PacifiCare to Serve Medi-Cal Patients

PacifiCare Health Systems Inc., a health-maintenance organization, said it has received state approval to provide managed health-care benefits to Medi-Cal recipients in Los Angeles County.

PacifiCare President Jeff Folick on Tuesday said approvals by the state Department of Health Services and the state Department of Corporations should boost the Cypress-based company’s annual revenue by $25 million by year’s end.

Under the contract, which became effective Monday, the state will pay PacifiCare about $85 a month for each Medi-Cal recipient who enrolls in the new HMO program, Folick said. The state’s Medi-Cal program provides state-funded health benefits to low-income residents.

Medi-Cal recipients have the option of allowing the state to pay for their medical care each time they go to a doctor or enroll in an HMO that provides them, in most cases, 100% coverage.

PacifiCare is the latest HMO to provide benefits to Medi-Cal recipients. Competitors Cigna Health Plans, Kaiser Permanente and United Health Plan also provide full coverage to low-income residents.

The program is similar to a federal program that allows companies to provide full health benefits to the elderly in exchange for their Medicare benefits. Under that program, HMOs receive about $400 a month for each Medicare recipient who signs up for a company medical plan.

PacifiCare Class A shares closed at $56.50 a share on the Nasdaq market on Tuesday, up 25 cents a share.