Another state may approve HMO liability

A bill is expected to be signed in Washington state this month. But physicians there worry about added costs and intrusion.

By Leigh Page, amednews staff. March 6, 2000.

Washington state is likely to enact the nation's fourth health plan liability law by the end of this month, but the state's physicians have mixed feelings about that.

A recent poll by the Washington State Medical Assn. found that more than two-thirds of members endorsed suing health plans -- and that their support fell to as little as one-third if it would mean higher premiums or more intrusion into their practices.

While similar bills languish in other states, the Washington provision -- part of a patients' rights package -- sailed through the Legislature. The Democrat-controlled Senate approved it by a vote of 48-1 on Jan. 26 and the evenly split House then did so by 92-3 on Feb. 14.

Lawmakers are expected to agree on a single bill by the end of the session on March 9 and send it to Democratic Gov. Gary Locke. Locke has not commented on the bill, but he endorsed health plan liability December 1999, and is expected to sign it.

The official price tag on the bill is $20 million a year in extra state spending, partly due to litigation against state-run health programs; however, supporters say that estimate is much too high because they don't expect many lawsuits.

In addition to plan liability, both versions of the bill would require an external review for health plan decisions, limitations against retroactive denials of coverage and in-state licensing for a health plan's medical directors. Both would also require privacy protections, disclosure of health plan information and adequate choice of doctors, including second opinions.

Going against the national tide

Health plan liability has become law in California, Georgia and Texas, and is pending in dozens of states and Congress. But in most other states and in Congress, health plan liability is meeting tough opposition. Business and insurers are lobbying heavily against the bills and Republican lawmakers generally oppose it.

In Washington state, however, Republicans' stiff opposition from last year has evaporated. It is one of the few states where Republicans do not control any branch of government. And in this election year, they ended up on the wrong side of public opinion, said the bill's sponsor, state Rep. Shay Schual-Berke, MD, a cardiologist and Democrat from Seattle.

Also, the bill won over opponents by answering concerns that the door to litigation would be flung wide open.

The House version requires health plan members to put their complaint through external review before filing a lawsuit.

And a last-minute amendment to the Senate version even stipulates that members must win that case before filing a suit, which would blunt the bill's impact.

But Dr. Schual-Berke said she hopes that item will be removed when lawmakers from both chambers hammer out the final wording.

She said the bill would restore "accountability" and "a balance of power and trust" to the health care system.

The two minds of doctors

But the Washington State Medical Assn. poll suggests that support for liability does not run very deep among doctors.

Some WSMA leaders such as Mark Adams, MD, last year's WSMA president, oppose the provision. And the medical association is officially neutral on health plan liability, though it supports the rest of the bill.

Dr. Adams, a Bremerton thoracic surgeon, said he wrote the follow-up questions in the poll that exposed doctors' concerns about added costs and intrusion because he wanted to get beyond doctors' "superficial" feelings.

Dr. Adams said the measure is unfair to HMOs because they make only coverage, not medical, decisions.

He added that litigation could kill small, community-based HMOs such as Kitsap Physicians Services in Bremerton, where he was board chair from 1994 to 1999. That plan went into state receivership last August.

But several specialty organizations, including the Washington Academy of Family Physicians, support the liability provision.

"I don't find it a tenable argument that HMOs should have immunity," said Glen Stream, MD, a Spokane family physician and academy president.

Based on the lack of lawsuits that have come out of the 3-year-old Texas law, Dr. Stream said he doubted the liability provision would inspire much litigation.