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Medi-Cal Cut Threatens Poor, Disabled

More than 3million patients could be affected by a 5% state reduction in payments to doctors, who say they may phase out services.

January 02, 2006|Carla Rivera and Jeffrey L. Rabin | Times Staff Writers

For 10 years, Wendy Botwin has struggled to overcome brain damage, balance problems and other disabilities suffered in an automobile accident.

Finding doctors willing to provide the specialized care she needs has been just as difficult.

More often than she can count, she has been rebuffed. And her experience is far from unusual. She is on Medi-Cal, the state and federal program for poor and disabled people, and studies show that many physicians consider its rates too paltry to accept.

"It's extremely stressful and frustrating to deal with the whole bureaucratic system and keep getting turned down all the time," said Botwin, 36, of Oakland.

The challenge for patients like her is about to become greater because a 5% cut in Medi-Cal payments took effect Sunday. Nearly 3.3 million patients treated by physicians, dentists and home health agencies on a fee-for-service basis could be affected.

For The Record
Los Angeles Times Wednesday January 11, 2006 Home Edition Main News Part A Page 2 National Desk 1 inches; 37 words Type of Material: Correction
Medi-Cal cut -- An article in the Jan. 2 California section about a 5% state reduction in Medi-Cal payments to doctors stated that patient Sharon Steele has cancer. Steele says she has been cancer-free for 18 years.

Payment for a routine doctor's visit has dropped from $24 to $22.80, less than half the amount a physician can receive from private insurers.

The temporary reduction will expire at the end of the year unless it's extended by the state Legislature. Hospitals, nursing homes, hospice services, pharmacies and labs are not affected. Nor are managed-care plans that serve roughly half the state's estimated 6.7 million Medi-Cal recipients.

Nonetheless, medical groups and advocates for the poor fear that the state cut will fracture an already brittle Medi-Cal system and reduce access to healthcare for some of California's most vulnerable patients.

They warn that doctors -- particularly specialists -- may reject new Medi-Cal patients or drop out of the program entirely.

"There is no question that further reducing already low rates will reduce access," said Linda Rosenstock, dean of UCLA's School of Public Health. "It's not a question of doctors getting out of Medi-Cal; it's a question of how many."

Botwin, who is disabled and can't work, dreads the prospect of seeing her carefully crafted network of healthcare unravel.

"I feel like only rich people are able to get the medical care they need, which is really wrong," Botwin said. "Those of us who need access the most ... have the least access."

The state's move comes just as legislation to reduce federal spending on Medicaid -- the U.S. government's name for programs such as Medi-Cal -- awaits final action in the House of Representatives. The bill would allow states to require patient premiums or co-payments, perhaps further reducing access to care.

Moreover, the state action comes after years of political and court battles over proposed reductions and restrictions in the Medi-Cal program, which, after K-12 education, receives the most state funds. Last year, Gov. Arnold Schwarzenegger sparked intense opposition when he proposed moving half a million elderly, blind and disabled Medi-Cal patients into managed-care plans. That move was put on hold.

The Medi-Cal program has had only one sizable increase in payments to healthcare providers since 1985.

State officials say the reduction is needed to help control Medi-Cal's soaring cost, which is growing by $1 billion a year.

"We don't like the rate reduction at all," said Stan Rosenstein, deputy director for medical services at the state Department of Health Services. "We think providers should get compensated. It's not a desirable change."

He said the Schwarzenegger administration is talking to provider groups about alternative ways to contain costs. But cutting provider payments is "better than reducing benefits" or cutting patients' eligibility for Medi-Cal, he said.

California has been comparatively generous with Medi-Cal patients, Rosenstein said. In the last 20 years, the state has chosen to use its resources to expand eligibility and services rather than significantly boost provider payments, he said.

"Every state believes we've got to do something to contain Medicaid costs," he said.

The reduction is expected to save $65 million out of the nearly $13 billion the state is spending this fiscal year on Medi-Cal. The total budget for the Medi-Cal program is $34.5 billion, most from the federal government.

The California Medical Assn., the professional organization that represents doctors, is seeking legislation to overturn the cut and providing physicians with a list of media talking points.

Among them: Acutely ill patients will seek far more costly treatment in emergency rooms if they cannot find a doctor who accepts Medi-Cal. And California's reimbursement rates for Medi-Cal services are among the lowest in the nation.

Some doctors say any cutback will force them to reconsider their commitment to the program.

Dr. Stuart Finkelstein, an internist and addiction specialist who runs a clinic in Cerritos with his physician wife, said he is torn between a desire to do good by all patients, no matter what their insurance status, and the practical consideration of staying in business.

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