The California Medical Association (CMA) has announced that it will go to court again to block the latest cut to already miserly Medi-Cal reimbursement rates in that state. According to the CMA, the 10% reduction in provider reimbursement will drive more physicians out of the program and make it harder for the poor to receive medical care, violating federal requirements that govern the Medicaid program. (Medi-Cal is the California version of Medicaid.) The CMA, other California healthcare organizations, and Medi-Cal beneficiaries, obtained a court injunction to stop a previous 10% pay cut set for fiscal 2008. That legal battle escalated to the US Supreme Court, which recently heard oral arguments on whether providers and beneficiaries have any standing to bring a lawsuit to enforce federal Medicaid regulations.
On October 27, the Centers for Medicare and Medicaid Services (CMS) approved a request by Medi-Cal to reduce reimbursement rates for physicians, dentists, nursing homes, and other providers by 10% in fiscal 2012, which began on July 1, 2011. Exempt from the rate cut are services for children. According to a survey released this week by the Kaiser Family Foundation, California is one of 14 states cutting physician reimbursement in the current fiscal year to control costs as they cope with higher Medicaid enrollment, declining tax revenues, and the loss of federal stimulus funds.
Dr. Mazer, an ENT physician in San Diego, noted that the Medi-Cal program requires that state programs set provider rates high enough so that beneficiaries enjoy roughly the same access to care as others in their community. “We haven't had that in the 25 years I've been practicing here," said Dr. Mazer, who stopped treating Medi-Cal patients 18 months ago because of the meager reimbursement. “That's what we sued over.” According to Dr. Mzer, Medi-Cal currently pays $24 for a midlevel office visit with an established patient. That compares with $68 to $75 from private insurers and $71 from Medicare. A 10% cut would lower Medi-Cal reimbursement for a midlevel office visit to $21.60. The amount will go down even more if CMS approves Medi-Cal's request to charge beneficiaries a $5 co-pay, which is included in the fee. “That will never get collected,” said Dr. Mazer.
According to the CMA, only 50% of California physicians participate in the Medi-Cal program because the reimbursement is so low. As a result, 56% of beneficiaries report difficulty in finding a physician. Often, they go without care until their problem escalates into a condition requiring an emergency department visit and/or a hospitalization.
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