A few years ago, the rapid rate of increase in the cost of health care premiums was a major public policy concern. Premiums were increasing by 15 to 20 percent annually, limiting American companies' ability to compete in global markets.

Now Congress is considering proposals that would return us to this unchecked medical inflation by ending health plans' ability to determine the "medical necessity" of services and procedures ordered by physicians. In effect, the proposals would make physicians the sole determinants of how and when your premium dollars are spent.

These proposals to change who determines medical necessity are part of a larger effort in Congress to impose a "check" on the managed care industry. Its advocates say this is necessary to stop managed care companies from denying coverage to individuals, something they claim is done routinely.

Opponents of the most restrictive of these proposals argue that such denials are rare. They say these drastic measures will raise premiums, forcing many more Americans to drop their health insurance and thus increasing the ranks of the uninsured.

Blue Cross and Blue Shield Plans view the debate in Congress as more complex than the antagonists would have you believe. Determinations of medical necessity is critical in allowing health plans to manage scarce dollars equitably. In a world of limited resources, a health plan occasionally has to say no to an initial recommendation of the physician. When health plans collect premiums from employers and individuals, they are accountable for using those funds wisely -- to pay for only the most appropriate services. The proposed legislation would allow physicians to spend premium funds without being accountable to customers.

The physician is the advocate for the treatment, and the health plan is the fiduciary for patients' premium dollars. If constraints on a physician's treatment decisions are eliminated, and the physician does not have to assume any accountability for how premium dollars are spent, then the system of checks and balances will collapse.

History shows that when insurers don't question medical expenditures, some health care providers order questionable services. A recent survey found that three-quarters of physicians write prescriptions whenever patients ask for them, even if the doctors don't know whether the drugs will work.

Similar abuses are common in the Medicare program. Government audits show that during the past three decades, Medicare has spent millions on services patients did not need. As a result, the federal government is addressing these problems with the same tools used in private-sector health plans: tests of medical necessity. For instance, the Health Care Financing Administration is cracking down on overuse of home oxygen therapy by requiring physicians to document why the therapy is needed. As the government's action shows, the only way to control potential abuses is to limit health care services to situations in which they are medically necessary.

Insurers' scrutiny of medical bills also protects patients against unnecessary treatment. Too much health care can be just as dangerous as too little. Research from the Rand Corp. shows that 20 to 30 percent of all health care currently provided in the United States is unnecessary. The research also shows that patients do not receive one-third of the services they actually need.

In recent congressional testimony, Jack Wennberg, a Dartmouth College health quality expert, said, "When medical science is weak, medical necessity is commonly determined by the opinions of local providers. One result is that patients with the same conditions are treated very differently, depending on where they live. What is medical necessity in one community is unnecessary care in another."

Physicians' groups believe doctors should decide what insurance will pay for. They say insurers' medical necessity guidelines put arbitrary limits on coverage. But an insurer's monitoring of whether a claim is appropriate increases access to care. By spending your money only when it is justified, health plans are able to provide more services at lower cost to people who need them.

Supporters of current legislative proposals suggest that health plans routinely deny treatments to the ill or injured. This is false. In 1998 health insurers processed more than 4.4 billion claims. A recent study in the peer-reviewed journal Inquiry found that fewer than 5 percent of all claims are denied. Blue Cross and Blue Shield companies believe these disputes are best resolved locally on a case-by-case basis with input of physicians and other health care professionals.

The final irony in the proposed legislation is the fact that it won't apply to federally funded programs such as Medicare and Medicaid. This irony exists because Congress is unwilling to allow untamed medical inflation within these important programs. Why, then, are lawmakers willing to open the floodgates for private-sector health plans?

The writer is president and CEO of Blue Cross and Blue Shield Association.