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Prime Healthcare pleads with state for return of CalOptima contracts with 4 OC hospitals

Physicians at Prime-owned facilities have reported 'prolonged, agonizing wait times for patients' since their contracts were terminated this week

Robin Wilson, a patient, and Billy San Juan, a patient advocate, join 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, and Billy San Juan, a patient advocate, join 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)

Prime Healthcare is pleading with the state to reverse CalOptima Health’s decision to terminate contracts with four of the company’s “safety net” hospitals serving Orange County’s poorest residents.

Since the contracts were terminated Monday, Feb. 5, physicians at Prime have reported prolonged, agonizing wait times for patients, the company’s president and chief medical officer said in a Friday letter to Dr. Mark Ghaly, California secretary of health and human services. In some cases, patients have walked out of emergency rooms in disgust and been refused transfers to other nearby CalOptima hospitals, wrote Dr. Sunny Bhatia.

“On behalf of patients, we ask that Department of Health Care Services hold CalOptima accountable to its responsibility to ensure access, continuity, and care to patients and include the safety net hospitals patients have relied on for decades,” states the letter. “These terminations are already negatively impacting patient safety, quality care, and outcomes for the vulnerable patients dependent on CalOptima, very literally putting their lives at risk.”

Ontario-based Prime operates 44 hospitals nationwide, including Garden Grove Hospital and Medical Center, Huntington Beach Hospital, La Palma Intercommunity Hospital and West Anaheim Medical Center.

In a statement Friday, Feb. 9, DHCS said Medi-Cal managed-care plans like CalOptima have the right to voluntarily terminate their contractual relationships with network providers with a 60-day prior notice.

Following termination of the Prime contract, the DHCS said, “emergency services and post-stabilization care continue to be covered” by the company.

CalOptima, which has 954,000 members and is the largest health insurer in Orange County, provides coverage to its members through three programs, Medi-Cal, OneCare, and the Program of All-Inclusive Care for the Elderly. Its contract with the four hospitals had been in effect for more than 15 years.

The termination of Prime’s contract has sent shock waves through physicians and patients at the four hospitals, outside CalOptima’s headquarters last week.

“Hundreds of patients, representing the tens of thousands cared for at these hospitals, pleaded with CalOptima to allow them to continue their care at these hospitals,” Bhatia said in the letter to Ghaly. “These were the hospitals they trusted, the care that provided them dignity, the quality that saved their lives, and the access and continuity they need and deserve. Despite their pleas, CalOptima unilaterally decided for them that they do not need these hospitals.”

CalOptima claims misrepresentation

CalOptima Chief Executive Officer Michael Hunn has cited under-utilization of the hospitals 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.

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.

Seven other CalOptima hospitals within five miles of Prime facilities can absorb patients, he told the Southern California ɫ̳ Group, adding that the termination of the contract should have little impact on patients.

“We stand against activities that detract from this focus, especially the misrepresentations related to CalOptima Health’s contract change with Prime hospitals,” CalOptima said in a statement Friday. “Those misrepresentations are not consistent with what is actually occurring with CalOptima Health members who have received care at Prime hospitals since our contract ended on February 5.”

CalOptima said it is providing Prime hospitals a clinical response within 30 minutes for those patients who may need post-stabilization hospital services.

“We are collaborating closely with our state regulators, who are aware of our unwavering commitment to quality care for members, delivered by our strong network that includes 39 acute and rehab hospitals across Orange County,” the company said.

Prime reports delays, angry patients

However, in the letter to Ghaly, Bhatia said Prime’s worst fears about delays and care for patients are being realized.

“Despite CalOptima CEO Michael Hunn’s assurances that he does not need these hospitals for network adequacy and can effectively transfer and care for patients requiring inpatient care, patients are suffering and denied the quality care and continuity they deserve,” Bhatia said.

According to the letter, in just three days following termination of the contract, documented evidence shows insufficient bed capacity at other CalOptima hospitals and the inability of Prime physicians to transfer stable patients. In some cases, Bhatia said, patients have reportedly left Prime hospital emergency departments, against the advice of doctors, with untreated medical conditions due to lengthy transfer wait times.

At least 37 Prime CalOptima patients have required transfers since Monday, with an average wait time in the ER of 30 hours, with some experiencing much longer delays, according to the company.

In one instance, a 57-year-old woman who went to a Prime ER with nausea, vomiting, and diarrhea waited 60 hours but could not be transferred to another CalOptima hospital because of a lack of inpatient beds and had to be admitted to the Prime facility’s intensive care unit, the letter says

Fourteen patients had clinical conditions that deteriorated while awaiting transfer, requiring urgent inpatient or ICU admission at Prime hospitals, the letter stated.

“This could have been avoided if these patients were allowed to be admitted promptly while stable and receive the quality, inpatient care that had always been provided,” the letter states. “Patient clinical outcomes have been unnecessarily and negatively impacted, causing irreparable harm as a result.”

A physician reported that a 45-year-old woman who had an acute flare of Crohn’s disease went to a Prime hospital and was denied a transfer to Orange County Global Medical Center.

Orange County Global Medical said Friday it could not comment because of patient privacy regulations and does not speak on behalf of decisions made by physicians who are independent contractors.

Dr. Kevin Truong, an emergency medicine physician at Garden Grove Hospital, said in a phone interview that earlier this week a man came to the ER complaining of shortness of breath and chronic obstructive pulmonary disease. However, after waiting for 31 hours to be transferred to another CalOptima facility, the man angrily stormed out of the ER, describing the lengthy delay as the worst service he had ever experienced.

The man’s frustration is understandable, Truong said, adding the ER is a “loud, noisy environment and is not good for inpatient care.”

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