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Riverside Lobbying for Raise in State Health Care Funding

Health care and government officials in Riverside County have banded together to lobby the state to adjust reimbursement rates they say are inadequate and creating a crisis in health care access.

Riverside County has the state’s second-lowest reimbursement rate for health care services for the indigent population and mental health services, according to county officials. This state money — separate from Medi-Cal and Medicare — is allocated to county governments that are responsible for providing mental health services and health care coverage for those who do not qualify for or are not enrolled in any other subsidized coverage.

“We’ve identified this disparity, and we’re talking with legislators about the problem,” said Rebecca Patchin, chair of the Riverside County Access to Care Coalition. “We’ve got to figure out a way to fairly redistribute the money in the state.”

Riverside officials are also lobbying for increases in Medicare reimbursement rates, which also fall below rates in many other counties.

The state formula for determining reimbursement rates for indigent and mental health, along with low Medicare rates shortchange local doctors and hospitals millions of dollars each year, officials said.

The Riverside County Access to Care Coalition was formed two years ago to address the inequities in county reimbursement rates. Coalition members include the Hospital Association of Southern California, Riverside County Medical Association, Riverside County Community Health Agency, Inland Empire Health Plan, Kaiser Permanente and Riverside County Regional Medical Center.

The coalition has been lobbying lawmakers to change the formula that determines how much state money is distributed to each of California’s 58 counties.

“What we’re trying to do is bring this to the forefront of everybody’s mind,” said Koen Brown, deputy director of ambulatory care for Riverside County Department of Public Health.

Raising awareness among lawmakers is critical because the only way to change reimbursement rates for county services would be through state legislation.

Formula Called ‘Outdated’

Officials say state and Medicare reimbursement formulas have not been updated in decades and have not kept pace with changing demographics.

Despite having a larger population and more people who live below the poverty line, Riverside County health care providers receive approximately one-quarter of the reimbursement rate given to providers in San Francisco County, which has the highest reimbursement rate in the state.

The state allocation for health care services in Riverside County is $45.24 per capita, compared with $199.82 per capita for San Francisco County, according to numbers provided by the Riverside County Access to Care Coalition.

Likewise, Medicare reimbursement rates have not kept up with changing times.

Patchin said the reimbursement formula — which is based on commercial rent, salaries and medical liability premiums — is incredibly complex. Different areas of the state have different conversion factors, she said.

“In the end, what it comes down to is formulas the state uses for reimbursement go back to how the allocation was 35 to 40 years ago,” she said. “It’s old, old numbers.”

From Rural to Urban

Forty years ago, Riverside County was a rural county, with much of its economic base derived from agriculture. But the county has witnessed dramatic population growth in recent years, as homebuyers, attracted to low home prices, flocked to the Inland Empire from Los Angeles, Orange County and San Diego.

Riverside County is now the fourth most populous county in the state. Historically, Riverside County has been compared to Kern County, a smaller, less-developed county, Brown said.

“That’s where the fallacy is, I believe. Our county is no longer a farmland, rural county,” she said. “We have huge urban areas, and we have huge growth.”

The six counties with the lowest per capita state reimbursement rates are (in order) Placer, Riverside, Ventura, San Luis Obispo, Orange and San Bernardino.

Officials were quick to make assurances that they don’t want to take money away from other counties.

Adding more money to the pot that is divided among counties could be a solution, but Patchin said that may not be feasible given the state’s current economic challenges.

“One solution would be instead of taking money away from counties, to freeze some of those who are getting a disproportionate amount of money, so new money in the system goes to those who are most disadvantaged,” she said.

Shortage of Doctors

Low reimbursement rates have had several effects. For example, officials say the low Medicare, Medi-Cal and state reimbursement rates have contributed to the region’s shortage of doctors. Riverside County has 34 primary care physicians for every 100,000 people, which is half the recommended number.

“We’re having a hard time attracting physicians,” Brown said. “If you’re a physician trying to open a private practice, are you going to want to open a private practice where you’re going to get 27% less?”

Brown was referring to how the Medicare formula pays doctors in Orange County and San Francisco more than those in Riverside County.

There is hope that UC-Riverside’s plans for a School of Medicine will help address the region’s shortage in doctors. The school will be the first public medical school to be built in California in more than 40 years.

The coalition estimates that if Riverside County had the recommended number of physicians per capita, the $1 million generated per practice would funnel nearly $5 billion per year into the local economy.

The idea is that a local medical school will help retain physicians because there is a tendency for graduates and alumni of residency programs to stay within a radius of 50 to100 miles of where they complete their training.

Patchin, however, acknowledged that retaining doctors in a county that has some of the lowest reimbursement rates in the state could prove difficult.

“That’s why it’s hard to recruit and retain physicians when they can go to other parts of the country and have a better income,” she said. “It’s an unsustainable practice plan to try to survive on Medicare and Medi-Cal. They don’t pay enough to pay the overhead, let alone let the physician take any income out of the practice.”

Rising Demand, Diminished Funding

As the effects of the recession have taken hold in the Inland Empire, officials are worried that an overtaxed health care system — already hurt by low reimbursement rates and state cuts — could be pushed to the brink. Since 2008, the county has been forced to reduce the number of family care center visits by 30,000 due to state budget cuts, according to numbers provided by Patchin. In 2009, patient visit demand reached 175,000, but the county health system was only able to accommodate 160,000 visits. That disparity is expected to worsen this year.

Meanwhile, unemployment in the county has topped 14%, and with it, the number of the uninsured has grown.

As of 2007, 513,860 county residents, or 28% of the population, were uninsured.

Enrollment in the Riverside County Medically Indigent Services program has more than doubled to 16,644 from 8,108 since the 2007 fiscal year, according to numbers proved by Patchin.

Despite these alarming numbers, Riverside County lags well behind other counties in reimbursements for people with annual incomes below the poverty level who cannot afford health insurance.

The county is the fifth fastest growing county for people living below the federal poverty level, but ranks fourth to last in allocations for that population, Brown said. Riverside officials said they want to get ahead of the curve now by addressing reimbursement rates because health care reform is expected to further increase the number of people receiving care through the county health system.

“One of the big questions is, are we going to be able to cover … the extra demand that’s going to be unleashed by this expanded coverage in the short term?” said Riverside County Supervisor Bob Buster, a longtime advocate for healthcare access.

“In some respects the problems are going to be outlined in even sharper relief in the next couple of years,” Buster said.

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