CMA Files Suit to Delay Public Disclosure of Medical Groups’ Financial Records
The California Medical Association has filed suit to prevent the Department of Managed Health Care from publicly releasing "detailed information" on doctor groups' finances, saying that such information could give health plans "too much power" in contract negotiations, the Los Angeles Times reports. The department is scheduled to release the records Oct. 1, as required by regulations finalized last week (Hayasaki, Los Angeles Times, 9/6). The financial disclosure regulations stem from a 1999 law sponsored by Sen. Jackie Speier (D-Hillsborough) that was "meant to determine the financial stability of medical groups and help them regain their footing." Groups are required to submit cash flow statements, profit and loss reports, debt load status, the number of Medi-Cal, Medicare or employer-sponsored beneficiaries they serve, explanation of the method of paying physicians and a list of contracting insurers (Ferraro, Sacramento Bee, 9/6). Groups have been filing quarterly and annual financial reports with DMHC since May, but the department has not yet released the information to the public (Wolfson, Orange County Register, 9/6). Medical groups say the new DMHC regulations go "beyond" the 1999 law because they require the release of a "broad range of confidential data." Astrid Meghrigan, a lawyer for CMA, said the 1999 law only requires a ranking of each medical group's financial stability to be submitted to an outside monitoring party once every three months.
But DMHC Director Daniel Zingale said that the law gives his department the authority to "determine what information is kept private and what is made public" (Sacramento Bee, 9/6). He added that the DMHC does not intend to release all of the financial records, but rather information that "would indicate whether a group was on the verge of going under" such as net worth and ratio of liability to assets (Colliver, San Francisco Chronicle, 9/6). He said, "These regulations will give patients some advance warning of medical groups' problems. Patients have been kept in the dark about finances and how finances affect their health care." But CMA spokesperson Peter Warren said that consumers will not be able to "digest or understand" the financial information, adding, "They perhaps may misinterpret it and run from medical groups that look like they are in debt or not doing well" (Los Angeles Times, 9/6). CMA President Dr. Frank Staggers added, "Releasing this financial information to health plans and others would give health plans an unfair advantage in negotiating with medical groups, causing their further demise and interruptions in patient care -- a complete contradiction of the law." Speier agreed, adding that DMHC's regulations "violate the intent of her legislation." She said, "When an insurer or HMO has full access to the financial statements of a medical group, it disadvantages the group's ability to negotiate a reasonable contract." The Sacramento Superior Court will hold a hearing on the CMA suit Sept. 26 (San Francisco Chronicle, 9/6).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.