FHP: JUDGE UPHOLDS STATE FINE FOR DENIAL OF MEDICAL CARE
"In a case that drew national attention to controversial HMOThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
policies," an administrative law judge in California upheld
Tuesday a $500,000 civil fine against an HMO that allegedly
denied needed care to a nine-year-old cancer patient. LOS
ANGELES TIMES reports that the fine, first levied in November
1994 (see AHL 11/21/94), is "the only time in 20 years of
regulating HMOs that the California Department of Corporations"
has penalized a health plan for "denial of medical services."
TakeCare, an HMO later acquired by Orange County, CA-based FHP
International, was fined after it decided to "have a urologist,
not a pediatric cancer specialist" operate on a young girl who
was suffering from a rare form of kidney cancer (Olmos/Marsh,
10/30).
BACKGROUND: The family decided to pay for the $40,000
surgery by the pediatric surgeon anyway, and TakeCare
"subsequently refused to pay" the bill. While the claim was
eventually settled in arbitration, the family "was not awarded
attorney's fees," and took its complaint to the corporations
department (Russell, SAN FRANCISCO CHRONICLE, 10/30). TIMES
reports that the case "raised questions about whether HMOs were
fully informing members about the limited choice of doctors they
may have when they choose a medical group." However, FHP said
yesterday the patient "received appropriate medical care from
qualified medical professionals. That is why she is healthy
today" (10/30). The judge ruled, however, that TakeCare "failed
to make medically necessary referrals, and found that the HMO had
attempted to mislead the department in its investigation." The
company's "[m]edical decisions ... had been hindered by financial
and management considerations," the judge said.
POLITICAL ANGLING: CHRONICLE reports that supporters of
California Proposition 216, an HMO regulatory ballot initiative,
"belittled the decision and predicted the fine would never be
paid." Jamie Court, co-chair of the Proposition 216 campaign,
said, "FHP is not going to pay that fine until the Supreme Court
tells them to." Court called Commissioner Keith Bishop's formal
adoption of the ruling an "empty gesture," and suggested that the
move was made "to make his agency appear tough on the eve of the
election when voters will consider" Proposition 216 and a "rival
measure," Proposition 214. Court said that "it was no
coincidence" that Gov. Pete Wilson (R) came out yesterday against
both propositions.
BABY STEPS: Consumers Union attorney Jeannie Finberg said
the decision "was important." She said, "This is good news. But
one fine on one company is not enough. Decisions like this are
being made all the time, and go unnoticed, because most parents
are not as good an advocate" as the patient's father (10/30).