Hospitals, Doctors Wary of Governor’s Proposed Reductions to Medi-Cal

Hospital officials and physicians are worried about the possible consequences of a provision in Gov. Arnold Schwarzenegger's (R) budget proposal that would eliminate $523 million from Medi-Cal by freezing reimbursement rates for inpatient care and scaling back other benefits, the Silicon Valley/San Jose Business Journal reports. Medi-Cal is California's Medicaid program.

On June 24, California's Department of Health Care Services notified health care providers that the governor's proposal would cap inpatient hospital reimbursement rates at January 2010 levels from July 1, 2010 through June 30, 2011. Certain designated public hospitals would be exempt from the rate freeze.

Schwarzenegger's proposal also would reduce Medi-Cal spending by:

• Enrolling seniors and people with disabilities in managed care programs;
• Eliminating coverage of specific over-the-counter drugs;
• Limiting coverage to six prescriptions monthly, excluding long-term care patients;
• Restricting coverage for physician or clinic visits to 10 annually, excluding long-term care patients; and
• Scaling back other benefits.

Hospital officials also are concerned about a provision in the governor's plan that would require Medi-Cal beneficiaries to contribute $50 copays for emergency department visits and $100 daily copays for hospital stays. Medi-Cal beneficiaries currently do not have copayments for inpatient services and have $5 copays for nonemergency ED visits.

Some officials say the copay changes would add extra burdens to hospitals because the facilities would be responsible for collecting the contributions (Duan, Silicon Valley/San Jose Business Journal, 7/2).

More Medi-Cal Funding in Jeopardy

In related news, state lawmakers say California might need to shut down certain hospitals and health care service providers if the federal government fails to approve an extension of state Medicaid assistance through the Federal Medical Assistance Percentage program.

California had expected to receive $1.9 billion in federal funding for Medi-Cal through the extension, which has stalled in the U.S. Senate.

To avert the loss, Schwarzenegger has joined 30 other governors to lobby federal lawmakers for the Medicaid funds (Sepulvado, "KXJZ News," Capital Public Radio, 6/30).