HEALTH PLAN LIABILITY: The Texas Experience As Guidebook For California?
A Texas legislator who co-authored an HMO liability statute in his state has sent a letter to California Assembly and Senate members in response to managed care industry opposition to a similar bill now being considered in Sacramento. In his letter, Texas Sen. David Sibley, a self-described "conservative Republican," notes that a bill introduced by Assemblywoman Liz Figueroa (D-Fremont) (AB 2436) would replicate the HMO liability protections guaranteed under the Texas law. He writes that his letter "is offered as clarification about the effects of this managed care responsibility legislation in Texas to counter any misrepresentations that may have been made by the managed care industry."
The Lone Star Way
Sibley notes that the HMO industry opposed his bill, arguing that "it would cost over a billion dollars." However, "[w]hen an actuarial analysis by Milliman and Robertson for a Texas HMO was performed on the impact of the bill," Sibley notes, "the cost was estimated to be a mere 34 cents per member per month (about 0.3%)." Managed care plans "also claimed the new Texas legislation would result in an avalanche of lawsuits." But Sibley points out in his letter that since the law took effect last September, "not a single case has been filed." Click here to read coverage of how few Texans are appealing HMO coverage decisions as permitted under Sibley's bill.
Sibley also discusses the reason why Texas lawmakers decided not to apply a liability cap to malpractice suits filed against HMOs and insurers. "Because HMOs and managed care companies ... often apply a financial filter to determine treatment denials, their liability must not be artificially limited by a compensation cap," Sibley writes, adding: "Such restricted responsibility would mitigate against approval of the most expensive treatment, such as cancer care."
Sibley offers himself as a resource for California legislators as they debate Figueroa's bill, reminding readers that his bill "had tremendous bipartisan support and passed the [Texas] Legislature by overwhelming margins" (letter, 6/24). [Note: Sibley's letter to the California Legislature was faxed to California Healthline by Consumers for Quality Care, the Los Angeles-based health care consumer group.]