Following a path blazed by a number of other HMOs in recent months, Blue Shield of California abruptly suspended promotion of its Shield 65 Medicare risk program in six Northern California counties on Aug. 1.
The San Francisco-based plan will continue to provide coverage for about 6,000 current enrollees in the northern half of the state, but it will not recruit new members, officials said. Like other managed-care plans, Blue Shield blamed high costs and low reimbursement rates from HCFA for the change.
The Blue Shield of California suspension came in the wake of several Medicare risk pullouts by other managed-care plans in recent months (See story, below).
Northern California reimbursement rates, even for urban areas such as San Francisco and Sacramento, are considerably lower than the comparable rates in much of Southern California.
The affected counties include Alameda, Contra Costa, San Francisco, Santa Clara and San Mateo in the San Francisco Bay Area and Sacramento to the east.
Thomas Gwyn, vice president of public affairs for Blue Shield, acknowledged that reimbursement rates were a factor in the decision. But he insisted that Blue Shield is committed to the California Medicare market and intends to resume marketing the Shield 65 program at some point.
"This is a temporary suspension of marketing activities," he maintained.
Blue Shield officials said the plan will continue to accept new Medicare risk business that comes its way during the suspension, either from employers or individuals. In the meantime, the plan will rethink the "full gamut" of Shield 65 operations in Northern California, including marketing strategy, relationships with providers and the range of benefits offered, Gwyn said.
Blue Shield acquired the former CareAmerica HMO from Burbank-based UniHealth last November, in large part because of CareAmerica's 48,000 Medicare risk enrollees in Southern California. Overall, Blue Shield now has about 58,000 senior enrollees.
Anthem Blue Cross and Blue Shield yanked its Medicare risk plan from 22 Ohio counties in May, and several other plans have followed suit since then, including PacifiCare of Utah and Salt Lake City's Intermountain Health Care. Health Net, the third-largest Medicare risk plan in California, will exit the Medicare market in 10 largely rural Northern California counties at year-end.