BILL ANALYSIS
AB 55
Page 1
Date of Hearing: April 20, 1999
ASSEMBLY COMMITTEE ON JUDICIARY
Sheila James Kuehl, Chair
AB 55 (Migden) - As Amended: April 15, 1999
SUBJECT : HMOs: INDEPENDENT MEDICAL REVIEW, LIABILITY AND
ADMISSIBILITY
KEY ISSUES :
1)SHOULD HMOs BE LEGALLY RESPONSIBLE FOR THE HARM THEY CAUSE
WHEN FAILING TO EXERCISE ORDINARY CARE IN PROVIDING OR DENYING
HEALTH CARE?
2)Should a NEW independent medical review system for unresolved
PATIENT complaints against HMOs be established in California?
3)Should THIS AND ALL OTHER INDEPENDENT MEDICAL REVIEW BILLS BE
AMENDED, CONSISTENT WITH THE COMMITTEE'S POSITION LAST
SESSION, TO ENSURE THAT ALL ASPECTS of the independent medical
review system contemplated in this bill ARe INadmissible in
subsequent JUDICIAL PROCEEDINGS?
SUMMARY : Holds health maintenance organizations (HMOs) legally
responsible for the harm they cause when failing to exercise
ordinary care in providing or denying health care, permits the
admissibility of independent review decisions in court
proceedings under the normal rules of evidence, expedites HMO
and DOC review of patient complaints, and establishes an
independent medical review system for specified unresolved
patient complaints against HMOs. Specifically, this bill :
1)Establishes an Independent Medical Review System, commencing
January 1, 2001, that requires health plans to provide
enrollees the opportunity to seek an independent medical
review whenever health care services have been denied or
terminated or otherwise limited by a plan or one of its
contracting providers based in whole or in part on a finding
that the proposed health care services are not medically
necessary or medically appropriate.
2)Authorizes an enrollee to apply for Independent Review if one
of the following conditions is met:
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a) the enrollee has received a provider recommendation
indicating that the disputed service is medically necessary
or medically appropriate;
b) the enrollee has received the disputed service on an
urgent care or emergency basis from a provider who
determined it was medically necessary or medically
appropriate; or
c) in the absence of a) or b), the enrollee has been seen
by an in-plan provider for the medical condition for which
the enrollee seeks independent review.
3)Provides that independent reviews be conducted by expert
medical organizations independent of health plans and
certified by a nonprofit accrediting organization, pursuant to
specified conflict of interest provisions.
4)Requires independent review decisions to determine whether the
disputed service is or was medically necessary or appropriate
based on specified practice guidelines, relevant medical or
scientific evidence, or generally accepted standards of
medical practice.
5)Permits the admissibility of independent review decisions in
judicial cases under normal rules of evidence.
6)Provides that a health plan shall have a duty of ordinary care
to provide medically appropriate health care service to its
members, subscribers, or enrollees where the health care
service is a benefit generally provided under the plan. The
bill would make a health care service plan or managed care
entity liable for any and all harm resulting from the failure
to exercise ordinary care in the provision, approval, or
denial of health care services.
EXISTING LAW :
1)Requires every health plan to maintain a grievance system
under which enrollees may submit their grievances to the plan.
An enrollee may submit an unresolved grievance to DOC after
completing the health plan grievance process or after
participating in the process for 60 days. Health plans must
address emergency grievances within five days. (Health and
Safety Code sections 1368 and 1368.01.)
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2)Regulates, pursuant to the federal Employee Retirement Income
Security Act (ERISA), employee benefit plans, including health
plans. ERISA has been interpreted to bar state common law
claims for compensatory and punitive damages against an
employer-provided health plan for alleged improper handling of
benefit decisions, including improper denial of treatment
under the plan. (See Pilot Life Ins. Co. v. Dedeaux (1987)
481 U.S. 41.)
3)Provides that only relevant evidence is admissible, and that
all relevant evidence is admissible unless the court excludes
it, after a finding that its probative value is substantially
outweighed by the probability that its admission will
necessitate undue consumption of time or create a substantial
danger of undue prejudice, of confusing the issues, or of
misleading the jury. (Evidence Code sections 350, 351, and
352.)
4)Limits testimony of witnesses who are not experts to what may
be rationally based on the his or her perception and what may
be helpful for a clear understanding of the testimony.
(Evidence Code Section 800.)
5)Limits testimony of expert witnesses, permitting only
testimony that is both:
a) "Related to a subject that is sufficiently beyond the
common experience that the opinion of the expert would
assist the trier of fact;" and
b) "Based on matter (including special knowledge, skill,
experience, training, and education) perceived by or
personally known to the witness or made known to him at or
before the hearing, whether or not admissible, that is of a
type that reasonably may be relied upon by an expert in
forming an opinion upon the subject to which his testimony
relates, unless an expert is precluded by law from using
such matter as a basis for his opinion." (Evidence Code
section 801.)
FISCAL EFFECT : Unknown
COMMENTS : This bill, one of several independent medical review
bills moving through the Legislature this year, laudably seeks
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to address the growing belief held by many Californians that
they are being denied medical care simply to maximize corporate
profits. The bill passed the Assembly Health Committee by a
vote of 9-5 on April 13, 1999. It is very similar to AB 1621
(Thomson), which is also scheduled to be heard by this Committee
April 20, 1999, and which also passed the Assembly Health
Committee on April 13, 1999 (in that instance by a bipartisan
vote of 11-0). Because this bill received an extensive analysis
and hearing in the Health Committee, this analysis will focus on
the principal issues in this bill which are within the
jurisdiction of the Judiciary Committee.
Brief Comparison Between AB 55 and AB 1621 : Regarding the
development of a new independent medical review system in
California, AB 55 and AB 1621 are very similar, and, in the view
of patient protection groups, are both generally promising
legislative efforts. Before turning to the principal legal
issue raised by both bills, that of the admissibility of the
independent review process in later court cases, a brief
comparison of their key differences may prove helpful.
Whereas AB 55 contains provisions holding HMOs liable for the
harm they cause when making treatment decisions, AB 1621 does
not contain these liability provisions on the ground that other
bills (like AB 55) are addressing this patient protection issue.
In addition, both bills are "silent" on the issue of admitting
aspects of the independent medical review process in subsequent
judicial proceedings. As such, the traditional rules of
evidence would appear to apply to both bills - a contrary
approach to the position adopted by this Committee when
considering this identical issue last year. At that time, the
Committee voted consistently in support of the proposition that
no aspects of the proposed independent medical review programs
should be admissible in any subsequent judicial proceeding.
(See fuller discussion below.)
The primary differences between AB 55 and AB 1621 on the other
issues pertaining to the independent review process are
relatively minor, and include:
1. AB 55 has a slightly different approach to
conflict-of-interest protections than AB 1621, reflecting the
different nature of the review participants in the two bills;
2. AB 1621 designates those individuals providing the
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independent medical review of the treatment decision as
"providers of second opinions," whereas AB 55 refers to
"independent reviewers," reflecting the more formal and
larger make-up of the review panel created in this
legislation; and
3. AB 1621 removes the $250,000 cap on administrative fines
that may be imposed by DOC on health plans that knowingly and
repeatedly fail to act promptly and reasonably to resolve
grievances.
Author's Statement : In support of the bill, the author
notes the growing fear across the country that too often
medical decisions are being made by insurance company
accountants instead of doctors and patients; that too
often, "managed" care is mismanaged, dangerous care,
dictated more by money than by medicine. As the author
notes, HMOs now dominate the health insurance market in
California. Many of these companies have become large
for-profit enterprises, forcing not-for-profit HMOs to
increasingly emphasize cost-cutting as a top priority. The
author therefore notes the following:
"AB 55 . . . in my view goes to the heart of restoring
consumer confidence in our health care system. I've
introduced AB 55 to require a fully independent,
outside review when HMOs deny care, and to give
consumers access to courts that we who work in this
Capitol building already enjoy. . . .AB 55 rectifies
the current situation where patients and their doctors
who believe needed care has been denied can be left
hanging while the dispute resolution process drags on
indefinitely. While there may be occasions when the
treatment a patient wants may not be appropriate or
necessary, I believe when HMOs deny a patient care,
those patients should have the right to an independent
look from someone concerned with that patient's
health, not preoccupied with the company's bottom
line.
AB 55 also makes HMOs liable in court for decisions
that harm the health of their patients. In doing so,
we reaffirm a basic principle of our democracy - that
there are three branches of government, not two - and
that California citizens deserve access to each one -
including the courts. . . .It has been suggested that
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granting Californians the right to take HMOs to court
will be too costly. AB 55 recognizes that attempts to
deny citizens the right to step through the doors of
their own government ultimately impose a far greater
cost."
Historical Backdrop: Governor Wilson's 1998 Managed Care Task
Force Recommendations : Last year, Governor Wilson's Managed
Health Care Improvement Task Force issued a series of
recommendations to reform managed health care in California.
One of these recommendations specifically pertained to
"Independent Third Party Review." That recommendation called
for the following:
"The state entity for regulation of managed care should be
directed to establish and implement by January 1, 2000, an
independent third-party review process that would provide
consumers and health plans with an unbiased, expert-based review
of grievances pertaining to delays, denials, or curtailment of
care based on medical necessity, appropriateness, and all
'experimental-investigational treatments.'" (Emphasis added.)
The various independent review bills introduced in the
Legislature this year, including this one and
AB 1621 (Thomson) (scheduled to be heard contemporaneously with
this bill), directly seek to implement this Task Force
recommendation.
The Federal Backdrop : As California policymakers consider
which, if any, HMO reforms have the most merit, Congress and the
President are also struggling with what combination of reforms
will most improve HMO practices nationwide. For example,
legislation now pending in Congress, called the Patient Bill of
Rights, would grant a broad array of new rights for enrollees in
managed care plans, including the right for HMO patients to go
to court when injured by the denial of needed medical care.
President Clinton has strongly endorsed this measure, as have
hundreds of organizations representing millions of patients,
doctors, nurses, persons with disabilities or chronic illnesses,
and many others.
Recent Poll Results in California : When considering public
support for the types of HMO reform proposals currently before
the Committee, the Committee may wish to note the results of a
1999 statewide survey conducted by Fairbank, Maslin, Maullin &
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Associates on this issue, which found that voters in California
are overwhelmingly dissatisfied with their HMOs, and feel very
strongly that they should have the right to sue them for
inappropriate conduct.
When asked particularly if Californians should have the basic
right to sue HMOs if the HMO unreasonably delays or denies a
claim, this survey reports that 85 percent felt they should have
this right, with nearly two-thirds feeling strongly about it.
Support for the right to sue apparently crosses party and
ideological lines, as nearly equal numbers of Democrats (89
percent), Independents (86 percent), Republicans (86 percent),
and conservatives (86 percent) surveyed stated they believe they
should have this legal right. (Survey Summary on file in
Committee.)
Background : As noted above, the Assembly Health Committee
strongly supported the health care reform policies in this bill
leading to the creation of a new independent medical review
system in California. The principal issue before this
Committee, therefore, pertains to the bill's provisions holding
HMOs liable for their treatment decisions, and whether all
aspects of the independent review process should be inadmissible
in subsequent court proceedings. Some brief background follows
to assist the Committee in grappling with these complex legal
issues.
The Liability Approach of this Bill : This bill would make tort
remedies available for all health care service plans or managed
care patients and enrollees whose provision of benefits and
services are unreasonably or wrongfully delayed or denied. In
amendments contemplated to track, verbatim, the liability
provisions being amended into SB 21 by Senator Figueroa, this
bill would provide that a health care service plan or managed
care entity is:
1)Legally responsible to patients to ensure that the health care
provider, rather than the plan or managed care entity, shall
be in charge of patient care for services rendered on or after
January 1, 2000.
2)Subject to a duty of ordinary care to provide medically
appropriate health care service to its members, subscribers,
or enrollees where the health care service is a benefit
provided under the plan.
3)Liable for any and all harm resulting from the failure to
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exercise ordinary care in the provision or denial of health
care services.
4)Not, by reason of this measure, defined as a health care
provider under any provision of law, including provisions of
the Medical Injury Compensation Reform Act (MICRA).
5)Prohibited from seeking contractual or equitable indemnity
from a provider for its liability incurred under provisions a)
and b), above.
6)Not subject to any new or additional liability for the sole
medical negligence, as defined, of a treating health care
provider.
ERISA Preemption : Federal law, the Employee Retirement Income
Security Act (ERISA), regulates employee benefit plans,
including health plans. ERISA has been interpreted to generally
bar state common law claims for compensatory and punitive
damages against an employer-provided health plan for alleged
improper handling of benefit decisions, including improper
denial of treatment under the plan. (See Pilot Life Ins. Co. v.
Dedeaux (1987) 481 U.S. 41.)
An estimated 75 to 80 percent of all health insurance enrollees
are covered by ERISA plans and are therefore subject to this
preemption. These enrollees' only remedy is the recovery of
contract damages. The other 20 to 25 percent of the enrollee
population, those covered by a public employee or government
sponsored (e.g. Medi-Cal) plan and those who bought individual
policies, are free to pursue tort damages for the improper
provision of benefits or "failure to treat."
Since 1987, there has been a great deal of debate in the legal
world as to whether a state statute seeking to impose civil
liability on a health plan can ever survive ERISA preemption
after the U.S. Supreme Court's seemingly unequivocal holding in
Pilot Life . Those arguing that Pilot Life prevents such state
efforts cite the fact that many federal circuit court cases, and
various state appellate cases issued after Pilot Life , have
broadly construed the case to expressly provide that state
statutory regulation of health claims practices are flatly
preempted by ERISA's enforcement provision. (See, for example,
Kanne v. Connecticut General Life Ins. Co. (9th Cir. 1988) 867
F. 2d 489; Commercial Life Ins. Co. v Superior Court (Juliano)
(1988) 47 Cal. 3d. 473; and Greany v. Western Farm Bureau Life
Ins. Co. (9th Cir. 1992) 973 F. 2d 812.)
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Proponents of state avenues of control in this area,
notwithstanding ERISA, argue that "[a] slavish desire to fulfill
Pilot Life's mandate to protect ERISA plans at all costs reads
far too much into the . . . decision and [have] extrapolated out
of it conclusions that were never expressly stated in it."
(Letter of Support for
AB 55 by the Consumer Attorneys of California on file in the
Committee.) In support of this position, they note that the
Supreme Court's discussion in Pilot Life regarding exclusive
ERISA preemption was dicta (not relevant to the outcome or
holdings of that case). They also argue that preemption
advocates in this area paint the ERISA bar under Pilot Life far
too broadly, since they fail to note the distinction between
state efforts to regulate the processing of patient claims via
the health plan versus the insurer. According to this argument:
There is no question that the Pilot Life decision
contemplates the application of ERISA's civil
enforcement scheme as the exclusive means of
regulating the manner in which a plan processes
claims, even if it does so through the purchase of an
insurance policy. But -- and this is a very important
but -- the Supreme Court nowhere states that a state
regulatory scheme . . . is ineffective with respect to
regulating the insurer, even as to the manner in which
the insurer processes claims.
Whether or not the particular approach taken in this
legislation, holding health plans liable for the harm they cause
their enrollees for the failure to exercise ordinary care, will
survive ERISA preemption must await resolution by the courts.
ARGUMENTS IN SUPPORT : The California School Employees
Association, California Psychiatric Association, California
Teachers Association, and the Union of American Physicians &
Dentists support this bill because it allows enrollees to appeal
unresolved grievances after 30 days instead of 60, provides for
an independent review system when health services are denied,
and imposes accountability and liability on health plans.
Supporters argue that experience in other states that have
independent review systems has shown that the mere existence of
such a process seems to act as a policing mechanism that
increases the reasonableness of health plans in reviewing the
medical necessity of decisions. They also believe that this
bill will help ensure that health care treatment decisions are
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driven by physicians and not health plans.
The Consumer Attorneys of California (CAOC) also supports this
bill if it is amended to ensure that no aspect of the
independent review process established under the bill is
admissible in any subsequent legal proceeding. (See fuller
discussion of this issue below.) CAOC supports giving enrollees
the right to sue HMOs. With regard to independent review, CAOC
wants to ensure that consumers need not exhaust the review
process before having standing to sue. CAOC also supports the
bill's recent amendments that ensure a broad definition of
medical necessity that focuses on the needs of the particular
patient. It also favors the recent amendments taken in the
Health Committee which allow both Medi-Cal and Medicare
beneficiaries access to the independent review system and also
eliminate application fees for appeals, arguing that such fees
may discourage legitimate appeals. CAOC also argues against
withholding privileged HMO information from patients requesting
documents on appeal.
Neighbor to Neighbor (N2N), a non-profit health access
organization, supports AB 55, stating:
Currently, everyone who gets health care coverage
individually or through a government or church
employer receives the full protection of state laws,
while those who get their coverage through group
employer contracts do not. AB 55 extends the full
protection of state laws to every person in this state
regardless of how they get their health coverage. In
so doing, AB 55 would create a strong deterrent for
health care service plans and health insurers (HMOs)
to interfere with health providers' medical judgment.
. . .HMOs require a strong financial deterrent to
counterbalance the overwhelmingly strong financial
incentive they currently have to second-guess the
judgment of physicians and other health providers.
This legislation, as amended, would protect patients
and health care providers by making HMOs take full
responsibility for the consequences of wrongfully
denied care.
ARGUMENTS IN OPPOSITION : The Association for California Tort
Reform opposes provisions in this bill which increase health
plan liability. Blue Cross opposes the extension of tort
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liability to health plans, and Kaiser continues to favor
independent review over liability lawsuits. With regard to
independent review, Blue Cross recommends that the results of
external review should be admissible in any subsequent legal
proceeding.
In addition to concerns about the liability provisions, the
California Association of Health Plans seeks amendments
regarding independent review to ensure that decisions are
admissible, that reviewers meet specified qualifications, that a
government entity selects the independent reviewers, and that
the review process is conducted in a timely manner. The
California Physician Groups Council seeks amendments to remove
the liability provisions and to fine tune the independent review
sections. The California Chamber of Commerce argues that this
bill will result in defensive medical practices that will lead
to increased costs and unnecessary treatment, and as costs go up
the number of uninsured will go up as well.
The Association of California Life and Health Insurance
Companies writes that it opposes the bill unless substantial
amendments are taken. It especially objects to the bill's
"attempt to redefine HMO coverage as 'the business of insurance'
to avoid ERISA preemption." It also notes that "the bill would
directly impact employee benefit plans . . . and make them
subject to enterprise liability. Therefore, this bill ropes in
other lines of insurance and employee benefit plans unrelated to
managed care, thus potentially expanding their exposure to
lawsuits, without any commensurate legal benefit to the patients
the bill purports to help."
The Health Insurance Association of America (HIAA) writes in
strong opposition to the bill's liability provisions, stating
that as a result of expanded liability, "businesses will be
forced to pay higher costs. By dramatically increasing the cost
of health care, California will increase the number of uninsured
persons in this state. . . .The costs to California employers
and employees for the expansion of medical malpractice liability
is estimated to be between $1.02 billion and $2 billion
annually." Additionally HIAA argues that "the administrative,
compliance and 'defensive medicine' costs associated with such
increased liability measures are conservatively estimated at
4-5% [increase in health care costs], with potential increases
as high as 12%."
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ISSUE: SHOULD THIS AND ALL OTHER INDEPENDENT MEDICAL REVIEW
BILLS BE AMENDED, CONSISTENT WITH THE COMMITTEE'S POSITION LAST
SESSION, TO ENSURE THAT ALL ASPECTS OF THE INDEPENDENT MEDICAL
REVIEW SYSTEM CONTEMPLATED IN THIS BILL ARE INADMISSIBLE IN
SUBSEQUENT JUDICIAL PROCEEDINGS ? Last session, several bills,
including
AB 1667 (Migden), SB 1504 (Rosenthal) and SB 1653 (Johnston),
attempted to establish independent medical review systems. When
this Committee heard the various independent review bills last
year, the issue arose as to whether any aspects of the
independent review process should be admissible in subsequent
court proceedings. The Committee consistently voted against
permitting any such information to be admitted in court
proceedings. Because both of the independent review proposals
before the Committee this year are silent on this issue, thereby
permitting admissibility of independent review decisions under
normal evidentiary rules, the admissibility issue is once again
squarely presented to the Committee. Following are the
principal arguments pro and con on this issue submitted to the
Committee this year.
The Argument For Admissibility : The California Medical
Association (CMA) wrote the Committee to argue strongly that the
"second opinion" approach taken in AB 1621, whereby a single
doctor provides a second opinion about the need for
patient-requested treatment, is sufficiently informal and
reliable as to support admissibility of the process in
subsequent court proceedings. Although its statement on this
issue was expressly directed to why such "second opinions"
should be admissible under the normal rules of evidence, as
opposed to this bill's independent review "panel" approach, it
raises several points which reflect the key arguments in support
of admitting this type of independent review information.
Among other things, CMA states:
We believe that the adversarial judicial process and
the existing rules of evidence for relevance and
expert witness testimony have been more than adequate
in dealing with the admissibility of a medical opinion
and the weight that a trier of fact would give such
evidence. . . .As you know, California Evidence Code
Section 351 provides that, except as otherwise
provided by statute, all relevant evidence is
admissible. Further, the court has the discretion to
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exclude evidence if its probative value is
substantially outweighed by the probability that its
admission will . . . create substantial danger of
undue prejudice, of confusing the issues, or of
misleading the jury (Evidence Code Sec. 352).
Currently, if a patient in a PPO or other non-HMO
health insurance plan seeks and obtains a second
medical opinion, unless the court determines
otherwise, everything related to that visit to the
second opinion provider that is relevant will be
admitted in any subsequent proceeding. This begs the
question as to why the rules of evidence are different
if the second opinion is sought from an HMO enrollee?
If the patient is in a PPO, that evidence is
admissible in subsequent legal actions. If that
patent is an HMO enrollee, CAOC would have that
evidence be inadmissible.
Kaiser Permanente also wrote the Committee to argue
strongly against taking the approach of last session and
making any aspect of the independent medical review process
inadmissible in subsequent court proceedings. Kaiser
wrote:
[We believe] that the decisions of the independent
medical review organization should be admissible for
all relevant purposes not inconsistent with existing
provisions of the Evidence Code, and that no special
provisions regarding the admissibility of such
decisions should be enacted. Because the decision of
the independent medical review organization would be
binding only on the plan, it would be patently unfair
to limit evidence in a subsequent appeal regarding the
organization's decision. . . .Of the more than 20
states that have enacted independent medical review
statutes, no state that we are aware of has imposed
unique admissibility restrictions on the decisions of
independent review organizations. . . .Because appeals
will be permitted only when the enrollee disagrees
with decision of the independent review organization,
the plan should be permitted to present evidence
regarding both the process regarding the conduct of
the independent external review and the substance of
the reviewing organization's decision.
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The Argument Against Admissibility : In contrast to these
arguments in favor of admitting at least some aspects of the
independent review process, the Consumer Attorneys of California
wrote the Committee to repeat their deep concerns about the
permitting any aspect of these proposed review programs to be
admitted in subsequent judicial proceedings. They write:
We strongly believe that for this external review
process to work fairly and effectively, any decision
reached by the reviewer or issued by the regulating
authority - whether favorable or unfavorable to the
enrollee - must be inadmissible in any subsequent
legal action. . . .
The external review process must not deprive consumers
of their right to seek redress under any other remedy
available in law. With appropriate safeguards and the
right to sue, the external review process may allow
some enrollees to receive an expeditious and
inexpensive determination of their dispute. However,
it must be recognized that this procedure is intended
to be an informal process in which the enrollee will
generally not hire an attorney.
Banning admissibility of any decision reached in these
informal procedures not
only encourages the parties to participate, but
assures their full and frank participation in the
process. In addition, significant due process issues
require that the decision from these informal
procedures not be admissible. . . .Under this informal
review process the appointed reviewer (or reviewers)
will review the provider recommendations and medical
records. However, there is no requirement for a
hearing at which either party may appear and provide
testimony or explanation. There is no opportunity for
either party to examine the expertise and clinical
experience of the reviewer, or to examine his or her
biases and credibility. Neither party is permitted to
cross-examine the reviewer to learn on what basis the
reviewer made his or her decision, nor to learn
whether the reviewer considered specific relevant
evidence. There is no opportunity for either party to
challenge any of the evidence relied upon by the
reviewer, or to introduce other experts to expand upon
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or rebut findings made by the reviewer. . .
.Instructing a jury to consider the reviewer's
decision as nothing more than the opinion of any other
expert simply will not overcome the jury's inherent
and perfectly normal acceptance of that expert's
conclusions as more valuable, more meaningful, and
more significant; merely because the "government"
appointed that expert.
Staff Counsel Comment: Although the experts above all ably
highlight the difficult and conflicting evidentiary issues
raised by the question of admissibility of independent
review procedures and decisions, it would appear the basis
of the Committee's determination last year to preclude the
admissibility of all aspects of any independent review
process remains sound. Although it is argued that barring
admissibility of a reviewer's recommendations and decisions
will benefit only the enrollee, it would seem clear that
banning the decision and recommendations of the reviewer
does not prevent the plan from introducing all the relevant
evidence and reasoning used by the reviewer during the
subsequent trial. In other words, notwithstanding a
statutory admissibility bar, a plan still would be able to
present this evidence to the jury. However, a trial
setting provides the enrollee with full due process rights
to cross-examine the witnesses, raise inconsistencies in
the evidence, investigate potential biases of witnesses,
and introduce other evidence that the plan or reviewer has
ignored or dismissed. This is not the case in the more
informal review process. Consequently, banning
admissibility of the decision does not appear to hinder the
plan, but rather properly assures that the parties have
full and equal rights to present the relevant evidence to
the jury.
Possible Committee Amendment : Should the Committee
conclude that admitting any aspect of the proceedings of
the proposed independent medical review into evidence is
inappropriate in a subsequent judicial proceeding, it may
wish to amend the bill with the following language
identical to that adopted last year in the various
independent review bills that came before it:
On page 30, line 15, insert: "(g) Nothing about the
independent review process established by this article,
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including but not limited to, the analysis,
recommendations, and conclusions of the review panel, shall
be admissible in any subsequent proceeding."
Related Pending Legislation : Several bills have also been
introduced this session to require, through varying means,
health plans to establish an independent medical review system.
These bills include
AB 1621 (Thomson) noted above, SB 189 (Schiff) and SB 254
(Speier).
REGISTERED SUPPORT / OPPOSITION :
Support (As communicated to the Assembly Health Committee)
California School Employees Association
California Psychiatric Association
California Teachers Association
Consumer Attorneys of California (if amended)
Union of American Physicians and Dentists
Western Center on Law and Poverty (with amendments)
Opposition (As communicated to the Assembly Health Committee)
Association for California Tort Reform
Blue Cross of California
California Association of Health Plans
California Association of Health Underwriters
California Chamber of Commerce
California Physician Groups Council
Health Insurance Association of America
Health Net
New York Life
Analysis Prepared by : Drew Liebert and Donna S. Hershkowitz /
JUD. / (916) 319-2334