California Medicaid tries to recover millions in fees

California's Medicaid agency plans to recoup millions of dollars in fees it paid in the past year for dental, chiropractic and podiatry services, but at least one group of affected health centers has said the move will put its facilities in a precarious financial position.

California lawmakers cut these and other optional Medicaid services effective July 1, 2009, but the U.S. District Court for the Eastern District of California issued an injunction against the cuts in October 2010, saying the state did not go through the proper Medicaid plan amendment process. However, the Centers for Medicare & Medicaid Services in May 2011 approved a state plan amendment allowing the California Dept. of Health Care Services -- the state's Medicaid agency -- to reinstate the cuts.

On Sept. 30, the state's Medicaid agency notified clinics and health centers that it will recover fees it paid for dental, podiatry and chiropractic services between October 2010 and May 2011, the period covered by the court injunction. The agency has the power to do so because it backdated its state plan amendment to cover all claims since July 1, 2009, said agency spokesman Norman Williams. Only conditions requiring surgery were eligible for Medicaid payment.

It's unclear how many health centers provided these three optional services during the court injunction period, said Sean South, spokesman for the California Primary Care Assn., which represents more than 800 community clinics and health centers. The association is surveying its members on the issue, he said. The state also does not have a dollar figure for the payments it seeks to recover or a timeline for the recoveries, Williams said.

Linda Findley, association coordinator for the California Assn. of Rural Health Clinics, said she did not know how many of its 92 members provided these services during the court injunction period. "Quite a few of them just avoided providing those services, because the outcome was uncertain and they just wanted to avoid the risk," she said.

Williams said the agency issued a notice in November 2010 warning centers and clinics not to provide the services, which, despite the injunction, were not authorized under state law. "We're responsible to recoup these [costs] for the Medicaid program."

Some individual health centers could be forced to repay hundreds of thousands of dollars to the state. Family Health Centers of San Diego, for example, provided $845,000 in dental care to Medicaid patients between October 2010 and May 2011, according to a Sept. 26 letter to state lawmakers from Fran Butler-Cohen. She is the CEO of the network of 16 health centers. The Medicaid agency suggested that health centers bill their patients directly to recover the costs, she wrote.

The state's recovery request is unreasonable and promotes an unconscionable business practice, said Jennette Lawrence Shay, Family Health Centers of San Diego's director of government and community relations. Dental patients at the center often had infected teeth or other serious dental problems, she said. "We can't retroactively take away people's care."

Meanwhile, a survey conducted for the California Medical Assn. and released on Oct. 21 found that California Medicaid enrollees were significantly more likely than the privately insured to face delays in getting nonemergency appointments with physicians and were more likely to visit an emergency department due to primary care access problems, among other disparities.

"This survey shows that patients' needs aren't being met with the current system," said California Medical Assn. CEO Dustin Corcoran.

Key findings from the survey are available online (link).