Health plans, including Blue Shield of California, Health Net and Community Health Group Partnership Plan, have filed lawsuits against the California Department of Health Care Services (DHCS) after the first-ever statewide competition for commercial Medi-Cal managed care plans for the was carried out 2024 Medi-Cal contract award.
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Through this procurement, DHCS did not award a contract to Blue Shield or the Community Health Group in any county, or to Health Net in the counties of Los Angeles, Sacramento, or Kern.
These lawsuits come after DHCS filed Sept. 30 to dismiss appeals against state Medi-Cal awards for managed care, including appeals from Blue Shield, CVS/Aetna, Community Health Group and Centene/Health Net.
DHCS 28 orders awarded, all beginning January 1, 2024, through to 3 commercial managed care plans to provide medical services in 21 counties statewide. Award-winning healthcare plans include Molina Healthcare, Anthem Blue Cross Partnership Plan, and Health Net.
Molina Healthcare will have operations in Los Angeles, Riverside, San Bernardino, Sacramento and San Diego counties.
The Anthem Blue Cross Partnership Plan operates in Alpine, Amador, Calaveras, El Dorado, Fresno, Inyo, Kern, Kings, Madera, Mono, Santa Clara, San Francisco, Sacramento, and Tuolumne counties.
Health Net will operate in Amador, Calaveras, Inyo, Mono, San Diego, San Joaquin, Stanislaus, Tulare and Tuolumne counties. However, Health Net’s parent company, Centene Corporation, opposes DHCS’ decision not to enter into express contracts with them in Los Angeles, Sacramento and Kern counties once the new contracts begin.
Blue Shield claims DHCS has violated the State Public Records Act by refusing to provide documents regarding the assessment process, methodology and communications related to the 2024 procurement.
Blue Shield alleges that it submitted a public record request to the state as part of the appeals process and also requested more time for the appeals process from the state-appointed hearing officer. The plan states that the DHCS failed to provide the requested documents and that the hearing officer denied the request for an extension.
Kristen Cerf, President and CEO of the Blue Shield of California Promise Health Plan, expressed the plan’s frustration over the matter.
“We have waited in good faith and the Department of Health Care Services refuses to provide the public information requested or to allow a reasonable time for the appeal process,” she said in a press release.
“On behalf of the Medi-Cal beneficiaries we serve today, whose healthcare is directly impacted by this decision, and all Californians, we are turning to the court to insist on a full, fair and robust Medi-Cal appeals process. We believe the Department of Health Care Services has a duty to get this right, not just approve its original decision.”
Blue Shield also determined that the state-appointed Hearing Officer is an employee of the Information Management Division.
“This means that an IT professional is responsible for reviewing all appeal materials and making the final decision on which health plans are available to millions of Medi-Cal beneficiaries.”
On October 14, Health Net and Community Health Group Partnership Plan joined Blue Shield to file lawsuits against DHCS to release documents related to this year’s procurement.
When the award was announced, Centene Corporation issued this statement on behalf of Health Net.
“…We are disappointed to learn that the state has decided not to award us contracts in Los Angeles, Sacramento and Kern counties,” Centene stated. “Through our local health plan, Health Net of California, we have provided quality, comprehensive, and equitable health care to our members throughout California for 25 years. We have a long history of serving these communities and members who depend on our service and care.
We firmly believe that our exit from these countries will mean a significant disruption in services to our members and providers. We are exploring all options to appeal the decision and protect our members and their access to quality healthcare.”
In addition to its lawsuit, Blue Shield of California also launched one public campaign Earlier this month, that includes statewide digital advertising that Blue Shield says underscores the consequences for Medi-Cal beneficiaries if DHCS’s tentative award decision is not reversed.
The public campaign also includes a website StandUpForHealthcare.comwhich includes information about the pricing decision and encourages Californians to voice their concerns to Gov. Gavin Newsom.
Mark Brnovich, President and CEO of Blue Shield of California also wrote: “Open letter to Californians‘ in which he criticized the state’s decision.
“This year’s historic Medi-Cal procurement was an opportunity to address the deficiencies and inequalities in the old system by selecting health plans best positioned to help realize the vision of CalAIM, the government initiative calling for that health plans are innovative, collaborating with physicians and bringing Medi-Cal into the digital age,” said Brnovich.
“Instead, the state intends to opt for for-profit health plans with poor track records in improving access to quality care and constructively engaging local communities. The state’s tentative decision was made with virtually no input from the people and communities that the Medi-Cal program serves – the voices of hundreds of organizations, community leaders, elected officials, providers and patients. It was a betrayal of trust in the very communities whose health and lives depend on Medi-Cal.”
DHCS made the following comment regarding the litigation in a expression for Becker’s Payer problems:
“DHCS remains committed to a robust procurement process to select award winners who demonstrate the capacity and ability to meet DHCS’ stated goals and priorities, including transparency, quality care, access, behavioral health services, children’s services, coordinated/integrated care, increased health equity and accountability,” DHCS stated.