No 10% Medi-Cal Cut!

The Honorable Denise Ducheny, Chair, Budget and Fiscal Review Committee
State Capitol Building
Sacramento, CA 95814

The Honorable Dennis Hollingsworth, Vice Chair, Budget and Fiscal Review Committee
State Capitol Building
Sacramento, CA 95814

Dear Senators Ducheny and Hollingsworth:

The San Diego County Medical Society (SDCMS), representing the over 8,000 physicians in San Diego County, wants to emphasize to you, the California Legislature's senior budget experts, the potentially disastrous ramifications of the recently passed current fiscal year cuts to Medi-Cal physician reimbursement, and consider rescinding this draconian route to cost control.

These cuts will have a significant negative impact on healthcare for patients whose healthcare is the responsibility of the state of California, and will impact all patients in California through increased waits in emergency rooms and increased pass-through costs.

A 10 percent cut to physician Medi-Cal rates, already among the lowest in the nation, will dramatically accelerate what is already a substantial exodus of physicians and physician groups from Medi-Cal.

• Fewer than half of San Diego’s physicians in private practice find they are able to afford to see patients with these low reimbursements — in fact, in many cases, the pre-10 percent-cut Medi-Cal payment rates fail to even cover the cost of rendering care. Over five years, SDCMS has been able to document a steady decrease of physicians willing to see Medi-Cal patients. The decreases in the percentage of physicians and physician groups willing to take Medi-Cal varies by mode of practice and specialty, but, in general, acceptance rates are already down 10–25 percent from three years ago.
• In a late 2007 survey, San Diego’s physicians were asked if they would continue to see Medi-Cal patients given a hypothetical 5 percent cut in payment. A staggering 93 percent of solo physicians, 81 percent of small groups, 56 percent of medium groups, and 83 percent of large groups stated they would reduce Medi-Cal patients or completely cease taking Medi-Cal. The entire section of the survey dealing with Medi-Cal is attached for your staff’s review.
• Several physicians seeing Medi-Cal patients have already notified us that as soon as the cuts go into effect, they will refuse all non-emergent new Medi-Cal fee-for-service patients, and will send any new Medi-Cal patient emergencies directly to the hospital emergency room. They will be referring new patients seeking routine care under Medi-Cal to their California state legislators, asking the patient’s legislative office to find them a doctor willing to render state-promised care under these unfair and unreasonable cuts.

If even a fraction of the Medi-Cal patient population is unable to see either specialists or primary care physicians, they will get their healthcare from emergency rooms. This will cause the budget deficit to increase, canceling out any savings because healthcare delivered in the emergency room is nearly always significantly more expensive.

In addition to raising costs for the state, which will have to pay for more emergency room care — and having to pay for the treatment of an illness made more severe by delayed care — the longer emergency room waits and disruptions will affect all patients seeking care in the emergency room.

We understand that California has a budget deficit, and we want to be constructive. In conjunction with the California Medical Association (CMA), we would be delighted to discuss options with you and your staff on ways to really save Medi-Cal dollars, including but not limited to:

• Offering generic drugs whenever possible, at much lower cost.
• Assigning all Medi-Cal patients a primary care medical home and requiring them to get all but true emergency care there. The cost savings would be enormous.
• Care management that could save as much as 30 percent of healthcare costs and improve quality and appropriateness.

Physicians accepting Medi-Cal have stayed in this program out of compassion and good will. That good will has been strained to the breaking point after years, if not decades, of underpayment. The cuts imposed by this legislature are the straw that will break the camel’s back, resulting in the disruption of an already fragile safety net, with a likelihood of increased costs to the state of California and potential health consequences to patients who get delayed care, or no care at all.

And we fear that once doctors leave Medi-Cal, where they have served out of compassion rather than profit, they will never return to seeing Medi-Cal patients. The Medi-Cal infrastructure, once destroyed by these cuts, may never be able to be re-established. Access for Medi-Cal patients to specialists will likely disappear.

We stand ready to discuss the importance of this problem with you and your staff, and implore you to rescind these devastating cuts.

California’s low-income constituents, the most vulnerable patients in your districts, are the ones who will truly suffer.

With deep concern for the future of California’s healthcare,

Sincerely,

Albert Ray, MD
President

Theodore Mazer, MD
Immediate Past President

Stuart Cohen, MD, MPH
President-elect

Cc: Office of Governor Arnold Schwarzenegger
Assembly Speaker Fabian Nuñez
Senate President Pro Tempore Don Perata
Senator Mark Wyland   
Senator Christine Kehoe
Assemblyman Kevin Jeffries
Assemblywoman Mimi Walters
Assemblyman Martin Garrick
Assemblyman George Plescia
Assemblywoman Lori Saldaña
Assemblyman Joel Anderson
Assemblywoman Shirley Horton
Assemblywoman Mary Salas
Joe Dunn, CEO, California Medical Association
Richard Frankenstein, MD, President, California Medical Association