CALIF. FINES 43 INSURERS
Louise Kertesz
Making a bold statement amid moves to take away its oversight of HMOs, the California Department of Corporations has fined 43 insurers-including a dozen major HMOs-a total of $500,000 for failing to notify enrollees of their grievance rights.
A 1995 law, sponsored by Democratic state Sen. Herschel Rosenthal, requires plans to notify enrollees in plan documents about a toll-free complaint hotline and grievance procedures. Officials from several HMOs said omissions in some plan documents were inadvertent.
Rosenthal, who brought the problems to the agency's attention, is expected to introduce a bill this month to move HMO oversight to the state consumer affairs department from the corporations department. Faulting the corporations department for allegedly lax oversight, critics tried but failed to pass a bill last session to move HMO control to the state insurance department.
The California Association of HMOs and several health plans said many plans changed most of their documents to comply with the law but they missed some.
Nevertheless, a CAHMO spokesman said, "If there is validity to the allegations, health plans need to conform to this immediately" because the industry supports consumer rights to grievance procedures.
A spokeswoman for PacifiCare of California said it included the mandatory information in enrollment kits, contracts, handbooks, annual benefit notifications, letters to enrollees who initiated grievances and magazines published for enrollees. "We thought we were in full compliance," she said.
But PacifiCare neglected to include the information in follow-up letters to enrollees with grievances. The state fined the plan $40,000.
Also hit with a $40,000 fine was Kaiser Foundation Health Plan. A spokesman said the plan changed all standardized materials to include the mandatory language but did not include it "in some individual letters" about grievances.