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State Weighs HMO Surveys

Regulators may allow an industry accreditation group to help monitor insurers. The idea draws praise and criticism.

June 17, 2005|Debora Vrana | Times Staff Writer

Regulators may let an industry accreditation group help monitor HMOs in California -- an idea that earns praise from some insurers but complaints from consumer activists and doctors who fear it would weaken oversight.

The California Department of Managed Health Care regularly conducts surveys to determine whether health plans comply with state requirements. Turning some of that work over to the industry group would save money that could be used to expand department efforts in other areas, such as mental health and access to healthcare for people with disabilities, backers say.

But critics -- including the California Medical Assn., which represents more than 35,000 doctors statewide -- say such a move would be shortsighted.

"It looks like a way to save money, but it is not going to protect the public," said Jack Lewin, the medical association's chief executive. Given the perilous state of healthcare in California, he said, "we need more scrutiny, not less."

State regulators are just beginning to consider the idea of collaborating with the nonprofit National Committee for Quality Assurance, said Lynne Randolph, spokeswoman for the state regulatory agency.

Healthcare regulators held a public hearing on the idea June 8 in Sacramento and have set no timetable for a decision.

"There is no [formal] proposal, no plan," Randolph said. "We just wanted to get people's views, then take them back and see if we want to proceed. We are really undecided at this point."

Conceptually, however, regulators are considering whether the state should use some results from the quality committee's accreditation survey of health insurers as a substitute for state surveys that duplicate them, Randolph said.

Some of these duplications, for example, include surveys that require health plans to check the credentials of all contracted physicians.

"It's just regular, routine surveys," said Randolph, who added that the department had not yet estimated potential savings.

The state would also like to use the quality committee's survey results to determine compliance with regulatory requirements, the department said.

But regulators would "retain all authority and discretion to enforce health plan compliance, including follow-up surveys ... and taking any necessary enforcement action," said a department notice for the June hearing.

The move has won praise from some insurers, which say it would reduce duplication.

The quality committee "has a very strong sense of what factors should be monitored," said Michael Chee, spokesman for Blue Cross of California, which has 7.6 million policyholders in California. "We are in favor of standards that can be understood and helpful to consumers."

But critics worry that outsourcing certain parts of the regular surveys and audits the state performs on insurers would undermine the state's role as a watchdog.

They also say the department would be putting a barrier between consumers and those who investigate their complaints, potentially reducing the state's ability to quickly issue fines or take over insurers if problems are found.

In addition, critics also charge that the committee has a conflict of interest because about 60% of its revenue is from insurers and doctor groups.

"We're very concerned," said Anthony Wright with Health Access California, a nonprofit consumer group in Oakland. "To delegate this to a private agency is not acceptable."

Richard Sorian, vice president of public policy at the Washington-based quality committee, contends that the group is independent of the industry, despite the large percentage of funding that comes from the industry it accredits. Sorian called the concerns raised at the hearing "understandable" but pointed out that the committee already helped 30 states accredit insurers. In six other states it performs work similar to what California is considering, he said.

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