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Kaiser, State Close on Healthy Families Pact

Officials from Kaiser Permanente and the state Department of Health Care Services are finalizing a deal to enable Kaiser’s participation in the state’s planned elimination of the Healthy Families program.

That is welcome news for the 193,000 Kaiser-enrolled children in Healthy Families — almost one-fourth of all children in the program. Up till now, it looked like the state and Kaiser were at an impasse over Kaiser’s participation in the conversion of Healthy Families to Medi-Cal managed care.

“Earlier it appeared we would not be able to include Kaiser,” said Norman Williams, deputy director of public affairs for DHCS. “But we have made some significant progress, and now it looks like they will be included.”

Chris Stenrud, executive director of advocacy and public affairs for Kaiser Permanente, said the finances of the move may not work well for Kaiser but ensuring continuity of care for so many California kids is important to the organization.

“From our standpoint, it’s about keeping the members, this keeps those 193,000 children in our system,” Stenrud said. “Ultimately, it is to some degree part of our not-for-profit mission, to provide care in the community for those who can’t afford it.”

According to Stenrud, it is unlikely a compromise number will be reached between the higher Healthy Families provider reimbursement rate and the lower Medi-Cal rate.

“We’re not asking for any rate different from the Medi-Cal rate at this point,” Stenrud said. “We just want to be an option for our Healthy Families members.”

Williams said he couldn’t comment on the details of the finalized proposal with Kaiser.

“They are very important, Kaiser is a very important negotiation,” Williams said. “And the progress has been encouraging.”

Stenrud said Kaiser still hopes for some kind of contractual compromise, to adjust contracts statewide, so that Kaiser doesn’t have to revise a series of local contracts all over the state.

“When [the elimination of Healthy Families and the shift to Medi-Cal managed care] was first rolled out, it was something we opposed, because we had legitimate concerns about funding the care needs of this population. And that concern hasn’t changed,” Stenrud said.

“But at the end of the day, the Legislature basically agreed to the governor’s terms on this provision, so there wasn’t any negotiating room. This is a deal between the Legislature and the governor, and we want to make sure our members aren’t caught in the middle of it,” Stenrud said.

If Kaiser opted out of the conversion, that would mean 193,000 children would need to find new providers in the next year, as the transition goes into effect. The planned Healthy Families elimination still needs federal approval before implementation.

“We haven’t at any point been supportive of the policy decision,” Stenrud said. “But in removing our opposition, hopefully we can reach an agreement.”

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