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DMHC Extends Phase-In of General Licensure Regulation

For CEOs, CFOs, government relations executives

The Department of Managed Health Care (DMHC) announced in an All Plan Letter that it is extending the phase-in period of a regulation that would have required hospitals to obtain a health plan license for some arrangements involving risk sharing. Because of the COVID-19 pandemic, the phase-in period has been extended to Dec. 31.   

In 2017, DMHC proposed regulations that would have required providers, including hospitals, to obtain a health plan license, or at least pursue an exemption from licensure, for common financial arrangements that are not now subject to the Knox-Keene Act. These arrangements could include bundled payments, institutional risk pools, and integrated care systems.

CHA and other providers opposed extending DMHC’s jurisdiction to common hospital risk-sharing arrangements that are low risk to the stability of the health care system and are intended to improve efficiencies in the delivery of health care. DMHC’s 2019 All Plan Letter established a phase-in period through June 30, 2020, and expanded opportunities for obtaining an exemption.