Protection plan for HMO users unveiled

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Patients’ rights would include independent review when care is denied.


Gov. Gray Davis on Wednesday outlined a sweeping proposal to

overhaul the way managed-care health plans do business in


The Democratic governor’s long-awaited blueprint for HMO reform

would grant patients new rights when dealing with doctors, medical

groups and health plans that don’t want to give consumers the care

they think they need.

It would allow patients to get a second opinion paid for by

their health plan when they disagree with their doctor’s diagnosis.

When a health plan denies them care, patients would be able to

demand an independent review of their case from a doctor

unaffiliated with their HMO.

And if a patient were seriously injured or killed by a health

plan’s decision to deny care, the patient or the family could sue

the HMO and collect punitive damages.

The governor’s plan also would create a new state department to

regulate managed care and produce regular, public report cards

ranking plans on the quality of care and services they provide.

“We think this is a very balanced first-year approach to health

care reform,” said Maria Contreras-Sweet, Davis’ secretary of

business, transportation and housing. “It isn’t everything

everybody wants but it does a lot for consumer protection. ”

The plan released Wednesday is not a finished product. His aides

said the governor expects his plan to change as legislators review

it and pass bills before adjourning Sept. 10. Most of the measures

would probably take effect Jan. 1.

Not included in this proposal but still to come is a list of

government-mandated benefits that Davis will support.

Susan Kennedy, a top Davis aide who helped draft the package,

said there are at least 16 bills pending in the Legislature that

would require the provision of specific services, such as mental

health care or contraceptive drugs. Davis, she said, hasn’t decided

how to approach those issues.

Early reaction to the governor’s plan was mixed.

State Sen. Jackie Speier, D-Daly City, chairwoman of the Senate

Insurance Committee, called it a “bold and ambitious” plan that she

said exceeded her expectations.

“It’s a big win for consumers in California,” Speier said. “It

will finally bring to an end half a decade of stalling in terms of

dealing with HMO reform. ”

The plan also won praise from Assembly Republican Leader Scott

Baugh of Huntington Beach, who said the governor’s approach avoided

micromanaging the health care industry and instead focused on

giving patients the power to enforce their contracts with the HMOs.

“I think it’s great,” Baugh said. “This will allow consumers to

hold HMOs accountable when they improperly deny care. ”

And Beth Capell, a lobbyist for Health Access, a coalition of

labor, religious and consumer groups, said the outline addressed

most of the issues her group has been pushing the state to adopt

for several years.

“These are fundamental reforms in the way HMOs operate in

California,” Capell said. “This will allow HMOs to continue to

operate but will make sure that people can get the care they need

when they need it. It will give them avenues of redress and appeal

when they don’t get what they need. ”

But Jamie Court, a lobbyist for the Foundation for Taxpayer and

Consumer Rights, said the governor’s proposal was riddled with

loopholes that would allow health plans to wiggle out of their

obligations to consumers.

He criticized the governor for insisting that regulation of the

industry remain under the purview of an agency headed by

ContrerasSweet, a former board member of Blue Cross of California,

one of the state’s largest HMOs.

“This plan looks like it was drafted behind closed doors with

HMO executives and no patients, doctors or nurses present,” Court


Yet the group that represents HMOs in the Capitol criticized the

governor for supporting any expansion at all in the right of

patients to sue their health plans.



Highlights of HMO reforms outlined Wednesday:


Allow patients to seek second opinions paid for by their health

plan when they disagree with a doctor’s diagnosis. Patients could

choose any doctor who has a contract with their health plan, even

if that physician was outside their own medical group.


Allow patients to have the case reviewed by an independent doctor

when health plans deny them care. The service would be free and

would be expedited in emergencies.


Give consumers the right to sue and collect punitive damages when

HMOs cause serious injury or death by denying, delaying or

modifying a doctor’s treatment recommendation.


Require health plans to publish the guidelines they use to decide

when to cover a procedure.

Require plans to decide within five days whether to cover a test

or procedure recommended by a doctor.

Hold medical groups to the same standards applied to HMOs.

Require all treatment decisions to be made by medical doctors.

Raise penalties for improper use or disposal of medical records.

Consumer Watchdog
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