National Alliance on Mental Illness
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Congress Prepares to Act on Managed
Care Patient Bill of Rights Legislation

Chris Marshall
For Immediate Release
19 Feb 99

As is being widely reported in the press, one of the major legislative priorities for both the Clinton Administration and Republican leaders in Congress this year is expected to be enactment of a managed care "Patient Bill of Rights" for all health care consumers. This effort is largely in response to growing concerns among Americans that health plans are exercising too much control over medical care and minimum federal standards are needed to ensure access to treatment and promote greater accountability and higher quality.

Background on the Legislation

Currently, there are dozens of competing "Patient Bill of Rights" proposals in Congress. While these proposals vary in terms of both the content of federally imposed standards and the degree to which these standards would be binding upon managed health care plans. In addition, President Clinton has his own proposal that has been endorsed by Democratic leaders in Congress. Perhaps the most contentious issue in the debate over Patient Bill of Rights legislation is expected to be whether to establish an explicit federal right to sue health plans in state court for denial of treatment. This is especially the case for employer self-insured health plans (chartered through the federal ERISA law) that currently are immune from damage liability for all but the actual costs of denied treatment.

In addition to sharp differences over plan liability, the competing legislative proposals in Congress also vary with respect to some of the specific standards - even in cases where specific bills claim to guarantee the same right. For example, while nearly every managed care bill in Congress has a right to an independent appeal for adverse decisions by plans, they vary in terms of whether outside decisions are binding upon health plans. Moreover, some of the plans in Congress actually require patients to post a bond prior to filing an appeal. Likewise, some of the proposals in Congress grant to health plans the sole discretion to define medical necessity while other proposals grant treating professionals the sole discretion to define medical necessity (the key criteria by which all managed care plans either accept, or deny specific claims).

NAMI Position

In September 1997 NAMI published "Stand and Deliver: Action Call to A Failing Industry." The report observed that managed care plans failed to deliver on the following expectations: publicly available and current practice guidelines, easy hospital admission and flexible hospital length-of-stay, PACT programs, immediate access to all effective medications, suicide attempt viewed as a medical emergency, consumer and family participation in treatment planning and care, measurement of clinical outcomes, access to psychiatric rehabilitation, and access to secure and supportive housing.

In an October 1998 NAMI survey of consumer and family experiences with managed care, 25 percent of respondents had positive experiences with managed care in four areas: improved access to treatment, emphasis on preventing crisis, focus on consumer satisfaction, and decreased unnecessary hospitalization. The five areas of most negative experience with managed care were: don't know how to file an appeal (55 percent), inability to see doctor (41 percent), problems getting medications (34 percent), problems getting crisis services (33 percent), and problems getting admitted to a hospital (28 percent). Twenty-five percent of respondents had filed an appeal with their health plan; families were successful 54 percent of the time and consumers were successful 42 percent of the time.

While NAMI is supportive of many of the provisions contained in these legislative proposals, several priority issues are guiding the organization's advocacy in 1999. The first is enactment of mandatory third-party, independent, clinical review with prompt timelines for binding decisions. NAMI supports clinical review of plan decisions that meet the following standards: a) that entities conducting reviews be composed of specialists who understand and deliver clinical care to persons with severe mental illnesses, b) that all clinical reviews be independent of health plans, c) that all clinical reviews be completed promptly, d) that all clinical reviews are binding on health plans, and e) that while an appeal of a denial is in progress, the patient must continue to receive necessary services.

The second major priority for NAMI is enactment of mandatory access to medications. NAMI supports federal standards that would require plans to offer access to all effective and medically appropriate medications. Under such standards, if a health plan uses a formulary, exceptions from the formulary limitation must be allowed when a non-formulary alternative is medically indicated. NAMI supports standards that would require health to establish procedures whereby members could appeal a decision to prescribe a medication (such appeals would have to comply with the third-party, independent, clinical review noted above).

Such standards on formularies would also allow enrollees to remain on his or her previously prescribed medication (until the appeal is completed). NAMI also supports barring plans from requiring enrollees to switch medications that have been effective for them. Finally, NAMI supports standards for formularies that would promote quality of care through greater adherence to practice guidelines with respect to medications (this recommendation is based on findings in the 1998 Schizophrenia PORT study which found that many patients are receiving either the wrong medication or an incorrect dosage of the right medication).

Other issues of concern to NAMI are adoption of language as part of the "emergency room layperson" standard to ensure that suicide attempts are treated as genuine medical emergencies under plan rules. NAMI also supports restrictions on involuntary disenrollment rules that allow plans to deny coverage for consumers who miss consecutive medical appointments or fail to comply with prescribed treatment (in many cases, such conditions for denial of coverage are the very symptoms of brain disorders such as schizophrenia). Finally, NAMI is supporting many other consumer-protection provisions, such as complete public sharing of health plan procedures, restrictions, and coverage information and the creation of ombudsmen programs to help enrollees understand and take advantage of their rights.

While no single legislative proposal encompasses all of NAMI's priorities, some of the bills in Congress do better than others. For example, the Democratic leadership bills (S6 and HR 358) are strong in the area of third-party appeals. In the area of curbing restrictive prescription drug formularies, the bipartisan Chafee-Graham plan (S 374) and the Ganske bill (HR 719) are strong. The Republican leadership bills are HR 448 and S 300. The text of each of these proposals is available through the policy page of the NAMI website at

Action Requested

NAMI advocates are urged to contact members of their state's congressional delegation to urge swift action on managed care patient protection legislation. Rather than advocate for any specific proposal, NAMI members are urged to focus on a few basic elements that must be included in any legislation Congress passes: binding third-party reviews, curb on restrictive formularies, ombudsmen programs for vulnerable consumers, etc. Access to treatment should be stressed as central to all of these issues. Personal stories are particularly effective in bringing home the message of increasing access to quality care and enhancing accountability in managed care.