HEALTH ACCESS UPDATE ON HMO PATIENTS BILL OF RIGHTS:

Colleagues:

Several disturbing developments have occurred that jeopardize the gains we made in 1999 in HMO reform.

· Yesterday, an administrative law judge ruled in a case involving Kaiser Permanente and Mrs. Utterback, a Kaiser enrollee who died because of inappropriate triage, that the Department of Managed Health Care has little authority to regulate the care provided by doctors, hospitals and other providers that contract with HMOs. This removes one of the major underpinnings of HMO reform.

· Earlier this year, a court ruled in CMA v. Zingale that the Department of Managed Health Care is unable to collect and disclose financial data necessary to assure that medical groups have the financial capacity to provide care they have contracted to give consumers.

Taken together, these rulings call into question the fundamentals of the structure for regulating managed care in California. They undermine the work that we have done to fight for consumers, to assure that people get the health care they need when they really need it.

We are calling on the Governor and the Legislature to respond. Specifically, in the letter attached, we are asking that the Legislature begin the work of devising a structure of directly regulation or licensure for medical groups, including the Permanente Medical Group, for both fiscal solvency and quality of care. Without these protections, consumers are at risk.

Health Access is already sponsoring legislation, AB2179(Cohn), that would require the Department of Managed Health Care to set real and effective standards for timely access to care. This is one of the key issues in the Utterback case. We have attached our letter of support for that bill and seek your support.

Health Access along with California Pan-Ethnic Health Network, Consumers Union, Center for Health Care Rights, Latino Issues Forum, and Western Center on Law and Poverty has been monitoring implementation of the Patient Bill of Rights since its enactment in 1999. It is because of this work that we are prepared to respond so promptly. The fight for consumer protections is an ongoing one: without our presence in the regulatory/administrative process, all too soon, the HMOs and the providers would once again take over the regulator.

Thanks for your help and support over these many years since we began this effort in 1995. Every Californian, including people with health insurance, should be able to get the health care they need when they really need it.

Melinda Paras, Anthony Wright and Beth Capell, on behalf of Health Access California.

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Senate President Pro Tem John Burton

Assembly Speaker Herb Wesson

Senator Jackie Speier, Chair, Senate Insurance Committee

Assemblymember Helen Thomson, Assembly Health Committee

Re: Regulation of Managed Health Care in California

Dear Senators Burton and Speier, Assemblymembers Wesson and Thomson,

Health Access California, a coalition of more than 200 consumer, community, senior and other organizations that sponsored the HMO Patient Bill of Rights from 1996 until its passage in 1999, is deeply disturbed by the rulings in the Kaiser v. Utterback case and in the CMA v. Zingale case.

Taken together, these rulings jeopardize regulation of health care received by HMO consumers in California and the work that was done in 1999 on a bi-partisan basis to improve consumer protections in HMOs. The ruling in the Utterback case calls into question the ability of the Department of Managed Health Care to protect consumers in terms of the care received from doctors, hospitals and other providers that contract with HMOs. The ruling in CMA v. Zingale calls into question the ability of the Department to assure that medical groups have the financial capacity to deliver needed care.

We conclude from these rulings and from our efforts since 1996 in both the legislative and regulatory arenas that California must move forward to direct regulation of medical groups and other providers to whom is delegated either financial risk or responsibility for quality of care. We recognize that creating such a regulatory structure may be challenging in the months remaining in this legislative session but we urge that we begin this effort so that it may be concluded as promptly and as carefully as possible. Given the record in the Utterback case, any such regulatory structure must include the Permanente Medical Group as well as other medical groups.

The ruling in Utterback speaks specifically to the lack of clear regulatory standards with respect to safe and timely access to care for HMO consumers: Health Access is sponsoring legislation, AB2179(Cohn) that requires DMHC to address this issue and that has received bipartisan support in the Assembly.

We look forward to working with you on these challenging issues. For more information, please contact our advocate, Beth Capell, Capell & Assoc., at (916) 497-0760.

Sincerely,

Melinda Paras

Executive Director

CC: Director Daniel Zingale, Department of Managed Health Care

Members and staff of the Senate Insurance Committee

Members and staff of the Assembly Health Committee

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May 29, 2002

The Honorable Jackie Speier, Chair

Senate Insurance Committee

State Capitol

Sacramento, CA. 95814

Re: AB2179(Cohn): Sponsor/Support

Dear Senator Speier,

Health Access California, a coalition of more than 200 consumer and community groups responsible for the California HMO Patient Bill of Rights, is pleased to sponsor and supprt AB2179(Cohn) which would require HMOs and contracting providers to provide reasonably timely access to needed care.

Existing law requires that health plans assure that “services shall be readily available at reasonable times to all enrollees”. Unfortunately, this provision of law was implemented by the old Department of Corporations by allowing HMOs to set their own standards for what constituted timely access to care—and by allowing HMOs to enforce their own standards.

The result is that Californians cannot get when they need it. Emergency rooms are filled with people with insurance who cannot get timely appointments with doctors. People wait for extended periods of time to get through on the telephone to providers and HMOs. People with insurance are unable to get referrals to specialists in a timely manner. Almost anyone who has needed care in the last few years has a story to tell about lack of timely access.

AB2179 sets in motion a process that would require the Department of Managed Health Care to develop standards for timely access and to assure their routine observance. AB2179 leaves to the regulatory process the work of sorting out what the standards should be but requires reports to the Legislature on progress.

AB2179 places squarely on HMOs the burden of assuring compliance with its requirements because HMOs are licensed by the State of California and medical groups are not.

AB2179 should constitute absorbable costs for the Department of Managed Health Care. For HMOs and contracting providers, AB2179 either costs nothing because they are complying with existing law—or if compliance costs money, it is proof that they have failed to comply with the existing Knox-Keene requirement to provide readily available services.

Too many consumers cannot get care when they need it. AB2179(Cohn) is another element of the HMO Patient Bill of Rights. For information, please contact our advocate, Beth Capell, Capell & Assoc., (916) 497-0760.

Sincerely,

Melinda Paras

Executive Director

CC: Senate Insurance Committee members and staff

Health Access California promotes quality, affordable health care for all Californians.
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