Low Reimbursement Rates Prompt Madera Community Hospital to Cancel Medi-Cal Contract

Citing low reimbursement rates, a nursing shortage and increasing energy and insurance costs, Madera Community Hospital is planning to cancel its Medi-Cal contract Oct. 29, the Fresno Bee reports. If the contract is canceled, Madera will continue to offer outpatient procedures for Medi-Cal beneficiaries. However, beneficiaries seeking treatment in the emergency room will be sent to another hospital if they can be transferred safely. If patients cannot be transferred, they will be moved as soon as they are stable. Twenty-five percent of the 1,800 patients that use the hospital each month are Medi-Cal beneficiaries. In response to the hospital's plans, Madera County Supervisor John Silva is drafting a letter to area lawmakers in the hope that they can help the hospital and the California Medical Assistance Commission, which negotiates reimbursement rates, "reach a compromise" that will keep the hospital in the program. On two other occassions, Madera has sent notice to cancel its Medi-Cal contract but ended up "coming to terms with CMAC." However, hospital CEO Robert Kelley said he believes the contract will expire this time. The hospital began renegotiating the contract in December. Kelley said, "We weren't close in December, and we've suffered even more cost increases since then. We haven't even been close enough to sit down at the same table together." He added that when the CMAC offered an "extremely small" increase in Medi-Cal rates, the hospital asked to cancel its contract. CMAC Executive Director Byron Chell said the hospital's decision "disappointed" him, adding, "It is Madera Community who terminated the contract with the state. I would just as soon have them in the program, but it was their decision to leave" (Correa, Fresno Bee, 10/19).