The Obama Administration approved cuts to California’s Medicaid program that will slash reimbursement rates and potentially cause providers to reject treatment for the program for the poor.
The federal Centers for Medicare & Medicaid Services (CMS) will allow the state to cut reimbursement rates by 10 percent this fiscal year for a variety of Medi-Cal providers, including physicians, pharmacists and optometrists. The state Department of Health Care Services says it will not cut rates paid to pediatricians, home health providers or nursing homes.
California Medical Association CEO Dustin Corcoran said Thursday his group will file suit asking the court to immediately block this latest round of Medi-Cal cuts.
The state expects to save a significant part of the projected $623 million associated with the rate cut, though it may fall short due to excluding some services.
The cuts were implemented as part of a budget deal in the state negotiated earlier this year. This has put doctors and advocates for patients on the same side of the equation, arguing that providers would simply abandon Medicaid rather than accept such a low rate of reimbursement. California already has an extremely low rate of reimbursement.
Not all of the cuts were approved. The CMS rejected a 10% cut to physician and clinic service for children and home health services. And they put in place a monitoring system to measure whether Medi-Cal patients have adequate access. So going forward, we will have metrics on whether patients can see a doctor, whether providers are refusing to participate, and whether patients are being forced to rely on the ER. In a statement, Cindy Mann at CMS said, “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.”
Some of the decisions on whether CMS will accept cuts are still pending, like a cut to long-term care services, cost-sharing on Medi-Cal patients and a cap on annual patient visits to a health care provider. There’s also a pending Supreme Court suit determining whether outside groups like patient coalitions and providers have the legal right to challenge cuts of this nature.
But the cuts approved will definitely have an impact. Anthony Wright of Health Access California said in a statement, “Even before these cuts, California has one of the worst Medicaid provider reimbursement rates in the nation. These additional cuts will clearly impact access to care for millions of Californians.”
The monitoring system to ensure adequate access for patients is a good step, and one that should be extended across the country. But I fear that the slashes to reimbursement rates will be replicated as well, and there’s no question that will affect access. While we gather data, significant numbers of Californians will find themselves unable to receive treatment for their illnesses.
The way to avoid the problem of denying access is to create one reimbursement system, so that providers cannot pick and choose whether to provide care based on how much money they will make off it. A lot of people call that idea “single-payer.”