The California Medical Association fears that physicians will start dropping out of Medicare and Medi-Cal due to cuts made by federal and state agencies. The Centers for Medicare and Medicaid Services implemented a 4.4 percent Medicare provider cut effective Jan. 1. Simultaneously, Gov. Arnold Schwarzenegger approved a 5 percent cut to Medi-Cal physician reimbursement on Jan. 1.

"The double whammy of Medicare and Medi-Cal cuts is insulting and injurious to access to care," says Jack Lewin, MD, CEO of CMA. "Both programs save money, improve healthcare access, and reduce unnecessary emergency visits and poor quality of care. The reward to physicians is a slap in the face. ... The CMA believes that until doctors make it clear that they will not roll over, these abuses will not only continue, but accelerate."

Medicare Cuts
Because Congress was unable to implement the payment freeze proposed in the last-minute budget reconciliation bill, the cuts took effect. Meanwhile, the Center for Studying Health System Change, a Washington, D.C.-based nonpartisan research organization, released a national study revealing the reduction would have little impact on physicians and patients. The number of physicians accepting new Medicare patients has increased to 73 percent, compared with 71 percent in 2000-01, the report says.

Dr. Lewin strongly disagrees. "We believe the Medicare cuts will cause physicians to reduce their participation in Medicare or drop out altogether," he says. "What we've been hearing is that the Center for Studying Health System Change is dead wrong, when it comes to California physicians."

The CMA and the American Medical Association are aggressively pushing Congress to act as soon as possible to enact the budget reconciliation bill. At press time, the House was scheduled to return on Jan. 31, and the Senate was set to reconvene on Jan. 18.

"When Congress reconvenes, it says it will act to reverse the 4.4 percent cut immediately," Dr. Lewin says. "We have also received confirmation from CMS that it is keeping track of every claim filed between Jan. 2 and the date of the reversal. At that time, physicians will automatically be reimbursed for the 4.4 percent Medicare cuts. Until then, physicians must continue billing at 2005 rates or they will not get the retroactive payment."

Medi-Cal Cuts
The situation will further reduce access to care and force Medi-Cal beneficiaries to delay care or use hospital emergency departments for primary healthcare, Dr. Lewin says. Medi-Cal now pays $20 for a typical office visit, which is substantially below the cost of providing care. Even without the cut, California ranks last among the 50 states and the District of Columbia in Medi-Cal payments for patient care, he says.

"Eliminating this cut would be a win-win for California," Dr. Lewin says. The CMA and a broad coalition of healthcare groups are urging Gov. Schwarzenegger to stop the cut by introducing a two-year bill to rescind the statute mandating the cuts. Named Californians United for Quality Health, the coalition includes more than 50 healthcare advocacy groups and was created several years ago by the CMA to preserve access.

"Sponsored by Sen. Denise Ducheny and Sen. George Runner, this bill not only reverses the Medi-Cal 5 percent cut, but asks for an increase, which is appropriate," Dr. Lewin says.