U.S. Keeps Brakes on Health Plan
Federal regulators have again delayed full-fledged start-up of the massive new managed care program for the poor in Los Angeles County, saying they have seen little progress in key areas of the state’s implementation plan, including an advertising campaign and community outreach.
The decision means the multibillion-dollar Medi-Cal managed care program--the largest of its kind in the nation, covering more than 1 million beneficiaries--will not be in full swing until Jan. 1 at the earliest, six months later than originally planned.
It is the second significant delay ordered by the U.S. Health Care Financing Administration amid complaints by consumer groups, physicians and others that the so-called two-plan model is critically flawed and that the state is not ready for such an enormous undertaking.
In a July 15 letter to the state, the federal Medicaid managed care director, Rachel Block, cited the state’s slow progress in implementing an advertising campaign to alert beneficiaries, developing improved enrollment materials and contracting with community organizations.
For the first time, however, Block set a target date for full start-up and spelled out specific requirements to meet that target.
The state’s deputy director of Medi-Cal, which is what the Medicaid program is called in California, had a mixed reaction.
“The things that [federal regulators] are looking for are reasonable, but we’re disappointed they are going to hold us off until January,” J. Douglas Porter said. “The good news here is that we do finally have a very definitive list from [the federal agency], and that’s progress.”
The delay is not a mere bureaucratic inconvenience. It tightens the financial squeeze on L.A. Care, one of the two Medi-Cal managed care plans in Los Angeles County, which was counting on the government funds that full implementation would bring.
L.A. Care is a locally organized health system, made up of one county-run and six commercial HMOs, which has been operating at half-capacity. Much of its patient base is expected to come from automatic assignments--patients assigned to L.A. Care because they do not make a choice of health plans. But that is precisely the portion of the program that the federal government has put on hold.
As a result, L.A. Care’s enrollment of about 190,000 members is well below projections, and money is tight.
L.A. Care Chief Executive Officer Anthony Rodgers took the matter to Sacramento on Friday, asking Porter for money to tide his organization over. A financial officer with L.A. Care said the HMO is seeking at least $17 million.
“This is the state’s issue,” Rodgers said, explaining that his organization had urged the state a year ago to develop a comprehensive beneficiary education campaign. “I’m really pleased with what’s happening now, but I wish it had happened a year ago. We would be much further along if it had.”
This, however, is not the only glitch in the new two-plan program. The commercial plan competing with L.A. Care, Foundation Health and its subcontractors, is also beset by start-up problems.
In this case, the state has come down on the HMO. In a June 30 letter, the state Department of Health Services warned Foundation that it is gravely concerned about Foundations’s failure to meet a number of start-up requirements. As a result, although the state is allowing the HMO to shift its existing Medi-Cal patients to the new program, it is freezing enrollment of any new Medi-Cal beneficiaries until all remaining requirements have been met.
The freeze means Foundation cannot even replace the beneficiaries it loses through attrition. Rather than suddenly derailing the commercial Medi-Cal plan, which would have confused beneficiaries, the state effectively tightened control over Foundation’s progress, said Medi-Cal managed care chief Ann-Louise Kuhns.
A Foundation spokeswoman said the company has answered the state’s concerns and the response is under review. Consumer advocates said they are pleased that the federal government is taking a strict stand with the state, but they are also dismayed that it has taken the state so long to get focused.
“There is no question that [the program] is in disarray and continues to be in disarray,” said Brian Johnston, immediate past president of the Los Angeles County Medical Assn. and one of the program’s most ardent critics.
For the number of problems and the number of beneficiaries involved, “January may be too soon” to go full throttle, said Consumers Union attorney Jeanne Finberg. But the delay “can only help consumers. . . . At least we have a few more months to try to fix the glitches.”
