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The Monterey County Herald

Cypress expands Peninsula's HMO options

Two national insurance companies have agreed to offer HMO plans in Monterey county, joining a spirited race to provide managed-care choices to residents and businesses.

Cypress Medical Network, a Monterey Peninsula-based medical management firm, negotiated health maintenance organization contracts with the two insurance companies - New York Life and Anthem Health.

Cypress represents the interests of 160 Peninsula doctors and Community Hospital of the Monterey Peninsula. The doctors are all shareholders in Cypress and make up almost 90 percent of CHOMP's medical staff.

The contracts are expected to be signed Tuesday night after approval from next few months, the insurance companies will start looking for members by marketing the two new HMOs to area employers.

Monterey County already has five HMO plans covering 48,000 residents. They have been administered for the last two years by financially troubled Mission IPA.

"The best thing in the world that could happen is for this county to have another medical group," said Susan Charkin, a Marina-based health care consultant. "Not only because of the financial condition of Mission, but because members can have more choice about HMOs and not be locked into one medical group."

Formed 18 months ago, Cypress Medical Network provides services to Monterey Peninsula doctors such as bulk purchases of medical supplies, liability insurance, and software for billing, collections and scheduling. Until now, the network was not responsible for health insurance contracts. Although up to 70 percent of residents in many California urban communities are covered by HMOs, the percentage of Monterey County residents is much lower - about 13 percent.

After predicting a $2.3 million budget deficit by the end of the year, Mission last month vowed to reduce costs by renegotiating contracts with its doctors. Mission reduced payments to primary-care physicians and restructured payments to specialists.

Mission has also vowed to spend less on patient care by reducing hospital stays for some patients and eliminating ``unnecessary" tests and procedures. Mission officials say they will spend no more in payments to doctors than they receive in payments from insurance companies.


Healthcents is a full-service consulting group that specializes in provider contracting and reimbursement analysis. Susan Charkin can be reached at Healthcents, (800) 497-4970; fax (831) 455-2695; email: charkin@healthcents.com