California’s Department of Health Care Services (DHCS) issued a corrective‑action plan on September 5 requiring Health Net, one of the nation’s largest Medicaid insurers, to continue providing assisted‑living and home‑care benefits for all Medi‑Cal members through the end of the year. The move comes after the insurer announced it would end those contracts in October, leaving roughly 3,500 low‑income seniors and their families without a clear path to continued care.
Regulators cite multiple deficiencies
In an August letter, DHCS identified eight specific failures in Health Net’s handling of the change, including the lack of transition plans for members, failure to move members to medically appropriate alternatives, and outright denial of services. The department warned that these violations “jeopardize member safety, disrupt continuity of care, and endanger medically vulnerable members.”
Potential penalties
If Health Net does not comply with the corrective plan—extending benefits and creating individualized transition plans for each affected member—the state can fine the insurer up to $25,000 per member per day of non‑compliance.
Impact on seniors
Advocates estimate that about 3,500 Medi‑Cal patients rely on Health Net for assisted‑living costs. Most are elderly, many with cognitive impairments such as dementia. Without the benefit, seniors risk losing their housing on Jan. 1, forcing them into skilled‑nursing facilities or homelessness.
Health Net’s response
Health Net spokesperson Beatriz Lopez told CalMatters the company still intends to end the assisted‑living benefit next year, but will now cover all members through Dec. 31. Lopez added that the insurer has found the benefit “has not led to better care” in terms of reduced emergency‑room visits or hospital days, and that it will continue analyzing data to support services that improve health outcomes.
Local reactions
Hagar Dickman, director of long‑term services and supports at Justice In Aging, praised the state’s corrective plan for averting an immediate crisis but warned it does not solve the longer‑term problem of seniors losing housing. “It’s disingenuous to say there are protections and then say the protections don’t apply,” Dickman said, noting that if a member switches to another insurer that still covers assisted living, continuity‑of‑care protections would disappear.
Pauline Shatara, deputy director of California Advocates for Nursing Home Reform, echoed the concern, stating, “It doesn’t sound like we found a solution to help pay for these people to remain where they are.”
Broader context
The assisted‑living benefit is part of California’s CalAIM initiative, which aims to improve Medi‑Cal services and reduce costs by stabilizing high‑need users who frequently use emergency rooms. Health Net operates Medi‑Cal plans in ten counties, including Los Angeles, Fresno, and Sacramento.
Providers confirmed that their contracts with Health Net will run through the end of the year, giving them time to adjust and coordinate care for affected members. The state’s enforcement action underscores the importance of safeguarding vulnerable seniors and ensuring that insurers honor their obligations under state Medicaid programs.
Original reporting: Alexandria, VA News – WTOP News — read the source article.
