For More Information Financial Solvency Regulations Do Not Require Public Disclosure of Medical Groups’ Confidential Financial Information [Posted 08/18/05] CMA Comments on DMHC's Revised Financial Solvency Regs [Posted 10/28/04]

CMA has learned that the current issue of PacifiCare’s provider newsletter includes inaccuracies about the Department of Managed Health Care’s (DMHC) financial solvency reporting requirements (under SB 260). The article, “How to Comply with SB 260,” erroneously states that all physicians with health plan contracts must submit quarterly and annual financial statements and “corrective action plans” to DMHC and to each contracting health plan.

CMA reminds physicians that the state’s financial solvency regulations apply only to risk-bearing medical groups/IPAs. (A “risk-bearing organization” is one that receives capitated health plan payments and is responsible for paying and processing claims from physicians who care for the plan’s members.) The financial solvency standards and the reporting requirements do not apply to individual physicians.

The PacifiCare article also incorrectly implies that the regulations require risk-bearing organizations (RBOs) to submit financial statements to each health plan with which they are contracted. The regulations only require RBOs to submit financial statements to DMHC. Some health plan capitation contracts may require RBOs to regularly submit financial statements, but this is not something that is required by state law.

PacifiCare, per CMA’s request, will issue a correction in its next newsletter.

Contact: Aileen E. Wetzel, 916/444-5532 or awetzel@cmanet.org.