CMA Objects to DMHC Attempt to Legitimize Illegal Discount Health Plans
[Posted 03/17/08]

The Department of Managed Health Care (DMHC) recently proposed regulations that would regulate “discount health plans” in California. CMA recently submitted comments on the proposed legitimization of these illegal referral services.

“CMA has serious reservations about the legitimacy of discount health plans in California,” wrote Armand Feliciano, CMA Associate Director of Medical and Regulatory Policy, in the comments. “Not only do we believe that they are illegal, but we also remain unconvinced that DMHC has jurisdiction to regulate them. Also, from a public policy perspective, we believe they bring little value to consumers, as the benefit they purport to provide is illusory at best.”

CMA emphasized the fact that the California Attorney General in 2001 concluded that the discount health plan business model was illegal under California law, which prohibits a person or business from referring or recommending a person to a health care provider for any form of medical care or treatment for a profit.

“There are no sufficient safeguards to protect consumers from discount health plans because the product is inherently deceptive,” wrote CMA. “We believe that discount health plans have too many structural deficiencies, and that those deficiencies are incurable.”
CMA believes that the appropriate course of action is for DMHC to enforce the law and to stop the deceptive and illegal marketing of these “health plans” in California.

Click here to read CMA's comments on this issue.

Contact: Armand Feliciano, 916/444-5532 or afeliciano@cmanet.org.