UPDATE: WEDNESDAY, JULY 29, 2009
The California Medical Association [1] has asked our California congressional delegation to support the progression of HR 3200, "America's Health Care Choices Act," to the next stage of the congressional process. Click here [2] to access our letter to Congress.
This letter, which we are sending with the unanimous approval of the CMA Executive Committee, does not reflect CMA's endorsement or unconditional support for HR 3200. Rather, it reflects CMA's dedicated pursuit of our organization's longtime objectives and policies and of the political imperatives of the congressional process. The letter is firmly grounded in CMA policy that supports expansions of health insurance coverage to our uninsured patients, calls for market reforms on the for-profit health insurance industry, and advocates for substantial improvements in Medicare and Medicaid payment to doctors improve access to care. As you may be aware, HR 3200 includes nearly $400 billion in Medicare and Medicaid physician payment fixes while cutting payments to every other provider group (Pharma, Health Plans, Hospitals, Nursing Homes and Home Health). As such, HR 3200 achieves many goals that we have been working on for years.
However, the letter makes it clear that despite major improvements in the public plan government option, we continue to have concerns. We have also registered in the letter and in person our opposition to scope of practice expansions for nurse practitioners, and our position that physicians should be allowed to privately contract with their patients in Medicare, the private sector and the public plan. We have also asked for Medicaid rates increases for specialists as well as primary care and improvements in the Medicare formula. We have excellent access to the House leadership guiding this bill - who are all Californians - Speaker Pelosi, Chairmen Waxman, Miller and Stark, and Democrat Leader Becerra. I give you my commitment as the CMA President, that we will continue to aggressively work on these areas of concern with these important leaders.
Despite these concerns, your Executive Committee still believes it is of critical importance to California doctors and their patients to send this letter. Physicians are under attack from all sides in Washington D.C. Many fiscal conservatives in both parties believe the bill does not do nearly enough to contain rising health care costs and dramatically change our health care delivery systems. To address their concerns, they are proposing major cuts to physician payment, the establishment of an independent commission to make binding decisions about physician payment and the implementation of a value-index that would impose up to 15% payment cuts in California. These cuts would dramatically harm patient access to doctors in California, particularly in already underserved areas with high numbers of low-income, ethnically diverse patients. Moreover, the Senate Finance Committee plan is not expected to be nearly as favorable for physicians and patients. This letter is designed to send a clear message to Congress that it must maintain the important Medicare and Medicaid payment provisions in HR 3200 as health reform moves through the legislative process.
I know that many of you have questions and concerns about various aspects of the bill, and want to know where CMA stands. With this letter, we hope to clarify where we stand on the key issues, and advance the interests of California doctors and their patients as much as possible. Please keep in mind that we are in the first quarter of a long legislative battle to change our health care system. We must maintain these favorable provisions now to continue to fight for the best possible end-game outcome. The public plan and other HR 3200 issues of concern will face greater hurdles in the Senate, where we can have an impact. As your President, I believe this is the best strategy to achieve our goals of improving payment and the practice environment for physicians, which will ensure we can continue to provide the best possible care to our patients.
We hope that all of you will meet with your Members of Congress when they are home for the August recess. CMA will have talking points prepared for those meetings as soon as the outcome of the House legislation is known next week.
Thank you and best wishes,
Dev GnanaDev, MD
President
UPDATE: TUESDAY, JULY 28, 2009
The governor signed the state budget this morning. The Legislature turned down two pieces of the budget — an expansion of offshore oil drilling and a local government gas tax shift — that were expected to bring in more than $1.1 billion. To compensate for these, the governor used his line-item veto authority (known in Sacramento parlance as "blue penciling") to cut additional expenditures out of the budget. The health-related vetoes are listed below.
Healthy Families Takes Another $140 Million Cut
With his blue-pencil, the governor increased the amount of state funding cut from the Healthy Families Program (HFP) from $125 million to $172 million. Since the federal government matches the state almost 2:1 in HFP, the program loses almost $500 million total, or roughly half of the program. The administration continues to believe that private or other public sources of funding can be found. Without those funds, approximately 500,000 children will be removed from the program.
Governor Eliminates $25 Million to Support Community Clinics
The governor eliminated $25 million in funding from the Primary and Rural Health Program. This eliminates funding for community clinic programs. Here again, the administration believes that these cuts can be made up through a combination of private funds, federal stimulus funds, and local programs.
Public Health and AIDS Programs Take a Hit
Finally, the governor cut funding for the following public health programs:
- Office of AIDS ($52 million)
- Domestic Violence Program ($16 million)
- Adolescent Family Life Program ($9 million)
- Black Infant Health Program ($3 million)
UPDATE: FRIDAY, JULY 24, 2009
The basic structure of the package has not changed in the last several days: large cuts to education at all levels, massive local government cuts, and continued furloughs and cuts for state employees. There are no new revenues in the package, and roughly a $1 billion reserve. This update is to flesh out the details of the cuts to Medi-Cal and Healthy Families, as those are now available.
Budget Directs DHCS to Request a Waiver From CMS Regarding Improving Care for Aged, Blind, and Disabled (ABD) Recipients — Expansion of Medi-Cal Managed Care and Medical Home Expected to Be Cornerstones
As CMA has reported, the governor made a firm condition of getting the deal done that there be reforms to service delivery for ABD Medi-Cal beneficiaries. These patients comprise a relatively small percentage of the total population of the program — 15% — but are more than 60% of the cost of the overall Medi-Cal program. The final deal requires the Department of Health Care Services (DHCS) to submit a waiver application to CMS to redesign service delivery for this population. Although the details are not worked out, it is assumed that the waiver will require ABDs to either enroll in a Medi-Cal Managed Care plan or to designate a medical home. There are no savings associated with this change in this budget. In fact, the administration has not scored savings until 2012-13, when the program is expected to be implemented. In the intervening time, DHCS will be conducting a stakeholder process to design the waiver. CMA will be involved in that process; further updates will be forthcoming.
Healthy Families Funding Is Cut by Nearly $400 Million, $124 Million of Which Is State Funding
The budget cuts $124 million in state general fund spending from the Healthy Families Program (HFP). Since the state receives a 2:1 match in HFP, this is effectively a cut of almost $400 million to the program. This cut amounts to almost 40% of the total funding for HFP. The discussions about finding other sources of funding for the program are ongoing. The First 5 California Commission has agreed to contribute some funding, and private foundations have expressed some interest as well. Without that funding, HFP may have to dis-enroll 450,000 children and turn away 300,000 more who are eligible.
$24.8 Million Is Cut From the Maddy Fund, Roughly One-third of the Total Amount of the Fund
In previous years, the state has shifted funding from Proposition 99 (Tobacco Tax) into the Maddy Fund, which helps to reimburse physicians for uncompensated care provided in emergency rooms. This budget deal suspends that transfer for this year, effectively cutting $24.8 million from the fund. This number represents almost one-third of the total amount of the Maddy Fund. CMA lobbied against this cut and asked physicians to call or write their legislators to oppose it.
Budget Assumes $1 Billion in Increased Federal Money Coming into the Medi-Cal Program
Although the press has reported that the budget includes $1.3 billion in Medi-Cal cuts, the vast majority of what is being termed a "cut" is actually an assumption of increased federal participation in the state's Medi-Cal program. The state has argued that the federal government owes California money for services provided for dual-eligibles that should have been paid through Medicare. The Schwarzenegger administration is working with CMS to resolve these issues and is hoping to receive this funding.
IOUs Will Not Stop Immediately
The state controller has announced that, even though the budget deal is done, the state is still in a cash crunch, and IOUs may continue for some time. There is still some question about whether Wall Street will view this budget favorably enough to consider California a sound lending risk again. Without substantial loans, the state treasury won't be in a favorable cash position for some time. As CMA has reported previously, physicians are not receiving IOUs for Medi-Cal and Healthy Families, but are receiving them for any state-funded programs, including CCS, EAPC, and GHPP.
UPDATE: TUESDAY, JULY 14, 2009
They’re Baaaaaack
It may sound like we’re beating a dead horse, but the trial lawyers again tried to overturn the noneconomic damages award in MICRA, the Medical Injury Compensation Reform Act. This 1975 law keeps professional liability rates affordable for California's doctors. CMA’s arguments and amicus filing before the 5th District Court of Appeal were validated when the court agreed with CMA and rejected each of the trial attorneys’ constitutional arguments.
Fighting to Keep ERs Open
Governor Schwarzenegger has proposed redirecting $24.8 million from the Maddy Emergency Medical Services Fund into the General Fund to help offset California’s record $26 billion budget deficit. The Maddy Fund reimburses doctors and hospitals for uncompensated emergency care provided to uninsured patients. Without these funds, many California emergency rooms will be at real risk of closing. CMA is working with state lawmakers and mobilizing physicians to fight the governor’s proposal.
State Can’t Cut Medi-Cal Fees
A federal court has ruled that the state of California acted illegally by trying to cut Medi-Cal fees by 10% last year for doctors and others who treat 7.1 million poor people. The ruling means that doctors will be retroactively paid in full for claims that were paid at 90% during the six weeks that the 10% cut was in effect. CMA’s legal efforts last year helped reverse the cuts and restore more than $1 billion to California’s healthcare system, including $121 million to California physicians who provide care to the poor. CMA attorneys are already consulting and working with Supreme Court experts to prepare for any challenge that could be mounted by the state to overturn this ruling.
It’s Cumbersome, Wasteful, and Off-putting to Doctors
Medi-Cal’s costly Treatment Authorization Request (TAR) process is set for an audit thanks to CMA. The TAR program costs the state $1.5 billion to administer and creates considerable added paperwork for physicians serving Medi-Cal patients. Since 92% of TARs are granted, the process does little more than delay treatment and increase administrative costs in nine out of 10 cases. CMA is advocating that those funds be spent on providing actual healthcare, like maintaining the state’s Healthy Families program, rather than wasteful administration, particularly given the state’s budget situation.
Fixing Medicare Payment Problems
This has been a top CMA priority for many years. CMA’s pressure on California’s congressional leadership has helped to create draft legislation that includes major changes to the Medicare payment system. While the legislation reduces payments to all other provider groups (hospitals, nursing homes, home health, Medicare Advantage health plans, and Pharma), it provides nearly $500 billion for physicians. The most significant victory for physicians is the plan to eliminate the SGR formula by wiping out $285 billion in future cuts. And, there are important market reforms that CMA has long sought for the for-profit health plan industry, including requirements to limit overhead and profit to 15%, and guarantees that individuals will not lose coverage or be subject to premium hikes because of health status or a pre-existing condition.