CA Consumers May Have Right to Sue HMO's

July 7, 2008 - 8:02 PM

Sacramento, CA (CNSNews.com) - The California Legislature has done what Congress so far has refused to do: give patients the right to sue their Health Maintenance Organizations.

As its legislature wound down its final session of the millennium last week, California Assembly members sent to Gov. Gray Davis (D) a wide-ranging series of hastily written and amended HMO reform bills.

Davis said he would sign a landmark bill which would allow more than 14 million Californians to sue their HMO's if they are denied necessary medical treatment and suffer substantial harm as a result. The governor also said he would sign a bill giving patients who are denied treatment the right to a second opinion by an independent panel of doctors.

To oversee the bill's requirement's, Davis said he would sign a measure to create a new state Department of Managed Care to regulate health plans. Consumer groups have complained the current regulatory agency, the Department of Corporations, had been lax in its scrutiny.

Reaction to the bill was mixed with Dr. Jack Lewin, chairman of the California Medical Association saying, "At this point, the patients don't know it yet but they ultimately are going to get squeezed. The doctors are certainly in for a tough time."

Lewin added: "We've really got to get back to what the patient needs and make sure that health care provides it. We are under-funding health care in California and at some point, or other, the system is going to blow up unless we decide to pay for what it's worth."

"For the most part, from our point of view, we are going to get substantial HMO reform giving consumers more protection and, with one or two exceptions, most of the proposals have been framed in such a way so there's not a great cost," said Walter Zelman, president of the California Association on Health Plans, representing 38 state HMO's.

"We need a broader dialogue that involves consumers, doctors, HMO's and employers that pay for it and government," Zelman said. "We do have to have a better understanding of what we want and what we pay for."

But mum was the word this weekend on whether Davis would sign other HMO reform bills, including one that would require HMO's to add more items to their coverage. Earlier, he said he would sign no bill mandating more services.

In the final days of the session, Davis publicly seemed more receptive to some health reform measures including a bill requiring HMO's to cover the costs of contraception. Another was a bill ordering HMO's to cover care for a variety of mental illnesses, including schizophrenia, manic depression, obsessive-compulsiveness, anorexia and bulimia.

HMO lobbyists contended increasing the services they provide will increase costs. Supporters of the bill say it could lead to a one percent premium increases

"I think everybody is being squeezed in the health care system," Zelman said. "California has the lowest health care costs in the nation, 10-40 percent lower than any comparable state. If you live in New York or Boston or New Jersey or even Illinois or Florida, your costs are going to be 20-30-40 percent higher than here."

"We've created such a bureaucracy in health care these days we either have to redo this whole system or we're going to have to build more trust between the HMO's and doctors," Lewin said.

"We're delivering high quality health care at very affordable prices," Zelman said. "The problem is it's so affordable everybody is getting squeezed."