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Intermediate Care Facilities Catch a Break

A U.S. District Court judge this week issued a ruling that temporarily prohibits California from freezing Medi-Cal reimbursement rates for intermediate care facilities that care for residents with developmental disabilities. Medi-Cal is California’s Medicaid program.

A permanent ruling is expected soon, possibly by the end of the week. However, even the temporary stay is a big victory for developmental services providers and their patients, according to Deborah Pacyna of the California Association of Health Facilities.

“These providers are required to provide quality care 24 hours a day, and yet they’re having to pay out of their own pockets to do that, to the point of possibly closing,” Pacyna said, adding, “They’re paying for patient assessments, staffing, fuel, food, in spite of being faced with this rate freeze, so we hope the judge recognizes this financial hardship.”

There are about 1,100 small intermediate care facilities, or ICFs, in the state. These small, six-bed-maximum facilities — which usually are run out of individuals’ homes — offer care to people who often have severe mental and emotional issues, according to Pacyna.

Nearly all of the 6,500 people receiving care at these ICFs are Medi-Cal beneficiaries — which means, Pacyna said, that reimbursement rates already are below reasonable cost.

“These facilities operate on an extremely thin margin,” Pacyna said. “At some point you have to say, ‘How much longer can I do this?'”

Even if the judge changes the May 2 temporary prohibition on a rate freeze to more permanent status later this week, Pacyna said there’s still miles of legal landscape to walk.

“This is just the first step,” she said, adding, “We still would have to go back to state court to get the money [owed at a higher reimbursement rate].”

The alternative to the intermediate care facilities is not a pretty prospect, Pacyna said. “Without these ICFs, these clients would have to be re-institutionalized,” she said. “And of course that’s more expensive. I think everybody is in agreement that community-based settings are the right settings for these patients. No one wants to be in an institution if they can help it.”

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Capitol Desk Medi-Cal Mental Health