The war over Medi-Cal: Critics of Gold Coast Health Plan propose replacing it

Leaders of a powerful private clinic system are pushing for state legislation that would rebuild Medi-Cal in Ventura County and could eliminate the publicly funded Gold Coast Health Plan that delivers health insurance to nearly 200,000 people.

The proposal being pitched by Clinicas del Camino Real representatives to state legislators would create a two-plan system in which Medi-Cal members would pick between competing insurance organizations.

Under the current system, approved by the Ventura County Board of Supervisors and launched in 2011, Gold Coast operates what its critics describe as a monopoly, administering insurance for virtually all low-income residents eligible for Med-Cal. It has an operating budget of $714 million.

The nonprofit Clinicas system grew out of a Santa Paula free clinic formed in 1971 and mushroomed into a safety-net organization that delivers care to 105,000 patients across the county and is one of the nation’s largest providers of care to farmworkers.

It has partnered with Gold Coast on projects but has also battled on and off with the Medi-Cal plan for more than seven years. Many of the recent struggles target a partnership proposal involving Gold Coast and a for-profit HMO owned by Clinicas, AmericasHealth Plan.

The drive to redo Medi-Cal, like previous battles, comes with allegations of bias and racism from Gold Coast and charges that the plan and its governing commission favor the Ventura County Healthcare Agency over other health care providers.

“We’re treated as third-class citizens, and that’s outrageous,” said Clinicas CEO Roberto Juarez. “How can we be partners with someone who is trying to destroy our organization?“

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Gold Coast leaders refute all accusations, including charges of unfair treatment, racism and ineffective performance. They cite quality of care scores that have brought an award from state regulators. They question the motives behind the allegations from Clinicas.

“What you are hearing are very self-serving statements. The people who are making the noise are those who have an interest in change,” said Gold Coast CEO Dale Villani, alleging the proposed legislation is a direct attack on his organization.

“It’s hard to feel good about a partner whose end game is the demise of your plan,” he said.

Dropping a bombshell

The current drama was revealed with a flourish at a January meeting of the Ventura County Medi-Cal Managed Care Commission, the 11-member entity made up of health care competitors. Appointed by the Ventura County Board of Supervisors, their job is to govern Gold Coast.

Five of the commissioners represent a county government that operates a clinic and hospital system that is by far the region’s largest Medi-Cal provider. Two commission members come from Clinicas, including current commission chair Tony Alatorre. He serves as interim CEO of AmercasHealth Plan.

Many of the commission members have vested interests in Medi-Cal, meaning conflict of interest issues sometimes swirl. The California Fair Political Practices Commission received anonymous complaints in November and January alleging Alatorre failed to recuse himself from commission discussions involving AmericasHealth Plan. The complaints are being investigated.

Alatorre said he recused himself from the commission but sat in the audience at an October meeting to watch a joint presentation by staff from Gold Coast and AmericasHealth Plan. He said commissioners representing Clinicas are asked to recuse themselves far more often than commissioners representing Ventura County government though both sometimes face conflicts.

“Everyone on the commission has a conflict except Laura Espinosa,” he said, referring to the commissioner appointed to represent Medi-Cal members.

Leaders of AmericasHealth Plan have been working for more than eight years on a partnership with Gold Coast that would allow them to act as insurers and take over coordination of care for at least some of the Medi-Cal patients currently in the Clinicas system.

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In 2012, Gold Coast agreed to and submitted a contract template for an approval from the California Department of Health Care Services, according to commission documents. 

The contract would have allowed AmericasHealth Plan to assume the financial risk and reward for coverage of Clinicas Medi-Cal patients in a population then estimated at 14,000 people though Clinicas says the number was higher.

State officials blocked the preliminary contract, saying Gold Coast needed to resolve the financial and operational issues that plagued its early years before entering into what is called a “plan-to-plan” agreement.

It was an early turn in a marathon dance between Gold Coast and AmericasHealth Plan with the plan-to-plan partnership progressing to the verge of reality but never navigating the last step.

Clinicas leaders blame Gold Coast for repeatedly and intentionally tripping them. Leaders of the Medi-Cal plan deny the allegations, blaming delays on shifts in the proposal, changes in leadership of the for-profit HMO and the temporary block by their regulator, the California Department of Health Care Services.

Frustrations grew. 

“At least 20 to 30 times we think we’ve reached agreement,” said Arnoldo Torres, longtime Clinicas consultant and a leader of the legislative drive for a different system. “Every time we think we’ve reached agreement, Gold Coast moves the goal posts.”

The latest iteration of the plan-to-plan proposal involves a pilot project in which AmericasHealth Plan would assume control of 5,000 Medi-Cal patients in the Clinicas system for a year. The pilot had been in discussion for at least two years with Villani agreeing to the project and the commission directed staff to negotiate a contract in June 2017, according to meeting minutes.

When the commission’s agenda at the January meeting turned to the pilot project, Alatorre and Dr. Gagan Pawar, Clinicas chief medical officer and a commission member, recused themselves. In the middle of a discussion on whether benchmarks were needed to measure the pilot project’s performance, Villani announced what he called “breaking news.” He said he learned AmericasHealth Plan was shopping a bill to legislators that would remake Ventura County’s Medi-Cal program into a two-plan system.

The plan would have a disastrous impact on the current system, he said.

“In the spirit of a partnership, you don’t say I’m going to totally destroy Gold Coast Health Plan,” he said.

Juarez later acknowledged the legislative pitch was real but was led by Clinicas, not AmericasHealth Plan, and involved a draft bill presented to several lawmakers in an effort to find a sponsor.

“We’re talking to people and not just in the county,” said Juarez. “There are other legislators in other counties who are interested.”

Local legislators contacted by Clinicas include Assemblywoman Monique Limón, D-Santa Barbara, and Assemblywoman Jacqui Irwin, D-Thousand Oaks. Neither Limon nor Irwin consented to interview requests, instead releasing a joint statement Friday morning.

“We are fortunate to have both Clinicas del Camino Real and Ventura County delivering healthcare to our community, including the Latino population,” the legislators said.  “It is our understanding that discussions are ongoing about a pilot program to test the feasibility of an additional health care delivery model. We urge all parties to continue to work together. Our hope is that a consensus is reached that will ensure the communities we were elected to represent continue to have access to high quality health care.”

Proposing dramatic change

Clinicas representatives declined to reveal the proposed legislation but said it would involve the kind of two-plan model used in 14 California counties. A copy of a draft bill obtained by The Star presents a timeline in which the two-plan system could be implemented by July 1, 2021.

The draft is a preliminary proposal, said Torres, adding Clinicas will continue to look for sponsors for the legislation. Bills have to be introduced for the current legislative session by Feb. 22.

If a two-plan system emerged, one of the plans would likely be a public entity governed by a commission appointed by the Ventura County Board of Supervisors.

State leaders said the public plan would need a federal Knox-Keene health care license. While Clinicas’ HMO has a limited license, Gold Coast has none, adding to speculation it would be forced out of its current roles.

Clinicas representatives have speculated it’s possible the local plan could be administered by the Ventura County Health Care Plan, the insurance system run by the county’s health care agency.

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Mike Powers, Ventura County county executive officer and the original chairman of Gold Coast’s governing board, said he’s opposed to changing the Medi-Cal system. He said Gold Coast has matured, built stable reserves and attained stable leadership after waves of turnover in its infancy.

Changing the current system would mean rebuilding a Medi-Cal delivery system almost from scratch, likely confusing doctors and thousands of patients, Powers said.

“It would be so disruptive and wasteful in terms of resources and provider networks,” he said.

The other plan in a two-plan system would involve a commercial plan that would be picked by California Department of Health Care Services leaders after reviewing different submissions. Outsiders say it’s possible some of the nation’s largest insurers would submit bids.

AmericasHealth Plan would likely compete to be the commercial plan but would need its limited Knox-Keene license to be expanded. It’s also possible Clinicas could partner with another commercial insurer, Torres said.

State officials say the introduction of a two-plan system might require not only state legislation but also a federal bill though others question the claim.

If the change happened, patients would see significant differences.

“You’d be sent an enrollment packet. You would have a choice of plans,” said Chris Perrone, of the California Health Care Foundation. If patients didn’t make a selection, they would be assigned to one of the two plans.

Doctors, pharmacists and other providers could choose between plans too though many people who currently serve Medi-Cal patients would likely want contracts with both plans.

Critics of the proposal contend replacing one plan with two means more money would be spent on running the system. Others note that in a two-plan system, the commercial insurer would answer only to the state.

“The central difference is how much local control there is,” said Stan Rosenstein, the former deputy director of the California Department of Health Care Services who advocated for a county organized health system when Medi-Cal managed care was introduced in Ventura County. “The people at the county have 100 percent control. In a two plan, they have 50-percent control.”

Supporters of the proposal suggest the county currently exerts too much control. Rick Castaniero, director of the Ventura County district of the League of United Latin American Citizens, argued that access and care would improve in a two-plan system.

“There’s greater accountability and oversight measures,” said Castaniero who leads an organization that has at times emerged as an outspoken critic of Gold Coast. “The county of Ventura would no longer have a monopoly of authority.”

Others reject the premise that the status quo represents a monopoly, noting that the county representation on the board reflects the size and safety net mission of the county’s hospital and clinic network.

About 79,000 of Gold Coast’s 194,000 members are cared for in the county system with about 38,000 in Clinicas and the balance spread out among other systems.

Growing pains

“Gold Coast Health Plan faces audit.” “Racism inquiry at Gold Coast Health Plan OK’d.” “Probe rebuts bias claims.” “Former employees sue local Medi-Cal system.”

The headlines trace a seven-year lifespan that has had its share of turbulence. Clinicas representatives say the history of accusations show evidence of the need for change. 

They point to allegations of racism made in reports from the League of United Latin American Citizens in 2014 and 2016. The reports alleged a culture biased against minority clients, employees and providers, including the use of racial slurs.

Juarez, who said he was targeted by slurs, asserted the culture remains. It emerges in what he calls the continued biased treatment of Clinicas including scrutiny for projects like AmericasHealth Plan pilot that he alleged is far more intense than what other area health systems face.

“We’re treated differently,” he said. “It’s absolutely disparate treatment.”

The first LULAC report on Gold Coast Health brought a two-tiered investigation that concluded Gold Coast made financial errors but didn’t intentionally hide data or commit any malicious financial abuse. An investigation on workplace improprieties was not released to the public with attorneys citing laws regarding personnel issues.

After four racially insenstive posters were found at Gold Coast in 2015, Ventura County Board of Supervisors called for changes, including hiring a chief diversity officer at Gold Coast. Training and diversity efforts were ramped up.

Ted Bagley, contracted to serve as Gold Coast’s chief diversity officer, noted that many of the allegations made by Juarez and others date back several years. He said he “totally and vehemently” refutes the suggestions of systemic racism. He challenged accusers to provide specific evidence.

“Give me some data... I want them to show me,” he said.

The binder of materials sent to legislators includes an October letter from the Department of Health Care Services stating Gold Coast owed $160 million to the state because it didn’t spend enough of its revenue on health care. Castaniero of LULAC said the returned money should have been spent delivering health care to poor families in desperate need of medical treatment.

Gold Coast leaders said the money returned to the state reflects over-payments made to managed care systems when Medi-Cal was expanded as part of President Barack Obama’s federal health care reform. They said the over-payments meant many California plans returned money to the state in an assertion echoed by representatives of the Department of Health Care Services.

Villani said the Medi-Cal plan’s performance has improved dramatically, citing achievements ranging from grants issued to nonprofit organizations to improvements made in 2018 for care in areas ranging from diabetes treatment to nutrition counseling.

The strides netted the plan an award from the Department of Health Care Services for being the most improved plan. Gold Coast officials said it had moved from 50th place in the agency’s ranking of 53 Medi-Cal managed care plans to 31st.

It’s unclear what will happen with the proposal to redo Medi-Cal. Torres said that if a sponsor is found, the exact timetable of the bill could depend on Gold Coast.

“We are of the absolute firm belief that there is very little incentive for the GCHP to really make a good faith effort to change in the way they operate,” he said suggesting a bill could be held for a year and used as leverage. “It’s the only thing that will make them change.”

Villani said the criticisms thrown at his organization need to be taken into context.

“The noise only sees to be coming from one place,” he said.