Medi-Cal lawsuit on the horizon, a financial policy one

This past week, SFGate announced that San Francisco’s Mayor Gavin Newsom’s administration and coalition are outraged by the 10% Medi-Cal physician reimbursement implemented by Governor Schwarzenegger’s Medi-Cal wonks (article 1 and article 2). This desperate $600 million savings attempt by the State government is plan B after Governor Schwarzeneggar’s Medi-Cal reform failed to come to fruition.

Being in the Medicaid field, I have no idea how Mayor Newsom’s lawsuit can stand legal grounds. Burden of health care access? By cutting reimbursement, physicians who can forgo the slim Medi-Cal reimbursement margins will bar medical services to existing or new Medi-Cal patients. If this financial barrier to health care access can be shown, then the new decreased reimbursement is not actuarially sound. If this cut had to be approved by the Center for Medicare and Medicaid Services (CMS), then an actuary’s signature must have certified the rates to be sustainable for the current level of access or greater. Obstruction to access is difficult to prove because of the intangible definition for the highly fluid Medi-Cal population. In addition this is only arguable for managed care but not for the fee-for-service system. The testy lawsuit stands weak legal grounds.

Can anyone with more policy and legal field experience enlighten me on the legal argument of this lawsuit?

In my mind, if Mayor Newsom wants to become Governor Newsom, this lawsuit is more of a political platform building opportunity for the 2010 election. I really hate seeing charismatic politicians that have the power to do wonders but then become a disservice to the American public, and I think Mayor Newsom thinks so too. So I nailed my opportunity yesterday to put in a plug. I really did not want to seem like every other San Francisco business person in line to shamelessly plug their business and that is it. I wanted to tell him how I could be part of his A-team of civil servants to make his health care policy progressive, hospitable, and vastly improved. So what did I do?

I am very gracious that my firm participated in the city planning team for San Francisco Earth Hour. In exchange for volunteering for the event by handing out energy conservation incandescent light, I earned an invite to the kick-off event at MarketBar where I knew that the Mayor had a public appearance.

I sealed the deal by thinking of two main points to capture his coveted attention. Point one was to get him engaged: Do you recall a few months ago when you rode the N-Judah Muni Metro to work?

My witness to his N-Judah presence provoked his outrage on the city’s MUNI issues. His knowledge of the issues and detailed ridership numbers impressed my friend whose husband has a MUNI love and hate relationship. As he pointed out the electric MUNI car parked outside of MarketBar, I took a jab that Austin long had these buses, and the vehicles are cleaner, wider, and more comfortable. That comment sparked Mayor Newsom’s competitive sportsmanship. San Francisco can do much better than Austin!

Point two was to hit his health care policy interest dead-on. I had a little trouble plugging myself because I am very shy, too polite, and passive. So my friend helped me out by shouting that I had health care policy interests. That grabbed his attention and he asked, “Did you know that we are suing the governor for their Medi-Cal cuts?” I thought, “Duh!?” Which health care policy wonk did not. So I put in my plug for what my team did for the current Governor’s administration on Medi-Cal redesign. He asked for my business card, and I sincerely hope his administration follows up.

If Mayor Newsom is going to be the next Governor, I want my hand at health care reform done right the first time his administration proposes it. I am sick and tired of living through stale iterations of reform, issue attrition, and waning political momentum. I am also sick of complaining. While young and capable, I have the time, patience, and aptitude, and I hope I get in on the action.

On a separate note, the Governor learned from former First Lady’s Hillary Rodham Clinton’s political debacle at health care reform. Since 2004, the Governor had various task forces to gather genuine buy-in, extensive input, and productive discussions. PR wise, “redesign” appears to be a more salient policy term than “reform.” This was one of my first health care policy field work assignments. I will save this story for another day but feel free to browse through one sliver of the redesign planning at the California Health Care Foundation. I am just sad that with all the effort, blood, sweat, and tears, plan A failed, hence this slapped together Plan B to help salvage the State’s budget. Not surprising, a lawsuit abounds.

Retro Actively Ineligible for Insurance

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California Insurance Commissioner Steve Poizner is slapping California Blue Shield on the back of their hand with a $12.6 million fine. Surely, this figure would not even rustle the feathers of many tech start ups, but when the 2004 average health care expense per capita in California was $4,638, this fine may cover the annual health care bill of about 2,700 persons.

Recall in Sicko when this insured lady had gone through medical treatment, and a few weeks later her health insurance company retro actively cancelled her insurance coverage. She was left with thousands of dollars in medical bills, which she thought she only had to pay a reasonable co-insurance or copay for. Her insurance company yanked her coverage because of lack of full medical history disclosure. Of a yeast infection, specifically. It was completely unrelated to her medical treatment. Who knew a treatable and fairly common infection could pull a startling surprise and pummel another American into deeper and insurmountable financial debt.

Health insurance companies claim that by leaving out any miniscule detail of one’s medical history is a path to coverage fraud. Surely, medical history disclosure at the time of application is the common commercial insurance practice to keep away people already known to seek expensive treatments. The incentive to make profit off of premiums is to not pay out claim expenses. Insurance companies rely on the applicant to list all previously diagnosed illnesses, common, severe, and even cured from. Then the company begins cherry-picking their applicants only to admit the healthiest applicants.

(You know you are guilty of cherry picking too. You pick the shiniest, reddest, and plumpest cherry. Oh this rule applies to lemons and apples too. Your entire grocery trip in fact.)

With all the administrative hoops to prove one’s identity in order to get indecipherable medical records in person, people often rely on their fallible memories to collect an entire medical history to apply for insurance. Most people do not have the intention of bilking insurance companies of coverage fraud.

How often will a woman recall her yeast infection from her wild, sexy, and roaring twenties? Yeast infections are so common that self-diagnosis and over-the-counter medicine will prevent mars on perfect medical histories.

The incentives appear to reward the healthiest, the sickest that never seek professional diagnosis and treatment, or the smart evasive ones that get cures from over-the-counter drugs or from a doctor friend with a loose prescription pad. Truly sick, indeed.

 In case you are curious of the 2004 per capita health care expense ranked by State:

United States—–$  5,283

1     Utah—–$  3,972
2     Arizona—–$  4,103
3     Idaho—–$  4,444
4     New Mexico—–$  4,471
5     Nevada—–$  4,569
6     Georgia—–$  4,600
7     Texas—–$  4,601
8     California—–$  4,638
9     Colorado—–$  4,717
10   Virginia—–$  4,822
11   Arkansas—–$  4,863
12   Oregon—–$  4,880
13   Oklahoma—–$  4,917
14   Hawaii—–$  4,941
15   Louisiana—–$  5,040
16   Michigan—–$  5,058
17   Mississippi—–$  5,059
18   Montana—–$  5,080
19   Washington—–$  5,092
20   South Carolina—–$  5,114
21   Alabama—–$  5,135
22   North Carolina—–$  5,191
23   Wyoming—–$  5,265
24   Illinois—–$  5,293
25   Indiana—–$  5,295
26   South Dakota—–$  5,327
27   Iowa—–$  5,380
28   Kansas—–$  5,382
29   New Hampshire $5,432
30   Missouri—–$  5,444
31   Tennessee—–$  5,464
32   Kentucky—–$  5,473
33   Florida—–$  5,483
34   Maryland—–$  5,590
35   Nebraska—–$  5,599
36   Wisconsin—–$  5,670
37   Ohio—–$  5,725
38   Minnesota—–$  5,795
39   New Jersey—–$  5,807
40   North Dakota—–$  5,808
41   Pennsylvania—–$  5,933
42   West Virginia—–$  5,954
43   Vermont—–$  6,069
44   Rhode Island—–$  6,193
45   Delaware—–$  6,306
46   Connecticut—–$  6,344
47   Alaska—–$  6,450
48   New York—–$  6,535
49 Maine—–$  6,540
50 Massachusetts—–$  6,683
51 District of Columbia—–$8,295