A report by the General Accounting Office says expanding California's managed-care Medicaid program could magnify its already serious problems.
California will nearly quadruple the number of managed-care beneficiaries in its Medicaid program, called Medi-Cal, to 3.4 million from 890,000 by the end of 1996.
In the 12-county expansion, recipients must choose between either a county-organized plan or a commercial plan. Beneficiaries now are enrolled in managed-care plans in 20 of the state's 58 counties.
The study by the GAO, Congress' investigative arm, found inadequate monitoring of Medi-Cal managed care. The report also said the state "provides little guidance and training" to the contract managers. Also, "the state does minimal review of plans' provider financial incentives to ensure that they do not encourage inappropriately withholding healthcare services," the GAO said.
What's more, the report said, the program is deficient in ensuring that children are receiving preventive services. Most of the new enrollees in the managed-care expansion will be children.
The GAO also said that allowing only two Medi-Cal managed-care plans per county as the state plans "will restrict competition and beneficiary choice."
Meanwhile, provider groups told the state Senate Health Committee recently that capitation rates proposed for the county-organized managed-care plans are inadequate. For example, the state proposes to pay Medi-Cal providers in Los Angeles County $71.68 per enrollee per month.
Several counties have announced they will pull out of the program because of the inadequate rates.
Proposed rates for commercial plans are $75 to $80 per month. That rate-which compares with $120 per month in other states-includes hospital and physician charges as well as administrative costs, said Nathan Nayman, vice president of the Hospital Council of Northern and Central California. The state's proposed rate is "so low that many commercial plans have said they won't participate in the program," he said.
In a letter to HHS Secretary Donna Shalala, Rep. Henry A. Waxman (D-Calif.) asked the department not to grant the necessary Medicaid waiver until the state demonstrates it has corrected the deficiencies found by the GAO.
Waxman requested that the GAO study the Medi-Cal proposal.
Ann Kuhns, assistant chief of Medi-Cal's managed-care division, said the state Department of Health Services has addressed many of the concerns in the GAO report and disputes others. The state has had no word from Shalala, she said.