CALIFORNIA BILL WOULD OPEN HMOS TO SUITS

CALIFORNIA BILL WOULD OPEN HMOS TO SUITS

The California Assembly has passed a measure that could enable disgruntled injured workers to sue health maintenance organizations for denying them proper medical care.

A.B. 2436, introduced by Assemblywoman Liz Figueroa, D-Fremont, is aimed at getting around complicated federal law and legal precedents that have shielded HMOs and other managed-care plans from lawsuits.

GROWING TREND

A workers compensation executive at the Alliance of American Insurers believes that California is following a growing trend.

''We're seeing state legislatures around the country responding to the very real or imagined demand of HMO patients and treating physicians,'' said John Lennes, vice president, Alliance of American Insurers in Schaumburg, Ill.

''They want recourse against cost-conscious managed-care organizations that are perceived to be willing to sacrifice quality of care in their pursuit to hold the line on medical costs and maximize corporate profits.''

Mr. Lennes noted that more than two dozen other states have been considering similar legislative proposals this year.

An American Insurance Association officer said his Washington, D.C.-based organization could foresee the legal floodgates blown wide open by A.B. 2436.

''Potentially, an employee who gets injured on the job could circumvent the workers comp system,'' AIA Vice President Mark Webb said. ''The system was designed over 80 years ago as a no-fault, no-litigation system, the exclusive remedy for injured workers, but all this could change with A.B. 2436.''

Mr. Webb cited an possible example: ''This could happen if a workers comp claimant, seeking treatment for an injured knee, is told by the treating physician that arthroscopic surgery is needed, but the health-care organization won't authorize that treatment and instead recommends physical therapy.

''If the knee doesn't respond to the HMO-recommended treatment, and in fact the condition worsens, then litigation would be an option with A.B. 2436 as law.''

Maureen O'Haren, of the California Association of Health Plans, said: ''We don't think we should be held liable for something that the doctors do.''

She warned that a study of the measure estimated that it would lead to a 5 percent upturn in premiums, because of added litigation costs, and another 12 percent, because physicians would practice ''defensive medicine.'' By that, she meant that physicians would prescibe extensive tests and care to avert litigation.

''The entire health-care field opposes this,'' said Lila Petersen, spokeswoman for giant HMO Kaiser Permanente, of Oakland.

'WATERLOO' FOR HMOS

Consumers for Quality Care spokesman Jamie Court had plenty to gloat about following A.B. 2436's recent Assembly victory, by a 43-28 count. ''The HMOs had 15 lobbyists working against this bill,'' he said. ''This was a big defeat for them. This was their Waterloo.''

Unlike Mr. Court, Assemblywoman Figueroa took the high road. ''If the HMOs change their behavior and emphasize quality of care, I don't think you are going to see the lawsuits,'' she said. ''What we're doing is changing the accountability for how HMOs provide care.''

California Gov. Pete Wilson doesn't appear to be terribly enamored with A.B. 2436. This legislation ''would get a very frosty reception'' should it gain Senate approval and cross the governor's desk, according to Sean Walsh, a spokesman for Mr. Wilson.

Mr. Walsh characterized A.B. 2436 as a pet project of plaintiff attorneys, and a proposal that would likely lead to higher health-care costs and increased litigation.

COURT CHALLENGE IN TEXAS

Ms. Figueroa's proposal seems to be patterned after a similar proposal that has been enacted into law in Texas. Interestingly enough, the Texas law faces a court challenge from health plans that argue they are protected by the federal Employee Retirement Income Security Act (Erisa).

Erisa is intended to protect employee pensions, but courts have held that the law also insulates employee health plans from harmful litigation. Missouri also empowers patients to sue HMOs.

The measure is bound for the Senate Insurance Committee, ''where it could face a difficult challenge, because some Democratic members of the committee are reluctant to approve a bill that could lead to a rise in health-care costs fueled by litigation,'' Mr. Webb said.