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Sutter Health/ PAMF Limits Access For Some Patients Enrolled in Original Medicare

Guest Article By Marc Derendinger

“Key Finding:  Sutter/PAMF wants you to enroll in Medicare Advantage plans, and is turning away new patients on traditional (original) Medicare Parts A and B (including those covered by supplemental medigap insurance)”

(This story has been updated) The popular neighborhood social platform, Nextdoor, has been buzzing with stories of Palo Alto Medical Foundation (Sutter Health) limiting access to doctors for some Medicare beneficiaries.  Nextdoor is a social platform that connects neighbors.

What happened?  

PAMF offices are reportedly saying its doctors will not accept new patients who are on original Medicare Part A and B.  When pressed for details, one PAMF employee explained this policy is really not new, and has been in effect since January 2021.  

Will This Be A New Trend for Medical Groups?  -See our Commentary about the need to solidify doctor relationships before turning 65

When pushed for details, the representative messaged a supervisor who confirmed the new rules and further explained “existing patients” are those who have been seen by their physician within the last three years.

This raises a serious question:  when your physician retires from the medical group, does this downgrade your status to “new patient?”

What doctors are saying…

Through chance, I met up with a PAMF physician earlier this summer who commented on a June 2021 staff meeting:  “Doctors were told they could no longer accept new Medicare patients, effective immediately.”  The reason cited was the amount of money Sutter/PAMF was losing on original Medicare patients (which was probably exacerbated by reduced procedures/visits during the pandemic).

The Sacramento Business Journal has also reported, March 4th 2021, on pending Sutter Health changes due to pandemic related losses.  Are these new access restrictions related?

>>>>>>>This story was updated on October 1st:

What professional insurance brokers are saying…

Conferring with local independent insurance agents who specialize in Medicare, the talk is how CMS (Medicare) has been applying pressure on Sutter Health in recent years, to shift more of their patients to Medicare Advantage Plans.  Why?  Agents say with these types of plans Medicare costs are lower and more predictable, and coverage is often better. “A win-win” situation, some say.

Story Update 3/1/2026:  PAMF Clarification

Speaking with a PAMF employee who described her position as “patient onboarding,” the employee clarified that Medicare patients, new to PAMF, will have access to some physicians via Medicare Advantage plans, but not via traditional Medicare Supplement plans (e.g. medigap Plan G, Plan F etc.).  

What does this really mean? PAMF appears to be saying patients with original Medicare coverage will continue to have access to their physicians at Palo Alto Medical Foundation.  However, new patients will have to enroll with one of the Medicare Advantage plans that have contracted with Sutter Health/PAMF or go elsewhere to obtain medical services.

“Established patients with original Medicare coverage will continue to have access to their physicians at Palo Alto Medical Foundation.  However, new patients will have to enroll with one of the Medicare Advantage plans that have contracted with Sutter Health/PAMF or go elsewhere to obtain medical services.”

What is Medicare Advantage?  According to the National Medicare Handbook, published by the Centers for Medicare and Medicaid Services (CMS), titled Medicare and You 2022:

Medicare Advantage (also known as Part C) 

  • Medicare Advantage is an “all in one” alternative to Original Medicare.  These ““bundled” plans include Part A, Part B, and usually Part D.
  • Plans may have lower out-of-pocket costs than Original Medicare (see related story on supplemental insurance for original Medicare).

[Marc: the “lower costs” claim has been widely debated, but a recent Kaiser Family Foundation (KFF) issue brief lends evidence to the claim]. 

  • In many cases, you’ll need to use doctors who are in the plan’s network.

[Marc:  network limitation is not a big deal for individuals who only utilize PAMF doctors, but if you have doctors outside of PAMF, you may wish to consider plans that allow more flexibility e.g. original medicare with medigap]

  • Most plans offer extra benefits that Original Medicare doesn’t cover—like vision, hearing, dental, and more.

The trend is up for Medicare Advantage plans, as KFF reported in recent years:  more and more people are enrolled in a Medicare Advantage plan.

However, despite all the positive press, there are risks to consider; Medicare Advantage may not be for everyone.

Risks Factors of Enrolling in Medicare Advantage 

CMS publications cite many positive attributes of Medicare Advantage plans, but to be fair, there are also risks:  I have talked with Medicare beneficiaries who did not properly understand these risks at time of enrollment, and I wish to share some of their experiences:

  • Risk #1:  You enroll in a Medicare Advantage plan for the first time, but later change your mind and wish to go back to original (traditional) Medicare with supplemental (medigap) insurance.

This is perhaps the biggest issue I come across.  While Medicare rules provide multiple opportunities to disenroll and return to original Part A and Part B, they do NOT provide as much protection on your right to re-enroll in Medicare Supplement (medigap) insurance e.g. Plan G, Plan F etc.

Why this matters:  supplemental Medigap insurance matters immensely,  because Medicare alone limits hospital coverage via deductibles, copayments and total number of days lifetime. Further, Part B only pays 80% (you are responsible for the remaining 20% coinsurance) for Part B expenses.  Let me emphasize there is no out of pocket maximum limit on the 20%.  Consider that Chemotherapy expenses usually fall under Part B and you start to realize the size of this financial liability.  Once this has been explained, no rational person would take on this risk without medigap insurance, especially given the low premium cost for such insurance.

Trial Rights

I would be remiss if I did not talk about trial rights i.e.  Medicare Guarantee Issue protections.  However, they do not go far enough:  Let me share a phone call last October from an individual with Stage 4 Cancer wishing to disenroll from Medicare Advantage after just 3 years (age 68).  

Why did he want to leave his Medicare Advantage plan?  He wanted access to a Cancer treatment center that he heard was accepting original Medicare, but the center was not affiliated with his Medicare Advantage plan.  

Technically, he could disenroll and go back to original Medicare, but….he could not buy supplemental medigap insurance unless he could provide evidence of insurability to the insurance company.  Sadly and reluctantly, he remained with his Medicare Advantage plan.

The “Trial Right” (return to medigap insurance) protections are complex and even the initial 12 month trial right does not apply in all situations.  I strongly urge readers to find a competent independent agent to explain these rules before enrolling in a Medicare Advantage plan for the first time.  The more “independent” and the more “local,” the better.  This subject is too important to take a chance on.

The Cost of Using Agents

Many readers wonder if there is an extra (embedded) cost to working with independent agents.  The answer is no, and the premiums are the same.  The benefit to you is local agents already know which Medicare Advantage plans are contracted with Sutter/PAMF- it has always amazed me why anybody would invite sales calls from 3 different insurance company representatives when one independent agent can impartially explain all three?  Note:  You can also find local agents using the United Healthcare Local Agent Finder tool.  Besides, a local independent agent will stay with you for years, to advise if better plans become available in the future.  Recommendation:  Engage with an agent by Age 62, to help you understand and prepare for Medicare.  But if you really don’t want to talk to an agent, just go to CaliforniaEnrollment.Com

Practice due diligence and don’t ever allow yourself “to be sold.”

Marc Derendinger is an independent insurance agent in Santa Clara County, with 30 years experience with Medicare health plans and related insurance programs. He helped set-up the City of San Jose’s first ever group long-term care insurance program in 2001, benefiting their 9,000+ employees and retirees. He is licensed by the California Department of Insurance, license no. 0644617, and can be contacted at 408-252-7300.  www.derendingerins.com.

Whatever Happened To The California Blues?

Anthem (Blue Cross) is not the same company as Blue Shield of California

Did you ever wonder about the relationship between Blue Cross and Blue Shield, here in California? This article seeks to help clear up any misunderstandings. No, Anthem Blue Cross and Blue Shield of California were never the same company: They are both independent licensees of the Blue Cross Blue Shield Association (BCBSA), which is a federation of 33 independent and locally-operated BCBS companies that provide health insurance across the United States.

In some states certain “licensees” cooperate on the same plan and this could explain some confusion. Yet, in California there are two distinct Blue-Branded companies:

  • Anthem Blue Cross (part of Elevance Health)
  • Blue Shield of California (an independent company)

They have very different ownership structures. In this article, we are presenting a brief history of each company to help clarify their roles in the California marketplace…especially for seniors age 65 and older, which is the focus of this website.

The History of Blue Shield of California

Blue Shield of California has a storied past that highlights its unwavering dedication to providing high-quality, affordable healthcare to the people of California. Established in 1939 in San Francisco, the organization has evolved into one of the state’s largest health plans, currently serving millions of members. Currently, it is the state’s leading issuer of medigap (Medicare Supplement) insurance policies.

From the outset, Blue Shield of California has been guided by a mission-focused approach rather than the pursuit of profits. This dedication is embodied in their unique 2% Pledge, which limits their net income to 2% of revenue. Any earnings beyond this limit are returned to customers or invested in community initiatives.

Over the years, Blue Shield of California has continually adapted to address the shifting needs of its members and the broader healthcare environment. In 2019, the company moved its headquarters to Oakland, solidifying its deep-rooted connection to the Bay Area.

Financial stability has always been a key aspect of Blue Shield of California’s operations. In 2023, the company reported revenues of $25.1 billion and a net income of $130 million, showcasing its ability to maintain financial health while staying true to its mission-driven ethos.

Throughout its history, Blue Shield of California has earned accolades for its ethical business practices, community involvement, and positive workplace culture. The Ethisphere Institute has named it one of the World’s Most Ethical Companies, and the Civic 50 has recognized it as one of the country’s most community-oriented companies.

The company’s commitment to diversity and inclusion is another significant aspect of its legacy. Blue Shield of California has consistently been honored as a top workplace for LGBTQ+ employees by the Human Rights Campaign and has been listed among DiversityInc’s Top Regional Companies.

Blue Shield of California has remained steadfast in its founding principles while evolving to meet the demands of a changing healthcare landscape. Its ongoing commitment to its mission, financial prudence, and community impact ensures its continued leadership in California’s healthcare system.

The Evolution of Blue Cross of California

1936 – The Beginning

Blue Cross of California was founded in 1936. Over the years, it has evolved to become a trusted name in health insurance.

An Independent Licensee

Blue Cross of California operates independently but is licensed to use the Blue Cross Blue Shield trademarks. This means you get the reliability of a well-known brand with the personalized service of a local entity.

2004 – A New Identity

In 2004, Blue Cross of California rebranded to Anthem Blue Cross. This was part of a broader strategy by its parent company, Anthem Inc., to unify its subsidiaries under the Anthem name.

Mergers and Changes

In 2004, Anthem Insurance Company merged with WellPoint Health Networks Inc., adopting the WellPoint name for a period. By 2014, WellPoint decided to change its name to Anthem, Inc. to streamline its brand identity.

The Latest Chapter

In 2022, another significant change occurred when Anthem, Inc. rebranded as Elevance Health. This new name reflects a broader mission to elevate healthcare and advance well-being. With this change, their stock ticker symbol also changed from “ANTM” to “ELV.”

Looking Forward

Elevance Health continues to own and operate various subsidiaries, including those previously known as WellPoint and Anthem. This latest evolution ensures that the company remains at the forefront of healthcare, committed to providing you with top-notch service and support.

We hope this history helps you understand the legacy and current focus of these companies.

Resources

How To Select A Medigap Plan

Blue Shield Closes Popular Medigap Plan

As of April 2024 Blue Shield of California has stopped accepting applications for one of its most popular medigap plans in Northern California, Plan G Inspire.

Subject to regulatory approval, Blue Shield intends to close the plan to existing members, as well; possibly as early as January 2025.

Blue Shield of California introduced the plan in September of 2020.  By April 6, 2022 Blue Shield issued a press release announcing it took the top position in market share for individual Medicare Supplement (also known as “medigap”) plans in California in 2021.

Blue Shield of California continues to offer the Plan G Extra.  This is a comparable plan to the Inspire, but without the AAA features.

Resources:

Centers For Medicare & Medicaid Services’ 2024 Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare 

Blue Shield of California News Center

AAA Northern California News

How To Select A Medigap Plan

United Healthcare Local Agent Finder Tool: https://www.myuhcagent.com

Whatever Happened To The California Blues?

Using Medicare At Stanford Healthcare- Stanford Hospital

Using Medicare At Stanford Healthcare- Stanford Hospital. Perhaps a better article title would be “Keeping Access To Stanford for Medicare Beneficiaries,” rather than “Using Medicare At Stanford.”

The purpose of this article is to acknowledge the thousands of Northern Californians impacted by recent Medicare plan changes, and to review possible solutions and resources to help gain Medicare access to the Stanford Health Care system or the Sutter system in the future.  If your plan changed and you have Sutter or “PAMF” doctors, read this related article.

Topics and Questions Addressed In This Article:

  • Are there any Medicare Plans that include Stanford after January 1st 2024?
  • Is Traditional Medicare Part A and Part B better than Medicare Advantage PPO?
  • Strategies to keep Stanford Healthcare as an individual Medicare beneficiary
  • Resources – Recommendations

Background: “Stanford” is popular with Medicare beneficiaries.  Prior to 2024, many individuals not covered on employer or retiree health coverage gained access to Stanford from Essence Healthcare, an individual Medicare Advantage HMO. 

Losing Your Plan, What To Do Next?

First, you could enroll in a different Medicare Advantage (HMO) i.e. give up your Stanford doctors, but this is probably not your first choice. Next, you might hope another Advantage plan picks up Stanford at the last minute.

Some suggest a Medicare Advantage PPO plan would solve your provider issues:  Options include i. getting help from an independent agent, ii. visiting medicare.gov, iii. phoning Medicare directly or iv. contacting each PPO plan directly.  Whichever resource you use, make sure your doctors have “in-network” status on the plan, otherwise, your out of pocket costs will be higher with “Advantage” PPO plans, when you use non-network providers.  

“Yes. You can also use out-of-network providers for covered services, usually for a higher cost, if the provider agrees to treat you and hasn’t opted out of Medicare (for Medicare Part A and Part B items and services).“ ref:  Page 19

(Medicare ref: page 19):  https://www.medicare.gov/Pubs/pdf/12026-Understanding-Medicare-Advantage-Plans.pdf

(Author: pay particular attention to the condition stated above, “if the provider agrees to treat you.”)

Original Medicare (Part A and Part B) + Medigap

Another term for “Medigap” is “Medicare Supplement Insurance” (It is unfortunate, but Medicare uses both terms interchangeably, which is confusing.).

Original Medicare is popular with individuals who wish to receive care from specialists in assorted medical groups and/or geographic regions.  Generally, this is not possible with “Advantage” HMO plans.

If you return to original Medicare and need coverage for outpatient medications, you should purchase a standalone Part D prescription drug plan (available at medicare.gov or by phoning Medicare directly, the plan directly or via your independent agent who can coordinate the enrollment details). 

Is Traditional Medicare (Part A Part B) Better Than Medicare Advantage PPO?

According to the nonpartisan research group, KFF (formerly Kaiser Family Foundation), 1% of physicians have opted out of Medicare.  The implication is clear:  Medicare beneficiaries have access to the vast majority of physicians across America. 

https://www.kff.org/f262da9/

If you subscribe to the financial publication, Barron’s, read the September 16, 2023 article comparing original Medicare and Medicare Advantage- it’s one of the best we have seen:

How to Decide Between Medicare and Medicare Advantage When You Turn 65

If You Do Not Have An Agent

We suggest you find a local independent agent who is familiar with major medical groups, such as the Stanford Health Care system or the Sutter system (PAMF in the bay area).  We advise using a competent, experienced agent to increase your probably of success, because the rules and the timing are complex and physicians are leaving and joining plans up to the last minute.  Medicare is ever changing, and once the current crisis has passed, you will probably need your agent in the future.

An alternative option for those who don’t want an agent is to phone Medicare for assistance.  They are open 24/7 at (800) 633-4227 or there’s no added cost to using an independent agent, but if you really don’t want to talk to one, “do-it-yourselfers” could try to self-enroll at this site.

Finding a Local Agent

https://www.myuhcagent.com

Key Words:  Stanford Health Care- Stanford Hospital, Medicare

US News Article Link:

https://health.usnews.com/best-hospitals/area/ca/stanford-hospital-and-clinics-6932330/doctors

Resources:

Finding a Local Agent

Medicare publishes a guide to medigap policies; here’s an excert:

“Cost is usually the only difference between Medigap policies with the same plan letter sold by different insurance companies.” CENTERS FOR MEDICARE & MEDICAID SERVICES (2023 Choosing A Medigap Policy): Section 2 

https://www.medicare.gov/Pubs/pdf/02110-Medigap-guide-health-insurance.pdf

From Barron’s: How to Decide Between Medicare and Medicare Advantage When You Turn 65
https://www.barrons.com/articles/medicare-choice-medicare-advantage-e9d7f1f2?reflink=article_emailShare

From MedPage Today, a very detailed story about medical groups cancelling Medicare Advantage contracts:

https://www.medpagetoday.com/special-reports/exclusives/106483

Whatever Happened To The California Blues?