A.M. Best Assigns "Qualified" Ratings To 13 Health Maintenance Organizations

Business Wire, Oct 12, 1999

OLDWICK, N.J.--(BUSINESS WIRE)--Oct. 12, 1999--

A.M. Best Co. today assigned "qualified" ratings to 13 health maintenance organizations.

The following HMOs were affected:

- SelectCare Health Plans, (Mich.)-- B q - OPTIMA Health Plan (Va.)-- C q - Providence Health Plan, (Ore.)-- B q - Physicians Health Plan, Inc (Mich.)-- B q - Priority Health (Mich.)-- B q - Omni Healthcare, Inc. (Calif.)-- B- q - National Med, Inc. (Calif.)-- B q - Harris Methodist Health Plan, (Texas)-- B- q - Tufts Associated HMO, Inc. (Mass.)-- B q - Virginia Chartered Health Plan-- C q - University Health Plans, Inc. (N.J.)-- C q - M-Care, Inc. (Mich.)-- C q - Paramount Health Care (Ohio)-- B q

Qualified ratings are based on a comprehensive review of the statutory filings of the HMO plans, but--unlike A.M. Best's interactive ratings--do not have the benefit of in-depth interaction with the rated companies.

A.M. Best began issuing qualified ratings on Aug. 23 in response to a growing number of requests by consultants, brokers, risk managers, employee-benefit managers and the public that A.M. Best increase its rating coverage of HMOs. These requests were driven largely by the rapid growth and changes occurring in the health-care market, combined with increasing national attention to the financial strength and stability of health-care organizations.

Best's Qualified Ratings currently are being confined of the HMO industry and will be assigned to HMOs that do not subscribe to A.M. Best's interactive rating process. 96 qualified ratings now have been assigned to HMOs, bringing A.M. Best's rating coverage of the HMO industry to over 265 plans that account for more than 85% of total HMO membership.

The assignment of a qualified rating is based on the quantitative analysis of the three key operating areas that comprise A.M. Best's traditional rating methodology: financial strength, operating performance and market profile. The procedure excludes, however, the qualitative portion of the interactive rating process, which includes the submission of supplemental financial information and interaction with management.

Best's Qualified Ratings are intended to assess the varying degrees of financial strength of HMOs--ranging from "Secure" to "Vulnerable"--and to identify plans that are potentially more susceptible to financial instability.

A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.