The state of Florida has taken over a Tampa HMO because it is insolvent and has no cash flow, regulators said Tuesday.
MD Medicare Choice served 16,000 Floridians on Medicare, including 1,700 in the Tampa Bay area, federal officials said. To avoid interruption of care, clients will be transferred today to a similar Medicare HMO run by Humana.
They can keep their primary doctors through the end of the year, even if those doctors are not included in Humana's network. Any hospital or nursing home care, chemotherapy or dialysis will also continue through the end of the year, when clients choose a new Medicare plan for 2009.
MD Medicare Choice officials could not be reached for comment.
Court documents filed Monday by the Department of Financial Services say the HMO lacked sufficient reserves to meet state standards and had a $10-million overdraft with its bank.
Late Monday, Leon County Circuit Judge P. Kevin Davey ordered the company into receivership and granted regulators the authority to liquidate any assets.
MDMC had already been under administrative supervision with the Florida Office of Insurance Regulation. Last week, its fiscal status worsened when $27-million in reserves invested in the Primary Fund of Reserve Management Corp. were frozen by the Securities and Exchange Commission.
In filings with the state, the company had contended that Medicare owed it $22-million, but Medicare denied that, court documents say.
Medicare HMOs are private insurance companies that receive fixed payments from the government for every person on Medicare they sign up. If they can treat patients efficiently, they can make money.
Several companies based in Florida have sprung up in recent years, creating networks of doctors and hospitals. Some have rapidly spread to other states.
Beneficiaries receiving care through MDMC should receive a letter today or Thursday from Medicare explaining their options, followed by a similar letter later from Humana, Medicare officials said.
Anyone who does not want to be served by Humana can switch to another Medicare HMO or switch to traditional fee-for-service Medicare for the rest of 2008.
People can select their 2009 Medicare coverage as of Nov. 15.
For more information and help with insurance questions, call Florida's SHINE program toll-free at 1-800-963-5337. For information about the receivership, call toll-free 1-800-882-3054 or visit www.myfloridacfo.com/Receiver/.
Stephen Nohlgren can be reached at firstname.lastname@example.org or (727) 893-8442.