CaliforniaCare Health Plans files lawsuit against NCQA.

CaliforniaCare Health Plans announced that it is filing a lawsuit against the National Committee for Quality Assurance (NCQA) in federal court in Washington, D.C.

The lawsuit alleges that the NCQA decision to deny accreditation to CaliforniaCare was substantively and procedurally flawed. Specifically, the suit alleges that NCQA, in its accreditation review, among other things: 1) failed to follow its own rules and procedures; 2) failed to afford fair and due process; and 3) breached its accreditation contract with CaliforniaCare.

According to Jeffrey Rideout M.D., medical director for CaliforniaCare, the NCQA survey did not find any deficiencies in the quality of medical care delivered to enrollees. The focus of NCQA's concerns were compliance with its procedural standards.

CaliforniaCare believes that NCQA, in conducting its survey, applied these standards inconsistently. Rideout noted that NCQA had no significant problems with CaliforniaCare's compliance level with 85 percent of NCQA performance standards.

"The most important fact is that CaliforniaCare has well-established quality-improvement programs with proven performance records in California," said Rideout. "We would like to work with NCQA to improve their surveys, requirements and procedures; however, we believe it is equally important to ensure that NCQA reviews are fair, unbiased and meaningful."

Among the issues in the review to which CaliforniaCare takes exception in its lawsuit are:

o An apparent lack of thoroughness of the NCQA review. This issue stems from the inadequate amount of time NCQA reviewers spent at some site visits, and lack of full consideration of all relevant information called for under NCQA'a own reviewer guidelines.

o Lack of clear evaluation criteria, including objective, consistent guidelines for determining when a plan is in compliance with a particular standard.

o Failure to disclose in NCQA materials and policies NCQA's preference for certain types of credentialing and quality-improvement activities.

o NCQA's refusal to disclose details of its system for scoring compliance, despite CaliforniaCare's repeated requests, until after the survey was completed. NCQA made public its scoring system only after CaliforniaCare's survey was completed and CaliforniaCare had submitted its final documents for appeal.

Rebecca Kapustay, senior vice president of CaliforniaCare, said: "We are disappointed with the NCQA accreditation decision and with the process that led to that decision. As one of the fastest- growing HMOs, CaliforniaCare maintains its pledge to continue to ensure that accessible, cost-efficient, quality medical care is provided to its members.

"CaliforniaCare remains one of the most progressive managed care plans, offering our members access to one of the state's largest provider networks, comprehensive benefits, affordable cost and excellent customer service."

CaliforniaCare's ongoing quality improvement programs include:

o care management grievance and appeals tracking that demonstrate consistent reduction in grievance rates and turnaround times amid record membership growth;

o a sophisticated medical group quality performance measurement system called Scorecard, operational for more than three years, that has proven measurement reliability for satisfaction, preventive health screening performance, and credentialing for each medical group in the CaliforniaCare network;

o annual comparisons between CaliforniaCare HMO and Prudent Buyer PPO performance regarding re-admissions and avoidable hospital admissions;

o institutional performance monitoring including heart surgery mortality rates and c-section rates in hospitals serving CaliforniaCare members, which is included in performance-based contracting of hospitals;

o a postcard reminder system to alert every appropriate member of necessary screening tests; and,

o several disease-specific intervention programs designed for CaliforniaCare's most at-risk members.

CaliforniaCare Health Plans is an affiliate of Blue Cross of California, the majority shareholder of WellPoint Health Networks Inc. (NYSE:WLP), the largest publicly traded managed health care company in the state.

Together with their affiliates, they offer a comprehensive array of managed care health plans provided through their health maintenance organization, preferred provider organization and specialty managed health care networks. Specialty products include pharmacy benefit management, dental, vision, mental health, life insurance, Medicare supplement and workers' compensation.

CONTACT: Larry Bryant, 818/703-2473