HMO Role: the Intimidator

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Los Angeles Times

On the morning of Jan. 26, 1996, Margaret Utterback awoke with a gnawing, sharp pain in her side and at 8:30 began trying to reach her doctor at Kaiser. After repeated calls, the 74-year-old Bay Area woman finally got a 4:15 p.m. slot. Unable to hold out until then, Utterback showed up at Kaiser‘s medical offices in Hayward at 3:30, pleading to be seen early. She was brushed aside, according to state documents, and was asked to wait until 4:30, after which her doctor diagnosed a life-threatening aortic aneurysm. Doctors could not bring her internal bleeding under control and she died.

Last year, Daniel Zingale, the director of the state’s then-new Department of Managed Health Care, fined Kaiser $1.1 million after alleging that “systemic problems” contributed to Utterback’s death. Kaiser, facing the largest fine ever levied against a health plan, promptly took legal action to get it overturned. Kaiser‘s action is pure intimidation and should be thrown out of court.

At a state court hearing last week, Kaiser‘s lawyers did not dispute the facts of Utterback’s death. Kaiser lawyers concede that Zingale does have the authority to regulate state HMOs but argue that if any errors contributed to Utterback’s death, they would have been the fault of doctors working for Kaiser, not of the health plan itself. At a federal hearing in Los Angeles today, Kaiser lawyers will argue a separate issue–that Zingale exceeded his regulatory authority by using the death of another Kaiser patient, who had a similar aneurysm, to show a pattern of misconduct and justify the fine. That patient, Kaiser‘s lawyers argue, was enrolled in a federally regulated Medicare HMO that Zingale, as a state official, lacks the authority to oversee. (Utterback was enrolled, as a former county employee, in a state-regulated Kaiser plan.) For this, Kaiser‘s lawyers have the gall to argue, Zingale should personally be held in contempt of court.

Federal and state court judges should powerfully reject Kaiser‘s tortured legal arguments. For instance, last week Kaiser said in state court that the HMO is simply a fiscal and administrative structure that has no responsibility for the delivery of safe care. What does it mean, then, by its own advertisements? “Teamwork and quality set us apart,” reads one ad, “because we’re a physician-led health plan, not an insurance company.”

Kaiser‘s argument that it should not be held accountable for negligence contributing to Utterback’s death belies evidence of systemic problems at the HMO, including the testimony of a receptionist with no medical training who said she had been required to assess patients’ condition before they saw a doctor. Finally, Kaiser‘s charge that Zingale lacks the authority to punish the HMO for actions involving Medicare patients is invalid because Zingale did not fine Kaiser for the Medicare patient’s death. He only cited it as an example of systemic problems.

Zingale has turned out to be an effective, thoughtful regulator, just what the state needed. Surely he won’t be thrown in the slammer because he dares to do his job.

Consumer Watchdog
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