Medi-Cal, “Supercommittee” cuts to hit California, not OC yet

*This article was originally published by the Viễn Đông on 31 October 2011. It was reported by Vanessa White.

WESTMINSTER, California—In efforts to keep California’s budget gap from widening, Medi-Cal providers will see 10 percent reduction in payments.

However, no date has been set for the cuts yet.

On 27 October 2011, Governor Brown announced that California had received federal approval to cut over $623 million from Medi-Cal provider rates. To “ensure that access to care is not compromised as the reductions are implemented,” a monitoring plan will be set up, according to the Brown administration.

So far, the federal government has not given California a date for when cuts will be allowed to start, but they are expected to affect most Medi-Cal covered patients, though not all.

Medi-Cal is California’s state Medicaid system. It covers low-income families with children, seniors, foster children, pregnant women, and people with specific diseases including breast cancer and HIV/AIDS.

People under Medicare, which covers seniors age 65 and older, will not be directly affected by the cuts and will not be forced to enroll in managed care plans as a way for the State to save money.

Although the cuts will be distributed throughout California, Orange County (OC) will not be affected this year, Pharmacist Thu-Hăng Trần of Tran’s Pharmacy in Garden Grove told the Viễn Đông.

Medi-Cal in Orange County (OC) is run under CalOptima, OC’s public health care plan, which works as a “middle-man” receiving funding from the State. CalOptima then gives that funding to OC providers. As CalOptima’s funding has already been allotted for in the 2011-2012 State budget, cuts will not dent it.

Providers in counties without county public health care plans, like Los Angeles and San Diego, receive their funding directly from the State and will experience the cuts.

The cuts were part of a 2011-2012 State budget trailer bill passed in March 2011 that were supposed to go into effect on 1 June 2011, however the State had to wait for federal approval to enact them.

Cuts include a 10 percent reduction in provider payments for multiple outpatient services, including adult physicians and clinics, therapy, optometry, dental, and pharmacy. Nursing home nurses and adult sub-acute care nursing home facilities will also experience 10 percent reductions in provider payments, while acute care nursing facilities will receive 10 percent reductions in provider payments as well as a rate freeze.

However provider cuts will not apply to child physician and clinic services, home health services, hospital based sub-acute care facilities, or outpatient hospital services.

Pharmacist Trần told the Viễn Đông that though the cuts would not yet affect her, many pharmacists throughout California will not even be able to break even under the new cuts.

For example, she said, if a pharmacist as a provider currently pays $100 for the cost of a patient’s medication and the State pays a $5 dispensing fee, then the pharmacy receives a total $105 from the State. This covers the cost of the medication and brings in some profit.

Under the new cuts, the pharmacist will only receive $95 from the State, not even enough to pay for the medication.

Pharmacists will be forced to not carry medication they will not profit from, making it difficult for patients to get medication from their pharmacists. These patients may ask their doctors to fill the prescriptions with generic medications, as they are less expensive than brand name medications.

A lawsuit will be filed in federal court this week, on behalf of providers, patients, and advocates, in attempts to keep the cuts from happening, Pharmacist Trần told the Viễn Đông. A hearing in federal court could happen as early as November 2011.

“We have no choice,” she said.

This is not a first, “Supercommitte” to ensure it’s not a last?

This is not the first time the Viễn Dông has reported on Medi-Cal cuts, meaning this issue of cuts has been a long-lasting one. On 26 July 2011 and 8 August 2011, the Viễn Đông covered Governor Brown’s elimination of Adult Day Health Care (ADHC) centers set to take place on 1 December 2011.

On 7 October 2011, the Viễn Đông covered the U.S. Supreme Court case, Douglas v. Independent Living Center of Southern California, which focused on whether or not people receiving Medi-Cal, their providers, and their advocates can sue California and stop its cuts to Medi-Cal provider rates.  

The U.S. Supreme Court case could change or keep in place the decisions made in California district courts in 2008 and 2009. Those decisions blocked cuts to Medi-Cal provider rates.

Assemblyman for the 69th District Jose Solorio, told the Viễn Đông that people throughout California have experienced enough medical cuts and doctors will only cut services to patients if they themselves see reduced payments.

However, Medi-Cal cuts could only be the beginning, as last week the Congressional “Supercommittee” in charge of figuring out how to fix the national deficit proposed cuts to Medicaid and Medicare.

The Supercommittee’s plan seeks to cut $400 billion from Medicare and $100 billion from Medicaid as part of closing a $3 trillion budget deficit.

Ms. Leah Bolger, with the organization Veterans for Peace, disrupted an opening meeting the Supercommittee held on 26 October 2011.

“We would have enough money for housing and healthcare and everything that we want, if we stopped spending our money in this black hole of the military machine,” she said. “The American people want to tax the rich and end the wars. That’s how we fix the deficit.”