Medi-Cal Doctors Have Yet to See Pay Boost Required by Obamacare

March 31, 2014

File photo/Getty Images

File photo/Getty Images

State, managed-care plans slow to distribute funds, hurting low-income residents 

By Hannah Guzik

Everyday George Ma waits for the money the state owes him.

The internist, who sees some of Los Angeles’ most destitute residents and receives meager reimbursement, was supposed to get a pay boost beginning in January 2013 as part of the Affordable Care Act.

But the state Department of Health Care Services and the managed-care plans it contracts with have been slow to turn over the tens of millions owed to California doctors, including Ma. The result is that the federally mandated pay boost is not having its intended effect of encouraging more primary-care doctors to accept low-income patients or accept them in larger numbers.

“I don’t think it does anything for that,” said Ma, past president of the L.A. County Medical Association. “Nothing is encouraging them to take Medi-Cal patients. Nothing’s getting better.”

The new health law, known as Obamacare, has ushered hundreds of thousands of new patients into Medi-Cal since October. Medi-Cal is the state’s version of Medicaid, the federal low-income health program.

Even before the influx of new enrollees, existing Medi-Cal patients had reported having difficulty accessing doctors because many do not accept the insurance.

“It’s difficult to add people to the program while simultaneously cutting resources, and somehow expect the program to better,” said Molly Weedn, associate vice president of public affairs for the California Medical Association.

Reimbursements low in California

The state has one of the lowest Medicaid reimbursement rates in the nation. But under Obamacare, primary-care doctors who treat Medi-Cal patients are temporarily eligible to be reimbursed at the Medicare rate. That equates to a 136 percent pay increase on average in California, according to a Kaiser Family Foundation report.

This pay boost was supposed to go into effect Jan. 1, 2013, but the state just began issuing checks in November. Although the Department of Health Care Services was late issuing the funds, it has said it will pay retroactively from the beginning of 2013.

Since mid-March it has sent out more than $154 million in reimbursement checks.

But many doctors, including those in L.A. County, have yet to see those funds.

That’s because the money is now tied up in most of the managed-care plans that provide Medi-Cal at the county level. The Inland Empire Health Plan distributed reimbursements to doctors before it received the money from the state, but most health plans did not, Weedn said.

“We’ve been getting notices that they’re not going to be able to disseminate payments until between April and June,” she said. “The concern for physicians is that they have been seeing patients under the understanding that they would be getting that bump sooner.”

Doctors in a few areas that have fee-for-service Medi-Cal programs should receive their checks directly from the state, said Anthony Cava, spokesman for the Department of Health Care Services.

Money still tied up 

Many of the managed-care plans have spent the last two months trying to figure out how to distribute the money to doctors, according to officials at three managed-care plans.

“We are currently working with the state to resolve a number of technical issues that have bearing on the accuracy of the payments, so we are still working on the figure,” said Amy Gurango, spokeswoman for L.A. Care Health Plan, the state’s largest managed-care plan with 1.3 million patients.

“We certainly aren’t the only health plan affected, and we are all in active discussions with the state to resolve this quickly.”

Health Net, which operates managed-care plans in 10 counties, including Los Angeles County, will begin issuing checks to providers in the “next few weeks,” said spokesman Brad Kieffer. He emphasized that the state’s deadline for the managed-care plans to distribute the money isn’t until the end of June.

Gold Coast Health Plan, which manages Ventura County’s Medi-Cal program, said it plans to start issuing checks to doctors this week. It will distribute about $5 million, covering the first six months of 2013.

“It’s unfortunate that the payment is a bit late, at least in terms of the year 2013,” said spokesman Steven Lalich. “Hopefully now that the process has been laid out initially, the payments can be made more quickly.”

The payment delay has frustrated clinics that see large numbers of Medi-Cal patients and were counting on the funds, said Karen Schneweis-Schmidt, chief of hospital operations for patient financial services at Ventura County Health Care Agency.

“We have to operate as a business, and that’s hard to do in health care,” she said. “You have someone coming in, and they need help — you can’t turn them away and say come back in four or five weeks.”

State still making changes 

The state was unprepared to implement the fee boost at the outset, Cava said.

The Department of Health Care Services was “delayed due to a number of technical payment and system issues that had to be resolved with CMS (the federal Centers for Medicare and Medicaid Services),” he wrote in an email message.

“Initially, extensive research of the law and frequent consultation with CMS was required, as DHCS had no prior experience completing a project of similar complexity. Some system changes are still being made currently.”

The pay boost lasts only until the end of this year. That’s another concern for doctors, some of whom worry that they may not be able to meet their overhead if they have too many Medi-Cal patients when the incentive disappears in 2015.

Last year Ma said he received only about $10 a month per patient from Medi-Cal. The doctor said he’ll continue seeing the low-income patients in his Chinatown clinic regardless of how much he’s reimbursed, but many doctors in the state will not.

“No one’s taking care of the Medi-Cal patients,” he said. “I have a religious reason — I’m Episcopalian — and I think this is my job. It’s a calling.”

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