HMO LIABILITY: Bill Passes Senate Judiciary Committee
Legislation that would allow patients who are denied coverage for medical treatment to sue their health plans passed the state Senate Judiciary Committee by a vote of 5-2 yesterday. AB 2436, sponsored by Assemblywomen Liz Figueroa (D-Fremont) narrowly passed the Assembly last month, and is expected to face a fight in the Senate. "If HMOs are not held accountable, they will have no incentive to make appropriate decisions. HMOs should be treated like every other business when it comes to negligence that causes harm," Figueroa said. She noted that the law is modeled after a recently-enacted Texas statute, and exhorted Gov. Pete Wilson to sign it if the opportunity arises, just as Texas Gov. George Bush (R) signed that bill. "It will be a tremendous test to see if the governor of California has the same courage to protect patients in the face of insurance company opposition as the governor of Texas did last year" (Figueroa release, 8/11).
Consumers For Quality Care Director Jamie Court said, "HMOs will never end their delaying and denying tactics until they face a financial penalty for their wrongdoing." Court cited three examples which show that creating HMO liability would not increase health care costs, as the industry claims it would. First, the Kaiser Family Foundation found that in the case of California public employees, who enjoy the right to sue, the additional cost amounts to 13 cents per member each month. Second, the Congressional Budget Office announced that giving patients the right to sue would add only 1.2% to health premiums. Finally, in the Texas case, there has been no sign of extra costs passed on to consumers since the law went into effect one year ago. No suits have been filed under the act, despite HMO projections of litigiousness (Consumers for Quality Care release, 8/11).
In related news, 10 of California's leading consumer organizations, including Consumers for Quality Care, the California Nurses Association and the Consumer Federation of California, are asking the Legislature to include HMO liability as part of any proposed health care independent external review legislation. Three such bills are currently pending: SB 1504 by Senator Herschel Rosenthal (D-Los Angeles), SB 1653 by Senator Pat Johnston (D-Stockton) and AB 1667 by Assemblywoman Carole Midgen (D-San Francisco). The consumer groups also listed nine other principles they feel are essential to any external review policy, including the right to sue should the review fail. The other principles include: no dollar thresholds for independent reviews, not forcing the patient to see another non-network physician for a second opinion, no application fees, access for Medicare and Medicaid recipients and the appointment of an external review ombudsman to which complaints may be addressed (Consumer Federation of California release, 8/6).