Panel OKs bill on health networks Doctors, hospitals could form groups to compete with HMOs

April 05, 1997|By Michael Dresser | Michael Dresser,SUN STAFF

A bill that would let doctors and hospitals form nonprofit "community health networks" to compete with health maintenance organizations cleared a critical hurdle yesterday, gaining approval from a previously skeptical House committee.

The House Economic Matters Committee, which had killed similar legislation in past years, approved this year's legislation by voice vote after amending it to require such networks to meet the same regulatory standards as HMOs.

Only two delegates, Del. Victoria L. Schade, an Anne Arundel Republican, and Del. Nathaniel Exum, a Prince George's Democrat, dissented.

Committee Chairman Michael E. Busch, an Anne Arundel Democrat, said he feels "very confident" that the bill will win final approval in the House and Senate.

Backers of the bill predicted the legislation will clear the way for increased competition in the managed-care industry.

Del. John P. Donoghue, who heads the subcommittee that drafted the amendments, said the bill will likely turn out to be the second most important health-related bill in this Assembly session. The first, he said, would be a bill on HMO appeals now in a Senate-House conference committee.

Donoghue said the community health network legislation specifies that the networks must be nonprofit organizations.

"This one is going to be driven by the patients and the providers and the hospitals. It's not going to be driven by shareholders and dividends and dollar signs," said the Washington County Democrat.

The heavily lobbied legislation had pitted Maryland's hospitals and some health-care providers against the HMO industry and ambulatory surgical centers.

After yesterday's vote, the hospitals' chief Annapolis lobbyist said she was pleased by the bill.

"We're very encouraged that people seem to want a locally controlled managed-care option in an increasingly consolidated insurance market," said Pegeen Townsend of the Maryland Hospital Association.

But HMO lobbyists sought to play down the significance of the bill, contending that the House amendments stripped it of most of its significance.

John R. Stierhoff, a lobbyist who represents Prudential Health Care, said the amendment ensures that the patients would have the same legal protections in a community network that they now have in an HMO. "We continue to wonder why this legislation is necessary," he said.

Busch said the House bill would require CHNs to go through the same licensing processes as HMOs and be affiliated with an existing health care provider. The chairman said the organizations would have to have boards made up of a majority of Maryland residents and work cooperatively with county health departments.

Pub Date: 4/05/97

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.