NCPA - National Center for Policy Analysis

A Better Offer On Patients' Rights

April 19, 2001

Advocates of the so-called Patients' Bill of Rights claim it is necessary to permit members of health maintenance organizations to sue their plans. However, this is not accurate, says health care attorney John Hoff.

  • Under current law, if an employer provides health coverage, employees who believe the plan has wrongfully denied coverage can sue for their benefits under federal law.
  • However, they cannot recover ancillary damages (such as lost wages), noneconomic damages (such as pain and suffering or loss of consortium), or punitive damages for wrongful denial.
  • Under different laws, Medicare and Medicaid beneficiaries and federal employees are subject to the same limitations -- but those programs would not be covered by the Patients' Bill of Rights.

An alternative way of resolving coverage disputes -- called Early Offers -- has been developed by Jeffrey O'Connell, a professor of law at the University of Virginia. With Early Offers, the plan could make an Early Offer to settle a patient's claim.

  • An offer would qualify only if the plan offered the denied treatment (or paid its cost) and economic damages due to delayed treatment.
  • It would provide reasonable attorney's fees for the patient to hire a lawyer to assess the offer.
  • The plan member could accept the offer, or reject it and still go to court to obtain the damages the legislation would permit.

However, a claimant who rejected an Early Offer would have to present clear evidence the plan had violated the terms of the coverage, and could recover only if the plan's denial of coverage was wanton or outrageous.

Source: John Hoff, "A Better Patients' Bill of Rights," Brief Analysis No. 355, April 19, 2001, NCPA.

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