Federal Reform Needed for HMOs

Re your April 2 editorial, “Round Two for HMO Reform”: Although you recognize the need for HMO reform, you persist in endorsing a piecemeal state-by-state legislative approach rather than a meaningful federal one.

As a former consultant to the California Department of Corporations, the state agency which oversees HMO regulation, I can assure you that there are plenty of current laws and regulations that are not being effectively enforced. State regulators are simply inadequate in number and expertise and are generally ineffective in their attempts to enforce existing laws.

A far better approach is one that would permit lawsuits by HMO members who are injured as a result of negligent decisions by their HMO. The right to sue is a universal right that has been inadvertently preempted by a fluke in a 25-year-old federal law which was never meant to apply to HMOs. The result is that those members allegedly covered by that law are not permitted to seek redress in state courts, whereas the 20% of members not covered by such law do have that right.

The threat of lawsuits and large damage awards is the only realistic way to hold HMOs responsible for their actions (or inaction).

JOANNE STERN

Professor of Law

Whittier Law School