General Practice, Solo & Small Firm DivisionMagazine

 
Volume 17, Number 5
July/August 2000

Legislative Update Fighting over Bills

E. E. Anderson

Last Column

When the second session of the 106th Congress opened, leaders in both houses hoped to pass their most politically bothersome issues by spring, and then turn their attention to the spending bills for next year. Several demanding issues faced the Democrats and the Republicans. Social Security, overhaul of the bankruptcy laws, managed care protection for patients, and competing education bills were the most pressing.

Several of these latter bills have passed both houses, but differences between House and Senate versions have prevented their final approval. The fights over these bills may seriously affect the passage of the spending bills, bills that will have their own problems. Senator Chuck Hagel (R-NE) states that "the partisan divisions are deepening, and both sides are trying to capture the issues for partisan gain." He contends that the White House has no rapport with the GOP-controlled Congress, but he also admits that some of the issues are so complicated that "you couldn't even resolve them quickly in a good environment."

The Republicans have been burned at the end-of-session battles over appropriations, and they are determined to pass the spending bills early, even if it means pushing other legislation aside. GOP leaders have expressed a hope to pass at least four of the 13 spending bills before they go on recess at the end of May. Yet, when Congress returned from a two-week Easter recess on May 2, much of the legislative schedule was already adversely affected by preoccupation with the China trade bill. How this factor, the beginning of work on the four spending bills, and other considerations will affect the passage of pending measures is unknown. An examination of the status of a few of those measures follows.

MANAGED CARE

In recent years, a major obstacle to enactment of managed care legislation has been the issue of liability. The Employment Retirement Income Security Act (P.L.93-406), known as ERISA, allows health plans to be sued only in federal courts and limits damages to the cost of denied care. The House bill (H.R. 2990) passed last summer gives patients greater power to sue their managed care providers for damages. The Senate bill (S. 1344), passed in July 1999, has no such provision.

On January 13, House Majority Leader Dick Armey (R-TX) predicted that the Congress will enact a managed care law allowing patients greater rights to sue their health plans. Last summer, Rep. Armey voted against passage of such a bill. Why his change of position? Armey reasoned that "there's a lot of change in public opinion on this." Also in late January, Senate Majority Leader Trent Lott (R-MS) said he is now willing to accept the liability provisions of H.R. 2824, passed by the House last October, which permit patients to sue their health plans in federal courts after exhausting a series of appeals and would allow suits in state courts if state laws permit them.

The White House does not like H.R. 2824, saying patients would be required to perform endless tasks before they could sue. The president is said to favor H.R. 2990. Of course, insurers and employer groups strongly oppose expanding liability, saying that it will prevent people from getting the medical care they need.

The debate on expanding the liability provision could be settled by the Supreme Court. In February, in Pegram v. Herdich, the Supreme Court heard a case that asked the Court to expand the right to sue under ERISA, by allowing a patient to claim that her physician-owned health plan failed to meet its legal duties as a "trustee"-a trustee who controls the plan's administration of benefits. The Court's decision is expected this summer.

Another promising development took place on April 13, when conferees agreed on a list of principles that would allow a patient to appeal the insurer's decision to an independent oversight panel. Some of those principles are: (1) a patient could appeal the insurer's decision that the procedure is not medically necessary or is experimental; (2) the patient could also appeal for coverage believed covered by the contract but denied by the insurer; and (3) the appeals board could decide that a claim does not warrant a review.

President Clinton recently met with House and Senate leaders in an attempt to resolve the differences between the House and Senate bills. At this stage, however, the two bills differ greatly in two areas: (1) whether patients should be allowed to sue plans if they are harmed when care is denied, and (2) who should be covered by federal law. H.R. 2990, supported by Democrats and 60-plus Republicans, allows lawsuits and covers all Americans who have private insurance-about 161 million. S. 1344 does not expand existing rights to sue and covers only those individuals whose health plans are exempt from state regulations-about 55 million.

BANKRUPTCY OVERHAUL

S. 625 and H.R. 833 are the Senate and House versions of bankruptcy legislation designed to reduce the number of personal bankruptcies. (This column addressed the treatment of this legislation in the first session of the 106th Congress in GPSolo, April/May 2000.) The core provisions of the two bills remain the same, requiring more people to file under Chapter 13 of the bankruptcy code, which calls for the reorganization of debt under a repayment plan, rather than under Chapter 7.

Chapter 7, the alternative to Chapter 13, allows consumers to discharge unsecured debts that remain after assets are liquidated. An early vote on limiting debate failed to obtain the required 60 votes to invoke cloture. Senator Charles E. Grassley (R-IA) predicted that Democratic Senators would not support cloture, as they wanted to use the bill as a means of inserting politically charged amendments.

Both bills create a means test, based on income and ability to repay the debt, that courts could use to determine whether a debtor could use the more lenient Chapter 7 provisions. Under the House bill, debtors with incomes sufficient to repay $6,000 of their debts over five years would be ineligible to file under Chapter 7. Under the Senate bill, $15,000 is the threshold amount, but the Senate is amenable to reducing this amount to $10,000.

In the Senate bill, Republicans added language to raise the minimum wage by $1 to $6.15 over a period of three years. This was done to preempt the Democrats calling for the increase to occur over a two-year period. The Republicans also included a tax break for businesses in their minimum wage proposal. President Clinton has indicated that these provisions would require him to veto the legislation.

Another sticky point in the Senate bill is the homestead exemption. The Senate bill prohibits a debtor from exempting more than $100,000 from seizure during bankruptcy. The House bill provides a $250,000 exemption, but states could opt out of the federal limit.

Since the Senate bill has tax provisions that originated in the Senate, the bill is subject to the objection by the House because it has the constitutional prerogative to act first on revenue proposals. Since a conference on the bankruptcy bills is not possible because of the tax provisions, an unofficial conference between the House and Senate members has been established by Speaker Hastert and Majority Leader Lott.

(Note: See the ABA's Washington Letter, May 1, 2000, for an excellent statement of the ABA's concern over possible changes in the bankruptcy code to provide certain federal agencies with special treatment under that code when agencies are acting as both creditors and regulators of companies that have filed for bankruptcy.)

HOUSE CHAPLAIN CONTROVERSY

Early in 1999, House Chaplain James D. Ford announced that he planned to retire at the beginning of 2000. Last summer, House Majority Leader Hastert and House Minority Leader Gephardt (D-MO) appointed an 18-member search committee evenly split along party lines. After interviewing numerous candidates, the committee selected their top three. Reverend Timothy O'Brien, a Roman Catholic priest, received a greater number of votes than the other two candidates, Reverend Bob Novak and Reverend Charles P. Wright. The three names were submitted to Hastert, Armey, and Gephardt without ranking. In November 1999, Hastert and Armey favored Wright; Gephardt favored O'Brien.

Democrats promptly accused the Republicans of anti-Catholic bias, pointing out that in the 210-year history of the House, there had never been a Catholic chaplain. Many Catholic organizations criticized the House leadership. A Catholic League spokesman remarked, "There's an odor of anti-Catholic bias coming from this whole thing."

On March 22, Reverend Wright withdrew his name from consideration and made the following statement: "Anti-Catholic charges of the selection process caused dissension among members and wounds between Catholics and other people of faith across our Nation. Let us be thankful that God is not an independent, not a Democrat, and not a Republican. He is for all of us."

The next day, Hastert appointed Reverend Daniel P. Coughlin of Chicago to the position of House chaplain, the first Catholic to hold this job. Hastert said that Coughlin had been recommended to him several weeks earlier by Francis Cardinal George, Archbishop of Chicago. Under House rules, Hastert had the authority to appoint a new chaplain until the end of the year without a floor vote. The full House will be required to vote on Reverend Coughlin next year, but no opposition is expected.

The battle in Congress between Democrats and Republicans continues even in matters other than legislation.

E. E. Anderson, a retired general in the U.S. Marine Corps, is a member of the ABA General Practice, Solo and Small Firm Division.

  • MARRIAGE TAX PENALTY
  • SOCIAL SECURITY

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