Dispute Between California Hospital Chain, HMO Affects Some Medicaid Beneficiaries’ Access to Care

Some Medicaid beneficiaries in California are "getting caught in the middle" of a contract dispute over payment rates between insurer Health Net Inc. and Tenet Healthcare Corp., the state's largest hospital operator, the Los Angeles Times reports. Health Net manages care for 577,000 beneficiaries of Medi-Cal, the state's Medicaid program. As of this month, the insurer will not permit new beneficiaries it covers to receive health services at 10 hospitals and 20 doctors groups owned by Tenet because of the contract dispute. Health Net said the action aims to "reduce the risk of patient disruption if negotiations broke down and resulted in termination of contracts." Christopher Ciano, general manager of Health Net's Southern California operations, said that only 10% of hospitals and approximately 12% of primary care physicians in the Health Net network are affected, adding that new beneficiaries can choose from other hospitals and doctors.

Access Concerns
Some health professionals and consumer advocates, however, say that the contract dispute has caused some beneficiaries to lose access to care in their areas. In certain parts of the state, Tenet has a "dominant market share," the Times reports, noting that Medi-Cal beneficiaries are less likely than other residents to "have transportation to see doctors farther away." Steven Fisher, deputy director for the state Department of Managed Health Care, which oversees HMOs, said the agency would examine whether Health Net's actions have "disrupted care" and whether new Medi-Cal beneficiaries have "reasonable access to providers, as is guaranteed under the [state's] patients' rights law." In addition, Fisher and Stan Rosenstein, assistant deputy director of medical services for the state Department of Health Services, said both agencies would ensure that Health Net's provider directory was updated to include "any changes, so that prospective Medi-Cal members" are aware of which providers and hospitals they can visit (Lee, Los Angeles Times, 7/24).