PRNewswire - December 21, 2005

LOS ANGELES, Dec. 21 /PRNewswire/ -- AIDS Healthcare Foundation (AHF), the largest AIDS organization in the United States, which currently operates free AIDS treatment clinics in the US, Africa and Central America -- including 12 free AIDS treatment clinics throughout California, joined the California Medical Association (CMA) and other concerned healthcare advocates in Sacramento earlier today to urge California Governor Arnold Schwarzenegger to reverse a pending 5% Medi-Cal provider cut that is scheduled to take effect January 1st.

Katy Robison, AHF's Associate General Counsel, spoke at the press event this morning in Sacramento in opposition to the planned cuts, pointing out that this cut will affect the health and well-being of California's neediest and most vulnerable citizens who rely on Medi-Cal care providers for life-saving care.

Following is a letter that AHF Sacramento lobbyist Rand Martin sent to the Governor detailing AIDS Healthcare Foundation's concerns regarding these potentially devastating cuts with a plea that the Governor intervene and reverse this Medi-Cal cut.

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December 21, 2005
The Honorable Arnold Schwarzenegger
Governor, State of California
State Capitol
Sacramento, CA 95814

Dear Governor Schwarzenegger,

On behalf of the AIDS Healthcare Foundation (AHF), we respectfully urge you to reverse your decision to implement the 5% Medi-Cal provider rate cut effective January 1, 2006.

Medi-Cal rates are already the lowest in the nation. Reimbursement rate cuts will force more providers out of the program, reducing access to care and forcing beneficiaries to seek care in already overcrowded emergency rooms.

Provider rate cuts place an additional burden on organizations like AHF that are committed to providing services to indigent Californians. AHF, which is the nation's largest provider of care and treatment services to persons with HIV/AIDS, currently serves approximately 1000 fee-for-service Medi-Cal beneficiaries. While AHF does not turn away people in need, every reduction in Medi-Cal funding makes it increasingly difficult to provide medical services to Californians with HIV/AIDS.

Furthermore, like many entities that will be hard hit by this reduction, AHF is a safety net provider. It does not have a mix of payers that might take some of the sting out of a rate reduction. Every Medi-Cal beneficiary that AHF serves will be hit by this cut.

Low reimbursement rates already have forced many providers out of the Medi-Cal program. This complicates AHF's efforts to create a comprehensive network of health care providers. In addition, the lack of access for Medi-Cal patients leads many of them to our doors, increasing our patient load without sufficient additional funding.

Because of the 5% rate reduction for Medi-Cal managed care that was adopted and implemented in the 2003 budget, AHF is losing over $1 million a year in care and treatment funding. If the fee-for-service rate goes into effect, that managed care loss will be exacerbated by future managed care rates that are actuarially based on this lower fee-for-service rate.

AHF has been a longtime and successful managed care provider and has supported efforts by this and previous administrations to expand managed care to other populations. This planned reduction is inconsistent with your desire to expand managed care because it ensures that essential provider networks will be nearly impossible to establish. AHF will have no choice but to resist any expansion of managed care if provider rates make it fiscally irresponsible.

Finally, it is important to note that the modest savings to the General Fund will have double the negative impact on providers because of the consequent loss of the federal match. On the heels of the 5% Medi-Cal managed care rate cut, this additional cut would be unacceptably harmful to our patient population.

A front-line provider like AHF faces ongoing financial challenges to pursue its mission. An additional rate reduction unnecessarily magnifies and exacerbates future challenges.

We thank you for your favorable consideration.

Sincerely,

Rand Martin
gcg Rose & Kindel
Sacramento CA

SOURCE AIDS Healthcare Foundation

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PR051237

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