Panel Cools Opposition to HMO Official

SACRAMENTO — The Senate Rules Committee abruptly backed away Monday from rejecting Gov. Pete Wilson’s embattled chief regulator of the HMO industry in California after Wilson unexpectedly named a health-care ombudsman, meeting a key demand of opponents.

The action was welcomed as a sign of flexibility on the governor’s part, prompting the Democratic-controlled committee to delay a confirmation vote on Commissioner of Corporations Keith Bishop until Thursday, the last day he can hold office without Senate approval.

The appointment of Joseph F. Parra came three days after a display of regulatory toughness by Bishop--namely, the release of a scathing report by his department alleging widespread abuses by Western Dental Services, one of the biggest dental HMOs in the state.

During the last month, patient advocacy groups, including Consumers for Quality Care and Health Access, led the fight to defeat Bishop, accusing him of demonstrating a pro-industry bias and failing to pursue alleged violations and consumer complaints.

Earlier Monday, Senate President Pro Tem Bill Lockyer (D-Hayward) predicted that the five-member committee would reject Bishop as corporations commissioner because he had been “‘inadequate in the oversight and regulation of HMOs.”

Lockyer, who chairs the Rules Committee, said denying confirmation to Bishop, who has held the $108,000 post for a year, “seems to be the only way we can ever get the governor’s attention.”

But four hours later, Lockyer recessed the Rules Committee hearing when a copy of the governor’s announcement of the appointment of the ombudsman was circulated among committee members. The document arrived shortly before Bishop’s confirmation was to be voted on.

Caught off guard, Lockyer said the vote would be delayed until Thursday while members examined the credentials of Parra, 32, a special assistant to Bishop. A West Covina attorney, he is former legislative director of the Hospital Council of Southern California. Parra does not need Senate approval.

Parra is now an aide to Bishop.

It remains to be seen whether choosing a Department of Corporations insider for the job of ombudsman, whose task is to investigate and resolve complaints about the department and HMOs, will satisfy lawmakers.

But Lockyer welcomed the appointment, noting that Wilson’s delay in filling the ombudsman post--vacant since it was created by legislation on Jan. 1--had been an issue with Democrats.

Asked whether the filing of the suit against Western Dental and the surprise appointment of an HMO ombudsman in the face of virtually certain rejection of Bishop was an act of political timing, Lockyer cracked, “Well, it could be just mere coincidence.

“But at least it’s a sign of movement on their part to do something about the deterioration of the quality of care for enrollees in health plans,” he said. “I’m not sure if Mr. Bishop were rejected, we’d get anybody better.”

Sean Walsh, a spokesman for Wilson, brushed aside the notion that the timing of the lawsuit and appointment of an ombudsman played any role in salvaging Bishop’s nomination.