Nearly 50,000 elderly, disabled and low-income Massachusetts residents who were at risk of losing their health insurance and coordinated care can breathe a collective sigh of relief.
Dual insurance and care provider Commonwealth Care Alliance (CCA), which was wading in insolvency and setting off alarm bells for MassHealth officials, has been acquired by CareSource, an Ohio-based nonprofit managed care organization with more than 2 million members across 13 states.
As a result, Commonwealth Care Alliance will continue to operate its Senior Care Options (SCO) and One Care plans in Massachusetts under the CareSource family of brands.
“The CareSource and Commonwealth Care Alliance partnership ensures residents of Massachusetts with complex health needs continue to have access to high-quality health care,” Erhardt Preitauer, president and CEO of CareSource, said in a statement.
- Read more: Commonwealth Care Alliance members left in the dark amid financial crisis
Preitauer thanked the state Executive Office of Health and Human Services and Gov. Maura Healey for their support throughout the acquisition process.
“We look forward to collaborating with our CCA colleagues to build strong working relationships with partners in the Massachusetts provider and patient advocacy communities to deliver high-quality service and outcomes for those who are counting on us,” Preitauer said.
What went wrong at CCA
Founded in 2003, CCA has historically been viewed as a leading model for combining insurance and health care for the Medicaid/Medicare crossover population. The nonprofit coordinates medical and social wraparound services for individuals, including physical and occupational therapy, homemaking, personal care, behavioral health, transportation to appointments and more.
But things began to crumble in recent years. State records show the organization suffered millions in operating losses: $14.3 million in 2022 and $105.8 million in 2023. Last October, signaling the financial tumult, CCA announced it would exit all Medicare Advantage plans in California, Michigan and Rhode Island and focus mainly on its Senior Care Options (SCO) and One Care plans in Massachusetts.
Notices obtained by MassLive show MassHealth began warning CCA in October that it was out of compliance with solvency reserve requirements. Reserves for CCA’s SCO and One Care contracts were deficient by more than $200 million, the notices addressed to President and CEO Christopher Palmieri stated.
MassHealth wrote CCA projected “having less than zero cash on hand during Q1 of (calendar year) 2025.”
CCA members previously told MassLive that losing coverage would be devastating. In March, Ludlow resident Amanda Sturtevant, who uses a wheelchair and sees a home health aid twice a week, said she couldn’t imagine having to start over with a new insurance and care plan.
“If I lost CCA and I lost aid, I would survive, but it would be hard,” she said at the time. “Some of these people won’t survive.”
CareSource touted as sharing CCA’s values
CCA had been actively searching for a buyer in recent months. The deal with CareSource closed this week.
“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,” David Klein, the outgoing chairman of CCA’s board of directors, 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.”
The Boston Globe reported the state has agreed to limit any of CareSource’s potential losses for two years, and, if CareSource earns more than a 2% margin during that time, the funds would be used to repay MassHealth money it is owed from CCA.
CareSource already sports a workforce of 4,700, and CCA employees will now be employed by CareSource, “ensuring continuity of care for members and patients.”
CCA President and CEO Chris Palmeri resigned from the organization this week as part of the transition.
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