Citing Losses, Florida Closes Troubled Plan

Florida regulators last month ended a nearly 1.5 year-long effort to save Health Plans of America from its financial woes, and shut down the Maitland-based HMO. The plan was partly a victim of its success, at least in selling itself. The state blamed the plan’s collapse mainly on explosive enrollment growth, from 3,000 to more than 30,000 in less than two years.

The Department of Insurance placed the plan in receivership after the company missed a deadline to improve its cash reserves by $2.5 million. HPA had been required to make monthly financial reports to the state since May 1997, when its reserves fell below state-mandated minimums. Other problems plagued the plan, including rising medical-loss ratios and the loss of a state Medicaid contract. The state pulled the contract and fired two state workers after it found out the plan had paid thousands of dollars to the workers to help prepare the HMO’s Medicaid application.

Physicians who worked with the plan doubt they’ll get paid for services they provided to its members. The state has assigned nearly three fourths of the plan’s members to Well Care of Tampa.

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