California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Lawsuit Filed Against DHCS Over Medi-Cal Managed Care Shift

A legal aid group has filed a lawsuit on behalf of five Medi-Cal beneficiaries, alleging that the state violated beneficiaries' rights by forcing them into managed care, the Los Angeles Times reports. Medi-Cal is California's Medicaid program (Gorman, Los Angeles Times, 12/23/12).

The group -- Legal Aid Foundation of Los Angeles -- filed the lawsuit on Dec. 21, 2012, against the California Department of Health Care Services (AP/San Jose Mercury News, 12/21/12).


A few years ago, California received federal approval to shift 340,000 Medi-Cal beneficiaries -- specifically, seniors and people with disabilities -- into managed care plans. The shift aims to reduce state spending by $151 million annually and provide the beneficiaries with more comprehensive care.

Shifted beneficiaries are restricted to using physicians on their managed care plan (Small, "KPCC News," KPCC, 12/21/12). Managed care plans generally provide lower physician reimbursements than fee-for-service plans (Los Angeles Times, 12/23/12).

Beneficiaries with severe and chronic illnesses could apply for exemptions from the managed care shift. DHCS granted about 7,000 such exemptions and denied about 20,000 other requests ("KPCC News," KPCC, 12/21/12).

Lawsuit Details

Attorneys representing the five Medi-Cal beneficiaries alleged that the plaintiffs lost access to their physicians -- specifically their specialists -- when they were placed in managed care.

The attorneys also claimed that beneficiaries who should have received exemptions were denied because the state was using a tougher standard than allowed by law to decide who could stay on fee-for-service plans.

Response From DHCS

Officials from DHCS said that they have not been served with the lawsuit, so they could not comment on it.

Norman Williams, a DHCS spokesperson, in a statement said that the agency "remains strongly committed to ensuring that Medi-Cal members receive the health services they need without interruption as they transition to the coordinated, efficient system of care" (Los Angeles Times, 12/23/12).

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