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CalOptima to cancel contract with OC hospitals that serve homeless and low-income patients

'I don't feel comfortable going anywhere else,' says a 63-year-old CalOptima member with chronic medical conditions

Robin Wilson, a patient, right, joins others they protest CalOptimaxe2x80x99s decision to cancel a contract with four Orange County hospitals in Orange, on Thursday, Feb. 1, 2024. (Photo by Jeff Gritchen, Orange County Register/SCNG)
Robin Wilson, a patient, right, joins others they protest CalOptimaxe2x80x99s decision to cancel a contract with four Orange County hospitals in Orange, on Thursday, Feb. 1, 2024. (Photo by Jeff Gritchen, Orange County Register/SCNG)
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They stood shoulder to shoulder under a canopy of menacing clouds united in a mission to block CalOptima Health, the health insurer of Orange County’s poorest residents, from severing ties with four “safety net” hospitals deemed to be under-utilized but beloved by patients and staff.

The unlikely mashup of foot soldiers — a dozen homeless individuals with chronic illnesses, health care executives, and doctors clad in white lab coats — held signs that read “Shame on you for taking away our care” and “Every patient matters” during a spirited 30-minute protest Thursday, Feb. 1, outside CalOptima’s high-rise headquarters in Orange.

The aim was to prevent the Medi-Cal insurance giant from terminating its contract on Monday with Ontario-based Prime Healthcare Services, which owns Garden Grove Hospital and Medical Center, Huntington Beach Hospital, La Palma Intercommunity Hospital and West Anaheim Medical Center.

“Garden Grove Hospital is my home away from home,” said Robin Wilson, 63, a CalOptima member who has diabetes and chronic colitis and lives just three stoplights away from the facility she has been using for 45 years. “I don’t feel comfortable going anywhere else. Garden Grove Hospital provides the best care. I can’t emphasize enough how much they do.”

Another CalOptima member, 53-year-old Wendy Bailes of Newport Beach, frequents the Huntington Beach Hospital’s emergency room and was most recently treated for broken ribs.

If CalOptima rescinds the facility’s contract, it will be a “major blow” to the community because medical providers take time to understand the needs of patients, Bailes said, adding, “They know me there.”

Created 30 years ago

CalOptima Health was created by the Orange County Board of Supervisors in 1993 as a county-organized health system and is the largest of six COHS in California.

It manages programs funded by the state and federal governments, but operates independently under the leadership of a board of directors made up of members, providers, business leaders and local government representatives that include Orange County Supervisors Doug Chaffee and Vicente Sarmiento.

“We are always concerned about a patient’s access to quality and timely care,” Sarmiento said. “We also recognize the importance of addressing concerns in the delivery of care and ensuring the rights of low-income patients are protected, throughout the process.”

With 954,000 members, CalOptima is the largest health insurer in Orange County, providing coverage for more than one in four residents through three programs, Medi-Cal, OneCare, and the Program of All-Inclusive Care for the Elderly.

In a last-ditch legal effort, eight CalOptima members filed a petition this week in Orange County Superior Court against CalOptima Chief Executive Officer Michael Hunn seeking a temporary restraining order to block the termination of Prime’s contract.

The petition request was denied Friday by Judge Scott Steiner.

“It is unfortunate that a single decision for no cause can alter the lives of so many in greatest need,” Prime said in a statement. “With this seemingly arbitrary decision, CalOptima is eliminating a significant percentage of the acute care hospitals in its entire network.

“While every person deserves expanded care and access, eliminating hospitals for no cause seems contrary to the best interests of patients, who are left wondering why their care can be limited and why they don’t deserve access to all hospitals willing and able to care for them, especially all safety-net hospitals.”

Reasons for termination given

Following Thursday’s brief protest, CalOptima members filed into the organization’s expansive boardroom, where for nearly 15 minutes Hunn explained why Prime Healthcare’s contract is being terminated, with approval from the California Department of Healthcare Services.

“It’s not helpful if there’s misinformation about the facts,” he told CalOptima’s board of directors. “It’s not helpful for our members to be frightened or worried. It’s not helpful for our members not to know what’s going on because they don’t understand, or they don’t speak the language. That’s not fair to vulnerable people.”

Hunn cited patient under-utilization as a chief reason for the termination of Prime’s contract.

From Dec. 1, 2022, to Nov. 30, 2023, 15,604 members accounted for 26,290 visits to the four Prime hospitals, with 98.6% being emergency room visits, according to data collected by CalOptima. Many members went to the ER more than once.

There were 2,800 CalOptima inpatient admissions and 364 visits for elective care at Prime hospitals during the year.

“We believe that our networks can certainly handle 364 cases, given the tens of thousands of cases here in our county,” Hunn said.

Within five miles of the Prime facilities are seven other CalOptima hospitals that can absorb patients, he told the Southern California ɫ̳ Group

Additionally, CalOptima delegates the care of approximately 750,000 members to large, managed-care medical groups, but there is no evidence of Prime contracting with any of those providers, Hunn said.

“We believe that our members are best off being in a managed-care environment with a primary care physician in a medical home, receiving coordinated care from both the doctor, their outpatient services, and any inpatient services they might need,” he told the board. “The state thinks they get better care, physicians believe they get better care, and we firmly support that.”

Prime learned only a month ago its lack of designated medical group contracts contributed to CalOptima’s decision to terminate its contract, according to company officials. The officials said they asked for time to pursue the contracts but were rebuffed by Hunn.

Little impact expected

Overall, the termination of CalOptima’s agreement with Prime should have minimal impact on members, Hunn said.

Members and anyone else in the community can go to any emergency room and receive medical screening and stabilizing treatment under federal regulations, he noted.

If a patient needs admission and no beds are available elsewhere, the hospital where they received emergency care — including the four Prime hospitals — can admit and treat them, he said. In that instance, CalOptima will cover medical costs for members based on the California Department of Health’s fee schedule.

“I just don’t want our members to think because of a contract change they can’t receive their medical care, they can’t go to the emergency room, or they won’t be able to stay in the hospital if they need to,” Hunn said. “They can go to the emergency room. They can be seen. They can be treated, and they can be admitted for care.”

Additionally, the termination of Prime’s contract will not affect members’ behavioral health care, outpatient services or the ability to keep their current physicians for elective care.

“That doctor will have privileges at other hospitals,” Hunn said. “And if they don’t, then we will work with them (CalOptima members) to find a primary care doctor that does have privileges at a hospital that they would like to attend.”

Hunn told board members that CalOptima works hard to ensure all members are treated with dignity and respect. “I will not allow us ever, ever to deviate off the mission of CalOptima Health,” he said. “And we will fight vigorously, and we will be unrelenting in making sure that message is clear.”

Patients, doctors fear worst

However, for some Prime officials at Thursday’s meeting, Hunn’s promises rang hollow.

Amy D. Searls, the company’s chief patient experience officer, chided Hunn, who appeared to look down as CalOptima members and medical providers shared their concerns during the meeting’s public comment period.

“I’m very offended that … Hunn hasn’t turned around and looked at one of them,” she told the board while standing at a podium. “These are people with hearts and lives who are trying to make a positive difference in their world.”

Mark Gamble, chief of advocacy and operations with the Hospital Association of Southern California, said the termination of Prime’s contract is fraught with problems and would tax Orange County’s already overburdened healthcare system. He asked the board to pause the contract cancellation

“Many hospitals in the region throughout Southern California, especially in Orange County, are reporting extremely high patient volumes, beyond normal capacity, and even higher than what we experienced during the height of the (COVID-19) pandemic,” he said.

The Orange County Health Care Agency did not immediately respond to a request regarding the potential impact on the EMS system.

Dr. David Ngo, an emergency medicine physician at Huntington Beach Hospital and LA Palma Intercommunity Hospital, estimated as many as 4,000 Prime patients a year will have to be absorbed by other acute care facilities faced with staffing shortages and low bed availability.

Brendan Barth, a patient advocate for Prime’s four Orange County hospitals, said members feel that CalOptima is attempting to eliminate their ability to choose which hospital they go to for treatment.

“They want to be at the hospital that is close to their home,” Barth said. “They don’t just want to be told to go somewhere else. They want to go where they get the best care, and denying them that would have a devastating impact on their social health, their mental well-being and their physical health.”

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