Don’t Rely on HMOs to Police Themselves

Published on

Opinion Editorial by Jamie Court

Los Angeles Times

Should the life and death appeals of HMO patients really be in the hands of private reviewers funded by an HMO industry that use private protocols to reach their decisions?

Privatization advocates have long tried to turn public control of our schools, courts, public assistance systems and municipal services over to private corporations in the name of greater efficiency. But California’s largest HMOs are trying to privatize legislative reforms of their industry with the announcement Dec. 2 of a plan to implement private “independent” review systems. They would fund third-party panels to review patient problems, rather than submit to public mandates.

State and federal legislators cannot trust the HMO industry’s promise to reform itself. Nowhere can the perils of privatization as a substitute for public accountability be seen more clearly than in the HMOs’ reliance on independent review systems, which purport to give patients facing delays and denials an appeal but deliver far too infrequently.

First, the universe of reviewing companies is hardly independent of the HMOs that pay for their services. Marketing communications from one company, Medical Care Management Corp. of Bethesda, Md., to HMO clients boasts that the company “can save payers millions of dollars a year on just a few cases. Our expert physicians affirm the high-cost, high-risk procedures submitted for review in one-half to two-thirds of cases, depending on the type of disease and the patient’s profile. If you are paying for 100 such cases now, inadvisable treatments may be costing you over $ 6 million.”

California actually enacted an independent review system in 1996 for patients in need of “experimental procedures” when standard therapies do not work. In theory, this “independent” review system was unassailable, but in practice not a single reviewing agency has been accredited to perform reviews under the law, which was to start July 1, 1998. No company has been able or willing to prove its “independence” through detailed disclosure about its financial ties to HMOs, their protocols and their reviewers.

Appeals decided by such companies are the HMO industry’s reform of choice because the private process permits bureaucratic maneuvers by HMOs that a seriously ill patient has neither the time nor the capacity to defend against.

Patients failed by such “independent” reviews claim the HMOs make every effort to control all the information provided to the reviewers and bias the experts against proposed therapy by steering them toward the HMOs’ own leading set of questions. In reports issued to some patients, third-party experts have said that their assigned role is to respond to the HMOs’ questions rather than to make independent determinations about medical necessity.

Private review systems are no substitute for civic scrutiny such as in a court of law. Congress and the California Legislature must not be deterred from enacting legislation that gives patients the right to sue their HMOs and other such public mandates.

Third-party review systems only work well in conjunction with public laws for HMO accountability when companies know that if they don’t play fair, they will face large damage awards or other fines.

Texas’ independent review process, for instance, has been held out as successful, but Texas is also the only state where all patients can take an HMO to state court for quality-of-care violations and receive damages. The independent review and liability laws were passed simultaneously.

A private system of justice without ultimate public accountability is destined to betray the HMO patient. Legislators who forget their public mandate to reform HMOs in favor of a private solution would be doing their constituents a grave disservice.

Jamie Court is director of a health-care watchdog project of the Santa Monica-based Foundation for Taxpayer and Consumer Rights.

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