California is considering increasing payments to doctors who treat Medicaid patients

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Hunter Morgan purchased an optometry practice in Southern California three years ago. He made a point to start seeing Medicaid patients, even though the previous owners hadn’t. But soon, the low pay from Medicaid forced him to stop. Charging $175 for eye exams, he could only get about $40 from Medicaid. This made it hard to cover expenses in Encinitas, a pricey beach community.

California has increased Medicaid enrollment, covering around 15 million people. But doctors aren’t getting paid enough, leading to crises in some rural hospitals and difficulties for Medicaid patients finding care.

To address this, Governor Gavin Newsom and the Legislature are raising taxes on managed care organizations. This tax increase means more money for Medicaid, helping pay doctors more. Last year, they raised $19.4 billion, with another $1.5 billion expected this year.

Newsom wants to use some of this money to pay doctors more for treating Medicaid patients. The first increases went to primary care doctors, maternity care, and mental health services. This year’s increases would include obstetric, vaccine, abortion services, and optometry.

For optometrists, Newsom wants to raise rates to match Medicare. This could mean a lot more money for California’s 8,000 licensed optometrists.

Providers are happy about the increases but worry about California’s growing budget deficits. Newsom plans to use $8 billion over four years for provider payments, instead of $11 billion over five years as previously planned.

Plus, the federal government must approve California’s tax on managed care organizations every three years. The Biden administration wants to reduce state collections, potentially affecting California’s ability to continue paying doctors higher rates.

Republicans criticize Newsom’s plan to raise taxes again. But Assembly Democrats seem more supportive, even with the deficit requiring changes.

An increase in payments for optometrists would be good news for low-income people in Fresno, where Medicaid is important for healthcare. Fogg Remington, an eye care practice in the city, stopped accepting new Medicaid patients due to low rates. But if California increases rates, they’d be happy to help those in need again.