Rising criticism against HMOs puts state regulatory agency in spotlight

As the battle between patients and their HMOs intensifies, the state Department of Managed Health Care – not the most visible or widely known of state agencies – is gaining a higher profile. The DMHC also offers an unusual perspective: This is the department that oversees the conduct of California HMOs, intervenes in medical care disputes and fines HMOs for bad conduct.

The department's Web site is replete with the costly and complex fights over care, taking the large issues of care and illness and reducing them to the stark realities of an individual's medical condition. Among the detailed descriptions rife with medical jargon, the real patient emerges.

Capitol Weekly looked at the summaries of findings in disputed cases during the final months of 2007, the most recent period for which statistics are available. Data from earlier periods also is available. The information is posted on the DMHC Web site.

During that period, arbitrators awarded more than $1.8 million to five HMO patients who had filed claims against their health plans. In all, arbitrators heard 43 complaints filed from HMO customers. In most instances, the health plans prevailed.

The complaints filed by consumers are settled in binding arbitration–meaning that both the patient and the health plan must accept the decision of the arbitrator. The decision cannot be appealed.  The cases before the arbitrators were varied in scope and magnitude. According to the judgments handed down by these arbitrators, a misdiagnosed pregnancy was worth $328,000; a butchered callus removal was worth $90,000; an undiagnosed, and ultimately fatal, pulmonary embolism earned a $257,000 judgment; and a botched colonoscopy resulted in a $290,000 award.

The numbers are about constant from the same period in 2006. During the final quarter of 2006, enrollees prevailed in six of the 39 cases that were sent to binding arbitration. Those six awards resulted in a total of $1.8 million in judgments for HMO patients.

Each of the complaints is summarized on the department's Web site.

But consumer advocates say the 150 or so cases reported by the department do not reflect the complaints Californians have with their health care providers. Jamie Court of the Foundation for Taxpayer and Consumer Rights says most Californians with health care are barred by federal law from making claims against their HMO.

Only enrollees who receive their health care from MediCal or government employers have recourse with the Department of Managed Health Care, he said. For the 60 to 70 percent of Californians with health care who receive that care through an employer, the state is preempted by federal law from intervening.

"In those cases, you don't have a remedy. Those cases are not subject to state regulation. So what you're seeing on the department Web site is not at all indicative of the overall problem."

The department rejected Court's contention, saying that all HMO enrollees except for those in self-funded plans can file complaints with the DMHC.

Court said the head of the department has taken steps to become more aggressive in its regulation of the health insurance providers. But, he says, her job is politically volatile.

"Cindy Ehnes is really trying to do a good job, but there are lots of political forces inside the industry and inside the administration that she has to navigate," he says.