Health Maintenance Organizations

Kaiser Permanente has agreed to a first-of-its-kind settlement aimed at ending patient dumping that requires the HMO to establish new discharge rules, provide more training for employees and allow a well-known former U.S. attorney to monitor its progress, officials announced Tuesday.

The state's top HMO regulator said Monday that health plans should be required to get outside review before dropping a policyholder, a dramatic step up in oversight that probably would face stiff challenges from the industry. Cindy Ehnes, director of the Department of Managed Health Care, said she hadn't yet developed details on how such a requirement would work.

Kaiser Foundation Health Plan Inc. said Tuesday that it was working with state regulators to develop standards to protect its members from unfair cancellations of health insurance, a move that the state's largest HMO hopes could lead to industrywide reforms. Kaiser's move comes as it was being fined $100,000 by state regulators for dropping a policyholder it accused of concealing his epilepsy when he applied for coverage, even though the condition had never been diagnosed by a physician.

California consumers continue to pay lower premiums with health maintenance organizations than with other forms of health insurance. But the state's HMOs may be losing their ability to contain prices and are no longer much cheaper than their counterparts elsewhere in the country, according to a report released Wednesday.

Under mounting pressure from consumer advocates, the state's HMO regulator plans to introduce a rule that would make it harder for health insurers to drop policyholders after they get sick. Cindy Ehnes, director of the Department of Managed Health Care, is expected to propose that insurers be required to maintain coverage unless they show an individual lied about his or her medical condition to obtain it.

In the first sanction of its kind, California's top HMO regulator fined Blue Cross on Thursday for illegally canceling a woman's medical policy because she did not disclose corrective surgery she had 23 years earlier. The $200,000 fine might not be the last resulting from the state's investigation of allegations that insurers dump sick policyholders to avoid paying claims, said Cindy Ehnes, director of the Department of Managed Health Care.

Rate increases for health maintenance organizations are set to decline in 2007 for the fourth consecutive year, but still create challenges for employers, according to a report released Tuesday. Preliminary figures indicate that HMO rates will jump 11.7% next year, down from initial estimates of 12.4% in 2006 and 13.7% in 2005, said Hewitt Associates, a consulting firm based in Lincolnshire, Ill.

WellPoint Inc., the nation's largest health insurer that covers about 1 in 10 people in the U.S., fared the worst among its peers in a survey gauging how quickly HMOs process and pay claims to doctors. The analysis, released Thursday, examined 5 million line items in claims submitted by 7,000 doctors to health insurance companies using a computer-based payment system sold by Athenahealth Inc., which compiled the study. Indianapolis-based WellPoint, which covers 34 million patients in the U.S.

About 1 million Californians with limited English proficiency could receive lower-quality healthcare from their HMOs because of language barriers, according to a UCLA study released this week. Of the 9.4 million adults enrolled in HMOs in 2003, the study found that about 10% of clients -- most commonly native speakers of Spanish, Chinese, Vietnamese and Korean -- reported not being able to speak English well or at all.

A nonprofit health plan that has served the poor and elderly of Southern California for more than three decades will be sold to rescue its parent foundation from bankruptcy. Watts Health Foundation Inc. has decided to sell its UHP Healthcare HMO for $30 million to a for-profit managed health company, foundation officials said Tuesday. The plan's 80,000 members would keep their coverage and should see little change, they said.