Here’s a Preview of New Laws Affecting HMO Patients

You may have read about it last week: Gov. Gray Davis signed a package of health reform bills into law. The new laws mark important changes for the millions of Californians enrolled in HMOs and other managed care plans, affecting the type of care you get and the recourse you have if you’re unhappy with your treatment.

Here’s a synopsis of some of the changes.

* Regulation of managed care (AB78). For many years, HMOs have been regulated by the California Department of Corporations, which also oversees securities firms and other businesses that have nothing to do with health care.

The new law removes that oversight responsibility from Corporations and creates a new agency, the Department of Managed Care, whose sole function will be to oversee health plans.

The Corporations agency has been broadly criticized for its lackluster efforts at protecting consumers. The department “has not had the focus, it has not had the resources and it hasn’t had the vision to make sure that patients get the quality that they should as members of health care plans,” says Peter Lee, executive director of the Center for Health Care Rights, a Los Angeles-based consumer advocacy organization.

The law also creates a new Office of the Patient Advocate, whose role is to make sure the patient’s point of view is represented within the department, assist consumers who have problems with their HMOs and create consumer guides and other educational materials. This is important, Lee says, because “a lot of consumers are confused about how managed care works, and they want to understand the rules of the game from someone they can trust.”

* The right to sue (SB21). Last January, a Southern California woman who sued her husband’s HMO was awarded a record $120.5-million verdict after a jury found that the HMO had improperly denied him cancer treatment. But until now, most of us would not have been able to sue their health plan.

While government employees have been able to sue their health plans for negligence, an obscure federal law has prevented the vast majority of people who get private insurance through their employers from pursuing such cases.

This law, which will likely face legal challenge from opponents, will only apply to medical services received after Jan. 1, 2001. And in most cases, a person would have to try to resolve their legal dispute in other ways--such as requesting an independent medical review of the case--before going to court. If they sued, they’d have to show that the HMO caused them substantial harm, such as loss of life, disability, disfigurement or serious financial loss.

* The right to independent review and the right to a second opinion (AB55, SB189, AB12).

The new law gives Californians the right to request an independent medical review outside their HMO when they believe that care has been delayed, denied or modified by their health plan.

This is a new consumer protection for most Californians, says Lee. When seeking a review, you have the right to see what information your health plan sends the review board and to provide additional information of your own, he says.

The review system won’t begin until Jan. 1, 2001--but you still have recourse now. You can file a complaint with the Department of Corporations ([800] 400-0815) or--after Jan. 1, 2000--with the new Department of Managed Care.

Many patients already had the right to a second medical opinion, which can be important if you are denied or are unsure about certain treatments. The new legislation fills in the gaps.

* The right to privacy (SB19). Medical information has not been secure from the eyes of other parties such as employers or insurers considering providing health or life coverage, says Lee. Information from pharmacies has ended up in the hands of pharmaceutical companies, which then used the data to market directly to consumers, adds Steven Thompson, vice president for government affairs with the California Medical Assn. The new legislation increases confidentiality by stopping plans and their contractors from unauthorized sale or sharing of medical information unless it’s necessary for care.

* Expanded Coverage (AB39, SB41, SB5, SB205, AB88, SB349, AB892, SB148, SB64). In the past, health plan coverage in certain areas--severe mental illness, contraception, screening and treatment of breast cancer, screening for other cancers, medical supplies for diabetics, screening of newborns for the genetic disorder phenylketonurea, and hospice care--has varied from plan to plan. The new laws extend such coverage to all HMO members. Thompson believes the laws will be particularly helpful for patients suffering from expensive-to-treat mental illnesses, such as schizophrenia.

You can read more about these and the other laws signed by Davis (SB59, AB416, AB285, SB260, AB215, SB559) at the state government Web site: https://www.leginfo.ca.gov/bilinfo.html.