Calif. pro­poses Med­i­caid bump and provider cuts, and other news

Med­i­caid cash in­fu­sion comes with provider cuts

Modern Healthcare - - NEWS -

Cal­i­for­nia Gov. Jerry Brown is ask­ing the state to put an ad­di­tional $350 mil­lion to­ward Medi-Cal, the state’s Med­i­caid pro­gram. But any­one cheered by the prospect, which was in­cluded in a $98 bil­lion bud­get pro­posal this month and aimed at ex­pand­ing el­i­gi­bil­ity for the pro­gram un­der the fed­eral health­care re­form law, was soon de­flated. Brown also in­tends to move for­ward with a dis­puted 10% cut to provider pay­ments.

It may take six months be­fore pri­ma­rycare physi­cians in the state see a Med­i­caid pay in­crease promised un­der the Pa­tient Pro­tec­tion and Af­ford­able Care Act.

The sit­u­a­tion re­flects a broader predica­ment as the fed­eral government pre­pares to in­fuse bil­lions of dol­lars into state Med­i­caid pro­grams to ex­pand cov­er­age for low­er­in­come Amer­i­cans while states con­tinue to look for ways to re­lieve the pres­sure the pro­grams ex­ert on their bud­gets.

A fed­eral judge had blocked the rate cuts for physi­cians, clin­ics, nurs­ing fa­cil­i­ties, op­tometrists, ther­a­pists, lab­o­ra­to­ries, dental care, durable med­i­cal equip­ment and phar­ma­cies, which the CMS ap­proved in Oc­to­ber 2011. Last month, how­ever, a three-judge panel from the 9th U.S. Cir­cuit Court of Ap­peals lifted the in­junc­tion.

As­sum­ing “pos­i­tive res­o­lu­tion in March,” this will re­sult in sav­ings of $431 mil­lion for the state, ac­cord­ing to the Cal­i­for­nia De­part­ment of Health Care Ser­vices.

The Cal­i­for­nia Hospi­tal As­so­ci­a­tion, Cal­i­for­nia Med­i­cal As­so­ci­a­tion and sev­eral other or­ga­ni­za­tions sued to pre­vent the cut from tak­ing ef­fect. CHA spokes­woman Jan Emer­son-Shea said her or­ga­ni­za­tion would fight on.

“We’re look­ing at months, if not years, of lit­i­ga­tion. This is a long way from be­ing re­solved,” Emer­son-Shea said. The CHA will ask the full ap­peals court to re­view the de­ci­sion.

Medi-Cal has al­most 8.2 mil­lion en­rollees. Its caseload rep­re­sents 21.7% of the state’s pop­u­la­tion, ac­cord­ing to the bud­get pro­posal. The fed­eral con­tri­bu­tion to Cal­i­for­nia’s pro­gram has been at the low­est amount al­lowed by law, 50%, since the in­cep­tion of Med­i­caid in 1965. Mis­sis­sippi, the state with the high­est fed­eral con­tri­bu­tion, gets 73%, and the na­tional av­er­age is 57%.

Physi­cians, es­pe­cially pri­mary-care doc­tors, are en­ter­ing a state of un­cer­tainty. They are look­ing for­ward to a boost from the Af­ford­able Care Act’s Med­i­caid par­ity pro­vi­sion, which pro­vides fed­eral fund­ing for two years to bring Med­i­caid fee-for-ser­vice pay­ments to Medi­care lev­els for fam­ily physi­cians, gen­eral in­ternists, pe­di­a­tri­cians and re­lated sub­spe­cial­ists.

Un­der Medi-Cal, th­ese physi­cians can get be­tween $18 and $24 for an of­fice visit. Un­der Medi­care rates, the visit could be around $52 and $54, de­pend­ing on the physi­cian’s lo­ca­tion.

Although the pro­vi­sion went into ef­fect Jan. 1, the CMS did not is­sue the fi­nal reg­u­la­tions on the pro­vi­sion un­til Novem­ber. States now have un­til March 31 to amend their Med­i­caid plans to re­flect the par­ity pro­vi­sion. The CMS has 90 days to re­spond af­ter that. The in­creased pay­ments will then be is­sued retroac­tively.

The Cal­i­for­nia De­part­ment of Health Care Ser­vices no­ti­fied physi­cians that im­ple­men­ta­tion is ex­pected “to oc­cur dur­ing the sum­mer of 2013.” The un­cer­tainty is lead­ing to frus­tra­tion, said Lisa Fol­berg, Cal­i­for­nia Med­i­cal As­so­ci­a­tion’s vice pres­i­dent of med­i­cal and reg­u­la­tory pol­icy. “It’s been one hit af­ter an­other for physi­cians—and this was kind of a bea­con in the fog for Cal­i­for­nia providers,” she said.

Dr. Steve Green, pres­i­dent of the Cal­i­for­nia Academy of Fam­ily Physi­cians, said prac­tices may re­sist tak­ing on new Medi-Cal pa­tients even as the pro­gram be­gins cov­er­ing more res­i­dents un­der the Af­ford­able Care Act.

“The way Medi-Cal pays, there is no room for a 10% cut—prac­tices are ei­ther not mak­ing any­thing or los­ing money,” Green said. “I think peo­ple need to re­al­ize there’s a dif­fer­ence be­tween say­ing a pa­tient’s in­sured and them ac­tu­ally hav­ing ac­cess to care.”

Cir­cuit Judge Stephen Trott, who wrote the opin­ion lift­ing the in­junc­tion against the pay cuts, was not im­pressed with that ar­gu­ment. “The term ‘cost’ is not as free from am­bi­gu­ity as the plain­tiffs would have us be­lieve,” he wrote. “The term ‘cost’ may also in­clude items such as con­tract prices to sup­pli­ers and ser­vice providers, which may them­selves be ne­go­ti­ated and re­duced if re­im­burse­ment rates are re­duced.”

Chris Per­rone, deputy di­rec­tor of the Cal­i­for­nia Health­Care Foun­da­tion’s Health Re­form & Pub­lic Pro­grams Ini­tia­tive, said that, with in­creas­ing fed­eral con­trol of Med­i­caid pro­grams, states “have a shrink­ing num­ber of levers” to ease the bur­den on their bud­gets.

One lever is el­i­gi­bil­ity, an­other is provider pay­ments and a third is mov­ing en­rollees away from fee-for-ser­vice and into man­aged care, which Cal­i­for­nia has ex­panded rapidly in the past two years, now cov­er­ing 4.8 mil­lion ben­e­fi­cia­ries un­der ver­sions of that model. “The state is mov­ing full-speed ahead on that,” Per­rone said.


Af­ter his bud­get ad­dress, Cal­i­for­nia Gov. Jerry Brown told the me­dia, “When you add a mil­lion peo­ple or more to the Medi-Cal sys­tem,” that puts pres­sure on provider rates.

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