After GOP health bill fails, California physicians push for higher reimbursement for treating Medicaid patients

California Capitol Building-Sacramento

California's doctors and dentists have renewed their push for more money to treat Medicaid patients now that the state has been spared the drastic cuts proposed under the failed GOP health care bill.

But Democratic Gov. Jerry Brown -- and some health advocates -- say they have other priorities for improving the low-income health program, which serves some 14 million residents, or about a third of the state's population.

Doctors had pinned their hopes for better pay on a new tobacco tax passed by voters in November. Proposition 56 was estimated to add about $1.2 billion to the state's Medi-Cal fund for 2017-18. But Brown's proposed budget in January disappointed providers: He did not recommend raising doctors' Medi-Cal rates, instead earmarking the money to cover the program's overall costs.

California doctors have long decried California's Medi-Cal rates, which are lower than those of Medicaid programs in 45 other states and the District of Columbia. They argue that skimpy pay deters many doctors and dentists from treating poor patients.

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Earlier this month, the California Medical Association and the California Dental Association, representing doctors and dentists, released their own budget proposal seeking to boost those payments. The proposal suggests giving doctors annual bonuses of up to $15,000 based on the proportion of their patients on Medi-Cal. The price tag on their plan could be as much as $607.5 million.

Now that it appears unlikely California will need to cope with the massive cuts in federal Medicaid funding anticipated under the GOP health bill, discussions about how to dole out state tobacco tax money will likely restart in earnest after being in a holding pattern during the debate in Congress, said Anthony Wright, executive director of the advocacy group Health Access.

"There's a lot of things that money could go for besides provider reimbursements," Wright said, noting that he and other advocates also favor restoring some Medi-Cal benefits, such as vision care, that were cut during the recession.

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Francisco Silva, general counsel and senior vice president for the California Medical Association, said voters approved the tobacco tax ballot measure to improve patients' access to care and that the governor's January budget proposal "does not follow the will of the voters."

For patients on Medi-Cal, "if you don't address their ability to see a provider, you don't address access," Silva said. "Adding more patients to the back of the line and maintaining status quo" won't work.

Gov. Brown is scheduled to release a revised budget proposal in May that could change how the tobacco money would be spent. For now, it looks as though he won't budge on his budget priorities. "We continue to make our views very clear that these are proper and appropriate uses of the proceeds of Prop. 56," said the governor's budget spokesman, H.D. Palmer.

Palmer said it's now up to state lawmakers to define their own budget priorities, which could result in higher rates for health care providers.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

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