Rules for HMOs are in limbo

Times Staff Writer

In 2002, California’s HMO czar, Daniel Zingale, declared, “The days are over when they could make patients wait and wait for healthcare.”

Zingale was heralding a new law that required his department to ensure that HMO patients received timely appointments with doctors. The law was spawned by the case of a 74-year-old woman who died from an aneurysm in a Kaiser Permanente waiting room while pleading to see her physician.

The Schwarzenegger administration’s enactment of the new rules, which the law required by January 2004, has not been prompt. The Department of Managed Health Care did not release its proposed rules until 2007.


When HMOs and doctors groups objected to them, the department scrapped the rules in favor of ones that let health plans come up with their own methods of complying with the law. The plans have to submit their guidelines in October, and the department will review them.

Consumer advocates charge that the way the department is putting the law into action controverts the promise six years ago from Zingale, who is now a senior advisor to Gov. Arnold Schwarzenegger and chief of staff for Schwarzenegger’s wife, Maria Shriver.

“The pending rules are a betrayal of consumers and of the clear intent of the law,” said Anthony Wright, executive director of Health Access California, a consumer advocate group that sponsored and helped write the original legislation. “The department is letting the insurance companies set their own standards.”

Physicians groups that contract with HMOs are not much happier. They complain that the department’s rules will revive one of the characteristics consumers have historically disliked most about HMOs: their tendency to micromanage how, when and for how long doctors can see patients.

“This is the problem people were complaining about years ago,” said William Barcellona, the chief lobbyist for the California Assn. of Physician Groups. “We’ve come full circle.”

About 21 million Californians belong to HMO networks. The 2002 law was signed by Gov. Gray Davis as part of a widespread backlash against the companies in the late 1990s. Some HMOs had trouble recruiting and contracting with doctors because of a shortage of specialists in some areas and the plans’ practice of paying set rates to care for each patient rather than the traditional fee-for-service method.

The 2002 law instructed California regulators to “develop and adopt regulations to ensure that enrollees have access to needed healthcare services in a timely manner.” As part of this, regulators were ordered to “develop indicators of timeliness” that included the length of waits for appointments with doctors, the time it took to be referred to a specialist, and the elapsed time before patients were able to speak to a physician or trained assistant.

Last summer, already three years overdue, the Department of Managed Health Care released draft regulations covering the allowed time for health plans to respond in various circumstances. Under the rules, the plans would have had to provide appointments for diagnostic testing within 24 hours, for urgent physical therapy within 72 hours and for preventive care with a specialist within 22 days.

The rules also would have required HMOs to set up guidelines so patients calling their doctors would not be kept on hold longer than 15 minutes during regular office hours or longer than 30 minutes when leaving an after-hours message.

Cindy Ehnes, director of the department, said she decided that imposing strict time standards would have been too bureaucratic and expensive for HMOs, which she said already are much more heavily regulated than more traditional health insurance companies.

HMOs have lost popularity. Last year they were the choice of 47% of workers, down from 54% in 2002, according to the California Health Care Foundation, an Oakland nonprofit organization. Ehnes said she did not want to take actions that would drive premiums higher.

“We got to where every provider was going to have to track every single appointment they made to see if it complied with those time-elapsed standards,” Ehnes said. “My job is not just to impose requirements willy-nilly but to do effective regulations, and that requires a balancing of interests.”

HMOs and doctors groups argue that anything that forces them to see patients within a specified period of time will inevitably require them to cut short appointments with other patients.

Chris Ohman, president of the California Assn. of Health Plans, which represents the HMO industry, said the final rules were “a step in the right direction” but would be unnecessary and costly to enact.

But he said they were preferable to the early version, which he said would have required “a physician assistant or someone standing in the office with a stopwatch” to track waiting times.

“I have sat in an exam room far longer than I would like to, so I certainly understand the frustration,” Ohman said. “But I don’t know what’s going on in the other exam rooms and what other physicians are seeing.”

Between 2002 and the first half of 2007, an average of 78 patients per year complained to state regulators that their HMOS had taken too long to schedule an appointment with a physician or make a referral to a specialist, according to state records. Timely-access complaints accounted for 1.8% of all protests against HMOs that patients brought to the state during that period.

Although consumer advocates have focused on HMOs because they do not allow customers to see doctors outside their networks, state regulation is looser or nonexistent for other types of health insurance. Managed care insurers must have at least one physician for each 1,200 patients under the 2002 law, and companies that insure their employees directly are exempt from state regulation.

Bobby Perry, a pharmacy clerk whose employer insures itself and uses Blue Shield of California’s provider network, said that for five weeks, Blue Shield could not provide a psychiatrist who would treat her 15-year-old son. He has psychosis that sometimes makes him violent.

Perry, who lives in a Sacramento suburb, said that because she couldn’t get an appointment for her son to obtain appropriate medication, she ended up having to call the police to have him institutionalized during an episode.

“Most of the doctors wouldn’t take adolescents,” she said, while the others “didn’t have appointments until one month later.”

“I asked them what happens in the meantime, and they said, ‘Just send him to the emergency room,’ ” she said.

David Seldin, a Blue Shield spokesman, said he could not comment on the case because of privacy rules. But he said there was a shortage of child psychiatrists throughout California and that it was “not reasonable to hold health plans responsible for access to physicians that aren’t there.”

But “why am I paying insurance,” Perry said, “if they’re not going to give me services?”