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New Legislative Strategies May Emerge To Raise Medi-Cal Reimbursement Rates

Legislative strategy may shift in the coming session over the issue of low Medi-Cal provider reimbursement rates, one lawmaker said.

California’s Medi-Cal provider payments are among the lowest Medicaid rates in the nation — and that was true even before the 10% payment cut passed by the Legislature in 2011. The reduction was instituted in September 2013 after almost two years of court battles, eventually won by the state.

Many lawmakers point out the original legislative agreement was made under great duress, during a severe budget crisis. As soon as state finances began to improve, legislators tried to reverse the across-the-board cuts.

That effort will continue, said Sen. Richard Pan (D-Sacramento), former chair of the Assembly Committee on Health — but this year, that effort might take a different form.

“If it’s not across the board, then maybe it could be targeted,” Pan said. “Maybe targeting 5%, or targeting specific kinds of providers.”

The most recent legislative attempt to reinstitute pre-2011 Medi-Cal provider rates was AB 1805 by Assembly member Nancy Skinner (D-Berkeley) with Pan as co-author. Sen. Pan also authored a bill when he was in the Assembly last year, AB 1759, which would have instituted an independent analysis of rates’ impact on access. Neither of the bills got out of committee.

Pan said it’s only a matter of time before low provider rates lead to access problems.

“This isn’t like the old days, Medi-Cal can’t be the program for everyone else to subsidize,” Pan said, referring to the higher rates paid by private insurance companies that have been cited as a primary factor to allow providers to see Medi-Cal patients. “When you take a look at where we’re going to be, with a third of the state’s population on Medi-Cal, it has to pull its own weight. When it’s this big, it needs to pay its own costs.”

At the root of Medi-Cal success, Pan said, is the payment system. The shortage of providers can become severe if providers are unwilling to lose money by seeing Medi-Cal patients.

“We need to face up to that and adjust the payments,” Pan said. “When we look at Medi-Cal, let’s look at what the access issues are. There are some across-the-board issues, but there are also specific areas. It’s time to have a conversation about access.”

Categories: Capitol Desk, Medi-Cal