Hold HMOs Liable

Published on

San Francisco Chronicle Opinion Editorial

San Franciso Chronicle

The threat of a lawsuit can be a powerful incentive to do the right thing, yet 14 million Californians insured through private employer health plans are denied the prerogative of a comprehensive court remedy. Because of a 1974 federal law — the Employee Retirement Income Security Act (ERISA), which was adopted mainly to thwart corrupt, incompetent pension managers — members of private health plans may not sue their HMOs for damages even though workers in state health plans may.

A number of judges have complained that the law has not kept up with the changes in health care and the workplace, and they say their hands are tied even when patients and families with legitimate claims against the HMOs come before them with clear evidence of disastrous results of treatment denied or delayed.

Congress should address ERISA’s inequities, but until that happens, the remedy for the injustice of allowing the HMOs to remain unaccountable must be state law.

A measure, SB 21, by Senator Liz Figueroa, D-Fremont, would close the ERISA loophole and allow patients denied proper medical care the right to sue for damages.

The idea of the legislation is to make the HMOs more accountable for bad medical decisions forced on doctors by managed-care bean counters, not to encourage lawsuits.

In states such as Texas where similar laws have been passed, the number of suits did not significantly increase. What did happen was that HMOs leaned toward honoring, not denying, doctors’ requests for treatment.

That result contrasts with what is happening now. A video about the internal workings of one HMO showed that complaints of patients who were prevented by ERISA from suing were given short shrift. Complaints from patients who were allowed to sue were investigated more quickly and thoroughly.

This inequity deserves redress. Figueroa’s bill has been approved by the Senate Judiciary Committee. It should receive swift approval as it moves through the Legislature plus a signature by the governor.

Consumer Watchdog
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