Providers Say Medi-Cal Cuts Will Affect Rural Care Significantly

Officials at California's rural hospitals are warning that their patients could lose access to health care services because of the latest set of Medi-Cal cuts, the Sacramento Bee reports. Medi-Cal is California's Medicaid program (Smith, Sacramento Bee, 11/30).

Background

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% reimbursement 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 as other nursing care facilities.

The cuts are retroactive to June 1 (California Healthline, 11/22).

Implications for Rural Providers

Rural hospital officials said that their facilities for elderly and long-term care patients would be especially affected by the payment reductions and that some facilities could be forced to close.

Administrators at rural facilities added that patients who receive skilled nursing care in rural areas likely would have difficulty locating new facilities to receive care.

Matthew Rees, CEO of the Mayers Memorial Hospital District in Fall River Mills, said that at his facilities, 97% of skilled nursing patients are covered by Medi-Cal and there are limited revenue sources to help fund operations. Though some patients also are Medicare beneficiaries, Medicare provides limited coverage of skilled nursing care (Sacramento Bee, 11/30).

Challenges To Block the Cuts

The California Medical Association and other professional medical associations have filed a lawsuit against the state and HHS challenging the Medi-Cal reimbursement cuts (California Healthline, 11/22).

Meanwhile, the California Hospital Association has petitioned a federal court to prevent DHCS from implementing Medi-Cal payment cuts for skilled nursing facilities in acute care hospitals (California Healthline, 11/23).

The hearing for CHA's request for a preliminary injunction is scheduled to take place in federal court in Los Angeles on Dec. 19. According to the Bee, it remains unclear when the cuts will take effect (Sacramento Bee, 11/30).