22 July 2010
California Edition
Calendar
July 22-24
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July 25-28
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September 22-24
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E-Mail
info@payersandproviders.com with
the details of your event, or call
(877) 248-2360, ext. 3. It will be
published in the Calendar section,
space permitting.
Ombudsman Prompts Head-Butting
Health Plan Objections Are Slammed By Advocates
A bill working its way through the
Legislature would create an ombudsman
office to help Californians navigate the
post-reform healthcare environment.
However, health plans and advocates are at
odds over whether such an office would
duplicate protections offered by other
agencies.
AB 2787, authored by Assemblyman
Bill Monning, D-Santa Cruz, and co-
authored by Sen. Elaine Alquist, D-San
Jose, would establish the California Health
Ombudsman. Its duties would include
educating Californians about their
healthcare choices, helping them enroll in
health plans, and obtaining tax credits
created by the recently enacted national
healthcare reform. It would also operate a
24-hour hotline that would allow
consumers to call in with questions. The
hotline’s number would be printed on the
membership cards of all health plan
enrollees.
The ombudsman office would initially
be funded through a portion of the $30
million in federal funds made available
through the national reform legislation to
boost consumer protections. However, it
would later be funded through a fee
imposed on health plans, based on the size
of their enrollment.
The bill has drawn the opposition of
the California Association of Health Plans,
the state’s primary lobby for health insurers.
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CAHP would prefer the federal funding be
used to beef up existing consumer
programs operated by the California
Department of Insurance and the
Department of Managed Health Care.
“We oppose any legislation that
would create another duplicative,
expensive ombudsman that will likely
confuse the public,” said CAHP President
Patrick Johnston. He added that the
Schwarzenegger Administration has
already applied for the state’s share of
federal consumer advocacy funding.
The DMHC, which is considered the
leading government watchdog in
California for HMOs, declined to
comment on the bill. But sources close to
the agency say there is concern that the
ombudsman would duplicate services it
already provides, at an additional cost of
millions of dollars per year.
Johnston said the health plans also
object to the fee that would be imposed
on them. The already pay an annual
assessment to help fund the DMHC, and it
has been ratcheted up in recent years to
compensate for the state’s budget deficits.
“The shift has been from broad-based
taxes to fees imposed on regulated
businesses that have no recourse but to
pay them,” he noted. “Those costs are
going to have to be recouped elsewhere.”
Continued on Next Page
 Payers & Providers
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In Brief
L.A. County Approves
New King Operating
Agreement
The Los Angeles County Board of
Supervisors last week voted
unanimously to approve an
agreement that would have the
county reopen Martin Luther King
Medical Center in South Los
Angeles with the University of
California by 2013.
As part of the agreement, the
county will provide $50 million in
startup funds, parceled out over the
next five years; $8 million in
reserves, and a $20 million line of
credit for operations. It will also
pay $13.3 million a year for the
hospital to care for indigent
patients, and provide funding to
help the hospital draw matching
payments from the Medi-Cal
program.
The University of California
will run all clinical operations at
the hospital, which is planned for
120 beds. Both the county and UC
will be allowed to appoint two
directors apiece to the hospital’s
operating board, and collaborate on
appointing the three other
members.
The hospital, which originally
opened in the early 1970s, shut
down in 2007 after it was barred
from participating in the Medicare
and Medi-Cal programs. It often
provided substandard and even
indifferent healthcare in the two
decades prior to its closure.
DMHC Bars Agent For
Enrollment Abuses
The Department of Managed Health
Care has barred a Folsom insurance
agent from selling Medicare Advantage
policies due to deceptive marketing
practices.
Continued on Page 3
NEWS
Ombudsman (Continued from Page One)
Monning spokesperson Jody Fuji
noted that the ombudsman’s office would
be used to help consolidate the nine
different state agencies Californians can
currently go to obtain assistance regarding
their health plans. The legislation would
require many of those agencies to make
referrals and coordinate and record
complaints in concert with the
ombudsman.
Johnston countered that agencies
which already offer consumer protections
clearly publicize services such as the
DMHC’s HMO Hotline.
The CAHP’s position was blasted by
Anthony Wright, executive director of
Health Access, a Sacramento-based
advocacy group that supports the bill.
“It’s not a surprise that insurers are
opposed to having a place where
consumers can complain about insurers,”
he said.
Although Health Access played a big
role in getting the DMHC’s HMO Hotline
Anthem Comes To End For Margolin
She Leaves Months After Reaching Out to Hospitals
Anthem Blue Cross of California President
Leslie Margolin left the insurer on Monday.
Although both Margolin and Anthem’s
parent company, WellPoint, Inc., say the
departure was a mutual decision, it comes
after the state’s largest insurer came under re
earlier this year after trying to raise rates on its
800,000 individual policyholders by as much
as 39%. The proposed increases – which
averaged 25% – were used as political
leverage by the Obama Administration to help
pass federal healthcare reform in March.
Intense scrutiny by the California
Department of Insurance (DOI) and its
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Page 2
up and running several years ago, he
contended that most healthcare consumer
protections in California remain
fragmented.
“In the transition to reform, we’re
going to need as many resources as
possible to help consumers get through
this,” he said. We need a place for
consumers to be able to talk through their
options. I’m concerned about that insurers
not be allowed to game things. It’s
important we get that right, and getting
feedback from consumers will be
important.”
The Senate’s version of the bill passed
the Health Committee last month on a 5-3
party line vote, with Democrats in
support. It is slated for a hearing in the
Appropriations Committee at an
unspecified date.
An older version of the bill passed the
Assembly 76-0 in May. However, it has
been heavily modified in the intervening
weeks, and must be voted on again.
outside actuary, Axene Health Partners,
discovered some mathematical errors in
Anthem’s rate hike application. Axene
estimated that its average rate increase request
was about 40% higher than necessary.
Anthem and WellPoint ofcials had
initially defended the rate hikes, then
postponed them, then withdrew them almost
immediately after Axene published its
analysis. It has since submitted much more
Continued on Next Page
Payers & Providers
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In Brief
Nadia King, 35, apparently
enrolled at least 11 people into a
Medicare Advantage plan she
represented without obtaining their
consent, often after approaching them
unsolicited. Some experienced delays
in receiving medical care as a result.
One customer accumulated $6,000 in
out-of-pocket expenses.
“The DMHC is committed to
protecting Medicare recipients from
these abusive tactics,” said agency
director Cindy Ehnes.
Payers & Providers to
Launch National &
Midwest Editions
Payers & Providers will launch a
monthly national print edition in
the fourth quarter of 2010 and an
electronic regional edition
covering the Midwest in the first
quarter of 2011.
Ron Shinkman, current editor
of the California edition, will edit
the national edition. It will focus
on healthcare news of national
import, and will contain in-depth
statistics and opinion pieces.
The Midwest edition will
appear weekly, covering healthcare
news in Illinois, Indiana,
Minnesota, Wisconsin, Missouri,
Ohio and Michigan. A weekly
Opinion page will also feature
members of its editorial board and
other contributors.
The Midwest edition will be
edited by Chicago-based
healthcare journalist J. Duncan
Moore. A veteran of Bloomberg
News , Modern Healthcare and the
Kansas City Star, Moore’s work has
also appeared in the Wall Street
Journal, the Los Angeles Times and
a variety of other publications.
“The expansion of Payers &
Providers was the next logical step
after it entered into a strategic
alliance with MCOL last month,”
Shinkman said. “I am very excited
to help make this happen.”
NEWS
Margolin (Continued from Page Two)
modest rate increases, which are still under
review by the DOI.
Margolin herself had been personally
criticized by U.S. Health and Human Services
Secretary Kathleen Sebelius, and faced mostly
hostile lawmakers in Sacramento during a
February hearing.
That Margolin had been called out so
adamantly was a departure from her
management style. She kept a low prole
during her time at Anthem and gave few
media interviews.
Margolin’s tenure was also by far the
shortest in her career, having joined Anthem
in January 2008 after spending nearly 20 years
in senior management positions at Kaiser
Permanente and Cigna.
Just last January, Margolin had engineered a
$6 million pledge from Anthem Blue Cross to
the state’s three regional hospital associations
to help improve patient safety. Hospital
ofcials had praised Margolin’s efforts to try
and improve sometimes frayed relations
Same Sex Couples Lack Coverage
Less Likely to Have Insurance Than Other Households
A new study by UCLA researchers concludes
that same-sex couples have access to
employer-based health insurance at a much
lower rate than their heterosexual
counterparts.
The study, based on data from the 2001,
2003 and 2005 California Health Interview
Surveys, concluded that partnered gay men
are just 42% as likely to be fully covered by
one partner’s employer-based health
insurance. Lesbian couples are 28% as likely
to have insurance coverage. The study
covered more than 110,000 men and women.
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Page 3
between Anthem and California’s provider
community.
Hospital Association of Southern California
Executive Vice President Jim Lott said on
Wednesday the quality improvement effort
remained in place.
Margolin, an attorney by training, said she
will head a coalition of hospitals, physicians
groups, health plans and medical groups
called Transforming Health Care. The
coalition does not have a website. An Anthem
spokesperson said it is not related to the
patient safety coalition.
“We cannot afford to ght each other any
longer. I took on the challenge of bringing the
parties together as Anthem's President, and I
am grateful to have had the platform to begin
this process,” Margolin said in a prepared
statement.
Margolin will be replaced on an interim
basis at Anthem by Mark Morgan, the insurer’s
vice president of small sales in California.
“We found no strong evidence to suggest
that California employers are discriminating in
providing health insurance to gay and lesbian
workers as individuals,” said UCLA professor
Ninez Ponce and co-author of the study.
Clarification
It was reported in last week’s edition of
Payers & Providers that critical use hospitals
had been excluded from all federal
stimulus funding to incentivize the use of
electronic medical records. The exclusion
applied only to Medicaid funding.
!Newsletters
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Payers & Providers
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OPINION
Closing The U.S. Health Literacy Gap
Obese Americans Lack Info For Changing Lifestyles
According to a recent study published in
the Journal of American Medical
Association, nearly one in every three
children ages 2-19 is overweight or obese.
While parent and child certainly bear
a share of the responsibility when a child
is overweight due to poor diet and a
sedentary lifestyle, we must ask ourselves:
Who makes lifestyle choices and
decisions in families? From where do they
get reliable information? How well-
equipped are they to obtain, evaluate,
understand and implement this
information? What role does
their healthcare provider
play in teaching them how to
make good choices?
The truth is, the roots of
the current childhood
obesity epidemic run much
deeper than just kids
choosing – and parents
permitting – too many candy
bars. Only about 12% of our
adult population has the
necessary health literacy skills to
effectively navigate our healthcare
system. For parents of heavy kids, this
includes the ability to:
• Read and understand the nutrition
facts label on most packaged foods Michael
we buy
• Understand the links between
obesity and chronic illnesses such as
diabetes, heart disease, and stroke
• Know what a healthy portion size is
• Recognize the danger of excessive
sugar in kids’ diets, from sodas, desserts,
snacks and other food
Studies show that if we take the
time to expose parents to the information
needed to keep their kids fit and healthy,
they can use it to make informed, healthy
choices. But we need to know how to do
that first.
Plenty of resources exist that
accomplish just that, but we need to all
do our part to make it happen.
Providers need to spend the time with
parents and use techniques such as the
teach-back method to ensure that they
understand and know how to use the
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Page 4
information given to them.
Educators need to ensure that the
materials they are developing are
appropriate for adults who cannot read
above an 8th grade level, and use graphics
and design techniques that aid in
comprehension, not impede it.
Families need access to information and
materials that they can understand and use,
and support in learning new skills such as
reading the Nutrition Facts label, knowing
what is an appropriate portion size, and how
to differentiate between foods that are
nutritionally dense and those
that provide empty calories.
Earlier this year, the White
House Task Force on
Childhood Obesity submitted
its Report to the President
outlining an “action plan to
end the problem of
childhood obesity within a
generation.” The second
pillar of the Report,
“Empowering Parents and
By Caregivers;” First Lady Michelle
Gloria Obama’s national “Let’s Move!”
Mayer campaign; and the recent rollout of
the National Action Plan to Improve
and Health Literacy align directly with
nationwide efforts to increase health
Villaire literacy and to reverse the trend of
childhood obesity.
According to a 2004 Institute of
Medicine study, most information provided
to patients is well beyond their ability to
read and understand it. So, let’s get busy
fixing that information so that it’s readable,
understandable, and usable by the majority
of the population who have had trouble with
it. This will put us in position to reap the
promise of that ounce of prevention once
and for all.
Gloria Mayer is the chief executive officer and
Michael Villaire the director of programs and
operations for the Institute for Healthcare
Advancement, a health literacy advocacy
group in La Habra.
Op-ed submissions of up to 600 words are
welcomed. Please e-mail proposals to
editor@payersandproviders.com, or call (877)
248-2360, ext. 3.
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