Knox-Keene Act licensure: Will you need it?

This summer, California’s DMHC is expected to release a proposed draft of its new regulations for public comment. The draft is likely to expose risk-bearing organizations (RBOs) and other organizations to expanded oversight and possible health plan licensing requirements.

More than 700 applications have been filed for temporary exemptions. Those organizations are awaiting the department’s final determination and review of their existing risk agreements.

Is your organization one of the 700? If so, this would be an excellent time to start creating and implementing a business plan to guide your next steps. In your planning process, consider the following:  

  • Are you bearing institutional risk now without a license?
  • If a license is required, is it worth the cost and effort to obtain it?
  • Can you effectively compete without a license?
  • Do you have the financial resources to obtain a license?
  • If you don’t want to obtain a license, can your existing agreements be renegotiated?
  • Is consolidation with other organizations an option?

Now’s a good time to have those internal discussions and get your plan in place. If a license is needed, or otherwise preferred, it will take time to work through the licensing process – and you’ll likely be in a queue with many others. Where in the queue will you be if you wait?

Mazars is happy to provide a free one-hour consultation to help you start the initial planning process. As your trusted advisor, the Mazars Healthcare Consulting Practice can offer the guidance needed to assess the new regulations' implications for your business model and find your best path forward – whether it’s seeking an available exemption, obtaining licensure, renegotiating contracts or consolidation.

Mazars has many years of experience working in managed care in California. Our team includes former DMHC and health plan employees with expertise in every aspect of the state’s health plan licensure and regulation, from financial modeling to quality to compliance matters. The team can also provide help with provider network contracting and adequacy capabilities.

Let’s talk. For more information contact our health professionals. 


Lori HackPrincipal
Russ Foster, Senior Advisor 
Kathy Neal, Managing Director
Kris Reuter, Director 

The information provided here is for general guidance only, and does not constitute the provision of tax advice, accounting services, investment advice, legal advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other competent advisers.

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