Health Plan Shake-Up Could Disrupt Coverage for Low-Income Californians

Nearly 2 million of California’s poorest and most medically fragile residents could have to modify well being insurers because of a brand new technique by the state to enhance care in its Medicaid program.

A primary-ever statewide contracting competitors to take part in this system, often called Medi-Cal, required industrial managed-care plans to rebid for his or her contracts and compete in opposition to others hoping to take these contracts away. The contracts will probably be revamped to require insurers to supply new advantages and meet stiffer benchmarks for care.

The long-planned reshuffle of insurers is prone to include short-term ache. 4 of the managed-care insurers, together with Well being Web and Blue Protect of California, stand to lose Medi-Cal contracts in just a little over a yr, in line with the preliminary outcomes of the bidding, introduced in late August. If the outcomes stand, some enrollees in rural Alpine and El Dorado counties, in addition to in populous Los Angeles, San Diego, Sacramento, and Kern counties, should change well being plans — and probably medical doctors.

“I’m nonetheless shocked and I’m nonetheless reeling from it,” mentioned John Sturm, one in all about 325,000 members of Neighborhood Well being Group, the biggest Medi-Cal plan in San Diego County, which might lose its contract. “Which medical doctors can I hold? How lengthy is it going to take me to modify plans? Are there contingency plans when, inevitably, of us slip via the cracks?” Sturm questioned.

Sturm, 54, who has three psychological well being situations, largely due to childhood sexual abuse, mentioned discovering a psychologist and psychiatrist he might belief took numerous effort and time. He pointed to the disruption brought on by the rollout of Medi-Cal’s new prescription drug program this yr, regardless of assurances it could go easily.

“I’ve considerations, and I do know different folks in the neighborhood have considerations about what we’re being informed versus what the fact goes to be,” Sturm mentioned.

Arguably, the most important loser within the bidding is Well being Web, the biggest industrial insurer in Medi-Cal, which stands to lose half its enrollees — together with greater than 1 million in Los Angeles County alone. St. Louis-based Centene Corp., which California is investigating over allegations it overcharged the state for prescribed drugs, purchased Well being Web in 2016, partially for its Medicaid enterprise, of which L.A. is the crown jewel.

However the state’s well being plan alternatives will not be set in stone. The dropping insurers are fiercely contesting the ends in formal appeals that learn like declarations of warfare on their opponents and on the state. A few of the losers basically name their profitable rivals liars.

The stakes are excessive, with contracts in play value billions of {dollars} yearly. Insurers that lose their appeals with the state Division of Well being Care Providers, which runs Medi-Cal, are prone to take their complaints to courtroom. That might delay ultimate choices by months or years, inflicting a headache for the division, which desires protection beneath the brand new contracts to begin Jan. 1, 2024.

State officers hope to spend the remainder of this yr and all of 2023 guaranteeing the chosen well being plans are as much as the duty, which incorporates having sufficient taking part suppliers to reduce disruptions in care.

“Member entry and continuity are actually our high priorities as a part of this transition, and we’ve got devoted groups that will probably be working with the well being plans on the transition planning and the continuity planning,” Michelle Baass, director of the division, informed KHN.

Baass additionally famous that enrollees have continuity of care rights. “For instance, if a member is at present beneath the care of a physician through the prior 12 months, the member has the proper to proceed seeing that physician for as much as 12 months, if sure situations are met,” she mentioned.

The aggressive bidding course of is an effort by the division to handle persistent complaints that it has not successfully monitored subpar well being plans.

Eight industrial insurers bid for Medi-Cal enterprise in 21 counties. They have been required to submit voluminous paperwork detailing each facet of their operations, together with previous efficiency, the scope of their supplier networks, and their capability to fulfill the phrases of the brand new, stricter contracts.

The brand new contracts include quite a few provisions supposed to bolster high quality, well being care fairness, and transparency — and to spice up accountability of the subcontractors to whom well being plans usually outsource affected person care. For instance, the plans and their subcontractors will probably be required to succeed in or exceed the fiftieth percentile amongst Medicaid plans nationally on a bunch of pediatric and maternal care measures — or face monetary penalties.

They can even be on the hook for offering non-medical social companies that handle socioeconomic elements, corresponding to homelessness and meals insecurity, in an formidable $8.7 billion, five-year Medi-Cal initiative often called CalAIM, that’s already underway.

Native, publicly ruled Medi-Cal plans, which cowl about 70% of the 12.4 million Medi-Cal members who’re in managed care, didn’t take part within the bidding, although their efficiency has not at all times been top-notch. Kaiser Permanente, which this yr negotiated a controversial cope with the state for an unique Medi-Cal contract in 32 counties, was additionally exempt from the bidding. (KHN will not be affiliated with Kaiser Permanente.)

However all Medi-Cal well being insurers, together with KP and the native plans, should decide to the identical objectives and necessities.

Along with Well being Web, Blue Protect of California and Neighborhood Well being Group — which have contracts with Medi-Cal solely in San Diego County — are additionally huge losers, as is Aetna, which misplaced bids in 10 counties.

Blue Protect, which misplaced in all 13 counties the place it submitted bids, filed a fiercely worded attraction that accuses its rivals Anthem Blue Cross, Molina, and Well being Web of failing to reveal a whole lot of thousands and thousands of {dollars} in penalties in opposition to them. It accused these three plans of poor efficiency “and even lying” and mentioned they crammed their bids with “puffery,” which the state “purchased, hook, line and sinker,” with out “an iota of unbiased evaluation.”

Well being Web’s attraction slammed Molina, which beat it out in L.A., Sacramento, Riverside, and San Bernardino counties. Molina’s bid, Well being Web mentioned, “incorporates false, inaccurate and deceptive info.” The entire bidding course of, it mentioned, was “extremely flawed,” leading to “inaccurate contract awards that jeopardize the soundness of Medi-Cal.”

Particularly, Well being Web mentioned, the Division of Well being Care Providers “improperly reopened the procurement” after the deadline, which allowed Molina to make “complete modifications” that raised its rating.

The protesting well being plans are requesting that they be awarded contracts or that the bidding course of begin over from scratch.

Joseph Garcia, chief working officer for Neighborhood Well being Group, mentioned, “It might be best for all involved if they simply added us. They don’t must take away anyone.”

Neighborhood Well being Group has garnered an outpouring of assist from hospital executives, doctor teams, neighborhood clinics, and the heads of a number of publicly ruled Medi-Cal plans who despatched a letter to Baass saying they have been “shocked, involved, and really disillusioned” by the state’s determination. They referred to as Neighborhood Well being Group “our strongest accomplice of 40 years,” for whom “fairness will not be a buzzword or a brand new precedence,” noting that greater than 85% of its employees is bilingual and multicultural.

Neighborhood Well being Group famous in its attraction that it had misplaced by lower than a degree to Well being Web, which received a San Diego contract — “a miniscule distinction that in itself resulted from deeply flawed scoring.”

Garcia mentioned that if Neighborhood Well being Group loses its attraction, it’s going to “completely” sue in state courtroom. A listening to officer appointed by Baass to think about the appeals has set deadlines to obtain written responses and rebuttals by Oct. 7.

There may be ample precedent for protracted authorized battles in bidding for Medicaid contracts. In Louisiana, Well being Web and Aetna protested the outcomes of a 2019 rebidding course of, which led the state to nullify its awards and restart the bidding. The brand new outcomes have been introduced this yr, with Well being Web and Aetna among the many winners. In Kentucky, the state courtroom of appeals issued a ruling this month in a contested Medicaid procurement that had been held two years earlier.

One other issue might delay the brand new contract: California is juggling a number of huge Medi-Cal modifications on the identical time. Amongst them are the implementation of CalAIM and the anticipated enrollment of almost 700,000 unauthorized immigrants ages 26-49 by January 2024, on high of almost a quarter-million unauthorized immigrants 50 and older who turned eligible this yr. After which there’s the recalculation of enrollees’ eligibility, which can happen each time the federal covid-19-related public well being emergency ends. That might push 2 million to three million Californians out of Medi-Cal.

“Simply listening to you checklist all these issues gave me a minor panic assault,” mentioned Abigail Coursolle, a senior lawyer on the Nationwide Well being Regulation Program. “They’re making numerous work for themselves in a brief period of time.”

However, Coursolle added, the state has “a really constructive imaginative and prescient for enhancing entry and enhancing the standard of companies that folks in Medi-Cal obtain, and that’s crucial.”

KHN (Kaiser Well being Information) is a nationwide newsroom that produces in-depth journalism about well being points. Along with Coverage Evaluation and Polling, KHN is among the three main working applications at KFF (Kaiser Household Basis). KFF is an endowed nonprofit group offering info on well being points to the nation.


This story may be republished free of charge (particulars).


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