Consumer Group Sues Agency

A consumer advocacy group filed a lawsuit last week charging that state regulators have failed to adequately investigate many patients’ complaints against HMOs and have kept consumers in the dark about their cases.

The California Consumer Health Care Council, an Oakland-based nonprofit group, alleges that the California Department of Managed Health Care has dropped or closed consumer complaint cases without explanation, without allowing patients access to their files and without following up on evidence that health plans misrepresented facts.

“This department is being held up as a model for the rest of the country,” said John Metz, chairman of the council that filed the suit on behalf of nine patients. “But our experience has been that they aren’t enforcing the law.”

Daniel Zingale, director of the state agency, expressed surprise at the allegations and pledged to personally review each of the cases cited in the suit. “We’ve had over 100,000 people seek help from us,” he said, “and this is the first time I’ve heard of problems like this. These nine may represent areas where we need to do better or to expand patients’ rights laws.”

The patients who brought the lawsuit include a school teacher, a former policeman and a 71-year-old retiree. Some have long-running disputes with their health plans, while others have more straightforward disagreements in which they claim that their HMOs delayed or denied necessary medical care. The agency sides with the health plans in all nine cases, Metz said.

“These patients never got clear closing statements telling them why the department ruled the way it did,” Metz said. All of the patients requested copies of the documents the agency used to make its decision, he said, but none received what they considered to be a complete file.

In an interview, Shirley Milligan, 71, of Banning, said she complained to the department that her health plan had misdiagnosed her Lyme disease and inappropriately denied her treatment for her symptoms. After reviewing her case, the department decided not to take action. In a letter to Milligan dated Aug. 16, 2001, an official from the department wrote that it “determined not to pursue formal enforcement action. ... Closure of a complaint without an enforcement action does not necessarily mean that the department ... did not find merit in your complaint.”

“That’s about it,” said Milligan, who is one of the nine consumers named in the lawsuit. “They just dusted me off. At least they could have told me why.”

Zingale said the department takes all consumer complaints seriously and investigates them aggressively. He acknowledged, however, that patients do deserve to know how the department arrives at its decisions and have the right to see copies of their files.

“If you send in a written request, we have to send the documents, we have no choice,” he said.

Shelley Rouillard, who runs the Patients’ Rights Hotline, an advocacy group in Sacramento, said she is unaware of complaints against the department similar to those described in the lawsuit.

“That is not to say they don’t exist,” she said. “Certainly consumers fought long and hard to get health plans to explain the basis for their decisions. It would make sense that the [department] should do the same thing.”

Established last year in part to improve patients’ leverage in bringing complaints against their health plans, the department has been praised by some consumer groups for its efforts to protect patients enrolled in health plans.

However, state senators criticized the agency last week for its resistance to physician-sponsored reform bills now pending in the state Legislature, including one that would expand doctors’ rights to sue health plans, and another that would require that health plans cover treatment for drug addiction and alcoholism.