The state's managed care watchdog has reached a settlement agreement with a Los Angeles physicians group that was accused of allowing business executives to decide whether patients get requested medical care.

The Department of Managed Care reached the agreement earlier this month with Accountable Health Care IPA, a firm that contracts with larger insurers such as Anthem Blue Cross and L.A. Care to manage primary care for 160,000 Los Angeles County residents.

Accountable agreed to pay a monitor who will report to state overseers and have "direct and unfettered access" to company employees and records. The firm also agreed to donate $500,000 to a nonprofit that serves the uninsured.

The company has also agreed to assign case managers to work with patients who the monitor determines had care denied, delayed or canceled by unqualified Accountable employees. State laws say that patient care decisions should only be made by doctors or other licensed health professionals who are "competent to evaluate the specific clinical issues."

"We take our commitment to patient care very seriously and provide each and every patient with quality health care services," Dr. George Jayatilaka, chief executive of Accountable Health Care IPA said in an Oct. 17 statement about the settlement. "We are confident our patients received the care they needed."

The Signal Hill-based company announced in September that it hired a new president, Mark Wright, a former state managed care regulator, "in an expanded effort to enhance the company's compliance." It also announced the resignation of its chief operating officer, Lili Tran-Maneerod, who will continue to advise the company as an independent consultant working in marketing and physician recruitment, a company statement says.

In July, state managed care overseers sent a dozen cease and desist orders to Accountable, including those to Jayatilaka, his son and company vice president, Druvi Jayatilaka, and utilization manager Ambarish Pathak, asking that unqualified employees stop making decisions about requests for patient care services.

The order letters also went to firms that contract with Accountable, including Aetna, Health Net and Blue Shield. Those letters asked the firms to stop enabling their contractor to run afoul of state regulations.

The department also asked the health plans in August to launch a "focused audit" of Accountable's patient care services that would review all claims and treatment requests that Accountable's unlicensed staff acted on. The health plans were asked to determine whether those decisions led to inappropriate delays or denials of patient care.

The settlement says that the state will rescind the request for health plans to perform those audits, instead assigning the task to the company monitor, Frank Stevens of Berkeley Research Group. The settlement says it is not an admission of guilt by Accountable or its employees.

Marta Bortner Green, a spokeswoman for the Department of Managed Health Care, said the enforcement division considers the case an open investigation and has arranged for three years of monitoring.

She said consumers with concerns about their care are urged to call state overseers at 888-466-2219.

View this story on California Watch

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