Sutter Health Has HMO License Ready To Go

Sacramento Business Journal by Kathy Robertson –

May 10, 2013:

Sutter Health quietly received its HMO license from the California Department of Managed Health Care on April 5.

The Sacramento-based health system is focused on building the plan, with an eye toward providing coverage in the greater Sacramento and San Joaquin Valley region starting in January, Sutter spokesman Bill Gleeson said.

“We are thrilled to have reached this milestone. It represents another important step along the path toward operating a Sutter-sponsored health plan,” Gleeson said.

The goal is to get more control over how health care dollars are spent by owning the insurance piece as well as provider portion of the health care delivery system.

“It’s time to get back into the insurance business and the ability to talk directly to employers,” Sutter CEO Pat Fry said when the application was announced in September. Sutter became a majority partner of Omni Healthcare in 1994, but the health plan never took off as expected. Sutter sold it to Blue Cross at a steep discount in 1999.

Whether Sutter is vying for a spot in Covered California, the new state health benefit exchange for individuals and small employers, is unclear.

Although Sutter said last fall it hopes to begin sales inside and outside the exchange in 2014, Gleeson was coy this week about whether the company has filed an application to participate in the program. Bids are confidential, but Covered California is slated to announce the lineup on May 23.

Sutter could be eying a role in the self-insured market instead.

The Sutter Health Plan is the second locally based HMO. Western Health Advantage has been operating since 1997 — and has applied to participate in the exchange.

Source: John & Rusty Report via Choice Admin