Las Cruces Legislator Wants More Oversight of State Insurance

July 5, 2006

A Las Cruces lawmaker is vowing to reintroduce legislation that would increase oversight of New Mexico’s Insurance Division.

Democratic Sen. Mary Kay Papen said a possible conflict of interest created by Eric Serna’s dual roles as state insurance superintendent and president of Con Alma Health Foundation figured prominently in her decision to push the legislation.

Serna retired as superintendent in May and has stepped down as president of Con Alma.

Papen’s legislation would allow people with health insurance from HMOs to appeal the state insurance superintendent’s decision on coverage disputes to the Public Regulation Commission.

Currently, people unhappy with the decision can appeal to state district court.

“We wanted some other avenue,” Papen told the Albuquerque Journal in a copyright story. “The superintendent is appointed. People should have the right to appeal to their elected officials.”

Papen said she still is upset over the case of Zelphoe Maloney, who had battled lupus for 12 years. Maloney’s doctor recommended a bone marrow transplant in 2004, but her HMO — Lovelace — wouldn’t pay for it.

Maloney appealed the decision to Serna’s office, and a three-member panel he appointed voted in favor of the insurance company. Serna upheld the recommendation.

Maloney, who received the transplant paid for by anonymous donors, sued Serna and Lovelace. The pending civil lawsuit charges Serna with having a conflict of interest in Maloney’s case because Con Alma, which he headed at the time, received large contributions from Lovelace.

“The public needs someplace to go when situations like this arise,” she said. “It was the clearest conflict of interest I’ve ever seen.”

Gov. Bill Richardson vetoed the original bill following the 2005 session because of technical problems, the governor’s office said.

Papen said she figures Richardson vetoed the bill to protect Serna’s turf because the two were close political allies.

Richardson spokesman Gilbert Gallegos said Serna has been a supporter of the governor for many years.

But he said, “Being a supporter does not mean there is an impact on policy.”

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