HMO PROBE: ‘Watchdogs Went Astray’

      An editorial in the Fresno Bee calls allegations against six HMOs including Kaiser Permanente, Health Net and Aetna U.S. Healthcare "ludicrous." Accusing these HMOs of "luring new enrollees by offering coverage of lots of prescription drugs," then "whittling away" at the formularies, state regulators overseeing California managed care programs "embarked on a new and ominous-sounding investigation." This month, regulators with the California Department of Corporations released the results of the investigation, finding that the information reviewed "does not support the allegation of inappropriate drug switching." The editorial argues that while "[c]hanging formularies is a constant and sometimes annoying part of the health care landscape," it is the only "leverage" HMOs have "on behalf of the paying public against drug companies to keep down costs." It adds, "What HMO in its right mind, even one interested solely with profits, would lure enrollees who desperately need a specific drug and then drop that drug from its formulary? This is a recipe for higher costs, not profits. The [California Department of Corporations] last year seemed to be listening to the legislative rhetoric rather than applying common sense ... Yes, [they] should monitor what the HMOs are up to. But California needs a watchdog not only with teeth, but with brains as well" (10/26).