Review Boards Siding With HMOs So Far

Using a new consumer protection law, state regulators since Jan. 1 have sent nearly 200 disputes between HMOs and patients to an independent medical review board, which has ruled in favor of the health plans 65% of the time, according to new state figures.

Consumers can sue HMOs if they are dissatisfied with the review process. But state officials, consumer advocates and plaintiffs’ lawyers said they are unaware of any such lawsuits since Jan. 1.

A report to be released today by the California Department of Managed Health Care provides the first snapshot of how recent HMO reforms have affected access to care and the way that consumer complaints are handled. State officials and consumer advocates hope that the report will help influence Congress as it prepares this week to debate national patients’ rights legislation that contains some elements, such as expanded rights to sue HMOs, similar to California’s law.

Health industry executives have strongly opposed patients’ rights legislation that would expand consumers’ rights to sue, saying it would lead to an explosion of frivolous lawsuits and raise health care costs.

“Certainly we have not seen that happen” in California, said Daniel Zingale, director of the managed care agency, which regulates HMOs. “And I would say that California’s laws are among the strongest in the nation” when it comes to protecting consumer rights.

Bobby Pena, a spokesman for the California Assn. of Health Plans, an industry group, said the lack of litigation demonstrates that the HMOs’ internal review systems are fair and effective. “We believe the process is working very well and there’s no need for the right to sue,” he said. “For the most part, the numbers show that the health plans are doing the right thing.”

Jamie Court, executive director of the Foundation for Taxpayer and Consumer Rights, a Santa Monica organization critical of HMOs, read the report a different way. “What we think is happening is that HMOs are giving people what they want before they get to external review, unless they have a good case,” he said. “The right to sue is acting as a deterrent.”

Since the independent review law took effect on Jan. 1, the department has sent 195 cases to be reviewed by outside doctors with no stake in the case’s outcome. The reviewers have rendered a decision in 168 of those cases: 110 have gone in favor of the HMOs and 58 in favor of patients. The remainder are pending.

In one case sent to outside review, for example, the parents of a diminutive 12-year-old girl complained to the agency after their HMO refused to pay for growth-hormone treatment. All three physician reviewers said the treatment was not medically necessary.

As a rule, consumer advocates have given the managed care agency good marks for responsiveness, especially when compared to the Department of Corporations, which handled HMO complaints until recently. When the department was established last year, Zingale promised to be a tough HMO watchdog and consumer advocate.

“The new department has more staff, it’s easier to get someone on the phone . . . and they act much more quickly,” said Earl Lui, a senior attorney at Consumers Union’s West Coast office in San Francisco.

Yet the number of cases sent to independent review is a minuscule fraction of the total complaints the managed care agency receives. About 15,000 people call the department each month, on average, about half of whom get their questions answered by the agency’s automated system, Zingale said. Most of the others get their complaints resolved, usually within a few days, after talking to someone at the agency, he said.

Some cases are trickier, and the department registers a formal complaint and requests documents from the health plan. In 2000, the agency recorded 3,288 formal complaints, almost all of which were resolved, Zingale said. In about two out of three cases, the HMO was found to be in compliance with state regulations.

In one recent case, for example, a Sacramento woman complained because her insurer wasn’t covering treatment for her son, who had a blood clot in his brain. The department intervened and learned that the health plan was having a contractual dispute with the hospital where the boy was a patient. The treatment was then covered.

Because the department is so new, it’s too soon to say whether the agency has become the effective watchdog that Zingale promised, consumer advocates say. “Clearly they’re doing better than what we had before,” said Lui. “Whether that’s enough, I don’t know. It’s one thing to say the dispute has been resolved. The question is: Are consumers satisfied with the result? It’s hard to know the answer to that without following up and asking the consumers what happened.”

The report to be released today also lists consumer complaints about some 50 health plans. Among private plans with more than 1 million members, the plans with the lowest rate of complaints were Aetna US Healthcare, with 0.67 complaints per 10,000 members, and Kaiser Foundation Health Plan, with 1.22 per 10,000. Among large plans, the highest rate of complaints were registered by Health Net, with 2.3 per 10,000, and PacifiCare of California, with 2.52 per 10,000.

Without more data, it’s unclear what these scorecards mean, some consumer groups said. For example, the managed care agency’s report lists zero complaints against LA Care, a managed care plan that serves nearly 2 million members in Los Angeles County, mostly low-income Medi-Cal patients. Zingale said he did not know how there could not be a single complaint against the plan, but speculated that frustrated members may be lodging their complaints with another state agency.

Another possibility: Despite stepped-up efforts by the state to inform consumers of their rights, many members still may not know which state agency to call when they have a problem.

The Department of Managed Health Care also said it is releasing the California Patient Guide: “Your Health Care Rights and Remedies,” a free, 80-page guide detailing health plan members’ rights in California. The agency said some 80,000 copies of the guide will be available in doctors’ offices and by calling 1-888-HMO-2219 or 800-952-5210.