|[March 22, 2013]
Health Care Advocates Our SALUD Request Attorney General to Take Action in Alleged Unlawful Operation
SACRAMENTO, Calif. --(Business Wire)--
STATEMENT FROM OUR SALUD COMMUNITY ADVOCATES NESTOR VALENCIA AND ELBA
Advocates for the Latino community of East Los Angeles have sent the
following letter to Attorney General Kamala D. Harris, requesting a full
investigation into HealthCare Partner's (HCP) alleged illegal operation.
HealthCare Partners is a Torrance-based medical group who currently
manages care for more than half a million Los Angeles area residents. In
October 2012, HealthCare Partners merged with DaVita, Inc., a
Denver-based, publicly-traded dialysis company with no previous ties to
California. The $4.4 billion merger was the largest consolidation in
healthcare history. This merger was completed with no requirements
pursued by the Department of Managed Health Care to force licensure by
Normal protocol requires consumers to take up issues of health care
delivery with the Department of Managed Health Care (DMHC). Our SALUD
sent their request for investigation directly to the Attorney General's
"The DMHC's abandonment of oversight responsibility of this medical
group has forced Our SALUD to take this issue to the state's top
counsel," said advocate Elba Romo, Our SALUD community. "We hope that AG
Harris considers the gravity of this issue and conducts a full
investigation of this renegade medical group."
It is a time of change in California and all over the nation as states
begin to prepare for the implementation of provisions under the
Affordable Care Act. HCP has been deemed a pioneer Accountable Care
Organization (ACO) under this new health care reform, allowing them to
lead the way in this new venture.
"This is a business model that clearly puts profits before patients and
certainly should not be the benchmark for such significant reform," said
Nestor Valencia, Our SALUD community advocate. "Patient lives have
already been affected by HCP's unlawful operation. California state
officials have the duty to ensure more patients aren't impacted and that
HCP is held accountable for its actions. Standing idle will only propel
HCP as a health care leader and set a dangerous precedent among all
medical groups that wrongful actions will not be penalized but actually
Nestor Valencia and Elba Romo, Our SALUD community advocates, are
available for interviews and further comment.
Our SALUD letter to the Attorney General:
Kamala D. Harris
California Attorney General
State Capitol, Room 205
Sacramento, CA (News - Alert) 95814
Dear Attorney General Harris,
Please consider this letter a formal request to immediately undertake a
full investigation into HealthCare Partners (HCP), as it has been
operating as an HMO in California without the proper Knox-Keene Act
license for more than a decade. We are writing to you to initiate this
investigation because the state agency assigned to provide oversight and
regulation on this matter, the California Department of Managed Health
Care (DMHC), has failed to provide the necessary oversight and
enforcement for the claims we are making.
It is our understanding that the following statements are true.
HCP is not a licensed HMO in California
HCP directly and/or indirectly accepts full risk for patient care
including the responsibility to pay for hospital care
Despite DMHC having discussions with HCP about obtaining a license,
HCP has not obtained a license
DMHC has not restrained HCP's conduct nor undertaken any enforcement
action regarding HCP's failure to obtain a license
Under California law only an entity with a Knox-Keene license may accept
risk for institutional care.
Healthcare Partners (HCP) does not have such a license. Also, only an
entity with a Knox-Keene license may direct and deny institutional care
for its membership. HCP, which is unlicensed, directs and denies its
members' institutional care. This is setting a statewide precedent for
prospective medical groups, implying licensure is not a requirement and
no consequences are to be had if you do not carry these credentials.
This has real world consequences. For example, HCP limits its members'
ability to access hospitals to those in its contracted network, even
though under the law the membership is entitled to go to any hospital in
their health plan's network. For instance, HCP would deny its members
the ability to access such world-class institutions as UCLA Medical
Center and Cedars-Sinai medical center, even though those hospitals
would be in the network of the members' health plan.
The DMHC was in communication with HCP through all of 2012 and told us
during a meeting with them in December that HCP agreed to pursue
licensure. State lawmakers have raised concerns, yet responses from the
Department have been insufficient. In December 2012, Brent Barnhart, the
director of DMHC, responded in a letter to Sen. Darrell Steinberg that
the department "has been actively engaged in discussions with HCP
regarding its business model." Since no action has been taken by the
DMHC then we presume that the DMHC is either in collusion with HCP or
unable to regulate.
Your office has made it a priority to scrutinize and review the negative
impacts healthcare consolidation can have on California residents.
Currently, your office is holding up the Express Scripts merger,
investigating Sharp (News - Alert), Scripps and Sutter Health System for unlawful
healthcare consolidation. A similar red flag should have been raised
when dialysis giant DaVita Inc. purchased HealthCare Partners for a
staggering $4.4 billion. This was the largest healthcare merger in U.S.
history which was made possible by HCP's aforementioned unlawful
activities and the likely non-disclosure of material evidence during the
merger. As a result, Davita HealthCare Partners is one of the largest
health care groups in the country yet they continue to operate without a
license and profit handsomely for it.
Patients are dying and lives are being destroyed, as described in a
recent class action suit against HCP. We are not asking your office to
adjudicate on those cases, but rather to investigate HCP's failure to
obtain a license, potential collusion with the DMHC, and profiteering at
the expense of patients.
These issues are worrisome as they address not only the legality of
HCP's operation and the oversight of a state regulator, but more
importantly the care of more than half a million patients. With that in
mind, we will continue to advocate for our communities. However, we
would like to do so knowing your office will pursue a full
investigation. Our goal is not to taint the reputation of a reputable
and trustworthy medical operation but rather to advocate for the
correction of wrongdoings.
We can be contacted at (424) 272-5386.
Nestor Enrique Valencia
About Our SALUD
Our SALUD (Somos Aliados Latinos Unidos por la Dignidad - Latino Allies
United for Dignity), is a grassroots coalition and healthcare watchdog
representing civic, community and business leaders from the Southern
California Latino communities. We believe that our low-income, minority
communities deserve quality healthcare access equal to other
communities. We believe our communities are not unlike other communities
in California which are yearning for best practices and quality health
care. With the new Affordable Care Act, we believe the legislators shall
bring transparency and good government practices in implementing new
health care delivery models, which should include exceptional, free of
conflict-of-interest, community-patient focused decision makers at every
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