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Apr 06, 1999

CA Senate Judiciary Committee Passes Landmark HMO Liability Bill

CA Bill Gives All Patients the Right-to-Sue that Public Officials Now Have
By a 6-3 vote today the California Senate Judiciary Committee passed California Senate Bill 21 (Figueroa), which allows all patients the right to sue their HMO for quality of care violations and for acting in bad faith.

Public employees can sue their HMOs for damages today, but patients with private industry employer-paid health coverage cannot due to a federal employee benefits law. Under the Employee Retirement Income Security Act of 1974, or ERISA, patients can only recover the cost of the benefit denied.

"If ERISA rules applied to bank robberies, convicted criminals would simply have to give back the money," said Jamie Court, director of Consumers For Quality Care, sponsor of SB 21. "It is no wonder HMO abuses have become epidemic. All working Californians should have the same right to sue their HMOs for damages as their public officials now have. Without the threat of damages, patients will continue to have no leverage against billion dollar HMOs that deny and delay medically necessary care."

SB 21 is based on a model Texas law, in effect since September 1997, that has resulted in doctors reporting that HMOs now defer to their treatment requests. Yet only one lawsuit has actually been filed under the law, deflating industry arguments that it would result in a flood of litigation.

"SB 21 is a long awaited remedy for 14 million Californians with private-sector, employer-paid healthcare who currently cannot hold their HMO accountable for wrongdoing," concluded Court.

Last year, Consumers For Quality Care faxed a different story and picture of another "ERISA Casualty of the Day" -- a patient denied treatment by an HMO or insurer and without a remedy -- to legislators and the media for five months. This year, the consumer group is tracking HMO liability legislation in 23 states.

Consumers For Quality Care is a health care watchdog project of the non-partisan, non-profit Foundation For Taxpayer and Consumer Rights.


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