Mid Atlantic Medical Services Inc. shares fell 8.7 percent yesterday after the Rockville-based operator of health maintenance organizations was denied accreditation by a national watchdog group.
The National Committee on Quality Assurance, or NCQA, examines an HMO's efforts to measure and track the quality of medical care. "They did not meet the NCQA quality standards for monitoring and evaluating the quality of care provided to members," said Marybeth Krovisky, a vice president for the group. "Additionally, there were issues around physician credentialing."
Mid Atlantic Medical's shares fell $2, to close at $21. New York Stock Exchange composite volume reached 2.58 million shares, more than five times the stock's three-month average daily volume of 506,300.
NCQA, an independent Washington-based organization, doesn't disclose the specific results of its reviews or why a plan receives a particular rating. It examines issues such as the coordination of doctors and hospitals, the amount of time it takes members to access care and a plan's efforts to demonstrate quality improvements, Ms. Krovisky said. It also looks at the way a plan screens doctors for malpractice and fraud, along with efforts to track physician performance.
Michael Savage, a Mid Atlantic Medical spokesman, said the NCQA wasn't satisfied with the plan's efforts to verify physicians' academic backgrounds, among other things. The group also noted that the company's committee that oversees the quality of the plan didn't meet frequently enough, he said. He refused to provide further details, but said the problems were "administrative" in nature.
"This has no affect on our ability to do business in any of the states in which we are licensed, and I am confident that this will have no impact on either our earnings or membership growth," said George T. Jochum, chairman and chief executive of Mid Atlantic Medical.
The NCQA has reviewed 172 of the nation's 574 HMOs, assigning fully accredited ratings to 34 percent, one-year accreditation to 40 percent, provisional accreditation to 12 percent and denying accreditation to 14 percent.
At least one analyst said he didn't think the NCQA rating will have an effect on the company's profits. "Not getting it on the first go-round is not really an issue, given the nature of the shortcomings," said Robert Mains, an analyst who rates the stock "buy" at First Albany Corp.
Mid Atlantic Medical's managed-care plans cover 1.24 million members in Maryland, Virginia and Washington.