State reverses course, awards Medi-Cal contract to San Diego's largest operator [The San Diego Union-Tribune]

About 366,000 fewer San Diego County residents on Medi-Cal will have to change health plans as a result of an announcement from the California Department of Health Care Services Friday.

In the waning hours of 2022, the state scrapped its ongoing effort to consolidate the number of private companies it allows to manage Medi-Cal benefits in markets across the state.

A controversial announcement this summer awarded management of nearly 900,000 Medi-Cal beneficiaries in San Diego County to three companies: Health Net, Molina Healthcare and Kaiser Permanente, all of which are already operating in the region.

But the announcement left Community Health Group, the region's largest Medi-Cal operator, with about 330,000 local beneficiaries, on the outs. The move was particularly controversial because CHG is a home-grown company with a robust roster of contracted medical providers and solid quality scores.

Medi-Cal is the state's implementation of Medicaid, the nation's health insurance safety net program estimated to cover more than 90 million Americans, about 14 million of whom reside in California. The program offers a wide array of services based on income and disability status.

Blue Shield of California, with nearly 130,000 local enrollees, was also frozen out. Both sued the state, alleging that the DHCS was not following its own procurement rules.

Had the plan gone forward, about half of those now in managed Medi-Cal plans would likely have had to find new main medical providers, as their new plans would have had a different array of contracted doctors and specialists for them to choose from.

The move would have been particularly disruptive for Community Health Group's clients, as the organization has been operating in the region for decades.

Rather than fight it out in court, the state appeared to simply give up on its original goal of winnowing the number of providers down to two, with Kaiser thrown in for good measure. The reason for narrowing the number of plans managing Medi-Cal benefits was that doing so would create large enough pools of patients that plans could focus on wide-reaching programs designed to prevent illness, especially by working "upstream" on issues such as homelessness and access to proactive services that can keep minor medical problems from growing in severity.

In its statement Friday the DHCS, which runs the Medi-Cal program statewide, insisted that new contracts with health plans will hold them to "new standards of care and greater accountability, helping to ensure Medi-Cal members have the support they need to live healthier, more fulfilling lives."

In addition to CHG, contracts in San Diego will be awarded to Molina, Blue Shield and Kaiser. Health Net, and several other providers with a few thousand members each, will have to change plans, though the number appears to be fewer than 100,000, less than one-fourth as many as was the case after the initial summer announcement.

Exactly how the state can simply scrap its previous request for proposals process and unilaterally award contracts to some and not others was discussed in the statement, and officials with the agency declined to provide more information, stating that questions would not be addressed until Tuesday.

Community Health Group, which staged a protest in front of the San Diego County Administration Building, in late September, declined to comment on the change, referring all questions to the state.

The announcement came as The San Diego Union-Tribune investigated the number of primary care doctors already offered in San Diego County by those operating in the region.

Molina, which indicated in its application to continue serving San Diego that its members "can choose from one of more than 2,100" primary care providers, has just 262 unique primary care doctors listed in the state's current Managed Care Provider Network list.

Molina did not respond to repeated requests for comment on the discrepancy.

This story originally appeared in San Diego Union-Tribune.

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