In the wake of state budget cuts poised to impact Medi-Cal payments, CalOptima Health is investing about $526 million from its reserves toward increasing rates paid to hospitals, community clinics and other health care providers serving Orange County.
Gov. Gavin Newsom’s latest budget proposal would take $6.7 billion originally reserved for increasing Medi-Cal payments to health care providers and redirect those funds toward the state’s deficit. To mitigate the blow, officials with CalOptima Health, the health insurance provider for more than 928,000 of the county’s low-income residents, voted to provide the funding over the next two years to cover the potential hit safety net providers might feel as a result of the budget cuts.
Historically, providers are not lining up to accept Medi-Cal because of the state’s lower reimbursement rates, said Isabel Becerra, vice chair of the CalOptima Health board and CEO of the Coalition of Orange County Community Health Centers. CalOptima increasing rates locally during a time of reduction will help keep providers in place, she said.
“It ensures that when when you are sick, you are going to be able to, for example, go to the doctor, or if you’re newly insured, you’re newly eligible for Medi-Cal and you’re looking for a provider, you’ll have a greater choice because you’ll have more providers willing to accept Medi-Cal,” Becerra said.
Those safety net providers, Becerra said, are willing to accept Medi-Cal patients – residents who fall below the federal poverty level – despite reimbursement for services being traditionally lower.
Michael Hunn, CEO of CalOptima Health, said in a statement that Medi-Cal reimbursement has been a barrier to access for patients.
“We ask a lot of our hospitals, doctors and others who provide life-saving care to our members,” Hunn said. “These new rate increases will ensure member access, provider financial stability, network access and medical care for CalOptima Health members throughout Orange County over the next two and a half years.”
Becerra said the cuts from the state could contribute to either a reduction or complete elimination of health care services accessible to many county residents because fewer providers would be willing to accept Medi-Cal patients. Along with health care services, communities of color and undocumented residents tend to lose a lot during times of budget cuts, she added.
“Such as, in-home support services for undocumented individuals. That’s on the budget. The ‘Food is Medicine’ program where we were going to provide packaged meals for the community – that’s been delayed,” she said. “I think it’s easier sometimes to go for the low-hanging fruit, maybe without thinking about the impact being felt harder by communities of color.
So the question for the CalOptima board became, she said. “How do we mitigate some of these potential cuts that are coming again down from the state and protect our vulnerable communities and ensure that the promises that we’ve made, at least in the last couple of years, to gain and expand these services are protected to the extent that we can protect them?”
CalOptima officials said this will be the largest increase in provider rates in 30 years.
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