Chiang Calls for Senior Health Plan To Repay $339M to California
California Controller John Chiang (D) recently announced that the Senior Care Action Network health plan owes the state about $339 million to account for overpayments by the Department of Health Care Services, the Central Valley Business Times reports.
SCAN provides managed care medical assistance to residents at risk of entering nursing homes in California.
In 2008, Chiang conducted an investigation into DHCS's contract rates with SCAN and found that the department's faulty rate calculations inadvertently provided SCAN with excessive profits.
DHCS then conducted an evaluation and determined that SCAN's profit margin was more than 80%, compared with other managed care providers that had profit rates between 4% and 5%. Following the investigation, the department reduced SCAN's contract rates by 70%.
Implications of Rate Changes
Chiang said that the rate adjustment would reduce Medi-Cal spending by $88 million annually over the four years remaining on DHCS' contract with SCAN. Medi-Cal is California's Medicaid program.
The controller is asking SCAN to work with DHCS and the attorney general's office to return any of the excess profits it collected under the earlier contract rates.
According to SCAN, Chiang's allegations about excessive profits are "untrue and unwarranted."
The company said, "We invite the controller to work with us so that his office can fully appreciate the complexity of this issue and arrive at a mutually agreeable solution" (Central Valley Business Times, 8/12).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.