HMOs Could Pay Lower Fees to California Regulator Next Year
HMOs' annual levies to the Department of Managed Health Care will be lower next year because the department has issued substantial fines this year, the Sacramento Business Journal reports.
DMHC's annual budget comes from fees paid by health plans. Under current law, any fines that the department collects go directly to its budget, reducing the fees that insurers will owe the next year.
The department's budget in fiscal year 2007-2008 was $44.1 million, with about $3.7 million of that coming from fines the agency collected in FY 2006-2007. Anthem Blue Cross paid $3.9 million in fees last year, down from the $4.5 million it would have paid absent the fines collected by DMHC.
This year, DMHC stands to collect at least $13.65 million from its fines against five major health insurers for their rescission practices. The insurers are:
- Anthem Blue Cross;
- Blue Shield of California;
- Health Net;
- Kaiser Permanente; and
Lisa Page, a spokesperson for Gov. Arnold Schwarzenegger (R), said the governor backs a proposal that would reallocate fines paid by health plans to the Managed Risk Medical Insurance Board, a state entity that helps people with high-risk health conditions obtain health insurance coverage.
MRMIB had a wait list of 957 people on July 5 and faces a drop in funding.
Schwarzenegger administration officials are negotiating with two lawmakers to amend legislation to make the change (Robertson, Sacramento Business Journal, 7/28).