Q: How Does A Doctor Make Money In California? A: You Can't.

The wise judges of the 9th Circuit U.S. Court of Appeals in San Francisco has decided that the state of California was within its rights to cut Medi-Cal reimbursements to physicians by ten percent. Medi-Cal is California's version of the federal Medicaid health insurance for the poor. The state first passed a bill, AB97, in the summer of 2011 to lower physician payments in an attempt to balance its woefully indebted budget. The bill would have allowed Medi-Cal to pay just $11 per office visit and $100/day to hospitals for inpatient care. Hospitals and doctors' groups immediately sued to stop the bill. An injunction against its implementation was placed on it until now.

According to the appellate judges, "prior to reducing rates states need not follow any specific procedural steps, such as considering providers' costs..." To add insult to injury, the judges further point out that, "Neither the state nor the federal government 'promised, explicitly or implicitly' that provider reimbursement rates would never change."

Hmm. So the state doesn't have to consider the costs of providing a service when it decides how much it is willing to pay for the service. And even when it does, it can change it at will without input from the people who has to provide the service. Doesn't sound like much of a business case for doctors. The state argues that with the expansion of Medi-Cal due to ObamaCare, doctors here will at least be reimbursed for treating patients that previously were uninsured and uncollectable, even if the payments are very low. That sounds like a version of the old business joke where a store owner loses money on every sale but he'll make up for it with volume. The bottom line just doesn't work out. It's no wonder most doctors in this state refuse to accept any more Medi-Cal patients.

California has said that it will monitor the ability of Medi-Cal patients to get physician access. If the state feels that its patients are not able to find doctors willing to take Medi-Cal, it will "take immediate action." Does that mean it will raise reimbursement rates to attract more doctors into the program? Hardly. There is talk that the government may obligate California physicians to accept a certain percentage of their patients from Medi-Cal as a condition for licensure. In other words, indentured servitude. If California really is the trendsetter for the country, we are witnessing the implications of ObamaCare in microcosm.

The California state government has helpfully provided a list of Medi-Cal reimbursements for all procedures listed by CPT codes. If you're contemplating on moving to the once Golden State, it may be worthwhile for you to spend a few minutes looking at it to see how it may impact your income if you decide to move to the land of low payments, exorbitant taxes, and onerous business rules. Also remember that these rates are subject to an immediate ten percent cut due to AB97 and more cuts in the future whenever the politicians feel like it.