Question & AnswerQ&A (DOH ADMINISTRATIVE ORDER NO. 34)
The title is "Rules and Regulations on the Supervision of Health Maintenance Organizations."
The purpose is to ensure the general public receives quality services from HMOs and to promote the growth of these organizations.
An HMO is a juridical entity legally organized to provide or arrange for pre-agreed or designated health care services to enrolled members for a fixed prepaid fee for a specified period.
The three types are: Investor-based HMO (for profit), Community-based HMO (non-profit for a community), and Cooperative HMO (regulated under the Cooperative Code and Cooperative Development Authority).
The Department of Health, through the Office for Health Facilities Standards and Regulations (OHFSR), with consideration of powers granted to the Securities and Exchange Commission and the Cooperative Development Authority.
Yes, all HMOs whether investor-based, community-based, or cooperative must obtain a Clearance to Operate from the Department through the OHFSR.
Applicants must submit: a statement of capitalization certified by SEC or CDA; a listing of providers; copies of benefit packages, schedules of fees, standard contracts, brochures on procedures, differences in benefits or fees for Medicare members, and agreements with providers.
Investor-based HMOs must manage one tertiary hospital or affiliate with five tertiary hospitals and have an outpatient clinic with basic diagnostic facilities. Community-based or cooperative HMOs must have one affiliated general hospital and one affiliated outpatient clinic.
Application fee is P25,000 for stock corporations and P5,000 for non-stock or non-profit cooperatives or community-based HMOs. Renewal fee is P5,000 for stock corporations and P1,000 for non-stock or non-profit HMOs.
They must submit audited financial reports, operational reports with actuarially certified active member data and claims experience, certified amendments/changes to documents, and a statement of financial reserves certified by an external auditor.
Complaints against member HMOs are first referred to the Association's grievance machinery. For non-members, complaints go directly to the Department. The Department only assumes jurisdiction after the Association certifies no settlement within 30 days.
The Department may suspend, cancel, or revoke the Clearance to Operate. There is also a re-application fee for new clearance after revocation or cancellation.
Failure to submit on time may result in the cancellation of the HMO's Clearance to Operate.
Existing HMOs must apply for clearance within one year from the effectivity of these rules.