Medi-Cal Cuts Reimbursement by 10%, Causes Outrage Among Healthcare Providers
Last week, the Obama administration gave the state of California permission to cut its Medicaid payments. A number of doctors and pharmacists are up in arms on the controversial decision, saying that this will make it even harder for thousands of low-income central San Joaquin Valley residents to get the care they need.
The Obama administration decided to allow a 10 percent cut in Medi-Cal (the state’s Medicaid program) reimbursement payments to doctors, hospitals and pharmacists. While the decision could save cash-strapped California millions, opponents say the decision could cost patients and the healthcare industry big.
Though California officials say they carefully preserved access to care with the decision, healthcare providers disagree, pointing out that California’s reimbursement payments are already the lowest in the country—and that payment reductions will mean reduction in care for the poor.
And people living in impoverished areas such as the Valley could find themselves suffering the most.
“We are most worried about our rural pharmacists because they serve a higher proportion of Medi-Cal patients. And they do not have the large corporate structure to spread out those costs,” said Jon Roth, chief executive officer of the California Pharmacists Association, in an interview with The Fresno Bee’s Barbara Anderson.
The state expects to save $623 million with the reimbursement cuts, as compared with the $14 billion the state currently spends on Medi-Cal.
“We are providing California with flexibility to address their difficult budget circumstances while protecting the health care needs of Californians served by the Medicaid program,” said Cindy Mann, Deputy Administrator and Director of the Center for Medicaid and CHIP Services, in a statement. “Many of the state’s rate cut proposals are now off the table, and we and the state will monitor implementation of the remaining reductions on an ongoing basis to ensure that they do not jeopardize Californians’ access to care.”
The California Medical Association has reportedly expressed its dissatisfaction with the new rates, calling them “unconscionably low” and saying that it has a hard time seeing how healthcare reform could be successful in California after these cuts.
Medi-Cal currently serves 7.6 million poor and disabled California residents and already had the lowest reimbursement rates in the country. The state is also working on a proposal that would require patients to pay co-pays of $5 for physician office visits, $50 for emergency room visits and $100 per day for hospital stays. Plus, most Medi-Cal beneficiaries would be limited to seven doctor visits per year.
Supporters of the changes point out that nearly every other state has required co-pays from some patients, eliminated benefits, moved patients into managed care programs and taken various other measures to reduce costs.