L.A. Care Health Plan Will Not Pass Medi-Cal Cuts to Provider Network
L.A. Care Health Plan, the largest Medi-Cal managed care plan in California, has announced that it will absorb the recently approved cuts to Medi-Cal reimbursements and not pass on costs to its directly contracted providers, Payers & Providers reportsÂ Â (Payers & Providers, 12/8). Medi-Cal is California's Medicaid program.
Background on Medi-Cal Payment Cuts
In October, CMS approved the state's plan to reduce certain Medi-Cal payments by 10%. State officials have projected that the cuts will save $623 million.
According to the state Department of Health Care Services, CMS has allowed the state to make a 10% reimbursementÂ cut to:
- A number of providers and outpatient services, including clinics, dentists, laboratories, optometrists and pharmacists; and
- Freestanding nursing and adult subacute care facilities, as well asÂ other nursing careÂ facilities.
The cuts are retroactive to June 1 (California Healthline, 11/30).
Details of L.A. Care's Move
L.A. Care CEO Howard Kahn estimated that it will cost L.A. Care between $10 million and $20 million to absorb the reimbursement cuts.Â He said funds will come from the plan's general fund and via cost-containment initiatives.
Kahn noted that the decision to absorb the cuts was made to help preserveÂ L.A. Care'sÂ network of health care providers.
L.A. Care covers about 800,000 Medi-Cal beneficiaries in Los Angeles County. Kahn said L.A. Care has been adding about 10,000 dual-eligible beneficiaries each month (Payers & Providers, 12/8).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.