Health Plans for Over 2 Million Californians Don’t Follow Consumer Protection Law

More than 2 million Californians in 21 counties are enrolled in health plans that are out of compliance with the Knox-Keene Act, which requires insurers to provide patients with timely access to doctors. Photo: Thinkstock

Every morning, Tracey Watts checked her body for blood.

The recent PhD has a rare condition that causes her to have leaky blood vessels. By August, she had been bleeding out of pinprick-size spots on her lower body and legs for eight months.

Despite having insurance through California’s low-income health program, Watts was unable to get a timely appointment with a dermatologist who could cauterize her wounds and stop the bleeding.

“I didn’t have access to medical care,” Watts, 42, said in late August, a few weeks after she was finally able to see a dermatologist for treatment in Santa Barbara County, where she lives. The visit was the result of months of effort that started in December 2016.

Her primary-care doctor deemed the matter urgent. Yet every dermatologist she called in the health plan had a waiting time of more than a month. The ER doctors she saw said they didn’t have the equipment to treat her—she needed to see a specialist with experience cauterizing and closing the leaky blood vessels. She saw one dermatologist, but the office also didn’t have the tools to treat her condition. The health plan had denied her requests to see a specialist out-of-network.

Watts is enrolled in a health plan called CenCal Health, which operates in Santa Barbara and San Luis Obispo counties. CenCal is one of five county-run health plans in California that do not comply with a consumer-protection law enacted by the state in 1975.

The Knox-Keene Health Care Service Plan Act requires insurers to provide patients with timely access to doctors, and that is now interpreted to mean that patients should be able to get an appointment with a primary-care doctor within 10 business days and with a specialist within 15 business days, among other rules. The wide-sweeping law also allows patients who believe they are unfairly being denied services to have an independent medical review with a third-party physician or other medical expert.

More than 2 million Californians in 21 counties are enrolled in the five health plans that are out of compliance with the Knox-Keene Act. In addition to CenCal, the plans are CalOptima in Orange County, Gold Coast Health Plan in Ventura County; Central California Alliance for Health in Santa Cruz, Monterey and Merced counties; and Partnership Health Plan of California in Del Norte, Humboldt, Lake, Lassen, Marin, Mendocino, Modoc, Napa, Shasta, Siskiyou, Solano, Sonoma, Trinity and Yolo counties.

The lack of compliance results in some patients being denied health care, at times posing grave risks to their health. Advocates say patients in these 21 counties sometimes have to delay necessary doctors’ appointments or go without medication they need—and when this happens, they do not have the same recourse as the rest of California’s insured population.

“Why should there be two separate systems in place, just based on where you live?” said Linda Nguy, policy advocate at the Western Center on Law & Poverty. “This is a significant number of people who don’t have the same protections.”

County Plans Avoid Oversight

The Knox-Keene act requires nearly all health plans in the state to be licensed by the California Department of Managed Health Care, which audits the plans to ensure they are complying with consumer protection laws. The agency fines plans that are out of compliance. Last year, for example, the department fined Anthem Blue Cross over $1 million for failing to resolve patient grievances.

California formed a handful of County Organized Health Plans, which are Medi-Cal plans run by counties, in the 1980s. These plans have a contract with the state that exempts them from complying with the Knox-Keene Act and from being regulated by the Managed Health Care department. Only one county-run plan, the Health Plan of San Mateo, complies with Knox-Keene regulations because the plan voluntarily obtained a license from the DMHC.

The state Department of Health Care Services, which administers Medi-Cal, said its contracts with the five health plans that are not licensed by the DMHC require the plans to adhere to some Knox-Keene provisions, such as timely access, including the right to see a primary-care doctor within 10 business days and a specialist within 15 business days. None of the contracts, however, allow patients to access an independent medical review.

The fact that the five plans are not licensed by the DMHC also means that if they fail to comply with the terms of their contracts, it may go unnoticed by regulators or be difficult for patients to get help, Nguy said.

“When problems arise—because problems do arise—the level of consumer protections to resolve these issues isn’t there, because the plans are not Knox-Keene licensed,” she said.

A Record of Complaints

The Western Center and a dozen other organizations, including the California Medical Association and Health Access California, supported a 2015 state Senate amendment that would have required the five county-run plans to be licensed by the DMHC under the Knox-Keene Act.

The amendment, which some county-run plans opposed, failed 23-43 on the assembly floor.

Brianna Lierman, CEO of Local Health Plans of California, a trade organization that represents all five of the county-run health plans, said requiring the health plans to go through the licensing process would be expensive and duplicate regulations.

“It is a huge financial investment to get a Knox-Keene license,” Lierman said. “It can approach millions of dollars and the plans would rather spend that money on their members.”

Lierman noted that the five county-run plans generally have good quality scores from the Health Care Services department. However, when patients in these five health plans have complaints, they do not have the same recourse as those with other Medi-Cal plans.

Last year, for example, there were 62 complaints and independent medical review requests from patients in the five county-run plans, according to Managed Health Care department statistics. Because the plans aren’t licensed by the DMHC, the agency referred the complaints to the Health Care Services department.

When asked if the Health Care Services agency was aware of any such complaints, spokesman Anthony Cava said, “No, DHCS is not aware of any complaints by beneficiaries in these five health plans that could have been addressed if the health plans had to comply with Knox-Keene.”

Cava said the department was not immediately able to provide complaint data for the five county-run plans for the last five years, and comparable data for other Medi-Cal health plans.

Had the five plans been licensed by the DMHC, the agency could have taken action on the 62 complaints, as it did for similar complaints from patients in the Health Plan of San Mateo last year. Last year, the DMHC resolved 19 consumer complaints and 11 independent medical reviews from San Mateo patients, said agency spokesman Rodger Butler.

This year, Legal Services of Northern California has worked on cases involving clients in some of the health plans that are not licensed by the DMHC, said Liza Thantranon, acting regional counsel and managing attorney. The clients have been denied medication, medical equipment or timely access to a doctor, she said.

Thantranon, whose organization supported the 2015 Senate amendment, said she is hopeful that California will reconsider the legislation.

“There’s an inequity between people who are in COHS (County Organized Health System) counties and Knox-Keene licensed counties,” she said.

‘What choice did I have?’

Watts, the Santa Barbara patient, became desperate after a few months of waiting to see a doctor.  She knew what needed to be done, and so—out of options, and unable to bear the constant pain, blood and the accompanying infection—she did what had previously been unthinkable to her. Using her undergraduate training in animal science, she ordered hypodermic needles from a livestock catalog, got them hot and cauterized some of her blood vessels herself.

“What choice did I have?” Watts said. When she was finally able to go in for treatment on Aug. 9, she dropped off the bag of 20 hypodermic needles she had used. After seeing the dermatologist, she asked to schedule a follow-up visit because the specialist wanted to biopsy and remove a few moles but didn’t have time to do it during her initial visit. Watts was told that the soonest available appointment was Oct. 30, an 82-day wait.

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