CALIFORNIA: LEGISLATURE CONSIDERS NUMEROUS HMO REFORM BILLS
California legislators "have launched an unprecedentedThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
onslaught of intended reforms" aimed at HMOs, Los Angeles Times
reports. Nearly 50 bills on HMOs, most "imposing new government
controls," have passed the state Assembly and approximately 30
bills have passed the state Senate. Most of these passed with
broad, bipartisan support. Beginning this week, each house of
the state Legislature will consider the bills passed by the other
house.
THE BILLS
The bills address a "wide range of complaints about health
plans," focusing primarily on complaints about California HMOs
"cutting costs at the expense of patient well-being." Many of
the bills "come down on the side of the doctor by making it
legally riskier for an HMO to turn down a physician's
recommendation for treatment." Under one bill's provisions, the
only person in an HMO allowed to turn down coverage would be a
physician licensed to practice in California. Two other bills
would require "public disclosure of why treatment was refused,"
and would require an in-house physical exam of a patient before
treatment can be denied. This provision would raise
substantially the legal liability of HMOs. Another bill would
"place new restrictions on an HMO's ability to sever doctors from
managed-care groups." Other measures "seek tighter regulation by
state agencies." Regulatory authority for HMOs currently lies
with the Department of Corporations, but detractors say that the
agency is more concerned "'with who pays the bills' than with
'quality of care.'" Some bills that have been proposed would
transfer the authority for HMOs to other agencies, while others
"would create a powerful HMO czar or establish a Department of
Health Care Oversight."
OUTLOOK FOR THE FUTURE
While Gov. Pete Wilson (R) has "shown signs of seeing a need
for beefed-up regulation of managed care," he "also appears
reluctant to endorse wholesale changes," Times reports. Wilson
recently bowed to critics and created a task force to examine
managed care regulation in the state. The governor has not said
which bills he would be willing to sign, and state Sen. Herschel
Rosenthal (D) said "the challenge is to get something that the
governor will sign." Opponents of the legislation, including
Gov. Wilson, cite rising costs as a primary reason not to enact
more government control of the industry. Dr. Albert Martin,
medical director of Blue Shield of California, said that "by
advancing so many control bills, the Legislature is 'practicing
medicine,' and getting away with it because of 'so much publicity
and so many anecdotal horror stories.'" However, Bruce
Livingston, executive director of Health Access, a coalition that
is sponsoring a 13-point managed care "patients bill of rights,"
said the bills are "not going to affect anyone's bottom line,
unless they are already giving poor care." And Assemblyman
Martin Gallegos (D) said that until the industry is responsive to
the needs of consumers, "the Legislature will be taking the
initiative" (Vanzi/Ingram, 6/17).