California officials announced Tuesday that they have reached a total settlement of $55 million with LACare, the public health insurance that serves Medical patients in Los Angeles County.
LA Care was fined $55 million in 2022 for what one state official described as “deep systemic deficiencies that threaten the health and safety of our members.” State regulators said such failures put vulnerable patients’ timely access to health care at risk.
The health plan protested the fines, calling them extreme and unnecessarily punitive. LA Care said in a statement Tuesday that it had successfully negotiated to divert a portion of the proposed fines into investments that would benefit its members and their communities.
Under an agreement with the California Department of Health Services and the California Department of Managed Care, LA Care will pay a $27 million fine over the next three years and contribute the remaining $28 million of the $55 million settlement. Los Angeles County’s program focuses on health equity, behavioral health and improving care delivery, among other things, state officials said.
LA Care said the $28 million would “far exceed” continued investment in such efforts.
State officials also said that under the settlement, LA Care will improve its operations to ensure its members “receive medically necessary health care services in a timely manner.” This includes working with outside consultants to monitor improvements such as the timely processing of treatment authorization applications and increasing oversight of contracted hospitals, clinics, and other health care providers. authorities said.
Serving more than 2.6 million people countywide, LA Care operates managed care plans for patients in California’s Medicaid program, Medi-Cal. It operates as a public agency and is overseen by a board of directors that includes representatives from local hospitals, the Los Angeles County Department of Health Services, and other health care organizations.
