Santa Clara County leaders are seeking to reduce the financial burden of supporting the county’s public hospital system by streamlining the management of Medi-Cal reimbursements. The county has established a plan to consolidate the management of Medi-Cal, a program for low-income families, foster youth, disabled people, and older adults, under a single-plan model. This move aims to improve reimbursement rates, eliminate inefficiencies, and reduce duplicative costs. As part of this plan, the Board of Supervisors voted unanimously to replace most of the governing board of the Santa Clara Family Health Plan with county employees.
The Santa Clara Family Health Plan, established in 1995, is a significant entity in the county’s healthcare system, with around 300,000 enrolled members. However, county leaders argue that its governance structure has created a barrier to funding care, as it functions more like a separate insurance company focused on cost containment and surplus revenue. County Executive James Williams stated that the plan’s lack of a financial backstop, such as the county’s general fund, encourages it to reimburse hospitals at lower rates.
The proposed changes aim to give the county more control over reimbursement rates and improve the overall management of Medi-Cal. The plan would make the Family Health Plan the sole Medi-Cal and Medicare provider, replacing private insurance providers like Anthem. However, the state Department of Health Care Services must approve the request, which could take several years.
The decision has been met with opposition from the leadership of the Santa Clara Family Health Plan, who claim that the move is a “hostile takeover” that disrespects the governing board, staff, and members. The plan’s CEO, Christine Tomcala, argued that the proposal is “frankly reprehensible” and prioritizes the county’s interests over the needs of its members. The Family Health Plan filed a lawsuit against the county, requesting a temporary restraining order, but a judge denied the request.
County leaders argue that the changes are necessary to mitigate the impact of federal funding cuts and ensure the stability of critical safety net services. Supervisor Susan Ellenberg assured residents that the actions taken by the board would not affect patients, but rather aim to provide the best care available from trusted healthcare professionals. The county is seeking to improve the efficiency and effectiveness of its Medi-Cal strategy, and the proposed changes are seen as a crucial step in achieving this goal.