1. What happens when an HMO becomes insolvent?
The Florida Office of Insurance Regulation monitors every HMO to help ensure that it remains solvent, which means the HMO has sufficient funds to pay its financial obligations. However, for a variety of reasons occasionally an HMO will lose money such that it no longer is able to do so. When that occurs, the HMO is insolvent, and it is placed in liquidation. Liquidation is similar to bankruptcy, and there must be a Court hearing to place an HMO in liquidation. When an HMO is liquidated, the Liquidator (also referred to as the Receiver), collects the assets of the company and verifies the liabilities such as claim payments and bills. The Liquidator then develops a plan to distribute the company’s assets according to law and submits the plan to the Court for approval.
2. What happens to a Medicare or Medicaid member of an insolvent HMO?
Persons who received Medicare coverage should contact CMS. Persons who received Medicaid coverage should contact the Agency for Health Care Administration. These agencies will work to ensure that Medicare and Medicaid members are able to access care and continue to have appropriate coverage.
3. What happens to commercial members of an insolvent HMO?
Initially, the HMOCAP will work with its third party administrator and the Department of Financial Services to ensure that these members are able to access care and continue to have appropriate coverage. Eventually, these members will have to switch to another HMO or health insurance coverage. The HMOCAP will work with the Department of Financial Services the Office of Insurance Regulation to help members of an insolvent HMO find appropriate coverage. Each HMO is different, and different coverage solutions may be necessary depending upon the insolvency.
4. Should a member of an HMO that is liquidated try to get a new policy from a different company?
You will need to obtain coverage with another HMO or other entity that provides health care coverage. The HMOCAP is only responsible for providing coverage for up to six months, until you have received $300,000 in covered benefits from the HMOCAP, or until you are able to move your coverage to another HMO or health insurance company.
5. What is the status of my claim?
The processing and payment of pending covered claims at the time of the insolvency will be made by the Department of Financial Services. Claims for services after the date of the HMO insolvency will be processed by the HMOCAP, and the HMOCAP will pay for services after the date of the insolvency.
6. Can I continue to see my doctor after an HMO insolvency? What if I have a scheduled appointment?
The Court order placing the HMO in receivership usually has a provision requiring that the HMO’s contracted providers (doctors, hospitals, and other health care professionals) remain available for six months after the date of the receivership (insolvency). Most providers will remain accessible, and they will be paid by the HMOCAP. Therefore, you should keep your scheduled appointments. If your doctor or other health care provider refuses to see you or honor your appointment, contact the HMOCAP through its administrator.
7. Will my benefits change under the HMOCAP?
No, the HMOCAP will continue providing the benefits written by the insolvent HMO as long as you are covered by the HMOCAP.
8. How long will I receive coverage through the HMOCAP?
By statute, the HMOCAP can continue to provide coverage for up to six months from the date of the insolvency. Generally, the HMOCAP works with one or more HMOs in the insolvent HMO’s service area to try to find replacement coverage as quickly as possible. When a replacement HMO assumes the coverage, the HMOCAP is no longer responsible.
9. Must I pay premiums if my HMO is insolvent?
The HMOCAP will continue your coverage for the period of time for which your premium was paid to the insolvent HMO. After that, you must pay premium to the HMOCAP for continued coverage. For example, if you paid premiums for the month of January, and your HMO was placed in receivership January 10, your coverage with the HMOCAP from January 11 through January 31 with no additional period. However, for coverage for February and beyond, you must pay monthly premium to the HMOCAP. Your premium will remain the same as the premium paid to the insolvent HMO for as long as you are covered by the HMOCAP.