Rules on HMOs out this year – IC

MANILA, Philippines - The Insurance Commission (IC) will issue the implementing rules and regulations (IRR) governing the country’s health maintenance organizations (HMOs).

An HMO is a prepaid healthcare service provider offering comprehensive coverage to its members through partnerships with hospitals and other health professionals.

IC deputy commissioner Ferdinand George A. Florendo said in a press briefing they have up to June this year to release the IRR and the accompanying memorandum circulars covering concerns such as minimum paid-up capital, actuarial requirements, investments, adoption of international accounting and risk-weighting standards.

The industry has 28 active players, made up of members of the Association of Health Maintenance Organizations of the Philippines (Ahmopi), the official trade association of HMOs in the Philippines, and non-members which are reportedly among the bigger industry players.

Florendo admitted consulting with a fractured industry faces difficulties especially in a regulatory transition.

“Nonetheless, we will meet with all the industry representatives to lay down the draft IRR and other circulars before the target period, he said.

Late last year, President Aquino signed Executive Order (EO) 192 transferring the regulatory functions of the HMO industry from the Department of Health to the IC.

The transfer was necessitated since HMOs are financial institutions rather than medical entities, as it promises financial assistance for medical services.

In 2010, the pre-need industry was transferred from the Securities and Exchange Commission (SEC) to the IC.

Similarly, the rationale behind the regulatory transfer was that the SEC did not have the financial or actuarial know-how to regulate a financial institution.

HMOs help reduce the financial burden on individuals seeking medical assistance or attention. But it requires an investment portion from the individual, although there are limitations to the type of medical services.

HMOs play an important role in the country’s social health insurance requirements, with the private sector playing a key role. These are made up of life and health insurance, and HMOs.