{"id":1510,"date":"2023-07-21T09:45:35","date_gmt":"2023-07-21T09:45:35","guid":{"rendered":"https:\/\/healthynewsusa.com\/?p=1510"},"modified":"2023-07-21T09:45:38","modified_gmt":"2023-07-21T09:45:38","slug":"industry-groups-in-california-vie-for-new-medicaid-money","status":"publish","type":"post","link":"https:\/\/healthynewsusa.com\/?p=1510","title":{"rendered":"Industry Groups in California Vie for New Medicaid Money"},"content":{"rendered":"
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SACRAMENTO, Calif. \u2014 California\u2019s powerful health care industry just notched a historic win: The state is going to give it an $11.1 billion infusion to improve care for millions of low-income Medicaid patients.<\/p>\n

But the intense jockeying over the money is only beginning.<\/p>\n

Top state health officials say they plan to plow most of the money into higher payments for doctors, hospitals, and other health care providers who serve Californians covered by Medi-Cal, the state\u2019s Medicaid program. But the framework, hammered out this summer as part of state budget negotiations, lacks critical details, which has set off a lobbying frenzy among health industry groups seeking a cut.<\/p>\n

Even as they battle for their share, industry leaders are quietly plotting a November 2024 ballot initiative to lock in the Medi-Cal payment increases, which they argue are needed to sustain the safety-net program that covers nearly 16 million<\/a> Californians \u2014 a staggering 40% of the state\u2019s population<\/a>.<\/p>\n

\u201cWe are addressing decades of systemic underfunding in Medicaid that has exacerbated inequity and health care provider deserts, where patients are often forced to get their care in emergency departments,\u201d said Dustin Corcoran, the CEO of the influential California Medical Association, which represents doctors.<\/p>\n

Corcoran also leads the coalition negotiating with Gov. Gavin Newsom and fellow Democratic lawmakers in Sacramento over how the money \u2014 a combination of state and federal funding to be doled out over six years \u2014 will be spent.<\/p>\n

\u201cEven with this historic deal, there are still parts of the health care system that are going to struggle to provide the care that patients need,\u201d Corcoran said. \u201cThe coalition is dedicated to ensuring long-term stability and predictability in reimbursement rates in California.\u201d<\/p>\n

California has among the lowest<\/a> Medicaid reimbursement rates in the country, which is often cited as a key reason many low-income patients can\u2019t get care and often face excruciating wait times, especially for primary care, obstetric, and mental health appointments, said Kathryn Phillips, the associate director for improving access to care at the California Health Care Foundation. (KFF Health News publishes California Healthline, which is an editorially independent service of the California Health Care Foundation.)<\/p>\n

\u201cThat\u2019s where the state is struggling the most,\u201d she said. \u201cLow rates are why a physician may not accept Medi-Cal patients, or only accept a low number of patients.\u201d<\/p>\n

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This deal funds the largest increase in base Medi-Cal reimbursement rates in at least 25 years<\/a>, said Jennifer Kent, a former director<\/a> of the state Medicaid agency.<\/p>\n

The money will come from the managed care organization tax, which has been levied since 2005 on health insurers that do business in California. Revenue from the tax, which allows the state to secure billions in federal health care dollars it wouldn\u2019t otherwise receive, has previously been funneled into the state general fund, which can be used for anything state leaders want.<\/p>\n

Under the deal, and for the first time, Newsom and the legislature have agreed to use the money to improve care for poor Californians. Of the $19.4 billion projected to be raised by the tax between 2023 and 2026, $11.1 billion will go directly to Medi-Cal and $8.3 billion to the general fund to offset state spending on Medi-Cal, according to state Department of Finance spokesperson H.D. Palmer.<\/p>\n

The new funding will start flowing next year, with $820 million earmarked for initial rate increases in primary care, obstetric care, and mental health care, Palmer said.<\/p>\n

From 2025 through 2029, the state plans to allocate nearly $2.7 billion<\/a> a year, according to the department. State and industry officials said they plan to direct some of the money to expand medical residency programs for doctors serving low-income people, fund new beds for psychiatric patients, and increase the workforce of other providers such as nurses, mental health therapists, and community health workers.<\/p>\n

But the bulk will go to rate increases for primary care and an array of providers and services, including hospitals and long-term care facilities, abortion care, and emergency services. Higher rates for specialists, such as psychiatrists and dentists, are also desperately needed.<\/p>\n

Although Newsom and state health officials have promised to direct the money to health care providers, they haven\u2019t specified which ones will get increases \u2014 and there\u2019s no guarantee the money won\u2019t be diverted to another program. Medi-Cal, a massive and ballooning program with a budget of $152 billion this fiscal year, is under tremendous pressure. The state continues to expand<\/a> the program to more people and offers a growing list of expensive services, despite the threat of budget deficits.<\/p>\n

\u201cThere has to be more guardrails,\u201d said Assembly member Vince Fong (R-Bakersfield) during a June legislative debate. \u201cThis should not be seen as a revenue grab.\u201d<\/p>\n

Mark Ghaly, Newsom\u2019s health and human services secretary, acknowledged that even though some providers and treatments may be left out initially, the payment boosts represent a critical step toward better access.<\/p>\n

\u201cThe core providers in Medicaid will benefit,\u201d Ghaly told KFF Health News. \u201cThere\u2019s always going to be someone out there with a question and a concern, and I hope that as we learn about them and we hear them, we address them.\u201d<\/p>\n

Ghaly said the tax will bring some Medicaid rates in California from the bottom in the country to the top. While he acknowledged concerns that the money might be diverted in future years, he said Newsom is committed to spending it on Medi-Cal. \u201cWho knows about the uncertainty of the future?\u201d he said. \u201cBut we have basically done as much as you can to hard-wire these changes into the way we design Medicaid. The man with the pen \u2014 the governor of California \u2014 is committed to this.\u201d<\/p>\n

Even though the tax deal isn\u2019t big enough to fix all the problems<\/a> in Medi-Cal, it will improve patient care, said Charles Bacchi, president and CEO of the California Association of Health Plans, which represents private and public insurers.<\/p>\n

\u201cThere\u2019s a lot more work to do hammering out the rate increases and where they should go,\u201d Bacchi said. \u201cWe have to make sure that the funding actually survives the budget process next year.\u201d<\/p>\n

Some providers worry they may be left out.<\/p>\n

\u201cWe\u2019ve argued hard for optometrists to be included,\u201d said Kristine Schultz, executive director of the California Optometric Association, noting that optometrists can\u2019t afford to treat poor patients because of low rates. For example, optometrists get about $39, on average, to conduct an eye exam on a new Medi-Cal patient, while Medicare reimburses $158, she said.<\/p>\n

As a result, she said, patients \u201care not able to get in for months.\u201d<\/p>\n

Ann Rivello, a therapist in San Mateo County specializing in trauma, also cited low rates \u2014 and complicated medical billing demands \u2014 as the reasons she doesn\u2019t accept Medi-Cal patients.<\/p>\n

\u201cI\u2019ve been practicing over 20 years and I do not accept Medi-Cal even though it\u2019s within my values,\u201d she said.<\/p>\n

Detailed rates for most health care treatments for Medi-Cal patients are not publicly available because they are negotiated privately by insurance companies and vary by geography and health insurance plan. And the state has a slew of bonus payments<\/a> it uses to supplement base Medi-Cal rates, further obfuscating how much health care providers receive.<\/p>\n

While Medi-Cal rates vary widely, on average, California reimburses 76% of Medicare rates, Phillips said. Next year, the state plans to raise that base payment rate to 87.5% of Medicare in three target areas \u2014 primary care, obstetrics, and mental health.<\/p>\n

As health care providers battle for their slice of the tax revenue, they say they want to avoid the same lobbying fight each time the state renews the tax, which happens every few years. One option they are considering: a ballot initiative next year that would lock the Medi-Cal funding into the state constitution.<\/p>\n

Bacchi declined to take a position on the concept but said insurers are \u201ctaking a look at it.\u201d He argues that California \u201cneeds to make a long-term commitment to the Medi-Cal program.\u201d<\/p>\n

John Baackes, the CEO of L.A. Care, the largest Medi-Cal insurer, supports the idea. He argues that a permanent increase in Medi-Cal rates would help address the disparities between Medi-Cal and private insurance coverage.<\/p>\n

\u201cThe pandemic showed us that inequality is a life-and-death matter, because if you look at the people who got sick the most and died, they were people of color,\u201d he said. \u201cIf we continue to ignore that, we\u2019re idiots.\u201d<\/p>\n

This article was produced by <\/em>KFF Health News<\/em><\/a>, which publishes <\/em>California Healthline<\/em><\/a>, an editorially independent service of the <\/em>California Health Care Foundation<\/em><\/a>.<\/em>\u00a0<\/p>\n