PacifiCare Settles Suit on Records Access

PacifiCare Health Systems Inc., settling a bitter legal dispute with the state, agreed Friday to allow regulators “reasonable access” to all health plan records, including patients’ medical records.

The settlement ends the controversial tug of war in Orange County Superior Court over the state’s power to regulate health plans. With the definition of “reasonable access” left open for future legal interpretation, both sides claimed victory.

Some critics, however, were skeptical of the settlement’s timing. They questioned whether it was part of an attempt by Gov. Pete Wilson’s administration to cast itself as a tough regulator after the governor announced that he opposes the two ballot initiatives--Propositions 214 and 216--that would tighten HMO regulation.

Friday’s agreement, signed by Judge John M. Watson, echoed a temporary ruling he made in support of the state’s position last year that said confidentiality of patients’ medical records “must give way” to the state’s responsibility to protect health-care consumers.

“This is what we wanted. We believed we had access to medical records necessary to enforce our regulatory oversight, but this settled it,” said Damian Jones, a spokesman for the state Department of Corporations, which regulates HMOs.

However, a PacifiCare spokesman described the decision as “win-win.” He said the agency began by requesting access to a limitless number of records, but the judge later ordered the request cut to about 300 cases that involved complaints.

The lawsuit stemmed from state investigators’ demand last year that the Cypress-based HMO hand over patient records and doctors’ critiques of treatment decisions as part of an investigation into complaints of inadequate care. PacifiCare resisted the sweeping request.

The Department of Corporations reported that since January 1994, it has received more than 11,000 complaints by members of PacifiCare and its Secure Horizons plan for senior citizens.

The company, which has more than 1 million members, sued, citing confidentiality of medical records and the broad scope of the agency’s requests.

This is the second major dispute with a large HMO that the agency has trumpeted in the week before the elections.

On Tuesday, it vowed to enforce a $500,000 civil fine against FHP International Corp. involving the limiting of care to a 9-year-old girl with a kidney tumor. The following day, the Fountain Valley-based HMO, which had protested the fine, agreed to pay.

The company admitted no wrongdoing.

Jones, the state agency spokesman, said there is no relationship between last week’s settlements and next week’s elections.

However, Jeanne Finberg, a senior lawyer with the Consumers Union advocacy group, said she believes both settlements were timed to appeal to voters, but that at least in the case of PacifiCare, both sides did “the right thing” for consumers in settling.