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Auditing Firm to Check Health of 80 HMOs in State

The financial solvency of 80 California health maintenance organizations will be examined by Arthur Young & Co. under a contract from the state Department of Corporations.

Under the agreement, the audits--required by state law--will be performed over a two-year period. The accounting firm will be paid about $784,000 for the first year.

“The bottom line here is that the state is entrusted to protect the public so that when a consumer purchases an HMO (policy) he or she knows the HMO will stand behind it,” said Jerry Bajada, a partner in Arthur Young’s health-care practice in Walnut Creek, Calif. In recent months, several HMOs have experienced financial difficulties.


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