Struggling PacifiCare of California has been hit with a lawsuit accusing it of violating a new state law requiring health maintenance organizations to send their HIV-positive and AIDS-stricken enrollees to specialists.

The PacifiCare Health Systems Inc. subsidiary, which was forced to pay a $3 million penalty earlier this year for late payments to health care providers, is being sued by the AIDS Healthcare Foundation.

The Los Angeles-based foundation sponsored the new law, which went into effect Jan. 1 and requires HMOs to provide members "standing referrals" to AIDS specialists in an effort to improve their health care.

The foundation, an operator of its own AIDS clinics, claims that HMOs in general are not complying well with the law, but it singles out Santa Ana-based PacifiCare as one of the worst.

In response, PacifiCare says that the lawsuit, filed Aug. 10 in Los Angeles Superior Court, only came after the insurer refused to bow to foundation demands to award it a contract to provide such care a charge the AIDS group claims is twisted.

"As far as the charge that we are going after a contract, I plead guilty," said Michael Weinstein, foundation president. "We want to be able to care for patients, not turn them away."

The foundation bills itself as the largest provider of AIDS services in the country, but it remains a David to PacifiCare's Goliath. The foundation serves only several thousand patients annually, while PacifiCare has 2.4 million enrollees in California alone.

Rising tension

The dispute is another example of the tension between special interest groups, which have managed to get the state Legislature to pass laws mandating various medical care procedures, and the HMO industry, which cites the laws as a primary reason medical costs are rising for everyone.

Those rising costs have hit PacifiCare particularly hard, resulting in its stock dropping about 80 percent over the past five years, a performance far worse than many others in the health care industry.

As for the lawsuit, it is based on a law that was carried by former Assemblyman Martin Gallegos, D-Baldwin Park. It requires HMOs to not only provide HIV-positive and AIDS patients with standing referrals, but allows them access to specialists outside their physician groups if no one in the group is qualified to provide the care.

PacifiCare says it is following the law by allowing its affected members access to doctors at "premier" groups, such as those in the Los Angeles area affiliated with UCLA Medical Center or Cedars Sinai Medical Center.

"The lawsuit is completely without merit. We work with groups that provide a continuum of full-service care," said Tyler Mason, a PacifiCare spokesman.

But the AIDS foundation charges that there are not enough experts accessible for all of the HMO's HIV-infected patients and that most are shunted to practitioners without much experience in treating the disease.

PacifiCare says it has not received a single complaint from its members, nor have any been filed with the Department of Managed Health Care, the state's HMO regulator. Moreover, it says that the lawsuit does not include a single patient as a plaintiff, nor did any patients attend an Aug. 13 press conference the foundation held announcing the lawsuit.

Disgruntled patients

In response, Weinstein says the foundation knows of individual patients unhappy with PacifiCare, but they do not want their names publicized or attached to a lawsuit while still members of the HMO. He also says at least four have filed complaints with state regulators, but those filings might not be known to top officials.

Daniel Zingale, director of the state managed care agency, said last week that he has made a request to the foundation for specific instances where PacifiCare violated the law, and he is awaiting a response.

The dispute is further complicated because there is no such thing as a "licensed" HIV or AIDS specialist, though the foundation maintains that doctors who see such patients on a daily basis would qualify.

The lack of an official definition for what constitutes a "specialist" has prompted a yearlong effort to develop one through a series of meetings among patients, doctors, educators and organized medical groups. The effort is being led by Dr. Scott Hitt, an internist who served as chairman of President Clinton's Presidential Advisory Council on HIV/AIDS.

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