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MANAGED CARE
LIABILITY: THE IMPACT ON EMPLOYER SPONSORED HEALTH PLANS
The debate over managed care is continuing in the Ohio General Assembly.
HB 52 (Jacobson) and SB 28 (Hagan) are managed care reform
bills that contain provisions to allow patients to sue their managed
care plan under tort law if they were harmed as a result of a decision
to deny payment for a recommended treatment.
HB 4
(Gardner) originally included a troublesome liability provision. While
the revamped Sub.HB 4 scraps the liability expansion in favor
of an external review process, the legislation faces an uphill battle
as proponents of health care liability fight to reinsert the provision
during upcoming legislative debates.
On the surface, liability seems to provide greater accountability for
health plan coverage decisions. These proposals even garner support
from individuals who have experienced glitches with their managed care
plan and are willing to pay more for the right to sue under tort law.
But, the unanswered question is how much more are they willing to pay
and will they still favor liability if they could lose their health
benefits all together? Surveys show that employers who provide health
care benefits are likely to discontinue providing health benefits when
faced with increased premiums and the potential to be sued. Since a
majority of Ohioans receive their health benefits from their employer
- an employers decision to drop benefits will be catastrophic.
Increased Premiums and Lawsuits/Decrease in Health Care Benefits
Marketplace competition
during the past several years has contained health care costs and expanded
health care access to more Ohioans. These proposals threaten to erode
those gains.
Using the legal system to address concerns in managed care will result
in substantial increases in health care premiums. The costs associated
with expensive liability insurance, fewer choices in health care coverage
options and the likelihood of multi-million dollar jury verdicts will
be borne by employers and their workers. In the end, increased costs
without increased quality diminish the ability of employers to continue
to offer health care benefits and results in more uninsured Ohioans.
Expanded liability
also encourages greater involvement by the courts and trial lawyers
in the health care decision making process. This approach encourages
more lawsuits - not improvement in the quality of treatment that patients
receive. Pushing enrollees into the legal system only increases the
burden on an already over-utilized court system. The policy focus should
be on ensuring patients receive the care they need, when they need it.
Employer liability
Ohio employers rely on the delivery of high quality health care
to assure healthy and productive employees and provide health benefits
as a way to retain and attract high quality workers. Promoting an increase
in legal remedies associated with health care will only discourage employers
from offering these benefits.
The liability provision contained in these bills may be applied to employers
who sponsor fully-insured and self-insured benefit plans. Although federal
ERISA law exempts self-insured plans from direct state regulation, federal
legislation likely to be passed this year and courts around the country
are slowly eroding away the preemption. This erosion along with the
practice of hiring independent entities who are subject to state regulation
to administer portions of the self-insured plan leaves employers vulnerable
to increased liability.
While SB 28 seeks to exempt employers from the liability provision,
it does not negate the ability of the courts to create a new cause of
action against employers. Ultimately, the decision on whether employers
are liable will be left to the courts around the state, some of which
have typically not been favorable towards business.
Conclusion
Resolving payment disputes in a timely manner and addressing
patient needs by striving to increase customer service are laudable
goals. But these goals are not likely to be met through increased lawsuits.
A more appropriate means is to ensure that patients have access to fast,
fair and efficient processes for resolving payment disputes. In addition,
increasing access to quality health care can only be achieved by containing
health care costs and establishing quality assurance programs with checks
and balances.
For additional
information contact the Ohio Chamber of Commerce (614)228-4201.
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