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News Release: 99-05
GRAY DAVIS, Governor
Date: 03/05/99
WILLIAM KENEFICK, Acting Commissioner
Department of Corporations Issues Cease and Desist Order Against MedPartners Provider Network, Inc.
Sacramento, March 5, 1999 — Today, the Department of Corporations issued a Cease and Desist Order against MedPartners Provider Network, Inc., a California health care service plan.
Under the Knox-Keene Health Care Service Plan Act of 1975, the Department is charged with determining the financial stability of health plans and, in accordance with this authority, conducted a routine financial examination of MedPartners. Based upon the findings of the financial examination, and MedPartners’ responses to the findings, the Department concluded that MedPartners had not sufficiently demonstrated a fiscally sound operation.
By issuing the Order, the Department is taking steps to ensure that MedPartners can continue to meet its obligations to provide health care services under the Knox-Keene Act. The Order prohibits MedPartners from transferring funds to its parent or affiliates, except to pay capitation and compensation to contracting and non-contracting providers. The Order will remain in effect until such time as the Department finds that the transfer of funds (1) will not impair MedPartners’ obligations under the Knox-Keene Act to provide timely and accessible health care services to enrollees and (2) will not result in the failure to pay providers for health care services rendered to enrollees.
In a separate action, the Department has scheduled a non-routine financial examination to determine MedPartners’ ability to meets its obligations under the Knox-Keene Act.
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Editor's Note:
As of July 1, 2000 the Health Plan Program and the administration of the Knox-Keene Health Care Service Plan Act of 1975, as amended by the 1999 HMO reform legislation, has transferred to the new Department of Managed Health Care (www.dmhc.ca.gov).