DMHC Takes Action Against L.A. Clinic

The Department of Managed Health Care has issued a rare cease and desist order involving a Los Angeles-area medical provider for failing to provide timely financial reporting and corrective actions.

Serra Community Medical Clinic operates two locations in Sun Valley. It is a risk-bearing organization, allowing it to contract directly with managed care health plans and receive capitated payments for care. It cares for more than 10,500 patients who are enrolled in seven different plans.

According to the Aug. 8 order, Serra Community failed to file its first quarter financial survey by the May 15 deadline. It has also failed to file a corrective action plan for financial deficiencies reported in its annual filing for 2012 with the DMHC, which itself was filed weeks late.

DMHC records indicated Serra Community fell short of requirements for working capital and tangible net equity, indicating it might not remain solvent.

Under the order, the seven health plans – Health Net, L.A. Care Health Plan, Blue Shield of California, Molina Healthcare, Easy Choice Health Plan, Care 1st Health Plan and UnitedHealth of California – are not to assign any additional members to Serra Community unless the agency approves them. The insurers are to also submit by early October a list of actions they have taken to ensure the financial soundness of the arrangements they have with Serra.