California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Farr Bill Would Tackle Geographic Gaps in Medicare Pay in Calif.

Today, Rep. Sam Farr (D-Calif.) is expected to introduce a bill that would increase California's total allotment for Medicare reimbursements to address rate inequities among some counties, the Santa Cruz Sentinel reports.

Sen. Dianne Feinstein (D-Calif.) is expected to unveil a similar bill in the Senate (Alexander, Santa Cruz Sentinel, 6/11).

Under current Medicare reimbursement rules, Santa Cruz and 40 other California counties are categorized as "rural," resulting in payments that are about 16% lower than reimbursements for providers in neighboring counties (California Healthline, 4/17).

Such geographic rate differences have deterred some health care providers from accepting Medicare beneficiaries as patients.

Bill Details

Farr's bill and its Senate companion would revise the previously determined geographic areas and calculate cost-of-living differentials using methods similar to those used to calculate Medicare reimbursements for hospitals.

No county would experience a drop in reimbursement rates resulting from the legislation. In fact, the bill calls for increasing the state's total Medicare endowment by $50 million.

A preliminary evaluation by the California Medical Association estimates that the bill would increase Medicare payments for 14 counties. San Benito County would receive the largest rate hike at 13.2%.

Larry deGhetaldi, president of the Palo Alto Medical Foundation's Santa Cruz division, said he expects the rate increase would be sufficient for physicians to resume treating Medicare patients.

One Piece of the Puzzle

Political observers say Farr's bill is likely to be incorporated into one of the larger, more comprehensive health care reform bills under consideration in Congress this year. This would mean the new rate structure would take effect in January 2010 (Santa Cruz Sentinel, 6/11). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.