New Budget Proposal Cuts Medi-Cal Rates by 10%
CMA Leaders Call Cuts Shortsighted and Unwise
[Posted 11/25/03]

The new administration announced today a budget proposal that contains significant health care cuts for the 2004-2005 fiscal year, including a 10 percent cut to Medi-Cal reimbursements to physicians and other health care providers. CMA leaders called the proposal shortsighted and vowed to stop the cuts to Medi-Cal, Healthy Families, and other health programs.

“Cuts in eligibility don’t save money. They just drive people to the emergency room and drive up costs,” said CMA President Ronald Bangasser, M.D. “The public knows this. It’s time for our political leaders to face up to this basic fact of life. Patients who cannot find care will increasingly turn to emergency rooms for basic care or ignore problems and see their health conditions turn into emergencies. This is an inefficient and expensive way to provide health care.”

This huge cut will roll back physician fees to 1980’s levels, ranking California last among the 50 states in Medi-Cal reimbursement. Such cuts undermine physicians’ financial ability to treat Medi-Cal patients and still maintain viable medical practices. Medi-cal covers 6.5 million poor, disabled, elderly, and children.

And rather than save the state money, the cuts will only worsen our state’s financial problems. For every Medi-Cal dollar cut from the General Fund, California loses more than one federal matching dollar. For every dollar cut from Healthy Families, the state loses two dollars in federal funding.

“These cuts in health care mimic former Governor Davis’ proposed budget cuts for 2003 and 2004 that were rejected early this year on a bipartisan basis,” said CMA CEO Jack Lewin, M.D. “In fact, President Bush and Congressman Bill Thomas made sure these same kinds of cuts, as proposed by Governor Davis, would be rendered unnecessary by approving this summer an increase of more than $1.3 billion in California’s federal share of Medicaid.”

CMA is currently working with Senator Dianne Feinstein to ensure that this one-time increase in federal aid is put into law, making permanent the assistance that President Bush gave California a few months ago, Lewin said.

CMA and coalition of health care advocates last month sued the state to stop the 5 percent Medi-Cal rate cut passed under the previous administration. In launching that suit, CMA and others cited the Social Security Act, which requires that provider payments be sufficient to assure patients equal access to medical care. To that end, the suit points out, the number of primary care physicians per capita for Medi-Cal patients was one-third less than for the general population, according to 2001 figures provided by the Medi-Cal Policy Institute. The figure for specialists is 50 percent less than for the general population; and for surgeons it is two thirds less.

A hearing on the plaintiffs’ request for preliminary injunction in this case (CMA et al v. Bonta) has been scheduled for December 17 in U.S District Court in Sacramento.

Contact: Heather Campbell, 916/444-5532 or hcampbell@cmanet.org.