HMO REGULATION: Audit Blasts DOC
Despite a $6.5 million infusion of cash to regulate HMOs, the state Department of Corporations "is failing to protect consumers at the same time it is overcharging the HMOs" for assessments, according to a state audit released Monday. The Sacramento Bee reports that the audit concluded that many of the shortcomings were the result of "a shortage of adequate leadership," and recommended removing HMO regulation from DOC oversight. "Without the necessary focus, direction and vision provided by qualified leadership, the department cannot ensure that health plan enrollees receive the level of protection expected by law," state Auditor Kurt Sjoberg's report said. Gov. Gray Davis press secretary, Michael Bustamante, said the governor agrees with the audit's assessment about the DOC's inability to regulate HMOs. "While he hasn't decided where (HMO regulation) should be placed, he's certain it shouldn't be in the Department of Corporations," Bustamante said. Maria Contreras-Sweet, secretary of the Business, Transportation and Housing Agency, which oversees the DOC, said in a letter to Sjoberg "that the Davis administration was aware it had 'inherited an organization with key deficiencies in key management and operational areas.'"
Too Much, Too Late
The audit, which covered July 1997 through January 1998, found that the DOC overcharged each HMO for assessments by an average of $50,800 per year. In addition, as of last month, there was a backlog of 200 complaints about HMOs that had surpassed the state's two-month limit for resolving such grievances. Further, many key positions in the department have remained vacant, including the head of the medical survey division, which is overdue on surveys for 40 HMOs (Capps/Smith, 4/6)