While Congress girds for a final debate on managed-care reform, California may have readied a blueprint with sweeping managed-care legislation that Gov. Gray Davis signed into law last week.
California and national managed-care lobbies wouldn't predict how the new laws might shape healthcare legislation in other states and Congress, but the state's action generated strong reaction nationally.
The measures allow enrollees to sue HMOs and seek second opinions and external review for treatment grievances. They also add benefits such as behavioral healthcare, create a new state Department of Managed Care to monitor HMOs and create a patient advocacy division, among many other changes.
"It's really hard to tell how this will all end up," said Susan Pisano, spokeswoman for the American Association of Health Plans. A spokesman with the California Association of Health Plans declined comment on the measures.
But consumer advocates for the most part hailed the legislation, which will be phased in from January 2000 to July 2001. They say the package of 21 bills will no doubt spark healthcare reform on the national level. "The right (for an enrollee) to sue an HMO, third-party review and mental health parity are harbingers of national legislation," said Jamie Court, director of advocacy for the Santa Monica, Calif.-based Foundation for Taxpayers and Consumer Rights, which has been one of managed care's harshest critics in the past decade. "How can Congress pass a less-ambitious bill of rights than the state that gave birth to managed care and is now teaching it to be potty trained?" she asked.
"The package provides strong protections, and is even historic," said Betsy Imholz, executive director of the West Coast office of Consumers Union.
While Pisano, the CAHP and many health plan executives supported the external review provision of the package, all were concerned that other items would drive up their costs. Along with the bill expanding mental health benefits was a similar mandate for contraceptives, which are widely prescribed even though many HMOs do not include them in their formularies. Other mandates established protocols for cancer screenings and for treating diabetes and phenylketonuria, a neural disorder that can cause brain damage if sufferers do not follow an elaborate and often costly prescription diet.
"California is now up to 24 mandated benefits, and that means anytime they design a new healthcare program or package, they start out with 24 things to do," said Patrick Garner, senior vice president of Thousand Oaks, Calif.-based WellPoint Health Networks, parent of Blue Cross of California. "Each mandate adds to costs, and this package of reforms will do that too."
Those on the managed-care side of the debate were also concerned that the laws allow enrollees to sue HMOs and to seek second opinions-even though both provisions were crafted with compromise in mind.
In most cases, enrollees would have to submit to arbitration prior to filing suit, a process that would give many health plans a major role in creating the pool of referees available to hear a case and could take 18 months or longer. Most second opinions must be sought within a health plan's network of medical providers, except in areas with a limited pool of physicians.
Court was concerned that arbitration would stymie many lawsuits, but expected that legislation would be introduced next year to address that issue.
Imholz noted that the 170 pages of legislation creating the new Department of Managed Care will be key to how effectively the other laws are implemented.
"We hope the new agency embarks on strong consumer education. We will be watching closely," she said.
