California plans to reduce payments to many Medi-Cal providers by 10%. The federal government’s approval of the budget-cutting measure raises concerns from doctors and others.

By Anna Gorman, Los Angeles Times
October 28, 2011

The Obama administration will allow California to cut hundreds of millions of dollars from Medi-Cal, a move doctors and experts say will make it harder for the poor to get medical treatment.

California plans to reduce rates by 10% to many providers, including physicians, dentists, clinics, pharmacies and most nursing homes, the Centers for Medicare and Medicaid Services announced Thursday.

The cuts “will have a real impact on Medi-Cal patients” because fewer doctors will be willing to see those covered by the program, which serves 7.6 million poor and disabled Californians, said Anthony Wright, executive director of Health Access, a consumer group. The head of the California Medical Assn., which represents doctors, echoed the concern.

Cindy Mann, deputy administrator of the Centers for Medicare and Medicaid Services, told reporters the action gives California the flexibility it had requested to address its budget shortfall. “We know that the reductions that are being approved today will have significant impact on affected providers, and we regret the very difficult budget circumstances that have led to their implementation,” she said.

The cuts are expected to save the state $623 million. California spends $14 billion on Medi-Cal, the state’s Medicaid program.

“The budget actions that the state had to make were very difficult decisions,” said Toby Douglas, director of the state Department of Healthcare Services. “But we knew we had to move forward with these reductions.”

Federal law requires that Medicaid beneficiaries be able to access healthcare services to the same extent as the general population in their area. California health officials will monitor whether the changes will affect that access.

The state withdrew a separate request to cut rates to hospitals and to children’s medical providers after determining those reductions could make it harder for patients to get care.

Yet to be decided is the state’s request to add co-pays for Medi-Cal recipients and limit the number of times people can see a doctor. Under that proposal, patients would have to come up with co-pays of $5 for doctor’s appointments, $50 for emergency room visits and $100 a day for hospital stays. Most beneficiaries would be allowed to visit the doctor seven times a year.

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