Medi-Cal braces for budget woes

If the state does not finalize its budget by July 1, Medi-Cal will have to stop reimbursement payments to hospitals and clinics that accept the insurance.

The Barstow Women’s Medical Center stopped receiving payments from Medi-Cal this week. Meriam Deleon, the office manager in charge of billing at the center, said that a lot of the office’s patients are on Medi-Cal, and the office relies on weekly reimbursement checks to pay personnel, rent and utilities. The center will not stop seeing Medi-Cal patients, Deleon said, but a temporary loss of reimbursement might affect their ability to keep the business going.

Medi-Cal is a state-run public health insurance program that covers medical costs for low income families, children, pregnant women, the disabled, the elderly, and low income people with certain diseases. Roughly 5,900 people in the Barstow area were receiving Medi-Cal benefits as of January 2007, said Steve Couchot, assistant to the director for Transitional Assistance, a San Bernardino County program that oversees Medi-Cal.

Many of Barstow’s Medi-Cal patients seek treatment at Barstow Community Hospital, said John Rader, spokesman for the hospital. This puts a strain on the emergency room, but the hospital cannot turn away a patient because of their inability to pay.  Rader does not expect the delay in reimbursements to affect the hospital. The hospital is used to late reimbursements, he said, as it is common to receive payments 60 to 120 days after a patient receives treatment.

Many doctors’ offices do not accept Medi-Cal often because of low reimbursement rates, Deleon said. Rader estimated that on average Medi-Cal only reimburses 78 cents for every dollar of costs incurred by a provider.

The California Department of Health Care Services, which administers the Medi-Cal program,  will not have the money to reimburse medical care providers if the budget is not completed by July 1. To prepare for a potential late budget, Medi-Cal has already started withholding some reimbursement payments, said Tony Cava, spokesman for the California Department of Health Care Services.

Medi-Cal will be withholding payments for the last two weeks of June and the month of August, Cava said. Payments withheld from June will be made on July 2, and August payments will be made in September. Cava speculated that this might be the reason why the Barstow Women’s Medical center did not receive Medi-Cal payments this week. 

Payment withholding happens whenever the state approves its budget late. Cava said there is a $2 billion fund set aside that will be used to pay providers in the event that the budget is not passed by July 1. Cava said that this same type of fund was used last year, but it ran out before a budget was passed. This year’s fund is expected to last until July 17, according to Medi-Cal’s Web site.  Once the fund is exhausted Medi-Cal providers will not receive payments until a new budget is enacted.
 

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