The General Assembly has stung the growing HMO industry by passing one of the strictest regulatory bills in the nation -- yet consumers may not benefit as much as the legislature intends.
Health maintenance organization executives say they will urge Gov. Parris N. Glendening to veto the bill, which guarantees HMO members a chance to choose their own doctors. If he signs the bill, passed just before the legislature adjourned Monday, the industry may sue, a top HMO official warns.
Consumers who belong to HMOs would be given the option of joining another health plan that allows them to see any doctor. The bill is specifically designed to help workers whose employers offer only an HMO plan that restricts choice of doctors.
But the alternative health plan could be quite expensive and discourage many consumers from choosing it.
The plan would have higher premiums than a conventional HMO, and employees would have to pay the added cost unless their employers voluntarily agree to pay for it. The plan also would impose an annual deductible -- which, based on current practices, could easily exceed $200 -- and require patients to pay 20 percent or more of the fee of each non-HMO doctor they see.
"If it is too costly, it may not be a real option" for consumers, State Insurance Commissioner Dwight K. Bartlett III noted in a letter he sent to key legislators on March 28.
Even the main advocate of the legislation, the state medical society, is worried. "If the intent of the legislation is to give the consumer a greater choice, you don't want to make the cost of the choice prohibitive," Ruth Seaby, a spokeswoman for the doctors' group, said yesterday.
Another problem, said Angelo J. Troisi, chief executive of the society, the Medical and Chirurgical Faculty of Maryland, is that the legislation appears to give consumers a chance at picking a health plan only once a year. If they choose a conventional HMO, they must wait a year to get into an alternative plan.
But he said it's still a good bill.
"It appears that it's very good for the citizens of the state because it gives the citizens the opportunity of selecting a plan that they want," he said.
Sen. Thomas L. Bromwell, the Finance Committee chairman whose support was critical to passage of the bill, agreed, saying "it allows you to keep your doctor."
He referred to the problem many patients have when their employers push them into HMOs, cutting them off in some cases from doctors who they have seen for years. Under the bill, they could remain with their old doctors, even if the doctors didn't work for the HMO.
Although patients would bear the additional costs of the alternative plans, HMOs fear the legislation is an ill-advised step toward even greater regulation.
Jeff D. Emerson, chief executive of HealthPlus, a Maryland HMO, says lawyers have advised him that the legislation may violate a 1973 federal law intended to protect the industry against anti-HMO state statutes. If the bill isn't vetoed by Governor Glendening, who hasn't taken a position on the legislation, HMOs probably will sue in court, he said.
While nine other states have passed some kind of so-called "patient access" laws, Maryland's legislation is uniquely troublesome to HMOs.
In addition to requiring HMOs to offer an alternative plan, dubbed a "point of service" plan by the industry, the bill bans the practice of withholding a portion of doctors' fees.
HMOs do this to encourage doctors to follow cost and quality-control rules. Those who comply generally get their money later, but the medical community resents the practice. Many doctors charge that it penalizes them for providing necessary services to patients, an allegation HMOs strongly deny.
The legislation would make Maryland the first state to prohibit "withholds," says Alphonso O'Neil-White, vice president and general counsel of the Group Health Association of America, an HMO organization.
HMOs say such a ban represents a deep intrusion into business practices designed to hold down costs and insurance premiums.
HMOs also fought the bill because it establishes rules HMOs must follow in considering and responding to applications of doctors who want to join their panels. HMO officials say they fear these provisions of the bill could lead to further legislation restricting their ability to hire and fire and open the door to expensive lawsuits from physicians.
HMO executives assert that the doctors' long-term legislative goal is to unravel managed care and revive the moribund system of traditional insurance, which allows patients to visit doctors and obtain services without any controls.
"This is the camel's nose under the tent," said Greg Conderacci, vice president for marketing for the regional Prudential Health Care Plan. "Doctors don't want to be controlled by managed jTC care. They want to set up a system where they can get around managed care."
Like many HMO executives, he said the doctors' real motivation for lobbying for the legislation was to protect their incomes.