Record Fines Might Mean California Is Finally Serious About Improving Medi-Cal

Is California getting harder on well being plans that take part in Medi-Cal, the state’s insurance coverage program for low-income residents?

Just a few weeks in the past, state regulators imposed a record $55 million in fines on L.A. Care, California’s largest Medi-Cal managed-care plan, for failing to make sure sufficient care and permitting remedy delays that threatened enrollees’ well being. Affected person advocates hope the transfer indicators stricter enforcement towards different Medi-Cal insurers, which have most of the identical shortcomings for which the regulators simply fined L.A. Care.

Twenty-five managed-care plans throughout the state present look after nearly 12 million of the greater than 14 million Californians enrolled in Medi-Cal, and the state is commonly accused of failing to carry the plans accountable for subpar care. Medi-Cal members are among the many state’s most weak individuals: They will face language and cultural obstacles and have disproportionately excessive charges of persistent sickness.

The state Division of Well being Care Providers, which runs Medi-Cal, is drafting a brand new managed-care contract, scheduled to take impact in 2024, that officers say will enhance care by holding collaborating well being plans to increased requirements. The state hopes to scale back well being disparities and enhance well being outcomes by tightening surveillance and enforcement.

“They’re attempting to do extra, and that’s actually optimistic,” says Abbi Coursolle, senior legal professional on the National Health Law Program in Los Angeles. “Clearly, they’ve much more to do.”

DHCS and the state Division of Managed Well being Care, which additionally regulates Medi-Cal managed-care plans, launched coordinated investigations of L.A. Care, based mostly partly on a 2020 Los Angeles Times report that highlighted lengthy, generally lethal, delays in care at amenities run by the Los Angeles County Division of Well being Providers. That company operates the county’s public safety-net system and contracts with L.A. Care to offer look after tons of of hundreds of the well being plan’s members. Of their investigations, state regulators additionally relied on info that L.A. Care reported to them.

That they relied on these sources, Coursolle says, raises questions concerning the effectiveness of their very own surveillance and auditing.

On March 4, the Division of Managed Well being Care hit L.A. Care with a $35 million penalty — greater than triple its highest earlier fantastic. The Division of Well being Care Providers levied $20 million, almost eight occasions its earlier report.

The state cited L.A. Take care of greater than 100,000 violations, together with late responses to affected person complaints and appeals, delayed or denied authorizations for crucial medical care, and failure to make sure the county well being providers company complied with affected person care rules. The California Division of Public Well being, which regulates hospitals and different well being care establishments, didn’t reply to a query about whether or not it’s investigating any of the county’s medical amenities.

In saying the fines, state company administrators mentioned: “The magnitude of L.A. Care’s violations, which has resulted in hurt to its members, requires rapid motion.” The well being plan has 2.4 million Medi-Cal enrollees.

“The latest enforcement motion towards L.A. Care indicators that DHCS intends to train our authorities to guard our Medi-Cal enrollees,” division spokesperson Anthony Cava informed me in an electronic mail.

L.A. Care’s CEO, John Baackes, says the plan just isn’t contesting the findings. “What we’re contesting is the quantity of the fines, which we imagine are unreasonable,” Baackes mentioned. The dispute might take months, and even years, to settle.

In an announcement launched after the fines have been introduced, L.A. Care famous Medi-Cal’s notoriously low funds to suppliers and mentioned the penalties create “yet one more monetary hurdle for a public well being plan that may be a essential a part of the well being care security web.”

Though L.A. Care has generated hundreds of thousands of {dollars} in income in recent times, it reported a loss of $132 million in fiscal 12 months 2020. However the plan can climate the fines. On the finish of final 12 months, its tangible web fairness — a key measure of solvency — was seven times as excessive because the minimal required by legislation.

The violations described by regulators are painfully acquainted to Theresa Grant, a Culver Metropolis resident I wrote about late final 12 months who has struggled to find relief from a debilitating ache in her rib cage. The violations are “horrific,” she says, “and I believe it’s very true.”

However she believes the specialist physicians who’ve been unable or unwilling to assist her deserve an enormous share of the blame. “You understand how lengthy I’ve been coping with my drawback,” she informed me. “It’s been over a 12 months now, and never a rattling factor is being carried out.”

Regardless of the numerous penalties levied on L.A. Care, client advocates and a few state lawmakers assume California wants the authority to levy even bigger ones.

A invoice sponsored by the buyer advocacy group Health Access would enhance most of the fines that state well being plan regulators can impose at the least tenfold. Supporters say the laws, SB 858, is required as a result of the quantity the division can legally levy on well being plans hasn’t been raised in some circumstances since 1975.

“We wish to ensure that insurance coverage corporations don’t view these fines as simply the price of doing enterprise,” says the invoice’s writer, state Sen. Scott Wiener (D-San Francisco). “By elevating them, they change into much less a value of enterprise and extra an precise incentive to observe the legislation.”

The fines imposed on L.A. Care are outliers due to their dimension, which was decided partly by the sheer variety of violations. “For each fantastic like that, there are numerous which can be dramatically decrease,” Wiener says. “I wouldn’t wish to depend on one case and say, ‘Oh, no drawback, as a result of they acquired an enormous fantastic.’”

One other necessary consider holding well being plans’ toes to the hearth, Wiener says, is client complaints, which may also help carry issues to the eye of regulators — and to the plans themselves.

However a report last year by KFF confirmed that client appeals of denied care are exceedingly uncommon.

You probably have an issue together with your well being plan or wish to enchantment a delay or denial of protection, a very good place to begin is the Division of Managed Well being Care (888-466-2219 or

The state additionally has an ombudsman for Medi-Cal managed care (888-452-8609 or

You may also strive the Well being Client Alliance (888-804-3536 or, which assists individuals in private and non-private well being plans. It provides free recommendation, offers authorized providers, and may also help you get your paperwork to ensure that an enchantment.

Regulators and well being plans alike ceaselessly say they’re engaged on behalf of the affected person. So in case you’re not getting the care you want, arise and be a part of the answer.

This story was produced by KHN, which publishes California Healthline, an editorially impartial service of the California Health Care Foundation.


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