California begins licensing discount medical plans

The Dept. of Managed Health Care plans to issue regulations specifically for these programs.

By Emily Berry — Posted July 15, 2009

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

California's HMO regulator has expanded to include oversight of medical discount programs, licensing the first such plan in June.

Medical discount programs offer consumers and businesses a list of doctors, hospitals and other health care entities that have purportedly agreed to offer care at a reduced price. In some cases, physicians have complained they did not agree to offer such discounts to the companies offering the programs, and patients have complained that the programs represented themselves as insurance.

The state's Dept. of Managed Health Care has received more than 925 complaints related to medical discount plans in the last five years, according to spokeswoman Lynne Randolph.

"Most of them were about a lack of a grievance process for an enrollee, or lack of a clear network," she said. There were cases "where an enrollee was promised even down to certain providers, and then they go to the office and the provider has never heard of the entity. Then there were a lot where the discount itself was nonexistent, and then others about just being able to get out of the plan."

And frequently, she added, there were complaints from people who thought they had purchased insurance, and were told their plan was "like a PPO," though it was not.

An administrative law judge ruled that the DMHC does indeed have jurisdiction over medical discount plans. Randolph said the agency will issue a full set of rules specifically for the programs.

"At any given time, we've been looking at about 150 of these programs," she said.

The first license went to a Houston-based company, Family Care, which, according to its Web site, offers discount programs in every state and in Puerto Rico. The DMHC also has issued cease-and-desist orders to some programs.

Many other states license or register medical discount plans, but the rigor of regulations vary by state. A few have adopted regulations recently. Washington state lawmakers in April adopted a new set of regulations for medical discount plans that takes effect July 26; New Hampshire in 2008 passed new rules for the medical discount plans that took effect in January.

In Indiana, medical discount programs in 2006 had to begin registering with the state's Dept. of Insurance and limit what they could claim in their advertising. They also had to label their program cards with a disclaimer stating, "This is not insurance."

Back to top



Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story

Read story


American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story

Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story

Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story

Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story

Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story

Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story

Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story

  • Stay informed
  • Twitter
  • Facebook
  • RSS
  • LinkedIn