Credit: Kenny Rivera

CalOptima, the $1.4-billion health plan for Orange County’s poor and disabled residents, will apply to join a state demonstration program intended to save money and coordinate services for those in need of the most care.

The pilot program is for “dual eligibles,” patients who receive services through both Medi-Cal and Medicare. Such patients, many of them elderly, now are served by a variety of programs that generally have no central coordination.

On a voice vote during their meeting Thursday, the CalOptima board authorized its staff to launch the application process but reserved the right to meet again should Supervisor Janet Nguyen, who represents the Orange County Board of Supervisors on the board, say she isn’t satisfied with the final application.

Orange County has about 75,000 people who are dual eligibles. The figure statewide is about 1.1 million, according to Deborah Miller, executive director of CalOptima’s programs for seniors and persons with disabilities.

“Dual eligibles suffer from costly and debilitating conditions and in many cases multiple chronic health conditions,” according to a 2011 state summary of the issues.

Nationally, individuals who are dual-eligible comprise 18 percent of the total Medicare enrollment but account for 46 percent of the cost, according to 2005 figures, the most recent available analysis. Total cost nationally for coverage of dual-eligible individuals was $287.3 billion.

Gov. Jerry Brown’s current budget proposal hopes to save $622 million over three years by making changes in the way the programs are structured for those who are dual-eligible and to bring more of them into managed care systems.

Miller warned the board that specifics of the demonstration program, including the rates to be paid to hospitals, doctors and other providers, are just being developed. She said key guidelines include replacing the fragmented system that most patients now use to obtain separate Medi-Cal and Medicare services with a single coordinated approach and writing strong consumer protections for those who receive the services.

One cost benefit may be that if care is coordinated, elderly adults can stay in their homes longer and avoid expensive nursing homes. Another goal is to bring as many providers as possible into the demonstration program so that patients need not switch doctors or other care systems.

Julie Puentes, Orange County vice president for the Hospital Association of Southern California, which represents 26 hospitals in the county, said thtat while the association favors CalOptima’s application,  members are not yet in a position to support CalOptima becoming one of the initial state demonstration projects.

Besides questions about how much money hospitals would be paid, she said, the trade association wants to work with the CalOptima staff and “ideally” see the final application before it is submitted. In addition, she said, the full CalOptima board should approve final details of the application.

Lloyd B. Wilensky, vice president for government affairs of Integrated Healthcare Holdings, said, “We’d like to recommend caution to the board.”

Integrated Healthcare owns four Orange County hospitals: Western Medical Center in Santa Ana, Western Medical Center in Anaheim, Coastal Communities Hospital in Santa Ana and Chapman Medical Center in Orange.

He urged the board to consider analyzing the revenue impact on all providers and consider developing an “exit strategy” if the demonstration project doesn’t work well.

Nguyen said that working with CalOptima on the issue has “definitely been a rocky road” for her staff. “As of today, the county is not on board officially with going forward.”

CalOptima is funded by state and federal governments, not by Orange County.

Nguyen said there were issues she wanted CalOptima to address in its application but didn’t specify what they are. She joined the voice vote in favor of application but said she wanted to be sure the issues that concerned her are in the application before it is sent to the state.

Asked after the meeting who was involved in the “rocky meetings,” she replied “I don’t know” and declined to answer further questions. Her office was asked for a list of the issues she wanted covered in the final application but so far hasn’t provided it.


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