Employer liability focus of Senate patient rights debate

WASHINGTON (CNN) -- The Senate opens a full week of debate Monday on the patients' bill of rights by resuming discussion on whether employers should share responsibility when an insurance provider is sued by one of their employees.

Chamber members debated the issue last Friday before leaving town for the weekend.

At issue is whether employers who play an active role in health treatment decisions made by an insurance provider or health maintenance organization should be held accountable if one of their employees -- a patient of the HMO with whom the employer has contracted -- sues the HMO for damages.

Republicans, who are battling Democrats as the bill favored by the new majority moves toward a final vote, argue that exposing certain employers to legal action could drive up premiums for individual beneficiaries, and could result in some small businesses dropping insurance benefits altogether.

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Insurance benefits should be seen as a perk of employment, some Republicans argued over the weekend. Employers are not required to provide insurance to their employees, they said.

"Do people have to provide this benefit? No. It's very expensive, in many cases not even appreciated, so I'm afraid the net result is a lot of employers would drop health care," Sen. Don Nickles of Oklahoma, the Republican whip, said Sunday on the CBS news program "Face the Nation." "We shouldn't do harm. We shouldn't increase the number of uninsured. We shouldn't make health care so expensive that people can't afford it," Nickles said.

But Democrats, who favor expanding the ability of patients nationwide to sue their HMOs if the organization overrides a doctor's treatment decision, say some employers take an active role in deciding what kind of health coverage should be afforded their employees. While they favor limiting the ability of patients to sue their employers, they do not wish to erase the option.

Sen. John Edwards, D-North Carolina, a chief sponsor of the bill, said the vast majority of employers would be exempted from exposure to lawsuits, "unless they actually make individual medical decisions."

Last Friday, Sen. Phil Gramm, R-Texas, revealed details of an amendment to the Democratic bill that would insulate employers from lawsuits. Gramm, backed by Texas' other Republican senator, Kay Bailey Hutchison, intends to amend the bill to mirror the patients' bill of rights enacted in his home state, where employers cannot be sued. Gramm hopes to shepherd his amendment toward a vote Monday or Tuesday.

That state bill became law in Texas despite the objections of then-Gov. George W. Bush.

Bills differ on liability issues

Liability issues are at the heart of the ideological rift between the chamber's Republicans and Democrats. There are two bills under Senate consideration, and they share similarities. Both would provide patients enrolled in health maintenance organizations with expanded access to a variety of specialists and prescription drugs.

But the rival camps are split on the issue of how an HMO or insurance provider should be made to address the consequences of a poor coverage decision. Democrats, supported by a handful of Republicans, have argued for more than five years that a patients' bill of rights is needed to combat the power HMO officials sometimes exercise over doctors.

Democrats in the Senate, led by John Edwards of North Carolina and Ted Kennedy of Massachusetts, with help from Arizona Republican John McCain, insist that the HMO industry must be held accountable when it denies or disallows a doctor's recommendation for medical treatment. Patients who believe they were wronged by such a decision, who can prove through an independent review process that their health was further damaged by an HMO's coverage choice, should be allowed to seek redress in court, they say.

But most Senate Republicans, who support a rival bill drafted by Republican Bill Frist of Tennessee, Democrat John Breaux of Louisiana and independent James Jeffords of Vermont, oppose the liability sections of the Edwards-Kennedy-McCain bill. The Edwards-Kennedy-McCain bill would allow awards of up to $5 million for pain and suffering, in addition to punitive damages. The Frist-Breaux-Jeffords bill would place a cap on pain and suffering payouts at $500,000 and ban punitive damage awards.

Democrats continue to press their case, even with the shadow of a veto threat hanging over them, and the prospect that some of their Fourth of July break could be lost next week if the chamber doesn't wrap up its work. Majority Leader Tom Daschle of South Dakota has pledged to keep the Senate in session next week if the bill is not completed by this Friday.

McCain, speaking Sunday on CNN's "Late Edition," said he believed the Senate and the Bush administration would be able to find a way to agree on the bill, putting an end to any talk of a veto.

"The president knows that we need a patients' bill of rights as well as anyone, and he doesn't want to have to veto, so I am cautiously optimistic that we can reach an agreement on a bill that he can sign," McCain said.