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This background paper was written as congressional conferees faced the task of resolving differences between patient protection bills by the U.S. House of Representatives and U.S. Senate in late 1999. In order to discuss the principal issues facing policymakers and options for reform, it begins by describing problems raised by the federal law governing private-sector employee health plans (the Employee Retirement Income Security Act of 1974) from a consumer perspective. It then discusses approaches proposed by the Clinton administration and the House and Senate to give consumers greater ability to challenge health plan coverage decisions, focusing in particular on issues that would arise if Congress decided to give health plan participants increased ability to sue for damages under state laws. The paper then explores, from the perspectives of physicians, employers, and insurers, employee health plan liability in areas such as negotiating the terms of contracts, improving the general quality of medical care, assigning liability for medical errors and coverage denials, and determining who has the power to decide which procedures and technologies are medically necessary. Finally, possible approaches to liability — ranging from contract law to tort law notions of liability — are presented in the context of the bills passed by the House and Senate in 1999.

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