Hospital ends contract with Medi-Cal
By Carissa Marsh Special to the Acorn

The Simi Valley Hospital ended its two-year contract with Medi-Cal last week, a decision that could force Medi-Cal patients to go elsewhere for non-emergency treatment.

The contract was terminated Dec. 8 after months of failed negotiations with the California Medical Assistance Commission, which negotiates Medi-Cal contracts on behalf of the state.

The hospital cited low reimbursement rates as the reason for the decision.

According to Gary Irish, president of Simi Valley Hospital, 10 percent to 12 percent of the hospital's patients are covered by MediCal, the state insurance program for low-income individuals or families.

Irish said patients insured by MediCal shouldn't be too concerned about the change. Outpatient services are not affected by the contract termination, meaning that Medi-Cal patients that arrive at the hospital's emergency room will be admitted and treated regardless of their insurance or ability to pay.

Once stable, a patient may be transferred to one of seven MediCal contracted hospitals in the area for further care if a bed is available. If a bed is not available, the Simi Valley Hospital will continue to provide services for the patient and receive reimbursement upon authorization from the state. Individuals seeking inpatient services will be referred to a Medi-Cal contracted hospital.

Irish said Tuesday that after four days of the new program, no MediCal patients had been transferred. He anticipates that the hospital will still see the majority of Medi-Cal patients.

"We are here to provide services to the community," Irish said. "When you come in to the hospital, we look at you as a patient, not as what kind of insurance you have, and we'll take care of you no matter what."

Irish said it was simply costing the hospital too much to stay under contract. Medi-Cal pays for about half of a patient's bill, leaving the hospital to foot the rest. Irish said the problem was that Medi-Cal only partially covered direct nursing care costs and did not cover any indirect expenses.

He estimated that under the contract the hospital was subsidizing the state medical program by about $2.4 million a year. Simi Valley Hospital is currently finishing a new bed tower, a project with $75-million price tag. Irish said that with the MediCal contract, the hospital was finding it difficult to "make ends meet."

According to Irish, the hospital will now have more money to pay for the new facility, as well as new equipment and technology purchases, which "benefits everybody in the community."

While the Simi Hospital is the first in the county to drop its Medi-Cal contract, the hospital's decision is part of a larger statewide problem.

Since November 2002, 16 hospitals throughout California discontinued their contracts because of low reimbursement rates, according to Tony Cava, spokesperson for the state Department of Health Care Services.

Cava said the solution is healthcare reform- specifically the governor's healthcare reform proposal, which, if passed, promises to increase MediCal reimbursement rates for the second time in the last two decades. The state Legislature has been negotiating the proposal for the past year, Cava said.

"We are hopeful to see reform very soon so those rates can take effect," he said. "It's always unfortunate when we lose partners, but we're hopeful that, with the healthcare reform the governor has put forth, that hospitals that have ended their contracts with Medi-Cal will come back."

Irish said the Simi Valley Hospital is in favor of the governor's proposal and that if reimbursement rates were raised the hospital would probably renew its Medi-Cal contract with CMAC.

Simi Valley Hospital has established a Medi-Cal information line at (805) 955-7000 to answer questions from the community. The line will be staffed Monday through Friday, 8 a.m. to 4 p.m.