Russ Newman, Executive Director
APA Practice Directorate
The central mission of the APA Practice Directorate is to advocate on behalf of
practicing psychologists. The activities leading up to the U.S. House of Representatives
adopting legislation giving patients the right to sue their managed care organization for
negligent care provides a good example of how the Directorate’s integrated
legislative, legal, marketplace, and consumer education strategy is working to shift the
focus of our rapidly evolving health care toward a better balance – away from cost
and toward quality.
As the House of Representatives prepared to debate patient protection bills in early
October, the center of controversy was clear: whether to include the right to sue
negligent managed health plans. When APA first proposed legislative language four years
ago to establish plan accountability, no one on Capitol Hill was much interested in taking
on this battle. Rep. Charlie Norwood (R-Ga.) later emerged as a strong advocate, and the
provision garnered growing bipartisan congressional support over the past couple of years.
On the other side of the issue, having spent millions on advertising, the managed care
and insurance industries captured substantial media attention for its key messages: plan
liability will cause a wave of litigation, drive up health insurance costs and force many
employers to drop employee health benefits. APA has been working to convey contrasting
messages to employers and consumers – that accountability offers a sound way of
encouraging greater attention to quality and less attention to profits, and can actually
serve to prevent patient injury. In the weeks preceding House deliberations, the
Practice Directorate took a series of strategic steps aimed at refocusing congressional
debate on the critical role of plan liability in assuring quality patient care.
This past summer, the Directorate asked PriceWaterhouseCoopers (PWC) to analyze the
income that insurance and managed care companies can generate by investing the money saved
while denied claims are appealed. The financial assumptions were based on a scenario
reflecting the Senate Patients’ Bill of Rights Plus Act (S.1344). The PWC study found
that the insurance and managed care industries could gain interest income of up to $280
million each year if as few as one percent of a year’s claims were denied and later
paid after the maximum amount of time allowed by the review process. The PWC study helps
make the point that managed care companies stand to make considerable money by denying
even a tiny percentage of claims and waiting for the review process to overturn the
decision.
On the eve of House debate, APA, joined by the Center for Patient Advocacy, ran an ad
in Roll Call, a Capitol Hill newspaper. The intent was to remind Congress that
little incentive exists for MCOs to provide high quality care, while considerable
financial incentive exists to restrict patient access. The ad, which asks, "Do HMOs
care about the treatment your family gets?," caricatures an HMO executive whose
decisions to deny care through the utilization review process result in considerable
company profits. The ad, and a companion fact sheet, encourages Congress to counter this
financial incentive by enacting health plan accountability through the Norwood-Dingell
bill (H.R. 2723).
Not unexpectedly, insurance industry representatives attempted to counter organized
psychology’s efforts. The Health Insurance Association of America (HIAA) publicly
criticized the PWC study of potential interest earnings from denied claims and demanded
that the association issue a "correction" to our conclusions of the study.
On October 7th, the House passed a bill giving patients the right to sue and
thereby forcing managed care firms to be held accountable for their actions. While the
Senate managed care reform bill did not contain a similar provision – and a
compromise needs to be worked out before the bill can become law – combining
legislative advocacy, lawsuits, consumer education and market analysis provides the
Directorate with an integrated approach to reforming the health care system with that is
beginning to have an impact.
This article first appeared in the Winter 2000 Edition of the APAGS Newsletter, Vol.
12(1)
