St. Joseph's Provider Network, a central California affiliate of Catholic Healthcare West, has become the first hospital-based system in California to win a limited Knox-Keene license from state regulators.
The license, a limited version of the state's traditional HMO license, is required for providers that want to take on some of the risks of an insurance company through globally capitated contracts. The license gives St. Joseph's the ability to negotiate such capitated contracts for its five hospitals and 800 doctors, said Steve Guasco, the network's director of managed care. Approval came from the state Department of Corporations, which regulates HMOs and related health plans in California.
The network includes doctors and hospitals affiliated with Stockton, Calif.-based St. Joseph's Regional Health System, owned by San Francisco-based CHW. The limited Knox-Keene license allows it to control capitated contracts between providers in four central California counties-Calaveras, Merced, San Joaquin and Stanislaus. However, Guasco said the network doesn't plan to activate the license in Calaveras County immediately.
Once existing contracts with health plans are rewritten, St. Joseph's will manage provider contracts and perform credentialing and quality audits. HMOs will continue to be responsible for enrollment, benefit design, sales and marketing, and regulatory matters.
Only six other organizations-including physician practice management companies FPA Medical Management, San Diego, and Birmingham, Ala.-based MedPartners, as well as San Francisco-based Brown and Toland Medical Group-have been awarded limited Knox-Keene licenses, said Julie Stewart, a spokeswoman for the Department of Corporations.
About 15 applications are pending, Stewart said. Other applicants include Cedars-Sinai Medical Center in Los Angeles, Sutter Health-affiliated East Bay Medical Network in Emeryville, Calif., and Scripps Clinic Health Plan Services, La Jolla, Calif.