Report Prompts Concern About Solvency of Gold Coast Health Plan

Actual costs for Gold Coast Health Plan at times have been higher than reported expenses, according to a preliminary report from the Berkeley Research Group, the Ventura County Star reports.

The findings have raised concern among state officials about the plan's solvency (Kisken, Ventura County Star, 3/23).

Background

Gold Coast Health Plan administers Medi-Cal to more than 100,000 Ventura County residents who are low-income or who have disabilities. Medi-Cal is California's Medicaid program.

The plan launched in 2011 as an HMO-style alternative for certain Medi-Cal beneficiaries.

Recently, the California Department of Health Care Services requested an audit of the managed-care plan after receiving complaints about late payments and poor management.

Earlier this month, the Ventura County Medi-Cal Managed Care Commission voted to keep the audit findings confidential (California Healthline, 3/19).

Report Details

The state Department of Health Care Services ordered the Berkeley Research Group report.

State officials consider the report an internal document and a first draft, so they declined to release it last week.

However, the report was delivered anonymously to the Star on Friday.

Key Findings

According to the Berkeley Research Group, the plan's reported medical expenses were about $1.3 million less than its actual costs in July 2011 and August 2011, its first two months of operation. In addition, July and August claims were not paid until last month, creating another imbalance, the report found.

The report said, "If the remaining months are understated by a similar amount, Gold Coast will become insolvent."

It also noted that "operations may be negatively impacted" because of turnover of management staff.

Responses to Report

Jane Ogle -- deputy director of health care delivery systems at DHCS -- said, "We're concerned about [the] financial stability" of Gold Coast. She said the report's findings create concern that the plan might not be able to pay claims.

Members of the Ventura County Medi-Cal Managed Care Commission -- which oversees the health plan -- said that the report is a work in progress and that the audit of the plan has not yet been completed.

Robert Gonzalez, vice chair of the commission, said, "We're engaged in a process in which numbers are being refined, and it's too early to come to a conclusion that this is insolvency."

Commission members added that financial reports show that Gold Coast generated an $8.4 million profit through February.

They also said some of the problems identified in the Berkeley Research Group report already are being addressed (Ventura County Star, 3/23).