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HMO Reform Still on Agenda of Legislature

Insurance: Governor stymied all but one bill in recently concluded session. Democratic legislators are considering a variety of ways to counter his stance.


SACRAMENTO — Among its other major endeavors, the Legislature this year went further than ever in trying to squeeze more patient benefits out of the medical managed care industry.

Mostly for naught, as it turned out.

Gov. Pete Wilson signed one HMO reform bill last month, increasing maternity benefits. But he vetoed another measure that would have allowed more direct access to women's health specialists--then announced that he would veto any and all HMO-related bills that reached his desk this year.

Wilson says he does not necessarily oppose placing some restraints on an industry that reformers charge is not above denying care to keep corporate costs down. He said he may approve managed care reform bills next year, after he hears from a task force that he appointed that is looking into the way that HMOs operate.

But for now aides report that the governor has not budged from his veto threat, despite overwhelming bipartisan support for a slew of managed care bills that passed the state Senate and Assembly, which are adjourned until next year.

Wilson's rejection of this year's bundle of bills has left HMO reformers in the Legislature frustrated, dejected and in some cases practically begging Wilson to change his mind.

In a letter to Wilson, state Sen. Tom Hayden (D-Los Angeles) pleaded with the governor to sign a Hayden bill allowing women to stay in the hospital after mastectomies. Hayden said he understands that Wilson wants to hear first from the task force, "but breast cancer patients do not have four to six months to wait."

In early August, Wilson wrote to members of the Assembly warning them against sending him "uncoordinated, reactive, piecemeal" bills proposing controls on insurers and HMOs. Until the Managed Health Care Improvement Task Force reports back in January on the "appropriate role for government" in setting standards of proper care and affordability, the governor said, he would veto "all managed care related bills," regardless of their merits.

Now, with the legislative year completed, legislators pushing HMO bills are poised with a variety of responses to Wilson's apparently unshakable stand.

By most counts, no less than 88 HMO bills were moving through the legislative process in recent weeks. Of those, leading proponents identified 48 measures as essential to reform.

Authors, all Democrats, adopted a variety of tactics to deal with the brick wall put up by the Republican governor.

Most simply withdrew their bills, deciding to await a nod from Wilson next year before taking up the fight again.

Sen. Herschel Rosenthal (D-Los Angeles), a point man on HMO legislation as chairman of the Senate Insurance Committee, elected to hold four of his bills until next year. They deal with consistency in prescribing drugs, requiring health plans to make certain records public and requiring licensed doctors to decide levels of treatment.

Another of Rosenthal's bills, along with a handful of bills by others, were sent to a two-house study committee, also to remain dormant until next year.

It makes no sense, Rosenthal said, to "jam" the governor by sending him bills certain to be vetoed. He dismissed as wishful thinking the theory that a Wilson veto of a popular bill puts the governor in a bad light.

But that is exactly what other legislators did--for exactly that reason. Some, like Hayden, tried to give the maneuver a friendly spin by appealing to Wilson's sense of compassion. Hayden included in his appeal excerpts of a letter to The Times from a woman who, "swimming in pain and nausea," said she was denied an overnight hospital stay after breast cancer surgery.

Other legislators simply said they knew a veto awaited them, but since both houses had passed their bills, they wanted to show that Wilson stood with the minority in opposing them.

Assemblyman Martin Gallegos (D-Baldwin Park), the chairman of the Assembly Health Committee, sent Wilson a bill that would make it harder for HMOs to deny prescribed care, pointing out the measure passed easily with 51 Assembly votes, including support from several Republicans.

Gallegos said he wanted to demonstrate that the governor's "unwillingness to review legislation is effectively delaying HMO reform."

Gallegos said, however, that he would not overdo his quixotic stand and would hold other bills of his in limbo and resume the fight next year.

Republican support for HMO reform bills had both cynical and altruistic interpretations. Democrats explained the GOP votes as Republicans having it both ways--voting in favor of the bills to appear compassionate to HMO patients, yet doing so without any danger of incurring the wrath of their industry friends because all concerned knew the measures would be vetoed.

But Republicans said they were influenced by repeated instances, from friends and family, of horror stories from patients in managed care health plans.

"Republicans used to march in lock-step with doctors and hospitals," said a GOP Capitol insider. "That's changing dramatically."

Said Assembly Republican leader Bill Leonard (R-San Bernardino): "My members are voting on HMO bills on their merits, without considering what their ultimate fate may be."

Egged on by the bipartisanship evident in the Legislature, at least nine HMO reform bills were sent to the governor before the Legislature recessed last week.

There was one exception, however. After a personal chat with Wilson, Democratic Assemblyman Bob Hertzberg of Sherman Oaks withdrew his HMO bill after it was sent to the governor.

His bill requiring managed care plans to cover prescription contraceptive methods will reemerge in the Legislature next year, he said.

When it does, it will join more than 30 other HMO reform bills held over for now, but ensuring that 1998 will again shine a spotlight on the managed care industry.

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