The Insurance Commission (IC) said it will push for a new law to further regulate health maintenance organizations (HMO) operating in the country.
Insurance Commissioner Dennis B. Funa said the IC is planning to submit to Congress a draft bill this year, which will further help set the guidelines for HMOs operating in the country. The proposed bill will include regulations on capitalization and how to settle disputes among stakeholders of the organization, among others.
“Right now we only have one rule, and that is the EO [executive order] issued by [former] president [Benigno] S. Aquino III. Other than that, it’s the circular letter [CL] issued by the IC. But, hopefully, within this year we will have a draft bill,” Funa told financial reporters.
In 2015 the Aquino administration issued EO 192, which transfers the jurisdiction of the HMO industry from the Department of Health (DOH) to the IC in order to supervise the establishment, operations and financial activities of the industry players.
Funa said an HMO law will enable the IC to address issues, such as to which level of capitalization to require from HMO companies, how to settle disputes between the company and its members if any, and will eliminate overlapping policies governing HMOs.
“There are a number of issues to be tackled. Capitalization, for example. How much capital should we really require for HMOs, can we do that just by issuing an office order or CL. So, to have it clarified by legislation would of course be the best course that we can take,” he said.
Funa added that the IC can write to the Senate President, as well as the Speaker of the House to expedite the process of finding a sponsor for its proposed HMO bill.
“I am confident that there is really a need for this law, so finding a sponsor [for the bill], I don’t think it will be a big problem,” he said.
In a separate interview, Maxicare President and CEO Christian S. Argos said that HMO companies are supportive of the efforts of the IC in terms of creating a law to further streamline and regulate the industry.
“I think that’s a very good thing, and the other positive thing about being under the IC is now we have a formal venue to engage lawmakers [or] the government, to form policy [and] to give our inputs on that law,” Argos said.
In July 2016 the IC issued Circular Letter 2016-41 requiring a minimum paid-up capital of P100 million for new HMOs planning to operate in the country, which will strengthen the industry through the provision of ample coverage to manage risks.
The circular only applies to new HMOs who want to do business in the country, as existing domestic HMOs were allowed to retain their P10-million capital requirement.