Citing Contract Dispute, Health Net Announces Plans to ‘Sever Ties’ With St. Joseph Health System
Health Net of California, one of the state's largest managed care organizations, with 2.4 million members statewide, announced Friday that it will not renew its contract with St. Joseph Health System of Orange County, a move that could cause 31,000 Health Net members to lose their doctors, the Los Angeles Times reports. Health Net representatives said that the MCO decided to leave St. Joseph when the network refused to renegotiate contract costs after losing Bristol Park Medical Group, a "major medical practice." Bristol Park Medical group, which left St. Joseph to establish an "independent operation," accounted for 40% of the physicians in St. Joseph's network. About 52,000 Health Net members have primary care physicians through St. Joseph, although 21,000 of those would be able to remain with their doctors through other existing contracts, according to the Times. But by losing access to Bristol Park doctors, Health Net said its members no longer had access to the "wider group" of doctors agreed upon in the current contract. "It's like paying in advance for a five-course dinner for your family, only to have the restaurant say, 'Oops, well, we're out of appetizers and desserts,'" Health Net spokesperson Lisa Kalustian said. Health Net "hoped" that St. Joseph's would "adjust" the contract costs to reflect the reduced services, but the medical network "refused." Saying he was "saddened and surprised" by the announcement, St. Joseph CFO Joe Randolph said that Health Net already has an agreement with Bristol Park, making the "termination" of the St. Joseph contract unnecessary. Health Net officials, however, said that the "issue comes down" to health plan members "not getting what they are paying for." Kalustian said, "We're now forced to pursue a relationship with Bristol Park on our own, in the best interests of our members, when we were supposed to have access to Bristol Park through St. Joseph in the first place." When the termination takes effect Jan. 1, Health Net members will no longer have "covered access" to St. Jude Medical Center in Fullerton, St. Joseph Hospital of Orange or Mission Hospital Regional Medical Center in Mission Viejo (Harris, Los Angeles Times, 7/21).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.