State injects millions of new patients into ailing Medi-Cal

Nov. 20, 2012

By Dave Roberts

California’s Medi-Cal managed care programs have an abysmal track record. So, naturally, state officials are planning to transfer a million more low-income Californians these lowly-rated care programs.

On a scale of 1 to 5, most plans rated 1 or 2 (poor or fair) in the following areas: the quality of the health plan, all health care, personal doctor, specialist, getting needed care, getting care quickly, how well doctors communicate, customer service and shared decision making.

“The ‘rating of health plan,’ ‘getting needed care,’ and ‘getting care quickly’ measures offer the greatest opportunities for plan improvement,” concluded the 2010  Consumer Assessment of Healthcare Providers and Systems survey. “Low performance in these areas may point to issues with access to care and timeliness of care.”

In other words, millions of California’s poorest and neediest, most of them minorities, are stuck in state-run health plan ghettos. The worst plans in the state, Anthem Blue Cross in Santa Clara County and the San Francisco Health Plan, “demonstrated significantly lower performance” than the Medi-Cal managed care average in eight out of nine measures. Anthem Blue Cross in San Francisco performed significantly lower than average in seven of nine measures.

Medi-Cal managed dental plans received a black eye in May when the Sacramento Bee reported that fewer than one in four Los Angeles children had seen a dentist in the previous year, and fewer than one in three Sacramento children. Some kids have had to wait months to see a dentist.

Part of the problem is capitation. The state pays a set fee for each beneficiary to private health plans, whether or not the beneficiary actually sees a doctor or a dentist. The fees are so low — currently about $11.50 per patient monthly for dentists — that many plans and doctors barely break even or lose money. As a result, they are increasingly refusing to treat Medi-Cal patients.

Another part of the problem is poor oversight by state officials. The California Department of Managed Health Care is responsible for monitoring the financial viability of the health plans that the state contracts with. The Department of Health Care Services oversees compliance with Medi-Cal requirements. Both have been asleep at the wheel, according to a 2011 Bureau of State Audits report.

“The BSA found that DMHC had been chronically late in completing financial reviews and did not have a tracking system until May 2011,” according to the committee briefing report. When DMHC found two companies with expense reporting errors, “it did not follow up on corrective action plans arising from the financial examinations.”

Oversight

DHCS oversight was not much better. The DHCS did not analyze all of the financial requirements in 44 percent of the reports reviewed. Both DMHC and DHCS failed to conduct medical audits.

But even with lax oversight, there have been numerous violations. Out of 64 “risk bearing organizations” with 2.6 million enrollees, 10 organizations were placed on a corrective actions plan for failure to meet the financial solvency requirements or failing to meet timeliness standards. Twenty-three more are being monitored closely for rapid increase in Medi-Cal enrollment, low reserves and consecutive net losses.

In the past year, DMHC has collected more than $3 million in penalties against health plans for issues related to access to qualified providers, timely access to care, continuity of care and other standards.

Despite all of these problems and failures, state officials have decided to vastly expand the program.

“The state is embarking on a major transformation of Medi-Cal that will impact the health care and ultimately the health of almost a million of the most vulnerable Californians,” according to the agenda for the Oct. 25 Assembly Health Committee oversight hearing on managed care. “This includes the transition of seniors and people with disabilities into Medi-Cal managed care, coordinated care demonstration projects involving persons who are dually eligible for Medi-Cal and Medicare, the transition of patients in Medi-Cal fee-for-service counties into managed care plans, and the transition of children in the Healthy Families Program into Medi-Cal.”

Dumping millions

Committee members were concerned about dumping another million people into failing programs without adequate oversight and accountability. Chairman Richard Pan, D-Sacramento, who is also a pediatrician, cited the terrible scores for most Medi-Cal programs.

“That disturbed me, because it meant that on average we have poor quality in terms of the patients’ perceptions,” said Pan. “So what are we doing about it? We are about to move more people into Medi-Cal managed care, which can be an opportunity for doing good and doing a lot better. But at the same time I’m, like, looking at this and going, ‘These are the plans I’m going to be sending people into?’ So what is the follow-through? What is the performance measure that we’re going to say, ‘OK, we want them to be at least three stars’?

“And what are we going to do to bring the plans up there, or else find new plans? I know that we’ve been through this for Sacramento GMC [Geographic Managed Care] Denti-Cal, taken out a plan finally in response [to failures]. What’s the follow-through on that? I know DMHC can impose fines and so forth. But are there changes in contracts? What are we going to be doing about this? We’re going to measure it and we’re going to have a [data] dashboard. But what happens if the dashboard shows things aren’t going so well? What are we going to do next?”

Most of Pan’s questions went unanswered in the three-hour hearing. The main stratagem is to display in an easy-to-read online “dashboard” table, data on the effectiveness or shortcomings of every plan.

Good experience

DHCS Director Toby Douglas disputed the rap against Medi-Cal programs.

“The California Health Care Foundation did a survey of Medi-Cal consumers and their experience with Medi-Cal,” said Douglas. “And over 90 percent had a good or very good experience with Medi-Cal. It crossed even higher for those in managed care. So there’s different ways that we have to take all these different measures into account.”

Pan reminded him that Medi-Cal’s low scores were on a standardized survey, allowing comparison with other plans in the commercial market. Douglas responded that officials are looking at providing rewards for high-performing plans and penalties for low-performers. But he acknowledged that more corrective measures may be necessary to fix California’s broken Medi-Cal system.

“We need to keep on looking at different measures,” he said. “There are questions that we do need to start to raise about if plans aren’t meeting the performance, do we need to start looking at other plans.”

Also concerned about the impending patient dump (it starts in January for some programs) is Assemblywoman Holly Mitchell, D-Los Angeles. She fears there will be a network overload, leading to even longer wait times and reduced quality of care.

“I hearken back to the Healthy Families hearing,” said Mitchell. “And in that transition there’s real concern among my colleagues on network adequacy. My concern is you find a situation where there is not network capacity. How long does that process take where you’re able to identify that there’s a problem and do something about it?”

“It depends,” replied Douglas. “Some will be real time in individual cases that we would be immediately be reaching out to the plan. What are they doing to provide services? Others there might be a lag that we are not getting individual complaints, but seeing the network as a whole, that’s where we are going to plan a corrective action.”

DMHC Deputy Director Shelley Rouillard sought to ensure the committee that her agency can respond quickly when it needs to.

“When we go out on medical surveys there have been times where we have found something in the process of reviewing grievance files,” she said. “And alerted the department right away that this is a problem. After a financial audit we did for one of the Medi-Cal managed care plans, we told them to take action as quickly as they can. As a general rule we do the assessment, and if there are critical areas we let them know that.”

Mitchell did not sound reassured.

“As an elected official, I have a job performance review every two years, also known as election day,” she said. “Half a million people have the opportunity to determine whether I represented them well and have done a good job or not. And so when I think about the sheer number of Californians that will be impacted by the transition, I have a question about accountability. Who’s ultimately accountable for the success of the transition, how that comes to fruition for Californians to stay healthy and alive. Who’s accountable?”

Douglas said the buck stops with him.