New Medi-Cal Rules Target Hospitals in County : Health: Just as the Fountain Valley center was dropping out of the system, the state instituted a new procedure to spread indigent care around.

The decision took doctors and administrators by surprise.

For weeks, they had warned Medi-Cal patients that their large, community hospital was quitting the state health insurance program for the poor.

But three days before their hospital’s Medi-Cal contract expired, the state revamped the rules.

In a new procedure which began on Nov. 17, Medi-Cal patients could seek treatment at any hospital in Fountain Valley, Westminster or Huntington Beach--not just those with a contract for indigent care.

Overnight, hospitals whose leaders had never wanted to treat Medi-Cal patients were informed by the California Medical Assistance Commission that their facilities were now “participating” in the Medi-Cal network.

And ironically, the hospital that precipitated this action--293-bed Fountain Valley Regional Hospital and Medical Center, Orange County’s second largest Medi-Cal provider--found itself back in the indigent-care system on the very same day that its contract ran out.

Though the commission’s decision was a narrow one--affecting just five hospitals in west-central Orange County--it marked the first time since 1983 that state officials had restructured the local Medi-Cal system.

And with another three of Orange County’s 12 remaining contract hospitals vowing to quit Medi-Cal by early January, the ruling signaled that Sacramento had finally noticed that the local indigent-care network here was in trouble.

“Orange County appears to have a problem in certain communities with insufficient licensed obstetrics beds to meet the needs of the community,” Michael Murray, executive director of the state commission, conceded.

Because Fountain Valley’s withdrawal from the program would have left the west-central area of the county with too few beds for Medi-Cal patients, the commission created an “open area” that allows hospitals without contracts to serve Medi-Cal patients. (South County has always designated an “open area,” where every hospital can be reimbursed for treating Medi-Cal patients.)

“We wanted to be part of the solution,” Murray said, explaining the commission’s decision to bend its rules.

Commissioners are hoping that the new “open area” will ease crowding at Fountain Valley and encourage more doctors to accept Medi-Cal patients now that their hospitals can accept them. “One reason doctors have said they don’t take Medi-Cal is that their hospital doesn’t have a contract,” Murray said. “They no longer have that obstruction.”

But success will depend on the answers to several questions. Will the new “open area” reduce Fountain Valley’s crowding? Will Fountain Valley’s Medi-Cal patients seek care somewhere else and even out the demand?

And will doctors at nearby hospitals--some of whom had refused Medi-Cal patients for year--agree to treat these patients now? (Under Medi-Cal rules, even when a hospital is allowed to accept such patients, doctors are not required to care for them unless they are emergency cases. And most Orange County physicians have declined to work with the slow, low-paying Medi-Cal system.)

After 10 days under the new California Medical Assistance Commission rules, doctors, health care leaders and some indigent patients sounded both perplexed and pessimistic about the commission’s latest decision. Many complained that it was like putting a “Band-Aid” on a gaping wound, and added that all of Orange County should be declared “open.”

“It didn’t solve a thing,” said David Langness, a vice president of the Hospital Council of Southern California. Fountain Valley’s main problem under Medi-Cal was overcrowding of its obstetrics facility, and Langness said that is unlikely to change under the new system.

A few patients might go to a hospital other than Fountain Valley for elective surgery, Langness said, but “I don’t think there’s an incentive for the current patient population to go anywhere” but Fountain Valley.

Richard Butler, executive director at Fountain Valley, said doctors and staff there are confused about how the “open area” will work.

He conceded that the new designation was “a small step” toward easing crowding at his hospital. But Butler has spent months pleading with the state to make all of Orange County an “open area,” and he said that he has received no assurances that the state is considering such a step.

Meanwhile, Medi-Cal patients can expect to gain little from the new “open area,” one doctor suggested.

“If Fountain Valley is helped, that’s good for Fountain Valley. But some patients are screwed,” said a physician who regularly treats Medi-Cal patients and believes that most doctors in the area will continue refusing to treat them.

“For years, physicians have treated Medi-Cal like leprosy,” he added. “The reimbursement is so ridiculously low and doctors are not interested in those patients . . . so patients with Medi-Cal shuffle through life like lost baggage,” going from hospital to hospital seeking for medical care.

And “open area” or not, the doctor warned, most physicians will probably decide not to take Medi-Cal patients.

Fountain Valley’s crowded obstetrics ward was at the core of the hospital’s Medi-Cal crisis.

To a visitor two weeks ago, the maternity ward looked pleasant, calm. There were no women in labor on gurneys in the hallway as there have been at other Medi-Cal hospitals this year.

But appearances can be deceiving.

Actually, it was a busy day, with patients not only filling all 38 obstetrics beds but also overflowing into nine surgery beds a quarter-mile of hospital halls away.

The extra beds on surgery have enabled Fountain Valley to handle a birthrate this year that has soared from an optimal 250 to 300 deliveries a month to 400, 450, even 470 a month.

Of these, Butler said, about half were Medi-Cal births, and each month, 50 involved “walk-ins”--high-risk Medi-Cal mothers who showed up at the hospital in labor but with no prenatal care.

Crowding in obstetrics was Fountain Valley’s main reason for quitting Medi-Cal, hospital officials have said.

Besides filling beds meant for surgical patients, a flood of maternity patients forced OB doctors and nurses to work unusually long and stressful hours, according to Dr. Wilma Rajcher, chairwoman of obstetrics and gynecology.

“We’re wearing down,” Rajcher said. When the ward is crowded, women in labor “can’t be watched” as closely as they should be, she said. And the hospital must discharge new mothers too quickly, often asking them to leave just 24 hours after delivery.

During the first week of the new “open area,” Fountain Valley’s maternity census was unusually low, but hospital officials declined to attribute that to the change in Medi-Cal status.

Rajcher is among those unimpressed with CMAC’s decision to invite other nearby hospitals to take Medi-Cal patients. “It opens up a few beds. . . . This will be some help,” she said. “But this is not a solution. This is a Band-Aid.”

At suburban hospitals near Fountain Valley, administrators were shocked to learn that, literally overnight, their facilities were now participating in Medi-Cal.

No state official had called to break the news, they said bitterly; most were informed by a reporter. They added that they were not particularly interested in joining a health insurance system that pays doctors and hospitals far below cost.

“I don’t think we’re going to be pleased,” said Angela Garland, associate executive director of Humana Hospital-Huntington Beach. Another hospital official said that most of Humana’s 325 doctors do not accept Medi-Cal patients, while Garland said that doctors there “have been unwilling to negotiate any obstetrics-only contracts (with Medi-Cal) in the past.”

At Humana Hospital-Westminster, executive director William Rasmussen also reported that most of his 200 physicians did not accept Medi-Cal, and he suggested that Medi-Cal reimbursements must improve before they would re-consider.

And at FHP Hospital, where all patients must belong to a prepaid health plan, hospital spokesman Ria Carlson said she and two senior managers “were just shocked” to learn that CMAC officials were now describing their facility as part of the Medi-Cal system.

Carlson said FHP officials were investigating further, but she doubted that the “open” designation would affect their hospital. “Our hospital is at 90% capacity; I really don’t think it’ll have a huge effect on us,” she said.

Of course, those with most at stake in the system are the sick, the injured, the poor.

Last Friday, several residents of a YWCA homeless shelter in Santa Ana said that even though they could now seek medical care at other hospitals, they would probably still go to Fountain Valley.

“I’d go there in a heartbeat,” said 35-year-old Jeanne Goodall. Sherri E. Kawaguchi, 39, agreed: “I still would go, because it was nice to me when I walked in the doors the last time.”

Comments like that were to be expected, Fountain Valley officials said, for it would take time to shed their image as a Medi-Cal hospital.

Indeed, late last week, Medi-Cal patients were still flocking to Fountain Valley’s emergency room.

“We’re still receiving Medi-Cal patients,” acknowledged Dr. Peter Anderson, the hospital’s emergency department director. “So many of the people don’t read the papers. If I asked 10 people about Medi-Cal, they’d have no idea what’s going on.”

Still, Anderson was hopeful that the “open” designation would help eventually. “Hopefully, it will allow the patients to go to the (hospital) in the closest city where they live. So Medi-Cal patients will be spread throughout the county.”

But he added that he wasn’t sure CMAC’s latest move was enough. “It’s a temporizing type of thing,” he said. “And it shows their system (Medi-Cal) . . . is falling apart.”