Payers speak out against Kaiser's special California Medicaid plan

California payers, providers, counties and unions are speaking out against proposed legislation that would cement Kaiser Permanente's special no-bid Medi-Cal contract with the state, according to CaliforniaHealthline.

The five-year contract was developed in secret with Gov. Gavin Newsom's office and first reported in early February. It would allow the Oakland, Calif.-based payer-provider to hand-pick enrollees and avoid the state's Medi-Cal contract bidding process in 32 counties, concerning other payers with being left sicker and more expensive members. 

Kaiser is currently allowed to accept only previous members and their family members. Under the proposal, eight other payers would have to compete for their contracts with Medi-Cal. The Kaiser contract would take effect in 2024 if approved by the California State Legislature.

Local Health Plans of California opposes the legislation, according to CaliforniaHealthline. The group represents the 16 Medi-Cal plans that cover most of the 12 million Medi-Cal members in managed care.

The boards of supervisors of 16 counties, the California State Association of Counties, two community clinic groups, the National Union of Healthcare Workers and Santa Cruz Community Health are also all opposed to the legislation.

The state's largest Medi-Cal providers, Health Net and Anthem Blue Cross, declined CaliforniaHealthline's request for comment.

"A closed system that excludes vulnerable populations is inequitable," the heads of 10 county boards said in a letter to Assembly member Jim Wood, who chairs the Assembly Health Committee, which will consider the bill. The counties asked whether Kaiser would be given patients with "more complex physical, behavioral, and socio-economic needs versus giving the existing safety net system and local plans, who do not exclude populations, a disproportionate share of complex and costly patients."

Kaiser told CaliforniaHealthline it would take more Medi-Cal patients with high needs and would work with counties and payers on patient care. It said the California Health Care Services Department first initiated the proposal and it agreed "because we recognize, fundamentally, the benefits to the enrollees" and the proposal "meets the fundamental objectives the state has for Medi-Cal: to improve quality, reduce complexity and improve patient outcomes."

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