Paying doctors more—will they treat more poor Californians?


Editor’s note: Voice of OC partners with the news nonprofit CALmatters, which provides periodic stories on state government issues.

It seems like a simple solution. Raise what you pay doctors for treating low-income patients, and they’ll treat more of them.

All those waits for appointments and physician shortages that have long plagued the state’s low-income health insurance program—a program that one out of every three Californians now relies on—could be remedied with a simple dose of economics.

But in health care, nothing is that simple.

Yes, while debate over the future of Obamacare waxes and wanes in Congress, California doctors are happily preparing for their first state pay increase in Medi-Cal in 17 years. Physicians and advocates for low-income patients pried a $325 million raise from a reluctant Gov. Jerry Brown, who was skeptical that a doctor pay increase would translate to better care.

Even so, civil rights groups and some California labor unions are suing the state to pay doctors significantly more—the latest in a long history of legal actions that blame meager Medi-Cal reimbursement rates for delays in patient care.

One way or another, California doctors are likely to get a pay raise soon. Here’s what you need to know about how physicians may respond—and how it could impact the ability of 13 million Californians to see the doctors they need, when they need them.

How tough is it for a Medi-Cal patient to get the care they need?

Overall, Medi-Cal patients have a tougher time getting the care they need than similar patients in other states, where the same program goes by its federal name, Medicaid. Recipients outside California are more likely to have visited a specialist and received a flu vaccination than recipients in California.

Medi-Cal recipients also were about 5 percent more likely to report delaying care because of difficulty getting an appointment.

Users of private insurance and Medicare (the federal health program for older people) typically fare better than Medi-Cal patients. Medi-Cal enrollees were more than twice as likely as adults with employer-sponsored insurance to use the emergency room as a usual source of care—a costly problem for the state.

Access problems are most severe for certain in-demand specialties such as psychiatry, which are even harder to come by for rural patients.

California has legally binding standards for access to care, including a maximum of a 15-day wait for specialist appointments and no more than a 90-minute drive to care for rural patients.

Unfortunately, the state has trouble collecting the data it needs to see if health plans it contracts with are actually complying with those standards.

This isn’t to say Medi-Cal is in utter disarray. Nearly 80 percent of Medi-Cal enrollees say the program provides access to most of the medical care they need. Interestingly, Spanish-speaking Latinos are among the groups most likely to report a positive experience with the program.

But without better data, it’s very difficult to know who’s doing the best and worst jobs of giving patient access—and how much difference higher reimbursements really make.

So just how stingy has California been to doctors?

California ranks 48th among all states in what it pays physicians for treating Medi-Cal patients, according to a recent and widely cited Urban Institute study. For primary care physicians, California ranks next to last—only Rhode Island pays less.

Those comparative rankings, however, are less definitive than they seem. They’re based on what the state pays on the “fee-for-service” portion of Medi-Cal, which only comprises about 20 percent of the program’s patients. Like the name entails, in “fee for service” the state pays doctors directly based off the services they provide: x dollars for a physical, y dollars for an MRI.

The remaining 80 percent of patients are in Medi-Cal managed care organizations—private health networks that receive a flat rate from the state for each patient they serve. The hope is that they can tamp down costs more effectively than the state could do on its own. Those managed care plans in turn contract with doctors—and those contract terms are confidential.

“The whole contracting process creates a black box and we don’t really know what’s going on in there,” says Gerald Kominski, director of the UCLA Center for Health Policy Research.

That makes it more difficult to easily incentivize those doctors to take on more patients. In fee-for-service, you can simply raise rates or target bonuses to certain physicians. In managed care, there’s a middleman.

While we don’t know precisely what the vast majority of Medi-Cal providers are being paid, it’s safe to assume that for most doctors it’s far less than employer-sponsored private insurers or Medicare.

Medi-Cal’s reimbursement rate for primary care has been just 41 percent of Medicare’s—meaning physicians have a much greater financial incentive to take on patients from Medicare than Medi-Cal.

Paying doctors more is going to entice them to see more patients, right?

Most research suggests that yes, raising reimbursement rates is associated with better patient access. States where Medicaid and Medicare reimbursements are about equal typically see higher provider participation rates in Medicaid than California.

“It may not be a simple linear relationship, but it’s fairly linear,” says Janet Coffman, associate professor of public policy at UCSF. “But you have to be a little careful extrapolating that out, especially to managed care.”

In fact, a recent experience with the rollout of the Affordable Care Act illustrates why. Rightly anticipating a massive swelling of Medicaid rolls, the Obama administration temporarily boosted Medicaid reimbursement rates to Medicare levels in 2013 and 2014 in the hopes of attracting more physicians to participate in the program.

But research was mixed: Some studies found that appointment availability increased for new Medicaid patients in certain states, while other states reported no increase in doctors willing to take on new Medicaid patients, and no uptick in patients seeing a primary care doctor.

Advocates for higher Medicaid reimbursements blame the mixed results on the flawed rollout of the pay raise—many doctors didn’t see the money they were promised for years after the policy was announced. Physicians also knew the increased payment rates were only temporary in most states, diluting the incentive to take on more low-income patients.

That’s the same obstacle California faces in structuring its own supplemental payments to Medi-Cal providers.

Doctors consider a lot more when deciding to take on poor patients

A marginal increase in reimbursements can be easily outweighed by the administrative strain of dealing with Medi-Cal. That’s especially true for providers without a lot of back office support, who could have difficulty making sure claims are paid on time. Many physicians also fear the risk of so-called “clawbacks,” when Medi-Cal recoups reimbursements paid to providers after a policy change or legal action.

Many doctors decide it’s just not worth it.

“If you’re a physician, you have to ask yourself, what is the administrative burden on me, how hard is it going to be for me to get paid from a Medi-Cal (managed care organization) plan, how easy is it going to be to get referrals?” says UCSF’s Coffman. “These administrative things matter.”

Geography also plays a part. If you work in a predominantly low-income community, you may have little choice but to see Medi-Cal patients. If you work in a richer area, you have more discretion. Rural areas like San Joaquin County or the northernmost stretches of the state, where Medi-Cal access is harder to come by, have a difficult time attracting doctors regardless of what type of insurance their residents have.

So how is the state planning to do this?

During negotiations with legislative leaders during budget season, the Brown administration expressed doubts about how higher payment rates translated to better patient access.

“The department has always indicated that funding and rates are only one element of access, and whether this will change access is a question,” says Mari Cantwell, chief deputy director of health care programs at the California Department of Health Care Services.

The state had options for how to distribute the $325 million in extra reimbursements approved in the budget. It could have tried to funnel payments to certain geographic areas in dire need of more physicians. It could have targeted specialty fields where doctors are in high demand. Or it could have offered higher reimbursement rates for treating new Medi-Cal patients.

Instead state health officials opted for a simpler approach—raising reimbursement rates across the board an average of 60 percent for all office visits, regardless of what type of doctor the patient sees or where the doctor works.

The result: Medi-Cal reimbursements for office visits will rise to about half of what Medicare pays, maybe more. While that sounds like a big jump, we’re talking about fairly nominal amounts per office visit. The biggest reimbursement raise—for seeing a new patient with complex illnesses—is $50.

The state also raised reimbursement rates for psychiatrists, given a severe shortage of Medi-Cal providers.

Still, the California Medical Association lobbied hard for the increase. This association of doctors calls it a cautious step in the right direction.

Calling the state’s plans for paying doctors more “encouraging,” medical association spokeswoman Joanne Adams wrote in an email that her organization would be “staying engaged” because how the program was carried out would determine its results.

California designed its plan to pass muster with federal health officials, who must approve the plan and have passed recent regulations limiting how states can direct extra payments to managed care organizations. The raises for providers in managed care programs will be similarly structured to the proposals in fee-for-service.

If approved, the payments would go into effect retroactively from July of this year.

The Brown administration also reserves the right to freeze the reimbursement raises should the federal government make major cuts to Medi-Cal. While that likely won’t affect this year’s payments, the money coming to doctors in future years is less secure. is a nonprofit, nonpartisan media venture explaining California policies and politics.

For more data points reporting by Matt Levin, click here.



  • LFOldTimer

    “a program that one out of every three Californians now relies on”

    There’s the 800 pound gorilla in the room that everyone seems to ignore.

    Did you know that illegal aliens up to age 19 are entitled to free Medi-Cal coverage now? When you give away free stuff it will only attract more takers.

    The poverty rate in California has gone exponential. The Census Bureau says that California has one of the highest poverty rates per capita in the nation. We have 12% of the nation’s population and 33% of the nation’s welfare recipients. Anybody with a couple working brain cells should be able to figure out the cause of the problem.

    No wonder rents have gone through the roof. Poor people need a place to live too. Simple economics. More demand means prices go up. Duh?

    I know people on both Medi-Cal and on private health insurance. The Medi-Cal coverage is actually better. It’s all free. A Medi-Cal recipient who has a sore throat and can’t see his doctor right away can go to any California hospital and get soup to nuts treatment with free medications free of charge compliments of the taxpayers. The private insurance patient pays a stiff deductible to see the ER doc. And it’s a myth that the private pay patient can call his doc and get a same day appointment. Hogwash. It’s common to have to wait 3 or 4 days to see a primary care doc with private insurance. It’s common to have to wait a full month to see a specialist.

    California keeps attracting the poorest of the poor with all the free give-a-ways. And then the legislature increases your taxes to pay for it all. This is the reason businesses and people of means are fleeing California is record numbers. Who’s going to pay for it all when all you have left are food stamp recipients and illegal aliens? Hmmm?

    Moonbeam recently signed a $52 BILLION dollar tax increase over 10 years. If you think that’s only going to road repairs you’ve got your wires crossed. Just like in the past – they’ll rob the transportation tax to fund pensions and social services. And now they’re looking for a way to crack Prop 13.

    They are chasing away productive taxpayers while giving a green light to the importation of more poverty. Sanctuary cities are a poverty magnet.

    Rob the rich. Give free stuff to the poor.

    That’s what California is all about.

    • justanon

      “If you’re a foreigner and want to mock our immigration laws – simply sneak into the country – run to any sanctuary city – and start using American resources with impunity. Does any thinking American understand how destructive that is to the sovereignty and integrity of your country?”

      What complete claptrap. Sanctuary city status applies to immigration status and policing, only the right-wing nuts interpret it as a ‘free ticket to everything’. But, considering the source …

      “I know people on both Medi-Cal and on private health insurance. The Medi-Cal coverage is actually better. It’s all free. A Medi-Cal recipient who has a sore throat and can’t see his doctor right away can go to any California hospital and get soup to nuts treatment with medications free of charge compliments of the taxpayers.”

      More claptrap. It’s obvious that you DIDN’T even bother to READ the article before jumping in with your right-wing, nut job, bombast. The whole article is about improving access to doctors for Medi-Cal recipients because they have more trouble finding doctors to treat them than patients on MediCare or those with private insurance.

      I guess it comes down to who people are going to believe, CALmatters with their access to actual data or LFOldBigot’s anecdotal …. ‘stories’? LOL!

      Hey, I forgot to ask, how’s that big, huge Seth Rich story panning out?

      • verifiedsane

        Justadiaperboy Ignored

        • justanon

          The loyal, little, lickspittle weighs in with … zip, lol.

    • verifiedsane

      The global socialist/anarchist are all in a huge frenzied melt down presently….numbers of illegal crossing our border dwindling, deportations are increasing, sanctuary cities are on the federal dollars chopping block, all the free welfare/medical for illegals is going to come to end, and finally the wall is going to be built. No wonder the left is are going absolutely bonkers…we finally have actual law abiding leadership in the White House…Don’t get me wrong…Trump is not the second coming by any stretch of the imagination…but that is not what he was elected to be…He was elected on a principled platform, with a solid hopeful and populous vision for America. Trump isn’t like the rest of the swamp! He doesn’t promise something and then delivery the exact opposite; as we have painfully experienced from the oligarchy ruling political class of both parties for many decades. Finally we have a President that is putting America and it’s *CITIZENS* first…. the only question now! is this all going to be to little, to late..the answer to that question is quite honestly a coin toss at best…

      • justanon

        “we finally have actual law abiding leadership ”

        Ha, ha, ha, maybe this didn’t make it onto Fox ‘News’:

        Special counsel Robert Mueller using multiple grand juries in Russia inquiry

        Six months in and already “multiple” Grand Juries, lol!

        And about that “melt down” it’s in YOUR head, that’s some unhinged screed you just wrote there buddy. You might want to talk to someone about your ‘thoughts’.

        • verifiedsane

          once again justadiaperboy doesn’t understand IGNORED…

          • justanon

            Every time you respond with “ignored” it lets me know you saw my comment : )


  • verifiedsane

    Once again government perpetuates the problem….just throwing other people’s money at a systemic problem without seeking actual solutions…how many times do we have to watch government heaping failure on top of failure, leading over and over again to still larger scale failure….just mind-boggling

    • justanon

      Another ‘genius’ who OBVIOUSLY DID NOT READ THE ARTICLE, sheesh.

      If you’d bother to read the article you would’ve found out the problem has not just been a problem of “throwing other people’s money at a systemic problem” as California has been particularly penurious when it comes to Medi-Cal payments and they ARE trying to find “actual solutions”, one of them being paying doctors more in-line with other states.

      Furthermore your auto-pilot, whining, BS about “government failure” is just that … bull sh*t!

      Read it and weep:

      In California—the largest and most diverse state in the nation—the launch of this new era of health care has been largely successful though certainly not without challenges and bumps along the way. Here are some of the indicators of that success:

      *The U.S. Census Bureau says California’s uninsured rate has been cut in half to 8.6 percent from 2013 to 2015. In raw numbers, California decreased the number of uninsured by 3.2 million people, which is the biggest decrease in the nation and more than the next three states combined. In addition, we have continued to make progress in many areas in 2016.

      *The Centers for Medicaid and Medicare Services found that Covered California had the healthiest risk mix in the nation in 2015, about 19 percent lower than the national average. This marked the second consecutive year that California had the best risk mix in the country.

      *Health plans in the California market have succeeded financially, generally meeting or exceeding their (low) profit targets and not forcing consumers’ to experience big swings in premiums.

      *For the individual market, not only were initial rates in 2014 lower than many predicted, over the past three years the average rate increase has been about 7 percent — lower than the frequently seen double-digit increases that consumers faced prior to the Affordable Care Act.

      *Covered California is on solid ground. We are sustainable without federal or state support, with substantial reserves and funding from an assessment on plans that averages 2 percent of the combined premium both on and off the exchange. The low assessment helps carriers lower their cost to bring in new enrollees compared to the prior market — meaning more dollars are available for health care.

      California’s success is anchored in the fact that our state expanded its Medicaid program (known as Medi-Cal) and launched its own state-based marketplace.

      • verifiedsane


        • justanon

          Fine by me, ‘genius’. I love having the last word, lol.

    • LFOldTimer

      Did you see this data on the costs of illegals in Los Angeles, verified?

      “Illegal immigrant families received nearly $1.3 billion in Los Angeles County welfare money during 2015 and 2016, nearly one-​quarter of the amount spent on the county’s entire needy population…”

      Think about it. Illegals under 19 years get free Medi-Cal. If the kid is an anchor baby mom and dad get welfare too! These are tax dollars that are stolen from citizens in need.

      No wonder L.A. is broke.

      One million indigent illegals residing in LA County! lol.

      No city or state ever became prosperous by importing poverty.

      • justanon

        Yeah, he already posted that fact-free Fox ‘News’ report. No actual proof, but lot’s of hyperbole and BS, so of course, you two rubes …. believe, lol.

        When will you EVER learn?

        • LFOldTimer

          More worthless empty claptrap on ignore in the interest of the VOC comment board.

          • justanon

            Translation: you can’t defend your comments.