A top federal official warns that HMO legislation recently passed by the Maryland General Assembly to protect consumers will in fact hurt the public by forcing HMOs to raise premiums.
The legislation also may violate federal law, according to Dr. Rodney C. Armstead, director of the office of managed care in the Health Care Financing Administration. The agency runs the Medicare and Medicaid health programs for the elderly and poor.
Responding to Dr. Armstead's opinion, a national HMO group said yesterday it will ask Gov. Parris N. Glendening to veto the legislation passed last month.
Mr. Glendening's staff is unaware of Dr. Armstead's views, and he has not yet decided whether to sign the legislation, a spokeswoman for the governor said. He will be briefed on the legislation next week and will make his decision then, she said.
The legislation guarantees that members of health maintenance organizations have an opportunity to seek medical care outside their HMOs, which restrict members' choices of doctors and hospitals.
Consumers who belong to HMOs would be given the option of paying extra to join another health plan that allows them to see any doctor. The legislation -- unique in the nation -- is specifically designed to help workers whose employers offer only an HMO plan.
Many HMO executives object to this and other provisions of the legislation, charging that they will undermine HMOs' ability to control costs and hold down premiums paid by employers and consumers.
The American Managed Care and Review Association (AMCRA) said it will urge Mr. Glendening to veto the legislation. But the Maryland Association of HMOs, taking note of the strong political support for the legislation, is not seeking a veto.
Legislators overwhelmingly approved the legislation in response to complaints from doctors and patients about HMO restrictions. Thirty-seven percent of Marylanders are enrolled in HMOs, according to some estimates, and the percentage is expected to rise sharply in the next few years.
Dr. Armstead's office commented on the legislation in response to inquiries from AMCRA. The legislation "could be in conflict" with federal law that limits the amount of physician services patients can receive outside their HMO, his office said in a letter received by the association last week.
Dr. Armstead's office asserts that the legislation singles out HMOs for regulation that "will result in higher premiums to HMO enrollees." Other kinds of health plans that limit subscribers' choices of doctors should be regulated, too, the letter stated.
The legislation further requires that HMOs establish procedures for dealing with doctors' employment applications and appeals by doctors who aren't hired or who are fired. This provision "may inadvertently create an environment" for lawsuits by unhappy doctors, Dr. Armstead's office said.