With Democrats now in charge of both the governor's mansion and the statehouse, a slew of HMO reform bills that died on Gov. Pete Wilson's desk this year have a real chance of becoming law.

State lawmakers and consumer advocates said that would be particularly significant because California, with more than 18 million people in HMOs, ultimately sets the tone for the entire country when it comes to managed care.

"The health plans have seen the worst-case scenario for them," said Assemblyman Martin Gallegos, D-Baldwin Park. "This was their (HMOs') worst nightmare come true."

Gallegos, who chaired the Assembly Health Committee last legislative session and authored many of the bills that died on Gov. Pete Wilson's desk, said the outcome of the Nov. 3 election sends a clear signal to the HMO industry.

"Health care reform is on the top of the list for voters," he said. "The people want meaningful HMO reform. (HMOs) hopefully will see the writing on the wall; this should be a wake-up call for them."

The Health Access Patients' Bill of Rights will top the party's agenda next session, Gallegos predicted. That 11-bill package of legislation would give patients the right to sue an HMO for damages when the company denies care, mandate direct access to specialists, force review from an outside third party on appeals, and direct a reorganization of the Department of Corporations.

"(Gov.-elect Gray) Davis will have reform high on his agenda," agreed Jamie Court, director of the Consumers for Quality Care. "And with a large California delegation in Washington, it will be high on their agenda as well. The Congress is likely to follow what happens here. Patients have a lot more hope."

But HMO industry officials said sweeping changes are not inevitable, pointing out that while Davis is not as aligned to the industry as Wilson, he will not rush to make dramatic changes, either.

"Gray Davis is likely to sign legislation that Pete Wilson wouldn't sign," said Walter Zelman, president and chief executive of the California Association of Health Plans. "But I also think he is very moderate and he will be very concerned about the business climate."

One issue both sides say they are most concerned about is HMO liability, or a patient's right to sue for damages if he or she has been denied care. Such lawsuits are currently prohibited by federal law and the betting is that any state legislation that's passed and signed into law likely will be held up in the courts.

But most industry, political and consumer advocate sources agree that some form of HMO liability likely will become law next year.

"HMO liability will carry through both houses and become law," predicted Leland Wong, state director of government relations for Kaiser Permanente. "But Gov. Davis will bring a very balanced view to the table. There will be a lot of caution in terms of what is actually written. There is no doubt that the industry is going to have to change."

Steve Thompson, vice president of government affairs for the California Medical Association, agreed. "It is going to be a different atmosphere for HMOs," he said. "HMOs are going to have to change, without question."

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