HMO Plan Called Good Step, Also an End Run

Ventura County doctors and consumer advocates said Thursday that a plan by HMOs to create independent panels for patient appeals is a step in the right direction, but also a public relations gambit intended to stave off far-reaching health care reform next year.

With a pro-reform Democratic governor and Legislature poised to take power, the California Assn. of Health Plans announced Wednesday that its 22 members will form panels of experts outside their organizations over the next year to hear the appeals of patients who are denied medical care they think is necessary.

Indeed, the association supported such panels last year in the Legislature as an alternative to Democrat-backed laws to give injured patients the legal right to sue health maintenance organizations.

“I think it is a good step,” said surgeon Gus Iwasiuk, former president of the 550-member Ventura County Medical Society. “But I think they’re just trying to preempt bigger changes. The thing they really don’t want is for the Legislature to give patients the right to sue.”

A federal law generally exempts HMOs from paying damages for personal injury. But Texas has passed a carefully worded law--which held up on appeal--allowing HMO patients to sue their health plans for negligence if they do not use “ordinary care” in denying or delaying payment for treatment. California lawmakers considered a similar bill last session, but it died amid partisan debate.

Fritz Menninger, current head of the county physicians group, said doctors statewide want broader reforms, especially creation of a powerful HMO czar. The state Department of Corporations now regulates the health care plans, which provide coverage for about 17 million Californians.

“But what we really need to do is let doctors be advocates for their patients again,” Menninger said. “Now, in many cases we are not, because HMOs put us in an adversarial position with our patients.”

Local patient advocates say that HMOs are simply positioning themselves for legislative battles to come, but that the new appeal panels are welcome nonetheless.

“It’s a positive move,” said Pamela Hasner, founder of Ventura-based Patient Advocacy Management, a nonprofit group. “But it doesn’t go far enough. Patients absolutely need the right to sue to force HMOs to be responsible.”

The top official at Buenaventura Medical Group, the county’s oldest HMO-affiliated physicians group, said creation of independent panels marks an important change in policy that is intended to head off more expansive reforms.

“I suspect that is exactly what this is,” said Dr. John Keats, medical director at Buenaventura. “But I don’t think that is necessarily a bad thing. Anything that can restore patients’ confidence in the managed care industry is a positive step.”

HMO officials insist that the new panels are part of the evolution of managed care, and not a publicity stunt.

“We agree that these panels should be law,” said Ron Yukelson, spokesman for Health Net, which has 57,000 Ventura County enrollees, more than any other HMO. “The California Assn. of Health Plans helped write the law that died in committee, and that the trial lawyers killed. But this is a good first step in the right direction,” he added. “We want to work with the Legislature in the next session to enact this legislation.”

Bobby Pena, spokesman for Aetna U.S. Healthcare, said, “The bottom line is that this is the move the industry should be making for our members, period. The industry is constantly trying to improve itself.”

But Oxnard lawyer Mark Hiepler, who is known nationally for his legal maneuvers around bans on suing HMOs, said the industry reform is a baldfaced effort to avoid further regulation.

“They’re trying to stem the tide, to dam up the flood,” said Hiepler, who won a landmark $89-million award against Health Net on behalf of his sister’s family after she died of cancer in 1993. “This is a great admission, that their system has been flawed.”

He said the HMOs’ voluntary reform is vague and difficult to enforce. A key problem with it, Hiepler said, is that, while it allows patients who have been denied necessary treatment to appeal, it does not clearly define what is “medically necessary.”

Hiepler said HMOs often argue that patients want care to which they are not entitled under their health care contracts. Oftentimes, so-called experimental treatments--especially cancer therapies--are denied, he said.

So unless the rights of patients are ironclad and guaranteed in state law, patients and HMOs could end up arguing continually over what is medically necessary and can be appealed.

“So the proposal has great public relations appeal,” Hiepler said. “But when you’re on the front line trying to help patients, you realize how they’re going to be able to conduct business as usual.”