Medi-Cal Funds in Jeopardy at Valley Hospital

State health officials have refused to renew a lucrative Medi-Cal funding agreement with Northridge Hospital Medical Center, citing the hospital’s practice of denying epidural anesthesia to poor women in labor unless they could pay cash in advance.

The California Medical Assistance Commission delayed approval of the facility’s eligibility for federal funds designed to augment the budgets of hospitals that take Medi-Cal and Medicaid, The Times has learned. The commission, meeting in closed session Tuesday, also asked its staff to consider other sanctions against the hospital.

“We want to send a very clear message that [denying women epidurals if they can’t pay] is a violation of the contract,” said former state Assemblyman Richard Katz, a commission member. “Any hospital engaging in this will not get supplemental money. Whatever leverage the commission has, we’re going to use to help Medi-Cal beneficiaries.”

Katz and others at the commission said the agency acted in response to allegations reported in The Times that women who were on Medi-Cal were denied epidurals at the hospital unless they paid cash upfront.

This week, in an investigation also prompted by The Times’ report, the state Department of Health Services referred the names of three doctors who practice at Northridge Hospital to regulators in charge of policing physicians. And Thursday, the department accused the hospital of violating six health-care regulations, including failure to provide care without regard to a patient’s ability to pay.

Candis Cohen, spokeswoman for the Medical Board of California, which regulates doctors, said the highly secretive agency is looking into questions about whether doctors acted improperly at Northridge Hospital. She would not name the three doctors who had been referred by state health officials.

Asking for money from a Medi-Cal recipient for a medical procedure that the agency covers violates the contract the hospital signed with the state to be allowed to accept the recipients as patients, said Byron Chell, executive director of the commission. Refusing treatment for financial reasons also violates the contract, he said.

Such behavior also violates state law, officials have said.

“I can imagine a physician asking for the money,” Chell said. “I just can’t imagine not providing the service if somebody doesn’t come up with the money. . . . Both are improper and both are a violation of our contract.”

The commission would not release the amount of funds involved for Northridge Hospital Medical Center, saying that such information is privileged for four years after the fiscal year in which the money is distributed.

But Chell said the total pot of $400 million in supplemental funds will be distributed to 66 hospitals (65 if Northridge is not reinstated) in the fiscal year beginning July 1.

Northridge Hospital Medical Center officials could not be reached for comment. But Ken August, spokesman for the Department of Health Services, said the funds are key revenue for many hospitals.

“It’s a significant amount of money,” August said. “Hospitals base their budgets around receiving this money. And they’re very upset when they don’t get it.”

August said Friday that the state is continuing to investigate the hospital’s practices, and is seeking to interview women on Medi-Cal who were denied epidurals at Northridge Hospital or required to pay extra for them.

He asked that patients who have had such experiences phone the department’s Los Angeles area licensing office at (213) 351-8200.

Theoretically, the money for Northridge will be withheld starting July 1 when the new fiscal year begins, although because the payments are made retroactively, the first checks are not scheduled to go out until October.

The commission will meet again in July, and if the hospital has presented a satisfactory plan to answer the failures noted by state officials, funding could be approved retroactively.

“They have to address the six citations Health Services has just issued,” said Katz, who said he was “astounded” by the allegations against the hospital. “They have to respond to the satisfaction of Health Services and to our commission, and tell us what changes have been made.”