Medi-Cal HMO Project Shelved for Year or More

A Medi-Cal pilot project scheduled to start in the San Fernando Valley this year has been delayed until at least July, 1987, because of financial constraints and community opposition, officials with the state Finance Department said.

The $23 million needed to implement the controversial program, called Expanded Choice, in the Valley was not included in Gov. George Deukmejian’s 1986-87 budget, which was released Friday.

Tom Dithridge, a state financial analyst, said the state is “not backing off” from the concept. It appropriated $36.5 million for an identical experiment that is expected to start in August in San Diego, he said. “It’s a matter of how to allocate your tight resources,” he said.

Dithridge said planning for the Valley-area project has been slowed by community protests that the San Diego program has not faced.

87,000 Affected

Under Expanded Choice, about 87,000 poor, disabled and elderly recipients of Medi-Cal in the San Fernando and Santa Clarita valleys would be required to join one of seven participating health maintenance organizations. The people would no longer see their own physicians unless the doctors were affiliated with a participating HMO. The program is aimed at reducing Medi-Cal costs and improving beneficiaries’ access to physicians.

Officials said that among the aims of delaying the Valley project was ensuring that all physicians and other health care providers who want to participate in the program can sign up with an HMO.

Dave Willis, another financial analyst, said the Valley project is lagging behind San Diego’s.

“We felt it was prudent not to include funds for the San Fernando Valley at this time,” Willis said. He anticipates that money for the Valley project will be included in the 1987-88 state budget, which will take effect in July, 1987.

Potential participants have been concerned about leaving their longtime physicians for health maintenance organizations. Some doctors and pharmacists whose patients include Medi-Cal recipients have complained that they would be excluded under the plan.

Kenneth Kizer, director of the state Department of Health Services, said: “We don’t want to rush into anything that hasn’t been carefully evaluated.”

The California Medical Assistance Commission, which oversees Medi-Cal contracts, has scheduled hearings next week throughout the Valley area on how to implement the program.

Jim Foley, director of the Valley project, said the governor could change his mind and insert money for the Valley project into his revised budget in May.

The medical commission, he said, will decide whether to ask the governor to do so.

Opponents of Expanded Choice expressed a wary happiness over the development.

“We’re thrilled to death,” said Norma Vescova, president of a Valley-based coalition of about 20 professional, civic and social organizations that formed in October to oppose the project.

Expanded Choice opponents say they will concentrate on creating a better Medi-Cal pilot project to offer the state. The critics have said that, in principle, they favor changes in Medi-Cal for the sake of patients, doctors and taxpayers.

Expanded Choice, first embraced by Gov. Edmund G. Brown Jr., was authorized in 1982 when the Legislature passed a package of Medi-Cal reforms. It was not until last year that the Deukmejian Administration decided to use its authority and carry out the experiment.

Since June, when the program was unveiled at a public meeting in Burbank, Expanded Choice has been soundly criticized in the Valley.

In contrast, it has generated little controversy in San Diego, where 165,000 people will be affected.

Robert Holt, an official with the Los Angeles County Medical Assn., attributed that partly to a lack of coverage of the issue by the San Diego news media.

Officials of two of seven HMOs that had intended to participate in Expanded Choice in the Valley reacted differently to the news.

Jeffrey Folick, president of CareAmerica Health Plan, a newly licensed organization, said he was not surprised or especially disappointed. He said the state’s timetable for implementation had been optimistic, considering the complexity of the task.

Folick predicted that Expanded Choice, if it is begun in 1987, could be quite different from the current proposal and could be undertaken in a different part of the state. He said CareAmerica, based in Chatsworth, might not participate in Expanded Choice if it begins in the Valley next year.

Clyde Oden, chief executive officer of United Health Plan, said he was surprised and dismayed by the temporary scuttling of the program. But he said United remains committed to Expanded Choice and will continue to expand its operations in the Valley.

The delay is one of several setbacks for Expanded Choice. The Medical Assistance Commission had hoped to begin providing health services through the program in April. That date has been repeatedly pushed further into the future.

Mark Gladstone reported from Sacramento and Lynn O’Shaughnessy from Los Angeles.