The Board of Supervisors today approved a proposal from Supervisor Terra Lawson-Remer to explore how we can enhance healthcare access and quality for San Diegans while reducing prescription drug costs for Medi-Cal and Medicare recipients. The proposal confronts the critical issue of low Medi-Cal reimbursement rates, which has burdened San Diego County’s healthcare system and made it harder to access quality care.

"It’s time we solved the problem of low reimbursement rates because it’s an issue that affects everyone in our county,” said Supervisor Lawson-Remer, Vice Chair of the Board of Supervisors. “It puts extra strain on medical providers and makes it harder for Medi-Cal beneficiaries to find quality care, which results in more people ending up in crowded emergency rooms, and adding to the healthcare staffing shortage we’re already facing. Today's action is a significant step forward to solving this problem and ensuring every resident of San Diego County receives the care they deserve.”

Medi-Cal, California's Medicaid program, serves as a lifeline for vulnerable community members, providing essential healthcare coverage to individuals and families in need—including roughly 325,000 children. 

According to the American Hospital Association, hospitals received payments equivalent to only 88 cents for every dollar spent on Medicaid patients in 2020, resulting in underpayment totaling nearly $25 billion. Historically, California has ranked near the bottom in the United States when it comes to Medicaid reimbursement rates, impacting  the financial sustainability of healthcare institutions and decreasing access to care.

As part of the sweeping proposal, Lawson-Remer also introduced an initiative aimed at reducing prescription drug costs by advocating for legislative and administrative actions at both the state and federal levels. 

"No one should have to worry about being able to afford the medication they need,” said Lawson-Remer. “Now, our County will be able to take an active role in addressing the root causes of high drug prices and implementing solutions to save San Diegans money.”

Supervisors also voted to appoint Supervisor Lawson-Remer and Supervisor Monica Montgomery Steppe to serve on a new ad hoc subcommittee of the Board which will:

• Review the information gathered by the Interim Chief Administrative Officer and feedback provided by stakeholders

• Provide input on strategies and opportunities identified for increasing Medi-Cal reimbursement rates and for obtaining new or additional sources of funding

• Help to develop findings and recommendations submitted to the Board

To gather input on this work, the Interim CAO will convene County staff, healthcare professionals, hospitals, Federally Qualified Health Centers, labor organizations, healthcare workers, consumer advocacy organizations, state and local government leaders, and community-based organizations. The County will also engage with the California Department of Health Care Services and Centers for Medicare and Medicaid Services to seek partnership and approval on initiatives to increase Medicaid reimbursement rates in San Diego County.

The Interim Chief Administrative Officer will return to the Board at the end of the year with a progress report, findings, and recommendations addressing low Medi-Cal reimbursement rates.

Review this link to the entire policy.

BACKGROUND:

Extensive research underscores the adverse consequences of these low rates, which can lead to restricted access to quality healthcare and poorer outcomes for Medicaid beneficiaries. When healthcare providers are inadequately compensated for the services they render to Medicaid beneficiaries, the entire healthcare systems bear the brunt of the financial strain. Civil rights advocates and attorneys also contend that these excessively low reimbursement rates are not just problematic but discriminatory, which also makes this a racial justice issue.