CHA Commends State's Decision to Exempt Rural Hospitals from Some Medi-Cal Cuts

Rural Hospital-Based Skilled-Nursing Facilities Get Some Relief; Issues Remain for Urban Hospitals

SACRAMENTO, Calif., Aug. 15, 2013 /PRNewswire-USNewswire/ -- The following statement is being issued by C. Duane Dauner, President/CEO, California Hospital Association:

The California Hospital Association (CHA) commends the decision by the California Department of Health Care Services (DHCS) and HHS Secretary Diana Dooley to partially exempt rural hospital-based skilled-nursing facilities from looming Medi-Cal payment cuts.  This announcement will protect the state's most vulnerable patients who live in rural areas by sparing these hospitals from previously-announced 25 percent or greater cuts, and halting a rate freeze based on 2008-09 payment levels.  Both cuts collectively represented a debilitating financial hit on facilities that, in many cases, provide the only source of health care in their communities.

The cuts, which stemmed from legislation enacted in 2011 (AB 97), have forced many of these facilities (known as distinct-part nursing facilities or DP/NFs) to make plans for cutbacks or closure. Mayers Memorial Hospital in Shasta County and Eastern Plumas Health Care in Plumas County have both halted new patient admissions. In Fresno County, Coalinga Regional Medical Center has been considering options for closure. And, in San Benito County, Hazel Hawkins Memorial Hospital also has been making plans to shut down a 70-bed facility.  The decision by DHCS will preserve access to care in rural communities throughout the state.

CHA appreciates the leadership of many legislators, including Assemblymember Luis Alejo (D-Salinas) and Senator Jim Nielsen (R-Gerber).  That bipartisan support was expressed last month when the Assembly voted 76-0 to support Assembly Bill 900, which is designed to reverse the Medi-Cal cuts. 

There are still a number of difficult issues to work out, including the financial threats faced by urban DP/NFs, and retroactive cuts affecting both rural and urban hospitals dating back to the enactment of AB 97 in 2011.  The decision to exempt rural DP/NFs from prospective cuts, however, is an important first step. 

CHA remains committed to working with the Administration and Legislature to craft a common-sense solution that addresses these remaining issues.

SOURCE California Hospital Association