Hasta La Vista HMO Regulation?

Published on

Capitol insiders are abuzz
with news that Governor Schwarzenegger is considering eliminating the
four year old Department of Managed Health Care in the interest of
"efficiency" and "consolidation." The rumor mill has it that HMO
regulation will be returned to financial bureaucrats at the Department
of Corporations – the very same securities lawyers who botched the job
during the Wilson Administration.

The only bipartisan agreement on California HMO reforms in 1999 was
that the Department of Corporations, because of its business bent, was
not able to adequately police HMO medicine or to respond to patients as
a dedicated consumer protection agency would. Under the Department of
Managed Health Care, a rapid-response, 24 hour complaint hot line has
made HMOs pay for more care than they like. That may be why the
Corporations idea is back. . . Remember Arnold’s Chief of Staff was
formerly the top lobbyist for the HMO Health Net. And California’s
Department of Managed Health Care levied a $100,000 fine on Health Net
in 2001 for failing to pay physicians on time, the second-largest
penalty for such a violation.

Then again the disappearing Department may just reappear…. That’s
what happened to the vanishing on-line labor rights manual ArnoldWatch
uncovered on Friday as a sign the pro-business administration was
denying workers the tools to protect themselves. By Monday afternoon,
after complaints from labor unions and inquiries from the press,
Schwarzenegger’s Administration said it would return the documents to
the Internet, claiming they were a mistaken casualty of the regulatory

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