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As Healthy Families Shift Goes, So Goes Rural Expansion of Medi-Cal Managed Care

Rural Californians already have challenges accessing health care and changes to Medi-Cal, the state’s Medicaid program, could further complicate matters.

Rural areas have fewer physicians and facilities and services are spread out over greater distances than they are in urban and suburban areas. Rural areas also have a disproportionately high number of lower-income, Medi-Cal-eligible residents which creates a challenging situation for state health officials charged with providing medical coverage in rural settings.

On Nov. 1, the state launched an ambitious plan to transition Medi-Cal beneficiaries in rural areas from fee-for-service care arrangements to managed care plans. The move shifts 28 rural counties to the financial model the state is using throughout the rest of the state.

Also on Nov. 1, the state launched the last phase of its Healthy Families transition — moving children in rural counties to Medi-Cal managed care. Healthy Families is California’s Children’s Health Insurance Program.

There have been scattered, anecdotal reports that parents can’t find available physicians for their children because some doctors who had participated in Healthy Families won’t be making the switch to the Medi-Cal managed care model, which pays lower rates.

Half the State’s Children Eligible for Medi-Cal

The concern for Kelly Hardy has always been the children. As director of health policy for Children Now, Hardy has kept a careful eye on the transition of 860,000 children from Healthy Families to Medi-Cal managed care.

“I do think [state health officials] deserve some credit. The rollout has gone relatively smoothly,” Hardy said. “But the access to providers, especially in rural and underserved areas, that’s a real question still.”

Children are the proverbial canary in the coal mine of rural counties’ shift to Medi-Cal managed care, she said. Healthy Families offered providers higher reimbursement rates than Medi-Cal, and physicians now stand to lose significant money by caring for Medi-Cal children.

And there are a lot of them.

State health officials estimate roughly 4.5 million children are in Medi-Cal. About half of the births in California are covered through Medi-Cal.

“We’re at a new point where about half of the kids in the state are Medi-Cal kids. It speaks to the stakes we’re talking about, that we better get this right,” Hardy said.

The potential for problems is greater in rural areas with a higher percentage of lower-income Californians, she said.

“I am just amazed by the numbers we’re talking about,” Hardy said. “That speaks to the dedication of the providers, that all of those children get care, and it speaks to the level of outreach by the Department of Health Care Services, as well,” to make sure kids can get care.

“But really, at the root, they just need to pay more for the care,” Hardy said.

Access Issues in Some Rural Counties?

Hardy and other children’s advocates say it’s too early to provide big-picture statistics, but they’ve heard reports of provider network inadequacy in Lassen, Placer and Imperial counties so far.  

“In some counties, especially those served by Partnership HealthPlan, things seem to be going well,” said Suzie Shupe, executive director of California Coverage and Health Initiatives, a not-for-profit children’s advocacy group. Partnership HealthPlan, based in Fairfield, is one of half a dozen not-for-profit, public-private, county-organized health systems in the state. It serves 14 counties in Northern California.

In other parts of the state, there have been reports of access issues, Shupe said.

“The bottom line is that it isn’t possible to know the extent to which families have encountered problems because the information available to families about how to get help and how to report such problems has been so thin,” Shupe said.

“I think what we’re seeing now is a lack of providers,” Hardy said. “It looks like few or no providers switched from Healthy Families over to Medi-Cal managed care. That’s what we’re hearing, rather than confusion.

People are saying there’s a non-existent network here.”

That is news to Jane Ogle, deputy director at DHCS. “We haven’t heard of any problems in Placer or Lassen [counties] at all.”

DHCS officials are monitoring rural counties especially carefully right now, looking for complaints or trouble, and they haven’t received many negative reports, Ogle said.

There was concern in Imperial County, Ogle said, where one plan’s provider network wasn’t up in time for the transition rollout.

“In Imperial County we only had one plan, so Molina (Healthcare) agreed to be another provider for us,” Ogle said. “So for them it was a tight timeline to line up that provider network.”

Once the provider network contracts were signed, Molina bought full-page advertisements in the local newspaper to alert residents, Ogle said.

“From our point of view, it has gone very well,” Ogle said.

Two Transition Efforts Are Linked

Ogle said both transitions — the rural expansion into Medi-Cal managed care and the shift of Healthy Families children — had to be done at the same time and be completed before January, when the Affordable Care Act will be fully implemented and the state’s expands Medi-Cal eligibility.

“We wanted to transition Healthy Families in the counties that have never had any managed care, and we wanted to open up managed care in rural counties at the same time,” Ogle said. “To allow for that expansion, we wanted to do it at the same time. If we only moved the relatively small population of Healthy Families children in rural areas, we would not have had the numbers to do it.”

When you add in the rural expansion of the adult population, she said, “then there are sufficient numbers to do it.”

Under managed care, Californians should have access to more services, Ogle said. “Making sure they get … immunizations done, … and having access standards, that kind of thing,” she said, “none of which is in fee-for-service.”

Given the size and scope of the Healthy Families transition this year, the overall smoothness and success so far has been remarkable, Ogle said.

“We know there will always be individual and anecdotal issues,” Ogle said. “But we transitioned 900,000 children, and by and large it’s been a good, smooth transition for them, and they’re now well-placed for the [ACA and Medi-Cal] expansion to occur.”

Hardy agreed that the rollout has gone well, and she gives DHCS officials a lot of praise for that. The children in rural areas, though, may encounter problems in the months ahead, she said. Because children use medical services less often than adults, the effect on access might not be immediately clear, she added.

“We haven’t seen a big smoking gun, and we’re really thankful we haven’t seen a big smoking gun,” Hardy said, “but we’re still concerned about sneaky issues like continuity of care and network adequacy.”

In Lassen County, for instance, there’s only one federally qualified health center in the entire county, she said, so the wiggle room for network inadequacy is razor-thin.

If a high percentage of children in the transition is able to maintain access to their preferred primary care physician, that’s great, she said. However, that still leaves a group of children who did not get to remain with their physician.

“Access to care is still a huge concern,” Hardy said. “So if you think this is a great result for California’s kids, your standards are way too low.”

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