San Diego Business Journal

Health Care Legislation's Focus is Keeping Care Going
Governor Davis Signs Bills Aimed at HMO Members


Gov. Gray Davis recently signed a package of health care bills that is likely to bring welcome changes to tens of thousands of San Diego HMO members.

Two bills, AB 1286 and SB 244, require health maintenance organizations to give members 60 days' notice of plans to end a physician or hospital contract and will allow patients with serious medical problems to keep seeing their regular doctors for up to one year after the contract expires.

Pregnant women, children of up to three years, and patients scheduled for surgery have the right to continued care within 180 days of contract termination.

"Every year, thousands of Californians endure the trauma of having to switch physicians because of breakdowns in contract negotiations between their health plans and their doctors," said Assemblyman Dario Frommer, D-Los Feliz, who wrote AB 1286. The legislative debate over continuity of care has been gaining momentum since 2000 when a string of contracts between health plans and hospitals and medical groups were terminated, forcing some patients to switch doctors and leaving others unsure whether their doctor visits would be paid by HMOs.

In 2002, some Blue Cross members in San Diego were concerned about whether they could continue seeing their doctors when Blue Cross terminated contracts with several medical groups, including Scripps Clinic, Scripps Mercy Medical Group in Hillcrest and Scripps Penn Elm in Escondido.

Michael Bardin, senior director of public affairs at Scripps, said Scripps renegotiated contracts with virtually all health plans.

"We wanted to move from a (payment system called) capitation back to a per-diem basis," Bardin said. Per-diem payment is based upon actual care and service provided. Under capitation, HMOs pay a fixed advanced cost per patient per month, Bardin explained.

Some local medical groups, who went out of business, blamed low reimbursement rates from HMOs for their demise.

Among the recent casualties were Scripps Physicians and Mercy Physician Medical Group, which closed its East County operations because it couldn't reach an agreement with PacifiCare health plan.

'Good News' Law

Dr. Ted Mazer, the former medical director of the Mercy Physician Medical Group, praised the new legislation.

"It's about time that the HMOs had a responsibility to the patient, so the patient can make proper arrangements and has the ability to change doctors according to their desire within 60 days," said Mazer, an ear, nose and throat specialist. He is affiliated with multiple local medical networks.

The law is good news for doctors who may not be aware that their medical group is no longer affiliated with a particular HMO, he said.

"Oftentimes, both (doctors and patients) were going about their business, not knowing there was no coverage for care," Mazer said.

Now patients can notify their doctors, he said.

But Steve Tough, chief executive of California of Health Plans, defended HMOs by saying that the plans have been notifying patients all along.

"The law (merely) codifies what has been industry practice for a year and a half now," Tough said.

Under the bills, HMOs must sign contracts with hospitals and doctors articulating how much medical providers would get paid to treat certain patients after the contract expires.

Burdin said that measure helps remove some of the uncertainty about health care bills and who will pay for them.

Davis also signed AB 1628, another Frommer bill that also seeks to expand patients' rights.

The law requires that emergency room staff consult with HMOs after patients have been stabilized and forbids hospitals from billing patients if the hospital fails to get approval for care from the HMOs.

Burdin said AB 1628 won't have a big impact on Scripps, because it already contacts the patients' insurance once they are stabilized.

Still, he finds that "This bill puts pressure on HMOs to make sure that HMOs make themselves available for contacts and get the appropriate response back to the non-contracting provider."

Mazer criticized the bill, describing it as "poorly thought out."

"It doesn't provide answers to what emergency staff ought to do when an HMO can not be reached," Mazer said.

"This is just another way that people get care, the ER (emergency room) takes a loss, and the HMO gets away without payment," he said.

Burdin however disagreed with Mazer.

"The bill provides details when appropriate attempts (have been made to contact the HMO). It's incumbent upon the HMO to respond to that contact We don't have a lot of problems in that nature."

Other health care bills signed by Davis include:

- AB 948, which permits doctors who are not U.S. citizens but are legal residents to participate in medical fellowship programs under the supervision of a physician or surgeon who is appointed to a state medical school.

- SB 1627, which requires hospitals to report fee schedules for supplies and services to the Office of Statewide Health Planning and Development.

Burdin said Scripps will comply with that measure by posting the gross charges for the 25 most common medical procedures , yet to be identified , on their Web sites by Jan. 1, 2004, when SB 1627 takes effect.

- AB 195 encourages partnerships among HMOs, school districts, and families to develop education about improved nutrition to help reduce the childhood obesity rate.

Program Encourages Doctors to Prescribe Generic Drugs

Blue Cross of California, Blue Shield of California, Health Net of California, and PacifiCare of California entered a new program designed to encourage doctors to prescribe less costly generic drugs whenever appropriate.

Under the Generic Advantage program, health plans will provide discount coupons for doctors to attach to new prescriptions for generic drugs.

Patients taking the coupon, prescription and health plan identification card to a retail pharmacy in their health plan network can save up to $10 of their co-payment on their first generic drug purchase.

"The patients are going to get a financial benefit for switching to the generics, so they will ask their physicians to prescribe generics," said Dr. Steve Green, a family physician with Sharp Rees-Stealy Medical Group in Mira Mesa. "Many of us already prescribe generics, because they often will offer an inexpensive, safe, and effective treatment."

In some cases, the discount will cover the co-payment entirely, the health plans said.

Generics available through the program include Ibuprofen, sold under the brand name Motrin, and Naproxen, sold under the Naprosyn brand name, for arthritis pain.

"The generic Ibuprofen is essentially equivalent to the higher-priced brand name Motrin," Green said. "Most of the time it makes no sense at all to prescribe a brand name when there is a generic available."

The generic ranitidine is used in place of the brand name Zanatac to treat acid reflux.

Glipizide, glyburide and metformin whose brand name equivalents, in the same order, are Glucotrol, DiaBeta or Micronase, and Glucophage are available for diabetics.

The generic fluoxetine can be used in place of the brand name depression drug Prozac.

Cheaper high blood pressure drugs include atenolol, hydrochlorothiazide, lisinopril, and metoprolol in place of Tenormin, Oretic, and Zestril or Prinivil, and Lopressor.

Lovastatin in available in place of Mevacor.

In addition to the coupons, patients also get educational materials about generics.

, Marion Webb