Assembly Sends HMO Reform Bill to Wilson

The Legislature broke the logjam Thursday on long-stalled attempts to enact HMO reforms, sending Gov. Pete Wilson the first of what could be dozens of bills to change managed care practices.

Operating in a cooperative atmosphere that differed markedly from the combative debate that prevailed last year, the Assembly gave final legislative approval to a proposal that would make it easier for patients to compare benefits among various health plans.

The bill, (AB 607) by Assemblyman Jack Scott (D-Altadena), passed 60 to 0 in the lower house and headed to Wilson’s office, where aides said he would sign it into law.

That measure and others to follow in coming weeks represent only modest reform of regulations governing the health maintenance organization industry, said Assembly Health Committee Chairman Martin Gallegos (D-Baldwin Park).

Bills much tougher on HMOs lie ahead, setting up a possible confrontation between Democrats and Wilson. The governor and some legislative Republicans are sympathetic to reform efforts, but caution against striking too hard at a major California industry.

Among the Democratic bills are proposals that would allow patients to sue managed care plans for malpractice for the first time in California. Present laws allow suits only against doctors affiliated with such plans--an unfair distinction, according to reform advocates, who claim faulty care often results from refusals by plan managers to allow needed treatment.

That proposal, and another that would require HMO medical directors to be licensed in California, as physicians are, could ignite major battles in months to come, health care analysts said.

Another conflict may erupt over Wilson’s proposal to bring managed care oversight, now scattered among several agencies, under one department with one director as the chief regulator. Democrats maintain that a panel of commissioners who are not solely appointees of the governor, should wield that power.

For now, however, all sides in the Legislature expressed optimism that 1998 would be a record year for placing new controls on HMOs.

“We are very hopeful we’ll be able to accomplish the principles the governor has laid out and continue to work with the Legislature” to improve health care in a number of ways, said Wilson spokeswoman Lisa Kalustian. “We think we can accomplish quite a bit this year.”

Scott, in an interview after his bill passed the Assembly on a unanimous vote without debate, said the public “is ready for reform” of the state’s 43 HMOs, in which more than 19 million Californians are enrolled.

Reform supporters note the results of a 1997 poll commissioned by the governor’s Managed Health Care Improvement Task Force, which showed that 42% of the state residents questioned said they had experienced one or more problems with their HMOs in the previous 12 months. Of those, more than half reported that their conditions either did not improve or became worse under HMO care.

A telling anecdote, Scott said, was the movie audience he witnessed breaking into applause during a scene in “As Good as It Gets” when a character verbally trashes her HMO. Other Sacramento legislators said they witnessed the same reaction at other showings of the movie.

Wilson vetoed several 1997 HMO bills and warned he would veto others, setting off bitter complaints from their Democratic authors. He said reform should proceed comprehensively, after his appointed task force reported its findings. The task force completed its work in January, announcing recommendations for several reforms that Wilson adopted for his own HMO agenda.

Since then, Assembly Republicans also have unveiled a package of reforms and a major managed care organization, the California Assn. of Health Plans, has announced that it will support “reasonable, responsible reforms this year.”

Democratic proposals have the upper hand in reaching Wilson at the moment because Democratic majorities in both houses have pushed their members’ bills to the forefront as the Legislature tries to digest almost 150 HMO-related bills.

Scott’s bill--which passed the Senate earlier this session and is likely to be the first to become law--would require HMOs to draft in simple terms the major components of the benefits they offer patients. All California HMOs would use uniform formats for easy comparison.

Presently, Scott said, “you have to be a lawyer reading the fine print” to understand what treatment is covered in HMO plans.

Two more bills considered modest reforms are expected to receive final passage and head to Wilson as early as next week. One, passed by the Senate last week, would allow women to bypass primary care doctors, who normally must approve referrals, and make appointments directly with the obstetricians and gynecologists.

Another bill to be acted on soon would guarantee patients a second opinion on a diagnosis in some cases, including when surgery is recommended. One problem with that plan, health care advocates contend, is that the second opinion would be given by a doctor working within the same HMO network as the first.