SACRAMENTO, Calif. (AP) — When Hunter Morgan bought a Southern California optometry office three years ago, one of the first things he did was create a government-funded low-income health center. The goal was to begin seeing patients using the insurance program Medicaid.
The previous owners did not accept Medicaid patients, which covers about one-third of California’s 39 million residents. But Morgan felt he had a responsibility to serve those in need.
After just five months, Morgan said he had to stop treating Medicaid patients because of the low pay. He charges his $175 for his eye exam, but the most he could get from Medicaid was about $40. That has made it difficult to pay staff and high rent in the upscale beach community of Encinitas, 25 miles (40 kilometers) north of San Diego.
“We couldn’t function like that,” he said.
California Governor Gavin Newsom and his Democratic allies in the state Legislature have significantly increased Medicaid enrollment. That includes all eligible adults in the state. stay in the country without legal permission. But while California’s Medicaid currently covers about 15 million people, the fees paid to doctors have not kept up.
This is contributing to a crisis in some rural hospitals, with some requiring emergency treatment. emergency loan Last year, the state Legislature requested that the prorogation be blocked. People enrolled in Medicaid may also have difficulty finding doctors who will treat them, forcing some to drive long distances to receive treatment.
Health care providers are seeking increased spending from California’s Medicaid program, known as Medi-Cal. But California doesn’t have any extra money, as billions of dollars are poured into it in quick succession. budget deficit. To pay doctors more, Newsom and the state Legislature chose to raise taxes, but not in the way you might think.
Nearly all states tax organizations such as hospitals, nursing homes, and ambulances to help pay their Medicaid share. Since 2005, California has taxed managed care organizations, which are private companies that contract with the state to provide Medicaid benefits.
However, unlike most taxes, businesses do not have to pay the full amount. The state pays them most of it and then uses that money to induce more federal payments for Medicaid. That means more money for everyone.
Last year, Newsom signed legislation that significantly increased this tax. This means the state will receive $19.4 billion by 2026. On Thursday, the state Legislature passed another increase, which would generate an estimated $1.5 billion more.
“California is using the full power of government to increase access to affordable, quality health care across the state,” Newsom said in a statement to The Associated Press.
California has traditionally used such surpluses to balance its budget. But now the state has vowed to use some of that money to pay doctors extra fees to treat Medicaid patients.
How much and who receives it will be completely decided this year. The first increases last year went to family doctors, maternity care and some mental health services. This year’s increase, which has not yet been approved by Congress, would include obstetrics, vaccines, abortion services, optometry and more.
Newsom is proposing to raise fees for optometrists to match those paid by Medicare, the federal health insurance program for people 65 and older. That could mean California’s roughly 8,000 licensed optometrists would receive more money for their Medicaid patients, about $130 per exam instead of $47.
Although health care providers welcome the increase, they remain concerned. California’s budget deficit continues to grow.
“If things get really bad, I think we can use that money for other purposes,” said Kristin Schultz, executive director of the California Optometric Association.
Newsom already wants to change the tax increase he signed last year, which includes raising payments to providers by an additional $11 billion over five years. With a deficit this year, Newsom wants to spend $8 billion over four years to pay providers, he said. Providers will still receive the same increases, but they will expire sooner.
Additionally, the federal government must approve California’s taxes on managed care organizations every three years. President Joe Biden’s administration recently signaled a desire to reduce the amount states can collect, which could force California to cut taxes in the future and hurt its ability to continue paying doctors high prices. There is sex.
“This is really concerning,” Stuart Thompson, senior vice president of government affairs for the California Medical Association, said at a recent hearing before lawmakers. “We don’t want to create a scenario where we do a program for four years and then we reach a cliff.”
Republicans in Congress have criticized Mr. Newsom’s plan to raise taxes again. “There’s no guarantee that that’s going to stay in health care,” said Rep. Vince Fong, a Republican and vice chairman of the Congressional Budget Committee.
But Congressional Democrats appear to view the plan more favorably. Democrat Akira Weber, chair of the appropriations subcommittee that oversees health care spending, said the budget deficit requires “some changes” but remained committed to raising rates.
Increased payments to optometrists would be good news for people in Fresno, a Central Valley city with a large population of low-income farm workers who receive Medicaid.
Historically, Medicaid patients made up about 15% of the clientele at Fogg Remington’s eye clinic in the city. But it stopped accepting new Medicaid patients in January, citing low reimbursement rates and a new law mandating health care providers. be paid at least $25 per hour.
Dr. Anthony Chavez, an optometrist at Fogg Remington, said if California were to raise rates, it would be a “no-brainer” to reverse the decision.
“We want to help these people,” Chavez said.
