House healthcare bill includes financial boost for California

Contained in the nearly 2,000-page House healthcare bill is a little-noticed provision -- worth $300 million to California -- that would increase federal Medicare payments to doctors in a wide swath of the state in response to complaints that low reimbursement rates have kept them from taking new patients.

Rep. Sam Farr (D-Carmel) was able to include a reimbursement calculation fix in the overhaul legislation. It was a testament to California’s political muscle in the House, where its delegation is the largest of any state and includes Speaker Nancy Pelosi (D- San Francisco) and five committee chairs.

But as the bill heads to the Senate, the California-only provision is drawing scrutiny from officials in other states who say they suffer from a similar problem.

“While the provision may be good for California, it is not good public policy,” said Sen. Charles E. Grassley (R- Iowa).

“It certainly may be the case that there’s an inequity being addressed,” added Rep. Tom Latham (R-Iowa). “But to have a specific earmark for California . . . and not fix the problem -- the much more severe problem -- that we’ve had in Iowa and throughout the rural parts of the country is simply unfair.”

At issue is the current system for calculating doctors’ costs and setting Medicare reimbursements rates. For example, according to the San Diego County Medical Society, the city of San Diego, with 1.3 million people, “is still considered a rural farm town under the Medicare payment system.”

In a letter to congressional leaders, a bipartisan group of California House members said that “physicians are declining to serve in some high-cost areas, such as San Diego and Santa Cruz counties, because the outdated reimbursement levels make it difficult to maintain a practice or afford the cost of living.”

The provision in the healthcare bill would raise payments to doctors in 14 California counties, including Riverside and San Bernardino. A Pelosi spokesman said the fix was intended as a pilot program that could be extended later to other states.

Still, the provision could face trouble in the Senate, where lawmakers from the most populous state have no more votes than those from the smallest state -- underscoring the problems that California officials have confronted in trying to secure more money.

“First, the ' ABC’ mind-set of some states’ politicians that would rather have federal resources go ‘anywhere but California,’ ” said Mary Beth Sullivan, executive director of the California Institute for Federal Policy Research. “And, second, the small- and rural-state bias in the Senate that can make it harder for California to get its fair share.”

Grassley is among the senators who see Medicare underpayments to doctors in rural states as a national problem. “The California provision would treat that state differently from any other state in the country,” he said. “It doesn’t address the real problem, which is the accuracy of the data being used.”

Grassley attached an amendment to the Senate bill that would direct Medicare officials to improve the accuracy of the data it uses to factor in geographic adjustments for physicians’ practice costs nationwide to “better reflect the real costs of running an office.”

California officials are hopeful the provision will survive in a final bill. And Rep. Farr, for one, credited the merits of the state’s argument -- not its political clout -- as the driving force.

“This is a question of equity,” Sen. Dianne Feinstein (D-Calif.) said this year in introducing legislation similar to the House provision. “Medicare reimbursements should reflect the true costs that California doctors face. Without action, it will become more and more difficult for Medicare patients in these counties to find doctors who will see them.”