National Alliance on Mental Illness
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House-Senate Conference Committee Begins
Work On Managed Care Legislation

For Immediate Release, 8 Mar 00
Contact: Chris Marshall

Amid sharp partisan disagreement, a House-Senate Conference Committee this past week began work to resolve differing versions of managed care Patients' Bill of Rights legislation. Despite the fact that the competing House and Senate bills are far apart on key issues (including scope of coverage and the right to sue health plans), members of the Conference Committee hope to complete their work by the time Congress adjourns for its Easter recess. For his part, President Clinton stepped up pressure on Congress last week and signaled that he is willing to accept a compromise on the key issue of the ability of enrollees to sue their health plans in state court for damages for wrongful denial of treatment. However, the White House is insisting that any compromise include all insured Americans (not just those in ERISA - Employee Retirement Income Security Act - self-insured plans as in the Senate bill). In recent weeks, key GOP leaders have publicly declared their willingness to compromise on a limited right to sue (only in federal court, once all administrative appeals are exhausted).


NAMI is supportive of many of the provisions contained in the separate House and Senate managed care Patients' Bill of Rights proposals. In particular, NAMI supports: 1) enactment of mandatory third-party, independent, clinical review with prompt timelines for binding decisions and 2) mandatory access to the most effective medications. Both the House and Senate bills contain versions of these issues and in both instances the House bill contains stronger protections.

NAMI advocates are urged to contact members of the House-Senate Conference Committee and urge them to:

1. Support a requirement for all health plans to offer access to all effective and medically appropriate medications. If a health plan elects to use a formulary, exceptions from the formulary limitation must be allowed when a non-formulary alternative is medically indicated. Health plans should be required to establish procedures whereby members can appeal a decision to prescribe a medication. Medication appeals must comply with the third-party, independent, clinical review established in the legislation. During appeals, enrollees should be allowed to remain on previously prescribed medications. Plans should not require enrolled individuals to switch medications that have been effective for them. NAMI prefers the House provision, Section 102, to the Senate version.

2. Support independent, third party clinical review entities composed of specialists who understand and deliver clinical care to persons with severe mental illnesses. Such clinical review must be completed promptly and must be binding on the health plan. While the appeal of a denial is in progress, enrollees must be able to continue to receive necessary services. Access to immediate, necessary, and appropriate care is the highest priority of NAMI. NAMI prefers the House provision, Section 103, to the Senate version.

3. Oppose inclusion of AHPs/MEWAs/Healthmarts. While NAMI strongly supports the goal of expanding access to coverage for the uninsured, the AHPs/MEWAs/HealthMart proposals, found only in the House bill, amount to a direct threat to state mental illness parity and mental illness coverage laws. These measures would allow vast numbers of small employers to band together to offer self-insured health plans under ERISA - the federal law that allows employers to self insure and exempt their plans from state law (more information included below). NAMI strongly opposes AHPs/MEWAs/HealthMart proposals in the House bill that would exempt plans from complying with state mental illness parity laws.



Nickles (R-OK), Chairman, Jeffords (R-VT), Gregg (R-NH), Frist (R-TN), Hutchinson (R-AR), Gramm (R-TX), Enzi (R-WY), Kennedy (D-MA), Dodd (D-CT), Harkin (D-IA), Mikulski (D-MD) and Rockefeller (D-WV).


Bliley (R-VA), Bilirakis (R-FL), Shadegg (R-AZ), Archer (R-TX), Thomas (R-CA), McCrery (R-LA), Boehner (R-OH), Talent (R-MO), Johnson (R-CT), Fletcher (R-KY), Burton (R-IN), Scarborough (R-FL), Goss (R-FL), Dingell (D-MI), Pallone (D-NJ), Rangel (D-NY), Stark (D-CA), Clay (D-MO), Andrews (D-NJ), Waxman (D-CA) and Berry (D-AR).

All members of Congress can be reached by calling the Capitol Switchboard at 202-224-3121 or by going to the NAMI website at and click on "Write to Congress."


Both the House and Senate passed managed care patient protection bills last year. The House bill (HR 2723), sponsored by Representatives Charlie Norwood (R-GA) and John Dingell (D-MI), establishes a new system of federal standards for all managed care plans, including a number of protections critically important to people with severe mental illnesses and their families. Among these are curbs on the use of restrictive prescription drug formularies and new external appeals for unjustified denial of treatment.

HR 2723 would also grant plan enrollees new rights to seek providers outside of a MCO's (Managed Care Organization) network, allow a limited right to continue with a provider when switching plans, and require plans to pay for more emergency treatment. The most controversial piece of the bill would allow patients to sue their health plan for damages in state court over a wrongful denial of care. This provision is strongly opposed by business and insurance interests. The more modest Senate bill (S 1344) does not include the right to sue plans in state court and does not extend patient protections in enrollees in fully insured plans.

In addition, HR 2723 has been linked to a separate controversial bill (HR 2990) intended to expand health coverage for the 44.3 million Americans who lack access to insurance. This bill includes a range of measures including expanded tax deductions and tax credits for people who currently lack coverage, medical savings accounts (MSAs), association health plans (AHPs), multi-employer purchasing cooperatives (known as MEWAs) and Health Marts. President Clinton is opposed to each of these measures and has threatened to veto any patient protection bill that includes them. In addition, the White House has expressed concerns regarding the bill's cost, estimated at $48.6 billion over 10 years, financed through future anticipated federal budget surpluses. The White House also points to a congressional Joint Economic Committee study showing that the tax provisions would benefit only 1% of those who are now uninsured.

While NAMI strongly supports the goal of HR 2990 to expand access to coverage for the uninsured, the organization opposes the AHP, MEWA and HealthMart proposals as a direct threat to state mental illness parity and mental illness coverage laws. These measures would allow vast numbers of small employers to band together to offer self-insured health plans under ERISA - the federal law that allows employers to self insure and exempt their plans from state law.

In recent years, the number of states that have enacted mental illness parity laws has expanded to 30 (Iowa and Utah are soon expected to pass parity laws). In each of these states, these state parity laws do not cover individuals and families enrolled in ERISA self-insured policies. While the federal Mental Health Parity Act (MHPA) does apply to ERISA plans, its requirements (parity is limited to annual and lifetime dollar limits) are far below most of the existing state laws. Because of the potential impact that expansion of coverage through AHPs, MEWAs and HealthMarts could have on state parity laws, NAMI remains opposed to their being included in any final patient protection bill.