FOR IMMEDIATE RELEASE
April 4, 2007

SAN DIEGO  –  The County of San Diego has taken the first step toward filing a suit against the federal government that seeks millions of dollars in unreimbursed Medicare costs that should have been paid to San Diego area doctors and healthcare providers.

The County of San Diego has joined with four other counties – Santa Cruz, Santa Barbara, Sonoma and Marin – in filing a claim with the U.S. Department of Health and Human Services that contends that the counties have been reimbursed for Medicare claims at rates lower than counties with equal costs of living. If the claim is rejected, it is likely that a suit will be filed.

According to antiquated federal guidelines, Medicare reimburses doctors up to 24 percent more to treat patients in “urban” areas than in “rural” areas, which San Diego and the other four counties are categorized.

“This failed payment system has caused critical shortages of health care personnel in our region,” said San Diego County Board of Supervisors Chairman Ron Roberts. “And it is severely impacting the quality of health care for our disabled and elderly populations.

Medicare is the single largest purchaser of health services in the United States, spending in excess of $55 billion each year on physician services alone, for 43 million aged and disabled Americans.  Payments to suppliers are calculated by DHHS based on the “geographic fee schedule areas” where the services are provided.  These fee schedule areas were first designed in 1966, and have not been updated since 1996, despite significant changes in demographics, and despite numerous requests from suppliers and state medical associations for restructuring.  As a result of the failure by DHHS to update the fee schedule areas, as directed by Congress, suppliers in certain counties in California, for example, are paid 12-24 percent less than their colleagues in neighboring, demographically similar counties for providing exactly the same services.

This is a national problem affecting the quality of health care to which our disabled and elderly are entitled.  Medicare’s system for payment to suppliers no longer bears a reasonable relationship between the amount of payment and the costs incurred by suppliers in providing medical services.  These inequities are causing a reduction in access to much needed medical care for millions of disabled and elderly Medicare beneficiaries in many areas of the country.

The claim brought by the five California counties seeks back payments from Medicare for all underpaid suppliers in the United States for the past six years, as is allowed by law.