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California Firm Running Physician Practices Is Closing Down as Scrutiny Ramps Up

Chad Terhune — Wed, 15 Nov 2017 17:15:47 +0000

SynerMed, a company that manages physician practices serving hundreds of thousands of Medicaid and Medicare patients across California, is planning to shut down amid scrutiny from state regulators and health insurers.

The company’s chief executive, James Mason, notified employees in an , obtained by Kaiser Health News, that audits by health plans found “several system and control failures within medical management and other departments.”

As a result, Mason wrote, the company “will begin the legal and operational steps to shut down all operations.” He said he was working on the transition of SynerMed’s clients to another management firm within the next 180 days.

Separately, the California Department of Managed Health Care confirmed it is investigating the company.

“There is an open investigation of SynerMed, but the details are confidential right now,” said spokesman Rodger Butler. His agency monitors the financial solvency and claims-payment practices of many physician groups that contract with health plans.

The company’s sudden decision to shut down has sparked alarm among some doctors and medical groups that have relied on the company to handle their finances and business operations.

For years, SynerMed has served as a key middleman between health plans and independent physician practices, handling insurance contracting, paying claims and performing other administrative tasks so doctors can focus on treating patients. That role has expanded as millions more Californians are enrolled in Medicaid managed-care plans under the Affordable Care Act.

SynerMed has billed itself as “one of the largest Medicaid/Medicare management service organizations in the nation.” Last year, the company boasted that it had enrollment of 1 million patients in California, aided by an influx of enrollees who got coverage under the federal health law.

Mason, the CEO, didn’t respond to requests for comment. The company referred calls to its general counsel, but she couldn’t be reached.

In his email to employees, Mason said he had “discovered certain internal control issues within the medical management department.”

“Well,” he wrote, “as a result of the manner in which those issues were disclosed to the health plans and regulatory agencies, we have been subject to unannounced audits by almost all of our health plan partners.”

The CEO said two medical groups, AlphaCare and EHS (Employee Health Systems) Medical Group, have already terminated their contracts with SynerMed.

“I am heartbroken and saddened by these events after we have worked so hard to build our reputation as a company that operates with integrity,” Mason wrote in his email to employees.

Part of SynerMed’s growth had come from managing care for low-income seniors and people with disabilities who are eligible for both Medicare and Medicaid, called Medi-Cal in California. The state has been at the forefront nationally in trying to shift those “dual-eligible” patients into managed-care plans, which are paid a fixed rate per patient to coordinate a range of medical care.

A spokesman for the Medi-Cal program said the agency had no information to share on SynerMed.

SynerMed is a subsidiary of PAMC, Ltd., which also owns Pacific Alliance Medical Center in Los Angeles’ Chinatown. The hospital agreed to in June to settle federal allegations of improper kickbacks to referring physicians.

The U.S. Justice Department said Pacific Alliance Medical Center agreed to the settlement to resolve a whistleblower lawsuit alleging that the hospital submitted false claims to Medi-Cal and Medicare. In a news release at the time, federal officials said the hospital and its owners did not admit liability in settling the case.

The later this month. Officials there attributed the closure to the fact that the lease on the property is ending and it wasn’t financially feasible to retrofit facilities to meet the state’s seismic requirements.

In a statement to Kaiser Health News, PAMC said “there is no connection between the closure of [the hospital] and any matters involving SynerMed. SynerMed is a wholly owned subsidiary that provides completely different services.”

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Survey: Low-Income Elderly Reject Calif. Managed Care Experiment For Fear Of Change

Anna Gorman — Tue, 27 Oct 2015 19:42:06 +0000

A large share of low-income elderly Californians have opted out of a statewide managed care experiment because they feared losing their doctors and were reluctant to make any changes to their health care, according to by the Field Poll.

California is in the middle of a three-year pilot project aimed at nearly 500,000 of the state’s most costly patients – so called “dual eligibles.” The beneficiaries receive both Medicare, the health insurance program for seniors and the disabled, and Medicaid, or Medi-Cal in California, which provides coverage for the poor.

The state program, known as Cal MediConnect, has had a high rate of people opting out — about 47 percent, according to the state Department of Health Care Services.

“Resistance to change is not surprising,” said Mark DiCamillo, senior vice president of the Field Research Corp. “It is an older population … The status quo is the easiest course.”

In some cases, DiCamillo said, their fears were valid. Nearly 30 percent of those enrolled in the new managed care program ended up with a different personal doctor, according to the survey. About the same percentage of enrollees in the program said they had been seeing their doctor for one year or less.

But once they are enrolled, less than 10 percent have decided to leave the program, according to the state. About 80 percent of enrollees said they were very or somewhat confident they could get their questions answered and that they know how to manage their health conditions, the poll found.

The experiment, which has about 117,000 enrollees, is designed to provide more coordinated care and to improve enrollees’ health, reduce their costs and help keep them in their homes. The participants typically have multiple chronic diseases and until now, have bounced between two government systems. Medicare pays for most doctor visits and hospitalizations and Medicaid covers nursing homes and long-term care.

The fact that people who enroll in the program stay enrolled is encouraging, said Jennifer Kent, director of the Department of Health Care Services. “The reason they are staying in the program is that they are satisfied with and in some cases, really pleased with the care,” she said.

Kent said it continues to be a challenge, however, to get the message out to beneficiaries about the advantages of being in a more coordinated program. “A lot of individuals think they are losing benefits,” she said. “We are working really hard to assure people that is not the case.”

Kent also said the state is evaluating the program to ensure that it is doing what it was intended to do – save money and improve care.

William Averill, a Torrance, Calif. cardiologist who treats many dual beneficiaries, said he doesn’t believe that the program is accomplishing that goal and that many people have been automatically enrolled without being aware of the change.

“The most vulnerable people were the ones who weren’t in a position to understand their choices,” he said. “I think the whole thing is going to collapse under its own weight.”

The survey was the first of four planned polls in 2015 and 2016 of 2,502 dual eligibles in California. The first round included 1,394 enrollees in the Cal MediConnect program in five California counties and 678 who opted out. Surveyors also interviewed 430 people in counties where the program is not being implemented.

The survey research was funded by The SCAN Foundation and done in conjunction with the California Department of Health Care Services.

Kaiser Health News receives support from for coverage of aging and long-term care issues.

helps fund KHN coverage in California.

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