Medi-Cal Under Fire

The class-action suit against the state of California regarding the inadequacy of Medi-Cal funding has been inevitable since Gov. George Deukmejian again vetoed long-overdue increases in fees for the doctors and dentists who provide the services.

Under the suit, a preliminary injunction will be sought on behalf of the five plaintiffs named in the suit, four of whom claim that they cannot now obtain the medical or dental care that each requires. Among them are pregnant women who, like so many in the state, are finding no prenatal care available despite its proven cost-effectiveness.

In commenting on the suit, state officials defended Medi-Cal as “very efficient.” And two days later the governor, in his weekly broadcast to the state, was reporting with pride that expenditures for Medi-Cal have increased 38% over the five budgets that he has presented since becoming governor--a figure that masks his efforts earlier this year to make massive cuts. Neither comment addresses the woeful and deteriorating condition of Medi-Cal and the stark failure to provide low-income families with access to quality care.

Obviously the state budget is a better instrument than the courts for addressing the problem. But the governor’s opposition to full funding has left no option other than recourse to the courts. The California Medical Assn., among others, used the courts earlier this year to block the governor’s plans to cut by 10% the fees to doctors and dentists. That would have made even worse a situation in which many health-care providers are refusing, for good reason, to participate in the Medi-Cal program. The fees that are offered them by the state are, on average, less than half the normal fees, and payments are wrapped in a tangle of red tape so that the inadequacy of the fees is often compounded by long delays in payment. And the fees negotiated with hospitals for their services already are forcing some hospitals to terminate Medi-Cal services.

The legal challenge to Medi-Cal funding and fees is being brought by the National Health Law Program, the Western Center on Law and Poverty, California Rural Legal Assistance and Legal Services of Northern California. A second suit, challenging the lack of adequate funds for home care, also is pending--again exposing unwise cost cutting. Many patients languish in hospital beds because fees for home care are so low that providers cannot be found even though home care would be cheaper than hospital care.

John Rodriguez, who directs the Medi-Cal program, reports that the total number pf physicians filing Medi-Cal claims is increasing, up about 2.2% in each of the last two years. But a special study that he conducted of obstetricians indicated a rapidly increasing number of pregnant women turning to county clinics and hospitals--a clear indication that fewer private obstetricians accept Medi-Cal patients. That is hardly surprising. The current fee is $657 per patient--including prenatal care, delivery and postpartum care--with no compensation paid until the case is closed. The state argues that this figure is 52% of usual and customary fees, but the lawyers challenging Medi-Cal compare that fee with $1,400 to $2,200 for most private obstetrical care. Comparison quibbles aside, it is not enough. And the rising cost of malpractice insurance for obstetricians has only made the inadequacy more evident. But the governor has twice vetoed efforts to remedy this particular priority problem.

California’s Medi-Cal is second only to New York among the Medicaid programs. The budget this year is $5.3 billion. Half of that is federal matching money. Each cutback and veto by the governor cuts off a federal dollar for each state dollar that is reduced. It is a costly program, handling more than 100 million claims a year. But far costlier are the consequences of denying access to basic health care. The result in postponing timely care is to invite medical complications that ultimately cost far more to treat. That is most measurable in denying prenatal care, with resultant premature births and costly neonatal services.