Staff Reporter

Virtually everyone in Democrat-dominated Sacramento expects a major overhaul in the way managed care plans are regulated. The only questions are, just how many screws will be tightened and how much it will cost the industry and consumers.

So far, half of the 130 health care bills introduced to date have passed their first committee; almost none have been rejected.

In fact, the pressure for reform is so great that the lobby for health maintenance organizations last month put forward its own set of reforms in an effort to exert damage control over the changes that occur.

But until Gov. Gray Davis shows his hand, few legislators are willing to predict exactly what measures will pass.

"People are waiting for Gov. Davis to take the lead on HMO oversight," said Assemblyman Martin Gallegos, D-City of Industry. "Some bills won't need to move forward if a new, stronger regulator comes in who is willing to exert more enforcement authority."

Gallegos said he has heard from officials in the Davis administration that the governor will announce his HMO reform package in the next few weeks. Davis himself was not available for comment.

The biggest battle looms over whether HMOs should be held liable in civil court for decisions they make about covering certain medical treatments. Two major bills deal with this issue: SB 21, sponsored by state Sen. Liz Figueroa, D-Fremont, and AB 55 by Assemblywoman Carole Migden, D-San Francisco.

Consumer advocates and trial lawyers are pushing to ensure that patients have legal recourse when they are denied treatment or believe treatment mistakes are made. They cite a Texas law enacted in 1997 that makes HMOs liable and say it has resulted in few court cases.

"The biggest problem is that consumers do not have the leverage they need to get the care that's medically necessary for them," said Jamie Court, executive director of Consumers for Quality Care. "That leverage cannot come from just another bureaucratic review system; it must be coupled with ultimate accountability in court."

But legal liability is fiercely opposed by members of the HMO lobby, who say allowing patients to sue will drive up coverage costs and perhaps result in employers deciding not to offer health care coverage.

"Liability is very expensive and unnecessary," said Walter Zelman, president and chief executive of the California Association of Health Plans. "That's why the industry endorses an external review process, where if an individual is denied something by their HMO, they should have the right to have an independent panel of physicians review it."


For reprint and licensing requests for this article, CLICK HERE.