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Current Legislative Issues

Managed Care Reform
Patient Confidentiality
Mental Health Parity
Medicare Graduate Medical Education Funding

I. Managed Care Reform

Managed care legislation passed the U.S. House of Representatives in October 1999 includes the health plan liability provision strongly supported by both the APA and AAP.  This provision would hold managed care and other health plans legally accountable for harm caused by their own negligent decisions to reduce or deny needed patient care.  Importantly, it would close a loophole in the federal Employee Retirement and Income Security Act (ERISA) of 1974 that has prevented patients in managed care plans from bringing state-level legal action against their plans for harm caused by negligent decision making.

In July of 1999, the Senate passed a narrower managed care bill that failed to include health plan accountability.  Given differences between the House and the Senate bills, the two proposals will be reconciled in a conference committee which is expected to arrive at some closure on the matter prior to the August Congressional recess.

Psychology, led by the APA, has had good success in advocating for the inclusion of other meaningful patient protections in both the House and Senate bills.  These protections, which would extend to far more Americans under the House bill, include:  patient choice of provider (point of service option); enhanced internal and external appeal procedures regarding decisions about treatment and payment for services; and patient access to a range of health care professionals for covered services (provider nondiscrimination).

Several challenges will be encountered during the conference committee deliberations especially with regard to the legal accountability provision of the bill.  The Republican leadership, opposed to the accountability provision, has stacked the conference committee with a majority of members who are adamantly opposed to the provision.  Additionally, the managed care industry is spending hundreds of thousands of dollars on advertising to the public aimed at convincing the public that accountability will result in increasing the ranks of the uninsured and that employers will face increased liability.  In truth, the House bill’s language protects employers from being sued for negligent care, provided the employer is not directly involved in decision making about benefit claims.

Several key issues which require a massive lobbying effort during the conference committee deliberations are:

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Preventing a “substantial harm" standard that requires a “physical injury.”

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Making certain that caps on noneconomic damaged are not included in the final bill.

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Eliminating provisions in the Senate bill which permit only physicians to fully participate in internal and external review of services.

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Retaining the “point of service” (POS) provisions.

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Retaining the “provider nondiscrimination” provisions.

During the negotiations of the conference committee, AAP will be working to support those legislators that are sympathetic to the legal accountability issue and the other key issues mentioned above.   Additionally, we will be working to cultivate relationships with those members who may be ambivalent about their positions on these matters currently.

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II. Patient Confidentiality

Federal legislators missed the August 1999 deadline to enact standards for patient records confidentiality as imposed by the Health Insurance Portability and Accountability Act of 1996.  Instead, the U.S. Department of Health and Human Services (HHS) released draft confidentiality regulations for public comment.  The draft regulations contain some favorable provisions.  Importantly, the proposed regulations specify that psychotherapy notes may not be shared without patient consent.  Problems do, however, remain in the draft. 

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The provision that permits disclosure of patients’ health records without authorization for “emergency circumstances” is too broad as applied to mental health and should be tailored to make certain that only the individual’s treating health care professional could make such disclosures.

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The rule does not recognize that patients can sometimes be psychologically harmed if they are permitted to see sensitive information in their mental health records.  Inspection provisions should be amended to permit treating health care professionals to prevent such disclosure upon a determination that it could cause substantial harm to the patient.

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With regard to law enforcement access to patient records, the proposed rule does not provide for limitations for further use and re-disclosure of the records.

Obviously, close monitoring of the proposed and final regulations released by HHS will be necessary.

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III. Mental Health Parity

Action on two mental health parity bill currently before Congress is not likely to occur in 2000.  Instead, Congress will likely address parity legislation in 2001 since the 1996 Federal mental health parity law sunsets in that year.

The House bill sponsored by Rep. Marge Roukema (R-NJ) would provide full parity in insurance coverage for mental health as compared to physical health services, including number of inpatient days and outpatient visits, copayment levels and deductible amounts, out-of-pocket requirements for beneficiaries, annual/lifetime dollar limits and other financial requirements.  By contrast, the Senate bill, sponsored by Sen. Pete Domenici (R-NM) and Paul Wellstone (D-MN), would require full parity only for designated “serious biologically-based mental illness” (such as schizophrenia, bipolar disorder and major depression) plus post traumatic stress disorder and attention deficit disorder.

Mental health parity legislation is a highly active issue in the states.  There too, the primary battle revolves around the comprehensive vs. serious mental illness (SMI)  argument.  APA continues to work with state psychological associations to help enact broad based legislation and amend cur rent SMI laws to protect all people with mental disorders.

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IV. Medicare Graduate Medical Education Funding

Representatives of the Health Care Financing Administration have advised selected members of Congress and their staff in recent months that the agency intends to issue a proposed rule that would include psychology among the health professions eligible for Medicare Graduate Medical Education (GME) funding.  Federal GME monies have been used to support the training of health care providers for more than 30 years.  This issue has been assiduously pursued for many years and finally there looks like there will be a rectification occurring soon.  Congress issued report language in November 1999 urging HCFA to propose a rule to include psychology for GME funding, and asked that this step be taken by June 2000.

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