California HMOs Offer Safeguard to Patients Denied Treatment

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Associated Press

Twenty-two California health maintenance organizations, which cover

nearly all of the state’s HMO members, have agreed to allow patients who are denied treatment to appeal to an outside panel of doctors.

Eighteen states have passed laws requiring such external review programs,

and the voluntary decision by California HMOs is expected to encourage more states, including California, to do the same, analysts said.

By enacting their own voluntary plan, HMOs stand to gain political

leverage in negotiating important details of the plans, such as who will pay for appeals. They also will be in a better position to fend off a campaign by consumer rights advocates for laws that would allow patients to sue for damages when care is denied.

“I think they’re trying to position themselves now as more constructive

participants in the debate, pointing to some kind of compromise,” said Larry Levitt, a health care analyst for the Kaiser Family Foundation, an independent research organization not connected with the Kaiser Permanente HMO. “The compromise would be external appeal, but no unlimited right to sue.”

The voluntary review plan announced on Wednesday by the California

Association of Health Plans covers nearly all of the state’s 17 million HMO members.

“Patients should not have to fear that they might be denied care they

need,” said Walter Zelman, president and chief executive officer of the association.

“The external review process is the best means of guaranteeing all

patients that they will get the care they need, when they need it,” he said.

Important details of the program, which would go into effect next year,

have not been decided.

The association has not said how companies will choose the doctors to

serve on the review boards, or how they will be paid.

Under the plan, appeals will be limited to medical decisions. Consumers

who have been denied a treatment that the HMO says is not covered, or who fail to follow HMO guidelines in seeking treatment, still will have little recourse.

California law requires that terminally ill patients be allowed to appeal

when requests for certain treatments are denied, and last year three bills were introduced mandating outside review for medical decisions by managed-care companies and imposing stricter liability on firms whose

gatekeepers deny needed care.

All three bills were withdrawn amid squabbling among consumer advocates

and concerns that Republican Gov. Pete Wilson would veto them. But Gov.-elect Gray Davis, a Democrat, is more supportive of consumer concerns, and the Legislature is expected to take up the issue again next year.

“The environment the last couple of years was that the Legislature was

passing a lot of bills and the governor was vetoing them,” Levitt said. “Gray Davis has clearly indicated he wants to go further than Wilson did. I think the industry is looking at a political aspect next year that’s much less favorable.”

Outside review is a key part of the proposed patients’ bill of rights

that Congress is expected to take up later this year.

Many consumer advocates believe external review will be of limited use

unless it is coupled with laws granting patients the right to sue when care is denied.

“A cardiac patient seeking entrance into an intensive care unit has no

time or capacity to appeal a denial,” said Jamie Court, an activist with Consumers for Quality Care in Santa Monica.

“An HMO will make the right decision about admitting him if the HMO knows

it will be liable for damages if it does not act reasonably,” he said.

Two states, Texas and Missouri, already have passed laws allowing

patients to sue health plans for denial of coverage, and consumer advocates are pressing for a change on the federal level as well, said Nicole Tapay, an assistant professor at Georgetown University’s Institute for Healthcare Research and Policy.

“I think it will resurface to be one, if not the, major issue in the

coming debate,” she said.

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