Cash-strapped California is aggressively moving its poorest residents to managed health care, whether they're seniors, rural residents or people with disabilities.
So, when Gov. Jerry Brown proposed earlier this year to transfer the nearly 900,000 poor children in the Healthy Families insurance program into Medi-Cal, he saw it as another opportunity to reduce costs by expanding dental managed care.
But something happened between then and now, and that something was Sacramento County.
Sacramento County's poorly performing Medi-Cal dental managed care program foiled Brown's plans, legislators say.
"That failure certainly has stopped the expansion of dental managed care," said Assemblyman Richard Pan, a Sacramento Democrat who also is a pediatrician. "Hopefully, we as a state have learned from that failure, and not only on the dental side. Hopefully, we can apply those lessons on the medical side."
Sacramento and Los Angeles are the only two counties with Medi-Cal dental managed care.
Their lackluster performance getting poor children to dentists made legislative leaders balk at adding Healthy Families kids to Medi-Cal dental managed care.
Instead, Senate President Pro Tem Darrell Steinberg of Sacramento and Assembly Speaker John A. Pérez of Los Angeles negotiated a deal to move Healthy Families kids into the more flexible – and potentially more expensive – fee-for-service dental care model under Medi-Cal.
"We want to ensure that the challenges in certain counties are addressed before we contemplate a major expansion" of Medi-Cal dental managed care, said John Vigna, a Pérez spokesman.
Dental care scrutinized
Medi-Cal, the state's version of Medicaid, is a public health insurance program for the lowest-income Californians. Healthy Families covers children in families with incomes too high to qualify for Medi-Cal, up to 250 percent of the federal poverty level.
Sacramento County's Medi-Cal dental managed care program has come under intense scrutiny since February, when a CHCF Center for Health Reporting story published in The Bee gave examples of children who have waited months to receive treatment for painful, rotted or broken teeth.
In fiscal year 2010-2011, about 31 percent of Sacramento County children with Medi-Cal saw a dentist, compared with nearly half of children on Medi-Cal statewide.
Los Angeles County's Medi-Cal dental managed care program scored even worse. That year, about 23 percent of the 154,000 children on managed care saw a dentist.
Under managed care, the state contracts directly with private dental plans, paying them a monthly fee – about $11.50 – for each child, whether or not the child actually sees a dentist.
The plans pay clinics and dentists a lesser amount per month to provide the care.
The rest of the state uses fee-for-service, which allows dentists to bill Medi-Cal for services and results in a higher reimbursement.
Over the past several months, lawmakers and state agencies have taken steps to address problems in the two counties' programs, such as adopting a new state law that allows some Sacramento County children who haven't been able to see a dentist within certain time frames to switch to fee-for-service.
The law also creates new accountability and reporting requirements for dental plans participating in Medi-Cal managed care programs in Sacramento and Los Angeles counties. From now on, the plans will face more intensive and frequent state reviews and tougher financial penalties if they don't comply, said Rene Mollow, deputy director for benefits and eligibility at the state Department of Health Care Services, which administers Medi-Cal.
"If it's warranted, we will terminate the contract," she said.
Under the legislative compromise for Healthy Families children, Sacramento and Los Angeles counties will continue to do business as usual. In Sacramento County, Healthy Families kids must enroll in Medi-Cal dental managed care, which is mandatory. In Los Angeles, it is voluntary, so parents can choose between fee-for-service and managed care for their kids.
Children's advocates say they're relieved that dental managed care won't be expanded statewide, but wonder why Sacramento County children in particular must remain in mandatory managed care.
"We continue to ask the question, 'If it's not good enough for everybody else, why does it continue to be good enough here?' " said Cathy Levering, executive director of the Sacramento District Dental Society.
Levering acknowledged that the state and dental plans "have jumped through hoops in the last five months to improve the oversight of this program and they've committed to making sure they're on it," she said. "But time will tell if it works."
A better record
Healthy Families has a better record with dental managed care than Medi-Cal. More than two-thirds of Healthy Families kids belong to dental managed care plans.
In 2010, about 52 percent of Sacramento County children on Healthy Families managed care saw a dentist. The figure was 47 percent in Los Angeles.
Though there is clearly room for improvement, some children's advocates say, Healthy Families shows that managed care doesn't automatically equate to dismal care.
What matters is how managed care is implemented, and perhaps more importantly, overseen, they say.
"Everyone talks about how, in theory, managed care is going to save money and provide better care. But that only happens when someone is paying attention, monitoring it and providing oversight," said Pan.
That hasn't happened in Sacramento County, he said. "The state can't abdicate its responsibility to ensure that patients are actually getting the care they need. You can't just say, 'Here's the contract, I told you to do this, now it's not my problem,' "
Pan's concerns about state oversight are not limited to Sacramento County's dental managed care program.
The state has been moving more Medi-Cal recipients into managed care for their overall medical needs, and the trend is accelerating.
"California has made a decision that we are able to provide better and more cost-effective care" through managed care, said Jane Ogle, DHCS deputy director for health care delivery systems.
Recipients are assigned to primary care physicians who coordinate their care and patients have faster access to specialists, she said.
Of the roughly 8 million Californians on Medi-Cal, about 4.5 million are in managed care, she said. By mid-2014, that number will grow to about 6 million.
Here are a few examples of recent Medi-Cal initiatives to expand managed care:
In the past year, the state has moved about 400,000 seniors and people with disabilities into mandatory managed care.
Next year, the state will begin enrolling more than half a million "dual eligibles" – people who are enrolled in both Medi-Cal and Medicare – in eight counties into managed care.
The state will start expanding managed care into 28 rural counties next year, primarily in Northern California.
But there are widespread concerns about the pace at which the state is moving.
Andrew Bindman, director of the University of California-based California Medicaid Research Institute, cautioned that many of those now moving into managed care are elderly, sick and often suffer from challenging chronic health problems.
The state needs to ensure that their quality of care keeps up with the transition to managed care, he said.
"The policy is moving at a pretty brisk pace, but our knowledge of how well it's doing is lagging behind," Bindman said.