Scripps Encinitas, Scripps Memorial La Jolla Hospitals Terminate Medi-Cal Contracts
Scripps Encinitas and Scripps Memorial La Jolla hospitals this week notified the state that they are terminating their contracts with Medi-Cal and soon will stop accepting nonemergency Medi-Cal patients because of the freeze in reimbursement rates that took effect Jan. 1, the San Diego Union-Tribune reports. Keith Berger, executive director of the California Medical Assistance Commission, which sets Medi-Cal reimbursement rates, said that last year's budget included a freeze on Medi-Cal rates at the 2003 levels for the state's 230 contracted hospitals because of the state budget deficit. Less than 25% of patients at the two hospitals, which are affiliated with San Diego-based not-for-profit health system Scripps Health, are classified as low-income patients; if more than 25% of the hospitals' patients were classified as low-income, the facilities would receive "millions in annual federal subsidies," which they would lose by terminating contracts with Medi-Cal, according to the Union-Tribune. "We wouldn't consider this if there weren't a significant gap between our costs and the reimbursement we get from Medi-Cal," Marc Reynolds, Scripps vice president in charge of contract negotiation for the hospitals, said. Scripps officials did not comment on how many patients would be affected.
"Scripps is just the first one on the block," Duane Dauner of the California Healthcare Association said, adding that other hospitals "have contacted me saying they are actively considering it and are likely to be forced to do it, too." Scripps Health's three-year contract with Medi-Cal expires Jan. 25 and is one of the first health system contracts to come up for renewal this year. San Diego health advocate Greg Knoll said that Scripps' contract termination "opens up a Pandora's box if a lot of hospitals get out of their obligation to take care of these people. Patients will have Medi-Cal coverage but no hospital or doctor to go to." Leslie Franz, spokesperson for the University of California-San Diego Medical Center, where 50% of the patients are Medi-Cal beneficiaries, said that the facility "could easily be pushed into disarray" by trying to absorb the Medi-Cal patients that were being turned away from other hospitals. "We can't just let 60 more patients into the hospital (each month)" (Clark, San Diego Union-Tribune, 1/9).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.