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Medi-Cal recoupment 'financially disastrous' to community clinics

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Imagine you're a small business owner and you're asked to provide a service for a big client. You've delivered the product, it's consumed and you've been paid in full. But a few months later, the client comes back to you and says they didn't want that product after all and wants all their money back. Because the product was a consumable, you can't get it back but they are demanding payment anyway.

In the health care world, that's called Medi-Cal recoupment.

For many years, the state of California provided adult dental services for Medi-Cal beneficiaries. The community clinics were a major source of this service. A few years ago, "Scientific American" devoted a full edition to the link between oral health and physical health.

Sharon Guynu, editor of the journal, noted, "Researchers are discovering that out-of-control inflammation (gum disease) may prove to be the engine that drives an ever-growing list of greatly feared, chronic illnesses from clogged arteries and heart attacks to arthritis and cancer".

As part of your regular dental check-up and cleaning, your dentist and the staff conduct an oral cancer screening, as early detection of cancer leads to better rates of success in fighting cancer. Clearly, dental coverage reduces avoidable conditions and more costly treatments, especially avoidable emergency room visits."

Sadly though, the state's budget cutting included reduction of funding for the adult dental program. Since a portion of the cost of this benefit was covered with federal dollars, an agreement between the federal government and the state was in place and California needed to amend that agreement, creating a "state plan amendment." Though this amendment had limited provisions for adult dental benefit to continue, the state and the feds needed to hammer out the specifics of this new arrangement. Once the feds approved that amendment, the benefit could be terminated.

The courts ordered the state to continue reimbursement while during the process of benefit elimination; this allowed community clinics to continue to provide adult dental services.

It's important to note that community clinics see both insured and uninsured patients. When someone has insurance, whether through a private or public program, they have an agreement with the insurer and bill accordingly. If someone is uninsured, the clinic has a sliding fee scale based on a person's income. Clinics can't back-up bill -- as in, charge a person in case they don't have insurance. This would constitute double billing and is illegal. Clinics, therefore, billed Medi-Cal for uncompensated adult dental services rendered under the state benefit and were reimbursed by the state of California for services provided that were deemed medically necessary.

Now that the state and the feds have a new agreement, the state is seeking to "recoup" payment from the date that the state budget passed until the new agreement was put in place. What the state is demanding is that community clinics reimburse the state for services the clinics delivered in good faith. The demand comes to millions dollars out of the coffers of private, nonprofit clinics. Community clinics operate on narrow margins that fluctuate between 2 percent profit and loss in any one year. In the simplest terms, the state is asking the clinics for money they do not have. The concept of calling patients back in to remove their crowns and forwarding those dental devices to the state is ludicrous.

Fortunately, most members of our San Diego Legislative Delegation -- both Democrats and Republicans -- see the unfairness in this recoupment endeavor. Many have contacted Diana Dooley, secretary of the California Health and Human Services Agency, to express their strong opposition to this plan.

The elimination of the benefit, even though it's a critical service, should be from the point that the agreement was amended. To force recoupment would be unfathomable as well as financially disastrous to community clinics that provide the San Diego community with a safety net of essential health care services.


Submitted by Gary S. Rotto, director of Health Policy and Strategic Communications for the Council of Community Clinics.

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