Record Fines Might Mean California Is Finally Serious About Improving Medi-Cal

Is California getting tougher on health plans participating in Medi-Cal, the state’s low-income insurance program?

A few weeks ago, state regulators introduced a note $ 55 million in fines at LA Care, California’s largest Medi-Cal managed-care plan, for failing to ensure adequate care and allowing treatment delays that threatened the health of those enrolled. Patient advocates hope that the move signals stricter enforcement against other Medi-Cal insurance companies, which have many of the same shortcomings for which regulators have just fined LA Care.

Twenty-five care plans across the state provide care almost 12 million of the more than 14 million Californians enrolled in Medi-Cal, and the state is often accused of not holding the plans accountable for subpar care. Medi-Cal members are among the most vulnerable people in the state: they can face language and cultural barriers and have disproportionately high rates of chronic diseases.

The State Department of Health Care Services, which runs Medi-Cal, is preparing a new one managed-care contract, scheduled to take effect in 2024, which officials say will improve care by keeping participatory health plans to higher standards. The state hopes to be able to reduce health inequalities and improve health outcomes by tightening monitoring and application.

“They’re trying to do more, and that’s really positive,” said Abbi Coursolle, a senior lawyer at National Health Law Program in Los Angeles. “Of course they have a lot more to do.”

DHCS and the state Department of Managed Health Care, which also regulates Medi-Cal managed-care plans, launched coordinated investigations of LA Care, based in part on a Los Angeles Times Report 2020 which highlighted long, sometimes fatal, delays in care at facilities operated by the Los Angeles County Department of Health Services. That authority operates the county’s public safety net system and has an agreement with LA Care to provide care to hundreds of thousands of members of the health plan. In their investigations, state regulators also relied on information that LA Care reported to them.

The fact that they relied on these sources, says Coursolle, raises questions about the effectiveness of its own monitoring and auditing.

On March 4, the Department of Managed Health Care struck LA Care with a $ 35 million penalty – more than triple its maximum previous fine. The Department of Health Care Services took out $ 20 million, almost eight times the previous record.

The state cited LA Care for more than 100,000 violations, including late responses to patient complaints and appeals, delayed or denied permits for necessary medical care, and failure to ensure that the county health authority complied with patient care regulations. The California Department of Public Health, which regulates hospitals and other health care facilities, did not respond to a question about whether it is examining any of the county’s medical facilities.

In announcing the fine, the state authorities said: “The extent of LA Care’s violations, which has resulted in harm to its members, requires immediate action.” The health plan has 2.4 million Medi-Cal registered.

“The latest supervisory action against LA Care signals that DHCS intends to exercise our authority to protect our Medi-Cal notifiers,” department spokesman Anthony Cava told me in an email.

LA Care’s CEO, John Baackes, says the plan does not dispute the results. “What we dispute is the size of the fine, which we consider unreasonable,” Baackes said. The dispute can take months, or even years, to resolve.

In a statement released after the fine was announced, LA Care Medi-Cal noted notoriously low payments to providers, saying the penalties create “another financial hurdle for a public health plan that is a crucial part of the health care safety net.”

Although LA Care has generated millions of dollars in profits in recent years, it reported one loss of $ 132 million during the financial year 2020. But the plan can handle the fine. At the end of last year, its significant net equity – a key measure of solvency – was seven times as high as the minimum required by law.

The violations described by regulators are painfully familiar to Theresa Grant, a Culver City resident I wrote about at the end of last year who has struggled to find relief from a debilitating chest pain. The violations are “horrible,” she says, “and I think that’s very true.”

But she believes that the specialists who have not been able or willing to help her deserve a large part of the blame. “You know how long I’ve been dealing with my problem,” she told me. “It’s been over a year now and not a damn thing is being done.”

Despite the significant penalties imposed by LA Care, consumer advocates and some state lawmakers believe California needs the power to charge even more.

A bill sponsored by the consumer group Access to health would increase many of the fines that state health planning regulators can impose at least ten times. Proponents of her case have been working to make the actual transcript of this statement available online. SB 858is needed because the amount that the department can legally charge for health plans has not been increased in some cases since 1975.

“We want to make sure that insurance companies do not see these fines as just the cost of doing business,” said state attorney general Scott Wiener (D-San Francisco). “By raising them, they become less of a cost to the business and more of a real incentive to follow the law.”

The fines imposed on LA Care are extreme values ​​due to their size, which was partly determined by the large number of infringements. “For every fine there is, there are many that are dramatically lower,” Wiener says. “I would not want to rely on a case and say, ‘Oh, no problem, because they got big fines.’

Another important factor in keeping the health plans’ feet against the fire, says Wiener, is consumer complaints, which can help draw the attention of regulators – and the plans themselves.

Men a report last year by KFF showed that consumer appeals about denied care are extremely rare.

If you have a problem with your health plan or want to appeal a delay or denial of coverage, a good place to start is at the Department of Managed Health Care (888-466-2219 or

The state also has an ombudsman for Medi-Cal managed care (888-452-8609 or

You can also try the Health Consumer Alliance (888-804-3536 or, which helps people in public and private health plans. It offers free advice, provides legal services and can help you get your documents to appeal.

Regulators and health plans often say they are working on behalf of the patient. So if you do not get the care you need, stand up and be a part of the solution.

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