Eyes on New HMO Regulatory Agency

Early next month, Daniel Zingale will mark his 100th day in office as head of a new state agency charged with policing HMOs and protecting the nearly 23 million Californians who belong to such plans.

The task in front of him is a daunting one. Polls show that public dissatisfaction with HMOs still runs high. From Washington to Hollywood, HMOs make a convenient whipping boy for what’s wrong with the nation’s health-care system. And in California, many of the doctor groups that care for health plan members are in deep financial distress.

As Zingale told hundreds of health industry executives at a recent meeting in Beverly Hills, “the eyes of the state and nation” will be on the new California Department of Managed Health Care, an agency created as part of a package of HMO reform bills signed by Gov. Gray Davis last year.

The Department of Managed Health Care was born out of years of criticism of another state agency--the California Department of Corporations--that had regulated HMOs since their inception in the mid-1970s. Many lawmakers and consumer advocates had long complained that HMO regulation under the Department of Corporations was a toothless tiger--more effective at protecting the industry it regulated than California consumers.

Zingale is familiar with the criticism of the past but deliberately steers clear of comparisons between his department and the former regulatory agency. “The department is not about past battles,” he told the industry executives.

So what is his agency about? Zingale discussed some of his plans for the department in a recent telephone interview with Health Editor David Olmos.

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Question: Let’s start by asking you to give us an overview of your agency.

Answer: It is the first of its kind in the nation. It’s a start-up government organization dedicated to improving the quality of managed health care for the enrollees and also helping to ensure the financial stability of the system that provides the medical care.

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Q: Can you give us your sense of the magnitude of the problem involving consumer dissatisfaction with managed care?

A: It’s too early to draw conclusions from our experience from July 1 [when the department officially began its work]. An early warning sign that I’m concerned about is we’re getting a number of complaints about barriers to preventive health care. Now, preventive health care is one of the founding principles of managed care, which is intended to keep people healthy so they don’t get sick later. For example, we have been receiving calls from

a gentleman with diabetes who was having trouble getting coverage for test strips [used to help monitor blood sugar], which are a very low-cost item. I find it somewhat alarming when there are situations in which people are being denied access to preventive health care.

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Q: A crucial role for your department is handling questions and resolving problems that consumers have about their health plans. How are you set up to handle these inquiries?

A: It is the single largest unit within the department, where we have customer service and HMO policy professionals available to help consumers resolve problems that they have not been able to resolve with their health plans. People can reach us by calling (888) HMO-2219 or by going to our Web site: https://www.hmohelp.ca.gov.

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Q: What is the size of your staff that will handle consumer complaints?

A: We have about 100 people assigned to the HMO help center. They can be reached 24 hours a day, 365 days a year. We can provide service in 150 languages.

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Q: You mentioned that your department will work only with consumers who have already attempted to resolve problems with their health plans or medical groups. Can you explain what you mean?

A: The new department requires health plans to maintain their own procedures for resolving grievances and to have a customer response capability. The plans have various methods that they use [for resolving member complaints]. But people do not always get satisfaction that way, and those are the ones we want to hear about. The philosophy we have is that of preventive regulation. We’re not as interested in trying to set a price tag on harm that’s already been done to a patient. . . . We want to get the health plan to act appropriately before we get to that point.

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Q: What do you do when you get a call from someone having a problem with their health plan?

A: The first thing we do is we contact the HMO and try to resolve the dispute so the patient gets appropriate care. We have medical and legal experts in-house and on contract. Our first priority is to get issues resolved at the customer service level before something gets dragged into litigation.

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Q: A frequent criticism of the state’s HMO regulatory agency in prior years [the California Department of Corporations] was that consumers who brought complaints were given little or no specific information about how their cases were ultimately resolved. For example, if a health plan was reprimanded, punished or required to change its policies as a result of the state’s investigation of a complaint, the consumer or patient wasn’t informed.

A: Our goal is to be very communicative and open with public information to both the enrollee and the plan, when appropriate.

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Q: What method do you have for tracking the type and number of complaints that come into your department?

A: What we experience in the HMO help center will inform the report cards that the department plans to issue on managed care plans in California. If we see a trend of a plan that’s not doing so well, or is not doing well by its patients, that will be reflected in the report cards.

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Q: Tell us a little more about these HMO report cards.

A: Again, the report cards are the first of their kind. They will give enrollees the type of information they need about their plans to make decisions on their health care. [The first report cards should be available to the public by July 1.]

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Q: Patients who have problems with their health plans often don’t know where they should go for help. And I’m sure many Californians are still unaware of the existence of the Department of Managed Care. How will you address that issue?

A: A Kaiser Family Foundation study found that more than 90% of Americans could not name the state agency that regulated HMOs in their state. . . . So we know we have a steep hill to climb in raising awareness. We have developed a Help Plus sign that gives our Web site address and our toll-free phone number. We’ll be looking for every opportunity to get the word out.