Health advocates say they hope it does not set a precedent. This change of course calls into question the power that insurance companies can have in pressuring state action with legal threats. The state’s summer announcement quickly became controversial as health plans that were left out questioned the state’s process for choosing the three insurers, appealed the decision and sued the state. And most nonprofit community-based health plans did not have to compete for a contract. Kaiser Permanente negotiated a special contract with the state early last year, bypassing the bidding process. “Less disruption is good, but we don’t want to lose the reason for the change, which is to have more accountability.” Anthony Wright, executive director of Health Access Some health providers decried the department’s original contract decision, claiming it would have caused “immeasurable” disruption to care. This proposed decision would force close to 2 million Medi-Cal enrollees to switch insurance and likely find new providers. In August of last year, the state announced that it would tentatively award $14 billion worth of Medi-Cal contracts to three companies - Health Net, Molina and Anthem Blue Cross. The state’s goal was to reduce the number of participating health plans from the current nine and move forward with only the most qualified plans, which would be held to higher standards related to patient outcomes, wait times and satisfaction, as well as improving health disparities. In 2021, the Department of Health Care Services, which oversees the Medi-Cal program, embarked on a bidding process that would allow it to rework contracts with commercial Medi-Cal health plans. Medi-Cal provides health coverage to more than 14 million low-income Californians, more than a third of the state’s population. “Less disruption is good, but we don’t want to lose the reason for the change, which is to have more accountability on these plans going forward.” “At some level it makes the transition easier, but we want to do better than the status quo,” said Anthony Wright, executive director of Health Access, a consumer advocacy group. The department did not provide answers to follow-up questions before publication. “To bring certainty for members, providers and plans, the State used its authority to work directly with the plans to re-chart our partnership and move with confidence and speed toward the implementation of the changes we want to see,” the department wrote in a statement released Friday afternoon. The big winners: Blue Shield and Community Health Group will get a contract after initially having lost bids, and Health Net will get to keep at least some of its Los Angeles enrollees. It also means that the state will avoid a protracted legal battle amid lawsuit threats from insurers who had previously been left out. It means more Medi-Cal enrollees will likely get to keep their current insurer and doctors, averting a confusing re-enrollment process for most members and preventing disruption to patient care. This upends the state’s previous plans of awarding contracts to only three health plans. In a significant course change, the California Department of Health Care Services announced that it has negotiated with five commercial health plans to provide Medi-Cal services in 2024, scratching a two-year-long bidding process for the coveted state contracts. But when the winners were announced, several insurers complained about the process and potential impact on patient care. State health officials last year launched a first-ever competitive bidding process for its Medi-Cal insurance contracts, aiming to implement higher standards.
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