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HOME > ABOUT > PRESS > OVERDUE BUDGET AND CUTS STRESS MARIN
Article published - August 8, 2008
Credit: MARIN INDEPENDENT JOURNAL
Government funding cuts and state's overdue budget stressing Marin's health care providers
by Richard Halstead
Agencies and doctors providing critical health services in Marin are being buffeted by cuts in government financial support and payment delays caused by the perennial state budget impasse.
Although Gov. Arnold Schwarzenegger and the Legislature continue to battle over the governor's proposed budget, they have agreed on and approved one component of that budget: a 10 percent cut in Medi-Cal reimbursements. That change became effective last month.
This week, due to the budget impasse, the state stopped reimbursing institutional Medi-Cal providers, such as the Marin Community Clinic and the Coastal Health Alliance, which supply medical care to most of Marin's needy. The clinics are continuing to treat patients. They are, however, being forced to cannibalize their cash reserves.
And Medi-Cal isn't the only problem that health providers in Marin are facing.
The Centers of Medicare and Medicaid Services announced last week that it will stop providing hospices in high-cost areas such as Marin with slightly higher Medicare reimbursement rates. Hospice by the Bay, which provides hospice care in Marin, Sonoma and San Francisco counties, estimates the change will cost it $250,000 in lost revenue this year and more than $1 million a year after that.
Larry Meredith, director of Marin County's Department of Health and Human Services, said it was nearly impossible to find a doctor in Marin who accepted Medi-Cal even before the 10 percent cut, due to low reimbursement rates.
"They are a rare breed in Marin," Meredith said. The new cut "will probably mean that fewer Medi-Cal recipients will be able to get treatment in Marin outside of the public clinics."
Low Medi-Cal reimbursements nearly spelled the end for Novato-based Senior Access, the county's only provider of adult day health-care services. Senior Access announced last week that it is entering into a partnership with LifeLong Medical Care, a federally qualified health clinic based in Berkeley. Federally qualified clinics receive higher Medi-Cal reimbursement rates. LifeLong will now provide services to Senior Access clients who qualify for Medi-Cal, which last year accounted for 75 percent of them.
The Marin Community Clinic and Coastal Health Alliance, which are also federally approved health clinics, are shielded from the 10 percent cut in Medi-Cal reimbursement rates. But these public health clinics are having to scramble to compensate for the interruption in cash flow caused by the overdue state budget.
"I think we can endure this for about four weeks," said John Shen, the Marin Community Clinic's executive director. The clinic has about $700,000 in reserves and other money it may be able to borrow against.
"The question is, when we borrow money there is interest and where does the interest money come from?" Shen asked. The clinic relies on Medi-Cal for more than half of its $10 million budget.
The threat to Hospice by the Bay's revenue is less immediate, because the change isn't due to take effect until October. The new policy was enacted by the Centers for Medicare and Medicaid without any action by Congress or President Bush, said Sandra Lew, Hospice by the Bay's chief executive.
"It may affect our ability to provide care to everyone who needs it," Shen said, "especially people who don't have any insurance at all."
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