Why do HMOs leave a specific zip code?
Congress has authorized a very low increase for HMOs for the past several years. In the past year, HMOs received less than a 2.5% increase in annual rates of reimbursement. At the same time, HMOs have been required to meet new compliance plans, training requirements, more stringent marketing requirements and other similar regulatory requirements. Faced with low annual increases, increased costs to operate physician group practices and increased regulatory requirements, HMOs often find it financially unfeasible to continue to provider services in a specific zip code.
