California payer drops 4 Prime hospitals

CalOptima, a Medicaid insurer in Orange County, Calif., terminated its contract with four hospitals owned by Ontario, Calif.-based Prime Healthcare on Feb. 5.

The Orange County hospitals affected are Garden Grove Hospital, West Anaheim Medical Center, Huntington Beach Hospital and La Palma Intercommunity Hospital, a spokesperson for Prime Healthcare said in a statement shared with Becker's on Feb. 7. 

"It is unfortunate that a single decision for no cause can alter the lives of so many in greatest need. With this seemingly arbitrary decision, CalOptima is eliminating a significant percentage of the acute care hospitals in its entire network," the spokesperson said.

CalOptima notified the four Prime hospitals of the contract termination Nov. 11, with affected Medi-Cal members told of the termination Jan. 3, according to a CalOptima document shared with Becker's.

"Our contract change with Prime Healthcare was approved by the California Department of Health Care Services because it does not create issues with members' access to care," a spokesperson for CalOptima said in a statement shared with Becker's. "Members can still go to the hospitals for emergency care and be admitted if their condition requires."

Less than 2% of all Prime facility visits by affected CalOptima members were for scheduled hospital care in a recent 12-month period, the CalOptima spokesperson said. The contracting change only affects members in the CalOptima Health-managed networks. More than 70% of members are in other health networks, and those networks do not contract with Prime.

"We remain committed to our member-centered mission and are working closely with member advocates, providers, elected officials and other stakeholders in the community during this transition," the CalOptima spokesperson said.

In light of the news, more than 500 people have signed a petition online pushing for CalOptima leaders to reconsider the decision.

"The direct result will be jeopardizing access for tens of thousands of patients who already have limited healthcare access and options," the Prime spokesperson said. "We appreciate the passion and advocacy demonstrated by our patients and are committed to finding solutions that benefit the health and wellbeing of all those we serve."

CaliOptima Health provides Medi-Cal coverage to low-income children, adults, seniors and disabled people in Orange County. It serves around 964,000 members with a network of over 10,400 primary care physicians and specialists, including 43 acute and rehab hospitals.

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