Lawmakers Defy Governor Over HMO Reform Bill

Defying Gov. Gray Davis, lawmakers Tuesday refused to endorse a bill that consumers say would have gutted one of the most important HMO reforms passed in California last year.

The bill would have killed a provision allowing patients who suffer heavy financial losses to sue their health maintenance organizations directly for large unreimbursed medical bills.

Davis wanted the right to sue reserved for patients who suffered physical harm, and said others should be routed through a new independent review process.

But his idea--contained in a bill introduced by Assemblywoman Sheila Kuehl (D-Santa Monica)--didn’t get far Tuesday. After the bill’s first hearing, the Assembly Judiciary Committee rejected it on a bipartisan 3-8 vote.

Consumer advocates praised the committee’s action, calling it evidence that the Legislature will not permit the governor to alter laws after the fact.

“This is a signal to the governor that it’s the Legislature’s business to legislate and you cannot sign a bill and then change its provisions before the ink is dried,” said Jamie Court, advocacy director for the Foundation for Taxpayer and Consumer Rights. “This was a classic case of the governor trying to implement his vision, and the Legislature said no.”

Hilary McClean, a spokeswoman for Davis, disputed that characterization, saying there was no evidence at the committee hearing that lawmakers were “trying to teach the governor a lesson.”

McClean added that the administration would continue to press the issue:

“The governor believes [last year’s reform] bill was overly broad in allowing individuals who have not suffered significant physical harm to skip the independent review system,” McClean said.

Les Spahnn, a lobbyist for Aetna, lamented the committee vote and predicted that “the issue is dead for the year.”

State Sen. Liz Figueroa (D-Fremont), who wrote the original bill allowing patients to sue their HMOs directly, advised the governor to take a wait-and-see approach.

The law, Figueroa noted in a statement, will not take effect until Jan. 1.

“There will be plenty of time in the future . . . to judge whether or not it is being abused and needs amendment,” Figueroa said.