An HMO trade group is challenging states to regulate physician-hospital organizations that bear insurance risk directly from employers.
Forty-one states have laws that would subject PHOs in prepaid contracts with employers to the same regulations as HMOs, according to the Group Health Association of America.
But many regulators are unaware of PHO activities or are passive in their enforcement, the GHAA report said.
This comes at a time when many states are grappling with how to regulate PHOs.
State insurance commissioners want to protect consumers if a provider becomes insolvent. But some hospitals and medical groups argue that requiring them to have the same capital reserves as HMOs would stifle innovation and drive up costs.
A few states have cracked down. Ohio and Georgia, for instance, have ordered PHOs to cancel capitation contracts.
"Our position is, if you're contracting with an employer directly (in capitation), you have to be licensed as an HMO. Most states have some kind of regulation that is similar to that," said Kenney Shipley, bureau chief of the Florida Department of Insurance.
Shipley heads a National Association of Insurance Commissioners task force that will recommend model regulations for provider risk-sharing arrangements.
The task force has agreed that HMOs and providers should be subject to the same set of standards but has yet to decide whether solvency requirements should be adjusted for providers based on level of risk.
Regarding other PHO contracting activities, the GHAA found:
Forty states do not require licensing of PHOs that contract directly with self-insured employers on a fee-for-service basis.
Twenty-five states require licensing when the transfer or risk from an employer to a PHO is limited by an annual budget or cap.
Two states would require licensing of PHOs that accept prepaid capitation from a licensed HMO.
`IF YOU'RE CONTRACTING WITH AN EMPLOYER DIRECTLY, YOU HAVE TO BE LICENSED AS AN HMO.' -Kenney Shipley