Sacramento-Based HMO Drops Out of Medi-Cal Over Low Payment Rates
Sacramento-based HMO Western Health Advantage has announced plans to cancel its contract to participate in the Medi-Cal managed care program beginning Jan. 1, 2010, because of low reimbursement rates and rising medical costs, the Sacramento Business Journal reports.
Medi-Cal is California's Medicaid program.
Although WHA's Medi-Cal contract expires at the end of 2012, the insurer sent a six-month termination notice on June 30 to the Department of Health Care Services, which oversees Medi-Cal.
The health plan currently administers benefits for 16,000 Medi-Cal beneficiaries, who will need to choose a different health plan or a fee-for-service option by the end of the year.
Starting Sept. 1, the state will send 120-day notices asking Medi-Cal beneficiaries enrolled in a WHA plan to sign up with one of the four other managed care plans that administer Medi-Cal benefits in Sacramento County, Tony Cava, DHCS spokesperson, said.
Officials will make special arrangements to accommodate beneficiaries who require continuity of care for their treatment, as designated by state law.
Background on WHA
Catholic Healthcare West, NorthBay Health Care System and UC-Davis Health System co-own WHA, which was founded in 1997 to provide health services for Medi-Cal beneficiaries in Sacramento County.
Gary Maisel, CEO of WHA, said, "While Medi-Cal may be a program that's workable for large plans like Kaiser, Health Net and Molina, it is not a viable business for a plan with 16,000" beneficiaries (Robertson, Sacramento Business Journal, 7/17).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.