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GEN: No Wonder Reimbursements Head SouthFrom: art fougner, md (evsono@pipeline.com)Tue Oct 31 07:09:04 2000
This in today's Reuters - Eleven HMOs fail financial stability test Last Updated: 2000-10-30 17:39:02 EDT (Reuters Health) NEW YORK (Reuters Health) - Eleven of the nation's HMOs failed to meet minimum capital levels recommended by the National Association of Insurance Commissioners (NAIC) for maintaining financial stability, according to a study released today by Weiss Ratings Inc. Weiss identified the 11 HMOs in an analysis of reports filed by 572 HMOs with their state insurance commissioners. The largest plans failing to meet the financial stability test were Bluegrass Family Health Inc., of Kentucky; Harris Methodist Texas Health Plan, of Texas; and Health New England Inc., of Massachusetts. Separately, Weiss gave its lowest "E" rating to 78 HMOs deemed "very weak" based on its own ratings criteria. That group of low performers included Harvard Pilgrim Health Care Inc., of Massachusetts, and Alliance Health Network, of Pennsylvania. An additional 162 plans considered "weak" were assigned "D" ratings. HMOs have the largest percentage of endangered institutions of all the financial industries reviewed by Palm Beach Gardens, Florida-based Weiss Ratings. "What's worrisome is that these financial pressures can sometimes impinge upon the quality of care afforded to consumers, or, in a failure, potentially leave them stranded," said Dr. Martin D. Weiss, the rating agency's chairman. NAIC recently adopted guidelines suggesting that HMOs maintain 70 cents in adjusted-capital-on-hand for each dollar of "target capital," or the amount considered necessary to cover the HMO's underwriting, business and investment risks. States should assume control of HMOs that fail to meet these guidelines, the NAIC recommended. So far, only 13 state legislatures are implementing some form of the NAIC model law, Weiss Ratings said. On a positive note, the 572 HMOs in the study experienced a 10% improvement in total capital, which reached $12.9 billion in the first quarter, on a 27% increase in net income, to $299 million. However, the study also showed that 252 HMOs, or 44% of the plans reviewed, reported losses in the first quarter. -New York Newsroom 212 603 3200 and why should this be a surprise? they make their money on enrollment. they keep their money by denial. they lose money when they actually have to pay claims. and check out those country club dues... art just my opinion, i could be wrong.
-- art fougner, md
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