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Insurers question plan to cover senior patients

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When Gov. Jerry Brown eliminated the Adult Day Health Care program, his administration quickly designated the state's Medi-Cal managed care plans as the entity to ensure that many of the program’s 35,000 seniors are cared for.

But the trade group that represents 39 California managed care plans has fired off six pages of questions about the plan, asking state officials to "temper beneficiaries’ expectations" of what insurers may or may not do to replace the program.

The letter from the California Association of Health Plans also reminds Department of Health Care Services officials that managed care plans “are not responsible for” services that the day care centers provided, such as day-to-day supervision; socialization; or routine physical, occupational or speech therapy.

Elissa Gershon, senior attorney with Disability Rights California, which is suing to stop the adult care program cut, said the letter shows state officials are overstating the benefits that managed care plans can provide to those who relied on the day care centers.

“I think the emperor has no clothes – this letter really shows that there’s nothing behind (the administration’s plan),” she said.

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However, Nicole Kasabian Evans, spokeswoman for the California Association of Health Plans, said the letter has been one piece of a dialogue between the organization and state about doing what's best for the patients who will be moved to managed care plans.

"We’re doing as much as we can to be supportive for the population at need," she said. "But we also need to ensure that in our work with the state, we’re working within the appropriate framework for a health plan." 

Gershon said the letter supports the case that Disability Rights has filed against the state on behalf of seven plaintiffs whose Adult Day Health Care benefits will be cut. She argues that cutting the adult care program will seriously harm patients who visit the centers up to four days a week and will increase the odds that they'll be put in nursing homes.

The case, filed in the federal Northern District of California, has a key hearing Nov. 1.

Norman Williams, spokesman for the Department of Health Care Services, which administers the Medi-Cal program, said it has had routine meetings with the health insurer group to "gather their input and ensure the plan is implemented as seamlessly as possible."

Williams also said many of the health plans' concerns are addressed in the adult care transition plan documents, which are on the department website.

California Watch reported in recent weeks that the Department of Health Care Services created a transition plan that relies on two firms that have drawn scrutiny from the U.S. Justice Department.

State Controller John Chiang has been particularly outspoken about one provider, the SCAN Health Plan, suggesting in a letter that the state could keep the adult day care program alive if it recovers millions in overpayments from SCAN.

The state has said it also will contract with another firm, APS Healthcare, which earlier this year reached a $13 million settlement with the U.S. Justice Department. Authorities backed a whistleblower who claimed APS took state money but failed to serve members of a Georgia Medicaid program.

In the Aug. 19 letter sent by the California Association of Health Plans, the advocates for managed care providers raised questions about the 80 percent of adult day care clients who are eligible for both Medicare and Medi-Cal.

For some patients, Medi-Cal manages some aspects of care. But when those patients need to go to an emergency room, Medicare picks up the bill. Also, if patients are placed in a nursing home, many managed care plans no longer cover them after two months. (Managed care plans in Napa, Solano, Yolo, Sonoma, Orange, Merced and several other counties, though, do cover nursing home care.)

That means that some Medi-Cal managed care plans do not have the traditional incentive to keep people healthy to avoid costly emergency room bills or the cost of a nursing home.

The Department of Health Care Services has proposed a plan to account for the skewed incentives. The state agency proposed a “health plan penalty pool” meant to keep health plans from routing seniors with costly medical care into nursing homes.

WIlliams, of the Department of Health Care Services, said Medi-Cal is working to develop financial incentives and penalties to help ensure adult day care patients are not subject to unnecessary institutionalization. Details of how they work "will be made public when finalized," according to a statement from Williams.

In their letter to the state, health plans raised questions about the penalty pool, pointing out that financial penalties “will diminish the already limited funds available to health plans for the transition.”

Clarification: This article was updated to reflect that some county managed care plans do cover the cost of nursing home care for two months or longer.

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