A 7-month-old state investigation of seven managed-care plans in Florida has apparently been dropped, with regulators concluding that the companies didn't violate any laws by nearly simultaneously exiting Medicare HMO markets in the state last year.
Separate probes by the Florida Department of Insurance and the state attorney general's office produced no evidence of wrongdoing, said Trisha Spillan, a spokeswoman for the attorney general's office.
The insurance department has ended its part of the investigation, but the attorney general's office is still "wrapping up some loose ends" and has not formally ended its probe, said insurance department spokeswoman Nina Bottcher.
The investigations stemmed from the plans' announcements last October that they would exit the Medicare-risk business in some Florida markets (Oct. 19, 1998, p. 2).
Combined, the seven plans withdrew from 25 Florida counties at year-end, forcing more than 53,000 enrollees to find other coverage. In nine counties, primarily rural areas where more than 18,000 of the affected enrollees lived, no other Medicare HMO option was available.
The health plans insisted they had done nothing wrong and had simply responded to a HCFA-imposed deadline for informing the federal agency of their plans to offer Medicare-risk coverage in 1999.
Nationally, nearly 100 managed-care plans pulled out of Medicare-risk markets last year, citing inadequate reimbursement rates and rising medical costs.
"We had no doubt that (the investigation would prove fruitless)," said Valerie Rubin, a spokeswoman for Miami-based AvMed Health Plan, a targeted company.
The managed-care industry, led by the Health Insurance Association of America, contended that the Florida probes were inspired in large part by the re-election campaigns of state Attorney General Bob Butterworth and Insurance Commissioner Bill Nelson.
Democrats Butterworth and Nelson were in the midst of successful re-election campaigns in mid-October 1998 when the investigations were announced amid great fanfare. In contrast, no press releases announced the investigations' conclusion. Nelson has since established an exploratory committee for a possible U.S. Senate run.
Some health plans served with subpoenas were Cigna HealthCare, Humana, Prudential HealthCare and United HealthGroup. Regulators demanded risk-contracting and marketing records and said they would focus on whether the competing plans colluded to make their pullout decisions, in violation of state or federal antitrust laws.
"We are putting HMOs and everyone else on notice that we will not tolerate those who take unfair advantage of some of Florida's most vulnerable citizens," Butterworth said at the time.