CMA: Asks DOC To Hold HMOs Responsible For FPA Payments
The California Medical Association yesterday filed a petition with the state Department of Corporations asking it "to hold HMOs responsible for paying $60 million the physicians say they are owed" by the bankrupt FPA Medical Management Inc. "The law is clear: In return for receiving a DOC license to operate ... health plans must be ultimately responsible for paying physicians," said CMA CEO Jack Lewin. The DOC said yesterday it had not yet received the petition, but spokesperson Julie Stewart said, "We will, of course, carefully consider all of the arguments" (Young, Sacramento Bee, 11/19). The CMA's petition cites Section 1371 of the state Health & Safety Code, which it contends holds plans responsible for payment "even when they subcontract with ... physician practice management companies" (CMA release, 11/18). The HMOs contend they've already paid FPA for the doctors' services and aren't liable because the doctors "voluntarily contracted to work in the FPA network."
The San Diego Union-Tribune reports that the CMA says the DOC "initially appeared ready to compel payment but later backpedaled under political pressure from the HMOs." Steven Thompson, CMA vice president for government relations, said, "On July 15th, the department sent a letter to 20 HMOs saying they were legally liable for the bills. After meeting with the HMOs and after the HMOs met with the government, the law became fuzzy to the department." But the DOC's Stewart denied that the agency backpedaled, insisting "that the bankruptcy court had limited its ability to regulate FPA and health plans in this case." She said, "The bankruptcy court has all but tied our hands in taking actions against FPA and HMOs." She explained that the DOC wrote to HMOs asking them to comply with the law, but that the law "calls for plans to provide payment to ensure continuity of patient care." Stewart said her department "is in the process of reviewing documents provided by HMOs to dismantle compliance" with the law, and that that review should be complete by year's end (Rose, 11/19).