Officials from the commercial HMOs and quasi-public initiatives that have won bids to enroll Medicaid recipients into managed care in California contend they have encountered far more red tape than green lights from the state health agency.
The California Department of Health Services is responsible for reviewing the operational and marketing plans of the participants and giving final approval for them to receive enrollees from Medi-Cal, the state's Medicaid program.
Officials estimate that 2.3 million people statewide could be enrolled in Medi-Cal managed-care plans. That would generate $2 billion in annual revenues.
Just nine of the 23 commercial plans and local initiatives were receiving enrollees as of Oct. 1. Three other operators have confirmed start dates between Nov. 1 and Jan. 1, pending completion of their applications. Though the remaining 11 providers are expected to be operational by the second quarter of 1997, DHS officials say that's subject to change.
Once a plan or local initiative receives its approval, the DHS supervises enrollment and handles enrollee queries. But its subcontractor doing the actual enrollment, Portland, Ore.-based Benova, has received nearly universal condemnation from enrollees and the health plans. Benova specializes in handling Medicaid enrollment for states.
"We've had many of our members and providers complain about Benova," said John Monahan, general manager of Medi-Cal programs for Woodland Hills-based Blue Cross of California, which is already treating enrollees in Alameda, San Francisco and Santa Clara counties. Monahan noted that most of the complaints are about jammed phone lines and Benova's enrollment of people with the wrong physician or health plan.
Moreover, Benova's difficulties often mean that enrollees who have a choice between a commercial provider and the county initiative are automatically defaulted to the latter if there is confusion about their selection of plans.
"We've lost several thousand defaults," said Monahan, who added that Blue Cross is working with the DHS to recover them. "It's delayed revenue, and that will hurt us."
DHS officials acknowledged the problems with Benova and recently put the contract back out to bid. The department said it will change subcontractors soon after Jan. 1.
Meanwhile, local initiatives and commercial providers that have yet to receive enrollees have begun to lose patience with the DHS and have taken to publicly criticizing the department.
"Despite a long-term commitment from the state, and considerable time and effort on the part of a coalition of consumers, advocates, medical providers and healthcare interests here in the county to prepare for this transition, we have been consistently delayed," said Gail Margolis, chairwoman of L.A. Care, the local initiative for Los Angeles County, at a recent board meeting.
L.A. Care was originally slated to become operational on Oct. 1. DHS officials say its start-up has been delayed until at least February because it hasn't submitted some required paperwork and received its HMO license from the Department of Corporations.
"I would expect (L.A. Care) to come up sometime in the spring; whether it's February, March or April remains to be seen. There are still a lot of things they need to show us first," said Ann-Louise Kuhns, deputy Medi-Cal director in charge of managed-care programs.
Tulare County's local initiative, MediCo, is in similar straits. Kuhns noted that MediCo is also not expected to accept enrollees until next spring.
Kuhns said the reasons for the delays are simple: The state wants to get it right the first time around.
While some of the Medi-Cal providers-such as Blue Cross and Rancho Cordova, Calif.-based Foundation Health Corp.-are supporting the DHS' caution, its detractors charge that the department is bumbling along, inexplicably reversing prior approvals of marketing plans and acting too suspicious of providers that have served Medi-Cal recipients for years, such as Long Beach-based Molina Medical Centers. Like Los Angeles' and Tulare's local initiatives, Molina has yet to receive confirmed start-up dates as the commercial provider for Riverside and San Bernardino counties.
"Working with the state has been like running into a brick wall," said Molina spokesman Phil Perry.
Perry said Molina lost an estimated $500,000 when it was forced to pull its initial billboard advertising campaign over the summer. The DHS had received complaints from the competing local initiative, Inland Empire Health Plan, about the campaign. It considered inappropriate Molina's depiction of Inland as a slow-moving county-operated plan.
"The problem was, (the DHS) had already signed off on our campaign," Perry said. "They simply changed their mind in midstream."
But other providers were critical of Molina's campaign.
"That ad campaign didn't do anyone any good, and didn't reflect well," said Kurt Davis, spokesman for Foundation. "The state is dealing with a new program, and for them to have a change of mind or policy is not necessarily a bad thing."
Foundation has shown restraint about the DHS' operations, even though it has yet to get the go-ahead to receive enrollees in the two counties where it won contracts. Moreover, the department now wants information regarding how Foundation's pending merger with Health Systems International will affect its operations.
"Sure, I would have liked the process to go along faster, but this program is new to the state, its people and the plans. So it's probably going along as well as can be expected," Davis said.