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North Bay Business Journal

Monday, August 20, 2012, 7:00 am

HMO plans to expand into North Bay

Western Health would affiliate with area hospitals, physician networks

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    Western Health AdvantageNORTH BAY — Sacramento-based HMO Western Health Advantage has filed for an expansion into Marin and Sonoma counties, where it hopes to partner with the Marin-Sonoma IPA and much of the region’s hospitals in offering a new health plan for employers and individuals.

    In June, the health maintenance organization filed plans with the state Department of Managed Health Care, which must approve of any move into new territory for any commercial health plan. Currently, Western Health Advantage operates in Solano, Yolo, Sacramento, Placer and El Dorado counties and serves some 92,000 members.

    If approved, Western Health Advantage could represent the most significant commercial health plan to enter the region since the bankruptcy of Health Plan of the Redwoods in 2002, which created a void that was filled quickly by Kaiser Permanente. Kaiser’s San Rafael Medical Center, which includes Petaluma, has 120,258 insured members, while it’s Santa Rosa Medical Center has 141,338 members. The next largest HMOs serving the North Bay are Blue Shield with 15,000 members, Health Net with 12,000 and United Healthcare with about 4,200.

    It’s not yet clear when Western Health Advantage will receive final approval, but Rick Heron, a spokesman for the HMO, said he expected it to be soon. Details of how the new plan would work are still being ironed out, and Mr. Heron said he could not comment on specifics while final negotiations take place with potential providers.

    “We have filed to potentially move and expand our geographic area to include Marin and Sonoma,” Mr. Heron said. “We are still at a point of negotiations and cannot confirm anything beyond anticipation of an expansion.”  

    The HMO must demonstrate a “network of adequacy — i.e., do they have enough providers in their network for the expanded service area to meet requirements of the law,” said Marta Bortner Green of the Department of Managed Health Care.

    According to the state filing, Western Health Advantage hopes to begin enrolling members in January 2013. It also intends to contract with the following hospitals: Marin General, Sonoma Valley, Palm Drive, Healdsburg District and Petaluma Valley and Santa Rosa Memorial, which are operated by St. Joseph Health.

    The plan includes tertiary agreements to include UCSF Medical Center for transplant and neo-natal intensive care patients, as well as for specialized care that would be out of network. UC Davis Medical Center would be the in-network option. Santa Rosa Memorial would be the in-network trauma hospital.

    The plan calls for having 93 primary care physicians across Marin and Sonoma counties, and the nearly 600-member Marin-Sonoma IPA would be the sole provider of both primary care and specialty physicians, according to the filing, which was obtained by the Business Journal through a public records request.  The filing also says that nearly 400 physicians practicing a wide range of specialties are on a list of contracting physicians. Western Health also notes that the Marin-Sonoma IPA “continues to recruit new physicians, which will result in even greater access.”

    Additionally, Western Health Advantage will include behavioral health services, chiropractic and acupuncture, and optional eye and dental services through “plan-to-plan” contracts.

    The expanded Western Health Advantage projects it could enroll as many as 3,900 new members in its first year of operation, according to the state filing. The plan would focus primarily on group members, and breaks down projections as such:

     – In Marin County, the plan projects that it could enroll 25 individuals and 100 group members per month;

     – In Sonoma County, it projects the plan could enroll 50 individual members and 150 group members per month.

    Should those projections pan out, it would expand the HMO’s membership approximately 4.3 percent.

    Both Marin General and Santa Rosa Memorial are listed as “potential subscriber groups” of the plan.

    Mr. Heron stressed that no formal contracts have been signed and that details are subject to change pending final state approval.

    While details of Western Health Advantage’s plans are still developing, the expansion and the collaborations appear to be the latest example of payers and providers adapting to a rapidly shifting landscape driven by health care reform.

    Mr. Heron, in an email to the Business Journal, said he could not speak for any other payer or provider, but he did note the changing environment.

    “I can say that Western Health Advantage is actively preparing for the changing health care landscape created by the implementation of the Affordable Care Act.  Part of this preparation does include exploring possible geographic expansion,” he said.

    Representatives from the Marin-Sonoma IPA could not be reached for comment. St. Joseph Health referred inquiries to Western Health Advantage.

    Last year, the Marin-Sonoma IPA expanded its hospital partners to include Palm Drive, Healdsburg District and Santa Rosa Memorial in addition to existing relationships with Marin General, Sonoma Valley and Petaluma Valley — essentially all hospitals in the region that aren’t Kaiser Permanente or Sutter Health, although Novato Community is a Sutter-affiliated hospital in the IPA’s network but will not be in Western Health Advantage’s network. That expansion also included adding the Annadel Medical Group, the St. Joseph Heritage HealthCare-owned medical practice foundation of St. Joseph Health, to its network.

    The Marin-Sonoma IPA has said it fully intends to become an accountable care organization, or ACO, a new classification under the Affordable Care Act that is being overseen by the Centers for Medicare and Medicaid Services.

    And Marin General has responded to reform by acquiring six medical practices in Marin County, a move that also could lead to the formation of an ACO.

    Western Health Advantage has been cited as an attractive option for a number of Sonoma County providers because of its ability to compete with Kaiser and Sutter in the Sacramento region. Its network includes more than 1,800 specialists across eight hospitals, as well as some 500 primary care physicians.

    Members of Western Health Advantage’s current network include the UC Davis Health System, NorthBay Healthcare, which operates two hospitals and the NorthBay Center for Primary Care in Solano County, Mercy/Dignity Health Sacramento, Woodland Healthcare and Hill Physicians Medical Group.  

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    Comments

    1 Comment

    1. September 1, 2013, 3:37 pm

      by Dina Glardon

      Is the ACO recruiting for Western Health Care Advantage? Is the first tier independent Practice Association? This group creates vehicles for PC physicians to compete with Kaiser P? Are you going to tell me what health care I can have?


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