The federal government has given California permission to cut its payments to physicians treating Medicaid patients by 10 percent.
Says Cindy Mann, deputy administrator of the Centers for Medicare and Medicaid Services, the action gives California the flexibility it had requested to address its budget shortfall. "We know that the reductions that are being approved today will have significant impact on affected providers, and we regret the very difficult budget circumstances that have led to their implementation," she said.
Due to the partnership between the federal and state governments which funds state Medicaid programs, states are not permitted to make major changes without approval from the Department of Health & Human Services.
California already spends less per Medicaid beneficiary than any state in the nation, resulting in approximately 50 percent of California physicians currently refusing to see lower income patients due to insufficient payment rates from the state's safety net program. The further cuts, which will save the state some $673 million dollars, is likely to reduce that number dramatically, resulting in a severe decrease in medical care availability to the state's poor.