PacifiCare Health System's high-flying Secure Horizons Medicare HMO is exiting two California counties and parts of a third. Officials blame the pullout on a provider rebellion against HCFA's Medicare-risk reimbursement rates.
Although Brad Bowlus, president and chief executive officer of PacifiCare of California, declined to name the providers in question, he insisted the choice was made by providers, not PacifiCare.
"This is not a step back, from our perspective," Bowlus said. "It's not necessarily our choice."
Because "there aren't enough alternatives in these specific areas" to put together an adequate network, Secure Horizons had no choice but to exit those markets, Bowlus said.
The forced withdrawal is a twist on the recent trend of voluntary pullouts from rural or low-paying regions by Medicare risk plans. PacifiCare said 7,800 Medicare HMO enrollees will be affected.
Secure Horizons plans to stop offering its Medicare risk product as of Jan. 1 to 4,200 enrollees in Monterey County-famous as the setting for many of John Steinbeck's novels-1,100 enrollees in Kings County, and 2,500 enrollees in parts of Tulare County. The pullback requires regulatory approval.
Providers in those areas are unhappy with lower-than-anticipated funding from HCFA, a common complaint in rural areas since passage of the federal Balanced Budget Act of 1997, and they feel "locked in" by the 2% annual increases offered by Medicare under the act, said officials at Secure Horizons.
Overall, Secure Horizons is the nation's largest Medicare HMO, with close to 1 million enrollees, of whom about 600,000 are in California. PacifiCare of California, of Cypress, Calif., has 2.1 million enrollees in the state.
The Secure Horizons plan intends to grow "and is absolutely committed to the Medicare market," said Bowlus, but it can't do business without a network of willing providers.