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Special "News You Can Use" — August 16, 2013



On Wednesday, the Department of Health Care Services (DHCS) announced that it would begin to implement the 10% Medi-Cal physician payment rate reduction on October 1, 2013 in Medi-Cal managed care and on January 9, 2014 in fee for service (FFS).

DHCS also announced that it would be retroactively implementing the cuts for FFS providers to June 1, 2011, when the law authorizing the cuts went into effect. DHCS said it would recoup a percentage of provider payments to recover overpaid funds during the retroactive period. These retroactive payment recoveries will not occur until after the prospective 10% payment reductions are implemented.

Additional details were not provided, but assuming the retroactive period ends as of the date the prospective cuts begin, the entire portion for which there would be a 'clawback' cut would be June 1, 2011 until January 9, 2014, or over 29 months.

According to information released by DHCS, managed care specialty services will not be cut, but the details of how this may impact such services under contracts with various managed care entities is unclear (which services, which physicians, the impact on capitation vs. FFS contracts, etc.). CMA is working on obtaining clarification, and we will distribute such information as it becomes available.


Click here to find your California state senator and assemblymember, and let them know what your plans are now that the cuts are set to be implemented.


These cuts could not come at a worse time, as California is poised to expand Medi-Cal to 1.4 million more Californians under federal health reform and the demand for physicians is expected to rise.

CMA is part of an unprecedented coalition -- "We Care for California" -- of physicians, dentists, healthcare workers and hospitals that will continue working to stop the cuts. The coalition includes the largest statewide organizations representing physicians, dentists, hospitals, and healthcare workers, as well as health plans, first responders, caregivers, and other health providers.

Even before the cuts, California's Medi-Cal provider payment rates are some of the lowest in the nation. Low reimbursement rates have driven many of California's providers from the program. As a result, 56% of Medi-Cal patients report difficulty finding a doctor. If these cuts are not stopped, Medi-Cal will become nothing more than a broken promise of access to care.


Every physician should decide for themselves what their response to these cuts should be, ranging from continuing whatever their current level of Medi-Cal participation is to resigning from the program.

If you desire to formally resign your participation in the Medi-Cal program, you may request to be deactivated by submitting a Medi-Cal Supplemental Changes (DHCS 6209) form along with a cover letter explaining the action requested and the effective date of the termination.

There is no official advance notice required when terminating your enrollment in the Medi-Cal program, which is why CMA suggests the physician simply indicate the requested date in their cover letter. Ultimately, the Medi-Cal Provider Enrollment Division has the final say on the effective date, but they try to honor the requested date. 


In March of 2011, the California Legislature passed and Gov. Brown signed AB 97, which included a 10% reimbursement rate cut for physicians, dentists, pharmacists, and other Medi-Cal providers.

Shortly thereafter, CMA filed a lawsuit, CMA et al. v. Douglas et al., to stop the State of California from implementing the 10% cut included in the 2011-12 state budget.

In January 2013, a three-judge panel of the 9th Circuit Court of Appeals reversed a decision by a district court that found that the cuts would irreparably harm the millions of patients who rely on Medi-Cal for healthcare. The Ninth Circuit also vacated the preliminary injunction enjoining the implementation of these rate reductions CMA requested a rehearing from the full Ninth Circuit Court of Appeals, which was denied.

CMA and the other plaintiffs in the case -- the California Hospital Association, California Dental Association, California Pharmacists Association, National Association of Chain Drug Stores, California Association of Medical Product Suppliers, AIDS Healthcare Foundation and American Medical Response -- subsequently filed a request with the U.S. Supreme Court for a stay to prevent the cuts going forward. This request was denied a day later.

"I never worry about action, but only inaction." — Sir Winston Churchill (1874–1965)

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