RIGHT-TO-SUE: Assembly Approves Measure After Deal with Davis
The Assembly yesterday passed overwhelmingly a bill that would make California the third state to allow residents injured by HMOs to sue for unlimited damages (Kowalxzyk/Weintraub, Orang e County Register, 9/9). "With only brief discussion and no debate," Republicans and Democrats "joined in a rare display of bipartisanship to approve" SB 21 by a count of 68-2, "far more than the 41 votes needed to return it to the state Senate for expected final approval today or Friday" (Ingram/Pyle, Los Angeles Times, 9/9). The "cornerstone" of HMO reforms pushed by Democrats in the Legislature, lawmakers altered the bill slightly this week at the request of Gov. Gray Davis. In its new incarnation, SB 21 will allow patients to sue who have suffered "substantial harm" -- defined as loss of limb or life, chronic or severe pain, permanent disability and monetary loss -- at the hands of HMOs to sue. Davis press secretary Michael Bustamante said, "All along the governor has sought to strike a balance between the needs of consumers and, at the same time, to do it in such a way where it doesn't inhibit business' ability to provide services because of potential rising costs." Davis wants patients to be required to first seek a second opinion from an independent review panel, unless injury has already occurred or is imminent (Jordan/Krieger, San Jose Mercury News, 9/9). Assembly members Martin Gallegos (D-Baldwin Park) and Sheila Kuehl (D-Santa Monica), who helped shepherd the bill through the Assembly, said a second bill, AB 55, may address Davis' requirements. Kuehl said the resulting grievance procedure would "create a very, very narrow doorway for litigation." She called SB 21, sponsored by state Senator Liz Figueroa (D-Fremont), "a great compromise and a great move forward for the people of California." Walter Zelman, president of the California Association of Health Plans, said, however, that the bill "opens up health plans to tens of millions of dollars in damages ... that are aimed at punishing the health plans." But Gallegos said, "There will be no stampede to the courtrooms. We haven't seen that in Texas and we haven't seen it in California with the public employees suing their plans." Assembly Republican leader Scott Baugh (Huntington Beach) added, "It is completely appropriate as a Republican value to hold people accountable when they do harm" (Los Angeles Times, 9/9).
Davis and lawmakers struck a deal on Wednesday that outlined the final structure of the bill. While conceding to many of Davis' terms, members did convince Davis to include "significant financial loss" as part of "substantial harm" (Lucas, San Francisco Chronicle, 9/8). Figueroa said, "We have gotten a lot more (from Davis) than we ever dreamed possible" (Willis, AP/Capitol Alert, 9/8). In addition, the Orange County Register reports, Davis and the legislators agreed to create a Department of Managed Care headed by an "HMO czar." Agency employees will help patients with complaints against HMOs and will compile report cards grading plans. Gallegos said, "These advocates will actually get on the phone with you and your health plan, they'll put you on a conference call, and help solve the dispute. They will hold the patients' hand, even to the point of helping them pick a health plan." The Legislature is expected to vote on the agency this week (Weintraub/Kowalczyk, 9/8). The Wall Street Journal/California Edition reports that Davis is also leaning toward supporting some new coverage mandates, including coverage of diabetes treatment, hospice care and contraception. But the meetings apparently did not resolve whether Davis will sign a mental health parity bill. Business, Transportation and Housing Secretary Maria Contreras-Sweet said, "He, of course, wants to have a balance. There's got to be plenty of consumer protection, but he also wants to see the insurance companies do well in this state and increase employment as well" (Benson, 9/8 issue).
From the Chronicle
A San Francisco Chronicle editorial expresses cautious support for the right-to-sue bill, noting that if "HMOs start denying all sorts of treatment ... they should be prepared for another, tougher bill." The editors note: "[I]n the case of HMO rejiggering, Davis' trademark caution is not unwelcome. If the bill becomes law, as is expected, it should be given a chance to prove itself. Or, at the least, to point in the direction of needed changes" (9/9).