Denticare Begins Talks With State Over HMO, Indemnity Insurance

Officials of National Health Care Systems Inc., responding to the state’s forbidding its Denticare of California subsidiary from selling indemnity medical insurance or enrolling new members in its health maintenance organization, said this week’s state action is unjustified and may be unenforceable.

However, the company added in a prepared statement, “for the benefit of the company’s enrollees and to avoid the expense and uncertainty of litigation,” Denticare on Thursday began negotiations with the state Department of Corporations, the state agency that oversees HMOs.

On Wednesday, the department accused the company of illegally marketing indemnity insurance without authorization from the state Department of Insurance.

Since mid-1988, Denticare has been offering employers what it calls a “dual-choice option”--both an HMO and traditional indemnity medical insurance. But the company said Friday that only about 9,000 of its 240,000 members are enrolled in plans that have indemnity coverage.