State to rule on physicians' HMO claims

The state's insurance commissioner will decide, probably in the next few days, whether HMOs are obligated to pay thousands of dollars in back claims to 474 doctors who participated in Sinai Care, an intermediary between the HMOs and the doctors which is going out of business.

Steven B. Larsen, the insurance commissioner, said yesterday that the key issue is whether the doctors should be considered "owners" or "shareholders" in Sinai Care, as opposed to outside contractors. If they are owners, the HMOs won't have to pay.


Sinai Care was set up in 1985 as a nonstock nonprofit corporation with all participating physicians as "members" of the corporation, said Jeff A. Nelson, chief executive officer of Sinai Care.

Larsen said he expected to rule soon. "We are discussing the legal issues around whether participating physicians are owners, partners or shareholders. If they are, there is no obligation for the HMO to pay them."


Larsen and Nelson said they could not put a dollar figure on the claims in dispute. Larsen said one physician who had appealed to his office for payment said he was owed $17,000. Nelson said the total amount in dispute represented "one or two months' claims," but said he did not have a dollar amount.

Sinai Care was formed by the doctors and Sinai Hospital to negotiate contracts with health maintenance organizations and other insurers. Generally, Sinai Care was paid a fixed amount per member per month, and was responsible for providing all physician and hospital care for about 13,000 HMO members. If it could have delivered the care for less than the fixed fee, it would have generated a surplus. But it didn't, and has decided to close.

Larsen said several other physician and hospital contracting groups have gone out of business, but he has never been called upon in those cases to determine whether the physicians were owners.

While some past claims are in dispute, Larsen said, the HMOs - FreeState Health Plan; Mid Atlantic Medical Services Inc. (operators of MD-IPA and Optimum Choice HMOs); WellNet; and Prudential Health Care, which is owned by Aetna U.S. Healthcare - have agreed to pay the doctors for any care delivered going forward, so patients should not experience any problems.

The claims in dispute are for care given by the doctors before last month, when the HMOs agreed to assume responsibility.