Already struggling from California's diversion of funds meant to pay for uninsured patients, the state's emergency departments may be facing an even grimmer financial scenario when fiscal 2011 begins in July, say California emergency department directors.
Physicians have already been coping with either no pay since last July or with a huge reduction in how much they are paid from county funds for care of uninsured patients. Now, with the state's ongoing budget crisis, some counties have decided to slash reimbursement rates even further. And that scenario could be repeated again in a few months, Dr. Robert Rosenbloom, president of the California chapter of the American College of Emergency Physicians (CAL/ACEP), said in an interview.
Uncompensated care in the state's private emergency departments has been reimbursed primarily through a combination of tobacco taxes and the Maddy Fund, which was created in 1987. The Maddy Fund law allows counties to collect a portion of fines from traffic violations and criminal offenses and dedicate them to emergency medical services. Fifty-eight percent of the fund's revenues must go to reimburse physicians, 25% to hospitals, and 17% to other emergency medical services.
However, physicians can be reimbursed only up to 50% of the losses incurred from uncompensated care.
So far, 50 California counties have established Maddy Funds. Some of those counties have been aggressive about collections, accounting, and distribution. But others have done a poor job of collections or accounting, which means that not all the monies are properly distributed—or distributed at all, said Dr. Rosenbloom.
CAL/ACEP is supporting a bill before the state legislature that would require counties with Maddy Funds to be transparent in their accounting so that proper amounts go to emergency services.
Budget Crisis Drains Maddy Funds
The California budget crisis has clouded the already uncertain Maddy Fund picture. In 2009, Gov. Arnold Schwarzenegger (R) used statutory discretion to redirect $25 million of emergency services money into the state's general coffers. That was out of a total $60 million, said Dr. Rosenbloom.
The move had immediate repercussions. Los Angeles County lost $9 million, and as of July 1, 2009, it halted all uncompensated-care payments to the county's private facilities and their physicians. Emergency physicians in the county were already receiving only 27% of their costs of caring for the uninsured.
In February, the Los Angeles County Board of Supervisors voted to give physicians and hospitals back pay, but at a further reduced rate: 18% of the cost of care.
Despite the low reimbursement, CAL/ACEP has fought to keep the system in place, said Dr. Rosenbloom. It ensures that the uninsured get some kind of care and reduces the pressure on public emergency departments, he said.
However, the low to nonexistent pay rates are exacerbating the difficulties in finding physicians who will take emergency department call, Dr. Rosenbloom said. Many specialists find the pay “insulting,” he said.
The latest reductions in funding have had “a huge effect on the willingness of private physicians to back up emergency departments,” said Dr. B. Thomas Hafkenschiel, an emergency physician at Santa Clara Valley Medical Center.
When the county's Maddy Fund is working, it at least ensures a minimal payment, which is better than nothing, said Dr. Hafkenschiel. But now the pay appears even more uncertain. Although he works at a county facility, he is monitoring—and feeling—the effects of the reimbursement cuts for private facilities.
Dr. Hafkenschiel has been working with a group of ED directors in the south San Francisco Bay area to get a better accounting of the criminal penalties being collected by the Maddy Fund and their distribution. As other funding sources have shrunk, including tobacco tax collections, “we have to make sure this is being done properly, or we're going to be in deep trouble,” Dr. Hafkenschiel said.
Uninsured Patient Visits Rising
The lack of funds for uncompensated care is a growing problem because of the increasing numbers of uninsured patients in California. Dr. Hafkenschiel said that the patient volume at his ED has grown from 82,000 visits in 2007 to 128,000 in 2009, largely due to people losing their health insurance. That trend may be accelerating in 2010—ED visits in the first 2 months of 2010 exceeded the volume seen in the same period of 2009.
Other ED directors in the county have noticed the same rise in uninsured patients, he added. In Los Angeles County, the percentage of uninsured patients in the ED has risen from 16% to 19% in the past year, said Dr. Rosenbloom.