Santa Rosa Pediatrics Medical Group Drops HMO Patients Over Low Reimbursement Rates
Citing low reimbursement rates and increasing costs, the Santa Rosa Pediatrics Medical Group will stop accepting patients covered by HMOs, the Santa Rosa Press-Democrat reports. The decision will affect about 3,000 of the group's 8,000. In letters to patients this week, Santa Rosa Pediatrics said that the group has suffered financially from the "failures of local medical groups" and "fears further losses" from low reimbursements from many insurers. Although a number of doctors' practices have dropped HMO patients in Sonoma County, Santa Rosa Pediatrics "is believed to be the largest so far to declare independence" from managed care, the Press-Democrat reports. Dr. Dorothy Coleman-Riese, a partner in the group, said that Santa Rosa Pediatrics receives only a "portion" of the monthly premium paid to HMOs and that costs for new technologies, utilities, prescription drugs and vaccines have "outpaced" reimbursement rates. She added that doctors in the practice lose $10 to $50 on routine office visits by HMO patients. In addition, income for the practice "has been flat" over the past three years, and physicians' "personal incomes" have dropped 5% annually during the same period. The Press-Democrat reports that patients hoping to retain their physicians may have to switch to PPOs, which have rates set as a percentage of Medicare and Medi-Cal reimbursements and are "usually more in line with service costs." According to HMO officials, the managed care companies have "enough contracts" with other pediatricians to switch patients to other doctors. However, physicians at Santa Rosa Pediatrics said that they hope HMOs will offer new contracts that pay doctors "on a fee-for-service basis rather than a set monthly amount" (Rose, Santa Rosa Press-Democrat, 7/27).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.