State Proposes Sweeping Changes to Medi-Cal Program

The state Legislature has held public hearings on a Department of Health Care Services' (DHCS) concept paper that contemplates significant changes to the Medi-Cal program, with the goal of providing patients with access to better coordinated care that will improve outcomes and help slow the long-term growth in program costs.

The concept paper, which contains no specific details, is the first step in the process of renewing — and expanding — California's Section 1115 Medicaid waiver. (Under the federal Medicaid program, certain laws and rules can be waived to grant states greater program flexibility.)

The proposal calls for shifting the most vulnerable enrollees (nearly all of the population of children and adults with disabilities, the blind, mental health needs, and seniors) out of the fee-for-service program into "organized delivery systems of care," such as managed care or medical homes.

CMA submitted comments on the proposal, telling DHCS that the physicians of California strongly support the idea of developing a model for patient-centered medical homes in the Medi-Cal program. However, CMA made it clear that any new treatment models must be carefully constructed so as not to overburden safety net physicians.

"Persistently low Medi-Cal reimbursement rates have forced many physicians to reduce or eliminate their Medi-Cal patient loads, and those physicians who continue to actively treat Medi-Cal recipients often serve very large patient panels, on very tight financial margins," CMA wrote in the comments. "Any new requirements on these physicians without an increase in resources available, will force many of these safety net providers out of the program."

CMA also told DHCS that only a physician should lead a medical home. While nurse practitioners and other allied health professionals play a crucial role in the healthcare delivery system, only a physician has the training and experience to properly coordinate patient care, particularly the high-risk patients that would be most impacted by this proposal.

Additionally, CMA expressed concerns that forcing patients into managed care might disrupt existing physician-patient relationships, and negatively impact access to care. CMA urged DHS to address these concerns by involving physicians in any local health system planning.

"Physician input in the process of establishing the treatment protocols for Medi-Cal Managed Care is essential," CMA wrote. "Physicians are often a patient's primary connection to the healthcare system, and they have a unique perspective on their patient's needs. While managed care can work well for some patients, one size does not fit all."

CMA also expressed significant concern over the program's pitifully low reimbursement rates. In many cases, the reimbursement does not even cover the cost of providing care. A number of legislators also echoed CMA's concerns.

"I really don't believe you can continue to ask the providers to pay for the privilege of treating Medi-Cal patients," said Senator Dave Cox, a member of the Senate Health Committee. "There comes a point in time when the physician is just simply going to say thank you very much, I will not pay to treat your patients and I think we are rapidly approaching that particular situation in the state of California."

CMA will continue to participate in the discussion and planning as the 1115 waiver proposal is fleshed out over the coming months.