Bill Introduced to Restore Medi-Cal Reimbursement Rates

(SACRAMENTO)— Assemblymember Luis A. Alejo (D-Salinas) introduced AB 900 to stop the proposed budget cuts to Medi-Cal reimbursements for medical services provided by hospital-based nursing facilities also known as Distinct Part/Skilled Nursing Facilities (DP/SNFs).

“Hospital-based nursing facilities care for patients of greater medical complexity and are often the only option for patients with specialized medical or behavioral needs or for individuals living in rural areas,” says Alejo. “The proposed cuts to Medi-Cal reimbursement rates will force a majority of them to close or reduce services, which would jeopardize essential medical care for patients and entire communities. This bill would restore Medi-Cal reimbursements rates to levels adequate to continue to provide quality care”

In 2011, The California Legislature passed and Governor Brown signed AB 97, which included a 10% across-the-board Medi-Cal provider rate reduction. In response, several healthcare organizations filed a lawsuit, forcing the administration to stop the implementation of the cuts. In December 2012, a federal appeals court affirmed California's right to cut payments made to Medi-Cal providers.

“The 2013-2014 Governor’s budget proposal intends to move forward with the Medi-Cal reimbursement cuts, which will result in an average effective rate decrease of 25% for hospitals that operate skilled nursing facilities. In addition, the Medi-Cal cuts will be retroactive to June 1, 2011,” says C. Duane Dauner, President and CEO of the California Hospital Association. “If these cuts are implemented, access to care for thousands of elderly, frail patients will be compromised, and some rural or safety net hospitals may be forced to close.”

“This bill eliminates planned reductions in access to long term nursing home care services for our most fragile senior community residents by many rural providers such as Hazel Hawkins, which are already struggling with other Medi-Cal and Medicare cuts,” says Ken Underwood, CEO of Hazel Hawkins. “The proposed Medi-Cal rate reduction would impact many small facilities by several million dollars annually, forcing providers to be reimbursed 20% to 40% below their actual cost to provide long term care services, and it will eliminate hundreds of jobs in areas with economies that cannot sustain full-time benefited job losses by the major employers in that community.”

This bill is eligible to be heard after March 22, 2013 in a California State Assembly policy committee.

Luis Alejo represents the 30th District in the California State Assembly, which consists of the Salinas Valley, Monterey County, San Benito County, South Santa Clara County and the city of Watsonville in Santa Cruz County.

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