Eight HMO companies have established a consortium designed to compete for Medicaid managed-care contracts covering 450,000 enrollees in Los Angeles County.
The partnership will compete for Medicaid enrollees under a plan by California Gov. Pete Wilson and the state's Department of Health Services to privatize the state's Medicaid program and move patients into state-contracted managed-care plans.
The state last week released its tentative plan for soliciting the contracts, scheduled to be awarded in the fall.
The consortium, which comprises major managed-care plans such as Kaiser Permanente, Cigna Healthplan, FHP and United Health Plan, will vie for contracts under its umbrella organization, dubbed the Los Angeles Health Advantage, said Joy Howell, a spokeswoman for the HMOs.
Ms. Howell said the health plan partnership was formerly organized late last month after executives determined they would join forces to try to win new business.
The consortium also is made up of health insurers that have traditionally stayed away from the Medicaid risk business, such as Woodland Hills, Calif.-based Blue Cross and San Francisco-based Blue Shield. The Blues long have maintained that they couldn't afford to care for patients profitably because state reimbursements were too low and treatment requirements were too broad.
Maxicare and PruCare are the other HMOs in the alliance.