States Dismayed by Federal Bills on Patient Rights "The House bill appears to pre- empt all state internal and external review laws," Mr. Fitzgerald said. "If that becomes law, I would have real concern about the ability of people to get an appropriate and adequate review of adverse decisions by H.M.O.'s. In regulating insurance and health care, it's critical to strike an appropriate balance between the rights of states and the role of the federal government." Democrats agree. In an interview, Gov. Gray Davis of California said: "The federal government is diminishing the health care rights of Californians. Congress should adopt minimum standards and allow states to exceed them. But instead, it's rolling back rights that we accorded to patients in a package of 20 separate bills that I signed in 1999." Under a federal bill passed by the Senate on June 29 and the companion bill passed by the House on Aug. 2, insurance companies could charge a filing fee of $25 for the external review of a health plan's decision. "Those fees are really a patients' rights tax, which I find wholly unacceptable," Mr. Davis said. California allows patients to sue health plans for any harm caused by the insurer's negligence, but the state does not limit the amount of damages. By contrast, the bill passed by the United States House of Representatives would set limits in state and federal court: $1.5 million for pain and suffering, plus $1.5 million in punitive damages. President Bush and many Republicans in Congress said the limits were needed to discourage the filing of frivolous lawsuits and to hold down insurance costs. Mr. Bush has said he will sign the version that passed the House, but not the one the Senate passed. Daniel Zingale, the director of the California Department of Managed Health Care, said the potentially unlimited liability of health plans in California had been "an incentive for good corporate behavior" by H.M.O.'s. "We have not had a single lawsuit under the 1999 law," Mr. Zingale said. http://www.nytimes.com/2001/08/13/politics/13PATI.html