If you’ve received a Medi-Cal Managed Care Plan denial for a medical treatment or prescription drug your doctor believes you need, it can be discouraging, to say the least. It’s important to remember, however, that you do have options following such a denial. Even more importantly, there is potential help out there in the form of the Law Offices of Scott Glovsky. Attorney Scott Glovsky has been helping people in certain situations for many, many years. This is what he and his highly skilled staff do, day in and day out. Don’t give up if you’ve received a Medi-Cal managed care plan denial.
What are Medi-Cal Managed Care Plans in California?
Medi-Cal is health care for those with low or no income. In fact, Medi-Cal is the name for Medicaid in the state of California. As of 2023, nearly 40% of or about 15.3 million Californians are on Medi-Cal. Of all those on Medi-Cal, about 88 percent of members have Medi-Cal Managed Care Plans while the remaining 12 percent are in Medi-Cal Fee-For-Service plans. Medi-Cal Managed Care contracts with a network of providers with an emphasis on primary and preventative care – similar to an HMO model of care. Often these healthcare providers are part of medical groups or Independent Practice/Provider/Physician Associations (IPAs}. Note that the predominant form of Medi-Cal Managed Care Plans is Managed Care Organizations, or MCOs.
All basic benefits covered by most health care plans are covered under Medi-Cal Managed Care, including prescription drugs, and even sometimes vision and hearing care. Medi-Cal dictates that you have one doctor or clinic for the majority of your healthcare needs, although you can change doctors or clinics after being assigned one when you join the plan. Your income and your medical issues are both considered when determining whether you qualify for Medi-Cal Managed Care.
What is the Difference Between Medi-Cal Managed Care and Fee-For-Service Medi-Cal Plans?
The main difference between these types of plans is the involvement of a health insurance company. With Fee-For-Service Medi-Cal, also known as regular Medi-Cal, you typically visit any provider who accepts Medi-Cal FFS. On the other hand, with Medi-Cal Managed Care, similar to an HMO, you work within your plans’ network of providers and facilities. Very often, your Primary Care Provider will coordinate all of your health care with other facilities and providers. Also, California pays providers and facilities directly for FFS members but pays a fee to a manged care plans for every member in its plan. And in terms of the appeals process, you appeal directly through the state to schedule a Fair Hearing in a regular Medi-Cal plan whereas you start with your health insurance company’s customer or member service department in a Medi-Cal Managed Care Plan.
How Do Medi-Cal Managed Care Plans Work?
Medi-Cal is the largest state Medicaid program in the nation. Under the Affordable Care Act, California expanded Medi-Cal eligibility, significantly increasing the number of Medi-Cal beneficiaries. Different managed care models operate in different California counties, shaped primarily by the available mental health services, public hospital services, and specific long-term services.
Managed Care Plans have contracts with healthcare providers and medical facilities that provide care for their members at reduced costs; these providers make up the “network,” and how much of your specific care the plan pays for depends on the rules of your network. Because managed care plans emphasize primary care and cost containment, those with chronic diseases, disabilities, or mental health issues may not receive adequate access to specialists who are qualified to diagnose and treat their specific conditions.
Did CMS Change Medi-Cal (Medicaid) Managed Care Rules in 2024?
CMS published the “Medicaid and Children’s Health Insurance Program Managed Care Access, Finance, and Quality Final Rule (CMS-2439-F) on April 22, 2024. This rule aims to strengthen managed care programs to better serve the needs of recipients by enhancing access to, and the quality of, care. Specifically, this rule improves standards for timely access to care and state enforcement actions. It also creates a quality rating system for managed care plans and establishes maximum wait times for outpatient mental health appointments at ten business days and for primary care appointments at fifteen business days. Each state must disclose dollar amounts paid to providers. And there are several other changes.
Are Medi-Cal (Medicaid) Plans Profitable For Health Insurance Companies?
Medi-Cal / Medicaid plans are very profitable for private health insurance companies. In fact, in 2023, even though Medi-Cal / Medicaid programs lost 10 percent of their members due to the unwinding of pandemic continuous enrollment rules, two of the five biggest for-profit Medicaid health insurance companies increased revenues. (For-profit health insurers comprise 49% of all Medicaid managed care plans. MCOs insure 66 million Americans.) Specifically, UnitedHealthcare, Centene and Molina increased their revenues from Medicaid plans by 3 percent to 18 percent in 2023. The other two private health insurers, Elevance (Blue Cross Blue Shield) and CVS (Aetna Health), do not separate Medicaid-specific revenue from other insurance revenue. In the first quarter of 2024, UnitedHealthcare’s Medicaid revenue increased approximately 9% vs. Q1 2023 and Molina’s Medicaid revenue increased about 19% vs. Q1 2023.
What California Insurers Offer Medi-Cal Managed Care Plans?
At the beginning of 2024, twenty-two health insurers were offering Medi-Cal Managed Care Plans in California. To find plans in your county, you can look at this document that specifies plans in each of the state’s 58 counties. Some of the California insurers that offer Medi-Cal Managed Care Plans include:
- Aetna CVS Health is exiting Medi-Cal.
- Anthem Blue Cross Medi-Cal Managed Care
- Blue Shield of California Promise Health Plan offers Medi-Cal Managed Care in Los Angeles and San Diego Counties.
- Health Net offers low or no-cost medical and dental benefits to qualified Medi-Cal members in Los Angeles and Sacramento counties.
- IEHP (Inland Empire Health Plan) was established in 1994 in the state as a Medi-Cal Managed Care Plan in the Inland Empire region. Today, IEHP offers Medi-Cal to residents in Riverside and San Bernardino Counties.
- Kaiser Permanente participates in Medi-Cal in many California counties, so those who are current Kaiser members who have had a change in their financial situation may be able to continue with Kaiser if they qualify for Medi-Cal and are in a participating county.
- L.A. Care is a health plan for Medi-Cal members in Los Angeles County.
- Molina Healthcare of California reached an agreement to deliver Molina Medi-Cal Managed Care services to Medi-Cal Managed Care members in 21 counties in the state, beginning January 1, 2024.
- VHP (Valley Health Plan) includes Medi-Cal Managed Care for those in certain counties.
Why Would a Health Care Provider Deny Care?
As a Californian with a Medi-Cal Managed Care Plan, often your medical care is decided by your assigned physician and is not approved or denied by your health insurance company. If you receive a Medi-Cal Managed Care Plan denial from your IPA, it can be devastating. (As mentioned above, an IPA is an Independent Practice Association, Independent Provider Association, or Independent Physician Association, which are all networks of doctors with their own practices.) Physicians may join IPAs to reduce their overhead, sharing billing, office systems, office space, electronic health records, and reimbursement processes.
To understand why a Medi-Cal Managed Care IPA might deny care, you must first understand capitation payments. Capitation payments are fixed monthly payment amounts the IPA receives from each assigned member, regardless of that member’s need for medical care. A member who receives little or no medical care equals pure profit, while a member who requires significant levels of medical care could cost the IPA more than the capitation amount received.
Risk-sharing pools are another reason an IPA might deny care. Risk-sharing also involves transferring the cost of healthcare services from the insurer to the IPA and medical providers. The insurer may hold back a percentage of the capitation payments at the beginning of the year, reserving those funds for things like hospital stays. The payments are placed in a “risk-sharing pool,” and at the end of the year, if the amount for hospital stays is more than the amount in the risk-sharing pool, the additional costs may be borne by the IPA.
If the amount is less than what was placed in the risk-sharing pool, the IPA may receive a percentage of the remaining funds. The bottom line is that less healthcare equals bigger IPA profits. Risk-sharing pools and capitation payments provide financial incentives for IPAs to deny healthcare to their members as a means of increasing their own profits. This means if your IPA considers you a “risk,” in that you may cost them more than they receive, they may issue Medi-Cal Managed Care Plan Denials.
How Do Medi-Cal (Medicaid) Managed Care Plan Denial Rates Compare To Medicare Advantage Plan Denial Rates?
Unfortunately, a July 2023 Office of Inspector General report revealed that prior authorization denial rates for Medicaid Managed Care Plans were 12.5%, while the denial rates for Medicare Advantage plans in the same period were 5.7%. A March 2024 report for Congress emphasized improving the appeals process as well as oversight and monitoring of Managed Care Plans.
What State Organization Regulates Medi-Cal Managed Care Plans?
The Department of Managed Healthcare (DMHC) regulates Medi-Cal Managed Care Plans that are subject to the Knox-Keene Act, also known as The Knox-Keene health Care Service Plan Act of 1975. This act includes laws that govern managed care plans in California. There are some plans that are not overseen by the DMHC and do not need to abide by the Knox-Keene Act. These plans operate a County Operated Health System and include CalOptima (Orange), CenCal Health (Santa Barbara and San Luis Obispo), Central California Alliance for Health (Santa Cruz, Monterey, and Merced), Gold Coast Health Plan (Ventura), and Partnership Health Plan of California (Solano, Napa, Yolo, Sonoma, Mendocino, Marin, Del Norte, Humboldt, Lake, Lassen, Modoc, Shasta, Siskiyou, and Trinity).
What Should You Do if You Have a Medi-Cal Managed Care Plan and Your Claim is Denied?
If you have a Medi-Cal Managed Care Plan and your claim for a medical treatment has been denied, you may feel as though you have little recourse. This is far from the truth. When you receive a Medi-Cal Managed Care Plan denial, you are entitled to an appeal. An appeal is used when your care plan has taken an action that “affects your care, such as delay, modification, denial, or reduction of services, denial or only partial payment for a service, or the determination that the requested service was not a covered benefit,” known as an Adverse Benefit Determination.
The appeal process is a little different for Medi-Cal Managed Care Plan Denials than it is for Fee-For-Service plan denials. For a Medi-Cal Managed Care Plan Denial, you will often first contact your plan’s customer or member service number. If your denial is not reversed, you can typically file an appeal with your care plan. An appeal is a review by your managed care plan and generally must be filed within 60 days from the date you received your Notice of Action (NOA) or Adverse Benefit Determination (ABD) letter. (Both of these are terms for a denial letter.) Your insurer then has 30 days to send you a response, otherwise known as a Notice of Appeal Resolution (NAR). In addition, with Medi-Cal Managed Care Plans, after receiving a denial to your appeal, you have the option of asking for a State Hearing (also called a Fair Hearing) with California’s Department of Social Services (CDSS) as well as an external review known as an Independent Medical Review (IMR) from the Department of Managed Healthcare. In a State Hearing, you or your attorney present your issue to an impartial hearing officer called an Administrative Law Judge (ALJ) who upholds or denies the insurance company’s decision.
Note that with Medi-Cal Managed Care denials, you must exhaust your appeals with the insurance company before requesting an external State / Fair Hearing or IMR. This “deemed exhaustion” means that you’ll want to work quickly to file your appeal. If your insurer doesn’t send you a NAR letter within 30 days, then its response is considered a denial and you can move forward with a hearing or IMR. There are other situations that equate to deemed exhaustion as well. These include the following — your insurance company didn’t give you the NOA in your preferred language, it didn’t give you the NOA in writing, it made a mistake that impacts your rights or a mistake in the written NAR letter, or it determined your situation was urgent but didn’t get you a NAR letter within 72 hours.
For Your Appeal, Is It Better To Have a State Hearing or an Independent Medical Review?
There are several things to consider in making this decision. Of course in some cases, you can do both.
- If you have a State Hearing prior to an IMR, then the decision of the Hearing stands and you cannot later request an IMR. However, if you submit an IMR and it upholds the insurer’s denial, then you can still do a State Hearing so long as you meet appropriate submission deadlines. That said, the IMR decision may greatly influence your State Hearing.
- After you request a State Hearing, you might also receive existing services until the appeal is resolved. You cannot continue services during the IMR appeal process.
- The timeline for an IMR is longer than it is for a State Hearing. As such, if you missed the deadline for a State Hearing, you might have time to file the IMR.
- You have 120 days after your receive your NOA / ABD / denial letter to request a State Hearing with Medi-Cal managed care plans. These 120 days include the time that you are filing your appeal with and waiting for a response from your managed care plan. The 120 day period stays running while you request an IMR. So if you do the IMR first and it upholds your insurance company’s decision, you now have a shorter window to request a State Hearing.
How the Law Offices of Scott Glovsky Can Help with Medi-Cal Managed Care Plan Denials in California
If you are on a Medi-Cal Managed Care Plan and have received a denial for service or Adverse Benefit Determination, it can be daunting to navigate your way through the appeals process. You may not have to do this on your own. Our firm helps individuals with Medi-Cal Managed Care Plans that also have a private insurance company involved. The good news is that you don’t need an army of lawyers to fight a big insurance company. You only need one person who is highly experienced, knowledgeable, and skilled—and who cares enough about you and about justice—to go to battle on your behalf.
The victories of the Law Offices of Scott Glovsky have positively impacted millions of California policyholders by forcing insurers to treat members with respect. Attorney Scott Glovsky and his staff are relentless when fighting for the rights of their clients. As we tell prospective clients—If results matter, hire us. Contact the Law Offices of Scott Glovsky today for assistance with your Medi-Cal Managed Care Plan denial.