Medi-Cal cuts worry Merced area health organizations

yamaro@mercedsunstar.comDecember 18, 2012 

— A 10 percent cut to the Medi-Cal reimbursement rate would make it more difficult for patients who use it to get the care they need, said Christine Muchow, executive director of the Merced-Mariposa County Medical Society.

Last week, the 9th Circuit Court of Appeals ruled that California can cut its Medi-Cal reimbursement rate by reversing an earlier decision that blocked the cuts, according to the California Medical Association.

Medi-Cal is the state's Medicaid program. It provides health coverage for low-income families.

"I believe that we would have a bigger problem with access to care," Muchow said of the reimbursement cut. "The other problem with that is that it causes congestion at the emergency room because they can't get access."

The state had proposed the cut in 2011 to help solve its budget woes.

Molly Weedn, spokeswoman for the California Medical Association, said her group is hoping the state will reevaluate the cut because its financial situation is better now than when it was first proposed.

The association has 45 days from the date when the ruling was issued to ask for a rehearing by all nine judges, Weedn said. It was only heard by three judges when the ruling was issued.

Weedn said the association is weighing its options.

H.D. Palmer, spokesman for the California Department of Finance, said the state is planning to move forward with the cut, but the date for it to take effect hasn't been confirmed.

Officials will wait to see if the association asks for the rehearing. "Until that happens or doesn't happen, this would not go forward," Palmer said.

The overall estimated annual savings from the cuts would be $659.3 million, of which $329.7 million would be state general fund savings, he said. The program is funded with a combination of federal and state dollars.

That doesn't include the retroactive savings of going back to June 2011, which would be around $248.9 million. Palmer said roughly half of that would be state general fund savings.

The Central California Alliance for Health manages Medi-Cal care in Merced County. It serves around 75,000 Medi-Cal members in the county, said Alan McKay, executive director for the alliance.

There are more than 2,000 providers in the region where the alliance operates, which includes Merced, Santa Cruz and Monterey counties.

The alliance would not necessarily be required to implement those cuts, McKay said. "I think our board is very concerned that we not lose access to physician services in Medi-Cal," he said.

"It's likely to be that the cuts not be locally imposed," McKay said. "In that case, the alliance would subsidize the cuts and keep physician payments without the cuts."

However, he said that final decision would need to be made by the governing board at a meeting next year.

The cuts would come at a time when children under the Healthy Families, the state's low-cost insurance program, will be transferred to Medi-Cal as part of the federal health care reform.

In Merced County, about 8,000 children will be transferred to Medi-Cal from Healthy Families next year.

"These issues combined with the cuts have the potential to cause a serious access problem in Merced County," Muchow said.

Reporter Yesenia Amaro can be reached at (209) 385-2482 or

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