September 24, 2009
Even as President Obama promised to address tort claims as part of his health "reform" proposals, House' Democrats' government takeover of health care (H.R. 3200) would maintain and expand trial lawyers' ability to bring job-killing and costly lawsuits against businesses:
- Section 1451 permits State Attorneys General to bring actions against drug manufacturers regarding disclosure of their relationships with physicians, which, coupled with the millions of dollars in potential new fines, would further raise costs for manufacturers and discourage the development and diffusion of life-saving breakthroughs.
- Section 153 creates new whistleblower protections against employees who file complaints regarding actual or potential violations of the Act's provisions. This section could increase the number of lawsuits filed against firms by disgruntled employees on the grounds that they were "about to provide" information regarding an employer's non-compliance with the bill's numerous mandates, raising the cost of health care-exactly the opposite effect of the bill's purported goal.
- Section 1415 extends federal whistleblower protections to current and former employees of nursing facilities regarding complaints made about that facility and permits victims of discrimination to pursue action against the facility in federal court. The bill permits successful whistleblower plaintiffs to receive damages as well as "reasonable attorney and expert witness fees"-with no statutory caps on same-and prohibits any contractual arrangement from waiving or infringing upon whistleblowers' rights. These provisions constitute an invitation to lawsuits against nursing home facilities, the cost of which could significantly hinder the facility's ability to provide quality patient care.
- Section 132 of the bill as introduced requires all insurance companies to establish third-party review processes for denied claims that would be binding upon the carrier-but does not restrict individuals' ability to pursue lawsuits even in the event of an "adverse decision" by the independent experts.
- Section 151 imposes additional mandates and regulations on all insurance plans-including those offered by employers-while maintaining current-law State and federal regulations, and providing that "rights and remedies under State laws" will continue to apply. These provisions could subject employers to review by 50 different State courts, thereby raising costs and encouraging more employers to drop their current health plans.
While the above provisions demonstrate that House Democrats are unwilling to restrain the demands of the trial bar when it comes to actions against private industry, H.R. 3200 shows no such compunctions with regard to protecting individuals from arbitrary actions by their government:
- Section 223(f) prohibits judicial review of payment rates established by the new government-run health plan-preventing underpaid doctors and hospitals from seeking payment levels that actually reflect their costs, rather than a bureaucrat's vision of what those costs should be.
- Section 1123 prohibits judicial review of the determination of efficient counties or areas receiving 5 percent bonus payments under Medicare-potentially preventing providers who are actively working to reduce health costs from receiving financial rewards for their efforts.
- Section 1151 prohibits judicial review of the methodologies used to determine which hospitals will receive payment reductions for high numbers of preventable re-admissions, potentially penalizing hospitals with sicker-than-average patients.
- Section 1156 prohibits judicial review of the exception process that allows physician-owned hospitals to grow-allowing unelected bureaucrats further to restrict the development of facilities that have made progress in increasing quality of care and decreasing patient infection rates.
- Section 1301 prohibits judicial review of the details surrounding the accountable care organization pilot program established in the bill, allowing bureaucrats in the Centers for Medicare and Medicaid Services to exclude without penalty potentially innovative physicians, teams of providers, or new ownership structures that could slow the growth of health costs.
- Section 1303 prohibits judicial review of the new 5-10 percent bonus payments to primary care physicians, which could prevent some providers from receiving additional incentives to practice primary care medicine.
- Perhaps most importantly, no provision in the bill would establish any right of judicial review for individuals harmed by the decision of a government health program to use clinical or cost-effectiveness research to deny care. Given the myriad new litigation rights permitted against the private sector in H.R. 3200, many may question why patients denied access to life-saving treatments by their own government should not have a right of recourse when harmed-or whether Democrats' failure to do so in the bill constitutes a tacit admission that the government-run health plan will provide "one-size-fits-all" care not directed to a patient's needs.
Thus even as President Obama calls for tort reform, an analysis of H.R. 3200 reveals what House Democrats consider such "reform" to mean-enriching trial lawyers over small businesses struggling to provide health insurance to their workers, and protection of unelected bureaucrats from legal actions by patients and doctors harmed by the federal government's actions. Many may therefore question whether this "change" in favor of the trial bar is one the rest of the country can believe in.
For additional information, contact:
The House Republican Conference Policy Office