County’s HMO Plan for Poor Approved

Federal regulators have given a thumbs-up to Los Angeles County’s massive foray into managed care for more than a million poor patients, allowing the program to swing into full gear the first of next year.

“We’re comfortable at this point, which we absolutely were not . . . before,” said Linda Minamoto, a manager in the Medicaid division of the U.S. Health Care Financing Administration.

The action, though it comes with some caveats, was welcomed by state officials and representatives of the two plans set up to serve L.A. county’s poor--especially county-organized L.A. Care.

“We are enormously gratified by the decision,” said Ken August, a spokesman for the state Department of Health Services. “We believed all along that the issues the [regulators] raised were not ones that couldn’t be resolved.”

But the federal move was condemned by longtime critics of the state’s approach, who said the new program will wreak chaos in the county.

“I think this whole system is absurd,” said Dr. Brian Johnston, an emergency room physician and former president of the Los Angeles County Medical Assn.

Earlier this year, federal regulators had delayed full start-up--originally set for July 1. Among other things, they said beneficiary outreach and education was lacking.

The delays gave a black eye to California’s Health Services department, which was responsible for ushering the county through one of the largest transitions in the nation from a Medicaid fee-for-service system to managed care.

When federal officials hit the brakes, it meant, essentially, that traditional fee-for-service Medi-Cal could not be phased out in the population targeted for managed care.

L.A. Care, made up of one county-run and six commercial HMOs, and its commercial competitor, Foundation Health Care, were not allowed to make automatic assignments to HMOs when patients failed to choose between the two plans.

That was particularly hard on L.A. Care, which, as the county-organized system, was counting on about 650,000 enrollments--some of them automatic--and the money they would bring in. (Foundation will be allowed to take on automatic assignments only when L.A. Care reaches that minimum level.)

The federal action brought a big sigh of relief from L.A. Care Chief Executive Officer Tony Rodgers. “We are very pleased,” he said.

The transition will not be immediate, but will be phased in over six months.

Rodgers added that he still is seeking $22 million from the state to reimburse his organization for costs it has incurred during the lengthy start-up period--for staffing, promotion and other activities. He has received no word on the request from state officials.

Federal regulators, in fact, did not give the state a clean bill of health. In a letter to state Deputy Director J. Douglas Porter dated Tuesday, regulators commended the state on its “progress . . . in developing a cohesive plan for enhanced outreach and education in Los Angeles.”

But the letter also said the state has not finished translating all enrollment and education materials into languages besides English and Spanish. Minamoto said the state will not be allowed to mail materials to or automatically assign patients who primarily speak any of nine languages--including Chinese and Vietnamese--until it has translated the materials and tested them in the field.

In addition, the state launched a marketing campaign in mid-September, including radio spots and bus ads in English and Spanish, but it could take time for it to reach 90% of the Medi-Cal population, as required. Also, federal officials urged the state to expand the campaign to include additional languages.

Critics said Wednesday that there is already ample evidence in other counties--including Alameda and others in Northern California--that the two-plan approach is flawed. They say patients have been assigned away from longtime providers, misassigned, sent the information late or in the wrong language, or sent no information at all.