The public plan acknowledged problems with its grievance resolution process, but called the fine excessive.
L.A. Care Health Plan, the nation's largest publicly operated health plan, has been fined $55 million by two state agencies for its "deep-rooted, systemic failure" to act on enrollee grievances.
“The magnitude of L.A. Care’s violations, which has resulted in harm to its members, requires immediate action,” Department of Managed Health Care Director Mary Watanabe and Department of Health Care Services Director Michelle Baass said in a joint statement.
“Our investigations found several operational failures at L.A. Care, which have significantly impacted the health and safety of some of the state’s most vulnerable health care consumers. This action is necessary to protect the plan’s members, and to get L.A. Care to make serious changes to repair the plan’s operations.”
In a statement released to HealthLeaders, L.A. Care said it brought the issue to state regulators and agreed that corrective action was needed – and has been taken -- to fix the plan's grievance process.
However, the payer said, "we disagree about the amount of the proposed fine as being disproportionate to the value L.A. Care brings to our members and our network of safety net and community providers."
"While L.A. Care anticipated and was prepared to pay a substantial financial penalty, we are surprised and disappointed with the unprecedented size of the state’s proposed financial penalty of $55 million," the statement read. "The proposed penalties seem arbitrary and unnecessarily punitive. L.A. Care will contest the financial penalties through the available processes."
California health plans must acknowledge receipt of non-urgent grievances within five days, resolve the grievance within 30 days, and send a written resolution to the member.
L.A. Plan, with more than 2.5 million members in Los Angeles County, was fined $35 million by DMHC and $20 million by DHCS after regulators identified thousands of violations of the plan's handling of enrollee grievances, the processing of requests for authorization, and inadequate oversight and supervision of its contracted entities regarding timely access.
L.A. Care had self-disclosed to DMHC in 2021 that it had identified more than 67,000 instances where the plan failed to timely respond for several of its business lines, including Medi-Cal. L.A. Plan self-reported 41,500 violations to from January 2019 through October 2021.
L.A. Care also self-disclosed that it had a backlog of 9,125 authorization requests to the DMHC and 8,517 to the DHCS for a three-month period in 2021. State regulators also identified 92,854 instances in which prior authorization requests were not processed timely from January 1, 2019 through October 13, 2021.
L.A. Care said that -- based on a review of penalties assessed of other healthcare organizations – "these proposed penalties are several times higher than what would be in alignment with previous state sanctions."
"What the state does not seem to factor into their equation is that a financial penalty of this magnitude creates yet another financial hurdle for a public health plan that is a crucial part of the health care safety net in Los Angeles County. L.A. Care is already striving to meet the needs of low-income county," the plan said.
Baass acknowledged L.A. Care's cooperation in the audit, but added that "the scope and breadth of its violations indicate deep-rooted, systemic failures that threaten the health and safety of its members. Our actions today send a strong message that California will hold L.A. Care accountable for providing quality care to its members.”
Jumpstart Nova founder Marcus Whitney speaks with HealthLeaders about the fund, why it's needed, and the metrics they'll use to measure success.
By some estimates, there are nearly 785,000 companies in the nation's healthcare sector, but only 35,000 – less than 5% – are Black-owned.
Jumpstart Nova, a newly launched, Nashville-based venture capital start-up, hopes to change that.
Touting itself as "the first venture fund in America to invest exclusively in Black founded and led companies at the forefront of healthcare innovation," Jumpstart Nova is backed by $55 million in assets, well oversubscribing its initial $30 million goal.
The need is there, Jumpstart says on its homepage, because "decades of chronic underinvestment in great Black healthcare founders (has) created an opportunity for a fund to focus on and invest in them, exclusively."
Jumpstart Nova founder and managing partner Marcus Whitney speaks with HealthLeaders about the fund, why it's needed, and the metrics they'll use to measure success. This interview was edited for brevity and clarity.
HealthLeaders: Are you targeting a particular area of healthcare for investment?
Marcus Whitney: It's broad. I would have said before we pulled the whole fund together that we wouldn't do anything in life sciences. But we did come out of the gate with a cell and gene therapy commercialization company.
We've got a specific list of the types of companies that we're looking for and we put those on our website and in the criteria section.
HL: You stress that you are Black-founded and led. Why is this important?
Whitney: It's two big things. The first is healthcare is almost like a utility. It's one of the few universally used services in America. When you look at the percentage of the population that Black people make up in America, and then you look at leadership in the healthcare industry, there's a pretty big delta between those two percentages.
Then, I would say that innovation has now finally arrived in healthcare and everyone recognizes that, to improve that cost-quality ratio as well as to address significant health equity issues, we're have to innovate and we're not able to do that with our existing systems.
Venture capital is an important component of healthcare innovation. So, for those two reasons, we need more Black-owned and led healthcare companies because there is no avenue where diversity, equity, and inclusion are most important than healthcare. It has the most to do with the change that we're looking to make in the healthcare system to make it more equitable for all, but also we want to bring as many diverse minds into the healthcare innovation ecosystem to solve problems for everyone.
Limiting where we're getting our ideas from or who's building those companies to certain demographics is not good for any of us. We're taking on the challenge of focusing on this one demographic, but you've got to find venture funds that are focusing on others and more broadly looking at underrepresented groups to level the playing field for the benefit of everybody.
HL: Do you think that your fund would be particularly receptive to entrepreneurs who address social determinants of health?
Whitney: What we are most in a good position to do is to get to know the ecosystem of Black founders in the healthcare space and support them broadly in any way that we can, but also find the ones that are qualified -- specifically because of our knowledge, our background, our network, our existing strategic, and limited partners -- to help those companies be successful.
We anticipate that some of these companies, because they're Black-founded, are going to have personal stories that drove them to create the businesses. Some of those personal stories will absolutely have to do with health inequities, and so they'll be driven and passionate about solving those problems. We want to back to those founders, but we also think they're going to be founders who are going to create solutions that are going to be great for problems that all people are struggling with today. For us, it's about understanding and being able to best support this group of founders that have been chronically underinvested in.
HL: Provide an example of one of Jumpstart's entrepreneurs who might otherwise be left behind.
Whitney: The founder's name is Derrelle Porter. He is an MD/MBA from Penn who worked at McKinsey and spent two decades working in pharma in senior leadership positions and strategy and commercialization at AbbVie, Amgen, and Gilead.
He has launched a company called Cellevolve Bio, a cell and gene therapy commercialization company. This company is incredible, a new type of biotech at scale to bring cell and gene therapies to market, something that nobody's figured out how to do. When you look at his background, how uniquely qualified he is for this, his understanding of the space, he's incredible. Getting funding at the seed stage is very difficult but we were able to be the lead investor, take a board seat, and push his seed round across the line to get it closed.
Some of it is meeting these founders at these critical inflection points where they need someone who will step up and lead and say "I'm backing this person. I'm going to put capital in. I'm going to take a board seat. They're going to be great." Then, others will follow along.
HL: Ultimately this is about private equity and making money. How will you measure success in five years?
Whitney: We see the social component as built in but not something that we are going to quantitatively measure. We will qualitatively measure that. Our quantitative measurements are the success of the fund and the success of the companies and the success of the founders that we invest in.
We were clear about that on the onset. It's very easy with this type of a company and investment thesis to move to an "impact investing mindset," but that's not our mindset. We're a healthcare venture capital fund. We have a very specific look through to what the makeup of the funding team needs to be and we believe that, just because of the chronic underinvestment of the teams that have this particular makeup, it's ripe with fantastic opportunities for investment.
The byproduct of that is that we're going to get different types of companies leading in different ways, solving different problems. In the end, there will be some great social benefits from that.
HL: Does making this about the bottom line simplify your message?
Whitney: We don't we don't want to say this is just about giving people a chance. We're trying to grow an institution that we think can be incredibly successful. So, we have one single goal ultimately, which is find the best Black-founded and led healthcare companies in the market, successfully invested in those companies, and support the for great outcomes, period. We think there will be tremendous byproducts as a result of us being successful in that one clear goal.
The payout is 40% higher than the $4.55 billion deal that was vacated by a federal court in December, and does not protect the Sackler family from criminal charges.
OxyContin maker Purdue Pharma and the Sackler family will surrender $6 billion for their central role in fueling the deadly and ongoing opioid epidemic that has claimed the lives of 840,000 Americans since 1999.
The civil settlement was announced Thursday by attorneys general from nine states that had challenged a 2021 settlement of $4.55 billion, and which was vacated by a federal judge in December. The new settlement still must be approved by a federal bankruptcy court and the U.S. Court of Appeals for the Second Circuit.
Among the many stipulations in the deal, the Sackler family must apologize for their role in creating the opioid epidemic, which until now they have steadfastly refused to do.
In exchange for the money and the other stipulations of the settlement, the Sacklers will be given immunity from further civil litigation. However, the deal does not shield them from potential criminal prosecution.
California, Connecticut, Delaware, Maryland, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia objected to and ultimately appealed the plan. The U.S. Department of Justice also appealed.
Connecticut Attorney General William Tong, who led the effort to overturn the earlier settlement, called the new deal "both significant and insufficient—constrained by the inadequacies of our federal bankruptcy code."
"But Connecticut cannot stall this process indefinitely as victims and our sister states await a resolution. This settlement resolves our claims against Purdue and the Sacklers, but we are not done fighting for justice against the addiction industry and against our broken bankruptcy code," Tong said.
Purdue 'Pleased With the Settlement'
Purdue Pharma issued a statement saying it was "pleased with the settlement achieved in mediation, under which all of the additional settlement funds will be used for opioid abatement programs, overdose rescue medicines, and victims. With this mediation result, we continue on track to proceed through the appeals process on an expedited schedule, and we hope to swiftly deliver these resources."
Thursday's announcement marks the second multibillion dollar opioid settlement in recent weeks. In late February, drugmaker Johnson & Johnson and drug wholesalers AmerisourceBergen, Cardinal Health and McKesson agreed to pay a combined $26 billion to resolve their role in the epidemic.
However, the settlements are dwarfed by the cost of opioid epidemic. The Centers for Disease Control and Preventionhas estimated that the "economic burden" of opioid epidemic is $78.5 billion a year, which includes the costs of healthcare, lost productivity, addiction treatment, and criminal prosecutions.
The settlement keeps intact provisions of the Purdue bankruptcy plan forcing the company to be dissolved or sold by 2024 and banning the Sacklers from the opioid business globally.
Under the new settlement:
The Sackler family must pay up to $6 billion to the bankruptcy estate – $1.7 billion above the initial bankruptcy plan. The payments will be spread over 18 years, with larger payments frontloaded so states receive more money, sooner as compared to the previous bankruptcy plan.
The Sackler family must allow institutions to remove the family name from buildings, scholarships, and fellowships.
Responding to state requests, mediator Judge Shelley C. Chapman urged the Bankruptcy Court to require members of the Sackler family to participate in a public hearing where victims and their survivors would be given an opportunity to directly address the family.
Purdue must make public additional documents previously withheld as privileged legal advice, including legal advice regarding advocacy before Congress, the promotion, sale, and distribution of Purdue opioids, structure of the Purdue Compliance Department and its monitoring and abuse deterrence systems, and documents regarding recommendations from McKinsey & Company, Razorfish, and Publicis related to the sale and marketing of opioids.
States reserve the right to object to nonconsensual third-party releases, including advising the court that agreement to the settlement does not indicate belief that those releases that remain in the Purdue bankruptcy plan are legal. The settlement also preserves the right of the states to file amicus briefs arguing against nonconsensual third-party releases if the case makes it to the U.S. Supreme Court.
In a separate settlement in October, 2020, Purdue Pharma agreed to pay $8 billion and dissolve as a company in a deal to settle civil and criminal charges. Purdue pled guilty to a three-count felony information charging it with one count of dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Federal Anti-Kickback Statute, for violations that occurred between 2007 and "at least March, 2017," DOJ said.
Under the earlier bankruptcy plan, Stamford, Connecticut-based Purdue Pharma was renamed "Knoa Pharma LLC," will dedicate resources to addiction treatment and relief, and will be overseen by a public board of trustees.
A copy of the mediator's report is available here. A copy of the motion for approval which includes the settlement term sheet is available here.
Audio consultations will launch immediately, and video visits are "coming soon."
Internet behemoth Amazon Inc. and Teladoc Health on Monday announced the launch of voice-activated virtual primary care services on Alexa-supported Echo devices.
The initial launch will provide 24/7 audio general medical services, with video visits "coming soon." The per visit cost will range from free with insurance to $75 without insurance, the two companies said in a joint statement.
"Teladoc Health's collaboration with Amazon is yet another step in breaking down barriers to healthcare access," said Donna Boyer, chief product officer for Purchase, New York-based Teladoc Health.
"By introducing and integrating our virtual first care experience with Echo devices, we are providing an innovative and convenient way for users to connect with a doctor," Boyer said. "We are meeting consumers where they are, to continue to deliver value and high-quality care to members."
To activate the platform, users will tell their Echo: "Alexa, I want to talk to a doctor." Echo will connect with the Teladoc call center and users will get a call back on their Echo from a Teledoc doctor for virtual visits for non-emergency care.
"We're excited to work with Teladoc Health to offer our customers an easy, hands-free way to connect with a doctor," said Debra Chrapaty, Amazon Alexa COO.
"Whether they're taking care of their sick child in the middle of the night or wanting to ask a doctor about allergy symptoms in between meetings during the day, we hope this experience will help customers find the convenient help they want from the comfort of their own home," she said.
Black women are three- to four times more likely to die from pregnancy related causes than White women.
Blue Shield of California is launching an initiative that links healthcare technology and collaboration with community-based organizations to improve services for new mothers and their babies.
The nonprofit health plan's Maternal Child Health Equity initiative aims to address disproportionate mortality rates among mothers and children, especially in underserved communities. Services are available to expecting and new mothers in Fresno, Los Angeles, and Sacramento counties through physician referrals.
According to federal data, Black women are three- to four times more likely to die from pregnancy related causes than White women, and more than twice as likely than non-Latinx White mothers to receive late or no prenatal care.
In addition, Black infants in the U.S. are more than twice as likely to die than White infants, which is also true within California, according to County Health Rankings.
"Black women continue to experience adverse birth outcomes and pregnancy-related complications at much higher rates compared to other racial/ethnic groups," D.D. Johnice, vice president of Blue Shield's Health Transformation Lab, said in an email exchange with HealthLeaders.
"Given the disparities in maternal and child health that are disproportionately impacting Black families and communities, something needed to change," Johnice said. "This health crisis is caused by racial health inequities – Black mothers are being ignored and underserved with the medical and social needs for them and their babies. That said, there is an urgent need for the healthcare system to develop thoughtful and impactful solutions to address it."
The initiative will work with community-based organizations such as Black Wellness and Prosperity Center, Diversity Uplift, and Her Health First to train "culturally congruent and trauma-informed" doulas and connect mothers to family-centered services, emergency funds, and maternal supplies.
The initiative will also collaborate with Mahmee to bring access to health records of the mother and baby, educational materials ranging from nutrition to return to work, and unbiased guidance throughout the process.
Johnice said the initiative was designed as a market test.
"From clinical and public health best practices, we developed a three-pronged approach to support and care for mothers and their babies – connecting them with community-based organizations, doulas, and technology," she said. "We are looking to improve pregnancy outcomes, mental health and stress, and the overall experiences with the healthcare system for birthing people and their families. Our goal is to learn what works best from this program in Fresno, Los Angeles, and Sacramento, and expand offerings from there."
Jessica Altman's tenure will begin in early March after the planned departure of Peter V. Lee, Covered California's founding executive director.
Pennsylvania Insurance Commissioner Jessica Altman has been named CEO of Covered California, the board of directors at the state's health insurance marketplace has announced.
A former Obama administration official who helped launch the marketplaces created under the Affordable Care Act, Altman's tenure will begin in early March after the planned departure of Peter V. Lee, Covered California's founding executive director, who has led the organization since its inception more than a decade ago.
"I could not be more honored to accept the position as Covered California's next CEO," Altman said in a media release.
"Under Peter's leadership, Covered California became a national model for the Affordable Care Act always putting consumers first and maximizing the role of the marketplace to transform healthcare."
Covered California boasts a record-high 1.8 million enrollees, thanks in part to the implementation of the American Rescue Plan, and record-low rate changes averaging just over 1% over the past three years.
Mark Ghaly, MD, Covered California's board chair and California Health and Human Services secretary, lauded Lee's "vision, passion and leadership" during his tenure.
"That work has improved the lives of millions of Californians and meant that Covered California has served as a national proving ground," Ghaly said, addint that Altman is "an impressive leader with significant experience with the Affordable Care Act, marketplaces and fighting for consumers."
As Pennsylvania's insurance commissioner, Altman led the transition to "Pennie," the nation's fifth-largest state marketplace, which began offering coverage in 2021. Before Pennie, the state offered coverage through the federal marketplace.
Hospital leaders express disappointment but pledge to "move on to a new path forward."
The Federal Trade Commission and Rhode Island regulators on Thursday said they will file suit to block the proposed merger of the two largest health systems in the nation's smallest state.
If consummated, the consolidated eight-hospital Lifespan and Care New England system "would control an unprecedented amount of healthcare in Rhode Island, taking the state's healthcare market from one in which there is healthy competition to a virtual monopoly," regulators said.
"Our review clearly established that Lifespan and CNE compete aggressively with each other across many inpatient and outpatient service lines," Rhode Island Attorney General Peter F. Neronha said in a media release.
"Eliminating this competition will have the same effects here as seen across the country following mergers of this size: rising healthcare costs, lower quality, and reduced access," Neronha said. "The parties simply have not demonstrated why these results would not happen here and how they would be able to deliver on promised benefits that would outweigh these risks."
The regulators' review noted that the consolidated system would:
Control 75% of all inpatient acute care hospital beds in the state
Control 80% of the state's inpatient hospital care
Control 79% of the state's inpatient psychiatric care
Control 60% or more of the state's market for many outpatient surgeries
Account for 50% of commercial healthcare spending on patients whose primary care physician is part of the merged system's ACOs
Employ 67% of the state's full-time hospital RNs.
Care New England President and CEO James E. Fanale, MD, and Lifespan President and CEO Timothy J. Babineau, MD, issued a joint statement expressing frustration with the regulators' decision.
"Of course, we are disappointed, but I will say that we can truly know that we did everything we could over the past few years of hard work to get this done," Fanale said.
"We thought it was the right thing to do, but now we will need to move on to a new path forward," he said. "There is always a path forward, and we will explore all options to find the best possible -- and acceptable to regulatory bodies – solution for access to affordable, quality, healthcare."
Neronha's office and the FTC will file a joint complaint in federal district court for a temporary restraining order and preliminary injunction to stop the deal and to maintain the status quo until an administrative hearing can be held.
“This proposed merger is a bad deal for patients who are likely to see higher hospital bills, lower quality of care, and fewer cutting-edge medical services," FTC Bureau of Competition Director Holly Vedova said.
"By eliminating competition between Lifespan and Care New England, this merger would create a new healthcare conglomerate with outsized power over the entire continuum of healthcare services," Vedova said.
"As this country struggles to recover from a devastating pandemic, we can't afford to allow this kind of concentrated control over critical healthcare services."
BCBS Rhode Island
Blue Cross & Blue Shield of Rhode Island said the failed merger bid will not affect its relationship with either health system.
"The decision of the Rhode Island Attorney General and the Federal Trade Commission does not impact our shared commitment to these efforts, which further long-term economic growth, predictability of healthcare costs, and the well-being of all Rhode Islanders," the payer said.
CMC claims no liability for the whistleblower allegations.
Catholic Medical Center will pay $3.8 million to resolve whistleblower allegations that it violated the Anti-Kickback Statute when the Manchester, New Hampshire-based hospital provided free call coverage services to a cardiologist in exchange for patient referrals, the Department of Justice said.
CMC claimed no liability, but said it settled with DOJ to avoid costly litigation.
The settlement agreement with DOJ stated that CMC "paid its own cardiologists to cover for, and to be available to provide medical services for, another cardiologist’s patients when she was on vacation or otherwise unavailable."
"The United States further alleged that CMC provided these call coverage services at no charge," DOJ said. "The cardiologist who received the free call coverage referred millions of dollars in medical procedures and services to CMC over the decade in which the free services were provided."
Because CMC submitted to Medicare, Medicaid and other federal payers claims for services provided by the cardiologist's referrals, DOJ said the payments were unlawful kickbacks.
"When patients are referred for medical services, those referrals should be based solely on medical need and not affected by financial considerations," New Hampshire U.S. Attorney John J. Farley said in a media release.
"We work closely with our law enforcement partners to protect the integrity of federal health care programs and we will use all appropriate enforcement tools to combat healthcare fraud in New Hampshire."
The settlement resolves allegations originally brought in a lawsuit filed by a whistleblower, David Goldberg, MD, a former CMC employee.
CMC Responds
Lauren Collins-Cline, communications director at CMC, said the settlement involves a call coverage arrangement that began 15 years ago "with the input of legal counsel in order to provide high quality care for patients. It is no longer in place."
"While CMC vigorously disagrees with the government's allegations that this arrangement violated federal law, we have agreed to settle in order to avoid long costly civil litigation. CMC holds itself to the highest ethical standards in patient care and business conduct. That’s embedded in our mission and will always remain our highest priority," Collins-Clinesaid.
It's believed to be the largest philanthropic donation to a U.S. university to support research focused solely on depression.
The estate of Newport Beach philanthropist Audrey Steele Burnand has gifted $57.6 million to the University of California, Irvine, with most of the money funding a new campus-wide center researching the causes and treatments of depression.
The $55 million of the gift that is dedicated to mental health funding is believed to be the largest philanthropic donation to a U.S. university to support research focused solely on depression, the most prevalent mental health disorder in the U.S., afflicting about 1 in 15 adults.
The remaining $2.6 million of the gift will support the UCI-managed Steele/Burnand Anza-Borrego Desert Research Center.
"This is a truly transformative gift from a longtime and great supporter of our vital work," said UCI Chancellor Howard Gillman. "Audrey Steele Burnand's legacy will enable us to create a world-class research center that builds upon UCI's historical excellence in the neurosciences to make life better for millions of people."
The gift will create the Noel Drury M.D. Depression Research Center, named after a board-certified psychiatrist who practiced in Newport Beach.
UCI will funnel the gift through the Drury Center for depression-related studies from biology and the health sciences to engineering and the social sciences. The university already centers for Alzheimer’s disease and dementia (UCI MIND), behavior and learning (the Center for the Neurobiology of Learning and Memory and the Conte Center@UCI), and integrative health (the Susan Samueli Integrative Health Institute) that are potentially poised to benefit from Burnand's philanthropy.
"This gift provides a unique opportunity for UCI to establish a world-class research center focused on the area of depression, which is extremely important from a societal point of view," said Pramod Khargonekar, vice chancellor for research. "With our campus strength in interdisciplinary, collaborative research, we are in a great position to leverage this support to produce discoveries about this debilitating disorder."
In addition to the settlement, the UC system said it has issued new directives to prevent, detect and address sexual misconduct.
The University of California Board of Regents has agreed to pay $243.5 million to settle 203 lawsuits filed by women who were sexually abused by disgraced former UCLA gynecologist James Heaps.
"The conduct alleged to have been committed by Heaps is reprehensible and contrary to the university’s values," the Regents said in a statement to the media. "We express our gratitude to the brave individuals who came forward, and hope this settlement is one step toward providing healing and closure for the plaintiffs involved."
In addition to the settlement, the UC system said it has issued new directives to prevent, detect and address sexual misconduct, including:
Increasing the resources and staffing of Title IX within UCLA Health;
Developing an interdisciplinary team, including Title IX, to coordinate effective and timely responses to reports of sexual misconduct in the clinical setting;
Expanding training for employees in order to recognize and report sexual violence and sexual harassment;
Updating and enhancing chaperone policies for sensitive exams and procedures, including the expanded use of chaperones in clinical settings and the rotation of chaperones between clinicians;
Strengthening patient feedback mechanisms; and
Instituting rigorous pre-hiring and credentialing protocols
"In light of this settlement and these changes at UCLA, we reiterate our ongoing commitment to never tolerate sexual violence or harassment in any form," the Regents said. "Allegations of sexual misconduct by any healthcare provider will be promptly addressed, and appropriate actions will be taken to ensure our patients are safe, protected and respected."
