As federal lawmakers prepare to battle over patient-protection legislation next month in Washington, California's Democratic governor, Gray Davis, late last week presented the state Legislature with a rough draft of his vision for managed-care reform.
Davis' plan would give HMO enrollees a tightly controlled right to sue their managed-care plans for damages and would establish a new state agency to oversee HMOs.
What California does could have a huge impact nationally. California has more than 20 million managed-care enrollees, far more than any other state. In managed-care penetration, it ranks behind only Delaware and Massachusetts per capita, according to U.S. Census Bureau data.
Davis' plan would shift HMO regulation from the Department of Corporations to a new department in the Business, Transportation and Housing Agency.
Other health insurers would continue to be monitored by the state department of insurance.
The proposal would also allow patients to demand an external review if their HMO denied treatment covered by the plan and would impose penalties of $5,000 per day if managed-care plans failed to comply.
The most controversial provision would allow patients to sue HMOs for damages but only if a decision to deny, delay or modify a physician's recommended treatment resulted in "death, loss of limb or loss of bodily function."
Specific details are still being drafted, but critics already say Davis' consumer protections don't go far enough.
State legislators have until Sept. 10, the end of the current session, to pass a managed-care reform package.
Other states also have been working on managed-care reform. Illinois Gov. George Ryan signed a patients' bill of rights bill late last week. It allows enrollees to appeal HMO decisions that deny care and to get emergency treatment without prior approval from their health plans. The measure takes effect Jan. 1.