Hospitals and Doctors Agree to Continue CMS : Medicine: They will keep providing care under an ill-funded public program. Hospitals will feel pinch.

The physicians, clinics and hospitals treating the county’s 25,000 poor and uninsured adults have agreed in principle to continue providing care for the next four to 12 months, despite a funding shortage that nearly closed the medical program earlier this year, officials said Tuesday.

The about 1,000 doctors and 16 clinics participating in the County Medical Services program have agreed to continue coverage until June 30, the end of the 1991-92 fiscal year, at about the same rates they received in 1990-91, said Dr. J. William Cox, director of the county’s Department of Health Services.

The 23 participating hospitals, however, will absorb a collective $10-million reduction in county payments, and so far have tentatively agreed to continue coverage only until the end of December, according to Cox and Jim Lott, president and chief executive officer of the Hospital Council of San Diego and Imperial Counties.

If formally signed, the new agreement will assure continued medical care for uninsured indigents and working poor people who nearly lost those services when the county Board of Supervisors voted to shut down the CMS program in March after state funding ran out. A successful lawsuit by Legal Aid lawyers on behalf of CMS recipients prevented closure of the program.

Medically indigent adults “will have health coverage without a reduction in the level of service or the scope of benefits,” Cox said.

But hospitals, which already receive just a small fraction of the actual cost of treating CMS patients, are dismayed with the $10-million decrease in payments, Lott and other hospital officials said.

Despite Cox’s assertion, UC San Diego, a major provider of care for CMS patients, has not decided whether to rejoin the program, said spokeswoman Leslie Franz. Existing contracts with providers and the county’s authorization for the program expire Saturday.

“We haven’t yet made a decision,” Franz said. “This is a huge concern. This reduction is going to hurt in a number of ways.”

Mercy Hospital and Medical Center, which experienced a 20% increase in the number of poor and uninsured patients coming to its emergency room when Southeast San Diego’s only hospital closed in March, will continue to participate in the program, said spokesman Michael Scahill.

“Can we afford it? No,” Scahill said. “Are we going to do it? Yes.”

“I think it’s a fantastic thing for the indigents,” Lott added. But, without major new funding for the program, “we’re still dealing with the bleeding wound of a patient who is ready to die.”

Asserting that the state cannot mandate CMS without providing the money to pay for it, the county has sued the state to recover the funding it has poured into the program during the past two fiscal years. The county won a major victory June 25 when Superior Court Judge Michael I. Greer ruled that the state is responsible for funding the program.

Greer has yet to determine how much the state should pay. County attorneys assert that the state owes $22.2 million it spent since 1989-90, when the state required payments of $41 million without providing the 70% funding it promised when it shifted responsibility for the program to counties in 1982.

For 1991-92, the county expects to have $31.4 million to spend on the $41-million program and will force the hospitals to pick up the difference, Cox said. If, however, the county lawsuit yields a payment from the state, that money will be passed on to the hospitals, Cox said.

A windfall from the cash-starved state government is far from certain, however. State attorneys could appeal Greer’s ruling and win a reversal or delay payments for years.

Lott said that hospitals have little choice but to continue participating in the program because they are required by law to treat people who turn up at emergency rooms requiring urgent treatment--often the same circumstances that CMS patients face.

At some point, however, the cost of dealing with the county bureaucracy may drive some of them from the program he said.

Cox said, however, that, by remaining part of the CMS system, hospitals maintain their eligibility for other state funding.