Stop-Loss and Malpractice Bills Near the House Floor

Members of the House Rules Committee could take up two narrow health insurance bills next week.

One, H.R. 1215, the Protecting Access to Care Act of 2017 bill, would cap liability lawsuit recoveries related to medical care, if the care was provided or subsidized with help from the federal government.

The other bill, H.R. 1304, the Self-Insurance Protection Act bill, would shield small employer self-insured plans from some state oversight efforts.

The Rules Committee — a panel that decides what a bill will look like when it comes up for a vote on the House floor, and what the rules for final consideration of the bill will be — has asked for lawmakers to file any proposed amendments for both bills by 10 a.m. Monday.

Links to information about the bill are available here, on the Rules Committee website.

House Republicans succeeded Wednesday at passing H.R. 372, a health insurance antitrust restriction bill, by a 416-7 vote, and H.R. 1101, an association health plan bill, by a 236 to 175 vote.

But Republican leaders have been too busy trying to get H.R. 1628, the American Health Care Act bill, to the House floor to celebrate the antitrust and association health plan bill victories.

If H.R. 1628 reaches the Senate, the Senate is likely to consider that bill under special budget reconciliation rules that could let it pass with just 51 votes.

The antitrust, association health plan, health care liability and stop-loss bills would probably be considered under ordinary Senate rules. Under the ordinary Senate rules, a bill must have the support of at least 60 senators to come up for a vote.

H.R. 1215

H.R. 1215, the liability lawsuit bill, would put a $250,000 cap on recoveries for noneconomic damages.

H.R. 1215 would also limit the size of the “contingency fees,” or award-based fees, that the patient’s lawyers could collect. Under the formula in the bill, the lawyers could collect up to 40 percent of the first $50,000 in recoveries, but only 15 percent of any amount recovered over $600,000.

The definition of “health care lawsuit” used in the bill would exclude suits based on criminal liability, government efforts to collect fines or penalties, or antitrust laws.

Members of the House Judiciary Committee approved the bill by an 18-17 vote Wednesday, and the House Energy & Commerce Committee discharged the bill Wednesday.

Rep. Steve King, R-Iowa, is the lead sponsor.

King and other supporters say the bill is necessary to provide checks and balances on lawsuits that increase the cost of health care and limit the availability of doctors.

Opponents say the bill would undermine the ability of the victims of medical malpractice to be fully compensated for their injuries, and that bill also would trample on states’ rights.

The bill would affect claims involving nursing home negligence, defective medical devices and defective pharmaceuticals as well as medical malpractice, the opponents say.

H.R. 1304

H.R. 1304, the self-insurance plan bill, would limit states’ regulatory role by excluding stop-loss insurance from the federal definition of health insurance coverage for purposes of the federal Public Health Services Act, the Employee Retirement Income Security Act of 1974, and the Internal Revenue Code.

Members of the House Judiciary Committee approved the bill Monday by a voice vote.

Rep. David Poe, R-Tenn., is the lead sponsor.

Employers can use ERISA exemptions to self-insure, or operate self-funded health plans outside the reach of state group insurance benefits regulations.

Many employers with self-insured plans use stop-loss insurance, or insurance for insurance plans, to protect themselves against catastrophic losses, such as bills for organ transplants, or a large number of bills for enrollees who need to spend time in the hospital due to a flu epidemic.

Some regulators and others say small employers are using stop-loss plans with very low attachment points, or stop-loss deductibles, as if the stop-loss plans were high-deductible health plans, without necessarily understanding that stop-loss plans follow different rules than the rules that apply to small-group plans.

Some health insurers have argued that letting small employers choose to self-insure may hurt the risk profile of the fully insured small-group market, by encouraging the small employers with the youngest, healthiest employees to self-insure, and leaving insurers with the small employers with the oldest, sickest, most wellness-program-resistant employees.

Supporters of H.R. 1304 say the bill will put small employers and large employers on a level playing field.

“Only self-insured plans are exempt from a patchwork of benefit mandates and regulations imposed under state insurance laws,” supporters say in the notes accompanying the Rules Committee version

Opponents say the bill would weaken Affordable Care Act protections and other protections for the workers enrolled in small-group health plans. A stop-loss provider can “laser,” or set higher attachment points for some employees based on health status, and employers may find ways to get around ACA rules and pass those extra costs on to the employees, the opponents say.

The opponents cite North Carolina as an example of a state that’s tried to prevent what it sees as stop-loss abuse by regulating small stop-loss insurance plans as if they were ordinary health insurance plans.

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