State Over Medi-Cal Cuts

SACRAMENTO, CA -- The California Primary Care Association today announced the filing of a lawsuit against the state of California to prevent the elimination of certain Medi-Cal optional benefits currently being provided by California’s Federally Qualified Health Centers (FQHCs). The elimination of these optional benefits is effective July 1, 2009.

Included among the plaintiffs in the lawsuit is Clinicas del Camino Real, a community clinic network based in Ventura County. Clinicas serves more than 47-thousand patients annually and in 2008 had more than 250,000 patient visits. Clinicas expects to lose up to 84% of its Medi-Cal funding in some of its centers and will have to lay-off more than 150 employees.

In February, the Governor and State Legislature enacted a budget that eliminated the provision of nine Medi-Cal optional benefits, including adult dental, psychology, chiropractic, acupuncture, speech therapy, incontinence creams and washes, audiology, optometry, and podiatry services. 

“The state’s action to eliminate Denti-Cal could have devastating consequences to patients who weren’t even directly targeted by the cut, meaning the non-adult Medi-Cal populations such as children and the developmentally disabled,” said Roberto Juarez, CEO of Clinicas Del Camino Real, Inc. “My health center will do whatever it can to continue to serve everybody who comes through our doors.  However, these cuts will likely mean the closure of at least two of our ten medical office practices."

In addition, Clinicas has three state-of-the-art, mobile medical centers; also, thirty school-based mental health and medical care sites.

"These cuts are coming at a time when Clinicas del Camino recorded the greatest increase in uninsured patients of any community-clinic group in the nation. While traditionally, we have served farmworkers, the face of our patients is changing and we're seeing more and more families and individuals hit hard by recent lay-offs from companies like Amgen and Countrywide. Clinicas will not turn anyone away who needs care but we need the continued funding to do it," he added.

The lawsuit seeks an immediate injunction to stop the elimination of Medi-Cal adult dental, chiropractic, optometry, podiatry, and psychology services when provided by a Federally Qualified Health Center. Two other plaintiffs in the lawsuit are the California Primary Care Association and Southern Trinity Health Services in Trinity.

“The fact that the state and federal government codified the definition of ‘physician’ to include dentists, chiropractors, optometrists, podiatrists and psychologists, means these services are indeed not optional when provided in an FQHC setting,”  said Cathy Larsen, executive director of Southern Trinity Health Services. “As one of the plaintiff’s in this lawsuit, we are confident that the courts will take action to protect the rights of FQHCs, whose mission is to provide a medical home to our state’s low-income, underserved and uninsured populations.

Filed in the State Superior Court of Sacramento County, the lawsuit contends that the State of California must continue to reimburse Federally Qualified Health Centers for core services provided to Medi-Cal beneficiaries, including services otherwise considered to be optional benefits. The suit maintains that FQHC services are a mandatory Medicaid benefit; that California defines FQHC services as a Medi-Cal covered benefit in statute; that federal and state law both define FQHC services in terms of the types of providers who render services rather than the types of services that are rendered; and that consistent with federal law, California’s definition of an FQHC visit for the purposes of reimbursement under the Medi-Cal statute and approved by State Plan includes dentists, chiropractors, optometrists, podiatrists and psychologists as FQHC core providers.

“California’s Welfare and Institutions Code and State Plan clearly protects reimbursement for FQHC services that are provided by ‘core’ providers, as defined both federally and by the state,” said Carmela Castellano-Garcia, president and CEO of the California Primary Care Association.   “Despite the state’s elimination of Medi-Cal optional benefits in the February budget, the key state statutes preserving the FQHC reimbursement structure remain intact and therefore take precedence over the budget bill.”

“Because FQHCs have a unique billing process with the state, one which basically lumps all of their patient encounters with all billable providers under one billing code and not by provider, we are questioning whether clinics were even included in the Administration’s cost estimates for eliminating these optional benefits. The Department of Health Care Services has not been able to substantiate their claims that FQHCs were included in their impact analysis”

Medi-Cal optional benefits allow California community clinics and health centers to serve and receive reimbursement for approximately 1.2 million patient encounters each year. Medi-Cal adult dental alone translates to $56 million a year and comprises approximately 40 percent of the budget from which FQHCs operate their full dental programs.

The plaintiffs in this lawsuit intend to seek a resolution on this matter prior to the elimination’s effective date of July 1, 2009. The Sacramento County Superior Court will likely hear the issue within 45 days. 

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