California Medical Association calls for retention grants for independent physicians

While many healthcare providers across the country are overworked and understaffed because of the COVID-19 pandemic, many independent physicians are struggling. In fact, a number of independent practices have had to lay off staff and even close temporarily because of a drastic reduction in patient visits. The California Medical Association (CMA) is taking steps to try to help independent physicians remain financially solvent through the coronavirus outbreak.

Patients are delaying primary care and other non-essential healthcare visits because of the coronavirus and that is significantly impacting independent practices. The CMA estimates that approximately half of the medical care in the state is delivered by solo and small practice physicians. It recently surveyed its members and found that:

• 50% of the physicians participating said they’ve had to lay off staff, including nurses and office staff
• 11% have closed down their practices temporarily.

Concerned that another wave of independent physicians may be forced to close their practices as the coronavirus shutdown continues, the CMA is lobbying the governor of California, Gavin Newsom, to provide financial aid in the form of retention grants issued by health insurance companies. The organization argues that patients are continuing to pay their insurance premiums but since the physicians’ offices with no patients are not submitting claims for reimbursement, they aren’t seeing any of that money.

Retention grants provided by health insurance companies would enable primary care practices and other healthcare providers to remain solvent throughout the crisis so they will be there for patients after it is over. As Dustin Corcoran, the organization’s CEO, says, “Three months down the road, we’re going to have high demand for physician services, surgical and primary care, and we’ve got to be able to meet that. Physician practices operate on very, very thin margins. They don’t have the reserves that payers have to weather the storm.”

In addition, the CMA estimates “statewide, up to 34% of Californians (more than 13 million people) could lose access to their physician absent financial assistance to maintain the financial viability of physician practices. Should California lose this critical piece of the health care infrastructure, health plans and insurers will be unable to maintain their physician networks and will be unable to meet the demand for medically necessary care that is building as the State’s health care resources are currently focused on treatment of COVID-19 patients.”

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Financial assistance is available in California and across the country, but it often either has to be paid back or comes with restrictions that some independent practices may not meet. For example, Blue Shield of California is distributing advance payments and loans, totalling $200 million, that will have to be paid back after the crisis has passed. Federal aid is based on how many Medicare patients the healthcare provider typically sees.

The CMA is also pressing Gov. Newsom to ask the Centers for Medicaid and Medicare Services (CMS) for a waiver that would allow California to repurpose some Medi-Cal funds that would also be used as retention grants for independent physicians.