California managed care regulators are ordering a doctors' group to stop letting business administrators make decisions about granting requested medical care.
The order targets Accountable Health Care IPA, where regulators say the chief executive's son and another manager made calls on patient care that, by law, should be made by a doctor.
The state Department of Managed Health Care, an oversight agency, issued 12 "cease and desist" orders to Accountable, a Los Angeles doctors' group that provides care for 148,000 patients. The orders are also aimed at large insurers that contract with Accountable, including Blue Cross, L.A. Care, Aetna, Health Net, Blue Shield and others. Those orders ask health plans to stop enabling its contractor to violate state law.
Accountable Health Care IPA denies the department's allegations.
“All medical necessity decisions at Accountable Health Care are made by a licensed California physician in compliance with state law,” a statement from company owner Dr. George Jayatilaka said. “While the final decision is the physician’s, other competent healthcare professionals also participate in the review process. This has been our practice for many years, and it is the process used by many other independent practice association (IPA) service providers.”
The July 16 orders allege that Accountable Health Care IPA allowed unqualified executives to perform medical reviews “involving a modification or denial for requested medical services.” The orders say the decisions were reached “on many occasions” since Dec. 24, 2008.
The orders also allege that Ambarish Pathak, a utilization manager, and Druvi Jayatilaka, vice president and the CEO’s son, may have ruled on patient care matters on more occasions “that are now concealed” because the company does not track who completed medical reviews of requested care. Orders sent to the managers ask them to stop violating the state's Health and Safety code.
Marta Green, spokeswoman for the Department of Managed Health Care, said patients whose care is denied can seek an independent medical review with the department. She said the department is still reviewing the matter and has not determined whether patients were denied needed care.
Lili Maneerod, chief operating officer of Accountable Health Care IPA, said the state’s allegations are “based on false information” and don’t account for the fact that licensed professionals reviewed the patient care decisions.
She said regulators “could not show evidence, so we don’t know why” the letters were issued. Maneerod said the matter is one of perception, “and we just need to work with everyone to change that perception.”
George Jayatilaka said Accountable is continuing to work with the department "on any revisions to our process that will assure the department of Accountable’s continued compliance with all applicable laws and regulations."
Independent practice associations are groups of doctors that receive a per-patient fee to render care to patients. Large insurers tend to contract with them to provide primary or specialty care to HMO patients.
Blue Cross of California has assigned the largest share of patients to Accountable Health Care, with 67,726 enrollees relying on the group for primary care. A spokesman from Wellpoint, the Blue Cross parent organization, did not return a call for comment.
L.A. Care, which provides managed care to low-income Los Angeles residents, assigned 24,953 enrollees to Accountable.
L.A. Care told California Watch in March that it planned to sever ties with the group but did not specify a reason. Last week, L.A. Care said it had not followed through with a plan to end its relationship with Accountable, but had ended the group’s role in seeing L.A. Care's Medicare patients and had limited enrollment.
John Wallace, L.A. Care’s chief operating officer, said the health plan takes the managed care overseer’s order “very seriously,” and is in close communication with the state on next steps.
“Accountable provided assurances that it took steps to improve its operations and (added) additional clinical and compliance resources,” Wallace wrote in an email. “L.A. Care regularly monitors and audits its contracted IPAs like Accountable and L.A. Care continues to monitor Accountable’s performance.”
The state’s managed care watchdog agency is pursuing the case as more than a million low-income Californians who rely on Medi-Cal are about to be added to managed care plans.
State officials see the plan to shift to managed care as a way to save money and better coordinate care for patients on Medicare and Medi-Cal and give doctors incentives to keep patients healthy.
The state will be providing a flat per-patient fee to large insurers, many that will, in turn, delegate everyday care of those patients to independent practice associations, like Accountable Health Care.
Green, of the state’s managed care watchdog agency, said the department oversees the financial solvency of those independent groups. However, she said, the department relies on the health plans it licenses to ensure that they follow state laws, such as allowing only licensed staff to decide whether patients get requested medical care.
View this story on California Watch
This story was produced by California Watch, a part of the nonprofit Center for Investigative Reporting. Learn more at www.californiawatch.org.