Connect with us

Kaiser Health News

Industry Groups in California Vie for New Medicaid Money

Published

on

by Angela Hart and Samantha Young
Fri, 21 Jul 2023 09:00:00 +0000

SACRAMENTO, Calif. — California’s 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.

But the intense jockeying over the money is only beginning.

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’s 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.

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 Californians — a staggering 40% of the state’s population.

“We 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,” said Dustin Corcoran, the CEO of the influential California Medical Association, which represents doctors.

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

“Even 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,” Corcoran said. “The coalition is dedicated to ensuring long-term stability and predictability in reimbursement rates in California.”

California has among the lowest Medicaid reimbursement rates in the country, which is often cited as a key reason many low-income patients can’t 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.)

“That’s where the state is struggling the most,” she said. “Low rates are why a physician may not accept Medi-Cal patients, or only accept a low number of patients.”

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

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’t otherwise receive, has previously been funneled into the state general fund, which can be used for anything state leaders want.

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.

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.

From 2025 through 2029, the state plans to allocate nearly $2.7 billion 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.

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.

Although Newsom and state health officials have promised to direct the money to health care providers, they haven’t specified which ones will get increases — and there’s no guarantee the money won’t 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 the program to more people and offers a growing list of expensive services, despite the threat of budget deficits.

“There has to be more guardrails,” said Assembly member Vince Fong (R-Bakersfield) during a June legislative debate. “This should not be seen as a revenue grab.”

Mark Ghaly, Newsom’s 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.

“The core providers in Medicaid will benefit,” Ghaly told KFF Health News. “There’s 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.”

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. “Who knows about the uncertainty of the future?” he said. “But 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 — the governor of California — is committed to this.”

Even though the tax deal isn’t big enough to fix all the problems 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.

“There’s a lot more work to do hammering out the rate increases and where they should go,” Bacchi said. “We have to make sure that the funding actually survives the budget process next year.”

Some providers worry they may be left out.

“We’ve argued hard for optometrists to be included,” said Kristine Schultz, executive director of the California Optometric Association, noting that optometrists can’t 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.

As a result, she said, patients “are not able to get in for months.”

Ann Rivello, a therapist in San Mateo County specializing in trauma, also cited low rates — and complicated medical billing demands — as the reasons she doesn’t accept Medi-Cal patients.

“I’ve been practicing over 20 years and I do not accept Medi-Cal even though it’s within my values,” she said.

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 it uses to supplement base Medi-Cal rates, further obfuscating how much health care providers receive.

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 — primary care, obstetrics, and mental health.

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.

Bacchi declined to take a position on the concept but said insurers are “taking a look at it.” He argues that California “needs to make a long-term commitment to the Medi-Cal program.”

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.

“The 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,” he said. “If we continue to ignore that, we’re idiots.”

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation. 

By: Angela Hart and Samantha Young
Title: Industry Groups in California Vie for New Medicaid Money
Sourced From: kffhealthnews.org/news/article/health-industry-groups-new-medicaid-money/
Published Date: Fri, 21 Jul 2023 09:00:00 +0000

Kaiser Health News

Older Americans Living Alone Often Rely on Neighbors or Others Willing To Help

Published

on

kffhealthnews.org – Judith Graham – 2024-11-12 03:00:00

SUMMARY: Donald Hammen, 80, relies on his neighbor Julie McMahon for support as he lives alone in Minneapolis. With no close family, he has formed connections with friends, former colleagues, and fellow volunteers, who help him navigate daily challenges. However, he remains uncertain about future care if his health declines. Many older adults like Hammen, lacking close family ties, face similar dilemmas. AARP research shows that only a quarter of solo agers can count on someone for help with basic tasks. Building local support networks is essential, yet many find it challenging to establish reliable connections for assistance in their later years.

Read the full article

The post Older Americans Living Alone Often Rely on Neighbors or Others Willing To Help appeared first on kffhealthnews.org

Continue Reading

Kaiser Health News

Watchdog Calls for Tighter Scrutiny of Medicare Advantage Home Visits

Published

on

kffhealthnews.org – Fred Schulte, KFF Health News – 2024-11-08 04:00:00

SUMMARY: A new federal audit from the Health and Human Services Inspector General highlights concerns over $7.5 billion in Medicare Advantage overpayments linked to home visits that yielded no medical treatment in 2023. Despite these findings, the Centers for Medicare & Medicaid Services (CMS) declined to limit payments for such visits, arguing they enhance in-home care access. The audit suggests UnitedHealthcare accounted for a significant portion of contested payments, highlighting inefficacies in treating diagnosed conditions. Critics argue CMS needs stronger oversight to prevent potential waste of taxpayer dollars and enforce accurate diagnosis reporting.

Read the full article

The post Watchdog Calls for Tighter Scrutiny of Medicare Advantage Home Visits appeared first on kffhealthnews.org

Continue Reading

Kaiser Health News

Tribal Health Leaders Say Feds Haven’t Treated Syphilis Outbreak as a Public Health Emergency

Published

on

kffhealthnews.org – Jazmin Orozco Rodriguez – 2024-11-07 03:00:00

SUMMARY: South Dakota is grappling with a severe syphilis outbreak, particularly affecting Native American communities, with rates increasing by 1,865% from 2020 to 2022. Public health officials, led by Natalie Holt, are mounting an urgent testing campaign, but are hindered by limited resources since no federal public health emergency has been declared. This year, 75% of the 577 reported cases are among Native Americans, who represent only 9% of the population. Tribal leaders are advocating for more federal support, as they believe enhanced resources are essential to combat the outbreak and prevent further health crises.

Read the full article

The post Tribal Health Leaders Say Feds Haven’t Treated Syphilis Outbreak as a Public Health Emergency appeared first on kffhealthnews.org

Continue Reading

Trending