pmpm® Consulting Group Inc. has been selected as an SB260 Reviewer

pmpm® Consulting Group Inc. has been selected as an External Party Reviewer by the California Department of Managed Health Care (DMHC) to conduct the Corrective Action Plan (CAP) oversight activities for risk-bearing organizations (RBOs) found to be deficient with the grading criteria established under Senate Bill 260.

In recent years the California healthcare environment has been characterized by a disturbing number of physician group insolvencies and bankruptcies. The effects of these financial performance issues have been disruption of patient care, increased cost of health care and loss of consumer confidence in the healthcare system.

In September 1999, California Senate Bill 260 was signed into law. The legislation established the Financial Solvency Standards Board (FSSB), required financial reporting by RBOs, and required the establishment of a process for reviewing or grading RBOs based on specified criteria. DMHC is collecting financial data from RBOs on a quarterly and annual basis, and performing an initial review, analysis, and grading against the performance criteria. As an External Party Reviewer, pmpm® is providing the oversight of the development of corrective action plans (CAPs) submitted by RBOs found to be non-compliant with the specified grading criteria.

pmpm® works directly with the RBO, the health plans, and DMHC in evaluating the feasibility of a CAP. Our consultants test the assumptions that lie behind the RBO’s financial projections, such as the historical trends of membership, revenue, and medical/administrative expense, requesting additional documentation if needed. We communicate with and consider the positions of the affected health plans relevant to an RBO’s CAP. A detailed analysis of each key element of the CAP is prepared for DMHC. This analysis delineates how the CAP and the RBO’s supporting documentation satisfies or does not satisfy the necessary attributes of an acceptable CAP, and sets forth the conclusions drawn from the review to substantiate pmpm®‘s recommendation that DMHC accept or reject the CAP.