Health plans terminate contracts with EHS and transition patients to other entities

January 30, 2018
Area(s) of Interest: Payor Contracting Payor Issues and Reimbursement 

As previously reported, the California Department of Managed Health Care (DMHC) issued a cease-and-desist order on December 26, 2017, requiring nine health plans to terminate their contracts with Employee Health Systems (EHS) Medical Group Inc. This order comes after SynerMed—a company closely affiliated with EHS—was accused of blocking patient access to specialists to hold down costs.

EHS has 600,000 patients statewide—90 percent of whom are Medi-Cal managed care patients. As required by DMHC, health plans affected by this order were required to submit a transition plan by January 3, 2018, and have begun the transfer all EHS patients to different health care providers, due to be completed by February 5, 2018.

EHS reports to the California Medical Association (CMA) that provider capitation checks for January have been issued and all fee-for-service payments to physicians will continue uninterrupted through the end of January. Additionally, the health plans have representatives onsite at SynerMed to ensure the timely exchange of authorization data and that enrollee and physician inquiries are being addressed appropriately.

Other groups affected by the health plan terminations are Multicultural Medical Group, a San Diego based independent medical association acquired by EHS in late 2017, and Inland Valleys IPA, acquired by EHS in 2009.

CMA is working with the health plans to ensure claims for services that were authorized by EHS, Inland Valleys IPA and Multicultural Medical Group, but performed after the termination dates, are still honored by the plans. CMA has also requested enrollee transfer documents through a public records request.

Physicians should be diligent in obtaining updated insurance information from patients and verifying eligibility at the time of scheduling, if possible, to avoid unnecessary patient confusion and denials of payment for services rendered.

Patients may also be able to continue to see their physicians, even if they are not contracted with the patient’s new delegated entity, under California’s continuity of care law. Under continuity of care laws, patients with an acute condition, serious chronic condition, duration of a pregnancy, duration of a terminal illness, care of children between birth and 36 months, or for the performance of a surgery or other procedure that has been authorized, may qualify to request continuity of care. To request continuity of care, patients should call the health plan number on the back of their ID cards.

For more information on continuity of care requirements, see CMA On-Call document #7051, “Contract Termination By Physicians and Continuity of Care Provisions.”

Practices experiencing problems with EHS, Inland Valleys IPA or Multicultural are encouraged to contact CMA’s Reimbursement Helpline at (888) 401-5911 or economicservices@cmadocs.org.


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