Will I continue to get care from Maxicare? Can I be liable for medical bills incurred with Maxicare physicians? Will I lose any services? Can I switch to another health-care provider?
These and other questions are undoubtedly on the minds of many of the 1 million enrollees in Maxicare Health Plans--and possibly others enrolled in other health maintenance organizations--in the wake of Maxicare’s filing on Thursday for protection from creditors under federal bankruptcy laws.
Here are some answers to those and other questions:
Question: Will Maxicare continue to operate?
Answer: Yes, it’s business as usual for the most part. The company intends to continue to provide medical care to its members and to pay its health-care providers on a current basis for all services rendered after Thursday. Doctors and other providers interviewed Thursday by The Times said they will continue to offer services under their contractual obligations--at least for now.
Q: Can I be forced to pay doctors or hospitals for past bills not yet paid by Maxicare?
A: The Knox-Keene Health Care Service Plan Act of 1975 prohibits hospitals and doctors under contract to an HMO from billing patients, says Wayne Simon, acting head of the health-care service plan division of the State Department of Corporations, which regulates HMOs. The providers’ only recourse is to go to the HMO, Simon says.
Some states, however, don’t have such protections. Some are considering legislation to create such protections or create emergency insurance funds to limit the financial liability of enrollees in bankrupt HMOs, says Brian Mittler, a San Antonio doctor and president of Physicians Who Care, an organization of non-HMO doctors.
Q: What if I’m out of town and have an accident and am treated by a hospital or physician not under contract with Maxicare? Will Maxicare still reimburse me?
A: Yes, in those cases you will be billed but can then seek reimbursement from Maxicare. Maxicare is obligated to pay if the accident occurred after the bankruptcy filing.
But if the accident occured before the bankruptcy filing, you may face a delay in getting reimbursed. Under federal bankruptcy law, Maxicare cannot repay debts incurred before its filing until it works out a reorganization plan, which may take months. In that case you may be grouped with other Maxicare creditors whose pre-bankruptcy debts won’t be repaid immediately.
Q: Can my doctor or clinic leave Maxicare or refuse to treat me?
A: Some have threatened to stop accepting Maxicare patients if they are not paid. But Maxicare is obligated to pay them for all bills incurred after the filing.
And providers still under contract with the company are obligated to honor their contractual commitments, says Art R. Chenen, a Los Angeles attorney specializing in representing physicians.
Even if their contracts expire, or if they have escape clauses, they may be required to continue accepting Maxicare patients under certain contract provisions, Maxicare says.
Some physicians also have clauses allowing them to leave if Maxicare is in bankruptcy proceedings for more than four months, Chenen says. But bankruptcy courts have broad powers to prevent doctors from leaving HMOs in bankruptcy proceedings if the court deems such actions to be detrimental to the rehabilitation of the debtor, Chenen says.
“As a practical matter, bankruptcy courts do not let contracting parties just walk away,” Chenen says.
Q: What if I’m refused treatment anyway?
A: Maxicare officials urge you to call them at (213) 568-9000 and ask for the consumer affairs department. They will intervene on your behalf, said Maxicare spokeswoman Tobi Nyberg.
Q: Could I lose any basic services provided by Maxicare?
A: Maxicare vows that it will not drop any of its current commitments.
Q: Will I be able to switch to another HMO?
A: If you are part of an employer plan, you generally will have to wait until your employer gives you the opportunity to switch plans, typically once a year. But that opportunity may arise soon for some employers. Competing medical plans already have started marketing themselves to employers, seeking to capitalize on Maxicare’s misfortunes.
Also, your employer may have clauses allowing you to switch health plans if, for example, you believe you are getting unsatisfactory treatment. Ask your employer.
Q: Can I switch plans and still keep my doctor?
A: Your doctor may be under contract with more than one health maintenance organization. Ask him or her about your options.
Q: Why did Maxicare file for bankruptcy protection?
A: The company said the action was largely because it couldn’t pay its bills. The company, which has logged losses in eight straight quarters, has been saddled with debt, the result of an overly ambitious expansion drive. And it has been hit, along with the rest of the HMO business, with soaring medical costs.
Chapter 11 allows it breathing time to reorganize and postpone paying past debts while continuing to operate. It must pay bills incurred after Thursday while in bankruptcy protection, although that should be easier because it doesn’t have to pay past debts for a while.
Q: What could happen if Maxicare is sold?
A: That is a strong possibility. The firm said Thursday that it is trying to sell its California division. In that event, you will likely continue to receive the same treatment under the acquiring company, because it probably will be required to honor Maxicare’s existing obligations.
Q: What if Maxicare shuts down?
A: That possibility is less likely. But if it does occur, in all likelihood Maxicare will continue to cover you while attempting to find an alternative provider to pick up its enrollees.