Virtually 2 million of California’s poorest and most medically fragile residents might have to change well being insurers on account 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, referred to as Medi-Cal, required business managed-care plans to rebid for his or her contracts and compete towards others hoping to take these contracts away. The contracts might 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 Defend of California, stand to lose Medi-Cal contracts in somewhat over a yr, in keeping 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, must change well being plans — and probably docs.
“I’m nonetheless shocked and I’m nonetheless reeling from it,” mentioned John Sturm, one among about 325,000 members of Group Well being Group, the biggest Medi-Cal plan in San Diego County, which might lose its contract. “Which docs can I preserve? How lengthy is it going to take me to change plans? Are there contingency plans when, inevitably, people 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 a whole lot of effort and time. He pointed to the disruption attributable to the rollout of Medi-Cal’s new prescription drug program this yr, regardless of assurances it might go easily.
“I’ve issues, and I do know different folks in the neighborhood have issues about what we’re being advised versus what the truth goes to be,” Sturm mentioned.
Arguably, the largest loser within the bidding is Well being Web, the biggest business 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, partly for its Medicaid enterprise, of which L.A. is the crown jewel.
However the state’s well being plan picks should not set in stone. The dropping insurers are fiercely contesting the leads to formal appeals that learn like declarations of struggle on their opponents and on the state. Among the losers basically name their successful rivals liars.
The stakes are excessive, with contracts in play price billions of {dollars} yearly. Insurers that lose their appeals with the state Division of Well being Care Companies, which runs Medi-Cal, are prone to take their complaints to courtroom. That might delay remaining selections by months or years, inflicting a headache for the division, which needs protection beneath the brand new contracts to start out Jan. 1, 2024.
State officers hope to spend the remainder of this yr and all of 2023 making certain the chosen well being plans are as much as the duty, which incorporates having sufficient taking part suppliers to attenuate disruptions in care.
“Member entry and continuity are actually our high priorities as a part of this transition, and we’ve devoted groups that might be working with the well being plans on the transition planning and the continuity planning,” Michelle Baass, director of the division, advised KHN.
Baass additionally famous that enrollees have continuity of care rights. “For instance, if a member is at present beneath the care of a health care provider throughout the prior 12 months, the member has the appropriate 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 deal with persistent complaints that it has not successfully monitored subpar well being plans.
Eight business insurers bid for Medi-Cal enterprise in 21 counties. They had been required to submit voluminous paperwork detailing each side 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 comprise quite a few provisions meant to bolster high quality, well being care fairness, and transparency — and to spice up accountability of the subcontractors to whom well being plans typically outsource affected person care. For instance, the plans and their subcontractors might be required to achieve 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 nonmedical social companies that tackle socioeconomic components, similar to homelessness and meals insecurity, in an bold $8.7 billion, five-year Medi-Cal initiative referred to as 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 take care of the state for an unique Medi-Cal contract in 32 counties, was additionally exempt from the bidding. (KHN just isn’t affiliated with Kaiser Permanente.)
However all Medi-Cal well being insurers, together with KP and the native plans, must decide to the identical targets and necessities.
Along with Well being Web, Blue Defend of California, and Group 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 Defend, 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 bunch of hundreds of thousands of {dollars} in penalties towards them. It accused these three plans of poor efficiency “and even lying” and mentioned they stuffed 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 data.” The entire bidding course of, it mentioned, was “extremely flawed,” leading to “faulty contract awards that jeopardize the soundness of Medi-Cal.”
Particularly, Well being Web mentioned, the Division of Well being Care Companies “improperly reopened the procurement” after the deadline, which allowed Molina to make “complete adjustments” 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 Group Well being Group, mentioned, “It could be best for all involved if they simply added us. They don’t must take away anyone.”
Group Well being Group has garnered an outpouring of help 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 had been “shocked, involved, and really upset” by the state’s resolution. They referred to as Group Well being Group “our strongest accomplice of 40 years,” for whom “fairness just isn’t a buzzword or a brand new precedence,” noting that greater than 85% of its employees is bilingual and multicultural.
Group 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 Group Well being Group loses its attraction, it’ll “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’s ample precedent for protracted authorized battles in bidding for Medicaid contracts. In Louisiana, Centene 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 had been introduced this yr, with Centene 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 adjustments on the similar time. Amongst them are the implementation of CalAIM and the anticipated enrollment of practically 700,000 unauthorized immigrants ages 26-49 by January 2024, on high of practically a quarter-million unauthorized immigrants 50 and older who grew to become eligible this yr. After which there’s the recalculation of enrollees’ eligibility, which is able to 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 listing 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 a whole lot of work for themselves in a brief period of time.”
However, Coursolle added, the state has “a really constructive imaginative and prescient for bettering entry and bettering the standard of companies that folks in Medi-Cal obtain, and that’s essential.”
This story was produced by KHN, which publishes California Healthline, an editorially unbiased service of the California Well being Care Basis.
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 data on well being points to the nation.
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