Lifeguard Patients See Disruption of Services Despite Assurances from DMHC

Although the Department of Managed Health Care has said its takeover of San Jose-based Lifeguard would be "invisible" to the not-for-profit HMO's members, the San Jose Mercury News reports there have been cases of doctors denying care to patients over fears that their costs will not be covered (Sevrens Lyons, San Jose Mercury News, 9/20). The DMHC last week assigned a conservator to assume control of Lifeguard because it has failed to meet state solvency requirements. The HMO's financial reserves fell below the state's requirement of $17 million to $18 million, according to DMHC spokesperson Steven Fisher. The HMO also has liabilities of more than twice its assets, causing concerns about its ability to pay creditors. In a statement on the company's Web site, Lifeguard said the state takeover will not "change the ability [of patients] to get the health care [they] need" (California Healthline, 9/17). The Mercury News today reports on anecdotal cases of doctors refusing to treat Lifeguard members, limiting the type of care they provide -- such as not providing vaccinations -- and using "creative billing practices." For example, Dr. Christopher Schmidt, a dermatologist in Los Gatos, required Lifeguard patients to sign a form stating they would be responsible for the cost of treatment if Lifeguard did not provide reimbursement within 30 days. After being notified he was violating his contract with Lifeguard, Schmidt has stopped the practice. Fisher said that physicians who contracted with Lifeguard are "legally obligated" to treat its members. "We can and will fine doctors who don't treat their patients or who bill patients improperly because they're on Lifeguard," he said. The Mercury News reports that the DMHC does not believe payments will be an issue for doctors. "The reason we appointed a conservator in the first place is we feared doctors wouldn't be paid," Fisher said (San Jose Mercury News, 9/20).