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Read Making a Killing

home / healthcare / in the media

Associated Press
Sep 08, 1999

by DOUG WILLIS

Assembly backs giving consumers right to sue HMOs for damages

Patients who suffer substantial harm from a health insurer's decision to delay or deny treatment would gain the right to sue under a bill backed Wednesday by the Assembly.

The proposal would also entitle consumers to independent review of decisions by HMOs and other health plans to put off or refuse treatment recommended by patients' physicians.

The bill, a compromise between Democratic Gov. Gray Davis and more liberal legislative Democrats, won Assembly approval 68-2. It now goes to the Senate, which is expected to consider it before the 1999 session ends Friday.

The bill would let patients sue their managed-care plans and other health insurers if they suffer "substantial" physical or financial harm because of an HMO decision to deny or delay care.

The proposal defines substantial physical harm as "loss of life, loss or significant impairment of limb or bodily function, significant disfigurement or severe and chronic phsycial pain." Financial harm is defined as the cost of treatment.

Consumers could only sue after exhausting all of their rights through the independent review process, and could only seek damages if they were denied "medically necessary" treatment.

That standard is narrower than the "medically appropriate" standard sought by consumer advocates.

"We intend for the independent review process to resolve the vast majority of disputes with only a very, very narrow doorway for litigation," said Assemblywoman Sheila Kuehl, D-Santa Monica, a co-sponsor of the measure.

Kuehl said the compromise allows suits by patients to recover the cost of needed care they received from other doctors after being wrongfully turned down by their HMO.

"You may have no physical harm because you went to another doctor for treatment that saved your life or prevented serious harm, but you may be out $ 30,000 or $ 50,000, or may even have lost your home," she said.

While the proposal allows suits against HMOs for delaying or denying treatment, it would not allow medical malpractice suits against HMOs for an attending physician's actions. That would remain a legal issue between the patient and the physician or physician group providing care.

Patients affected by the measure include an estimated 15 million Californians covered by employer-purchased managed-care plans. Most of the bill would take effect in 2001.

While several legislators describe the measure as a victory for consumers, Jamie Court of the Foundation for Taxpayer and Consumer Rights, said the proposal gives far more to HMOs than to patients and unnecessarily delays the new patient rights.

Court said the bill does take a "step in the right direction."

"For patients who are denied treatment by their HMO and have only severe pain, there will be no remedy," Court said. "But hopefully HMOs will fear a deterioration in their conditions that could result in damages and will treat them better."

"We intend for the independent review process to resolve the vast majority of disputes with only a very, very narrow doorway for litigation," said Assemblywoman Sheila Kuehl, D-Santa Monica, a co-sponsor of the measure.

Kuehl said the compromise allows suits by patients to recover the cost of needed care they received from other doctors after being wrongfully turned down by their HMO.

"You may have no physical harm because you went to another doctor for treatment that saved your life or prevented serious harm, but you may be out $ 30,000 or $ 50,000, or may even have lost your home," she said.

While the proposal allows suits against HMOs for delaying or denying treatment, it would not allow medical malpractice suits against HMOs for an attending physician's actions. That would remain a legal issue between the patient and the physician or physician group providing care.

Patients affected by the measure include an estimated 15 million Californians covered by employer-purchased managed-care plans. Most of the bill would take effect in 2001.

The Senate was expected to act on the proposal Thursday. The Legislature plans to adjourn for the year Friday.

While several legislators describe the measure as a victory for consumers, Jamie Court of Consumers for Quality Care said the proposal gives far more to HMOs than to patients and unnecessarily delays the new patient rights.



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