suddenly altered mid course, potentially causing adverse health consequences.

Allow financial incentives to threaten critical patient care. The Republican Leadership proposals fail to prohibit financial incentives to providers. This omission would leave patients vulnerable to financial incentives that limit patient care.

Undermine existing medical privacy protections. The House Republican Leadership bill would preempt some existing medical privacy protections guaranteed by state law, without putting protections in their place. As a result, the Republican bill would increase the number of individuals who can review and give out health records without a patient's knowledge or consent.

Fail to compensate patients who have suffered harm as a result of a wrongful health plan action. The proposed per-day penalties in the Republican Leadership plans fail to hold health plans accountable when patients suffer serious harm or even death because of a health plan's wrongful action. For example, if a health plan improperly denies a lifesaving cancer treatment to a child, it will incur a penalty only for the number of days it takes to reverse its decision; the plan will not have to pay the family for all the damages they will suffer as the result of having a child with a now untreatable disease. And because the plan will not have to pay for all the harm it causes, it will have insufficient incentive to change its health care practices in the future.

Do not cover all health plans. Both Republican Leadership bills leave millions of Americans unprotected. The Lott proposal, for example, covers only self-insured plans, thus leaving out more than 100 million Americans, including millions of Americans in small businesses. These Americans are left to hope that states will provide them with the set of patient protections that the Republicans in Congress will not.

LABOR DEPARTMENT REGULATION BUILDS ON THE ADMINISTRATION'S EFFORTS TO EXTEND THE PATIENTS' BILL OF RIGHTS TO ALL HEALTH PLANS UNDER FEDERAL OVERSIGHT. In February, the President issued an Executive Order directing all Federal health plans to come into compliance with the patients' bill of rights. In June, the Department of Health and Human Services extended the patients' bill of rights to the 40 million Americans who receive Medicare. Last month, the Department of Veterans' Affairs began to put in place a new, rapid appeals process for its 3 million beneficiaries. This month, the Department of Defense issued a directive to all military bases throughout the world, extending patient protections to 8 million servicemen and women and their families; in addition, the Office of Personnel Management released a new anti-gag regulation as part of its efforts to implement the patients' bill of rights for the nine million Federal employees and their dependents in the Federal Employees Health Benefits Program.

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