Local News

Thursday, Mar 07 2013 07:11 PM

Supervisors to grapple with differing health care plan proposals

BY JAMES BURGER AND RACHEL COOK Californian staff writers jburger@bakersfield.com, rcook@bakersfield.com

Managed Care Systems and county administrators are presenting conflicting analyses of the private health care manager's work for Kern over the past three years -- and the county's proposal to award the next three-year contract to other businesses.

Next Tuesday, the Kern County Board of Supervisors will be asked to choose which version of the MCS story they buy -- and who will get the $9.8 to $13.9 million contract.

Since 2009, Managed Care Systems of Bakersfield has handled Kern's "point of service" health care plan, which covers 5,024 of 7,065 county employees enrolled in the county system.

But a county review panel has recommended stripping the program from MCS and splitting up its services among three different out-of-county health care management firms.

Bob Severs, chief executive officer of MCS parent company Golden Empire Managed Care, has accused the county of rigging the "request for proposals" process that produced the report and argued that the panel ignored gaps in his competitors' ability to provide services and overlooked MCS' track record of providing savings to the county.

But, in a detailed report to supervisors, Assistant County Administrative Officer Elissa Ladd countered Severs' arguments and provided data that indicates MCS' analysis of its work was presented in a rosy light.

Severs said Thursday that he hadn't had a chance to review Ladd's letter, but that MCS would be "well prepared" on Tuesday to respond to it.

At a meeting with The Californian's editorial board Wednesday, Severs, accompanied by Bakersfield Memorial Hospital CEO and President Jon Van Boening and Dr. Vincent Phillips, presented information that Severs said proves that MCS' competition for the county contract would not deliver any savings.

Severs said he requested the other companies' responses to the RFP process and crunched the numbers.

County staff has reported to the board that the three other businesses' combined bills to the county would be $4.1 million lower than the $13.9 million charge that MCS has proposed the county pay to stay with it.

Severs told The Californian's editorial board that there are $4.4 million in hidden costs in his competitors' proposals for out-of-area care and management of specialist care.

Ladd said Thursday she doesn't know where Severs is getting his numbers.

But her report says the request for proposals, and the health care plan structure it was based on, demands the same services of all bidders.

It states that MCS costs the county more for out-of-area and out-of-state care because it cannot contract directly with the national Anthem/Blue Cross network and must pay a sub-contractor a separate access fee.

In addition, the report states, $5 million in savings MCS claims to have secured for the county through Anthem/Blue Cross is available to the county through all the other bidders.

Severs has repeatedly stated that MCS administration of the point of service health plan has saved the county $40 million and he repeated that claim on Wednesday.

But Ladd's report questions the reasoning behind that claim.

The report says Severs based his savings amount on the assumption that, without MCS, the county would have continued to see a 7.5 percent increase in health care costs. The report questions that cost increases would have been that high.

And, the Ladd report states, since December 2008, 1,937 county employees have left the point-of-sale plan and migrated to other county plans not administered by MCS. Fewer members means lower costs.

But supervisors will also have to consider a less numerical concern when it takes up the proposed contract.

Managed Care Systems is owned, in part, by the Dignity Health system of hospitals in Bakersfield and the close relationship between the company that contracts for health care and the hospitals that provide care has created the appearance of a conflict of interest.

The county dinged MCS for that cozy relationship when the firm was scored by the review panel.

Severs pointed out that MCS scored zero out of a possible 35 points for conflict of interest on the scorecard for the RFPs, putting it at an immediate disadvantage.

"We lost before it was over," Severs said.

Ladd's report says that even with those 35 points removed from the talley, MCS would not have won the bids on two of the three pieces of the contract.

As for the allegations of conflict of interest, Van Boening said that in a big small town like Bakersfield, everyone has certain conflicts of interest. They pointed out that Dr. Donald Cornforth, a critic of the county's contract with MCS, has connections to San Joaquin Community Hospital.

Severs asserted that the matter is personal. He said he worked with County Administrative Officer John Nilon 25 years ago and that Nilon dislikes his success.

"John Nilon does not like the fact that I left and made money in the private sector," Severs said.

Severs said MCS took in 42,000 calls from employees and providers last year. He questioned what will happen when there are three different companies doing that work.

The loss of the contract would cost MCS more than 40 jobs, Severs also said.

The men said they have been sharing their claims with the supervisors in preparation for Tuesday's meeting.

The recommendation from Ladd is to award the contracts to:

* Zenith American, of Florida, to handle payments for services to health care providers.

* Burns Consulting, of Maumee, Ohio, to create and manage contracts for services between the county health care plan and outside doctors and hospitals.

* Clinix, of Columbus, Ohio, to sub-contract through local MCS competitor the Foundation for Health Care to handle connections between workers and specialist doctors and other specialist care.

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