CalPERS Delays Vote on Dropping 38 Hospitals From HMO Network
The CalPERS board on Tuesday voted to delay until at least next week a vote on whether to eliminate 38 hospitals from its HMO network because of questions about disruption of service to members, the Sacramento Bee reports (Rapaport, Sacramento Bee, 5/12). CalPERS said it could save $25 million to $50 million in 2005 by dropping coverage at the facilities, including some hospitals owned by Sutter Health. The move would reduce projected 2005 premium rate increases by between 1.9% and 3.8%. The 38 hospitals are part of CalPERS' Blue Shield of California network (Silber, Contra Costa Times, 5/12). Sutter and CalPERS on April 8 signed an agreement that would allow CalPERS to eliminate coverage at some Sutter hospitals or maintain coverage for beneficiaries at all Sutter facilities at a discounted rate. Sutter began negotiating plans to reduce CalPERS' costs, including proposals to allow Blue Shield of California to exclude the 15 Sutter hospitals from an HMO plan for CalPERS members; to include all Sutter facilities in a health plan for CalPERS members if Sutter would discount prices for them; or to create two separate Blue Shield HMOs for CalPERS members -- one that included all Sutter hospitals but would cost more and one that would exclude Sutter and have lower premiums (California Healthline, 4/20). On Tuesday, CalPERS President Sean Harrigan said, "We have questions about the level if disruption to our members that we need time to resolve." The Bee reports that dropping the 38 hospitals would force at least 53,000 members statewide to find new primary care doctors and hospitals. The CalPERS health committee is scheduled to vote on the matter May 18, and the full board is expected to vote on the proposal May 19 (Sacramento Bee, 5/12).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.