Watts Health Foundation Permitted to Again Solicit Medi-Cal Patients

The state Department of Corporations has partly lifted a cease-and-desist order that had stopped the financially plagued Watts Health Foundation from soliciting members for the foundation’s prepaid health plan.

Revenues from the plan have been used to subsidize care at the foundation’s Watts Health Center, which offers medical care based on an individual’s ability to pay.

George A. Crawford, an attorney for the department’s enforcement division, said the state has enough confidence in the financial stability of the foundation to allow it to resume soliciting Medi-Cal beneficiaries, whose membership premiums are paid by the state.

The foundation is still prohibited from soliciting “commercial” members, who pay premiums through their employers, or people covered by Medicare, Crawford said.

An unanticipated revenue shortfall in the foundation’s 74,000-member prepaid health plan caused the foundation to lay off nearly 25% of its 800 employees in March and seek protection from creditors under Chapter 11 of the federal Bankruptcy Code.