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Vacco backs anti-HMO bill - MAY 1998

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Joining trial lawyers, physicians, and assorted "activist" groups, Attorney General Dennis C. Vacco has spoken out in support of two ideas that could drive up health-care costs borne by business.

Vacco proposed legislation to formally allow independent reviews of denials of health care coverage by HMOs and other managed-care insurers. He also urged a review of laws that limit HMO liability for coverage denials.

Vacco proposed a three-step process for reviewing coverage denials. First, consumers would appeal to their HMO. If they were dissatisfied with the result, they would ask the state Health Commissioner to decide if external review is warranted.

If external review were deemed appropriate, a binding review would be conducted by an independent organization selected by the Health Commissioner.

The Business Council opposes creation of a new review process and expansion of HMO liability because these proposals would drive up health care costs, said Elliott A. Shaw.

"High costs are the main reason cited by the uninsured for not having insurance," he said. "These proposals would increase costs and, thus, add more New Yorkers to the ranks of the uninsured."

Shaw cited a report released May 5 by the Public Policy Institute, the research affiliate of The Business Council. This report, Managing With Care, documents the cost-containment value of HMOs and the dangers of new health mandates.

May 28, 1998