SACRAMENTO, Calif. (KNX) — The administration of California Gov. Gavin Newsom has negotiated a “secret” deal to give Kaiser Permanente a special Medicaid contract allowing the healthcare company to expand its footprint in the state. It also would allow Kaiser to select its own enrollees, leaving other health plans with a disproportionate share of the sickest and most expensive patients.
The deal was negotiated between Kaiser executives and senior officials with Newsom’s office. Critics have said it could complicate reform of Medi-Cal, the state’s Medicaid program, which covers about 14 million low-income Californians.
The contract allows Kaiser to limit enrollment largely to its prior enrollees, exempting foster children and those eligible for both Medicare and Medi-Cal.
Officials are expected to announce the plan publicly Friday, and will take effect in 2024 pending approval from the state legislature. Approval will render Kaiser the only insurer with a statewide Medi-Cal contract. It would also place the company at the front of the line in bidding for commercial Medi-Cal plans.
Critics have pointed out a possible conflict of interest at play, given that Kaiser Permanente has donated nearly $100 million in charitable gifts and grants towards Newsom’s homelessness, COVID-19, and wildfire relief programs since 2019.
There has also been significant personnel exchange between Kaiser and the Newsom administration. Jim DeBoo, Newsom’s executive secretary, lobbied for Kaiser before joining the administration. Toby Douglas, a former director of the state’s Department of Health Care Service, which administers Medi-Cal, is now Kaiser’s Vice President for National Medicaid.
State officials have justified the deal by pointing out that not agreeing may have put access to the healthcare giant’s facilities at risk. Michelle Baass, director of the Department of Health Care Services, told Kaiser Health News (not affiliated with Kaiser Permanente) that Medi-Cal had risked losing Kaiser’s “high quality” and “clinical expertise” all together had it been contractually required to accept all enrollees.
She added the state intends to have greater oversight over Medi-Cal patient care in Kaiser facilities.
“This proposal is a way to help ensure Kaiser treats more low-income patients, and that more low-income patients have access to Kaiser’s high quality services,” she said.
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