Curbs Sought on HMO ‘Phantom Coverage’
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The Davis administration Wednesday moved to protect HMO members who unwittingly lose their medical coverage when an employer fails to pay premiums in a timely fashion.
Gov. Gray Davis directed the Department of Managed Health Care to develop regulations to prohibit “phantom coverage.” This occurs when an employer tries to save money by delaying HMO premium payments and the HMO suspends a patient’s coverage without notice.
The regulations would require HMOs to notify patients directly when that happens.
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