[Pages S2484-S2486]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

PATIENT RIGHT TO KNOW

<bullet> Mr. WYDEN. Mr. President, this week my colleagues, Senators
Kyl, Kennedy and Hutchinson, and I have introduced S. 449, the Patient
Right to Know Act of 1997. This legislation outlaws so-called gags in
contracts between managed care companies and their licensed
practitioners which have limited what doctors can tell patients about
their medical condition and all treatment appropriate to their care.
Plain and simple, such gags have been used to limit appropriate
medical care. While this is a dollars-and-cents issue for health care
organizations and insurers, for patients and their doctors

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such restrictions on the usual free flow of communication--held sacred
since ancient times--literally may be a matter of life or death.
I was pleased to join Mr. Kennedy in offering legislation on the
floor last session which would have ended such restrictions. I also
wish to thank Mr. Kyl for his support of our legislation last year, and
for his diligent efforts in the intervening months to prepare this bill
for re-introduction.
I also wish to acknowledge support for this legislation from
organizations including the Consumer's Union and the American Medical
Association.
We have this broad range of support because the need for this
legislation is clear and documented. Three in four Americans now
covered by private health insurance receive their care from managed
care organizations. Increasingly, Medicaid enrollees and seniors in
Medicare are covered by managed care plans through their respective
Federal health insurance programs.
Residents of my home State of Oregon boast the highest penetration of
managed care in the Nation. The State's Medicaid Program for the most
part is organized through private managed care companies. And in
Portland, managed care plans service almost 60 percent of the Medicare
population.
In Oregon and elsewhere, the managed care presence has grown for
reasons that are quite wholesome. Managed care helps enrollees stay
healthy through illness prevention programs. They assure coordination
of services for persons with multiple ailments. And through systematic,
quality-conscious gate-keeping, they work to reduce unnecessary
treatments which drive up health care costs.
At the same time, however, some managed care providers have tried to
enhance their profit margins by limiting what doctors may tell patients
regarding all appropriate treatments, thereby reducing services
patients may actually receive. These gags in my view are outrageous.
The President through administrative order during the last few months
has made such gags illegal in managed care plans operating under
Medicare and Medicaid. He has pledged his support for legislation
eliminating these restrictions in private health plans as well.
Mr. President, while I am convinced that we need a single Federal
standard on this matter to protect patients in managed care plans I am
much encouraged by the voluntary efforts to end such gags recently
announced by the managed care insurance industry. My long association
with these companies has convinced me that coordinated care providers
as a group often are on the cutting edge of developing both efficient
and high-quality care for their enrollees. It is entirely appropriate
for this provider group to try to police their members on the issue of
gag provisions and the protection of doctor-patient communications.
I ask that the text of the bill be printed in today's Record.
The bill follows:

S. 449

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; FINDINGS.

(a) Short Title.--This Act may be cited as the ``Patient
Right to Know Act''.
(b) Findings.--Congress finds the following:
(1) Patients need access to all relevant information to
make appropriate decisions about their health care.
(2) Open medical communications between health care
providers and their patients is a key to prevention and early
diagnosis and treatment, as well as to informed consent and
quality, cost-effective care.
(3) Open medical communications are in the best interests
of patients.
(4) Open medical communications must meet applicable legal
and ethical standards of care.
(5) It is critical that health care providers continue to
exercise their best medical, ethical, and moral judgment in
advising patients without interference from health plans.
(6) The offering and operation of health plans affect
commerce among the States.
(c) Purpose.--It is the purpose of this Act to establish a
Federal standard that protects medical communications between
health care providers and patients.

SEC. 2. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL
COMMUNICATIONS.

(a) Prohibition.--
(1) General rule.--The provisions of any contract or
agreement, or the operation of any contract or agreement,
between an entity operating a health plan (including any
partnership, association, or other organization that enters
into or administers such a contract or agreement) and a
health care provider (or group of health care providers)
shall not prohibit or restrict the provider from engaging in
medical communications with his or her patient.
(2) Nullification.--Any contract provision or agreement
described in paragraph (1) shall be null and void.
(3) Prohibition on provisions.--Effective on the date
described in section 5, a contract or agreement described in
paragraph (1) shall not include a provision that violates
paragraph (1).
(b) Rules of Construction.--Nothing in this Act shall be
construed--
(1) to prohibit the enforcement, as part of a contract or
agreement to which a health care provider is a party, of any
mutually agreed upon terms and conditions, including terms
and conditions requiring a health care provider to
participate in, and cooperate with, all programs, policies,
and procedures developed or operated by a health plan to
assure, review, or improve the quality and effective
utilization of health care services (if such utilization is
according to guidelines or protocols that are based on
clinical or scientific evidence and the professional judgment
of the provider) but only if the guidelines or protocols
under such utilization do not prohibit or restrict medical
communications between providers and their patients; or
(2) to permit a health care provider to misrepresent the
scope of benefits covered under a health plan or to otherwise
require the plan to reimburse providers for benefits not
covered under the plan.
(c) Enforcement.--
(1) State authority.--Except as otherwise provided in this
subsection, each State shall enforce the provisions of this
Act with respect to health insurance issuers that issue,
sell, renew, or offer health plans in the State.
(2) Enforcement by secretary.--
(A) In general.--Effective on January 1, 1998, if the
Secretary, after consultation with the chief executive
officer of a State and the insurance commissioner or chief
insurance regulatory official of the State, determines that
the State has failed to substantially enforce the
requirements of this Act with respect to health insurance
issuers in the State, the Secretary shall enforce the
requirements of this Act with respect to such State.
(B) Enforcement through imposition of civil money
penalty.--
(i) In general.--With respect to a State in which the
Secretary is enforcing the requirements of this Act, an
entity operating a health plan in that State that violates
subsection (a) shall be subject to a civil money penalty of
up to $25,000 for each such violation.
(ii) Procedures.--For purposes of imposing a civil money
penalty under clause (i), the provisions of subparagraphs (C)
through (G) of section 2722(b)(2) of the Health Insurance
Portability and Accountability Act of 1996 (42 U.S.C. 300gg-
22(b)(2)) shall apply except that the provisions of clause
(i) of subparagraph (C) of such section shall not apply.
(3) Self-insured plans.--Effective on January 1, 1998, the
Secretary of Labor shall enforce the requirements of this
section in the case of a health plan not subject to State
regulation by reason of section 514(b) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1144(b)).
(4) Rule of construction.--Nothing in this Act shall be
construed to affect or modify the provisions of section 514
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1144).
(d) No Preemption of More Protective Laws.--A State may
establish or enforce requirements with respect to the
protection of medical communications, but only if such
requirements are equal to or more protective of such
communications than the requirements established under this
section.

SEC. 3. DEFINITIONS.

In this Act:
(1) Health care provider.--The term ``health care
provider'' means anyone licensed or certified under State law
to provide health care services who is operating within the
scope of such license.
(2) Health insurance issuer.--The term ``health insurance
issuer'' has the meaning given such term in section
2791(b)(2) of the Public Health Service Act (as added by the
Health Insurance Portability and Accountability Act of 1996).
(3) Health plan.--The term ``health plan'' means a group
health plan (as defined in section 2791(a) of the Public
Health Service Act (as added by the Health Insurance
Portability and Accountability Act of 1996)) and any
individual health insurance (as defined in section
2791(b)(5)) operated by a health insurance issuer and
includes any other health care coverage provided through a
private or public entity. In the case of a health plan that
is an employee welfare benefit plan (as defined in section
3(1) of the Employee Retirement Income Security Act of 1974),
any third party administrator or other person with
responsibility for contracts with health care providers under
the plan shall be considered, for purposes of enforcement
under this section, to be a health insurance issuer operating
such health plan.
(4) Medical communication.--
(A) In general.--The term ``medical communication'' means
any communication made by a health care provider with a
patient of the health care provider (or the

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guardian or legal representative of such patient) with
respect to--
(i) the patient's health status, medical care, or legal
treatment options;
(ii) any utilization review requirements that may affect
treatment options for the patient; or
(iii) any financial incentives that may affect the
treatment of the patient.
(B) Misrepresentation.--The term ``medical communication''
does not include a communication by a health care provider
with a patient of the health care provider (or the guardian
or legal representative of such patient) if the communication
involves a knowing or willful misrepresentation by such
provider.
(5) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.

SEC. 4. EFFECTIVE DATE.

This Act shall take effect on the date of enactment of this
Act, except that section 2(a)(3) shall take effect 180 days
after such date of enactment.

Mr. KENNEDY. Mr. President, I am pleased to join Senator Wyden in
introducing this gag rule legislation and I commend him for his
leadership. Last year, a majority of the Senate voted for similar
legislation but it was defeated on a procedural technicality.
Gag rules have no place in American medicine. Americans deserve
straight talk from their physicians. Physicians deserve protection
against insurance companies that abuse their economic power and compel
doctors to pay more attention to the health of the company's bottom
line than to the health of their patients.
I am pleased that this legislation has strong support from both the
American Medical Association and Consumer's Union--because it is a
cause that unites the interests of patients and doctors.
One of the most dramatic changes in the American health care system
in recent years has been the growth of health maintenance
organizations, preferred provider organizations, point of service
plans, and other types of managed care. Today, 75 percent of all
privately insured Americans are in managed care. Even conventional fee-
for-service plans have increasingly adopted features of managed care,
such as ongoing medical review and case management.
In many ways, this is a positive development. Managed care offers the
opportunity to extend the best medical practice to all medical
practice. It emphasizes helping people to stay healthy, rather than
simply caring for them when they become sick. It helps provide more
coordinated care and more effective care for people with multiple
medical needs. It offers a needed antidote to incentives to provide
unnecessary care--incentives that have contributed a great deal to the
high cost of care in recent years.
At its best, managed care fulfills these goals and improves the
quality of care. Numerous studies have found that managed care compares
favorably to fee for-service medicine on a variety of quality measures,
including use of preventive care, early diagnosis of some conditions,
and patient satisfaction. Many HMOs have made vigorous efforts to
improve the quality of care, gather and use systematic data to improve
clinical decision-making, and assure an appropriate mix of primary and
specialty care.
But the same financial incentives that enable HMOs and other managed
care providers to practice more cost-effective medicine also can lead
to under treatment or inappropriate restrictions on care, especially
when expensive treatments or new treatments are involved.
Too often, insurance companies have placed their bottom line ahead of
their patient's well-being and have pressured physicians in their plans
to do the same. These abuses include failure to inform patients of
particular treatment options; barriers to reduce referrals to
specialists for evaluation and treatment; unwillingness to order
appropriate diagnostic tests; and reluctance to pay for potentially
life-saving treatment. It is hard to talk to a physician these days
without hearing a story about insurance company behavior that raises
questions about quality of care. In some cases, insurance company
behavior has had tragic consequences.
In the long run, the most effective means of assuring quality care in
HMOs is for the industry itself to make sure that quality is always a
top priority. I am encouraged by the industry's development of ethical
principles for its members, by the growing trend toward accreditation,
and by the increasingly widespread use of standardized quality
assessment measures. But I also believe that basic Federal regulations
are necessary to assure that every plan meets at least minimum
standards.
Medicare has already implemented such a prohibition. All Americans
are entitled to this same protection.
A gag rule provision is also included in a more comprehensive managed
care bill that I introduced earlier this session. That bill addresses a
number of other issues as well. This prohibition of gag rules is such a
simple need and cries out for immediate relief.
This legislation targets the most abusive type of gag rule--the type
that forbids physicians from discussing all treatment options with
patients and makes the best possible professional recommendation, even
if the recommendation is for a non-covered service or could be
construed to disparage the plan for not covering it.
This bill specifically forbids plans from prohibiting or restricting
a provider from any medical communication with his or her patient.
This is a basic rule which everyone endorses in theory, even though
it has been violated in practice. The standards of the Joint Commission
on Accreditation of Health Care Organizations require that ``Physicians
cannot be restricted from sharing treatment options with their
patients, whether or not the options are covered by the plan.''
We need to act on this legislation promptly. The Senate has the
opportunity to protect patients across the country from these abusive
gag rules. Action on this legislation is truly a test of the Senate's
commitment to the rights of patients and physicians across the
country.<bullet>

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