Officials from Orange and seven other California counties are awaiting approval of a demonstration project they hope will improve the care of low-income, elderly and disabled patients while at the same time cutting costs.

The project focuses on so-called “dual eligible” patients, those who are on Medicare but also eligible for state and federal aid like in-home care, nursing homes, wheel chairs and other medical equipment.

Care of this patient group, which comprises up to 75,000 people in Orange County, is the most difficult and expensive. The program is intended to address the ever increasing medical problems but also issues that exacerbate medical problems, such as lack of transportation and lack of regular access to preventive care.

And if these challenges aren’t enough, the pilot program must deal with the politics of medicine.

How It Will Work

The three-year pilot program is scheduled to begin in June, and the goal is to provide one organization where the patients can receive both their Medicare and Medi-Cal services.

Medicare patients now participate in the traditional fee-for-service model for medical treatment, which means doctors and other medical providers are paid for each service they perform. But if patients need long-term institutional care or home-based services, they receive them through the Medi-Cal system.

The pilot project essentially merges these two systems into one. And beyond the changes it will bring to patient care, the program has a big impact on doctors.

The pilot program is set up like a managed care program, with overall costs managed by an administrative group and doctors receiving a flat monthly fee per patient that increases or decreases depending on how ill the eligible patient is.

And that’s where politics come in.

The staff of Orange County’s CalOptima health plan, which administers Medi-Cal programs for the county, has proposed making 12 medical groups available to patients, and more may apply. In addition, the staff has proposed that CalOptima run its own program so doctors who don’t want to belong to the other groups may participate.

Starting in June, about 50,000 dual eligibles will be brought into the system, which is caring for about 25,000 more through other health systems, including an earlier CalOptima-sponsored project. Most are elderly, but as many as 40 percent may be younger adults who are disabled. Also nearly half of all the patients could have mental health issues, and a majority could have three or four chronic conditions.

Medical groups and health plans that want to participate would be screened for competence, financial soundness and a history of quality patient care.

Too Much for Overhead?

According to a series of interviews with doctors and medical professionals, one complaint among doctors is a perception that the managed care groups will keep too much of the money for operating expenses and not pay doctors enough. The in-house CalOptima Care Network, according to some doctors, is expected to pay doctors more than the other groups because of lower administrative costs.

Among physician organizations supporting CalOptima’s extended doctor participation proposal is the California Medical Association (CMA) and the Orange County Medical Association.

“We applaud them [CalOptima] for that,” said  Jay Hansen, the CMA’s chief strategy officer, during a telephone interview.

According to the CMA, the program runs the risk of having a large number of patients “opt out” if their doctors don’t participate or if not enough doctors are included so patients can quickly find good medical care.

That’s what happened in 2005 when CalOptima created One Care, a county program intended to meet goals for elderly and disabled patients similar to the upcoming program for dual eligibles. But without a large number of the patients’ current physicians participating, patients quickly dropped out, often encouraged to do so by their doctors or pharmacies.

Based on experience with One Care, concluded a CalOptima staff report, “if members are not able to maintain access to providers of their choice, members will exercise their right to disenroll from the Demonstration.”

But some of the medical groups already approved to handle dual eligibles are opposed to letting more doctors in. During this month’s meeting of the CalOptima board of directors, members said it was important to write agreements with medical providers that prevent cherry-picking patients who are likely to bring in the most money.

Under current state plans, all qualfied dual eligibles will automatically be in the pilot programs and then be given the option of dropping out or staying. But there has been opposition to the automatic inclusion rule by a variety of doctors groups around the state, and some expect federal officials to reject that requirement, even though they may approve the overall demonstration project.

The CMA is concerned that the pilot program is too big for a demonstration project and is urging the state to cut the size until it determines whethr it will work.

On Jan. 3, the CalOptima board on a split vote delayed for one month issuing requests for proposals for providers that want to participate. The issue is scheduled to be debated again at the board’s Feb. 7 meeting.

Please contact Tracy Wood directly at and follow her on Twitter:

Since you've made it this far,

You are obviously connected to your community and value good journalism. As an independent and local nonprofit, our news is accessible to all, regardless of what they can afford. Our newsroom centers on Orange County’s civic and cultural life, not ad-driven clickbait. Our reporters hold powerful interests accountable to protect your quality of life. But it’s not free to produce. It depends on donors like you.

Join the conversation: In lieu of comments, we encourage readers to engage with us across a variety of mediums. Join our Facebook discussion. Message us via our website or staff page. Send us a secure tip. Share your thoughts in a community opinion piece.