California’s Former Director of Finance: SB 349 Would Increase Costs to Care for Medi-Cal Patients on Dialysis by Up to $270 Million Annually
For Immediate Release: August 16, 2017 Contact: Kathy Fairbanks, 916-443-0872
California’s Former Director of Finance:
SB 349 Would Increase Costs to Care for Medi-Cal Patients on Dialysis by Up to $270 Million AnnuallySACRAMENTO – A new analysis prepared by Michael Genest, California’s former Director of Finance, finds that Senate Bill 349 (Lara), the dialysis clinic staffing ratio bill, would increase costs to care for Medi-Cal patients by as much as $270 million each year. SB 349 would mandate minimum staffing ratios for nurses, technicians, social workers and dieticians at California dialysis clinics. A significant percentage of patients on dialysis in California are covered by the state’s Medi-Cal program for low-income people. “SB 349 would increase staffing costs at dialysis clinics by 35%. If Medi-Cal were to reimburse fully for those increased costs, it would be $60 million annually, or $30 million in direct General Fund costs,” said Genest. “If the state Medi-Cal program does not increase its reimbursement rates, many clinics will have to reduce access and care for fewer patients. These patients will develop complications and be forced to receive care in more costly settings, like emergency rooms and the hospital. Medi-Cal potentially would incur additional annual costs of $270 million or more, or $135 million from the state General Fund, for additional health care for patients whose access to clinic-based dialysis is reduced or eliminated.” Genest pointed to a separate report conducted earlier by Health Management Associates (HMA) that found “research does not demonstrate a link between higher staffing ratios and quality of care.” Additionally, HMA evaluated publicly available data from the Centers for Medicare & Medicaid Services (CMS) which regulates and tracks dialysis clinic performance and found, “there is no demonstrated relationship between staffing ratios, on the one hand, and improved patient outcomes and patient satisfaction, on the other.” The lack of evidence supporting the claim that staffing ratios are linked to better care, in addition to the fact that California dialysis clinics already provide some of the highest quality care in the country as tracked by independent, government entities, demonstrates that SB 349 is a solution in search of a problem. Nonetheless, that “solution” would cost the state significantly in terms of reduced access and impact to the state General Fund, specifically:
- A 35% increase in staffing costs at dialysis clinics for salary and benefits due to the staffing mandates. This equates to total annual costs beginning in 2019 of $370 million to community dialysis clinics in California.
- For Medi-Cal to increase reimbursement rates to cover its share of these staffing-related costs would total $60 million annually ($30 million General Fund).
- As a result of this reduced access, Medi-Cal could incur additional annual costs of $270 million or more ($135 million General Fund) to cover patients who develop complications and must receive emergent care and/or dialysis treatment in the hospital.
- Dangerous for Patients – Arbitrary staff ratios and specified “time outs” between treatments would result in fewer available appointments, more missed treatments and a dangerous backlog of needed care. California already faces a shortage of dialysis clinics and appointment times, as well as staff. SB 349 will reduce the availability of treatment slots, increasing hospitalizations and emergency room visits, and will end in less flexibility for working patients as evening and overnight treatments would be jeopardized.
- Unnecessary – Federal data collected by the Centers for Medicare & Medicaid Services (CMS) show that California dialysis clinics outperform dialysis clinics nationwide in both clinical quality and patient satisfaction, including outperforming states with some form of mandated staffing ratios.