California officials announce settlements with L.A. Care Health Plan over fines
California officials announced Tuesday that they had reached settlements totaling $55 million with L.A. Care, a publicly operated health plan serving Medi-Cal patients in Los Angeles County.
L.A. Care had been facing $55 million in fines for what one state official had described in 2022 as “deep-rooted, systemic failures that threaten the health and safety of its members.” State regulators said such failures were jeopardizing timely access to medical care for vulnerable patients.
The health plan protested the fines, arguing the amount was extreme and unnecessarily punitive. In a statement Tuesday, L.A. Care said it had successfully negotiated to divert some of the proposed fines to investments that would benefit its members and their communities.
Under the agreements with the California Department of Health Care Services and the California Department of Managed Health Care, L.A. Care will pay a financial penalty of $27 million and contribute $28 million — the rest of the $55-million settlement — over the next three years to programs in L.A. County focused on health equity, behavioral health, and improving the delivery of care, among other priorities, the state agencies said.
L.A. Care said that the $28 million would be “over and above” its ongoing investments in such efforts.
One year after L.A. Care was hit with record fines by state regulators, Southern California hospitals complain that problems at the publicly operated health plan have persisted.
State officials also said that under the settlements, L.A. Care will improve its operations to “ensure timely access to medically necessary healthcare services” for its members. That will include working with an outside consultant to monitor improvements, including the timely processing of requests to authorize care, and enhancing its oversight of contracted hospitals, clinics and other healthcare providers, the agencies said.
L.A. Care, which serves more than 2.6 million people across the county, operates a managed care plan for patients on Medi-Cal, the California Medicaid program. It is operated as a public entity and is overseen by a board that includes representatives from local hospitals, the L.A. County Department of Health Services, and other groups involved in healthcare.
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