DMHC Releases ‘Abbreviated’ Medical Group Financial Information
Only 44% of the more than 200 medical groups in California met all of the state's requirements for fiscal solvency in the first quarter this year, according to financial information released yesterday by the Department of Managed Health Care, the San Francisco Chronicle reports. The information does not provide "hard numbers," but simply states whether specific groups met or did not meet the standards. Those standards included whether a group's "working capital" exceeded its claims; whether "tangible" assets were greater than "tangible" liabilities; whether groups have a method to track unpaid claims; and whether claims were paid in a "timely manner" -- within 45 days -- 95% of the time. The agency decided to require medical groups to submit financial information for the first time this year after several groups filed for bankruptcy, "disrupt[ing]" patient care. DMHC Director Daniel Zingale said there was "no clear pattern" to indicate what groups had more success. He said, "Some are doing well and some are not. But now we have a clear picture. There's clearly a serious problem of too large of a percentage not meeting the criteria."
The California Medical Association has "vehemently opposed" the release of the information, and last week won an injunction that temporarily prohibited "detailed" financial data from being made public (Colliver, San Francisco Chronicle, 10/5). While a hearing is set for Nov. 30 to determine if such information may be released, the data released yesterday was "abbreviated" and was not covered by the injunction. The association has argued that "releasing particulars" about the financial situation of medical groups would provide health plans with an "unfair advantage" in negotiating contracts. In a statement released yesterday, the CMA said, "It is only appropriate for the department to release this data as part of a procedure that ensures continuity of patient care, especially one including developing a program that helps provide stability for financially [troubled] medical groups" (Fong, San Diego Union-Tribune, 10/5). Doctors have cited low reimbursements from health plans "for much of their financial woes." CMA CEO Dr. Jack Lewin said, "Some people will misinterpret the information. They will not understand medical groups have never been insurance companies and have never been designed to amass reserves" (San Francisco Chronicle). The information is available at http://www.hmohelp.ca.gov/righttoknow.asp.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.