County cutting ties with Kaiser

The Stanislaus County Health Services Agency says it intends to no longer see patients with Kaiser insurance at its clinics, in an effort to reduce its budget deficit.

The decision will require 2,000 to 3,000 Kaiser Permanente members to find new doctors.

The cancellation is part of an effort to reduce a $10.6 million deficit in the Health Services Agency, said Mary Ann Lee, the agency's managing director. The county estimates a gain of $350,000 a year from this and related decisions.

Kaiser's payments to the county were not covering the costs of providing care for Kaiser members who use county health clinics, she said. The county sent a cancellation notice to Kaiser in mid-November after it wasn't able to negotiate a higher rate, Lee said.

The contract is to expire in May, giving patients about six months to change doctors.

"We are talking to Kaiser about how the notification process to Kaiser enrollees will work," Lee said. "We are moving forward as though the contract is terminating."

Kaiser spokesman Terry Lightfoot said, "We are looking at the communication they have sent, but we don't have any comment at this time."

The county health clinics started contracting with the nonprofit health maintenance organization in the late 1990s.

A few thousand people with Kaiser insurance were served by doctors at the county clinics, but fewer of those patients have used the clinics since Kaiser opened medical offices in Modesto, Lee said.

Besides its primary care and specialty clinics, Kaiser plans to open its hospital in north Modesto in fall 2008.

Most of the 70,000 to 80,000 patients who use the county Health Services Agency clinics are in government health programs, but a small percentage are privately insured.

This fall, the county tried to renegotiate contracts with commercial insurers that have paid little more than $50 for routine patient visits at the clinics, Lee said. The county is canceling contracts with two other insurers that declined to increase payments. Those insurers cover a smaller number of patients.

The county persuaded the Children and Families Commission to increase payments for the Healthy Cubs program, which provides outpatient services for young children and pregnant women.

The cancellation of the commercial insurance contracts will allow the county to serve more Medi-Cal patients at higher reimbursement rates. Because the clinics were granted federally qualified health center status in September, the clinics will receive $130 to $140 for Medi-Cal patient visits.

Bee staff writer Ken Carlson can be reached at kcarlson@modbee.com or 578-2321.