Peter Lee

If you thought the rollout of Obamacare was problematic last year, this year could be worse — including its implementation here, called Covered California.

State officials are still struggling to clear a huge backlog of Medi-Cal applications from the past year, while legislators field numerous complaints from frustrated constituents, insurance premiums are increasing and Medi-Cal renewals are down. The open enrollment period for 2015 begins Nov. 15.

“As much as the first year of enrollment was big and rocky, on some levels the second year is going to be harder,” said Covered California Executive Director Peter Lee at a recent Senate Health Committee informational hearing.

Both Lee and Department of Health Care Services Director Toby Douglas are proud of their progress in implementing Obamacare in California.

“We reduced the number of uninsured by 3.4 million people in this state, from 22 to 11 percent,” said Lee. “That’s the largest reduction by percentage in the entire nation. We can feel proud of California serving as an example for the nation how to do this right.”

“[We] have had tremendous success with the implementation of the Affordable Care Act,” agreed Douglas. “We have within our Medi-Cal program dramatically changed the perception. The perception overall is positive and it gets high marks.

“That being said, we’ve had challenges, many challenges with the process. We know our implementation has not been without problems. We have to continue to learn from those challenges, continue to improve it and make it a better experience for all of those, whether applying for Covered California or enrolling into our Medi-Cal program.”

Backlog

One of DHCS’s biggest challenges has been clearing the Medi-Cal application backlog. It had reached 487,000 pending applications in July, which were whittled down to 171,681 by Oct. 15. Nearly 1,400 applicants have been waiting a year to find out whether they’ll receive coverage.

This has not only been an embarrassment for state health officials, but it’s also illegal. State law requires that health insurance applications either be accepted or denied within 90 days. Several social advocacy organizations have filed a lawsuit to get the state to abide by its own law.

“There has been an increase recently,” acknowledged Douglas. “Covered California has been going through administrative renewals, and that has pushed populations over to Medi-Cal. And we know that there’s at least 40,000 that are duplicates that need to be denied within the system of 171,000. And there’s 20,000 where we’re looking at our administrative strategies that are eligible.

“We have been going through a lot of different enhancements to try to reduce the pending cases and bring it down. Our ultimate goal is we want all applications determined eligible in the required time frame. And we might still always have pending cases, because counties might be waiting for verification information. But we want to make sure that there is no one out there stuck and pending because of system problems.”

Renewal

Another challenge for Douglas is getting Medi-Cal recipients to renew their coverage. The renewal rate in 2013 was 60-70 percent in many of the state’s larger counties. But that range has dropped to 50-70 percent in 2014, with some counties below 50 percent.

That decrease concerns Sen. Holly Mitchell, D-Los Angeles. “This is deeply troubling,” she said. “We spend all this energy talking about congratulating ourselves about our enrollment numbers and that number will be a moment in time because we get to re-enrollment and we lose them.

“And the Legislature will have kneejerk reactions like, ‘Get rid of the status reports, get rid of this, get rid of that’ to try to fix that number. That’s why I ask what the problem is so we can be a partner rather than kneejerk to try to plug this hemorrhage – because that’s huge and a problem.”

Douglas responded, “We’re not sure. We delayed the actual disenrollments to get more outreach. We would have thought it would be the same. This is not what we wanted. We think it’s because it’s a new process. There’s been concern from community groups that … thought it was confusing. It’s going to take a lot of grass roots work to break down and understand this new process and why it’s different.”

Mitchell said the confusion is inherent in the way government does things.

“Government does a horrible job in communicating,” she said. “At first I thought it’s because we really don’t want to enroll people. And I don’t think that’s the case. We are bitten by the IRS bug. Every form we create we have to make it as complicated, use as many words and make it look as academic and unfriendly as possible. It’s not just you, it’s government across the board. I’m not sure why that is. We have a bad habit of making the process as difficult and complicated unnecessarily as possible.”

Lee disagreed: “We certainly don’t, as either a matter of habit or purpose, try to make things complex, as you know.”

That prompted Mitchell to laugh, saying, “It’s government – we can’t help ourselves.”

Outreach

She also criticized the state’s education and outreach efforts to blacks.

“The effort in the first go around was lackluster,” she said. “And we need to have a clear conversation and commitment around who is engaged and contracted to do the advertising and outreach to this very specific and targeted community.

“I sponsored a [Covered California] storefront [in the Crenshaw mall] because I happened to think it was a great idea when I was approached by community-based organizations. But I have to say, I was quite disappointed at the outcome. We had five kazillion touches, but our enrollment numbers were nowhere near what I anticipated.”

Lee responded, “The Crenshaw mall enrolled not as many people as you thought it would and we thought it would. But a lot of people came and asked questions. And one of the things we learned is that it’s not a one-touch-and-done enrollment process. So the fact of having a storefront where people can come in, ask questions, take material home, come in again and then maybe go enroll with an insurance agent at that storefront we say, ‘Hallelujah, wherever you are enrolling is OK.’”

Calls

Committee Chairman Sen. Ed Hernandez, D-West Covina, voiced a complaint made by legislators at an Assembly Health Committee hearing on Obamacare in September.

“My office on a regular basis is getting calls,” he said. “They get funneled up to Sacramento. These are people who are in support of the Affordable Care Act. And they are just really upset. It can be anything from [a lack of] network adequacy to call time to wait time to length of time in Medi-Cal to get enrolled.

“So I want to make sure that not only California continues to be the leader, but absolutely most important that we address as many if not all of the concerns that the consumers of the state of California have.”

Sen. Bill Monning, D-Monterey, has also received numerous complaints from constituents.

“I represent rural areas where in much of my district there is no competition” among health insurance providers, he said. “Our phones are ringing off the hook with people who have coverage and can’t find a [health care] provider who will accept that coverage. So, coverage without access is not real coverage.

“We have a health care plan in Monterey County advising providers at a local hospital that diabetes prevention is not covered. It’s wrong. They are giving disinformation, turning people away. A major health plan that is our only health plan in the region of Monterey County is advising providers it will not cover preventing for diabetes.”

Lee said preventive care is covered, and insurance companies are reviewed annually to make sure they are providing adequate coverage.

“When we sit down with health plans, we don’t say the first question is: What’s the cost?” he said. “The first question is: Are there adequate networks of doctors, hospitals to make sure people get the necessary care? Not all, but in a number of cases there were areas where we specifically said there appear to be shortfalls in networks. And part of what plans came in with was expanded networks of hospitals or of doctors.”

Lee and Douglas assured the committee that they are working to fix the problems and improve service, but acknowledged that will take time.

This article was originally posted on CalWatchdog.com.

In an embarrassing new black eye for Covered California, the state’s implementation of Obamacare, the health exchange, has admitted it violated accepted practice by awarding $184 million in so-called “no-bid” contracts, according to a new report by the Associated Press.

State governments routinely consider competing bids for work. It’s a process designed to prevent corruption and the appearance of impropriety.

In the past, government contracting that skirts the process has been a target of prominent Democrats. During Republican President George W. Bush’s 2004 run for re-election, Democratic rivals Sen. John Kerry and Sen. John Edwards campaigned against the energy company Halliburton’s no-bid government contracts in Iraq. Republican Vice President Dick Cheney had been the head of Halliburton.

Now officials with close ties to the Obama administration have come under scrutiny for the practice.

During the Halliburton controversy, the Bush administration’s defenders appealed to one of the few established excuses for no-bid contracts, arguing that no other company was capable of doing the necessary work in the time available. Similarly, Covered California has responded to the current revelations by invoking a state of emergency.

In a statement, executive director Peter Lee explained Covered California “needed experienced individuals who could go toe-to-toe with health plans and bring to our consumers the best possible insurance value.”

Cozy ties

Among those individuals, it turned out, were members of The Tori Group, a contractor whose founder, Leesa Tori, had worked closely with Lee in the early 2000s. Amid the scramble to get Covered California up and running, the exchange’s board approved a grant increasing The Tori Group’s contract to $4.2 million.

“Contractors like The Tori Group,” Lee continued in his statement, “possess unique and deep health care experience to help make that happen and get the job done on a tight deadline.”

Covered California’s relationship with The Tori Group, however, was not a one-time affair. Leesa Tori became Covered California’s director of plan management — one of nine Tori Group personnel with current positions at Covered California.

Lee’s close relations with Tori mirrored those he has maintained with the White House. In the Obama administration, he was a deputy director at the Centers for Medicare and Medicaid Services, after working on national policy with HHS Secretary Kathleen Sebelius.

A case of emergency

Although Covered California has not necessarily broken any laws in its no-bid contracting, the impropriety of Lee’s intimate professional ties with The Tori Group underscored the risk the exchange was willing to run to succeed in their race to establish viability. Without moving quickly enough to implement the health-care system made possible under Obamacare, officials worried Covered California would befall the same fate as such failed state exchanges as neighboring Oregon’s.

In addition to the political humiliation visited on officials whose state exchanges failed, policymakers feared an excess of failures and a shortfall in enrollments would cause the state exchange system itself to collapse. That, in turn, would place a burden on the federal government which could make Obamacare implementation prohibitively costly and complex.

Through Lee’s efforts, however, Covered California survived. Those efforts, as the no-bid revelations have confirmed, blurred the line between appropriate and inappropriate action.

‘Death spiral’

To stave off a so-called “death spiral” of under-enrollment, for instance, Lee oversaw the inclusion of hundreds of thousands of Covered California applicants with missing or suspect identification. Those numbers helped give Obamacare the critical mass of enrollees it needed for political and policy purposes.

Alone, Covered California was responsible for over one-eighth of individual enrollments in Obamacare, even though California has only one-twelfth of America’s population.

In sum, the story that has emerged about Covered California’s success has captured the weakness of Obamacare implementation. While supporters of the health care law insisted it faced only a few bureaucratic bumps in the road, the reality was different.

Without a successful state exchange in California, the future of the Affordable Care Act would be in doubt. The stakes were high for Peter Lee, and he delivered — netting him a five-figure bonus this year.

This article was originally published on CalWatchdog.com

Open-enrollment headache again strikes Covered CA