June 5, 1996

Thanks to your efforts, Americans (and the Congress) are beginning to awaken to the disastrous effects of H.R. 3103, especially the ``anti-fraud'' provisions derived from the Clinton Plan. We hear that Capitol Hill is deluged with telephone calls. This is not the time to let up the pressure.

The conference committee has not yet been appointed.Possible members:

SENATORS

• Robert Dole (R-KS)
• Trent Lott (R-MS)
• William Roth, Jr. (R-DE)
• Nancy Kassebaum (R-KS)
• Orrin Hatch (R-UT)
• William S. Cohen (R-ME)
• Jim Jeffords (R-VT)
• Strom Thurmond (R-SC)
• Dan Coats (R-IN)
• Bill Frist (R-TN)
• Alfonse D'Amato (R-NY)

REPRESENTATIVES

• Newt Gingrich (R-GA)
• Richard Armey (R-TX)
• Tom DeLay (R-TX)
• Bill Archer (R-TX)
• John Boehner (R-OH)
• Michael Bilirakis (R-FL)
• Thomas Bliley, Jr. (R-VA)
• William Thomas (R-CA)
• Harris Fawell (R-IL)
• Dennis Hastert (R-IL)
• William Goodling (R-PA)
• Bill Paxon (R-NY)
• Henry Hyde (R-IL)
• David Hobson (R-OH)
• Bill McCollum (R-FL)
• Christopher Shays (R-CT)
• Steven Schiff (R-NM)

Some additional talking points:

On Fraud:

• There are no good studies on the incidence of insurance fraud in the private sector. The "10%" figure is an extrapolation from a 1992 study on Medicare. There were no hearings on the fraud provisions. Congress has insufficient information on which to base such sweeping legislation.
• The entire section on fraud should be deleted, and Congress should direct the General Accounting Office to study insurance fraud. Specifically, the GAO should compare the incidence of fraud on assigned vs. unassigned claims. Federal policy may be increasing fraud through incentives to take assignment.
• Tax penalties on expatriates do not belong in an insurance reform bill. Combining them with the criminalization of medicine is all too reminiscent of Nazi measures against emigrating Jewish physicians.
• Existing federal anti-fraud statutes should be amended to protect constitutional rights. No person shall be deprived of liberty or property without due process of law, including a presumption of innocence, proof of specific intent to defraud under laws that give clear notice of prohibited conduct, and protection against involuntary self-incrimination or unreasonable searches and seizures. Penalties shall be proportional to the offense. Law enforcement agencies shall not be given incentives to prosecute for reasons other than to uphold the law.
• Federal administrative and criminal jurisdiction should extend only to programs directly funded by the Federal government and to entities having a contractual relationship with the Federal government.

On Portability

• Congress should amend the tax code to stop discriminating in favor of employer-provided insurance. Medical savings accounts should be allowed. Exclusions of insurance benefits from income should not depend on employer payment of premiums. Flexible spending accounts should be allowed to roll over.

On Affordability

• Congress should reaffirm Article I, Section 10, of the U.S. Constitution, which provides that "No State shall...pass any...law impairing the obligations of contracts," specifically with regard to medical insurance. Congress should assure freedom to contract by preempting State insurance mandates that drive insurers from the market or increase costs to consumers by mandating benefits. Furthermore, Congress should itself refrain from increasing the cost of insurance by mandating costly benefits.
• Congress should direct the GAO to study the transactional costs imposed by regulations, the costs of insurance claims processing, and the costs and effectiveness of utilization review, preauthorization, and quality assurance as compared with voluntary market mechanisms such as Medical Savings Accounts, higher deductibles, and copayments.

On Access

• Congress should reaffirm the right of patients to contract with their physicians on mutually agreeable terms, as long as no federal benefits are claimed, even if the patient is enrolled in Medicare Part B.
• Congress should repeal the McCarran-Ferguson exemption to the Sherman Antitrust Act, which permits anticompetitive behavior resulting in the exclusion of certain providers of medical services from the marketplace.

On Privacy

• So-called "administrative simplification" provisionsÄmeaning forced computerization of medical records and forced reporting of confidential information to centralized data basesÄshould be deleted, as no adequate mechanisms for patient protection have been devised.
• Privacy considerations reinforce the need to guarantee the right of private contract.

The Capitol Hill switchboard is (202)224-3121.