Nursing Home Denials in CA Raise Concerns About Larger Move to Managed Medicaid

Managed Medicaid plans in California have, in some cases, denied coverage to patients for nursing facility care, raising concerns among long-term care advocates in the state about coverage by such plans.

California Healthline, a publication of Kaiser Health News, reported the story earlier this week.

California pays plans a monthly rate for every Medicaid beneficiary to provide the medically necessary services each recipient needs; more than 80% of 12.8 million Californians on Medi-Cal, the state’s Medicaid program, are covered by managed care plans, California Healthline noted.


The article focused on one incident where 36 nursing home residents in San Luis Obispo County, Calif., were told in September 2018 that their Medi-Cal managed care plan would stop payment for nursing home care. That led to a year-long dispute; last month, the California Department of Health Care Services (DHCS) sent Medi-Cal managed care plans a notice that residents could receive “intermediate care” in nursing homes, under federal law.

That means that plans would be paying for lower levels of care instead of ending coverage altogether. The managed care plan, CenCal Health, is reconsidering the eligibility of some residents because of that notice, CenCal CEO Bob Freeman told the publication.

The denials by CenCal were isolated, the DHCS told California Healthline, and some long-term care advocates agreed. Still others, however, told the publication they had seen an increase in coverage denials for nursing home residents on Medi-Cal. It’s a development California Association of Health Facilities president and CEO Craig Cornett finds “troublesome.”


“We are encouraged that the state has stepped in to clarify this important issue, especially since the entire long-term Medi-Cal population in California will be transitioned into managed care in 2021,” he said in a statement.

Most of California’s nursing homes have a majority of residents on Medi-Cal; the typical nursing home population is two-thirds Medicaid, according to California Healthline.

The move by California to move its long-term population to managed care stands in contrast to another populous state: New York earlier this year moved to take its long-term SNF residents off managed Medicaid as part of a bid to save money.

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