PALM BEACH GARDENS, Fla.-Some HMOs are not spending as much as they should on patient medical care, which could jeopardize participants' health, an insurance rating agency warns.

"Too many managers in the HMO industry have their hands in the cookie jar," contends Martin D. Weiss, president of Weiss Ratings Inc., a Palm Beach Gardens, Fla.-based life and health insurance rating agency.

"They pay out too much in salaries, bonuses and other administrative expenses-but not enough to take care of their members' health. Companies have to strike a balance between providing quality care and being profitable," Mr. Weiss suggested.

A spokesman for the Washington-based Group Health Assn. of America, the leading HMO trade group, bristled at Mr. Weiss' assertion.

The Weiss ratings, which focus on the financial solvency of HMOs, do not provide any indicators of the quality of care, he pointed out. Weiss draws its information from annual NAIC filings and surveys of HMOs. The report covers 1994, the most recent year for which data is available.

"Martin Weiss says that HMOs do not do enough to take care of their members' health. That is totally incorrect and unacceptable," the GHAA spokesman said. "Study after study has shown that the quality of medical care in HMOs is as high or higher in many cases than in fee-for-service medicine."

According to its most recent tally of medical loss ratios, Weiss singled out CaliforniaCare Health Plan as an example of a large network/independent practice association HMO that spends less than 75 cents on medical care for every dollar of premium it collects from its 2 million members-far below the national IPA model average of 83 cents for each premium dollar collected.

At the other end of the spectrum, Oakland, Calif.-based Kaiser Foundation Health Plan Inc., the largest group-model HMO in the country with 5.8 million enrollees, spends more than 98 cents of every premium dollar on medical expenses, Weiss Ratings found.

The national average of medical spending for group and staff model HMOs is 89.2% of premiums collected, according to Weiss. However, there is wide disparity in the amounts these types of HMOs spend on medical care because of the varied accounting methods these plans use, a Weiss spokeswoman explained.

Not all group-model HMOs allocated more premium dollars toward medical expenses than their network and IPA-model counterparts, Weiss found.

For example, Kaiser Foundation Health Plan of Georgia, a group-model HMO with 175,055 members, spent just 72.42% of its premiums on medical expenses, while CIGNA Healthcare of Florida Inc., a mixed IPA-staff model HMO with 72,333 enrollees, spent 93.33% of its premiums on medical care, according to Weiss Ratings.

Weiss Ratings rates nearly 300 HMOs for their financial safety, charging consumers $15 per company for a one-page "Personal Safety brief" on their HMO. For more information, contact Weiss Ratings at 4176 Burns Road, Palm Beach Gardens, Fla. 33410; 1-800-289-9222.