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Thursday, Dec 7, 2023


HMO Regulators Cracking Down

I was surprised and disappointed in an article in the June 2 edition of the Business Journal (“State HMO Regulators Talk Like Lions, Seen as Lambs”), especially since the facts don’t support the premise that the Department of Corporations has failed to take appropriate enforcement action against HMOs charged with violating the law. It is important that your readers know the facts and not simply the rhetoric.

I have made improving the handling of consumer complaints a top priority. Since January of this year, the department has issued 80 Cease and Desist Orders and fined health plans over $890,000 for failure to inform enrollees of their right to complain to the department’s “800” consumer complaint number about quality of care problems. After initiating these enforcement actions in January, calls to the number (1-800-400-0815) nearly doubled.

In addition, I have been particularly concerned about ensuring that every enrollee grievance is handled professionally and expeditiously. To that end, I have increased both legal and medical resources available for reviewing complaints.

Today, we have more than eight times the number of medical consultants available to review consumer complaints than we did when I became commissioner. As commissioner, I have cut the backlog of complaints pending over 60 days by more than 70 percent.

At the same time, I have stepped up enforcement of the Knox-Keene Act. In the last 10 months, I have signed 178 different enforcement actions against plans. In addition, I have collected more than $1 million in fines and penalties. Recently, I announced a civil action against a specialized plan seeking $3 million in penalties and the appointment of a receiver. Today, we have nearly three times the number of health care enforcement actions pending that we did a year ago.

There is still much more to be done. Over the last several months, we have been studying the resources available to the department’s Health Plan division. This study culminated in Gov. Wilson’s recent proposal to augment the department’s enforcement budget by 73 percent. The proposed augmentation will give the resources needed to provide enhanced oversight of managed care plans.



California Department of Corporations

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