The California Legislature passed a $234-billion budget on Friday that will reduce Medi-Cal payments to physicians and other providers by 10%. The cuts were originally passed as part of the 2011-2012 budget, but were held up in court as the SFMS/CMA and other plaintiffs filed suit to stop the draconian cuts.
In January 2013, a three judge panel of the 9th Circuit court ruled that the state could move forward with the rate cuts, despite an earlier district court ruling that found that the cuts would irreparably harm the millions of patients who rely on Medi-Cal for health care. SFMS/CMA and the other plaintiffs in the case had requested a rehearing from the full Ninth Circuit Court of Appeals, which was denied.
Although the state is in a much better financial situation than it was in 2011 when the cuts were first passed, the 2013-2014 budget includes roughly $1 billion in Medi-Cal provider rate cuts annually.
On Saturday, the California Legislature passed legislation (AB X1-1) that would expand Medi-Cal to more than 1.4 million state residents under the Affordable Care Act. The irony of slashing rates while promising coverage to more than a million new patients has not gone unnoticed. If the state moves forward with the cuts, particularly at a time when millions of new patients will be eligible for the program, access to care will be decimated in our state, undermining the success of federal health reform.
The budget does restore dental and mental health benefits under the Medi-Cal program.
The final agreement includes $206 million to improve mental health services, including $142 million in one-time general fund money; $51 million in non-general fund money in the coming fiscal year and about $150 million the following fiscal year to boost grants for CalWORKS, California's welfare-to-work program; and $16.9 million in general fund money in the coming fiscal year and $77 million the following fiscal year to help partially restore Denti-Cal (Medi-Cal dental program) benefits for adults.
Even before the cuts, California’s Medi-Cal provider payment rates are some of the lowest in the nation. Low reimbursement rates have driven many of California’s providers from the program. As a result, 56% of Medi-Cal patients report difficulty finding a doctor. If these cuts are not stopped, Medi-Cal will become nothing more than a broken promise of access to care.
“What good does it do our communities if they have health care coverage, but cannot get in to see a doctor?" said Senator Ricardo Lara, author of SB 640, one of two CMA-sponsored bills (along with AB 900, authored by Assemblyman Luis Alejo) that will stop the Medi-Cal cuts. “If we want healthy communities we need to provide access to quality and preventative care.”
CMA has joined an unprecedented coalition of physicians, dentists, health care workers and hospitals that will continue working to stop the cuts. The coalition, called “We Care for California," includes the largest statewide organizations representing physicians, dentists, hospitals and health care workers, as well as health plans, first responders, caregivers and other health providers.
CMA and the We Care for California coalition will aggressively push for a solution to the provider cut before the end of session.
Reports began circulating that legislative leadership—the Speaker and Senate Pro Tem—had come to agreement on the major pieces of a budget ‘deal’ with Governor Brown. SFMS/CMA has been working to uncover the details and determine the main pieces of relevance to physicians.
To our knowledge, the deal does not include a fix for the rate cuts. Right before the public announcement of a deal, CMA was joined by the Calfiornia Hospital Association and SEIU-UHW in a meeting with Senate President Pro Tem Darrell Steinberg. In discussing the rate cuts, the Pro Tem committed to going to the Governor with the Speaker and securing a delay in implementing the AB 97 cuts until January 1, 2014 at the earliest, in order to allow time for a late summer/August legislative proposal to secure more funding in the Medi-Cal system through the state paying a higher rate for the expansion population (that rate increase being entirely federally funded for three years). We are anticipating receipt of a written agreement to delay within the next couple days.
There isn't much information about what form the managed care organization (MCO) tax would take in the ‘deal’. The health plan community still doesn’t know what form the MCO takes in the deal and if they’re opposed or not. They want CMA’s support in ‘dividing the question’ and only having one year (2012-13) of MCO, at only the MCO rate to fund finally paying the Healthy Families plans. They do not want to discuss the higher sales tax rate and where that funding stream should go until after the first of July, when they see their rates for next year.
We haven’t heard much yet about the county funding scheme, but have heard many rumors about a variety of potentially problematic proposals being included in the arrangement, potentially including an extension of the Low Income Health Programs/LIHPs as well as a potential renegotiation of the 2010 Medi-Cal 1115 Waiver, which doesn’t expire until 2015. The contents of the county funding arrangement will likely impact CMA’s positioning on the remainder of the budget items impacting physicians due to its pivotal role in the restructuring and expansion of the Medi-Cal system in preparation for health reform implementation in 2014.
The conference committee adopted action to appropriate $15 million to UCR. Their action seemed to have included the money but instead of appropriating additional funds, it was taken out of the existing UC appropriation.
The bicameral Budget Conference Committee finished their work just before 9:30 pm on June 10. Of note, the Pro Tem’s Mental Health Wellness package was approved ($142.5 million), and the DP-SNF facilities did not have their rates restored from the 2008/09 level instituted in AB 97 to the current year level, as originally proposed in the Senate Budget Subcommittee #3 on Health and Human Services.
More details should be emerging about the contents of the full deal in the coming days. SFMS/CMA will continue to keep you apprised of the situation as we receive updated information.
More than 8,000 people filled the Capitol grounds yesterday to rally against a 10% reduction in the amount the state pays for Medi-Cal reimbursements. SFMS physicians also took part in the event.
The reduction would jeopardize care for the low-income patients who depend on the program, according to the California Medical Association, one of the leaders of the "We Care for California" coalition.
Ongoing cuts have left doctors with little option but to stop taking qualified patients because the reimbursements do not meet the cost of overhead and supplies to treat them.
"I've never seen such a large mobilization of people from all over California, and for health care!" said Assembly member Luis Alejo (D-Watsonville).
"We've all been making do with these low Medi-Cal rates, and now the state wants to take back what it has already paid us," said Assembly member Richard Pan, MD, referring to retroactive payments the state expects for the past two years' worth of 10% cuts that have not been collected while the issue was argued in court. "This Scrooge-like approach endangers people's health," Pan said. "When we look at [how to handle] Medi-Cal, we don't want to take away Tiny Tim's crutches."
Two bills had been proposed to reverse the 10% across-the-board rate cut. Both had bipartisan support when they were first introduced. But two weeks ago, SB 640 by Sen. Ricardo Lara (D-Long Beach) was put on suspense file in the Senate Committee on Appropriations and AB 900 by Assembly member Alejo was narrowed in scope to reversing cuts only for one type of provider – distinct part skilled nursing facilities. Now most provider groups and advocates for reversing the cuts are turning their hopes and attention to budget negotiations taking place over the next few weeks.
"We're very hopeful we can find some kind of solution," Lara said. "It may not be the whole rate reduction, but we think we can do something in the budget process and reduce at least part of it."
Besides physicians, the coalition urging restorations includes the California Hospital Association, SEIU-UHW, American Medical Response, Anthem Blue Cross, Blue Shield of California, California Association of Physicians Groups, California Dental Association, California Primary Care Association, Dignity Health, Health Net, Kaiser Permanente, and Molina Healthcare.
Click here for more information on SB 640.
Click here for more information on AB 900.
Sources: Associated Press, June 4, 2013, and California Healthline, June 5, 2013.
In the dispute over whether Gov. Jerry Brown's budget should do more to repair the state's tattered safety net, the fate of a planned cut in Medi-Cal payments to providers has taken a prominent role. A coalition of medical professional associations (including the California Medical Association and the California Hospital Association) and the Service Employees International Union-United Healthcare Workers West is busing thousands of advocates to Sacramento today for a huge Medi-Cal rally.
Lawmakers expected to speak during between 1 pm and 2 pm include Assemblyman Richard Pan, MD (D-Sacramento), and Assemblyman Luis Alejo (D-Watsonville). There are a couple of bills dealing with Medi-Cal payments before the Legislature right now—the one authored by Alejo made it out of the Assembly while the Senate version was re-referred to committee—and Brown's proposed budget includes a 10% reduction that has been ensnared in a court fight since being approved in 2011 but was just upheld by a federal appeals court.
Join thousands of physicians, hospitals, dentists, health care workers, community clinics and patients in the historic rally to urge Legislature and Governor Brown to support SB 640 and AB 900! The main event will take place on the West Steps of the State Capitol from 1pm to 2pm.
Source: Sacramento Bee Capitol Alert, June 4, 2013.
By Lloyd Dean and Shannon Udovic-Constant
In a time of reform, if there's one underlying truth that unites every health care provider in our state, it's this: We cannot successfully implement the Affordable Care Act and open the doors of health care access to all Californians without a strong, adequately funded Medi-Cal system, California's version of Medicaid.
Medi-Cal is nothing less than the foundation of California's health care safety net. It provides coverage to millions of families who can't afford traditional primary and preventive care and protects those of us who can pay from having to bear the cost-shifting burden for those who can't.
Nearly 1 out of every 4 Californians who have health insurance receive it through Medi-Cal. Yet, at a time when the state needs desperately to expand Medi-Cal to meet the new demands of federal health care reform, a law enacted in 2011 reduces access to Medi-Cal services by cutting the Medi-Cal payment rates by 10%. Health care leaders had challenged the law, but the federal court Friday denied an appeal to rehear the case, which allows the cuts to stand. This will shred California's safety net.
Together, we represent the largest private hospital provider of Medi-Cal services in California and the largest San Francisco-based organization representing physicians who see Medi-Cal patients.
We both have joined the "We Care for California" coalition comprised of nearly every health provider organization in the state—hospitals, community clinics, physicians, dentists, first responders, health plans and rank-and-file workers—to ensure that federal health reform is more than an empty promise.
The coalition is sponsoring SB640 and AB900, which are co-authored by a majority of state legislators and address the obvious—slashing Medi-Cal funding while simultaneously trying to expand the program is a recipe for disaster.
These bills would simply stop the 2011 cuts from taking effect. California Medicaid reimbursement rates are the lowest in the nation, even though California is one of the most expensive states in which to operate a medical practice. Last year alone, San Francisco-based Dignity Health and its member hospitals lost $571 million in the actual cost of providing high-quality care to Medi-Cal patients.
Right here, the Jewish Home of San Francisco, the largest private nonprofit nursing facility in California, has issued pink slips to 300 workers and is contemplating bankruptcy, jeopardizing care for hundreds of Jewish seniors, because of Medi-Cal cuts.
No one is more committed than we are to reach the long-sought-after finish line of universal health access for all Californians. Many of us have worked closely and collaboratively to make innovative programs such as Healthy San Francisco a successful model.
But those of us who deliver high-quality, affordable care to those very Californians who need it most will never reach that finish line if Sacramento continues to cut our financial legs out from underneath us.
Source: San Francisco Chronicle, May 28, 2013.