Lawyer Raises Questions on Choosing HMO

For lawyer Mark Hiepler it all began when California’s second-largest HMO refused to authorize a $150,000 bone marrow transplant for his sister, Nelene Fox, saying the procedure was experimental.

She died of breast cancer in April 1993 at age 40 before Hiepler could finish his court case to prove the health maintenance organization was wrong.

The subsequent $89-million damage judgment Hiepler won from HealthNet earned him national recognition and prompted him to set up his own law office in Oxnard in 1994 to continue battling problems in the HMO industry.

“Most of this never would have happened if my sister had not had breast cancer,” he said. “From this, I thought I could perhaps prevent other tragedies from happening.”

After winning the largest settlement in history against an HMO, the 34-year-old Pepperdine law school graduate was invited to the White House to discuss health care issues with President Clinton and has received top billing on news programs. His lawsuit exposed a managed health care practice called “capitation”--a system that Hiepler argues encourages doctors to provide less than adequate care.

Through capitation, a doctor is paid the same flat fee per month whether he sees the patient or not and there is no extra money provided if the physician recommends extra treatment or refers the patient to a specialist.

In the midst of his growing law practice and frequent travels on the lecture circuit, Hiepler is taking time Monday to hold a public workshop at the Camarillo Health Care District to discuss the top 10 questions he thinks all people should ask of their prospective HMO.

The HMO industry is growing at a staggering rate throughout the state, with about 60% of Ventura County’s residents and more than 12 million people in California enrolled in health maintenance organizations.

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As a result, Hiepler said, his office receives more than 200 calls a month from people who feel lost in the HMO system. He lectures nationwide to patients, employers and physicians on how to avoid becoming inextricably tangled in the system’s bureaucracy.

“Through all of these cases and national talks, I see that employers as well as patients spend very little time seeking to understand or learn what they’re really entering into when signing up for health coverage,” Hiepler said. “It’s the most important consumer choice any of us can make because of the consequences . . . if you’ve made the wrong health care choice, your life may actually depend on it.”

In addition to advising patients and employers on selecting a health organization, Hiepler said he lectures to educate doctors on their legal liability with an HMO and to update attorneys on the system’s difficulties.

Hiepler has also spoken to groups of health care executives in Northern and Southern California and to the California Assn. of HMOs, which has invited him to speak again to its members.

“We have to get the doctor-patient relationship back to where it should be and not have it impeded by people with MBAs who are 2,000 miles away from the patient and are just sitting there watching the money,” he said.

The current system has resulted in what Hiepler says are doctors left to figure out where their alliance lies--with the HMO that controls their access to patients or with the patients who need treatment.

Dr. Aubry Milunsky, director of the Center for Human Genetics at Boston University of Medicine, said that HMOs do not promote the best care available.

“It is inevitable that many people will get hurt by being confined in a system that will ultimately result in mediocre care,” said Milunsky, who heard Hiepler speak in January at a conference for physicians and attorneys. “HMOs have moved to limit the access of patients to specialized care and in doing so have forced routine care to primary care doctors who have no hope whatsoever of being able to keep abreast of all fields simultaneously.”

And consumers should be aware of the difference between for-profit and nonprofit HMOs, according to Dr. Ralph Brindis, director of the coronary care unit at Kaiser-Permanente Hospital in San Francisco.

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Profit-making HMOs may seek a rate of return of 20% to 30%, Brindis said. By contrast, Kaiser is a nonprofit that spends 98% of every health care dollar on patient care.

“People should know how money is spent and whether it’s going to stockholders, big CEO salaries or is being plowed back into patient services,” Brindis said. “Both patients and physicians alike must become sophisticated users in understanding what an individual HMO offers. But I think [an HMO] is a terrific way of care in many ways because there’s cross fertilization of physicians, free interchange of ideas and consultation.”

But Hiepler said he can see a day when HMOs will be considered unnecessary.

He suggests that consumers will one day pay premiums directly to hospitals, such as St. John’s Regional Medical Center, and then use their doctors as needed. Or people would subscribe to a group of physicians, who would carry their own private health insurance, and be referred to specialists as needed.

In the meantime, Hiepler said, he is gratified that a lot of legislators attend his lectures to hear about where flaws exist in the system.

“They understand it’s a very topical area and like to jump on the bandwagon to expose things and hopefully correct errors in the system,” Hiepler said. “Legislation has been at a fulcrum of interesting debate with opportunities for me to have input that will hopefully make a difference to patients--this would be the greatest tribute of all to my sister.”

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Health Care Workshop

10 Consumer Questions

Oxnard attorney Mark Hiepler, known as a crusader against the managed care industry, will speak at the Camarillo Health Care District at 3639 E. Las Posas Road, No. 117, on Monday to discuss questions patients should ask before selecting a health plan. The workshop runs from 6:30 to 7:30 p.m. Seating is limited. Call 388-1952 to register.

Hiepler suggests not joining a health maintenance organization unless the following 10 questions are answered:

1. Do primary care gatekeeper doctors get more money if they deny referrals to specialists, testing centers or hospitals? Ask them to describe the existing incentives?

2. What percentage of the monthly HMO premium actually goes to the doctors?

3. What percentage of the monthly HMO premium actually goes to the hospital?

4. What percentage of your primary care doctor’s practice is HMO?

5. What percentage of your primary care doctor’s income comes from the specific HMO?

6. How much money a month is actually received by your primary care doctor from your premium?

7. Does the HMO contract with the doctor allow the HMO to terminate the contract if the company believes the doctor is over-utilizing services?

8. Does the insurance plan have an “experimental/investigative” exclusion? Do you understand it? Does your company understand it? Can they explain it?

9. What are the most frequently requested procedures presently being denied by your HMO on the basis of “experimental/investigative” or “not medically necessary” exclusions?

10. Do the primary care doctors receive bonuses at the end of the year from the HMO if they limit referrals to specialists or hospitals?