Panel Postpones Vote on HMO Regulator

SACRAMENTO — California’s top regulator of HMOs ran into more trouble Monday when a state Senate committee put off his confirmation after the Wilson administration failed to pledge more money to beef up oversight over the fast-growing health plans.

The Senate Rules Committee, which is considering the nomination of acting Department of Corporations Commissioner Keith P. Bishop, said it would ask Gov. Pete Wilson to temporarily withdraw Bishop’s name from confirmation to give the panel more time to evaluate his agency’s performance.

Senate President Pro Tem Bill Lockyer (D-Hayward), who chairs the Senate panel, said he was disappointed that the Wilson administration had not pledged to increase the agency’s modest $8.9-million budget for regulating HMOs that provide medical care for 17 million Californians.

At a previous hearing on Bishop’s confirmation, during which the panel heard a litany of complaints about lax state enforcement, Lockyer said he would be likely to vote against the Wilson appointee unless the governor agreed to bolster the agency’s budget.

Bishop has agreed to revive a committee to study medical quality issues and to hasten the creation of a health-care ombudsman. But there was no proposed budget increase from the administration.

“That was a mistake,” Lockyer said at the hearing.

Sandy Harrison, a spokesman for Lockyer, said later that Lockyer is still “more or less optimistic that Bishop can satisfy the concerns. I think Sen. Lockyer is trying to give him the benefit of the doubt.”

Steve Tatum, a spokesman for Wilson, said the governor had no immediate comment on the concerns raised by Lockyer. Bishop, 40, has occupied one of the hottest seats in the Wilson administration since his appointment as acting commissioner nearly a year ago. Patients’ rights activists and some legislators have attacked his agency for failing to aggressively police HMOs--a criticism that predated his tenure. And five lawmakers--four Democrats and one Republican--have introduced legislation to strip his agency of oversight over HMOs.

The controversy surrounding the confirmation of the former Orange County securities lawyer underscores the broader national debate over the managed-care industry’s growing influence on medicine.

Bishop has recently blunted some of that criticism by slapping HMOs with nearly $4 million in fines and taking a tougher-than-expected stance on HMO mergers. He also has won support from some unlikely places, such as the California Medical Assn., which has endorsed Bishop’s confirmation.

Lockyer expressed concerns Monday about fresh complaints from a patients’ rights group that Bishop’s agency had allowed a Long Beach-based HMO, Molina Medical Centers, to expand its business the same month that federal health regulators were citing the plan for violating rules in the Medi-Cal program.