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Boston Globe
09-04-2025
- Business
- Boston Globe
Amid financial turmoil, Massachusetts insurer Commonwealth Care Alliance finds new owner
The acquisition is a dramatic about-face for a storied Massachusetts company, which has long served people simultaneously eligible for Medicaid — which serves mostly low-income people — and Medicare, which helps largely people over 65 and those with disabilities. For months, the organization Related : Advertisement Commonwealth Care had initially struggled to find a buyer, with the state going so far as to put out a Preitauer credited the state's involvement with helping streamline the process, helping with required approvals and providing 'risk mitigation.' 'The state's support is what really helped us to jump into a very quick process,' Preitauer said. That support included an agreement by the state to limit any of the insurer's potential losses for two years, according to the state's Department of Health and Human Services and its public insurance arm MassHealth. The agencies did not say how much MassHealth might spend to do so. Advertisement Additionally, if CareSource earns more than a 2 percent margin over the next two years, the funds would go to repay money MassHealth said it is owed from Commonwealth Care Alliance. 'Our team within the Healey-Driscoll Administration has worked tirelessly to avoid a disruption in health care services for Massachusetts residents, and we can all breathe a little more easily as we welcome mission-driven CareSource to our state,' said Kate Walsh, secretary of Health and Human Services, in a statement. The bulk of Commonwealth Care's insurance operations will be folded into the Ohio organization, including two Massachusetts primary care physician practices, a component Massachusetts regulators were All 1,682 of Commonwealth Care's employees will join CareSource, though it is unclear how many of those employees will have long-term jobs with the company. Preitauer said starting next week, senior leadership at Commonwealth Care will be meeting with CareSource to decide what the organization looks like moving forward. But the goal for members is to minimize disruption. 'Might some things change? Probably,' Preitauer said. 'We're not going to leave it exactly like it is, but we're not coming in with a big hatchet.' With the solvency issues resolved, the state's Medicaid program allowed the insurer to reopen enrollment for two of its products: one for disabled individuals under 65 called One Care and a product for low-income seniors, Senior Care Options. Under both plans, Medicaid and Medicare provide Commonwealth Care a set amount of monthly money per member, allowing the organization greater flexibility in funding care. Advertisement CEO Chris Palmieri steps down Commonwealth Care CEO Chris Palmieri resigned from the organization this week, as has the entirety of the board, though former board chair David Klein will stay on with Commonwealth Care's parent organization to wind down operations in other states, including selling two Michigan-based organizations that worked with physicians to coordinate health insurance and services. 'As we searched for a strategic partner, CCA prioritized finding an organization that shares our values, and would enhance care for those we are privileged to serve,' Klein said in a statement. 'CareSource is the ideal partner for the long-term sustainability of CCA, with decades of expertise in managing complex care and a unique member-centric focus.' It was unclear whether Palmieri Preitauer said the entirety of his company's $400 million investment was going to the assets it acquired, not to Commonwealth Care's parent company, and anything involving the former CEO's compensation had been settled prior to his company's acquisition. 'Whatever agreements he had with his board, that's not something that I saw or got involved with. That is outside of our scope,' Preitauer said. 'Whatever happened happened before we closed.' The acquisition adds to the more than 2 million members that CareSource manages in 13 states, largely focused on people with government insurance, including Medicaid, those dually eligible for Medicaid and Medicare and those who receive state subsidies but purchase insurance from state-based insurance markets. Advertisement To date, CareSource counts 4,700 employees. While some have suggested that Commonwealth Care's expansion contributed to its financial problems, Preitauer said expansion wouldn't be destabilizing for his organization. The organization has a track record of growth, and a technology platform that he said allows it to scale. Being a non-profit has also allowed the organization to invest in its platforms rather than paying out to shareholders, Preitauer said. 'We've been able to invest resources in ways that others cannot or won't,' Preitauer said. 'And the way we've invested has strengthened our capability, strengthened our depth and our reach in a way that I think will really help CCA too. If we do this right, CCA is going to deepen its mission and its legacy here in Massachusetts.' The acquisition and expansion comes amid federal uncertainty and turmoil over Medicaid reimbursement rates. Preitauer said while there may be some federal financial pressures, the organization didn't want to pass up this opportunity. CareSource's scale also is even more of a reason for Commonwealth Care to be brought under the umbrella, Preitauer said, as it strengthens the organization to weather any potential storms. As the organizations combine, Preitauer asked for members of the disability community and others to have patience, and he promised to deliver on the organization's mission of caring for vulnerable populations. 'We get how special it is. We're going to do a really good job. And we ask the stakeholders, give us a minute,' Preitauer said. 'We're looking forward to being able to earn that [trust] and to show where our hearts are. But we do have a lot of work ahead.' Advertisement Jessica Bartlett can be reached at
Boston Globe
19-03-2025
- Health
- Boston Globe
State prepares in case insurer for 50,000 poor, elderly, and disabled people collapses
Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up The state has for months raised concerns about the stability of Commonwealth Care, which has been running out of money, records show. The organization acts predominantly as an insurer for people simultaneously eligible for Medicaid, which serves mostly low-income people, and Medicare, which helps largely people over 65 and those with disabilities. For some, the nonprofit also acts as a service provider, offering care through several avenues including two primary care practices. Advertisement In many ways, the organization's programs go beyond what is typical of an insurer, and is one deeply involved in a patient's care, often coordinating multiple specialists, appointments, and services, leaving members and disability advocates deeply concerned about the organization's trajectory. Commonwealth Care Alliance did not respond to requests for comment. Walsh's comments came during a forum Tuesday hosted by the Disability Advocates Advancing Our Healthcare Rights coalition, where she and other state officials said they were committed to ensuring that Commonwealth Care's services remain undisrupted, even if its insurance arm collapses. 'It's destabilizing enough to worry about the economics of an insurance plan that you come to rely on, but you certainly don't want to have to change your doctor, don't want to have to change your psychiatrist, don't want to have to change your physical therapist,' Walsh said. 'We want to be very sure that we can, wherever possible, ensure continuity to the providers that have been caring for you and maintaining your independence and dignity and resilience over the last 10 years.' Advertisement Last week, the state issued a request for vendors who could take over the care coordination work Commonwealth Care has been providing, should patients be forced to transfer their insurance to regular MassHealth. Walsh also said the state was 'fully committed' to working with Commonwealth Care to preserve operation of its two primary care practices in Boston and Springfield, which collectively serve 1,100 patients. A spokesperson for MassHealth also said the state would be willing to step in if necessary to keep the clinics running. Commonwealth Care Alliance's Boston primary care clinic, one of two it operates that the state has pledged to work to keep open in case of the organization's collapse. David L. Ryan/Globe Staff The forum was held, in part, to discuss what kinds of care might be affected were Commonwealth Care to close. Walsh said the state was committed to supporting everything that came along with the model for which Commonwealth Care was known. 'CCA is not losing money because Medicaid didn't pay them enough,' she said. 'We actually believe there are dollars in the system to support all of the services that you're talking about … I'm not convinced this is going to be the end of what you know.' Despite Walsh's assurances the state would maintain all the benefits Commonwealth Care members currently receive, advocates still voiced concern. While other insurers offer the same products as Commonwealth Care, Commonwealth Care has a reputation for being more generous. Members could also choose to go to regular MassHealth, but even with the state supplementing some care management with vendors, disability advocates said some services may be abandoned without the holistic, individualized 'enhanced' support Commonwealth Care currently provides. Advertisement 'For you to be able to say, 'yes, we have choice.' Yeah, we do. We have choice to enroll in a plan that doesn't come anywhere near CCA,' said Charlie Carr,a legislative liaison for the Disability Policy Consortium advocacy group. 'So I think a number of people with complex disabilities like myself will just opt for (basic Medicaid) rather than go into a plan which is insufficient and doesn't meet our needs.' Dennis Heaphy, who is a member of Commonwealth Care and a longtime disability advocate, said members could be at risk of losing crucial benefits such as free over-the-counter medications and enhanced transportation coordination, which he said were not available under basic MassHealth services. 'At this point, we don't have a clear indication of how MassHealth will ensure everyone gets enhanced services,' he said. More broadly, what was at risk was a program built around the member, Heaphy said. For example, if an individual needed a piece of medical equipment, Commonwealth Care had long provided it, rather than make members jump through months-long insurance approvals, or offering a cheaper version than what the doctor had ordered to reduce costs in the short-term. 'What seems to be getting lost in this conversation is … the broader CCA insurance world will be put into insurance companies and plans that probably will not have embraced or not been shaped by the disability rights movement as CCA was,' Heaphy said. 'It's their ethos.' State officials have increasingly flagged and voiced concern about the direction of Commonwealth Care for the past year. In October, MassHealth officials noted in a letter to the nonprofit that the insurer projected having 'less than zero cash on hand' by the first quarter of 2025, and had taken out a $120-million line of credit that was due to be paid back in three months. Advertisement The insurer's reserves were also $216.4 million below solvency thresholds for two of its MassHealth products: one for disabled individuals under 65 called One Care and a product for low-income seniors, Senior Care Options. In November, the state froze new enrollments in both the MassHealth programs. Disability advocates say they understood the organization was looking to be acquired, but that a buyer had not materialized, and have been pushing for the state to put the insurer into receivership. Matt Selig, executive director of Health Law Advocates, a public interest law firm working on behalf of the Disability Policy Consortium, said the attorney general still has the statutory authority to take over the organization. A spokesperson for the attorney general's office did not immediately respond to a request for comment. As uncertainty swirls, the organization has sought to reassure its members. In a memo circulated to staff, Commonwealth Care told employees to 'transition conversation to routine matters' if members asked about the Boston Globe's struggles. If someone asked if CCA was closing, staff were to tell them the organization remained open for business as usual. If members pushed, staff were to direct them to discuss their health plan options with a counselor. If asked about being fearful of losing their jobs, staff were instructed to say: 'My focus is on delivering the support you and our other members rely on.' Advertisement Jessica Bartlett can be reached at
Boston Globe
04-03-2025
- Business
- Boston Globe
Insurer for nearly 50,000 poor, elderly, disabled people in Mass. running out of money
But after years of multimillion dollar operating losses, Commonwealth Care's cash reserves have fallen dramatically, triggering MassHealth, the state's Medicaid program, in November to block the insurer from acquiring new members. Disability advocates recently said in a letter to state regulators that they understood the company was looking to be acquired, but that those efforts have so far not been successful. Executives from Commonwealth Care declined to comment. Advertisement The organization's financial struggles come after a period of rapid growth, in which it took on tens of thousands of new patients in three other states, former board members said. Some have suggested state and federal payments to the company to cover the care of their clients have not kept pace with a population in need of especially expensive services. 'What appears to be the demise of the organization is actually frightening, when I think of the consequences for the people it enrolls,' said Bill Henning, executive director of the Boston Center for Independent Living, which provides advocacy and services for people with disabilities. 'The immediate concern we all need to have … is how do you continue to care for folks?' The extent of the cash crisis was detailed in letters MassHealth sent to Commonwealth Care in October, warning of an impending enrollment freeze starting the following month, and laying out a litany of concerns. Among them, Commonwealth Care had borrowed $120 million from a line of credit, due to be paid off in December 2024. But by October, the organization had not secured additional cash, potentially forcing the organization to 'liquidate a significant amount of assets' to pay off the debt. Advertisement The insurer had also informed state regulators that it projected having 'less than zero cash on hand' by the first quarter of 2025. Additionally, the organization was required to have over $100 million for two of its MassHealth programs. By August, the organization had only $66.9 million in reserves. MassHealth worried the organization wouldn't be able to pay vendors and providers. 'CCA, as an organization, is in financial distress,' said the letter, sent to CEO Chris Palmeri. In a recent statement , a spokesperson for the state's Medicaid program MassHealth said the state was closely monitoring the organization's finances, and said the temporary enrollment freeze was to 'protect members' while the insurer addressed its solvency issues. The turmoil has alarmed disability advocates. In a letter to state officials, advocates called for the state to appoint a receiver to oversee the organization. 'We have heard that no acquisition of CCA is imminent, that its financial position may be unsound, and that its members are at increasing risk,' said the letter, sent by Health Law Advocates, a public interest law firm, on behalf of the disability advocacy group the Disability Policy Consortium. The care of the insurer's members is complex, with networks of clinicians coordinated by the insurer and built up over time in a way that might not be transferable to other insurance plans. In some parts of the state, few similar options exist. It is unclear if other insurers would even have the capacity to take on so many additional members. Should patients move to other insurers, they may face denials or lack of coverage for crucial services. Advertisement Harry Weissman, left, executive director of the Disability Policy Consortium, and Matt Selig, executive director of Health Law Advocates, in their office. The Disability Policy Consortium has called for the state to appoint a receiver to oversee the financially unstable insurer Commonwealth Care Alliance. Pat Greenhouse/Globe Staff Governor Maura Healey's office said it was reviewing the advocates' letter and monitoring the situation. Attorney General Andrea Campbell's office said it was assessing how best to help members if they lose coverage. 'Our office understands the potentially serious effects that any disruption of care coordination could have on the communities served by CCA,' said a Campbell spokesperson. For most of its members in Massachusetts, Commonwealth Care acts as an insurer, offering two products: one for disabled individuals under 65 called One Care and a product for low-income seniors called Senior Care Options. Under both plans, Medicaid and Medicare provide Commonwealth Care a set amount of monthly money per member, allowing the organization greater flexibility in funding care. The 'magic of the model,' Henning said, is that it brings together disparate physical and behavioral health services with community-based aid such as personal care attendant services, meals, and transportation, allowing people with disabilities and seniors to live independently. Dennis Heaphy, a patient from Boston who uses a wheelchair, said a nurse practitioner at Commonwealth Care coordinates his care, which includes physical therapy, occupational therapy, allergy specialists, pulmonology specialists, and dental care. Before CCA, Heaphy primarily used the emergency room for medical needs. 'I owe my life to CCA, to the model of care they have provided me,' said Heaphy, who is also a policy analyst with the Disability Policy Consortium. 'That for me is why it's important for this to be preserved. I know how well it works when it works.' Dennis Heaphy said he owes his life to the insurer Commonwealth Care Alliance, which serves Massachusetts' disabled, elderly, and low-income residents and is struggling financially. Jessica Rinaldi/Globe Staff While other insurers in Massachusetts may have similar offerings, Commonwealth Care has a reputation for often being more generous and is among the largest, serving roughly 20 percent of those in Senior Care Options and about 70 percent of the state's enrollees in One Care. Advertisement A pioneer, Commonwealth Care has also gone further than other insurers, operating health clinics that serve over 1,000 patients annually. One of the nonprofit's founders, Bob Master, said he realized first as a doctor in the 1970s and later as the state's Medicaid director that disabled elders weren't adequately served by the typical brief office visit. Keeping those patients out of the emergency department would take a different payment model, one that would provide a set amount of money per patient, adjusted for their illnesses' severity. With funding like that, you could do home visits, or simply buy someone an air conditioner to prevent heat stroke. The model's success was clear in its growth. What was a Medicaid grant in the '90s to care for a few hundred elderly ultimately blossomed into an example used by the federal government as the basis for expanding similar programs in other states under the Affordable Care Act. By 2015, Commonwealth Care had some 18,000 members. That same year, Master retired and the board chose Palmeri, a health plan executive from New York, as its new leader. Palmeri had dreams of expanding the model nationally, but some board members were skeptical, said Charlie Carr, a former board member who works as a legislative liaison for the Disability Policy Consortium. 'The concerns against expansion were that we were entering into unknown territory,' said Carr. 'We didn't know how CCA's model would be accepted in other states.' Commonwealth Care's expansion progressed anyway, propelled by the acquisition of companies in Michigan and California and the launch of insurance products in Rhode Island. By 2022, the organization said it was overseeing care for 100,000 people across four states. Advertisement Paramedic Matthew Michaud, left, of EasCare Ambulance Service, draws a blood sample from Jamal Lee during a home visit in Quincy in 2018. The visit was part of a pilot program, in partnership with Commonwealth Care Alliance, to provide care in patients' homes. Craig F. Walker Around that time, Commonwealth Care also made a As Commonwealth Care grew, however, advocates and members said it increasingly denied health care services. The organization began to experience high staff turnover, they said. Because of the changes, Heaphy said, providers have told him the level of services that once allowed him to recover from surgery in his home likely wouldn't be available to members today. 'They have abandoned that original care model that was developed in concert with the disability community,' said Harry Weissman, executive director for the Disability Policy Consortium. Signs of troubles also emerged. The company's massive expansion was accompanied by operating losses, including $14.3 million in 2022, and $105.8 million in 2023, according to MassHealth records. In October, Commonwealth Care announced it would cease all Medicare Advantage plans in California, Michigan, and Rhode Island, and one such plan in Massachusetts by the end of the year. It is unclear how many people Commonwealth Care still serves outside of Massachusetts. That same month, MassHealth sent the letters to Commonwealth Care, barring new enrollees starting in November. 'My biggest question now is how could the board see this gradual decline in their financials, and not take action?' said Carr, who left the board but has stayed in touch with leadership. Board chair David Klein did not respond to requests for comment. A view of the CCA Primary Care clinic in Boston. David L. Ryan/Globe Staff Joe Paduda, a former board member, said the expansion was aimed at diversifying the revenue Commonwealth Care relied upon from Massachusetts, but the organization made mistakes such as not doing enough market research on approaching potential customers. The larger factor, he said, is that Medicaid reimbursements haven't kept pace with CCA's costs to provide robust services. 'We did the right thing at the wrong time,' he said. 'The state of Massachusetts said 'We're not giving you money,' the feds said the same thing, and we failed at execution in some expansion states. It was a perfect storm.' Paduda ultimately resigned from the board in December over disagreements with the board's chair, as well as the CEO, though he declined to detail specifics. MassHealth contested that its rates were insufficient, saying it increased the payment per member from 2022 to 2024 for both Commonwealth Care programs. While Medicare reimbursement might sometimes be insufficient, MassHealth overcompensates, the agency said. Jessica Bartlett can be reached at
