California counties, medical health insurance plans, neighborhood clinics, and a significant nationwide well being care labor union are lining up towards a controversial deal to grant HMO large Kaiser Permanente a no-bid statewide Medicaid contract because the invoice heads for its first legislative listening to Tuesday.
The deal, hammered out earlier this yr in closed-door talks between Kaiser Permanente and Gov. Gavin Newsom’s workplace and first reported by KHN, would permit KP to function Medi-Cal plans in no less than 32 counties with out having to bid for the contracts. Medi-Cal’s different eight industrial well being plans should compete for his or her contracts.
Medi-Cal is California’s model of Medicaid, the federal-state program that gives well being protection to low-income folks.
Opponents of the KP proposal say they have been blindsided by it after having spent months planning for large modifications taking place in Medi-Cal, which serves greater than 14 million Californians. They are saying the deal would largely permit KP to proceed selecting the enrollees it desires, and so they worry that will give it a more healthy and cheaper affected person inhabitants than different well being plans.
At the moment, the state permits KP to restrict its Medi-Cal membership by accepting solely those that have been its members within the latest previous, primarily in employer-based or Inexpensive Care Act plans, and their rapid relations.
“A closed system that excludes susceptible populations is inequitable,” the heads of 10 county boards stated in a letter to Meeting member Jim Wooden (D-Santa Rosa), who chairs the Meeting Well being Committee, which is able to take into account the proposal. They questioned whether or not Kaiser Permanente could be assigned sufferers with “extra advanced bodily, behavioral, and socio-economic wants versus giving the prevailing security web system and native plans, who don’t exclude populations, a disproportionate share of advanced and dear sufferers.”
Kaiser Permanente stated in an emailed assertion that, below the phrases of the deal, it might take extra Medi-Cal sufferers with excessive wants and would collaborate with counties and different well being plans on affected person care.
Michelle Baass, director of the Division of Well being Care Companies, which runs Medi-Cal, instructed KHN in early February that the deal would “make sure that extra low-income sufferers have entry to Kaiser’s prime quality providers” and “result in higher well being look after extra Medi-Cal enrollees.”
The deal should win state legislative and federal approval. Opposition to the invoice that will codify it, AB 2724, is being spearheaded by Native Well being Plans of California, which represents the 16 native, publicly ruled Medi-Cal plans that cowl a lot of the 12 million Medi-Cal beneficiaries in managed care. The proposal would make a lot of them direct opponents of Kaiser Permanente, and so they may lose a whole bunch of 1000’s of enrollees and thousands and thousands of {dollars} in Medi-Cal income.
Amongst them are a few of the state’s largest Medi-Cal well being plans, together with L.A. Care, by far the largest, with 2.4 million members; and the Inland Empire Well being Plan, with about 1.5 million members in San Bernardino and Riverside counties.
As well as, the boards of supervisors of 16 counties had registered their opposition as of April 15, as had the California State Affiliation of Counties, no less than two neighborhood clinic teams, and the Nationwide Union of Healthcare Employees, which represents 1000’s of KP clinicians.
The opposite industrial Medi-Cal plans are mendacity low as they bid for the state’s Medi-Cal enterprise. The 2 largest, Well being Web and Anthem Blue Cross, declined to remark.
The general public well being plans and most of the counties stated the proposal was sprung on them after they spent months getting ready for main Medi-Cal shifts — for instance, a extra demanding contract with the state, scheduled to take impact in 2024, and an formidable $6 billion mission to supply enrollees with nontraditional providers, comparable to meals help, house modifications, and assist with housing.
Some medical suppliers are additionally crucial of the proposal.
Leslie Conner, CEO of Santa Cruz Group Well being, which operates three clinics in Santa Cruz County, stated her group is constructing a $19 million major care clinic primarily based on estimates — accessible on the time the plan was drawn up — of the variety of uninsured residents and Medi-Cal members who don’t have a health care provider.
“It’s simply not useful to need to recalculate when Kaiser is available in taking extra major care lives,” Conner stated. “We didn’t get an opportunity to speak via that with the state or with Kaiser.”
Conner stated that KP, which at present doesn’t have Medi-Cal members in Santa Cruz County, has generously collaborated with Santa Cruz Group Well being prior to now and that she expects that to proceed.
“I’m extra disturbed by the state doing this negotiation with a personal firm,” she stated. “That’s simply mistaken.”
Kaiser Permanente stated in its emailed assertion that the Division of Well being Care Companies approached it with the proposal and that it agreed to collaborate “as a result of we acknowledge, basically, the advantages to the enrollees.” The proposal, it stated, “meets the basic targets the state has for Medi-Cal: to enhance high quality, cut back complexity and enhance affected person outcomes.”
KP, which covers 9.4 million Californians, the overwhelming majority in its industrial plans, has 912,000 Medi-Cal enrollees. Most of them are via subcontracts with different Medi-Cal well being plans in 17 counties, and the remaining are within the 5 counties the place KP already contracts instantly with the state.
Kaiser Permanente calls its present enrollment-limiting association continuity of care, however critics say it leaves different well being plans at a drawback — and so they fear about it changing into enshrined in state legislation. Along with leaving them with a disproportionate share of sicker, costlier sufferers, they are saying, it may saddle them with decrease high quality scores from the state.
However KP stated its mixture of sick and wholesome Medi-Cal sufferers is “similar to different Medi-Cal managed care plans.” It added that the proposal calls on it to extend the variety of its Medi-Cal enrollees, together with these from “extra susceptible populations.”
Underneath the proposal, KP has dedicated to rising its Medi-Cal membership 25% over the 5 years of the contract. It could accomplish this partly by taking earlier KP enrollees in counties the place it at present doesn’t have Medi-Cal members, based on an 11-page doc launched in March by the Division of Well being Care Companies. KP would additionally take, for the primary time, a restricted variety of the enrollees who don’t select a plan after they join Medi-Cal. And it might enroll youngsters in foster care and the usually advanced, costly sufferers who’re eligible for each Medi-Cal and Medicare.
As of April 15, many particulars weren’t but within the invoice language, which shall be fleshed out and debated over the following a number of months.
As an example, the invoice makes no point out of the 25% enrollment progress goal. And though the Division of Well being Care Companies doc says KP’s direct contract would cowl 32 counties, the invoice leaves that quantity open.
“The state clearly has to reveal much more info and element about how it will work,” stated Edwin Park, a California-based analysis professor with Georgetown College’s Middle for Kids and Households.
Felicia Matlosz, a spokesperson for the invoice’s writer, Meeting member Joaquin Arambula (D-Fresno), stated his workplace is “working to reconcile the language” with the state’s proposal.
Arguably, the well being plans that will be most affected by this proposal are these which might be the only real Medi-Cal plan of their counties, generally known as county organized well being techniques, or COHS.
They have been created by the boards of their counties and function in partnership with the counties, their safety-net well being amenities, and private-sector medical suppliers. Within the 40 years since they have been established in California, they’ve been the one state-contracted Medi-Cal plan of their counties.
“It’s the tip of the mannequin,” stated Stephanie Sonnenshine, CEO of the Central California Alliance for Well being, a county organized well being system for Santa Cruz, Monterey, and Merced counties. “It’s a big coverage change that hasn’t been vetted as a coverage change.”
KHN correspondent Rachel Bluth contributed to this report.
This story was produced by KHN, which publishes California Healthline, an editorially impartial 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 info on well being points to the nation.
Picture: THEPALMER, Getty Pictures
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