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Read Making a Killing

home / healthcare / in the media

Aug 19, 1999


Protection plan for HMO users unveiled

Patients' rights would include independent review when care is denied.
Gov. Gray Davis on Wednesday outlined a sweeping proposal to
overhaul the way managed-care health plans do business in

The Democratic governor's long-awaited blueprint for HMO reform
would grant patients new rights when dealing with doctors, medical
groups and health plans that don't want to give consumers the care
they think they need.

It would allow patients to get a second opinion paid for by
their health plan when they disagree with their doctor's diagnosis.

When a health plan denies them care, patients would be able to
demand an independent review of their case from a doctor
unaffiliated with their HMO.

And if a patient were seriously injured or killed by a health
plan's decision to deny care, the patient or the family could sue
the HMO and collect punitive damages.

The governor's plan also would create a new state department to
regulate managed care and produce regular, public report cards
ranking plans on the quality of care and services they provide.

"We think this is a very balanced first-year approach to health
care reform," said Maria Contreras-Sweet, Davis' secretary of
business, transportation and housing. "It isn't everything
everybody wants but it does a lot for consumer protection. "

The plan released Wednesday is not a finished product. His aides
said the governor expects his plan to change as legislators review
it and pass bills before adjourning Sept. 10. Most of the measures
would probably take effect Jan. 1.
Not included in this proposal but still to come is a list of
government-mandated benefits that Davis will support.

Susan Kennedy, a top Davis aide who helped draft the package,
said there are at least 16 bills pending in the Legislature that
would require the provision of specific services, such as mental
health care or contraceptive drugs. Davis, she said, hasn't decided
how to approach those issues.

Early reaction to the governor's plan was mixed.

State Sen. Jackie Speier, D-Daly City, chairwoman of the Senate
Insurance Committee, called it a "bold and ambitious" plan that she
said exceeded her expectations.

"It's a big win for consumers in California," Speier said. "It
will finally bring to an end half a decade of stalling in terms of
dealing with HMO reform. "

The plan also won praise from Assembly Republican Leader Scott
Baugh of Huntington Beach, who said the governor's approach avoided
micromanaging the health care industry and instead focused on
giving patients the power to enforce their contracts with the HMOs.

"I think it's great," Baugh said. "This will allow consumers to
hold HMOs accountable when they improperly deny care. "
And Beth Capell, a lobbyist for Health Access, a coalition of
labor, religious and consumer groups, said the outline addressed
most of the issues her group has been pushing the state to adopt
for several years.

"These are fundamental reforms in the way HMOs operate in
California," Capell said. "This will allow HMOs to continue to
operate but will make sure that people can get the care they need
when they need it. It will give them avenues of redress and appeal
when they don't get what they need. "

But Jamie Court, a lobbyist for the Foundation for Taxpayer and
Consumer Rights, said the governor's proposal was riddled with
loopholes that would allow health plans to wiggle out of their
obligations to consumers.

He criticized the governor for insisting that regulation of the
industry remain under the purview of an agency headed by
ContrerasSweet, a former board member of Blue Cross of California,
one of the state's largest HMOs.

"This plan looks like it was drafted behind closed doors with
HMO executives and no patients, doctors or nurses present," Court

Yet the group that represents HMOs in the Capitol criticized the
governor for supporting any expansion at all in the right of
patients to sue their health plans.


Highlights of HMO reforms outlined Wednesday:


Allow patients to seek second opinions paid for by their health
plan when they disagree with a doctor's diagnosis. Patients could
choose any doctor who has a contract with their health plan, even
if that physician was outside their own medical group.


Allow patients to have the case reviewed by an independent doctor
when health plans deny them care. The service would be free and
would be expedited in emergencies.


Give consumers the right to sue and collect punitive damages when
HMOs cause serious injury or death by denying, delaying or
modifying a doctor's treatment recommendation.


Require health plans to publish the guidelines they use to decide
when to cover a procedure.

Require plans to decide within five days whether to cover a test
or procedure recommended by a doctor.

Hold medical groups to the same standards applied to HMOs.

Require all treatment decisions to be made by medical doctors.

Raise penalties for improper use or disposal of medical records.

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