The avalanche of bills in the state Legislature to tighten oversight and increase regulation of the managed care industry may have been stopped this year by Gov. Pete Wilson's veto threat, but the groundwork is already being laid for a bigger push next year.

Consumers, patients' rights groups and physicians are gearing up for another battle to rein in the authority of health maintenance organizations. They are being opposed on some or all of the legislation by insurance carriers, the HMOs themselves and by employer groups that fear the hard-won cost savings in their health plans will vanish.

Reform advocates hope that this time around, they will be able to count on election-year politics to get their legislation past Wilson's desk. They are even talking about mounting an initiative campaign aimed at forcing the hand of the Legislature and the governor.

"If there is a ballot initiative that goes beyond the bills that have so far been introduced in the Legislature, it will provide an incentive to get those bills passed. Otherwise, Wilson is likely to veto many of the bills," said Jamie Court, spokesman for Consumers for Quality Care, a patients' rights group based in Los Angeles.

HMO and employer lobbyists have so far been on the defensive. However, they have had a powerful ally in Wilson.

Earlier this month, Wilson said he would veto all but one of the 85 HMO-related bills the one exception being a bill that would prohibit insurance policies from requiring new mothers to leave the hospital within 24 hours after giving birth. Wilson said he is awaiting the recommendations of a special task force before approving any other HMO-related bills.

The 30-member Managed Health Care Improvement Task Force is due to come out with its recommendations in early January. Twenty of the task force members are Wilson appointees; the state Legislature appointed the remaining 10 members. They represent health care service plans, employers, employees who enroll in health plans, physicians and nurses, and consumer groups.

Reform advocates are wary of the task force, noting that two-thirds of its members are appointed by Wilson. They are planning to reintroduce their bills when the Legislature reconvenes from its holiday recess in January.

They will be focusing their reform efforts in five areas:

- whether physicians or health care organization administrators should have the final say on patient treatment;

- the extent to which HMO enrollees can choose their own doctors;

- disclosures of why HMOs deny treatment alternatives;

- capitation agreements (fixed payment levels for medical treatments) between physicians and HMOs; and

- which state agencies should have oversight responsibility for HMOs.

Currently, HMOs are overseen by the Department of Corporations. Reform advocates say that the current department head, Newport Beach securities attorney Keith Bishop, lacks the knowledge of the health care industry to regulate HMOs.

They would rather see the Department of Insurance or the Department of Consumer Affairs take oversight responsibility for HMOs.

In addition, they plan to reintroduce a series of mandates similar to the hospital stay bill that Wilson said he will approve. Among these: hospital stays for mastectomies and ensuring that patients who go to emergency rooms get treatment.

Most of these bills can be expected to pass the Legislature. The key question is whether Wilson will sign them. And that in turn will likely depend on what the task force comes up with.

Whatever the outcome, employer and HMO groups are anticipating more mandates and restrictions on the authority of HMOs.

"Mandates are coming," said Jeff Gorell, spokesman for the California Manufacturers Association. "What is happening is that the Legislature is shooting for the maximum level of care. That means higher costs for employers. The employers will either pass the costs on to their employees in the form of higher copayments or they will simply not hire as many workers to begin with."

Gorell said he hopes that whatever mandates do come are put together in a comprehensive package and not passed on a piecemeal basis.

Meanwhile, HMOs themselves are expecting to see consumer legislation guaranteeing greater patient access to specialists. They are also anticipating legislation that would increase HMO coverage for medications.

While the HMO industry is willing to negotiate on such bills, it draws the line on physican demands for increased payments from HMOs, according to lobbyist Maureen O'Haren of the California Association of Health Plans.

"We're not getting engaged in 'pay-me' bills for doctors," O'Haren said.

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