Chuck Grassley: “I want to address what I believe is a very fundamental, fatal flaw in the legislation before us. That flaw relates to…”

“I want to address what I believe is a very fundamental, fatal flaw in the legislation before us. That flaw relates to how the bill treats health plan contracts, and the precedents that this treatment sets for all contracts, not just those between health plans and employers. As currently drafted, the bill states that specific definitions and terms in health plan contracts can be entirely thrown out in favor of another definition made up by a third party charged with reviewing a plan's decision to deny care. This basically invalidates all contracts between health plans and employers and makes them non-binding. Putting the terms of health plan contracts on the chopping block undercuts the very purpose of the health plan contract itself. If these contracts are not binding, the health plan will have no way of knowing what standard it should follow in making coverage decisions, the employer will have no way of knowing what its costs will be, and the patient will have no way of knowing what kinds of items and services are covered. In short, the contract won't be worth the paper its printed on. How do you do business without a contract? Quite frankly it's almost impossible to imagine doing business at all without a binding agreement. The Kennedy-McCain bill forces managed care plans to do business in a way that no other industry is forced to do--by that I mean without a binding and valid contract.”