Medi-Cal reimbursement rates on the agenda as Legislature reconvenes

Increasing reimbursement rates for doctors and other health care providers who treat the poorest Californians will be among the dozens of issues lawmakers in Sacramento will address as the new legislative session reconvenes Monday morning.

According to estimates from Gov. Jerry Brown’s office, more than 11.3 million people now receive Medi-Cal benefits. The program has increased dramatically under the Affodable Care Act, which expanded eligibility for the program to single adults, and moves by Brown and Gov. Arnold Schwarzenegger to move 900,000 kids from Healthy Families onto the Medi-Cal rolls.

And yet, California’s reimbursement rates for those who treat Medi-Cal patients are among the lowest in the nation. That means an increasing number of doctors are refusing to treat Medi-Cal patients just as the system is exploding.

The issue of network adequacy is not new, and has been raised by doctors and hospitals among others for years. But this year, the problem is particularly acute.

Making matters worse is the fact that a two-year bump in the federal Medi-Cal reimbursement rate is set to expire, which could lower the payments to doctors and others even more. A two-year Medicaid federal rate increase for primary care providers expired on Jan. 1. Meanwhile, the state has ordered a 10% reduction in reimbursement rates for fee-for-service Medi-Cal primary care providers.

The federal payment bump elevated Medi-Cal primary care provider rates up to Medicare levels for 2013 and 2014. There has been little talk in Congress about extending the temporary rate hike past its Jan. 1, 2015 end date.

The current state budget continues a 10% cut in reimbursements to some healthcare providers which has been offset by the higher federal rate. With that higher federal rate now epired, health care advocates fear even more doctors will refuse to take new Medi-Cal patients.

Lawmakers are sure to make Medi-Cal rates an issue this year, but thus far, Brown has been resistant to any effort to increase rates for those who treat the poorest Californians. But failure to act could undermine Medi-Cal, which has become more important to the state’s healthcare delivery system under Brown’s policy direction and guidance.

Much has been made of the fight between Brown and his fellow Democrats over pressures to increase the safety net, which was pared back during the Great Recession. But no single issue may be more contentious, and more important, than the fight to maintain a vibrant and sustainable Medi-Cal network, which provides healthcare services to 30% of all Californians.