CALIFORNIA: HMOs AGGRESSIVELY COURTING MEDI-CAL PATIENTS

      As California prepares for the mandatory HMO enrollment of
 more than three million Medi-Cal recipients this fall, health
 plans have "touched off a pitched marketing battle" to entice
 patients to sign up, LOS ANGELES TIMES reports.  Sales agents for
 HMOs "are turning up at schoolyards, doctors' offices, churches,
 clinics and hospitals" in an attempt "to exploit what is arguably
 the most sweeping change ever in medical care for California's
 poor."  The TIMES notes that mandatory Medi-Cal HMO enrollment
 "could be a goldmine" for health insurers:  In Los Angeles County
 alone, Medi-Cal spending is expected to total $9.5 billion over
 the next six years.  However, health care advocates and HMOs are
 concerned that the state "may be woefully unprepared -- or even
 unwilling -- to monitor the sometimes questionable or illegal
 recruiting schemes" used by health plans.  There is also concern
 that the state Department of Health Services, which is
 responsible for privatizing Medi-Cal, "is also charged with
 policing" the plans. 
      BAD PRACTICE:  The TIMES notes that Medi-Cal reform
 legislation signed by Gov. Pete Wilson (R) last year took effect
 July 1 and prohibits door-to-door marketing and telephone
 solicitations and bans HMOs from directly enrolling patients. 
 Instead, patients will be enrolled by independent contractors. 
 However, the TIMES reports that "marketing agents for HMOs have
 tracked down Medi-Cal recipients at their homes, aboard city
 buses, and at check-cashing outlets and welfare offices." The 
 TIMES reports that marketing agents have offered illegal $20
 inducements to potential enrollees.  In addition, according to
 the TIMES, recruiters have "lied" to Medi-Cal recipients, telling
 them that they would lose their benefits if they didn't join an
 HMO or that the plan would let them see any physician they
 choose.  
      MORE:  In addition to direct contact with Medi-Cal
 beneficiaries, some HMOs have reportedly offered kickbacks to
 doctors and hospitals for referring their patients to a
 particular health plan.  And HMO marketers have "literally set up
 shop in doctors' offices and hospitals around L.A. County." 
 Critics of HMOs say that this practice is "in effect using the
 providers' reputations and influence to help steer Medi-Cal
 recipients to specific HMOs."  However, state officials say that
 HMOs should be allowed to market at doctors' offices and
 hospitals, "saying those are the logical places to reach
 patients."  
      CONCERN:  Critics have also expressed concern over the state
 awarding contracts to health plans "with questionable track
 records."  "Especially troubling to many health care experts" is
 the state's decision to award a $5.9 billion Medi-Cal contract to
 Foundation Health -- one of the largest HMOs in the state -- and
 two subcontractors.  The TIMES reports that Foundation has a
 "record of marketing abuses" and that a 1994 audit by the state
 cites violations of state licensing requirements in eight
 categories, including "quality of care, continuity of care,
 handling of patient grievances and preventive services."  State
 health officials "acknowledge" that the bidding process "did not
 take into account the state's own medical quality reviews," and
 said that the companies were measured by how well they met "state
 and federal bidding criteria" (Olmos, 7/22).