Medi-Cal squeezes providers

SACRAMENTO, Calif. - Medi-Cal, California's Medicaid program, is less and less of a viable business for providers, they say.

In June, Gov. Jerry Brown signed a state budget that includes an across-the-board cut of 10% to all Medi-Cal providers, including HME providers, physicians and hospitals. The cut was slated to go into effect July 1, but CMS needs to approve it first. State officials estimate the cut would save $623 million.

"A big provider group met with (CMS administrator) Donald Berwick a couple of weeks ago, encouraging him not to accept the cut," said Bob Achermann, executive director of the California Association of Medical Product Suppliers (CAMPS). "There's safety in numbers. We are all taking about how this could impact access."

There is some flexibility in the proposal: The state could cut reimbursement for certain provider groups, products or services, but not others; or it could a smaller cut across-the-board, said Achermann.

Any cuts are a concern for HME providers already grappling with competitive bidding and ongoing reimbursement reductions. CAMPS recently provided information to CMS about the cumulative effect of all these changes.

"Provider pools are being reduced and you are going to have limited access to certain services," said Achermann. "We know people who are getting out of the business, or abandoning certain patient pools."

Adding to the squeeze: Medi-Cal has begun moving seniors and persons with disabilities into managed care plans--a total of about 450,000 beneficiaries. The transition will take place over about a year.

"A lot of providers have not signed contracts with a lot of these HMOs," said Tony Myrell, president of Premier Medical in Colton, Calif. "Now they find themselves losing quite a bit of their population."

It's the beneficiaries who will suffer, said Achermann.

"The plans think that they can handle all comers," he said. "But a lot of these patients have more acute chronic needs and have more needs on an ongoing basis."