Judge Orders PacifiCare to Open Its Books : Health care: Consumer advocates hail the ruling as a victory for patients. The HMO says it will comply.

A Superior Court judge, confirming that the state has broad powers to regulate health care plans, ordered a Cypress-based company to hand over records involving people who have complained about the company’s health care.

Judge John M. Watson issued the order Thursday against PacifiCare of California, which had resisted efforts last summer by the state Department of Corporations to gain access to files of health plan members. The company, a unit of PacifiCare Health Systems Inc., has more than a million members.

Consumer advocates hailed the ruling as a victory for patients. Peter Lee, a lawyer for the Los Angeles-based Center for Health Care Rights, a consumer group, said the ruling “sends a message” to other health maintenance organizations that they cannot shut the door when the state’s Department of Corporations launches investigations into the quality of care they provide.

Health maintenance organizations across the state have been carefully monitoring the case, which has been viewed as one of several signs that state Commissioner Gary S. Mendoza has mounted an aggressive effort to dispel his department’s reputation as a lax regulator.

PacifiCare executives indicated Thursday that they will comply with the judge’s directive to give the state access to records of about 300 health plan members who had filed complaints with the state. The Department of Corporations, which regulates HMOs, said it is investigating the complaints to determine whether the company needs more supervision.

Jon R. Wampler, president and chief executive, said the company is eager to work with the department. He also said he is pleased that the judge required the state to narrow its earlier demand for access to a sweeping array of company documents dating back to Jan. 1, 1993.

Department officials and consumer advocates said the state won Thursday. Although the judge temporarily limited the investigation to the 300 cases, they said he left the door open for the state to reassert its broader demand in the future.

However, a department spokesman refused to say how the judge’s ruling might affect future state investigations into other health plans.

In legal briefs, attorneys for PacifiCare argued that the department should only be allowed to examine members’ medical records and peer-review documents at company quarters. The company, saying it was concerned about enrollees’ right to privacy, also sought to prevent the state from copying records.

But the judge indicated that the state can copy and take possession of records to pursue an investigation so long as it takes steps to prevent the disclosure of confidential information. Watson also ruled that patients’ rights to privacy “must give way” to the state’s right to oversee health plans.

The judge ordered PacifiCare to open its books for inspection by Jan. 15. He also assigned a court-appointed expert to referee any disputes between the state and PacifiCare over which documents to hand over.

The dispute between PacifiCare and the state arose in July when the department’s enforcement division demanded to inspect members’ complaints and records on members who have dropped the plans, as well as the company’s grievance procedures, contracts with health care providers, peer-review procedures and financial statements.

In August, the company went to court in an effort to keep the department from gaining access to the records. The company argued that the demands were unreasonable and that compliance would be too costly.