Lawmakers, activists weigh proposed Medi-Cal cuts

Lawmakers, activists weigh proposed Medi-Cal cuts
BY JANET LAVELLE UNION-TRIBUNE
MONDAY, FEBRUARY 7, 2011 AT 6:52 P.M.

Medi-Cal basics

What is it: Covers health care services for low-income Californians, jointly funded by the state and federal government.

How it works: Medi-Cal provides full coverage for people with incomes up to 100 percent of the federal poverty level ($22,000 for a family of 4) and then a share up to 133 percent of the federal poverty level.

Who’s affected: 7.7 million Californians receive Medi-Cal, including 423,391 San Diegans. Medi-Cal covers 19.7 percent of Californians and 46 percent of all births in the state.

Governor's Medi-Cal proposal

Total Medi-Cal budget cut: $1.7 billion

• Limits prescriptions to six per month, except life-saving drugs. Saves $11.1 million.

• Limits doctor visits to 10 per year, saving $196.5 million. Cuts visits from 3.3 million annually to 2 million annually.

• Limits medical supply costs, saving $9.8 million. Limits would be set for hearing aids ($1,510), medical equipment ($1,604), incontinence supplies ($1,659), urological supplies ($6,435), wound care ($391).

• Institutes a $5 copay for doctor, clinic, dental, pharmacy visits. Saves $294.4 million.

• Institutes a $50 emergency room co-payment. Saves $111.5 million.

• Institutes a $100 copay per day for a hospital stay, maximum $200. Saves $151.2 million.

• Eliminates adult day health care, saving $178.1 million. The program is used by 27,000 seniors at 330 centers statewide.

• Cuts health care provider payments by 10 percent, saving $718.9 million (pending a U.S. Supreme Court ruling). This affects physicians, pharmacies, clinics, medical transportation, home health, adult health care, certain hospitals, nursing facilities and long-term nursing homes.

Other Health and Human Services cuts

CALWORKS

This is an aid program for families in crisis, providing food, shelter and clothing aid with work requirements. The budget reduces cash grants, cuts partication from 60 months to 48 months.

Saves $547 million.

In-Home Supportive Services

This program funds services for low-income people with disabilities. The budget reduces service hours and ends some payments for people living with their caregiver or without doctor certification.

Saves $486.1 million.

Supplemental Security Income

Cuts monthly grants to the federal minimum.

Saves $192 million.

Healthy Families

The state's insurance plan for children in low-income families not eligible for Medi-Cal. The budget would raise premiums and copayments and eliminate some vision care.

Saves $135.7 million.

Multipurpose Senior Service Program

The budget eliminates this program, which provides case management and other services for 12,000 seniors who want to remain in the community instead of going into a nursing home.

Saves $19.9 millon.

AIDS Drug Assistance Program

Increases cost-sharing for some participants, based on income.

Saves $16.8 million.

As state lawmakers continue to weigh Governor Jerry Brown’s proposed budget aimed at closing a $25.4 billion financial hole, health care providers say $1.7 billion in cuts to Medi-Cal will harm some of the state’s sickest residents and ultimately fail to save money.

The nonpartisan Legislative Analyst’s Office has echoed some of those concerns, saying Brown’s proposal to limit Medi-Cal recipients to 10 doctor visits a year and six prescriptions per month, and to impose copayments on emergency room and hospital stays “may disproportionately affect medically fragile beneficiaries.”

Statewide, 7.7 million people received Medi-Cal, including 423,391 people in San Diego County.

Medi-Cal faces the single largest budgetary cut of any state program, under Brown’s proposed budget.

“We believe these proposals could adversely impact those with the greatest need for health care services,” particularly seniors and people with disabilities, the analyst’s office said in a recent report.

The report agreed with the concept of copayments but recommended lowering them and creating annual out-of-pocket limits.

The report also said the governor may be overstating savings because requiring hospital copayments and limiting doctor visits could force the state’s poorest residents to delay treatment until they’re sicker and need more expensive care that the state would end up covering anyway.

Brown’s proposal would reduce doctor visits covered by Medi-Cal from 3.3 million annually to 2 million.

Vista Community Clinic Executive Director Barbara Mannino said the 10-visit limit targets people with chronic illnesses such as diabetes, hypertension or seizure disorders. Last year, 500 of her 14,500 Medi-Cal patients came to the clinic more than 10 times, she said.

“People who come in more than 10 times a year need to come in,” she said. “Limiting visits will only force them into the emergency room at a higher cost of care. Shouldn’t we be paying for a $100 doctor visit instead of a $1,500 emergency room visit?”

Mannino said community clinics aren't in the business of turning away people in need and will be further squeezed after already losing significant state funding last year.

"Something's got to change," she said. "It's just not right to be continually reducing services to the poor."

Brown has called his 18-month budget proposal a massive governmental restructuring with painfully deep cuts “requiring sacrifice from every sector” to dig out of a financial hole a decade in the making.

Brown predicted a $25.4 billion deficit by the end of June 2012, including an $8.2 billion shortfall this fiscal year. Brown’s budget includes $12.5 billion in spending cuts and he’s asked lawmakers to set a June special election to ask voters to extend temporary taxes.

Brown spared K-12 schools — which account for nearly 43 percent of general fund expenditures — saying they’ve taken a disproportionate hit for four years.

With schools left intact, Brown turned to the second largest piece of the general fund, the Health and Human Services Agency, for the biggest cutbacks. The agency took a 21.5 percent hit, including the $1.7 billion cut to Medi-Cal, the state’s health care program for the poor.The Medi-Cal cuts also axe an adult day program, limits medical supply spending, and cuts provider payments 10 percent.

Whether the state could actually reduce payments remains to be seen.

Federal courts previously blocked about $1 billion in Medi-Cal payment cutbacks the Legislature adopted in 2008 and the U.S. Supreme Court recently agreed to hear the state’s appeal.

The legislative analyst has recommended approving payment cuts of up to 10 percent and assessing access to care. Federal law requires service payments high enough so that enough providers take Medi-Cal so recipients have the same access to care as the general population.

According to Brown’s budget proposal, Medi-Cal costs are governed by the number of recipients, the services covered and rates paid to health care providers. Federal health care reform bans tightening eligibility and court rulings make provider payment cuts uncertain. That leaves service limits — and copayments — as the other budget-cutting option.

According to Brown, his proposal leaves 90 percent of Medi-Care recipients unaffected by the cuts.

That idea was challenged by speakers who have flocked to legislative subcommittee hearings. After listening to pleas from kidney dialysis and cancer patients, disabled seniors, doctors and others not to drastically cut Medi-Cal, Brown’s proposals are still on the table.

The analyst also said the governor’s plan shifts some state Medi-Cal costs to hospitals, since emergency rooms are required to treat everyone even if they can’t make a copayment.

The California Hospital Association said hospitals lost $4.8 billion in 2010 treating Medi-Cal patients because of low reimbursement rates. The proposed copayment would worsen the situation.

“It is unlikely that most Medi-Cal patients will be able to afford this increased cost-sharing,” the association said in a statement. “Hospitals will face greater losses when they treat Medi-Cal patients.”

Health care advocates say limiting doctor visits and drugs would be disastrous for cancer patients getting chemotherapy, transplant recipients needing follow-up care, kidney failure patients who need dialysis treatments, and asthma sufferers who get regular allergy injections.

“If you’re someone who has a chronic illness, the best place for you to receive care is a doctor’s office,” said Dr. Andrea Brault, president of the California chapter of the American College of Emergency Physicians. “If you’re sitting at home with your chest tightening from an asthma attack, are you going to be thinking about whether to go in or wait until it gets worse and then end up in the emergency room? Many of his proposals will end up costing more money in increased medical care for sicker patients.”

“We’re extraordinarily concerned about the impact to cancer patients and their treatment,” said Alecia Sanchez, legislative advocate for the American Cancer Society. “Cancer patients need more than 10 visits a year, so this would be dire for them.”

Sanchez said women being treated for breast cancer often have chemotherapy treatments several times a week for three to six months or radiation treatment five days a week for six weeks.

“And that doesn’t take into account any extenuating visits for diagnostics, toxicity and adverse reactions or other visits,” she said.

It’s unclear the impact on kidney dialysis patients, who typically get 13 treatments a month or face life-threatening consequences.

Medicare pays 80 percent of dialysis for people of all ages, with Medi-Cal picking up the rest. Medi-Cal caps the total fee at a lower rate than Medicare, however, so the state often pays some or none of its share. Since Jan. 1, Medicare has switched to a monthy “bundled” rate for dialysis and associated costs such as lab work and medications.

Under the governor’s proposal, Medi-Cal would no longer pay its share of the doctor’s fee after 10 visits, said Vanessa Baird, deputy director for health care policy at the Department of Health Care Services, which administers Medi-Cal.

“The dialysis center would continue to get paid but the physician wouldn’t,” she said.

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