Billions In New Medi-Cal Funding For Physician Reimbursements Could Increase Access To Care

A budget deal between the governor and the state legislature will expand Medi-Cal reimbursement rates starting next year. Medi-Cal is the state’s health care program covering low-income Californians. Just over a million San Diego County residents rely on Medi-Cal for health care. Advocates hope the move will give recipients more options and better access to medical care.

Groups like the California Medical Association said this is a big deal because Medi-Cal has not historically covered the full costs of care.

“If you don’t have adequate compensation to help run a business or keep a practice open, it’s very difficult to see as many Medi-Cal patients as we need to have been seeing,” said Dr. Sergio Flores, a Sharp HealthCare physician and vice chair of the California Medical Association Board. “It’s easy to have everyone have a Medi-Cal card, but if they don’t have access to care — it’s difficult for the patients to see a physician.”

State funding for Medi-Cal will increase by at least $2.7 billion. It will largely go toward raising reimbursement rates for physicians and hospitals. The increases will bring provider reimbursement rates to 87.5% of Medicare rates. Right now that reimbursement rate could be as low as 60% for some procedures, Flores said.

The California Medical Association said increases will start in January for primary and maternity care along with some mental health services, before expanding to specialty care.

“Getting the rates for Medi-Cal higher will hopefully attract more physicians,” Flores said. “More physicians to see Medi-Cal patients, so they can get better access.”

The increase in reimbursements is being funded by the Managed Care Organization Tax. It is paid by health plans and has traditionally gone into the state’s general fund.

“I wholly anticipate that this is going to really open up access in a huge way,” said Dr. Toluwalase Ajayi, a pediatrician and former president of the San Diego County Medical Society.

With the increases Ajayi also expects more doctors to accept Medi-Cal patients. That should increase access to care and decrease wait times, especially in underserved areas.

“Before I started in organized medicine I thought, if you have insurance you’re going to be taken care of — but if your insurance doesn’t allow physicians to actually maintain their practice, they wouldn’t accept your insurance,” Ajayi said. “So being able to have coverage that actually allows access, that is the key.”

The reimbursement increases are expected to run through 2029.

“I think it’s going to be a win-win and hopefully this will continue long-term,” Flores said.

California state Senate President pro Tempore Toni Atkins (D-San Diego) said the budget deal, “Expands critical access to Medi-Cal.”

Carmela Coyle, president of the California Hospital Association said part of this deal, hundreds of millions will also help hospitals.

“This is a historic investment in Medi-Cal that comes despite a projected $30 billion state budget deficit and represents a significant, multi-year commitment to protecting access to health care for vulnerable Californians,” Coyle said.

A coalition of groups including the hospital association and the California Medical Association pushed for the extra funding. A breakdown of proposed expenditures can be found here.


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