State Agency Sets Up Phone Line for HMO Complaints : Consumers: Dept. of Corporations says it expects to get as many as 10,000 calls a month.


When California consumers have a beef with their HMO, only the most resourceful are able to find the obscure state agency charged with regulating these health plans.

Now that agency--the California Department of Corporations--is pledging to do better. Its first big step: a toll-free hot line where the state’s 12 million members of health maintenance organizations can register complaints.

Consumer activists say the line--(800) 400-0815--is long overdue. They have frequently criticized the agency as a passive, ineffectual regulator of the rapidly growing HMO industry.

But these activists also say the hot line and other recent moves by Corporations Commissioner Gary Mendoza are signs the agency is willing to police these health plans more aggressively.


“It’s great that the department has taken this step,” said Judith Bell, co-director of Consumers Union’s San Francisco office.

Mendoza described the 800 number as the cornerstone of his efforts to transform the agency from “a regulatory organization to a consumer-oriented one.”

The agency said it expects to field up to 10,000 calls monthly. That would be a huge increase over the 2,000 a year the agency now receives.

One explanation for the expected increase is that the Department of Corporations, in its 20 years of regulating HMOs, has done virtually nothing to inform consumers of its watchdog role. And some HMOs make no effort in their membership materials to tell consumers of their right to appeal grievances to the agency.


The phone line was established in legislation approved by the Legislature this summer and signed into law Thursday by Gov. Pete Wilson.

The HMO industry supports the hot line but disputes the state’s estimate of complaint volume, said Myra Snyder, executive director of the California Assn. of HMOs.

“If there were 10,000 inquiries per month, we would need to look at our own internal systems to make sure they are working effectively,” Snyder said.

Hot line callers will be told they must first go through the HMO’s internal grievance process before appealing decisions to the Department of Corporations. The hot line, Mendoza said, is “not intended as a substitute, but as a supplement to the HMOs’ grievance procedures.”

Some consumer advocates have criticized the agency’s plan to automatically refer Medicare and Medi-Cal HMO complaints to other government regulators, even though the agency has regulatory authority over such plans. Medicare callers would be referred to the federal Health Care Financing Administration and Medi-Cal calls would be sent to the California Department of Health Services.

“If you’re trying to understand how HMOs treat consumers, why would you want to send away thousands of complaints?” asked Bell of Consumers Union.

Mendoza said his agency will share complaint information with the other agencies.

The legislation also requires HMOs to notify members in writing if their complaints are unresolved after 30 days. After 60 days without a resolution, members could take their complaints to the Department of Corporations. Exceptions to the 30-day rule would be made if the complaint involved a medical emergency.