SFHSS and Blue Shield apologize for rocky Medicare Advantage rollout; audits find programming and operational gaps

The San Francisco Health Service System (SFHSS) and Blue Shield of California apologized Thursday for a troubled transition of nearly 19,000 retirees into a Blue Shield Medicare Advantage PPO plan that took effect Jan. 1. Ray Guillen, interim executive director for SFHSS, told the board the implementation "was unacceptable and nowhere near the experience that we had planned for or what they deserve."

Why it matters: retirees reported interrupted care, lengthy holds and repeated phone calls. Guillen and Blue Shield representatives said many issues have been fixed and that call volumes and most service metrics have improved since January, but acknowledged the transition eroded trust with retirees.

What SFHSS presented: SFHSS engaged Aon to perform two post‑implementation audits — a programming and claims analysis and an operational readiness assessment — and shared those findings with the board. Anne Thompson of Aon said auditors ran 75 claim test scenarios and identified two programming errors that were in the process of being corrected. She summarized operational findings that included a customer service staff mix where 54% had less than two years’ experience, an auto‑adjudication rate of about 73% for claims and an opportunity to reduce time to complete claim adjustments. Thompson said Blue Shield had exceeded some timeliness targets and improved other call center metrics month‑to‑month.

Blue Shield response and fixes: Charles Lee and Rob Smith of Blue Shield said their concierge call center has helped many members and that service metrics have stabilized. Lee told the board abandonment rates dropped from about 7.5% to about 1%, average speed to answer stabilized at about 35 seconds and first‑call resolution rose from the high 80s to about 96%. Blue Shield said it removed a prior authorization pause for chiropractic and acupuncture after five visits and reprocessed out‑of‑network claims for certain providers so members would not owe more than their $15 copay. Rob Smith emphasized that Medicare Advantage plans must adhere to CMS rules and that prior authorizations are normal managed‑care processes handled by clinical staff.

Member and stakeholder reaction: Retiree advocates echoed both continuing concerns and cautious optimism. Fred Sanchez, president of Protect Our Benefits, praised ongoing meetings between SFHSS, Blue Shield and retiree groups but said members had spent "countless hours" resolving problems. Lois Scott of Protect Our Benefits urged stronger consumer education and said predatory marketing that misenrolls seniors remains a concern she would like the board to address.

Next steps: Guillen said SFHSS would discontinue the special monthly transition reports now that no new systemic transition‑related issues had been reported since January and shift to its normal plan oversight; staff will continue to work with Blue Shield and stakeholder groups and will include retiree organizations in future communications and materials before they are sent. Blue Shield committed to monthly educational webinars and member mailings, and Aon will perform follow‑up checks to confirm programming corrections. SFHSS staff said they will present the plan‑year 2026 renewal on schedule and continue to monitor pharmacy‑related and other operational drivers.

Sources: Presentation materials and post‑implementation audit findings presented to the Health Service Board and direct statements from Ray Guillen (Interim Director, SFHSS), Michael Visconti (SFHSS contracts administration manager), Anne Thompson (Aon), Charles Lee (Blue Shield) and Rob Smith (Blue Shield).