State Panel ‘Opens’ Region for Care of the Poor

Concerned that Orange County’s second largest Medi-Cal provider is quitting the state health system for the poor, the state commission that negotiates hospital contracts has suddenly revamped its rules, allowing indigent patients to get care at any hospital in the Fountain Valley-Huntington Beach-Westminster area.

The decision by the seven-member California Medical Assistance Commission board was made Thursday, as the 293-bed Fountain Valley Regional Hospital and Medical Center prepared to quit the Medi-Cal system at midnight Saturday.

Fountain Valley still plans to terminate its Medi-Cal contract. But by consensus, the Medical Assistance Commission agreed to allow Fountain Valley, plus three nearby hospitals that currently do not have Medi-Cal contracts, to treat non-emergency, indigent patients and receive state reimbursement. Under the state health system, Medi-Cal recipients generally must go to one of Orange County’s 13 Medi-Cal contracting hospitals. But now, in designating this west-central county area “open,” Medi-Cal recipients can go to any hospital in the area for emergency or non-emergency care.

“We did it because, with Fountain Valley leaving the area (quitting Medi-Cal), we didn’t have enough beds to ensure access” to health care for the poor, CMAC general counsel Byron Chell said Thursday.

Ironically, other CMAC officials had maintained earlier this year that Orange County did have sufficient beds for the poor. But that was before August, when Fountain Valley and subsequently three other hospitals announced that they planned to quit the Medi-Cal system. The other hospitals in Fountain Valley’s area--182-bed Humana Hospital-Westminster, 141-bed Humana Hospital-Huntington Beach and 109-bed Pacifica Community Hospital--do not have Medi-Cal contracts.

Chell added that the commission was worried about a gap in care for Medi-Cal patients had it not allowed non-contracting hospitals to be reimbursed for treating Medi-Cal patients in this section of Orange County. He noted, however, that doctors first must agree to treat these patients and that the commission will be monitoring whether Orange County doctors in this area are willing to do that.

(In “closed” Medi-Cal areas--a designation which covers most of central and northern Orange County--hospitals without contracts can be reimbursed for giving emergency care to Medi-Cal patients, but not for non-emergency care. That reimbursement, hospital officials say, is usually well below a facility’s actual treatment costs.)

The commission’s decision to “open up” the Fountain Valley area took hospital leaders in Orange and Los Angeles counties by surprise. Some called it good news for poor women in the area who, for at least two years, have faced severe overcrowding in Medi-Cal hospital maternity wards.

“I think my initial reaction is this is good news--maybe a practical first step,” said Richard E. Butler, Fountain Valley’s administrator. “But our feeling is a broader area needs to be opened up” to include hospitals such as UCI Medical Center and Western Medical Center-Santa Ana, which are also overburdened with Medi-Cal maternity patients, Butler said.

Butler has spent much of the past three months asking Medi-Cal leaders as well as local, state and federal legislators to abandon the 8-year-old Medi-Cal contracting system in all of Orange County and instead adopt a system in which every hospital takes its “fair share” of Medi-Cal patients.

Butler noted that his facility’s decision to quit Medi-Cal was not motivated by the state’s poor reimbursement for Medi-Cal patients, but rather because for the past two years the hospital has been deluged with these patients, jeopardizing the quality of all patient care. Fountain Valley’s maternity division, for instance, has been delivering about 400 babies a month in a facility designed for 300.

Meanwhile, John Cochran, president of La Palma Intercommunity Hospital, warned that the commission decision to “open up” a small part of Orange County “will have very little impact” on Fountain Valley’s maternity load. Also, he said, the remaining dozen Medi-Cal hospitals in north and central Orange County will still have a heavy load of indigent patients.

Cochran and other hospital officials noted that La Palma and Martin Luther Hospital in Anaheim have given notice that they plan to terminate their Medi-Cal contracts in January. Also reportedly intending to terminate its Medi-Cal contract by year’s end is a key Medi-Cal maternity provider, AMI Medical Center of Garden Grove.

But another hospital leader was more optimistic about CMAC’s decision. “It helps a little,” said David Langness, vice president of the Hospital Council of Southern California. “I think it’s the precursor to most likely all of Orange County being opened” and no hospital being required to take Medi-Cal patients.

Currently, the largest “open” Medi-Cal area in Orange County is South County, where a Medi-Cal patient can go to any hospital for emergency or elective care. And if a doctor agrees to care for him, the doctor and the hospital can be reimbursed for that care.