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Is Your Hmo Too Stingy?

Anne Berends, a Dallas art teacher, felt too exhausted to go home from the hospital after delivering her first child last summer. She had endured 28 hours of labor, a forceps delivery and a heavy loss of blood. Nonetheless, her HMO tried to shove her out the door of Baylor University Medical Center 36 hours after she'd given birth to her daughter, Caitlin. Berends, 39, was hardly thrilled. "I wasn't one of those women who jump out of bed and say, 'Well, I'm ready to go'," she recalls. She and her husband, Jim, decided that she would stay one more day anyway and appeal the $900 in extra fees under a new Texas law. In the end, the HMO paid. "My husband and I have often looked at each other and said, 'Thank goodness we live in Texas'," says Anne.

Beats Washington. After a pulse-pounding debate in the U.S. Senate last week, the Republican majority killed the Democrats' idea of a "Patients' Bill of Rights" intended to limit HMO abuses. The GOP then pushed through its own more modest version, including $13 billion in health-care tax breaks and a way for patients to appeal HMO decisions internally. President Clinton threatened a veto, and the issue now shifts to the House--and to the campaign trail. But if anyone is interested in a place where the debate is mostly settled, take a look at Texas. Adopted in 1997, the state's patients' rights law allows clients to challenge HMO decisions by appealing to an independent, board-certified physician. Texas patients can even sue their HMOs in state courts, a right the Senate refused to adopt nationally. Just as important, Texans on all sides are mostly happy with the new rules.

Not incidentally, presidential candidate Gov. George W. Bush gets high marks as a health-care reformer. In 1995, he vetoed a patients' rights bill but then imposed tough regulations that gave patients more choices of doctors, emergency-room treatment and other services. When the new bill reached his desk two years later, he let it become law despite intense lobbying from insurers and others. Texas is the only state in the union that allows patients to take HMOs to court for punitive damages. And of the 19 states that allow some way to appeal HMO decisions, Texas is by far the toughest. Yet since the Patient Protection Act became law, only three lawsuits have been filed. In addition, 557 patients (Anne Berends among them) have sought a review of their HMO's judgment under the new system. The score so far: 260 HMO decisions upheld, 260 overturned and 37 partially overturned.

The evenhanded record doesn't fully square with the medical horror stories told on Capitol Hill last week. Texas state Sen. David Sibley, the conservative Republican who sponsored the 1997 law, argues that the issue of patients' rights deserves nonpartisan support. "If you're going to hold a welfare mother accountable for a child out of wedlock," he says, "why not hold an HMO accountable for a medical decision they make?" In Texas, health-care justice comes swiftly these days. Sibley calls it "a rope-'em-and-throw-'em docket." The system guarantees patients a hearing within three days in life-threatening cases, and within 14 days for all other reviews. Patients who appeal for external review and lose tend to feel they've already had their day in court, says Sibley. "Three lawsuits is not an avalanche."

So far, the array of new rights has not led to higher medical bills. Average HMO premiums in Texas have risen only modestly: from $120 in 1995 to $127 in 1999. Those who oppose the right to sue argue that it is too soon to celebrate. "The sky hasn't really had a chance to fall yet," says Jerry Patterson, head of the Texas Association of Health Plans. Yet the underlying lesson of the Texas experience may be that a pound of reform brings no more than an ounce or two of trouble. Very few people use the right to appeal or to sue, says Larry Levitt, an analyst with the Kaiser Family Foundation who has studied the 19 states that allow appeals. The main reason, Levitt thinks, is that the threat alone makes HMOs more responsible and patients more secure. "Reform gives people peace of mind and diminishes worry about the future," he says. "A lot of this is symbolism." If so, Texas has a symbol that matters more than the noise of last week's health-care debate.

The Fine PrintThe Senate plan includes reforms affecting many Americans. The main measures:
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