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Process Begins for Medi-Cal Provider Cuts

The Department of Health Care Services this week outlined its plan to implement a state-ordered 10% cut to Medi-Cal providers’ reimbursement rates.

It will begin Sept. 5, starting with medical transportation and dental providers.

The reimbursement rate for durable medical goods will drop starting Oct. 24  and the bulk of the cuts — to physicians, pharmacists and clinics — will begin Jan. 9, 2014, according to a document posted on the DHCS website on Wednesday.

“What we find interesting and disheartening is that pediatric dental services are not exempted [from the rate cut],” said Jenny Kattlove, director of Strategic Health Initiatives at The Children’s Partnership, a not-for-profit children’s advocacy group.

“The state was going to exempt most children’s services because it would impact access to care,” she said. The idea that children’s dental care is somehow different from that, she said, is ridiculous.

“That’s absolutely not the case,” Kattlove said. “Access will be affected because one of the top reasons dentists do not see pediatric patients is because of reimbursement rates.”

California already ranks among the bottom three states in the nation in Medi-Cal reimbursement rates — and that’s before this 10% cut, she said.  

“This can only make it worse,” Kattlove said.

A written statement from DHCS said access to care likely will not be impacted, but if it is, the state’s monitoring plan should be able to correct any problems.

In addition, DHCS made exemptions for three specific groups: some not-for-profit dental pediatric surgery centers, distinct part Level B nursing facilities and certain prescription drugs used to treat serious conditions such as hemophilia or multiple sclerosis.

“The exemptions were made to preserve access for our Medi-Cal members,” said a statement from Norman Williams, deputy director of public affairs for DHCS. “We have authority to make the exemptions because state law grants the authority to the department to determine if the reductions comply with federal law.  In approving the payment reductions, the federal government also required and approved an access-monitoring plan that ensures that we sustain sufficient access for our Medi-Cal members. In the case of these rural [distinct part nursing] facilities, pediatric dental care and prescription drugs, we have determined that an exemption was necessary in order to protect access to care as required by the federal government.”

Kattlove said pediatric dentists have endured the low rates out of a sense of duty to low-income Medi-Cal children. “Anecdotally, I have heard dentists see these patients, in a sense, like it’s pro bono work,” Kattlove said.

She worried the new cut, ordered by the state Legislature and approved by the governor in 2011 then held in limbo by court action until now, will be the last straw for providers.

“In terms of pediatric dentists, I suspect they’ll stop taking children in Medi-Cal,” Kattlove said. “That’s on top of having so many more children and adults enrolled [in Medi-Cal], there will such a great demand there. It will just be a bigger mismatch between medical providers and patients.”

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