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CalPERS says PPO transition to Blue Shield, new navigation partner amid rising pharmacy costs
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Summary
CalPERS staff described a Jan. 1 administrative change moving PPO administration from Anthem to Blue Shield of California and the introduction of Included Health for care navigation; staff and plan clinicians warned pharmacy spending remains the dominant driver of rising premiums and said a PBM procurement for 2026 is underway.
CalPERS health leaders told stakeholders on Jan. 15 that changes to the system’s preferred provider organization (PPO) services are underway and that pharmacy costs remain a major pressure on premiums.
Chief Clinical Director Dr. Julia Logan said CalPERS replaced Anthem as the PPO third‑party administrator on Jan. 1, and that Included Health now provides a new care‑navigation front door for many PPO members. “The PPO transition is definitely number one,” Logan said, adding that the program team is focusing on stabilizing member experience and clinical quality after a major operational change.
Why it matters: CalPERS provides health coverage to a very large population. Operational problems during a vendor transition — long call center wait times, mismatched primary‑care assignments, or delays in ID‑card mailings — can disrupt care and generate intense public comment.
Problems identified and fixes under way: Logan acknowledged “bumps in the road” after the change. She listed three recurring issues: very high call volumes to the new care‑navigation vendor that produced long wait times, primary‑care provider mismatches tied to ID‑card information, and ID cards lost or delayed in mail. CalPERS said most problems have specific work plans: increasing call center capacity, correcting provider rosters, and encouraging use of digital ID cards available through Blue Shield’s portal.
Pharmacy and affordability: Logan and CEO Marci Frost flagged pharmaceuticals as a systemic driver of rising premiums. Frost said CalPERS is the second‑largest purchaser of health care after the federal government and that the system is examining ways to use buying power, including combined purchasing and policy engagement, to contain drug costs. Logan added CalPERS joined policy forums such as ICER’s leadership forum and coordinates with the state Office of Health Care Affordability.
PBM procurement and oversight: Frost said the contract for the pharmacy‑benefit manager is under active procurement review and that the board will ultimately approve the PBM selection for 2026. Staff did not announce a selection at the forum.
Emergency response: Logan described plan responses to recent Southern California fires: major hospitals (UCLA, Cedars‑Sinai, USC) were reported open, some clinics had closed and members were advised to use virtual care when possible. CalPERS posted an FAQ and plan‑specific guidance to its website, staff said.
Discussion vs. direction: The session was informational; board or staff did not adopt policy changes at the forum. Staff described operational fixes being implemented now and a procurement process that will return to the board for contract approval.
What members can do: CalPERS encouraged members to use digital ID cards, check included health navigation resources and the FAQs on calpers.ca.gov, and to report unresolved access issues to the contact center so staff can escalate.
Ending: CalPERS leaders said improving clinical quality and cost containment will be ongoing priorities as PPO operations stabilize and as the PBM review proceeds.
