California levies fines against 43 health plans for failing to tell members of appeal rights
The California Department of Corporations (DOC) fined 43 HMOs Jan. 21 for failing to inform members of their right to file complaints with the department’s HMO Consumer Services Unit by calling a toll-free phone number.
The DOC created the consumer unit in October 1995 after the California Legislature passed the Knox-Keene Health Care Service Plan Act of 1995. A section of that law requires HMOs to notify enrollees of their rights to pursue unresolved complaints with the DOC, which regulates HMOs. The unit, reached by calling (800) 400-0815, helps consumers whose HMOs’ grievance procedures have failed to resolve disputes.
“The complaint and disclosure documents of healthcare service plans are critical in the ongoing efforts to inform enrollees of their appeal rights and for the department in its efforts to assess the quality of care being provided to consumers,” DOC Commissioner Keith Paul Bishop said. The law gave health plans until Jan. 1, 1996, to make sure their contract documents and complaint forms were updated to inform consumers about the phone service.
The DOC assessed fines ranging from $2,500 to $40,000, depending on the HMO’s enrollment, for a total of $515,000 in fines. More health plans may be subject to fines, the DOC said. “We take the new disclosure requirements very seriously, and we require the managed care community to do the same,” Bishop said. Six HMOs were fined $40,000, five were fined $20,000, 10 were fined $10,000, eight were fined $5,000, and 14 were fined $2,500.
“In general, we feel this is a very positive step,” said Betsy Imholz of Consumers’ Union, a San Francisco advocacy group. “It’s important that consumers know they can complain to the Department of Corporations if they are not being heard, and many of them would be unaware that the Department of Corporations regulates HMOs.”
Not everyone feels the penalties for noncompliance are justified. A spokesperson for one HMO said, “We see no reason to believe we are out of compliance and have been given no notice or indication as to how we might change our practices to come into compliance.” The California Association of HMOs is reviewing the situation.
This month the department is scheduled to release a report on complaints logged on its consumer service for 1996.
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