Suing HMO: No Sure Cure
HMOs, acknowledging at last that many Californians don’t believe managed care has their best interests at heart, recently agreed to support something they once staunchly opposed. That something is legislation giving patients the right to appeal treatment denials to an “external reviewer,” a medical expert independent of the HMO.
HMOs have long insisted that their treatment denials are based only on “medical necessity,” but they know they are losing the public relations war.
Ironically, however, the consumer advocates and attorneys who initially championed external review are now lobbying for much more--insisting that external review be combined with greater legal liability for HMOs. Their crusade might sink the modest reforms that are due for final revisions in the Legislature Tuesday.
Consumer advocates are right in saying that some laws unduly restrict the rights of managed care patients, especially when it comes to suing HMOs. But much of the problem stems from a federal law that only Congress can change. And political prospects are dim for banning other unfair HMO practices like requiring patients to agree to arbitration as a condition of joining a plan. Gov. Pete Wilson has promised to veto any expansion of patients’ ability to sue, so linking that expansion to external review would only delay the reform process another year. California needs external review now, both to preserve the credibility of managed care and to grant patients an essential right.
Legislators have succeeded in eliminating the glaring conflicts of interest in the external review legislation first proposed by the HMO lobby. Gone, for example, is a passage that allowed HMOs to choose and pay the external reviewers directly.
Some HMO lobbyists are still pressuring legislators to introduce unnecessary hurdles to external review, like prohibiting patients from appealing treatments that cost less than a certain dollar amount--which would include a lot of denials of certain medications. And legislators have yet to commit to two essential provisions: The first, a measure by Assemblyman Kevin Shelley (D-San Francisco), would make state ombudsmen available to help guide patients through the external review process. Experiences in the 17 states that have implemented external review so far have shown that patients often need help to explain why they believe a treatment is medically necessary. The second, making the external review decisions public, would help consumers judge HMOs and help HMOs better predict which kinds of treatment decisions are likely to be overturned by external reviewers.
Some consumer advocates argue that lawsuits are a superior alternative to external review because they give patients more power to collect damages. But it’s not an all-or-nothing proposition. External review is fast, cheap and, if properly designed, decisive. Lawsuits may provide a larger sense of justice, but they are grindingly slow and expensive, culminating long after harm may have been inflicted. Legislators should resist the consumer lobby’s pressure to link the two.
