Fueling the Flames
Labor and greens must join forces to stop Bushs assault on the planet.
More African-Americans are running for governor than ever before.
Rigged elections are widespread throughout Africa, and not just in Zimbabwe.
A New Detente?
The Bush administration cozies up to China.
No evidence, but a Missouri inmate is facing execution.
Britain passes measures to elect more women.
Seeds of Destruction
Genetic contamination raises stakes on GMOs.
Pennsylvania debates are calculated to exclude Greens.
HMOs aim to stop even modest reform in its tracks.
BOOKS: Israel, the occupation and "apartheid."
Disasters in Waiting
BOOKS: Ahmed Rashid on more impending Jihad.
Play It Again, Sam
MUSIC: How multiple reissues keep record labels flush.
FILM: The moral dilemmas of Storytelling.
An interview with ®mark's Frank Guerrero.
March 1, 2002
When HMOs Attack
HMOs aim to stop even modest reform in its tracks.
Californias HMO reform laws, in force since mid-2000, make up the toughest
patients bill of rights in the nation. They allow bigger fines and send
more types of challenged HMO decisions to independent review boards than in
any of the other 40 states with such panels.
But those reforms are now facing significant challenges. In recent months,
California HMOs have filed a string of lawsuits in an effort to escape the regulations
they failed to defeat in the state legislature in 1999.
In December, the HMO California Blue Shield filed the first suit challenging
Californias reforms. Bridling under the system of almost unlimited review
of patient care decisions, Blue Shield is trying to sharply limit the kinds
of cases Californias new Department of Managed Health Care can ask the
independent boards to review.
Many HMOs object even more strongly to another part of Californias laws,
which have allowed regulators to levy the nations biggest HMO fines. Kaiser
Permanente, Californias largest HMO, sued in federal court last fall after
getting hit with a $1.1 million penalty for inadequate care in cases that led
to the deaths of three plan members between 1996 and 2000.
All died after seeking care in Kaiser hospitals that even the HMO admits are
overcrowded. Kaiser argued that since the patients were covered by federal Medicare
insurance, the state didnt have the right to oversee their cases, asking
a federal judge to cite Daniel Zingale, director of the new oversight department,
for contempt of court for levying the fine. On December 10, Judge Ronald Lew
declined to issue a contempt citation. Kaiser has promised to appeal and has
filed a separate suit to overturn the fine.
These efforts are part of a steady campaign by HMOs to shake off the states
tough new regulations. The California Medical Association, a branch of the American
Medical Association, has also sued to prevent Zingales department from
releasing information on the financial standing of medical groups, winning a
temporary restraining order from state courts. Zingale argues that the public
is entitled to know how much of the health-care dollar goes to actual care and
how much to administrative costs and corporate profits.
It was predictable that lawsuits would be a prime HMO tactic. This industry,
which lobbies in both Congress and state legislatures against allowing patients
any right to sue them, hesitates little in filing legal actions of its own.
HMOs have also appealed hundreds of orders from the new California department
and simply refused to comply with others.
This is a new department, and we think theyve overstepped their
bounds in some of their enforcement actions, California Blue Shield lawyer
Steven Madison told a reporter after filing the HMOs bid to cut regulators
ability to refer patient disputes to independent review boards. (Madison also
represents Kaiser.) The boards have the power to compel HMOs to provide services
or medications they have previously denied patients. In their first year of
operation in California, the boards handled 651 patient appeals and upheld HMO
decisions in 58 percent of cases.
Of any of these steps, Kaisers demand that director Zingale be cited
for contempt is the most threatening to regulators and patients seeking redress.
Judge Lews refusal left intact the powers of the new HMO regulators, allowing
them to consider the experiences of their states 4.1 million Medicare
patients in evaluating HMO servicesMedicare patients account for 23 percent
of HMO members in California. But Kaisers pending appeal leaves the future
of HMO regulation very much in doubt.
Kaisers penalty was the largest of 48 assessed by the new agency in its
first year. The company didnt even bother to deny the charges that led
to the big fine, claiming instead that in its zeal to be perceived as
a patient and consumer advocate the department is overstepping.
This case is becoming a battle over whether Kaiser has a license that
requires it to provide timely care to patients or whether it has a license to
kill, Jamie Court, director of the Foundation for Taxpayer and Consumer
Rights, responds. The HMO is seeking to put itself above the law in every
jurisdiction where the public challenges it.
A challenge to the somewhat narrower authority of review boards in Illinois,
brought by the Chicago-based Rush Prudential HMO, presents an even greater danger
to HMO regulation. The case is now before the Supreme Court: If the Court does
not uphold the power of Illinois review board, Californias board
will be rendered powerless. The Illinois case has the potential to gut
our independent review process, just as much as the California suits,
Zingale says. Take that process away, and youve all but eliminated
the California patients bill of rights.
A decision ending independent reviews in Illinois would raise questions about
the legality of any reviews of HMO decisions, all but wiping out any chance
of significant federal reform, says Jamie Court. A decision is expected in July.
These businesses are trying to evade regulation as much as they can,
Court says. They say theyre nothing but fiscal and administrative
agencies with no responsibility for medical care, [but] theyre making
decisions about what care patients are allowed.
Thomas Elias is a political columnist for 62 California newspapers. His latest book is The Burzynski Breakthrough, now available in an updated second edition.