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Simi Valley Hospital stops accepting Medi-Cal patients

Facility lost $2.5 million last year because state reimburses only 53% of the costs. Outpatient service will continue.

December 13, 2007|Gregory W. Griggs | Times Staff Writer

Citing excessive costs, Simi Valley Hospital has terminated its state contract to accept Medi-Cal patients and will now treat such patients only on an emergency or outpatient basis.

The state's Medi-Cal reimbursement rate was too low, so the 153-bed hospital ended its contract with the state Saturday, said hospital spokesman Jeremy Brewer. Medi-Cal is the state's version of Medicaid and covers the poor, elderly, pregnant and disabled.

Brewer said Medi-Cal paid Simi Valley Hospital about 53% of the cost of providing patient services, which resulted in a $2.5-million loss in 2006.

"Economically, we can't afford a $2.5-million loss," Brewer said. "It jeopardizes our ability to reinvest money in providing quality healthcare to the community."

As required by law, Simi Valley Hospital will continue to treat all emergency room patients regardless of their ability to pay, he said. But once stabilized, Medi-Cal patients will be transferred to another facility, he said.

The hospital will continue to provide outpatient care, which includes lab work and some same-day surgeries and treatments, he said. Certain non-life-threatening conditions, such as patients on respirators or with brain injuries, also will continue to be covered.

Simi Valley Hospital is the first in Ventura County to withdraw from the state program, although 16 hospitals statewide have terminated their Medi-Cal contracts since 2002, officials said. Of the more than 460 hospitals in California, 207 have Medi-Cal contracts.

"It's unfortunate whenever we lose a partner . . . but from our perspective there should be few problems with beneficiaries going to other hospitals for services," said Tony Cava, spokesman for the state Department of Health Care Services. There are seven other hospitals in Simi Valley Hospital's service area to accommodate its Medi-Cal patients, which is 8% to 10% of its patient load.

Los Robles Regional Medical Center in Thousand Oaks, the closest neighboring hospital, learned of the action Monday when Simi Valley Hospital personnel called looking for unused beds to transfer patients.

"To their credit, we haven't seen them take out a full-page ad to announce the change," said Jim Sherman, Los Robles' president and chief executive.

No patients have been transferred to Los Robles, and their acceptance will be based on available space and whether an appropriate physician who accepts Medi-Cal insurance is on site at the time, he said.

Los Robles, which is reimbursed at about the same rate as Simi Valley Hospital, doesn't intend to end its Medi-Cal contract, said Sherman, adding that such patients represent about 4% of his hospital's patient load.

California ranks behind all other states and Puerto Rico in its level of Medi-Cal funding, said James Lott, executive vice president of the Hospital Assn. of Southern California. Also, the number and proximity of hospitals in the region have led the state to push down reimbursement levels about 17% below what is paid, on average, in Northern California.

"Most hospitals try to hang in as long as they can because this is a population in need," Lott said. "It's only when the continued losses threaten their viability that they take this measure. When you're only getting 53 cents on the dollar, you can never make that up in volume."

Lott and others in the industry said relief would come only with meaningful healthcare reform.

USC professor Glenn Melnick, director of Center for Health Policy Management, said this was the time of year when hospitals renegotiate reimbursement rates with the state.

"This could be a negotiating ploy," Melnick said. "One outcome is that they threaten to drop out, go back to the table and then negotiate a new rate."

Simi Valley City Manager Mike Sedell said the city was arranging a meeting early next week at the city's Senior Center where Medi-Cal recipients and others could have their questions answered.

Simi Valley Hospital discusses the issue on its website,, and has set up a Medi-Cal information line at (805) 955-7000 that will be staffed weekdays from 8 a.m. to 4 p.m.

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