Southern California-based Vitality Health Plan is in dire financial need, which has caused several area hospitals and surgery centers to terminate their contracts with the insurer, The Mercury News reports.
What you should know:
1. Vitality has more than 10,000 people enrolled in its Medicare Advantage option in Southern California. The company began serving the area in January 2019, offering inexpensive medication along with its health coverage.
2. Since then, the company's financial health has deteriorated. Vitality has a clause that requires it to maintain millions of dollars in its financial reserves. However, the company has a negative working capital and is owed more than $15 million in unpaid provider claims and payments, according to California's Department of Managed Health Care. Vitality said it owes $17 million.
3. Several area hospitals and three surgery centers have either terminated or announced their intent to terminate their agreements with the insurer.
4. Brian Barry, Vitality's president, said to The Mercury News its financial situation was a victim of circumstance. Mr. Barry said several new members signed up for coverage but never saw a primary care provider. The payer did not receive payment for those new members.