Lawmakers Aim To Tackle Rural Health Challenges: Transportation, New Docs

Aug 25, 2016

Two proposals meant to ease burdens faced by California’s rural patients and their health care providers are breezing through the state legislature as lawmakers finish up for the year.

One measure passed Wednesday requires Medi-Cal to cover patients’ transportation to medical appointments. Another bill would allow small rural hospitals to hire doctors directly, which supporters say could reduce health care costs and make it easier to keep physicians in areas where there are few. To get to the governor’s desk, the hospital employment measure would need to pass the Senate and go back for a second Assembly floor vote before Aug. 31.

Supporters of the transportation measure said patients would be more likely to show up for a medical appointment if they didn’t have to worry about the cost of a bus ticket or were reimbursed for driving long distances.

“Some families report having to drive over four hours one way to see a provider,” said Linda Nguy, a policy advocate for the Western Center on Law & Poverty, which sponsored the bill. Nguy said the law would particularly help patients who need to see specialists. Many Medi-Cal managed care health plans already cover transportation for patients, but this bill would make it a required benefit for all Medi-Cal beneficiaries, regardless of their health plan or if their care is reimbursed directly by the state.

The new mandate would increase Medi-Cal costs by $3 million to $6 million each year. But the up-front investment could help avoid more costly services down the road, Nguy said.

“For individuals who aren’t able to get to their dialysis appointment, it can be quite expensive for them to go to the emergency room,” Nguy said. “So making sure that these members have access to these services before it becomes an emergency can be a cost savings.”

Health plans, legal advocates and several Planned Parenthood organizations support the bill. The California Ambulance Association is against the measure, arguing that Medi-Cal “severely underpays” its industry and that transportation benefits in the program should not be expanded until emergency transportation is adequately reimbursed.

The other bill would allow 34 of California’s smallest, rural hospitals to hire physicians. Currently, a decades-old law specifically prohibits hospitals from directly hiring physicians. The law was initially adopted to prevent a doctor’s medical decisions from being influenced by an employer, known as “the corporate practice of medicine.” Typically, hospitals contract with independent physician groups to engage doctors’ services.

“It’s a pretty big problem,” said Amber King, a senior legislative advocate for the Association of California Healthcare Districts, referring to hospitals’ inability to bring doctors on staff. Her association supports the bill and represents many of the 34 hospitals, which typically have no more than 25 patient beds.

King says not being able to employ physicians makes it very difficult to recruit and keep them in rural areas.

“These physicians would have to come out to these rural areas and set up their own practice,” King said, adding that it’s financially difficult to be an independent physician in these areas because of the higher proportion of uninsured and underinsured patients, a clientele which does not yield high reimbursement rates. “When those physicians retire, it’s very hard to replace them.”

At the 22-bed Mayers Memorial Hospital in northeastern Shasta County, Mayers contracts with a nearby clinic system for doctors to serve hospital patients and a separate company for a handful of emergency department physicians.

“If we were able to hire our own physicians, it would obviously be a financial benefit to us,” because it would avoid the expense of contracting out, says Valerie Lakey, director of public relations at Mayers Memorial.

The Medi-Cal transportation proposal is now headed to Gov. Jerry Brown’s desk. Last year, he vetoed a similar measure, because of “considerable uncertainty” in Medi-Cal funding. Advocates are confident that the governor will be more supportive this year because funding for the program, California’s version of Medicaid, is more stable.

This story comes from California Healthline, which is produced by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.