California Has Not Issued Report on Physician Medicaid Payments for Past 15 Years

California has not been complying with a state law that requires the Medi-Cal director to review physician reimbursement rates annually and ensure that Medi-Cal beneficiaries have access to physician and dental services, the Sacramento Bee reports. Medi-Cal is California's Medicaid program.

Sandra Shewry -- director of the state Department of Health Care Services, which administers Medi-Cal -- said the report has not been completed in the past 15 years. Shewry said the law is an "obsolete statute" that is a holdover from when health care expenditures made up a smaller portion of the state budget and the health department made annual recommendations for adjustments in the rates. The law, passed in 1976, is intended to keep physician reimbursement rates competitive with other insurance programs, as well as to ensure "reasonable access" to health services.

Last month, the Legislature approved a 10% cut to Medi-Cal physician reimbursements to help address an $8 billion budget deficit that the state faces through June 2009. Critics contend that the cuts are being made without full understanding of their statewide effects. Ned Wigglesworth, a spokesperson for the California Medical Association, said, "Here you have this statute that's being ignored, and the medical program that's supposed to be a safety net has frayed and eroded," adding, "The funding decisions have been made unnecessarily in the dark." According to the CMA, physician reimbursements for Medi-Cal are the lowest of any state Medicaid program.

Assembly member Patty Berg (D), a critic of the Medi-Cal cuts, said the additional information from the report would have been helpful in considering the rate cuts, but she said, "I probably don't have to wait for a report to know the rates are too low." Berg estimated that the statewide deficit could increase to $10 billion.

San Francisco Mayor Gavin Newsom has threatened a lawsuit to block the cuts from taking effect (Lin, Sacramento Bee, 3/28).