Medi-Cal Reimbursement Rates Trail Most States and Private Health Plans, Studies Find

Reimbursements to doctors who treat beneficiaries Medi-Cal, California's Medicaid program, lag behind those of other states', Medicare and private health plans, according to three new studies released July 3 by the Medi-Cal Policy Institute, a project of the California HealthCare Foundation. According to the first study, Medi-Cal reimbursements ranked 37th among the Medicaid plans in the 50 states and the District of Columbia; however, California dropped to 42nd "once differences in geographical costs" were counted. The study also found that Medi-Cal pays California physicians "62.5% of the rate they would receive from [the] Medicare program for providing a comparable service." The second study found that the reimbursement rate for most services covered by Medi-Cal is between 35% and 60% of the rates private insurers pay (CHCF release, 7/3). In the third study, researchers studied seven states that have adopted the Medicare Resource Based Relative Value Scale, a key component of Medicare's payment system, as a "benchmark for establishing physician fee-for-service payments" in Medicaid and considered how a similar program could be adopted in California (Medi-Cal Policy Institute release, June 2001). "Low payments have been a longstanding issue in many states' Medicaid programs and have clearly affected doctors' willingness to treat Medicaid beneficiaries," Joel Menges of the Lewin Group, which conducted the first study, said, adding, "The challenge to sustain Medi-Cal as a quality health program for Californians depends upon its ability to offer competitive reimbursement for good care" (CHCF release, 6/3). The reports, "Comparing Physician and Dentist Fees Among Medicaid Programs," "Comparing CPT Code Payments for Medi-Cal and Other California Payers," and "Applying RBRVS to Medi-Cal: Case Studies in Seven States" are available online. Note: A brief overview of each study is available at these pages, and links to the full reports can be found at the bottom of the pages.