California doctors fight back: Medicaid pay cut goes to court

The AMA supports the California Medical Assn.'s lawsuit challenging a Medi-Cal payment reduction that could hurt patients' ability to get care.

Editorial. Aug. 9, 2004.

Should Medicaid patients have the same access to high-quality medical care as people with private insurance?

The answer, of course, is yes.

But the reality is that they often don't.

A major reason for that sad fact is that Medicaid in many states pays doctors so poorly, sometimes below their costs, that many physicians don't have the financial wherewithal to continue participating in the program.

Overall, Medicaid pays doctors less than 70% of the Medicare rate. But that figure, published in a June Health Affairs article, is an average. Some states pay only half or one-third Medicare's rate.

Many physicians have reached the end of their ropes. A notable example of their fighting back, with some success, is a lawsuit California doctors have filed against the state. The California Medical Assn. in 2003 won a preliminary injunction against a 5% Medicaid payment reduction that was to go into effect at the beginning of this year. The state has appealed the decision.

The AMA and the American Academy of Pediatrics have rightly supported the CMA in this fight. The two groups submitted a friend-of-the-court brief last month asking a U.S. appeals court to uphold the injunction.

The crux of their argument gets back to that notion of equal access to health care services for Medicaid patients. It is required by federal law. But California, as well as many other states, is breaking that law by failing to pay doctors adequate rates, the medical groups argue.