President Obama signs California Medicare fix

Seniors will now have access to more California doctors

On April 1, President Obama signed Rep. Sam Farr’s, bill to permanently fix the underpayment by Medicare to California doctors who practice in certain counties. The problem has led to a shortage of doctors in affected counties, with even fewer of those doctors able to treat seniors. Farr’s Geographic Practice Cost Index (GPCI) Fix would solve a four-decade-old problem that mislabels 14 California counties as “rural,” meaning doctors are under compensated for Medicare procedures. Monterey, San Benito and Santa Cruz Counties are among those affected by this problem.

“I first heard about this problem when seniors started coming to my town halls to tell me they could not find doctors who were willing to treat them,” said Farr. “It has taken a lot of work but I am proud to say those doctor’s doors will once again be open to those seniors.”

In 1966, when the formula was initiated, counties were designated as either “rural” or “urban,” with the expectation that those designations would be updated every few years. That never happened, and as a result, doctors in counties that have seen economic growth are being compensated at levels significantly lower than those in nearby counties. For instance, counties such as San Diego and Sacramento are improperly designated as “rural’ despite large populations. The 14 California counties (San Benito, Santa Cruz, Marin, Santa Barbara, San Diego, Monterey, Sonoma, Placer, El Dorado, Yolo, Sacramento, San Luis Obispo, Riverside and San Bernardino) are underpaid by as much as 10% each year, forcing doctors practicing in those counties to forgo up to $54 million in Medicare funding each year.

“An outdated formula has led to too few doctors for too many patients in these counties,” said Farr. “Now, more doctors will be willing to open up shop in places like the Central Coast. It will allow us to attract more talented doctors and keep the ones we already have.”

“The news is particularly welcome to San Benito County residents and physicians,” exclaimed Lawrence Cappel, Ph.D. Executive Director of the San Benito Medical Associates, the independent medical practice association of over 120 physicians and mental health practitioners formed in 1994. “Since the beginning of Medicare in 1965, rural providers have been paid significantly less than their peers in metropolitan areas—in some cases less by 15-20%. This differential made it financially difficult to entice physicians to practice in the rural areas. This difficulty translated into long trips for residents to receive the care they needed or they simply did without the care. It also translated to overwhelming patient loads for those physicians who choose to practice in these areas.”

Dr. Cappel states further, “As geographical areas changed and populations increased the government refused to recognize that rural areas of the past were now urban areas. These areas had all the same good traits and not so good traits including the expenses of city life. The Hollister of 1965 is not the same as the Hollister of 2014. The legislation crafted by Rep. Farr is a milestone in recognizing not just the financial needs of the areas physicians but more so the healthcare needs of a vital and important geographic area of our State.”

Farr’s GPCI Fix would require the reimbursement formula to be calculated based on Metropolitan Statistical Areas (MSAs), which better reflect the cost of practicing medicine. Medicare already uses MSAs for hospital payments. The higher payments would be phased in over a six-year period starting in 2017.

The GPCI Fix was included as part of H.R. 4302, a bill to extended Medicare payments through the end of 2014. Both California Senators voted for the bill, which passed the Senate on Monday. The House of Representatives passed the legislation by voice vote on March 27, 2014.


With more than a decade of community engagement, business advocacy, public relations and government affairs experience, Kristina Chavez Wyatt specializes in building and favorably positioning projects,...