This article will discuss:

• What Medi-Cal patients will not be effected by this decision
• What Medi-Cal patients will be effected by this decision
• What is Medi-Cal?
• Who is eligible for Medi-Cal?
• How Medi-Cal contracts with hospitals
• Reasons Madera Community Hospital did not renew its Medi-Cal contract

What Medi-Cal patients will not be effected by this decision

Madera Community Hospital (MCH) will see and treat patients regardless of their financial status (private insurance, HMO, Medi-Cal, or self pay) as it always has.

The current Medi-Cal contract MCH chose not to participate in involves only some Medi-Cal patients that need to be admitted into the hospital. It does not affect:

• Medi-Cal patients coming to the Emergency Room for evaluation
• Pregnant Medi-Cal patients in active labor (a true medical emergency)
• Medi-Cal patients currently seen for outpatient services (clinic, outpatient lab and radiology)
• Medi-Cal patients requiring hospital admission that require monitoring or therapy during the ambulance ride.
• Medi-Cal patients requiring hospital admission that refuse to be transferred to another hospital.

Please note-> Medi-Cal can require a patient go to a Medi-Cal contracted hospital once they are stabilized by refusing to pay for further medical costs. However, MCH cannot refuse to treat a patient in need. Any insurance carrier may deny payment if a patient does not adhere to the terms of their contract with their insurer. However, a hospital cannot deny necessary treatment.

All insurances (HMO's, PPO's, Medi-Cal, Medicare, etc...) are required by law to pay for emergency medical screening exams for patients coming to any hospital emergency department. The law is quite liberal in that an emergency condition, as determined by an examining doctor, does not actually have to be present as long as the patient thought an emergency condition might exist. No insurance can tell a patient not to go to the closest hospital if the patient believes they have a possible medical emergency.

All patients presenting to the Emergency Room or Labor/Delivery will be examined and treated. Patients who require hospital admission that have an insurance plan not contracted with MCH for inpatient services will be examined by a health care provider to determine whether or not they are stable to be transferred to another hospital that the insurance plan has a contract with. This is true for Medi-Cal, Kaiser, and certain other HMO's

Medi-Cal patients that present to MCH and need hospital admission will not be transferred to another facility unless:

1. They are medically stable for transfer
2. Another hospital has agreed to accept them and has an accepting physician
3. The patient agrees to the transfer and has signed a consent to be transferred (this is a federal law).

All three of the above criteria must be met!

The only reason a person with a potentially unstable emergency medical condition may be transferred to another facility is that a higher level of care is required than can be provided at MCH. For example, a person requiring immediate brain surgery will need to be transferred to a hospital that has a neurosurgeon (brain surgeon) available because there are no neurosurgeons available in Madera. A person in an automobile accident with serious injuries to multiple body systems will need to go to the nearest Level 1 Trauma Center (University Medical Center, Fresno).

Examples of Emergency Medical Conditions not stable for transfer unless a higher level of care is required include:

• Active Labor
• Serious breathing problems
• Chest pain related to the heart
• Change in level of consciousness

This list of potential emergency medical conditions is extensive. Generally, if a Medi-Cal patient requires any type of stabilization during ambulance transport they are considered to have a potential medical emergency and thus not transferable due solely to financial considerations. Interventions that are considered advanced stabilizing therapies include:

• Patients requiring supplemental oxygen and monitoring of breathing
• Heart monitoring
• Intravenous medications or intravenous fluids that are necessary during the ambulance ride.

Somewhat sicker patients can be transferred at the request of their insurance plan in certain situations. Insurers having contractual arrangements with ambulance providers to provide more advanced ambulance transfers to specific hospitals, such as Kaiser, can request that patients be transferred to a their contracted hospital solely for financial reasons if the patient can be safely transferred by advanced ambulance. Advanced Life Support (ALS) ambulances can give certain therapies and perform heart and breathing monitoring during transport the BLS (Basic Life Support) ambulances cannot. This might include moderately ill but not critically ill or unstable patients.

Again, this is because some insurers have specifically contracted with advanced transport ambulance services, accepting doctors and hospitals to provide care for its own patients. Medi-Cal currently has no such arrangements with a Fresno area health providers.

What Medi-Cal patients will be effected by this decision?

Medi-Cal patients requiring admission for elective procedures will not be able to have such procedures performed at MCH. Examples include gastric bypass operations, scheduled repeat Caesarian sections, and other scheduled surgeries. This is a most unfortunate inconvenience that MCH hopes can be resolved in the near future. However, it must be pointed out that millions of Californians belonging to commercial HMO's have had these same restrictions and inconveniences for many years. This is the reality of managed care.

Medi-Cal patients that come to the emergency room and require hospital admission but are stable to transfer (need no treatment during ambulance ride) will be transferred to a Fresno hospital if:

• A hospital has available beds and will accept the patient
• The physician specialist on call at the hospital is willing to accept the patient
• The Medi-Cal patient signs consent agreeing to be transferred

Again, all three conditions must be met. Although hospitals that contract with Medi-Cal for inpatient services are required to accept Medi-Cal patients that require admission from non-contracted hospitals there is no such requirement for the physician specialist on call. It has been the uniform experience thus far that on call physicians at all private Fresno hospitals have declined to accept Medi-Cal patients transferred solely for financial reasons. This is within the right of on-call physicians to refuse transfers that are not based on medical necessity if Medi-Cal does not have contracts with individual on-call physicians to care for hospitalized Medi-Cal patients.

Medi-Cal patients requiring emergency hospitalization who are stable to be transferred to a hospital contracted with Medi-Cal will not be transferred if:

• They do not sign written consent to be transferred
• At least four Fresno hospitals have been contacted and will not accept the patient.

What is Medi-Cal?

Medi-Cal is a state sponsored program, administered by the California Department of Health Services, that provides health care insurance to residents of California based on financial income.

Medi-Cal is a health insurance provider as are private insurers. Medi-Cal pays health care providers (Doctors, Hospitals, Pharmacies, etc...) to provide services for its enrollees just as "Blue Cross" does. Medi-Cal must negotiate the rate it pays health care providers just like other insurers. Overall, Medi-Cal reimbursement rates to health care providers are among the lowest, if not the lowest, of all insurers.

Who is eligible for Medi-Cal?

Persons may be eligible for medical if their income does not exceed set guidelines. Eligibility for Medi-Cal is not only based on income but will depend other factors including:

• Age
• Sex
• Number of family dependents

Persons who might not otherwise qualify for Medi-Cal may be eligible for "Emergency Medi-Cal" in specific circumstances. An example would be a woman whose income exceeds that for general Medi-Cal but is eligible for Medi-Cal specifically related to pregnancy.

Generally speaking eligibility requirements are strictest for men between the ages of 18 to 65 and most liberal for children and women of child bearing age. This article does not get into specific eligibility requirements. For specific eligibility requirements one should contact their local Medi-Cal office.

How Medi-Cal contracts with hospitals

California has had a two-tiered relationship with hospitals since 1982 when it authorized selective contracting with hospitals pursuant to the Welfare and Institutions code Section 14082. The purpose of this was to allow the Department of Health Services to get lower rates from hospitals than it was able to get by using its reimbursement schedule. The idea was that hospitals would be reluctant to give up their Medi-Cal contracts and would give a better deal to keep them.

The dynamics are similar to those that many hospitals, particularly in the Bay Area and Southern California, experienced with large HMO's in the mid to late 1990's. Many hospitals and physician groups negotiated rates with HMO's that were below cost. In many cases part of the reason was the fear on part of hospitals and Doctors that they could not afford to lose such large contracts. When it became apparent that contracted rates were too low many health care providers and hospitals either renegotiated new contracts or dropped insurers that did not provide adequate reimbursement.

Most hospitals, including Madera Community Hospital, did enter into negotiated rate contracts with the Medi-Cal program. These have been administered by the Department of Health Services' agency known as the California Medical Assistance Commission (CMAC). In areas the CMAC felt it had adequate hospital coverage, it deemed those areas "closed" In areas where it did not have enough contracted hospital coverage, it deemed those areas to be "open". Reimbursement is higher to hospitals in "open" areas. Most rural hospitals in Northern California are "open".

The importance of the "open" and "closed" designation is that in an "open" area, a patient can be treated at any licensed hospital and the hospital will be paid by the Department of Health Services in accordance with the Department's reimbursement schedule. This rate is higher than the contracted rate. In a "closed" area a Medi-Cal patient who presents to a non-contracting hospital must be transferred whenever the patient is stabilized. (Welfare and Institutions Code Section 14087.10) A non-contracted hospital must be reimbursed for stabilizing services and until the patient is transferred at the rate paid an "open" area hospital.

The Department of Health Services, through Medi-Cal, will only pay the hospital for:

"Providing stabilizing services as required to program beneficiaries located in a closed health facility planning area who are in a life threatening or emergency situation before the beneficiary may be transported to a contracting hospital.

The State of California is obligated to arrange for medical services for Medi-Cal beneficiaries. It attempts to do so at the lowest rate possible.

Arguments have been made in the press that MCH is violating federal law (Hill-Burton Act) and refusing to care for Medi-Cal patients. This is not true!

All patients presenting to MCH requesting medical examination are seen and evaluated regardless of ability to pay. Patients requiring hospital admission will be admitted and cared for even if they are indigent.

Medi-Cal patients have a medical insurance plan just as Kaiser and Blue Cross patients have an insurance plan. Many insurance plans mandate that their beneficiaries be transferred to a contracting facility when they are stabilized. They too must reimburse a non-contracted hospital at a higher prevailing rate, not a lower contracted rate.

Reasons Madera Community Hospital did not renew its Medi-Cal contract

MCH is a well managed small community hospital dedicated to serving all in the community. It does not have large numbers of high paying businesses that it can rely on to cover losses from medical contracts and serves a substantial number of noninsured patients who are unable to pay medical bills.

Part of the problem is that Medi-Cal reimbursement, marginal at best, has not kept pace with rising hospital costs. According to Madera Community Hospital CEO Robert Kelly important factors in the past year that have taken MCH form a break even situation to a significant financial loss include:

• Skyrocketing energy costs
• Serious Nursing shortages that have required the hospital to increase nursing salaries.
• Increased insurance costs

Attempts to negotiate a new Medi-Cal contract with CMAC officials that had reasonable cost increases were not successful. CMAC officials apparently felt they had more than enough hospital facilities contracted for in Fresno County at lower rates. The cost increases requested by Mr. Kelly were no more than other rural hospitals in "open" areas receive from Medi-Cal.

It must be stressed that no entity, even state and federal governments, can continue lose money and still function. Madera Community Hospital is a small rural not for profit hospital that serves all Madera residents. It does not have money from the city or county of Madera. It cannot continue to operate at a financial loss.

The most reasonable accommodation would be for MCH to be designated and "open" area as most Madera residents are not within 30 minutes drive of Fresno area hospital. Medi-Cal has the responsibility to insure that there are contracted hospitals within a reasonable distance of a Medi-Cal patient or make the area an "open" area where a patient can go to non-contracted hospitals. South Fresno is an open area where a resident with Medi-Cal can be admitted to any hospital.

Madera citizens are encouraged express their concerns about this issue with their elected state representatives.

Readers may write to us at: Feedback@MaderaHealth.Com

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Opinions expressed in this article are those of Doctors Corner INternet Group, Inc. Our site is not affiliated with Madera Community Hospital. To the best of our knowledge information presented is accurate as of Jan, 2002.