HMO LIABILITY: Key Bills To Take Center Stage In Legislature This Week
"Sacramento lawmakers today take up three bills that attempt to allay consumers' most common complaint with their health insurance -- delays or denials of medical treatment," the Contra Costa Times reports. Current California law only requires health plans to have their own internal review process for medical coverage decisions, but patients can take their grievances to the Department of Corporations if they are "unsatisfied." Capitalizing on managed care backlash within the state, politicians are seeking to broaden the degree of redress that patients possess (Appleby, 8/11). The independent review bills are Sen. Herschel Rosenthal's (D-Los Angeles) SB 1504, Sen. Pat Johnston's (D-Stockton) SB 1653 and Assemblywoman Carole Migden's (D-San Francisco) AB 1667 (release, 8/10). Each bill contains language "allow[ing] patients who have been denied treatment a medical review by an independent organization whose decisions would be binding on the health plans," SB 1653, however, is the only bill supported by the managed care industry. That bill, according to Ross Goldberg of the California Association of Health Plans, would effectively "re-establish public trust in health plans and reduce the circumstances in which plan members believe their only course of action is potentially litigation in the courts." Critics contend that SB 1653 would make appeals too difficult, as it would charge a $50 application fee and would require a second doctor's opinion that the treatment is necessary. Johnston says the requirements are "needed to avoid frivolous reviews."
The Contra Costa Times notes that "[s]ome consumer groups want to link the bills to another pending proposal that would broaden patients' ability to sue HMOs over treatment denials" (8/11). That proposal, AB 2436, introduced by Assemblywoman Liz Figueroa (D-Fremont) would allow patients or their families to collect punitive damages for bad decisions by health plans. Current law only allows those under employer-purchased health care to sue for the cost of a medical procedure, not economic compensation for pain and suffering. Health care attorney Mark Hiepler said California's current HMO liability law is "as if a poorly manufactured car blows up with a mother and father and three children inside, and the company says they'll pay for a new car." Figueroa's bill narrowly passed the Assembly earlier this year, and will be heard by the Senate, likely this week in the Judiciary Committee ( Orange County Register, 8/11). Gov. Pete Wilson has said he will veto any legislation that makes HMOs more susceptible to lawsuits (Times, 8/11). But, as Consumers For Quality Care's Jamie Court sees it, "[w]ith Wilson eyeing another run at the White House ... the last thing the governor wants is to be portrayed as protecting an unpopular industry from accountability for its abuses" (Register, 8/11).