Downey Regional Medical Center Ends Medi-Cal Contract

Officials for Downey Regional Medical Center on Friday announced that they have canceled their contract with Medi-Cal and will no longer offer nonemergency or outpatient services to beneficiaries, the Long Beach Press-Telegram reports. Hospital officials said that reimbursement for treating Medi-Cal beneficiaries is not sufficient to cover the cost of care. Medi-Cal reimburses Downey Regional $850 per day for the treatment of beneficiaries, but hospital officials said it costs $1,623 per day to provide care.

Last year, about 18% of inpatients treated at Downey Regional were Medi-Cal beneficiaries. Hospital officials estimate the financial loss from treating Medi-Cal beneficiaries at about $7 million.

The hospital also estimates that it lost more than $8 million by providing uncompensated care and about $2 million for emergency services. Downey Regional officials said they are considering separating from the 911 system in the next several years to limit the number of admissions to its emergency department.

Hospital administrators said they were prompted to cancel the contract after a "breakdown" in discussions over the last six months with Department of Health Services officials, according to the Press-Telegram. The hospital suggested that DHS increase Medi-Cal reimbursement to $1,650 per day, but DHS officials instead offered a 25% increase.

Downey Regional is referring Medi-Cal patients to nearby hospitals.

Robert Fuller, executive vice president of Downey Regional, said, "If there's any reasonable way to cover costs, we'd be happy to rejoin the program" (Robes, Long Beach Press-Telegram, 10/15).