Blue Cross Leaving O.C.’s CalOptima

About 30,000 poor, elderly and disabled people in Orange County will have to switch to a new health insurance provider because Blue Cross of California will no longer contract with the county’s CalOptima program.

In a joint press release issued Friday, CalOptima and Blue Cross of California announced the change, which will take effect March 31.

CalOptima officials said patients would have to switch to one of nine health networks that remain with the agency. CalOptima disburses government funds to companies such as Blue Cross, which then pay doctors to provide health benefits to Medi-Cal patients. But about 25,000 patients have doctors who also are enrolled in the other networks, so only about 5,000 will need new physicians, CalOptima officials said.

A letter was sent to CalOptima members Thursday explaining the changes. A Blue Cross spokeswoman said Friday that contracting with CalOptima no longer fit into the company’s business plan.

Although few of the 275,000 people in CalOptima will have to change doctors, Marty Earlabaugh-Gordon, CEO of the Coalition of Orange County Community Clinics, said some of those who do may have problems.

“Those who have chronic conditions and are really depending on their physician, they don’t want to change,” she said.

Blue Cross had been part of CalOptima since 1995, when the agency began providing managed care to Medi-Cal beneficiaries in Orange County. CalOptima receives nearly all of its budget, about $700 million, from the state, and is by far the largest participant in the county’s public health-care sector.

Like other networks in the system, Blue Cross was paid a fee per member each month. It was the second largest plan in the system. The largest is the Children’s Hospital of Orange County Health Alliance, with 40,000 members.

Ray Jankowski, CalOptima’s CEO, said Blue Cross turned down basically the same three-year contract that the other plans signed. “It wasn’t much of a case of negotiation,” he said. “I suspect they’ve been thinking about it for some time.”

Blue Cross remains involved in Medi-Cal programs in 12 other counties. Because CalOptima is administered differently, however, the company had to build a separate bureaucracy that cost additional money, said Blue Cross spokeswoman Lisa Mee-Stephenson.

The rates CalOptima pays its health networks are reviewed annually.

Because of the huge budget deficit California is anticipating, CalOptima is worried it will be forced to cut back. CalOptima already will be using $11 million of its reserves to help cover an anticipated $20.8-million deficit.