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CAPG Applauds DMHC Inclusion of Undertakings in Blue Shield-Care 1st MergerThis statement was issued today by CAPG President and CEO Donald H. Crane on the inclusion of undertakings in the California Department of Managed Health Care (DMHC) approval of Blue Shield's acquisition of Care 1st: "I'm very pleased to see the Department of Managed Health Care, Blue Shield and Care 1st so acutely focused on the needed infrastructure improvements in the undertakings ordered by Director Shelley Rouillard. "Providing the electronic infrastructure for more accurate physician directories improves access for patients in this new environment of expanded coverage under the Affordable Care Act. While the accompanying requirement for a single, uniform encounter data project is perhaps 'insider baseball' to most Californians, it means that the DMHC and the merged plans are focusing on 21st century data management - which provides vastly improved cost and quality transparency in the healthcare system and in turn, makes the patient experience much more satisfying in the long run. "We are grateful to DMHC Director Rouillard for listening to CAPG's September 9 proposal recommending this undertaking in the state's numerous pending health plan mergers." DMHC October 8 announcement of the Blue Shield-Care 1st merger: Department of Managed Health Care Approves Blue Shield Acquisition of Care 1st $200 Million Investment to Help Consumers, Make Health Care More Transparent and Accessible (Sacramento) - California Department of Managed Health Care (DMHC) Director Shelley Rouillard has issued an order approving Blue Shield of California's (Blue Shield) acquisition of Care 1st Health Plan (Care 1st). "This order brings Blue Shield into the Medi-Cal program and requires the plan to improve quality and access for Medi-Cal beneficiaries. Prior to approval, my team performed an exhaustive review of all aspects of the proposed transaction, performed complex legal analyses, conferred with external experts and considered all public comments," said Director Rouillard. The DMHC examines proposed mergers to ensure enrollees of all plans involved in the transaction are protected and have continued access to appropriate health care services. During the review process the DMHC examines organizational and corporate structure, administrative capacity changes, health care delivery system changes, product or subscriber changes, the effect of the transaction on financial viability of the plan, the financing for the transaction and its impact on consumers. "The Department's approval includes commitments by Blue Shield that will improve the state's health care delivery system, benefit consumers and improve access in the Medi-Cal program. This includes $200 million in investments to strengthen the health care delivery system, particularly in Medi-Cal, and support consumer assistance programs," continued Rouillard. "Blue Shield must also make improvements in the areas of health care quality and access." "This agreement will provide important tools to standardize information about manged care and improve oversight of managed care services, for Medi-Cal members and all Californians," said Jennifer Kent, Director of the California Department of Health Care Services (DHCS). DHCS administers the Medi-Cal program, which provides coverage to 12.5 million Californians, largely through managed care plans. As a condition of approving the acquisition, the DMHC successfully negotiated several commitments, referred to as undertakings, to protect consumers, make investments in the health care delivery system, and improve health care quality and access. The undertakings include: Health Care Investments: Blue Shield agrees to invest a total of $200 million to increase transparency and accessibility in health care and support consumer assistance programs. The investments are described in the following:
Health Care Quality and Access:
Education:
Click here to view the full list of undertakings: https://www.dmhc.ca.gov/Portals/0/AbouttheDMHC/NewsRoom/2015/pr100815.pdf Background: Blue Shield announced in January 2015 that it had reached a $1.2 billion agreement to purchase Care 1st, a privately-held, for-profit health plan operating mostly Medi-Cal and Medicare business in Los Angeles and San Diego counties. Following the closing, Blue Shield will convert Care1st to a nonprofit corporation. The DMHC held a public meeting on June 8, 2015 on the transaction to be as transparent as possible and provide members of the public an opportunity to comment. The meeting provided an opportunity for Blue Shield and Care 1st to publicly explain the transaction and for members of the public to comment on what the DMHC should consider when reviewing the transaction. The Department also required an independent fair market valuation, which showed that the purchase price is fair and thoroughly examined the transaction to ensure there are no conflicts of interest. With the DMHC Order of Approval, Blue Shield and Care 1st may complete the terms of their merger. About CAPG CAPG is the leading U.S. association for and the voice of physician organizations practicing capitated, coordinated care. The organization comprises close to 200 multispecialty medical groups and independent practice associations (IPAs) in 39 states, the District of Columbia, and Puerto Rico. CAPG members provide comprehensive healthcare through patient-centered, coordinated, and accountable physician group practices. We strongly believe this model-which CAPG members have successfully utilized for more than two decades-offers the highest quality, most efficient delivery mechanism, and greatest value for patients. For more information, please visit www.capg.org.
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