CJAC: Civil Justice Association of California

Trial Lawyer-Backed Health Care Regulation Bill Dead For The Year

By Kim Stone on 09/01/2011 @ 11:48 PM

Tags: Legal Climate, Legislature, Plaintiffs Lawyers

Yesterday Assemblyman Mike Feuer (D-Los Angeles) announced that he would not be moving forward with Assembly Bill 52 this year due to a lack of support in the State Senate. We are extremely pleased that legislators have recognized the major flaws of this proposal.

The bill, sponsored by Insurance Commissioner Dave Jones, would create additional regulations on health plans regarding the rates they may charge and contains several provisions that would encourage unnecessary litigation. The bill would allow any person to intervene in any proceeding to enforce any action of the government agencies charged with rate regulation and enforce provisions of the requirements created by the bill on behalf of him or herself or members of the general public. It would allow a lawyer to sue as an "intervener" on behalf of the general public whether they have a client who has been harmed or not.

These interveners would be able to collect attorney's fees, expert witness fees and costs - a recipe for abusive claims. Not surprisingly, the bill was supported by groups like Consumer Watchdog and the Consumer Attorneys of California. Consumer Watchdog currently takes in hundreds of thousands of dollars per year in intervener fees relating to other types of regulated insurance rates.

Every dollar spent in a dispute with a plaintiff's attorney is one less dollar that can go towards patient care. Creating an intervener process would add major costs to the healthcare system, and patients are the ones who would end up suffering. In recent weeks, the state Department of Finance, CalPERS, and the new California Health Benefit Exchange all expressed concerns over the added costs and complications of AB 52.

Californians are much better off with this bill being shelved for the year. We will continue to be vigilant in fighting proposals that will create a new cottage industry for lawyers at the expense of our healthcare system.

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