HMO APPEALS: Health Net Leads The Pack In External Review Of Denied Treatment

      Los Angeles Times business reporter David Olmos takes a look today at the growing movement, both in Congress and in the marketplace, to ensure an external appeals process for patients denied medical treatment by their HMOs. Although consumers have the right to take complaints to the California Department of Corporations or even to pursue private arbitration, most become frustrated while still in the "lengthy ordeal" of appealing to the HMO itself, and choose to "give up the fight" rather than sue. In Congress, both Democrats and Republicans are working toward passage of external appeals legislation. And in Sacramento, Sen. Herschel Rosenthal (D-Los Angles) and Assemblywoman Carole Migden (D-San Francisco) have introduced similar bills. A Rosenthal spokesperson called the legislation "a high priority for the governor's office and the health plan industry." Olmos notes that even the California Association of Health Plans "has supported the concept of external appeals, but only for claims above a certain dollar amount to discourage frivolous actions."

Breakaway!
      Woodland Hills, CA-based Health Net is a step ahead of the game. Beginning last month the HMO announced its intention to "speed up its appeals process and guarantee that members could seek an outside review of any denied appeal." Whereas appeals typically took 60 days "to work their way through both the patient's doctor and the HMO itself," Health Net pledges to complete the process in 20 days. Health Net senior vice president Mary Gilligan says the HMO receives 100 to 130 appeals per month and that, upon review, it sides with the patient between 50% and 60% of the time. The patients whose appeals are denied are then promised the right to a review by "an independent third party" -- two private medical review organizations chosen by Health Net. Further, the HMO has "said there would be no dollar limit ... for appeals."

Lesser Of Evils?
      Olmos writes, "One reason HMOs are slowly warming to the idea of external review is to head off legislation they consider more draconian." For example, legislation pending in Congress and in some states would allow consumers to sue their health plans for malpractice. Most states currently exempt health plans from such accountability. Although HMOs have claimed "external review would be too costly, a new study by the Kaiser Family Foundation found that such a program would add only 3 cents a month to the average medical premiums for Californians (6/26).