Politically connected HealthCare Partners sidestepped licensing for 10 years

Posted by Kassy Perry

Part One of a series

May 3, 2013

By Katy Grimes

One of the original pioneers of the Obamacare patient networks, HealthCare Partners, has been operating in California without the required state license. But according to health care experts and a new lawsuit, the California Department of Managed Care has known this, and allowed it for 10 years, saving HealthCare Partners millions of dollars.

HCP has flown under the radar of the California Department of Managed Health Care regulatory authority by claiming it’s a medical group, while in fact operating as an unlicensed Health Maintenance Organization. It has done so by taking standard HMO global risk for the patient — hospital care, medication and physician services.

The Affordable Care Act, also known as Obamacare, works through a network of Accountable Care Organizations providing managed health care services to all people throughout the country. Health care experts have said all along there is not enough money in the system to do what the ACA purports it can do.

The acronyms are confusing. What’s the difference between an HMO and an ACO? “ACOs amount to little more than the old HMOs of the 1990s — which Americans detested — and will yield lower-quality, centralized care that ends up costing patients more,” Sally Pipes wrote in Forbes magazine; she is president, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute,’s parent think tank, and the author of the book, “The Truth About Obamacare.”

House of cards

HealthCare Partners, one of the original pioneer ACOs, appears to have been built on a house of cards. Charges of illegal operations, providing unlawful hospital networks, and repeated denials of care at the patient level are just some of the issues.

HealthCare Partners, hand picked by the Obama Administration, allegedly has been operating in California for one decade without the required state license, according to charges filed last September in a class action lawsuit by lead plaintiff Juan Carlos Jandres (lawsuit pdf here).

Charges include shoddy, substandard care to more than 675,000 patients in Southern California, including a disproportionate number of Latinos in East and South East Los Angeles.

The lawsuit was filed by the Johnny Cochrane law firm on behalf of Juan Carlos Jandres, a hospital worker in Orange County, and a class of other patients allegedly harmed. Jandress was denied access to a quality hospital and oncologist by HCP for nearly three years. Finally, his Human Resources department changed his medical group from HealthCare Partners to Monarch, and Jandres was allowed to go to UCLA, where doctors found a malignant tumor in his mouth.

Class action charges include that HealthCare Partners had illegally taken payments from the HMO for hospital care, and created its own substandard network of community hospitals, and then forced patients to go use its network.
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