State coverage for Medi-Cal patient dental and podiatry services was cut amid budget shortfalls in mid-2009, but reinstated by court order after clinics sued in October of last year.
Clinics offered the services again until May, when the state met the procedural hurdle to eliminate state coverage of benefits such as dental care and podiatry, which are considered optional under the state and federal Medicaid program.
Now, leaders of clinics are bracing for bills in the hundreds of thousands of dollars as the Department of Health Care Services says it wants its money back.
"We can't take money from a dentist's paycheck, take dental supplies back or get part of our light bill back," said Jennette Lawrence Shea, director of government and community relations for Family Health Centers of San Diego. "It puts all of the burden on community clinics, and that's just not right. We're the safety net, here to help the most vulnerable. We're struggling to do that with all of these cuts."
Lawrence Shea said the clinic provided 5,300 dental visits from October to May at sites throughout San Diego County and expects to be on the hook for about $850,000.
Norman Williams, spokesman for the Department of Health Care Services, said in an e-mail that providers were warned during the court-order period that they may have to send back the money.
"We have a responsibility to protect the fiscal integrity of the Medi-Cal program," Williams said.
Williams did not have an estimate for the total amount owed to the state or how many clinics would be expected to send refunds. The state has issued an advisory letter on the matter but hasn't started billing individual clinics yet.
The effects are expected to be felt statewide.
Marty Lynch, executive director of LifeLong Medical Care in Berkeley, said his organization provides a range of care to about 23,000 low-income and homeless adults each year. He estimates the organization will owe about $400,000 worth of dental services.
"We were in the place of needing to serve patients," he said. "The care was covered in that period, and I felt the state was acting in good faith."
William D. Hobson Jr., chief executive of Watts Healthcare Corp., which runs several clinics in the Los Angeles area, said his organization held back on billing for dental and podiatry services in the last year. Still, he said he's concerned about the precedent the state is setting.
"You essentially have a budgeting nightmare and destabilizing factor for those programs," he said.
Lawrence Shea said the San Diego clinic group met with local lawmakers, who said they will raise their concerns with the state's health and human services agency.
"We're getting to the point where now is the time for action," she said.
Medi-Cal has been hit hard by budget cuts, including an across-the-board 10 percent pay cut for doctors, hospitals and nursing homes. Results have been mixed for health providers who have lobbied or sued for a reprieve.
Attorneys for hospitals and doctors went before the U.S. Supreme Court this month, arguing for the right to sue over the Medi-Cal cuts. Nursing homes, in contrast, brokered a deal to take a smaller 7 percent cut and see the docked funds refunded in 2012.
Read more California investigative reports at CaliforniaWatch.com.