House bill may erode rights of Calif. patients
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Read Making a Killing

home / healthcare / in the media

Sacramento Bee
Aug 06, 2001

by LISA RAPAPORT

House bill may erode rights of Calif. patients

A patients' bill of rights passed by the House of Representatives late last week will undermine HMO reform efforts in the state, the California Department of Managed Health Care said over the weekend.

The federal legislation grants patients the right to sue their health plans for denials or delays of care but sets caps on damages that do not exist under California law, state officials said. It may also replace California's independent medical review process with a federal appeal system that diminishes the state's ability to regulate health maintenance organizations.

"This could completely gut our efforts in California," said Daniel Zingale, director of the Department of Managed Health Care.

California is one of 37 states with patient-protection laws that give managed-care plan members the right to a second opinion if their insurer refuses to pay for treatment recommended by a doctor. Consumers displeased with the outcome of an independent medical review can sue their HMO in a California court, with no restrictions on damages in state law.

Under the House bill, California patients would have a hard time taking their HMO to court unless independent reviewers found the insurer had wrongly denied care. In most cases that went to trial, damages would be capped at $1.5 million.

Without the threat of a costly trial, state regulators could lose much of their leverage to resolve patient disputes with HMOs before they reach court, Zingale said. Currently, counselors at the department's HMO help center address the vast majority of consumer concerns by simply calling health plans on patients' behalf.

Health plans fund the department's entire budget, which is $32 million for the current fiscal year. Plans also pay for the medical reviews, which cost between $395 and $2,500, depending on the complexity and urgency of the case.

Under proposed federal legislation, however, consumers would pay up to $25 for a review.

Since the state's independent medical review program started in January, doctors in two-thirds of roughly 300 cases found that the HMO had made an appropriate denial of care.

By and large, the state's HMO reform efforts get high marks from health plans.

"I don't see any reason to turn back California laws. We have a good system in place, and I'd like to give it a chance to work," said Walter Zelman, president of the California Association of Health Plans.

Zelman would, however, like to see federal patients' legislation include limits on damages that his organization was unable to achieve at the state level.

While state regulators are not yet sure how far federal patients' rights legislation will go in weakening or eliminating California's independent medical review process, they agree it likely will complicate matters for patients.

"There's some very ambiguous language in the House bill that seems to suggest that federal regulation of claims benefits overrides state regulation of quality of care," said Jamie Court, executive director of the Foundation for Taxpayer and Consumer Rights.




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