County Proposes to Shift Some Indigent Health Care to State

Major changes in public funding of medical care for the poor--including pregnant, undocumented residents--were proposed Wednesday in the county’s plan for negotiating new contracts with UCI Medical Center.

Under the plan, approved 4 to 0 by the Board of Supervisors, the county would shift the bulk of obstetrical and newborn-care costs to the state Medi-Cal program over the next three years by having the new mothers file paperwork for their babies, who would be U.S. citizens.

Emergency Health Care

Another target area is emergency medical care. Bob Love, interim director of the county’s Health Care Agency, said the county counsel has advised him that the county may not have an obligation to pay medical costs for illegal aliens. He has recommended that the county extend its current contract with the medical center in this area for only one more year, “and determine what our policy should be at that point.”

County officials now will begin negotiating new contracts with UCI Medical Center, which treats most of the county’s poor. The county now spends $11.8 million a year for indigent care at the medical center, but the chief negotiator would not reveal by how much he hopes to reduce that figure.

“These are my marching orders,” Love said, referring to the negotiating strategy. “But I didn’t lay all my cards out.”

Blow to Medical Center?

The proposed cuts appear to be another blow to the medical center, which is grappling with a deficit totaling $10 million thus far into the fiscal year.

Hospital officials have laid most of the blame for the financial crisis on the heavy load of public-sponsored patients. UCI Medical Center has the highest percentage of poor patients of any university-owned hospital in the nation, and government agencies--federal Medicare, state Medi-Cal and the county--do not pay for full patient costs, officials have said.

Medical center officials were delivered a copy of the county negotiating strategy Wednesday, but acting director Leon Schwartz declined to comment on it.

Asked if the plan for reduced funding might not force the medical center to turn indigent patients away, Love answered, “It’s best for them (hospital officials) to respond to that.”

The county has two contracts with UCI Medical Center. The first, called Indigent Medical Services, uses largely state Medi-Cal funds for the working poor, primarily low-income residents who have no health insurance or those suffering from catastrophic medical problems. Thirty-one other hospitals also have Indigent Medical Services contracts with the county, but the bulk of the patients go to UCI Medical Center, Love said.

The second contract--held exclusively by UCI Medical Center--affects patients who do not qualify for the indigent program, including pregnant women, jail inmates and undocumented residents. The current contract was negotiated 10 years ago, just before the university took over the former county hospital, and it expires June 30.

Schwartz said Wednesday that the hospital loses money on both contracts, but added that the level of reimbursement is less for the Indigent Medical Services program.

The county will try to renegotiate the Indigent Medical Services contracts with all 32 hospitals at the current level for six to 12 more months, according to the strategy approved Wednesday. Legislation has been proposed to increase state funding, and the contracts would be renegotiated after the funding bill has been voted on, Love pointed out.

But Love said that the county is interested in “spreading around” the indigent patients at hospitals other than UCI Medical Center.

Obligation to Share

“There’s a certain obligation (by other hospitals) to accept these patients . . . . If any one hospital gets a high volume of these patients, they’re going to go under. The only way the system can work is if there is an equitable distribution somehow.”

He said hospitals will be enticed to take indigent patients “if there are sufficient funds. Hospitals are a business, and if there’s a way for them to pick up some money for their losses, it’s amenable to them.”

A major cost for the county at UCI Medical Center has been for obstetrical services, Love said, adding that nearly 90% of that care goes to undocumented residents.

“Since it is not completely clear that the county has any liability for the care of undocumented alien mothers and their newborn, the issue . . . is cost and the degree to which the county wishes to continue its traditional support,” Love’s report states.

He said a large number of those cases could be underwritten by state Medi-Cal, which covers the care of newborns and their mothers. Babies born in this country are U.S. citizens, eligible for Medi-Cal, and no separate application would be needed for their mothers, who would not have to fear that they would be reported to immigration officials, Love explained.

INS Would Be Removed

“By removing any Immigration and Naturalization Service involvement from this eligibility process, a major barrier to a Medi-Cal application by undocumented patients is removed,” Love’s report said.

He proposed that county funding ($3.4 million last year) for these patients could be phased out over the next three years, combined with an “education program” in the Latino community. He said the mechanics would be decided in the negotiations, but it might come down to “having Medi-Cal workers on the OB (obstetrics) ward.”

By shifting the cost of the mothers and their newborns off the county and onto the state, those women conceivably could go to any hospital that accepts Medi-Cal patients, Love said. He added that community hospitals have shown “insufficient interest” in becoming part of the plan.

Love conceded that if pregnant women enter the hospital and then do not give birth or fail to sign up for Medi-Cal, the hospital would receive no money for their care, under the proposal.

However, he said, the Los Angeles County-USC Medical Center has a comparable obstetric program and more than 90% of its newborns qualify for Medi-Cal.

Thelma Fraziear, division chief of Medi-Cal operations in Sacramento, said she was not sure that state funding for eligible newborns also applied to their mothers, if the women did not themselves hold separate Medi-Cal cards. But she said that Medi-Cal officials have no concerns about counties shifting the costs to the state program as long as the patients are legally eligible.

Taking a Harder Look

Also included in the county’s negotiating plan is a one-year extension of the current contract for UCI Medical Center’s care of emergency patients who do not qualify for other public funding. These include undocumented residents and other indigent persons who show up at the emergency room for care. Love said increased demand for the county’s share of state health-care funds requires the county to take a harder look at the cost for these patients.

Love recommended that the county negotiate with UCI Medical Center for continued care of patients referred there by the public health office. These include patients with communicable diseases who require the specialized care that the medical center can provide.

But Love said the county should no longer pay for the Medi-Cal workers at UCI Medical Center. Last fiscal year, the county paid more than $500,000 for the workers, while other hospitals in the county financed their own, he said. “That’s a half-million dollars out of the county’s general fund,” he said.

Still, Love said, there is “good news” for UCI Medical Center in the county’s negotiation strategy. Asked what the good news is, he replied, “I’d rather talk to them (hospital officials) directly about it.”

Other Health Needs

Love said the cutbacks are necessary because there are other health needs vying for the county’s money. These include health care at Orangewood, the county’s new shelter for abused and abandoned children, as well as emergency medical services and jail inmates’ health care.

“Any dollars we save will continue to be used to meet health needs,” Love said. “They won’t be used for roads or the airport.”