April 1998 Bulletin

Hospitals eye modified HMO licenses

California hospital systems are showing great interest applying for modified-HMO licenses, says Modern Healthcare magazine.

Although many California hospitals and medical groups take on some financial risk for the care of health plan enrollees, the modified-HMO license allows recipients to accept global capitation, Unlike a full HMO-license it doesn’t allow them to underwrite lives or market themselves as an HMO. Six limited licenses have been granted thus far. About six hospitals systems are awaiting word on applications.

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