Alameda Alliance For Health Seized
Citing ongoing financial and operational difficulties, the Department of Managed Health Care has seized control of the Medi-Cal managed care plan serving one of Northern California's most populous regions.
The DMHC announced on Tuesday that it would go to court this week to obtain a conservatorship appointment for Oakland-based Alameda Alliance For Health. The carrier serves Medi-Cal managed care recipients in Alameda County, including Oakland and virtually the entire East Bay region. It has about 201,000 enrollees in total, of which 186,000 are enrolled in Medi-Cal.
According to DMHC officials, the Alameda Alliance has had ongoing financial difficulties, failing to meet state mandated solvency standards for health plans.
Alameda Alliance’s most recent financial statement, which was filed with the DMHC at the end of February, indicated it was about $6.2 million short of the required tangible net equity of about $21.8 million – a roughly 30% shortfall.
The plan, which has been operating since 1996, lost about $1.4 million in 2013. Although its operations were profitable, a $3.5 million loss by the joint powers authority that operates in tandem with Alameda Alliance contributed to the red ink.
However, a statement issued by the DMHC indicated Alameda Alliance was in a much deeper funk than a single monthly and annual statement indicated. It also lacked sufficient working capital, and an independent auditor recently raised worries about the health plan as a going concern in a recent report.
Moreover, the DMHC said the Alameda Alliance had spent $9 million over the past three years to transition to a new electronic claims system, a project it termed as “failed.” According to regulators, the only result has been a backlog of more than 280,000 unpaid claims, which is contributing to Alameda Alliance's precarious financial condition.
“Our goal is to bring the plan into a healthy financial condition as quickly as possible and to transition it back to local control,” said DMHC Director Shelley Rouillard.
Ingrid Lamirault, who is listed on the Alameda Alliance website as its chief executive officer, told Payers & Providers on Wednesday she is no longer employed by the health plan. She declined further comment. A longtime veteran of the Los Angeles County Department of Health Services, Lamirault had headed Alameda Alliance since 2003.
DMHC officials indicated it would work closely with the Department of Health Care Services, which oversees the Medi-Cal program, to manage Alameda Alliance moving forward. The intent is to “correct these problems and establish a firm foundation for local control of the Alliance,” said DHCS Director Toby Douglas.
The DMHC will ask Alameda County Superior Court judge Evelio M. Grillo this week to appoint J. Mark Abernathy as the conservator for the health health plan. Abernathy, who is a Florida-based director with the Berkeley Research Group consulting firm, is an expert in dispute resolution. He was appointed conservator of Maxicare Health Plans when it was seized by regulators in 2001. Abernathy was not immediately available for comment on Wednesday.
