MARYLAND: Senate Reverses Course On HMO Oversight Bill
"The HMO industry succeeded yesterday" in its effort to defeat a bill "that would have given the state authority to revoke the medical licenses of administrators who made coverage decisions that harmed patients," the Baltimore Sun reports. Senators voted 24-22 "to kill the bill," which they "had tentatively endorsed two days earlier" (Daemmrich, 3/27). The Washington Post reports that "an intensive lobbying battle between ... organized medicine and the HMO industry -- and a last-minute letter from the state insurance commissioner raising concerns about the measure" -- helped lead to the Maryland Senate's reversal. State Sen. Paula Hollinger (D), sponsor of the measure, "attributed the turnabout to intense lobbying by HMO groups, which framed the issue largely in economic terms." According to the Post, HMO lobbyists emphasized that doctors' motive in the battle was "that managed care has eroded their incomes." Yesterday's vote "means Maryland medical directors will remain beyond the reach of state physician discipline even if they make unethical medical decisions" (Goldstein/Babington, 3/27).
Several senators said they prefer to protect patients in managed care plans through "creating a new system to appeal coverage denials to the insurance commissioner," the Sun reports. New legislation embodying that idea "has cleared the House and passed unanimously yesterday in the Senate" (3/27). This "less-stringent measure ... would strengthen the [insurance] commissioner's power to scrutinize treatment decisions and sanction HMOs for withholding appropriate care," according to Maryland Insurance Commissioner Steven Larsen. He noted that allowing the state Board of Physician Quality Assurance to oversee HMO medical directors, as proposed in Hollinger's measure, "could cause confusion and conflict" (Washington Post, 3/27).
Better Days Ahead?
Hollinger said "she was surprised when six of her colleagues switched their votes" yesterday to defeat the bill. She also promised "to try again next year" (Sun, 3/27). Meanwhile, the HMO industry "described Hollinger's bill as a medical society-sponsored attempt to undermine the entire philosophy of managed care." "Turning regulation of the managed care industry over to (the physician disciplinary board) is like the wolves guarding the sheep," said HMO lobbyist Gerard Evans. However, Joseph Schwartz III, lobbyist for the state medical society, said, "To have HMO medical directors regulated by insurance regulators, and not by the board that regulate physicians, is incomprehensible. To think that (the commissioner's office is) going to have the inclination to oversee medical decision-making is fairly fanciful" (Washington Post, 3/27).