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California Docs 'Extremely Angry' with CMS over Medicaid Cuts

By John Reichard, CQ HealthBeat Editor

October 28, 2011 -- The California Medical Association blasted a decision by federal officials this week to approve $623 million in Medicaid cuts that state officials asked for. The group says the cuts will deny poor people access to doctors, drive many sick Californians into costly emergency room care and badly weaken the state's Medicaid system just as millions of uninsured residents get access to coverage under the federal health care overhaul law.

"CMA is extremely angry with CMS for approving these cuts in light of the overwhelming access to care problems in the state's Medi-Cal program," the medical group said in a statement Oct. 27. "The cuts will unquestionably cause irreparable harm to patients by forcing physicians out of the Medi-Cal program."

Cindy Mann, head of the federal part of the Medicaid program, said that the cuts would be monitored to ensure that patients have access to care.

California officials said that they received federal approval for a 10 percent cut in payments to doctors, clinics, optometrists, therapists, labs, dental services durable medical equipment, and pharmacy. They also got the nod for a 10 percent payment reduction to free-standing nursing facilities and adult subacute care facilities.

State officials said they would no longer ask for to 10 percent payment cuts to doctors and clinics for treating children. The California Department of Health Care Services said it is "still reviewing some long-term care services to determine if additional proposed reductions should be reduced or in any additional reduction would be appropriate."

Department of Health Care Services Director Toby Douglas said "we value our provider partners and look forward to continuing our service to our most vulnerable populations. We will conduct ongoing monitoring and assessment of beneficiary access, thus ensuring they continue to receive essential health care services."

CMA said that "California's Medi-Cal rates are already almost the lowest in the nation. Currently, half the doctors in the state cannot afford to participate in the program. The gaping hole in the safety net will be further exacerbated as there will be three million uninsured newly eligible for Medi-Cal in 2014 under the federal health reform legislation."

CMA's CEO, Dustin Corcoran, said that "the President built his expansion of access to care on the Medi-Cal system and with this decision his administration has effectively destroyed it. Adding three million patients to Medi-Cal while reducing physician resources is nothing but a recipe for disaster."

CMA said that it commissioned an independent study that found 49 percent of Medi-Cal patients are unable to get health care when they need it, compared to just 26 percent of privately insured patients.

James T. Hay, CMS's president, said that "with these cuts, physicians will only be reimbursed $11 per Medi-Cal patient visit, when it costs the physician several times that to provide" care. The CMA statement also said that recent data show emergency room use by Medi-Cal patients increased 30 percent between 2007 and 2009.

Cindy Mann, director of the CMS Center for Medicaid and CHIP Services said, "We are providing California with flexibility to address their difficult budget circumstances while protecting the health care needs of Californians served by the Medicaid program. Many of the state's rate cut proposals are now off the table, and we and the state will monitor implementation of the remaining reductions on an ongoing basis to ensure that they do not jeopardize Californians' access to care."

According to the CMA, CMS has yet to rule on other cuts requested by California, including $5 co-payments for physician visits, $50 co-payments for ER visits, and a cap of seven office visits per year.

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