With legal questions dogging a new state law for resolving disputes between patients and their health insurers, the Maryland General Assembly is bracing for another fight over legislation that would hold HMOs accountable for subpar care.
Bills have been introduced in both chambers that would give consumers the right to sue their HMOs and would threaten HMO medical directors with sanctions if they blocked medically warranted treatment.
Lawmakers have rejected both measures the past two years. Supporters say the bills are needed because of uncertainty about the law that took effect last month letting most Marylanders appeal HMO coverage decisions.
"It's bringing accountability to a system that's in disarray," Sen. Leo E. Green, a Prince George's County Democrat, said of his right-to-sue bill. "You need some sting at the end of the road to shake them up with."
Many doctors and their patients remain concerned that cost-conscious insurers are undermining the quality of health care. The HMO accountability bills also have a prominent new supporter, Gov. Parris N. Glendening. Though he did not make either measure part of his legislative package, he publicly endorsed both during last fall's re-election campaign.
Whether the governor's backing will sway lawmakers remains to be seen; both bills face a formidable array of opponents. HMOs and the business community argue that either measure would raise health care costs by making insurers fearful of refusing to pay for anything, no matter how expensive or medically unnecessary. Legislative leaders seem sympathetic to that view.
"Before we start ruining HMOs by saddling them with the costs of defending lawsuits by every person who feels he or she has been aggrieved by a gatekeeper, we have to give the appeals process an opportunity to work," he said.
Maryland's HMO appeals and grievance law, enacted last year, gives the state insurance administration power to review consumer complaints about HMOs' denials of claims.
This month, in its first emergency case, the agency ordered Prudential HealthCare to provide in-hospital rehabilitation to a teen-ager nearly paralyzed by viral encephalitis and fined the HMO $1,000.
The law also requires HMO medical directors to obtain state licenses and makes them subject to penalties or removal for abuses.
Maryland's law does not apply to self-insured health plans, which are regulated by the federal Employee Retirement Income Security Act. And federal courts have struck down HMO review laws in Texas and Arkansas, saying that the ERISA law prevents any state oversight of health insurance coverage.
Given those and other court rulings, Maryland's HMO appeals law could be overturned if it is challenged in court, Insurance Commissioner Steven B. Larsen said.
"It's only a matter of when the insurance companies are going to challenge it," Green said.
He said he sponsored the HMO liability bill because of constituent complaints and told of a woman he represented, who was dying of cancer, who initially had been denied a treatment deemed too experimental to justify coverage.
Sen. Paula C. Hollinger, a Baltimore County Democrat, has reintroduced her bill to make all HMO medical directors subject to the state Board of Physician Quality Assurance. The 18-member panel reviews allegations of doctor misconduct and can suspend or revoke licenses to practice medicine.
Hollinger's bill would cover medical directors of HMOs, including federally regulated ones, and of hospitals. By law, medical directors must be physicians, and supporters of the legislation say it would give consumers another avenue for getting their complaints reviewed.
"If we can't have everyone under [the HMO appeals] law," Hollinger said, "they would at least have the board to go to."
Appeal to Congress
Lawmakers and some HMOs have joined in calling on Congress to sort out the confusion over the regulation of health plans. But agreement ends on whether to make HMOs or their managers liable for coverage decisions.
One other state, Arizona, lets medical licensing boards regulate medical directors, Hollinger said. But a patient advocates group she helped organize says legislation like hers is needed.
"Who knows more of what is medically necessary than the person treating you?" asked Pearl L. Lewis of Pikesville, vice president of Maryland Patient Advocates Group.
Lewis, 53, who has Crohn's disease, said the medical director of her health plan denied her overnight hospitalization to prepare for surgery last fall, overruling her doctor, though another medical director had approved an overnight stay for her earlier in the year under similar circumstances.
She said she appealed and got the hospitalization but that "the average person does not know how to fight the system."
"It makes the patient a little more real when there's a personal liability associated with that decision," said Charles R. Gerhardt of Parkville, president of the patients group.
The Medical and Chirurgical Faculty of Maryland, the state medical society, which has more than 7,000 physician members, strongly supports making medical directors accountable but also favors the right-to-sue legislation.
T. Michael Preston, society executive director, said physicians favor "putting the decision-makers on an equal footing." Doctors can lose their licenses to practice if they neglect a patient's care, he said, and medical directors should have the same accountability for determining whether a test or treatment is medically necessary.
'No benefit to anybody'
Not surprisingly, HMOs oppose additional legislation opening them to lawsuits or their medical directors to outside scrutiny.
"It's going to drive up the cost of health care with no benefit to anybody," said D. Robert Enten, lobbyist for the Maryland Association of Health Maintenance Organizations. HMOs supported the appeals and grievance law last year as a less onerous alternative to those measures.
Two states have recognized patients' rights to sue their health plans, but Enten said courts in several states, including Maryland, have awarded damages to patients claiming they were harmed by denial of coverage. "If a problem is there, the courts will fashion a remedy to deal with it," Enten said.
The HMO lobbyist was equally critical of subjecting medical directors to loss of their licenses. "You're going to turn regulation of the payers over to the payees," he said. He noted that the state medical society administers the process by which doctors are nominated for the Board of Physician Quality Assurance. The governor appoints them.
The Maryland Chamber of Commerce opposes both measures, concerned that HMOs would pass the costs of lawsuits on to employers and their workers. "We know who pays in the end -- the consumers," said W. Miles Cole, the chamber's vice president for government relations.
A bill to hold medical directors accountable passed the Senate two years ago but died in the House. The Senate defeated it last year, and right-to-sue legislation failed to get out of committees reviewing it.
Del. Michael E. Busch, an Anne Arundel County Democrat who is chairman of the House Economic Matters Committee, cast doubt on the future of the measures in his panel this year.
"If we enforce the regulations we have," he said, "we have enough clout over the insurance industry."
Pub Date: 2/21/99