The California Hospital Association has filed a lawsuit against Anthem Blue Cross claiming the insurer is in violation of state laws about timely transfer of patients awaiting discharge from an acute-care hospital to a sub-acute facility. When a hospital patient’s condition improves and no longer requires acute care but the patient cannot be safely discharged to home, he or she goes to a skilled nursing facility. 

In the post-Covid environment we find ourselves in, all health care providers are under stress. Nursing shortages caused by burnout during Covid increased costs for nurses (when they can be found), and inflation in all underlying health care costs –combined with a general staff shortage and the pressure to increase minimum pay for staff to $25 an hour – have created unprecedented challenges and accompanying frustration. 

In less stressful times, hospitals have always had the responsibility for discharge planning and have arranged patient transfers to sub-acute care. Since skilled nursing facility capacity has been reduced as a consequence of Covid, hospitals have turned to the health plans to help with placement. Health plans can assist, but cannot guarantee placement if there is no facility willing to accept the transfer. These skilled nursing facilities are under no regulatory obligation to take transfers. They do so at their discretion.

At L.A. Care Health Plan we faced this issue last year with our participating hospitals complaining that patients ready for sub-acute transfer were occupying beds needed for acute-care patients. Rather than hurling blame at one another about who was responsible, L.A. Care convened contracted hospitals and skilled nursing facilities in three brainstorming sessions to figure out a better way for these transfers to take place. 

We learned a lot. We found that the nursing facilities did not trust patient assessments provided by hospitals, because they often understated patients’ conditions to facilitate transfers. We also confirmed what we already knew – that low reimbursement rates for Medi-Cal patients was an impediment, and that Medi-Cal patients were often of higher acuity with multiple social needs, which skilled nursing facilities have little ability to influence. 

As a result, we formed a strategy that has resulted in improved relations between L.A. Care and our participating hospitals and nursing facilities. We beefed up our care management team to work with hospitals in placing complex Medi-Cal patients. We are re-contracting with more than 300 skilled nursing facilities to provide better reimbursement. What’s more, we established a pilot program with a large skilled nursing facility provider, guaranteeing much higher reimbursement for acceptance of the most difficult-to-place Medi-Cal patients with complex long-term care needs. Through this multifaceted collaboration, we were able to improve the outcomes for patients and reduce the frustration of providers. 

Engaging in lawsuits is most always good for the attorneys, but creates more animosity and suspicion among the parties involved. The threat of litigation is a prime indicator that we do not have a system of collaborative care in our communities, but a system of competition. 

Engaging in lawsuits is most always good for the attorneys, but creates more animosity and suspicion among the parties involved. The threat of litigation is a prime indicator that we do not have a system of collaborative care in our communities,
but a system of competition.

It does me no good as a health plan chief executive if I have a strong bottom line and reserves, but the providers that I rely on to take care of my health plan members are struggling financially. This type of situation only means care to those members is likely to be shortchanged. If those of us who are the leaders do not collaborate on crafting solutions to the myriad challenges facing health care, it will be done by state and federal legislators and regulators. This could lead to a system that the providers and, most importantly, the patients, are not participating in to improve health care outcomes.

John Baackes is the chief executive officer of L.A. Care Health Plan, the nation’s largest publicly operated health plan. It provides coverage for more than 2.6 million LA County residents.