FHP Critics Continue the Attack After Federal Inquiry : Health care: An anti-HMO physician complains that the near-clean bill of health given the firm came from a non-objective agency.

Critics of FHP International Corp. reacted with disappointment to news this week that the health-maintenance organization had been given a near-clean bill of health after a six-month federal investigation into its sales methods to seniors.

“I think we will gradually start seeing the same abuses as before because (FHP) got away with it,” Dr. Ronald Bronow, president of an anti-HMO group called Physicians Who Care, said Tuesday.

He challenged the federal Health Care Financing Administration’s objectivity as a watchdog agency, pointing out that the federal government saves about 5% in health-care costs when HMOs assume the care of seniors who were receiving Medicare benefits. “This is part of the government policy--to push managed care,” Bronow said.

FHP’s stock rose 50 cents Tuesday, to close at $12.25 in over-the-counter trading.

The federal agency began its investigation after an unusually large number of Medicare recipients complained that they had signed FHP enrollment forms without being told that they could no longer see their regular doctors or that the forms committed them to enrolling. Some alleged that their signatures were forged. Others complained that the company took months to remove them from its roster and restore Medicare coverage once they decided against using FHP’s services.

The investigation found isolated incidents of improper sales and recommended some changes to the company’s marketing program, which have been implemented, FHP officials said. For example, sales representatives now receive a bonus if a senior citizen stays in the HMO for at least 90 days, which is expected to discourage quick-sale tactics. The government has withheld its findings from the public until it closed the investigation. Investigators could not be reached this week for comment.

But even with the changes, Bronow said he has continued to hear complaints from HMO clients and their family members.

A lawsuit filed in June on behalf of three elderly women in the San Fernando Valley was also named by federal investigators as a reason for their concern. But the attorney pursuing the case, Kurt Eggert of Bet Tzedeck Legal Services, said the government agents never spoke with him in connection with their investigation.

The suit, which is filed in Van Nuys Superior Court, seeks in excess of $25,000 in damages for the three women, who continued to see their regular doctors because they did not understand that they had enrolled with FHP and were required to use FHP doctors. They incurred medical expenses that FHP would not reimburse, along with emotional and physical damage, the suit claims.

Eggert also questioned whether the federal government is much of an HMO watchdog.

“The fact that HCFA has (cleared FHP) just shows how important that lawsuits such as ours are,” Eggert said. “They seem to be the only way that individuals who feel taken advantage of can obtain justice.”

Three shareholders have also filed suit, claiming that FHP should have known that an investigation was coming on May 3 when it issued 4.5 million common shares and that such a probe would hurt stock values.