Editor's note: The following article first appeared in the July 13-26, 2001 NH Business Review and is reprinted with the author's permission.

WHEN THE U.S. Senate opened debate in June on S.1052, the Bipartisan Patient Protection Act (commonly referred to as the "Patients' Bill of Rights"), Sen. John McCain (R-Ariz.) gave to all who listened the best piece of advice: "Read the bill."

As an attorney who handles legal issues for both patients and insurance companies, I took Sen. McCain's advice and "read the bill" that everyone claims benefits lawyers only.

From a legal perspective, you might be surprised to find two things. First, the bill returns many rights that patients took for granted before managed care. Second, despite the media attention firestorm, the bill's key provisions enjoy broad bipartisan support.

For example, both Democrats and Republicans want to ensure that patients receive reimbursements for emergency room services, even if they didn't get prior authorization from their Insurers. Both parties also want to provide patient access to specialists without unnecessary interference from primary-care physicians. In addition, both parties want to enhance consumer access to OB/GYN care, breast cancer treatment, pediatric care and prescription drugs.

The biggest difference at the center of the debate concerns the patients' right to sue their health maintenance organization for negligently withholding access to covered treatment. Many health insurance policies are governed by federal law under the Employee Retirement Income Security Act (ERISA), and an employee welfare benefit program under ERISA is "any plan, fund or program...established or maintained by an employer...for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise...benefits in the event of sickness, accident, disability, death or unemployment."

Under most circumstances, state law is preempted with respect to suits involving ERISA plans. Under ERISA, an insured may bring suit to recover "benefits due...under the terms of his plan," but an insured is not entitled to compensatory relief or other damages.

Prior to ERISA, New Hampshire consumers aggrieved because of negligently withheld treatment could bring suit in state court and could seek compensatory damages caused by their insurer's failure to provide treatment.

Both Democrats and Republicans seem to agree that patients under an ERISA health plan should have some access to legal redress when access to medical treatment is unreasonably withheld. Democrats and Republicans appear to have strong differences in opinion as to the forum within which patients should be entitled to seek such redress - state or federal court - and whether any damage award should be subject to legally imposed caps.

One proposal under debate allows patients to bring suit in state courts for medical decisions made by their insurance company, and it provides a federal court forum for medical decisions made by third-party administrators. Both types of suits under this proposal would be subject to a $5 million damage cap. A countering proposal would only access to a federal court forum after all internal administrative appeals against one's insurer have been exhausted and any damages awarded by a federal court jury would be subject to a cap of $500,000.

If the patients' bill of rights is drafted to create a cause of action under federal law with exclusive jurisdiction in the federal courts, New Hampshire consumers would lose those rights that they enjoyed prior to ERISA under RSA 491:22. RSA 491:22 creates a cause of action for insureds to sue their insurance company in state court to seek a judicial determination as to the insurer's contractual obligations under the terms of an insurance policy. Under RSA 491:22-a, the insurance company bears the burden of proving the absence of coverage even if the insured initiates the petition.

Ordinarily, the insured, by instituting suit, would bear the burden of proof to establish his or her right to coverage. The statute's shift of the burden of proof to insurance companies provides strong protection for New Hampshire consumers. RSA 491:22-c provides further relief and protection for consumers whose coverage has been erroneously withheld. Under that law, in an action to determine coverage of an insurance policy pursuant to RSA 491:22, if the insured prevails, he or she is entitled to recover all reasonable court costs and attorney's fees from the insurer who wrongfully refused to provide coverage in the first instance. Under traditional circumstances, each litigant bears his or her own litigation costs, regardless of which party prevails. Consequently, RSA 491's provision for the recovery of fees and costs in an insurance policy dispute provides significant benefits.

The competing versions of legislation currently under debate that address a patient's legal remedies when covered treatment has been unreasonably withheld both attempt to restore legal rights and remedies enjoyed by consumers prior to ERISA's enactment. The legislation is not aimed at opening the door to frivolous legal actions, nor does it attempt to create new legal remedies or rights.

If the final version of the bill remains focused on the restoration of previously held rights, consumers will benefit and insurers in the health field will simply be held accountable to the same rules as insurers in other fields.

Doreen Connor is an attorney with the law firm of Wiggin & Nourie, Manchester. Her practice areas include insurance coverage questions from insureds and insurance companies, appellate work and personal injury defense.

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