Officials, advocates say California HMO law should be national model

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Associated Press

A new state law allowing patients to sue health maintenance organizations has not resulted in a flood of lawsuits as insurance companies had feared, according to state regulators and a consumer group.

Two laws regulating HMOs went into effect in January, requiring independent medical review of complaints when judged warranted by the state’s Department of Managed Health Care and allowing patients to sue if they are not satisfied with the result.

The department reported Monday that since Jan. 1, 65 percent of 168 independent medical review cases were decided on behalf of HMOs, with the rest decided on behalf of patients. No patients have sued, according to regulators.

That differs from the experience in other states with similar laws, where there has been a more even split between patients and insurance companies. Consumer advocates said Monday the seeming advantage enjoyed by insurers actually means the laws are working to protect patients.

“There appears to be a deterrent effect,” said Jamie Court, executive director of the Foundation for Taxpayer and Consumer Rights. “We think this shows that HMOs are concerned about being sued, concerned about being overturned by an independent reviewer, and therefore they are making sure patients get the care they’re entitled to early.”

A trade group representing health insurers said the statistics prove that laws allowing lawsuits against HMOs are not needed.

“It flies in the face of the premise that we have accountants making decisions,” said Bobby Pena, spokesman for the California Association of Health Plans. “Independent reviewers are upholding decisions made by health plans. It sends a strong statement that we’re doing right in the first place.”

Consumer advocates and state officials hope the report will aid Congress as it debates national patients’ rights legislation this week that contains some elements, such as expanded rights to sue HMOs, similar to California’s law.

The health care industry has opposed patients’ rights legislation because it would enhance consumers’ rights to sue, which could lead to frivolous lawsuits and rising health care costs.

“It’s unnecessary because the process is already working well,” Pena said. “These numbers prove that point for us.”

The taxpayer group has published an 80-page booklet explaining patients’ rights under the new laws. Copies will be distributed by mail and will also be available at many doctor’s offices. The guide is also available on the Internet.

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