Blue Shield of California Campaigns Against New Medi-Cal Contracting process

The payer has complained that the skewed process has allowed the state to award contracts to 'national, for-profit companies beholden to Wall Street.'

Blue Shield of California has filed a lawsuit and launched a publicity campaign urging the state to undo its "failed process" for contracting Medi-Cal health plans that has threatened the payer's participation in the Medicaid plan.

Oakland-based Blue Shield filed suit in the State Superior Court and asked a judge to force the California Department of Health Care Services to release public documents related to the state's initial decision on the award of Medi-Cal contracts for 2024.

The payer has complained that the skewed process has allowed the state to award contracts to "national, for-profit companies beholden to Wall Street."

Blue Shield says it has yet to receive a response to its public records request with California Department of Health Care Services that seeks details about the state's scoring process, methodology, and communications about the bid. Blue Shield also wants the state-appointed hearing officer to provide more time for appeals so the payer can review documents related to the request for proposals.

"We have waited in good faith and the Department of Health Care Services is refusing to provide the public information we are requesting or to provide a reasonable amount of time for the appeal process," said Kristen Cerf, president / CEO, Blue Shield of California Promise Health Plan.

Medi-Cal's new payer contracting competition requires the program's commercial managed-care plans to rebid for their contracts with other payers. The new process is designed to improve benefits and lower costs for Medi-Cal, which provides coverage for 13.5 million Californians.

However, stakeholders have warned that the new process may also force about 2 million medically frail and poor Californians to switch plans.

State regulators hope to spend 2023 finalizing contracts and benefits and hope to have the new contracts in place by mid-2024. California media have reported that Blue Shield and Health Net are among the big managed-care insurers that are likely to lose their Medi-Cal contracts next year and could sue the state and delay the process by months or years.

CDHS Director Michelle Baass has defended the new contracting process, saying in August that it "establishes new standards of care and greater accountability, helping ensure Medi-Cal members have the care and support they need to live healthier, more fulfilling lives."

"This is a defining moment for Medi-Cal and its millions of members," Baass says. "We're raising expectations for our plan partners as we begin a multiyear, multistep plan to transform Medi-Cal and support the health and well-being of all our members."

Blue Shield says the state's preliminary decision issued in August "intends to award contracts to national, for-profit companies that are beholden to Wall Street and lack engagement with local communities."

"The decision puts access to quality care at risk for the millions of Californians who depend on Medi-Cal. Blue Shield of California has appealed the state's decision, which did not include any California-based nonprofit health plans," Blue Shield says.

The payer says the state "also failed to provide meaningful opportunities for the voices of the state's Medi-Cal beneficiaries, physicians, and organizations that serve local communities to be heard in the process."

Blue Shield has also complained that CDHS assigned an IT worker to hear the payer's appeal, "which means an IT professional is responsible for reviewing all appeal materials and making the final decision as to which health plans will be available to millions of Medi-Cal beneficiaries."

"On behalf of the Medi-Cal beneficiaries we serve today whose healthcare is directly impacted by this decision, and of every Californian, we are turning to the court to insist on a full, fair, and robust Medi-Cal procurement appeals process," Cerf said. "We believe that the Department of Health Care Services has a duty to get this right and not just rubber stamp its original decision."

Urging Public Action

In addition, Blue Shield of California President / CEO Paul Markovich, in an "Open Letter to Californians," writes that the new Medi-Cal procurement was "an opportunity to address the shortcomings and inequities in the old system and create one that is innovative and advances health equity."

"But that didn't happen," Markovich writes. "It was a breach of trust with the very communities whose health and lives depend on Medi-Cal. Californians deserve better."

The statewide public campaign includes digital ads and a website, StandUpForHealthcare.com.

"The State of California undertook this procurement with great intentions, but the actual process has failed to match their words," Kristen Cerf, president / CEO of Blue Shield's Medi-Cal California Promise Health Plan. "The message of this campaign is that it's not too late for the state to change course and make choices that will advance innovation and health equity for everyone."

“The decision puts access to quality care at risk for the millions of Californians who depend on Medi-Cal.”