founded in 1996, appears headed for bankruptcy.
As more Californians fall under Medi-Cal, the state's health care program for the poor, the Alameda Alliance for Health was one of a handful of local providers poised to cover them after the new national health law took effect this year.
But the financial problems of the Alameda Alliance are a "calamity" and a "debacle" for its mostly low-income enrollees, the state Department of Managed Care said in court papers this month after naming a conservator to oversee the nonprofit public health care provider.
"The crisis is not simply a matter of bookkeeping woes," said a court memo by Carol Ventura, deputy director of the state Department of Managed Care, which regulates health plans. Ventura wrote that the Alameda-based insurer could also be committing "serious violations" of state law by not promptly paying back some 280,000 backlogged claims.
"The Alliance has no controls over its spending," he wrote. He wrote that Alliance increased staffing faster than membership growth, and spent more on furniture, equipment and software than comparable providers.
He blamed a combination of factors, including problems with the new mandated computer system, a huge number of new members in January and underpayment by the state for care of seniors with disabilities.