Fountain Valley Hospital to Quit Medi-Cal System

In a move that is expected to flood nearby hospitals with indigent patients and exacerbate a crisis in maternity care, officials at Fountain Valley Regional Hospital and Medical Center announced Friday that they are quitting the Medi-Cal system for good.

Richard Butler, administrator of the 293-bed facility, said that hospital leaders had just sent an official “notice to terminate” their Medi-Cal contract, indicating that on Nov. 20, they will take only emergency Medi-Cal patients.

Butler said that board members of the for-profit, doctor-owned hospital, which has been one of Orange County’s largest Medi-Cal providers, had seen a steady increase in Medi-Cal patients, accounting for a fourth of admissions--or about 4,000 patients--last year.

In addition to low Medi-Cal reimbursements for these patients, the hospital was handling “a disproportionate share” of Orange County’s high-risk, high-cost obstetrical and pediatric patients, Butler said, and these “were stretching our services to the limits.”

He noted that last month Fountain Valley handled 440 deliveries--more than any other hospital in the county--with 41% of those being Medi-Cal patients.

Butler said hospital officials had listened to county plans for “birthing centers” and promises that more hospitals would be recruited into the Medi-Cal network, “but these are not going to happen overnight. And we have a major problem now,” he said.

Asked if he felt there was a social responsibility for indigent patients, Butler said: “I think we’ve filled it. . . . It would be irresponsible for us to overtax our facilities, services and staff.”

Dr. Stephen Bush, an obstetrician there for five years, added that the decision to quit Medi-Cal “is not a financial ploy. It’s not a bargaining issue. It’s my understanding that even if (Medi-Cal) gave them (hospital executives) an offer they could not refuse, it would be refused, because we have no room to take these patients.”

He noted that the hospital was so “overloaded” with indigent patients “that we can’t even take care of our own private patients.”

Day or night, Medi-Cal and private patients alike must labor upright in chairs, waiting for a bed or delivery room, he said, and when the 35-bed, postpartum unit fills up, “we scatter (patients) around, on the surgical floor, in pediatrics.”

Butler and Bush said that hospital officials would like to see the Medi-Cal contracting system disbanded, with every Orange County hospital instead taking its “fair share” of indigent patients.

From hospitals in Santa Ana to Medi-Cal headquarters in Sacramento, the reaction to Fountain’s Valley’s plans was one of shock.

“If Fountain Valley goes out, what does that do to the other Medi-Cal providers? Would there be a mass exodus? Obviously, we don’t want to be the sole provider,” said Glen Kazahaya, chief financial officer of Western Medical Center-Santa Ana. Western Medical Center and a sister hospital, Western Medical Center-Anaheim, were planning to rejoin the Medi-Cal network on Aug. 1, but Fountain Valley’s plans to drop out might make them reconsider, Kazahaya said.

Local health experts also expressed alarm that poor women who are pregnant will have even more trouble finding a hospital that will accept them.

“A lot of us would like to implore Fountain Valley” not to quit Medi-Cal, said Dottie Andrews, executive director of the March of Dimes.

At UCI Medical Center in Orange, the largest of the county’s 14 Medi-Cal hospitals, spokeswoman Elaine Beno said a decision to quit by Fountain Valley “further restricts” the poor’s access to health care. It “shifts more patients over too few providers,” she said.

UCI Medical Center officials, now renegotiating their Medi-Cal contract, have repeatedly warned that they might drop out of the indigent care system if state officials did not recruit more hospitals.

In Sacramento, Sally Lee, chief of Medi-Cal operations, called Fountain Valley’s move “a great disappointment. We’ve been working with the county and other hospitals to participate. . . . (But) how can we (Medi-Cal) ever have some success if every time somebody gets in, another drops out?”