Federal Judge Amends Medi-Cal Reimbursement Rate Reduction Ruling / Bill Limiting Health Insurer Profits, Administration Moves Forward

[CAL/AAEM News Service]

Federal Judge Amends Medi-Cal Reimbursement Rate Reduction
Ruling

 

Source: The California Healthline ( http://www.californiahealthline.org
)

Date: September 04, 2008



U.S. District Judge Christina Snyder has amended her ruling to overturn a
10% reduction in Medi-Cal reimbursement rates by requiring that the state repay
health care providers only for services performed on or after Aug. 18, which
effectively "spares the state from tens of millions of dollars" in
reimbursements, the San
Francisco Chronicle reports. Medi-Cal is California's Medicaid program (Egelko, San
Francisco Chronicle, 9/4).



In February, California
lawmakers and Gov. Arnold Schwarzenegger (R) approved the reduction as part of
an effort to address the estimated $15.2 billion state budget deficit. The
reduction took effect on July 1. Snyder on Aug. 18 ordered California to reverse the reduction.
According to Snyder, California lawmakers did not consider the
effect that the reduction would have on quality and access to care for
beneficiaries, as required by federal law (California Healthline,
9/2). 



State officials had estimated that the original injunction would cost the state
$500 million annually. Under the amended ruling, the state would save an
estimated $65 million and the loss to health care providers would total $130
million, according to the Chronicle.



Lynn Carman, a lawyer for pharmacists, patients and community organizations
that challenged the cuts, said he would ask the appeals court to enforce
Snyder's original ruling that would have required reimbursement of services
from July 1 onward. 



Norman Williams, spokesperson for the state Department of Health Care Services,
said the department has told its workers and contractors to "fully comply
with the order" unless Snyder agrees to suspend the injunction during the
state's appeal of the decision (San Francisco Chronicle, 9/4).

 



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Bill Limiting Health Insurer Profits, Administration Moves
Forward

 

Source: The California Healthline ( http://www.californiahealthline.org
)

Date: August 22, 2008

 

 

A bill mirroring one of the key components of Gov. Arnold
Schwarzenegger's (R) defeated health reform package took another step toward
fruition this week when the California Assembly approved legislation limiting
health insurance administrative expenses and profit to 15% of premium income.

 

The bill (SB 1440), by Sen. Sheila Kuehl (D-Santa Monica),
requires 85% of premiums and fees received by health insurers and health plans
to be spent on treatment and other benefits for patients.

 

Administration, profit, broker commissions and other costs
would be capped at 15%, starting in 2011.

 

The bill, approved 41-26 in the Assembly, now goes back to
the Senate for consideration of Assembly amendments. 

 

Assembly member Hector De La Torre (D-South Gate) said
administrative costs account for as much as 30% of health insurance premiums.
"Health insurance is the only business where denying the customer what
they paid for makes you money," De La Torre said.

 

Republicans argued that the limit on administrative costs
could drive some health insurers out of the California market.

 

"By passing this legislation, we may cause millions of
Californians who purchase (insurance) in individual markets to lose
coverage," said Assembly member Bill Emmerson (R-Redlands). "I know
that administrative costs in many plans are above the 15% level."

 

Schwarzenegger included the same percentage limit on
administrative costs and profits in his comprehensive health care reform
proposal that died earlier this year. Schwarzenegger's office said he hasn't
taken a position on Kuehl's bill.

 

Without a budget deal, it looks like the Legislature will
stay in session through the Democratic National Convention next week, working
their way through bills before the Aug. 31 legislative deadline. Here's a
rundown on some recent actions.

 

Health Insurance and the Uninsured

 

The Senate is considering AB 2 by Assembly member Mervyn
Dymally (D-Compton) (Bill status, 8/18). The measure was amended to allow the state
to collect $1 per member per month from health plans to help support the Major
Risk Medical Insurance Program. Health plans that offer coverage to people
eligible for the program would be exempt from the fee (Bill text, 8/14).

 

Hospitals

 

Sen. Alex Padilla's (D-Pacoima) SB 902 was amended to permit
counties to raise fines for traffic violations to help support emergency
medical services. Originally, the bill dealt with firefighters' use of dogs
(Bill text, 8/15). The measure is before the Assembly Rules Committee (Bill
status, 8/15).

 

SB 158 by Sen. Dean Florez (D-Shafter) was amended to
require hospitals to adopt plans aimed at preventing patient safety events and
create a surveillance program within the Department of Public Health for
hospital-acquired infections (Bill text, 8/15).

 

Health Privacy

 

AB 211 by Assembly member Dave Jones (D-Sacramento) was
amended to require health care providers to monitor employees to ensure that
they do not violate patients' medical privacy rights (Bill text, 8/12). The
legislation is before the Senate (Bill status, 8/14).

 

For more information, please visit: 

http://www.californiahealthline.org/theweekly.aspx?article=legislative&w=08/22/2008

 

Abid Mogannam &
Brian Potts MD, MBA
Managing Editors, CAL/AAEM News Service
University of California, Irvine

The CAL/AAEM Archives are available at: http://maillists.uci.edu/mailman/public/calaaem/

CAL/AAEM, a nonprofit professional organization for emergency physicians, operates the CAL/AAEM News Service solely as an educational resource for physicians. Dissemination of an article by CAL/AAEM News Service does not imply endorsement, agreement, or recommendation by CAL/AAEM News Service, CAL/AAEM, or AAEM.  


      
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