The San Diego Union-Tribune

SACRAMENTO — Gov. Gray Davis yesterday proposed a vast new set of rights for managed-care patients, including

second opinions, an independent system for challenging HMO decisions and more help investigating complaints from a

new consumer-friendly agency.

Davis’ plan also would allow patients to sue their health maintenance organizations for decisions that cause substantial

physical harm such as the loss of a limb.

Senior administration officials, who have been considering reform proposals in meetings with lawmakers and

health-interest groups for months, announced the plan yesterday to guide the Democratic-controlled Legislature in the final

four weeks of the legislative session.

Maria Contreras-Sweet, secretary of the Business, Transportation and Housing Agency, said the plan contained “something

for every group to object to and something every group will like.”

“It’s heavily weighted for consumer protection,” she said. “But that’s where the governor is. He cares about consumers.”

Some consumer advocates didn’t care for the plan, calling it too weak. Others praised it for giving patients important new

powers.

“We are generally pleased,” said Beth Capell of Health Access, a consumer group. “He’s recognized that we need more

consumer advocacy in the regulatory agency.”

The plan drew guarded praise from the managed health-care industry.

“We’re pleased that he puts external review front and center. . . . We recognize that patients have concerns about managed

care,” said Walter Zelman, president of the California Association of Health Plans, an industry trade group that represents

38 plans covering 20 million Californians.

Zelman, however, said he believed that allowing even limited lawsuits may drive up the costs of health care.

Lawmakers eager to make changes in the health-care system, after being stymied by former Gov. Pete Wilson for years,

have considered 68 health bills this year, some of them overlapping and contradictory.

Last month, Davis said that he wants to consolidate the legislation to a manageble four to six bills. Since then, legislators

and health groups have been looking to Davis for guidance.

“We’ve been anxiously awaiting something in writing from the governor,” said Assemblyman Martin Gallegos,

D-Montebello. “Overall, there are some good proposals in here. It’s a good starting point.”

Gallegos and other lawmakers expect the governor’s plan to be the framework for legislation that will be further refined in

the Legislature in the next four weeks.

Davis’ aides grouped the changes in three broad categories: consumer protection, patients rights, and HMO oversight and

enforcement.

Davis has not yet decided on an entirely separate category of legislation: bills mandating coverage of particular benefits,

such as contraceptives and mental health.

The governor plans to work on that next week, said Cabinet secretary Susan Kennedy, but she added that he also may try

to persuade lawmakers to put off decisions on those bills until next year.

“We don’t want to rush,” she said. “We don’t want to have a bill just to have a bill.”

The Democratic governor’s proposal sets up a series of safeguards for patients worried that their doctor or health plan may

not be giving them the best care because of the need to make profits.

A variety of public opinion polls have repeatedly shown that improving HMOs is a top priority among voters.

First, patients would be guaranteed a second opinion from the doctor of their choice with no cost above any normal

co-payment.

Patients dissatisfied with their treatment could appeal to a newly created external review process.

Under the process, a group of experts would determine whether a treatment is medically necessary based on accepted

standards of medical practice, professional standards and scientific evidence.

The state would administer the review, the managed-care plans would pay for it and the patients could choose the

state-accredited reviewers. A separate speedy review process would be set up for decisions involving emergency and

life-threatening situations.

Currently, California has an external review process only for new and experimental treatments.

The final appeal, under the Davis plan, would be a lawsuit. But such suits would only be allowed in cases where the patient

died or suffered substantial physical harm.

“We just don’t think that litigation is necessarily the answer to our health-care problems,” said Kennedy.

Jamie Court, director of the Foundation for Taxpayer and Consumer Rights, slammed the lawsuit proposal as too weak,

saying that it “looks like it was drafted behind closed doors with HMO executives and no patients, doctors or nurses

present.”

Court pointed out that Davis’ proposal is far more restrictive than a liability law signed by Texas Gov. George W. Bush.

Gallegos said that he would work with the governor’s office in an attempt to expand the right to sue HMOs. A quirk in

federal law prohibits such suits except by public employees.

Davis would also set up a new department of HMO regulation in the Business, Transportation and Housing Agency that

would more rapidly pursue complaints on behalf of consumers. He proposes cutting in half the time the department is

allowed to answer complaints from 60 days to 30 days.

Eventually, the new department would publish an HMO report card ranking quality of care and services.

HMO proposal

Changes in managed-care regulation backed by Gov. Gray