The payer also allocated $45.2 million for digital transformation assistance to improve provider interactions.
CalOptima's board of directors has approved $64 million in supplemental funding for its contracted Orange County providers, including $58.2 million for COVID-19 expenses, and $6 million to cover Medicare funding cuts.
The CalOptima board also allocated $45.2 million for digital transformation assistance to streamline and improve interactions with providers.
The COVID-19 payment hikes of up to 7.5% will fund efforts by providers to administer COVID-19 vaccinations, cover costs for tests and treatment, and address virus variant outbreaks.
"COVID-19 cases are fluctuating, and providers are continuing to grapple with the pandemic. CalOptima wants to support our partners with the resources they need to ensure quality care for our vulnerable member population," CalOptima CEO Michael Hunn says. "The supplemental funding will provide stability for the health care system as we prepare to transition out of the Public Health Emergency."
The payments will be made for a full year, from July 1, 2022, to June 30, 2023. The board first approved supplemental payments in 2020 after noting the strain on providers. The supplemental funding also supports the healthcare safety net, as CalOptima membership has grown 23% during the pandemic to nearly 900,000.
CalOptima's Medicare programs OneCare, OneCare Connect Cal MediConnect Plan, and the Program of All-Inclusive Care for the Elderly are subject to 2% federal cuts that total $6 million a year.
The board voted to protect providers from this reduction particularly during this time as CalOptima will transition approximately 14,500 members from OneCare Connect to OneCare on Jan. 1, 2023. California is closing Cal MediConnect Plans as part of a larger initiative known as California Advancing and Innovating Medi-Cal.
CalOptima's digital transformation is part of a new three-year strategic plan to deliver efficiencies for providers, including same-day treatment authorizations and real-time claims payment. CalOptima's new budget allocates $45.2 million to this effort and signifies that the agency is moving forward with strengthening its systems on behalf of Orange County providers.
A few initiatives identified for the first year are provider portal enhancements, a provider data management system the integrates contracting and credentialling, and robotic process automation to better connect members to providers offering the services they need.
The gap between the state's wealthiest and poorest widened by an additional four years over the two-year span.
Life expectancy in California fell by more than three years during the first two years of the COVID-19 pandemic, with lower-income people and communities of color suffering disproportionately, new research shows.
In the study, published this month in JAMA Network, Northwestern University and UCLA researchers looked at nearly 2 million deaths in California between 2015 and 2021 and found that life expectancy shortened from 81.40 years in 2019 to 79.20 years in 2020, and 78.37 years in 2021.
The life expectancy gap between the state's wealthiest ($232,261 mean household income) and poorest ($21 279 MHI) widened by an additional four years over the two-year span, growing from 11.52 years in 2019 to 14.67 years in 2020 and 15.51 years in 2021, while life expectancy for the richest 1% dropped less than one year, the study found.
"Families of lower socioeconomic status are more vulnerable to economic instability and were less likely to access income support programs during the pandemic," the study says, "raising concerns that the stresses brought on by the pandemic might have widened health gaps related to income and race and ethnicity."
Study co-author and Northwestern University Prof. Hannes Schwandt, PhD, says he was "shocked by how big the differences were, and the degree of inequality that they reflected."
"We've had indications that the pandemic affected economically disadvantaged people more strongly, but we never really had numbers on actual life expectancy loss across the income spectrum," he says.
Communities of color were disproportionately affected by the pandemic, with life expectancy declining 5.74 years among Hispanics, 3.04 years among the non-Hispanic Asians, 3.84 years among the non-Hispanic Blacks, and 1.9 years among the non-Hispanic Whites.
"The disproportionately large decreases in life expectancy among Hispanic and non-Hispanic Black populations reflect their exposure to higher COVID-19 infection, hospitalization, and death rates, especially early in the pandemic," the study notes. "This disparity, much like other racial and ethnic inequities, has roots in the social determinants of health as well as structural barriers resulting from systemic racism that have helped perpetuate disparities for generations."
"In the case of COVID-19, Hispanic and non-Hispanic Black populations were more likely to rely on jobs (often as frontline workers), transportation, and housing conditions that heightened viral exposure and to encounter barriers to healthcare, a higher prevalence of comorbid conditions, and socioeconomic challenges that jeopardized their health."
S&P reports that inflation, rising labor and borrowing costs, and sputtering investments are stressing margins.
The first quarter of 2022 proved to be one of the toughest performance quarter on record for the nation's not-for-profit hospitals, according to a midyear analysis by S&P Global Ratings.
The bond rating agency reports that hospitals in early 2022 struggled with inflation and high but possibly plateauing labor costs, while simultaneously confronting rising interest rates and demands on cash flow, and underperforming investments in a weakened market, all of which are likely to hobble operations for the rest of the year, and into 2023.
"Midway through 2022, not-for-profit hospitals and health systems face a difficult operating environment that, while easing from the extreme pressures of late December 2021 and early January and February related to the omicron surge, is still causing operating cash flow compression for many of them across the U.S.," S&P says.
"Although many entities, particularly those with healthy business positions and unrestricted reserves, should be able to handle the stress as they implement near- and medium-term solutions, S&P Global Ratings believes those with weaker financial profiles and business positions or those that have had underlying operational problems in recent years or have less balance sheet cushion, could be at increased risk for a downgrade or negative outlook revision. Much will depend on the extent and duration of the operating pressures as well as the broader macroeconomic conditions," S&P says.
Unless Congress acts, providers will also have to contend with further reductions in federal funding with the re-introduction of sequestration and the anticipated end of the public health emergency later this year.
"That said, for many hospitals and health systems, underlying demand, including pent-up needs for care that was deferred during the omicron surge earlier in the year, remains sound," S&P says. "However, if a structural imbalance of labor supply and demand persists, it could be hard to meet those patient needs, thereby further elevating the human capital social risks that we capture under our environmental, social, and governance (ESG) factors."
"We had noted these operating pressures, but some of them are more pronounced than anticipated, with the financial flexibility provided by unrestricted reserves starting to lessen for certain organizations, as investment markets have been volatile since the beginning of 2022," S&P says.
Inflation and Labor Costs
Earnings were down in the first quarter of 2022 for almost every hospital rated by S&P, primarily because of inflation and rising labor costs.
"The questions are: How much of the heightened expenses are temporary due to the omicron surge at the beginning of the year versus how much is built into base salaries and will be ongoing? And when does the imbalance of labor supply and demand begin to ease?" S&P says.
In the short term, providers have had to spend more to recruit and retain staff as burned-out clinicians either retire or quit. All this is happening, S&P says, amid "significant uncertainty on how long it might take to fill vacancies, reduce agency usage, address staff burnout, and return to a more balanced labor market."
While the reliance on travel nurses and other temporary clinicians has eased somewhat since the height of the pandemic in 2021 and early 2022, S&P projects that labor costs "will likely remain higher for at least the next year and possibly for several years to come as staff shortages could continue and more workers may seek to become travelers than before the pandemic," S&P says.
"Anecdotally, we've observed nurse agency rates of more than $200/hour from providers at the height of the omicron surge; for many, those rates have fallen and still vary widely, but may be closer to $130-$150--and are still higher than agency rates before the pandemic," S&P says.
Pay Raises
Salary and wage hikes, and signing and retention bonuses -- key components of employee retention -- are also much higher rate than previous annual increases of around 3% and often higher than what was budgeted.
"Some hospitals and health systems are making further wage and benefit adjustments midyear to retain and attract staff," S&P says. "All of this is in addition to absorbing the agency and one-time impacts previously mentioned."
M&A Options Limited
Whereas in the past, hospitals facing financial duress often looked to mergers, S&P notes that the regulatory crackdowns on healthcare consolidation may close that outlet.
"Given recent denials by the Federal Trade Commission and other regulatory agencies, this option may be increasingly difficult to deploy," S&P says. "If these denials affect organizations that are already struggling operationally, options could become increasingly limited for certain providers."
Molina has also paid $80 million in disputed and delayed claims to providers, plus $1.8 million in interest.
Molina Healthcare of California has paid a $1 million fine levied by state regulators for failing to timely acknowledge and resolve nearly 30,000 provider disputes between September 2017 and September 2018.
In addition to corrective actions ordered by the California Department of Managed Health Care, Molina has also paid $80 million in disputed and delayed claims to providers, plus $1.8 million in interest.
"It is important health plans promptly and accurately pay claims to hospitals, doctors and other providers when health care services are provided to enrollees to ensure the financial stability of providers, and the overall stability of the healthcare delivery system," DMHC Director Mary Watanabe said.
"Molina's systemic failures to timely resolve provider disputes caused payment delays, potentially jeopardizing the financial stability of providers. The plan has agreed to take corrective actions including remediating payments to impacted providers plus interest."
Molina did not return email requests for comment from HealthLeaders.
California health plans are required to have a Provider Dispute Resolution program for claims dispute with providers. State law requires plans to identify and acknowledge each provider dispute within two working days of the date of receipt of an electronic provider dispute, with 15 business days to respond.
Plans must also resolve each provider dispute or amended provider dispute and issue a written determination stating the pertinent facts and explaining the reasons for the plan's determination within 45 working days after the date of receipt.
As part of the required corrective actions, and in addition to remediating payments to providers, Molina must demonstrate compliance with acknowledgment and resolution timeliness requirements.
If a provider disputes Molina's PDR process, or the plan takes longer than 45 days to issue a written determination, the provider can contact the DMHC Help Center's Provider Complaint Unit for further assistance.
The Lown Institute Hospitals Index for Social Responsibility, launched in 2020, identifies leading and laggard hospitals nationwide using benchmarks for hospitals to measure how well they serve their patients and communities.
Adventist Health Howard Memorial was named the top hospital among the 66 hospitals nationwide that earned the “most socially responsible” designation by Lown.
In total, Lown ranks 3,606 hospitals—with less than 2% earning top marks across metrics that include racial inclusivity of patients, employee pay equity, and avoidance of unnecessary and potentially harmful procedures.
“Citizens put their lives and billions of tax dollars in the hands of America’s hospitals,” said Vikas Saini, MD, president of the Lown Institute. “We believe communities should have high expectations and the most socially responsible institutions should be lifted up as models for the system.”
Among the 66 most socially responsible hospitals, Lown Institute analysts identified 15 hospitals that had an extraordinary COVID burden—defined as having 26 or more weeks with at least 10% of inpatient beds filled by COVID-19 patients during the first year of the pandemic.
“Achieving the trifecta of great outcomes, value, and equity is hard—especially under the pressures of a global pandemic,” Saini said. “Hospitals that met the unprecedented challenges of COVID while staying committed to their social mission should be very, very proud.”
The Lown Institute Hospitals Index measures social responsibility of more than 3,600 hospitals nationwide, evaluating hospitals on 53 metrics across equity, value, and outcomes. Hospitals with “A” grades on each of the three major categories achieve the title of “most socially responsible.”
The Lown Institute used publicly available data from Medicare claims, CMS hospital cost reports, IRS 990 forms, and other sources. COVID burden for March 2020-2021 is reported for each hospital but does not factor into the hospital social responsibility ranking.
California, Oregon, and Washington form the Multi-State Commitment to Reproductive Freedom.
Minutes after the U.S. Supreme Court's landmark ruling on Friday overturning Roe v. Wade, California Gov. Gavin Newsom joined the governors of Oregon and Washington state with a pledge to make the West Coast a "safe haven" for abortion rights.
“The Supreme Court has made it clear – they want to strip women of their liberty and let Republican states replace it with mandated birth because the right to choose an abortion is not 'deeply rooted in history,'" Newsom said in a media release announcing the creation of the Multi-State Commitment to Reproductive Freedom.
"California has banded together with Oregon and Washington to stand up for women, and to protect access to reproductive healthcare," Newsom said. "We will not sit on the sidelines and allow patients who seek reproductive care in our states or the doctors that provide that care to be intimidated with criminal prosecution. We refuse to go back and we will fight like hell to protect our rights and our values."
Newsom has proposed a $125 million Reproductive Health Package to expand access for women and help prepare for the influx of women seeking abortions from other states. The California Legislature has introduced a constitutional amendment to enshrine the right to abortion in the state constitution. Newsom recently signed legislation eliminating copays for abortions and has signed into law a legislative package to further strengthen access and protect patients and providers.
Oregon Gov. Kate Brown said "abortion is healthcare, and no matter who you are or where you come from, Oregon doesn't turn away anyone seeking healthcare. Period."
"Let me be clear: You cannot ban abortion, you can only ban safe abortions — and this disgraceful Supreme Court decision will undoubtedly put many people's lives at risk, in addition to stripping away a constitutional right that disproportionately affects women and has been settled law for most of our lifetimes," Brown said. "For all the Americans today feeling scared, angry and disappointed — for everyone who needs an abortion and does not know where they can access safe reproductive healthcare –– please know you are not alone, and the fight is not over."
Washington Gov. Jay Inslee said abortion rights laws in his state "remain unchanged," but he warned that "the threat to patient access and privacy has never been more dangerous."
"Even in Washington state, Republicans have introduced about 40 bills in the past six years to roll back abortion rights and access to reproductive care," Inslee said. "The right of choice should not depend on which party holds the majority, but that's where we find ourselves. More than half the nation's population now lacks safe access to a medical procedure that only a patient and their doctor can and should make for themselves."
"Instead, law enforcement, vigilantes and judicial systems can force patients to bear the burdens of forced pregnancy and birth," Inslee said. "Washington state remains steadfast in our commitment to protecting the ability and right of every patient who comes to our state in need of abortion care, and we will fight like hell to restore that right to patients all across the country."
The Hamburg area of Lexington-Fayette County is a fast-growing area of the Bluegrass region.
UK Healthcare has purchased a 27-acre tract in the Hamburg development just east of Lexington for $20.3 million, with plans to turn the site adjacent to Interstate 75 into the future home of a regional hospital and medical office complex.
Mark F. Newman, UK executive vice president for health affairs, says the project recognizes "the need to make healthcare more geographically accessible for our patients in Lexington as well as across Central and Eastern Kentucky."
"Not only will this location be more convenient for many of our patients, it will support our continued growth in outpatient services and create more capacity for essential clinical programs," he says.
The Hamburg area of Lexington-Fayette County is a fast-growing area of the Bluegrass region. As part of its 2025 strategic plan, UK HealthCare is focused on providing convenient access to healthcare.
The proposed community medical campus will provide acute care to complement UK HealthCare's main medical centers, UK Chandler Hospital and UK Kentucky Clinic.
UK HealthCare now offers outpatient services at several other medical facilities across Lexington, including Kentucky Children’s Hospital's pediatric clinics, the Good Samaritan Professional Arts Center, UK HealthCare-Turfland, the Lexington Surgery Center, Kentucky Clinic South, Polk-Dalton Clinic, the UK HealthCare offices at Fountain Court, and Physical Medicine and Rehabilitation at Cardinal Hill Rehabilitation Hospital.
UK HealthCare in December announced plans for a new cancer center/ambulatory facility across South Limestone from UK Chandler Hospital — the future home for the UK Markey Cancer Center.
The deal must undergo due diligence and will be finalized with the approval from the UK Board of Trustees and Kentucky's Secretary of Finance and Administration.
Newman says UK trustees will get the details for the medical campus when UK HealthCare presents a master facility plan, which will focus on creating new access sites across the Bluegrass and in underserved areas of Fayette County.
"We want to treat patients where they are — as close to home as possible with the best of care as possible," Newman says. "That's the goal of this initiative as well — to create greater access, closer to home, for more people in the area to the best possible primary and specialty care."
Stakeholders want to increase access and support efforts to address social determinants of health.
The Association for Community Affiliated Plans is calling on the federal government to strengthen support for efforts to address social determinants of health for the nation’s poor and underserved.
The push is part of a new initiative by ACAP and its 74 member nonprofit plans across the nation that provides a framework for stakeholders and policymakers to reduce health disparities and improve health outcomes.
Pathway to Improve Health Equity uses a three-pronged approach to increase equity among plan beneficiaries, who have low incomes, are disproportionately from communities of color, and may live with disabilities.
ACAP CEO Margaret A. Murray says the initiative will rely on robust data collection to support improvement on equity measures, pursuing public policies that improve equity, and listening and learning from the experiences of other plans.
"Increasing health equity requires a shared commitment from policymakers and health plans," Murray says in a media release.
"With an intentional focus on measuring and reporting data, and more support for policies that improve health care coverage, Safety Net Health Plans will continue to lead the way in meaningful, innovative progress on health equity," she says. "Policymakers can support these important efforts by backing policies that allow plans to address social determinants of health as an essential element of healthcare."
ACAP wants federal policymakers to fund more benefits that address SDOH, including food, transportation, and housing programs, and to promote healthcare access by establishing continuous eligibility for people covered by Medicaid and the Children’s Health Insurance Program and extending postpartum Medicaid coverage to 12 months.
ACAP is also pushing a learning collaborative to help Safety Net Health Plans advance equity across their members. The two-year program partners with the Center for Health Care Strategies to address health disparities and help nonprofit health plans develop and vet health equity strategic plans.
"There are no silver bullets to solve the widespread, systemic disparities that plague America's health care system, but there are concrete actions that can move the needle," says Christopher D. Palmieri, president and CEO of Massachusetts-based Commonwealth Care Alliance and chair of ACAP’s board of directors. "Health equity can progress from an aspiration to a reality, but it requires policymakers to work with health plans and others in new and deliberate ways. The Pathway fuels that process."
The mega-health system cites its 'unique position' to address the epidemic of gun violence.
Kaiser Permanente wants to "amplify" the opening of its Center for Gun Violence Research and Education by doling out $1.3 million to nonprofits with a shared interest in gun violence prevention.
"It is increasingly and distressingly clear that gun violence is a public health crisis in the U.S., claiming lives and creating trauma with untold, long-lasting consequences for countless people," said Bechara Choucair, MD, chief health officer and senior vice president for Community Health at Kaiser Permanente.
"As a major health care organization caring for 12.6 million people, we are in a unique position to expand, amplify, and implement promising work underway by healthcare and public health leaders to prevent future gun-related injuries and deaths, starting with a series of grants to organizations focused on addressing gun violence," Choucair said.
Grant partners include:
UC Davis — To provide core support for the Violence Prevention Research Program;
The Ad Council — To scale the End Family Fire campaign, which promotes safe gun storage in order to prevent shootings involving unsecured or misused firearms;
Association of State and Territorial Health Officials — To develop materials on evidence-based public health approaches to gun violence and suicide prevention, as well as to plan a national summit and develop collateral materials for broad use;
Big Cities Health Coalition — For public education on public health approaches to gun violence prevention:
Health Alliance for Violence Intervention — To convene researchers and experts to study the effectiveness of hospital violence intervention programs and their ability to break and prevent the cyclical nature of gun violence;
Johns Hopkins Bloomberg School of Public Health - To support the Johns Hopkins Center for Gun Violence Solutions, including efforts to study the implementation of extreme risk protective orders and the role clinicians can play in raising awareness of these measures:
National Institute for Criminal Justice Reform (NICJR) — To provide core support for NICJR violence reduction initiatives in states impacted by increased rates of gun violence;
California hospitals were reminded that they must provide written notice to patients – in their native language – of the availability of "charity care" and how to apply.
California Attorney General Rob Bonta has issued a consumer alert after receiving reports that the state's hospitals are ignoring the state’s charity care law obligation to tell patients about free and cheaper care options.
Bonta also sent letters to California hospitals warning them that they must provide written notice to patients – in their native language – of the availability of "charity care" and how to apply.
"When hospitals fail to inform patients of the availability of free or reduced-cost medical care, they force patients and their families to make impossible choices and confront financial hardship," Bonta said. "No family should ever have to think twice about getting their loved one's necessary medical care because they're afraid of high medical costs. Hospitals have a responsibility to inform Californians about their charity care options."
Bonta said the California Department of Justice has received complaints, particularly from rural and farm-working communities across the state, that hospitals are not providing charity care policy notices in a language that patients understand as required by state law.
A media release by CDOJ points to a 2021 survey from Gallup and West Health, showing that one-third of Americans have skipped medical treatment because of the high cost of care.
"As patients continue to face high out-of-pocket costs, they have the right to know that charity care programs exist to help families avoid financial catastrophe," Bonta said.
Those eligible for charity or reduced cost care include:
Uninsured patients: California law requires hospitals to provide free or discounted care to uninsured patients who earn up to 400% of the federal poverty level.
Insured patients: Californians with health insurance may qualify for discounts if they: (1) earn up to 400% of the federal poverty level, and (2) have faced out-of-pocket medical expenses in the preceding 12 months that exceed 10% of their income.
Immigrants: Californians’ immigration status does not affect eligibility for charity care. Hospitals may request proof of their financial situation — such as pay stubs or documentation from a local social services agency — but only to assess financial eligibility.
Bonta said Californians have the right to: request payment assistance even if they have health insurance or are undocumented; receive information about charity care and an application for charity care in their native language; receive a written estimate of the out-of-pocket cost they will be expected to pay if they are uninsured; negotiate an extended payment plan to pay for their treatment if they qualify for charity care.
Patients who believe a hospital is violating the law can file a complaint with the California Department of Public Health here.
