California was to hand Kaiser Permanente a statewide, no-bid contract to serve Medi-Cal enrollees under a closed-door deal closed by Governor Gavin Newsom’s administration, raising questions about preferential treatment, among other things. a generous supporter of the governor.
The secret of the special accommodation for Kaiser has caused anger among other providers, some of which are in the midst of a public tender, as the state overhauls its health care program, which serves nearly 14 million low-income residents. Meanwhile, local health plans say the contract will allow Kaiser to select healthier enrollees, allowing other health care providers to cover a higher percentage of the state’s sickest and most expensive patients.
The Newsom administration said it will ask the legislature to approve the contract, which has yet to be made public.
“This prioritizes the interests of large corporations over the interests of the safety net Medi-Cal delivery system, which exists only to serve the underprivileged, is accountable only to the public and continuously works to improve the Medi-Cal delivery system. Cal delivery system because it’s the right thing to do — and no other motivation,” said Linnea Koopmans, chief executive of Local Health Plans of California, which represents 16 local health plans that represent more than 70% of Californians enrolled in Medi- Operate Cal Managed Care.
State officials Friday tried to crack down on claims that Kaiser is receiving a “sweetheart deal,” as reported Thursday by Kaiser Health News, saying the healthcare company would be subject to the same terms and conditions as other plans needed to go through the bidding process. However, Kaiser maintains a number of provisions that allow the plan to exclude most Medi-Cal enrollees. For example, Kaiser generally does not accept new Medi-Cal enrollees unless the individual has a recent history with the insurer or a family member with coverage.
Under the new agreement, Kaiser would continue to limit which Medi-Cal enrollees are accepted, while also providing coverage for youths in foster care and those eligible for Medicare.
“Having a situation where you can choose the members who are healthier puts an extra strain on the public safety net system,” said Jarrod McNaughton, chief executive of the Inland Empire Health Plan. “It’s much easier to have higher quality scores for a healthier population than it is for the most deprived. That inequality worries us.”
Serving 9 million Californians, Kaiser has built a formidable political presence in the Capitol, routinely giving millions to politicians and their causes. Last year, Newsom enlisted Kaiser to support the state’s vaccination program. In 2020 Kaiser was the top donor of imposed payments to Newsom, and gave $35.5 million in charitable donations on behalf of the governor.
Michelle Baass, director of the State Department of Health Care Services, which oversees Medi-Cal, said the contract with Kaiser is part of a larger effort by the state to overhaul its health care program and improve the quality and equity of health. improve. Since Kaiser is both an insurer and a healthcare provider, Baass said its system is limited in the number of patients it can serve and what it can physically care for enrollees. That hampered Kaiser’s ability to be part of the formal bidding process with other plans, Baass said.
Without creating a separate avenue for Kaiser, state officials said they were in danger of losing the highest-quality plan, affecting 900,000 Medi-Cal enrollees currently with Kaiser. Under the new deal, Kaiser would commit to growing the number of new Medi-Cal enrollments by 25% over its five-year contract in 32 counties where it currently operates.
“The proposal recognizes that they have a unique structure and that is why we propose to enter into this direct contractual relationship,” said Baass.
dr. Bechara Choucair, chief health officer at Kaiser, said the new contract will enable the healthcare company to provide quality care to more people who depend on the state’s safety net system.
“The goal is not for Kaiser Permanente to compete with the safety net, but to support it,” Choucair said. “We do not compete with other Medi-Cal membership plans, nor do we try to make a profit on Medi-Cal subscription. Kaiser Permanente participates in Medi-Cal because it is part of our nonprofit mission to improve the health of the communities we serve.”
However, the change means that local health plans would lose hundreds of thousands of enrollees that Kaiser provided through subcontracting with the local plans. With local health plans shutting down, they risk losing millions of dollars.
For the Inland Empire Health Plan, the Kaiser contract could mean the loss of 144,000 Medi-Cal enrollees in Riverside and San Bernardino counties. That translates into a $9 million to $10 million annual loss paid by Kaiser to the Inland Empire plan for community support not provided by the commercial plan and for administrative costs, McNaughton said.
Critics have questioned why the state of Kaiser would offer the expanded contract to serve California’s most needy residents, given that the health care company has long faced criticism — and state sanctions and fines — for his mental healthcare.
Anthony Wright, executive director of the advocacy group Health Access California, said the contract would give the state greater oversight of Kaiser, which he says is “a step in the right direction.”
“As much as Kaiser does well on many quality measures, it can and should do better,” said Wright. “The deal between [the state] and Kaiser should include requirements to maintain or improve Kaiser’s track record of quality and equity as they hire more of this vulnerable population, especially given their patchy behavioral health track record.”
This story originally appeared in Los Angeles Times.