The UC Davis Medical Center is suing Sacramento County and responsible public officials for their failure to process and pay more than $100 million in claims for medical care.

The lawsuit involves care and services that UC Davis provided to indigent patients eligible for benefits under the County Medically Indigent Services Program, or CMISP,  and to incarcerated people who are the responsibility of the Sacramento County Sheriff’s Correctional Health Service. The unpaid fees sought in the lawsuit are for medical care that UC Davis provided from July 1, 2008, through Sept. 1, 2009, and are based on negotiated rates that the county agreed to pay.

The lawsuit, filed Nov. 19 in Sacramento County Superior Court, seeks not only to recover amounts due UC Davis, but also asserts the rights of indigent residents and seeks to prevent the county from denying them public benefits under the CMISP.

“We are increasingly frustrated and disappointed in Sacramento County’s failure to support essential health services for its most vulnerable citizens,” said Ann Madden Rice, chief executive officer of the UC Davis Medical Center. “The county’s actions have put UC Davis in the position of providing — without compensation — necessary care for thousands of county patients. We are facing unprecedented demand for our services, and our resources are stretched so thin as to threaten the availability of care for all patients in the community.”

Under California’s Welfare and Institutions Code, counties are the provider of last resort and are required to provide and pay for medical care for all indigent county residents. Sacramento County had a long-standing contractual relationship with UC Davis for the care of CMISP-eligible patients. On June 30, 2008, the county terminated that contract and chose to access UC Davis’ services, at negotiated rates, through a different contractual arrangement with a third-party administrator. UC Davis repeatedly warned the county that this arrangement would not save the county money.

In September 2009, the county decided that it would no longer pay UC Davis for any services (emergency or nonemergency) it provides to CMISP beneficiaries. On Sept. 2, 2009, the county issued a letter to its indigent patients, notifying them that effective Sept.1, 2009, “the CMIS Program is not responsible for payment of any type of medical services to CMIS participants at UC Davis Medical Center.”

“The county has implemented a new eligibility standard that is unrelated to patients’ ability to pay for care, and denies them emergency services due to a circumstance patients typically cannot control — the specific emergency room where they happen to receive care,” said David Levine, UC Davis Health System counsel.

According to Levine, “State law and county trauma and emergency medical services policies dictate that the patient be transported to the nearest hospital providing emergency services, and very often, that hospital is UC Davis.”

Nate Kuppermann, an emergency physician and chair of the UC Davis Department of Emergency Medicine, said, “Every day, we see patients who are severely sick and injured, or are experiencing some other medical emergency, and they need our care immediately. A man in the midst of a heart attack or a woman in active labor should be able to go to the nearest emergency room without worry about whether that emergency room is the one with which the county has a contract.”

Sacramento County seems to recognize the unrealistic nature of its guidelines. In its letter to patients, the county advises them to “go to the nearest emergency room” in case of a life-threatening emergency. The nearest emergency room for many indigent patients is the one at the UC Davis Medical Center, which the county acknowledges.

For example, an Oct. 15, 2009, letter to UC Davis from Ann Edwards-Buckley, director of the Sacramento County Department of Health and Human Services, stated that if a patient is picked up by ambulance at the county’s primary-care clinic at Broadway and Stockton Boulevard, “it is likely the ambulance will bring the patient to UCD as it is the closest hospital.”

She later explained, that, "unfortunately, this patient was experiencing a life-threatening situation and it is the policy of ambulances to take patients to the nearest ER. You were the nearest ER and the (county) MD wrote the referral so the treating physician would be aware of the circumstances.”

“Remarkably, the county now denies all CMISP eligibility applications from patients receiving emergency services at UC Davis,” said Levine, “even as it continues to advise indigent residents to go to the nearest emergency room, knowing that this often will be UC Davis Medical Center.”

Although UC Davis has less than 15 percent of the inpatient market share in Sacramento County, it provides almost 60 percent of the hospital charity care in the county. Last year, UC Davis provided $165 million in charity care, up from $102 million the year before. In addition, UC Davis faculty, students and staff provide countless volunteer services, including free community clinics, health screenings, educational and mentoring programs, and other services that contribute greatly to the community’s health and well-being.

“Our emergency room staff is committed to providing the best care we can to every patient we see. And we need the county’s support if we are to continue providing the services upon which our community relies,” Kuppermann said

“When the county does not pay for medical services provided to its indigent residents, it severely hampers our ability to continue providing services to all patients, regardless of their payer status,” he said. “We provide essential services not available elsewhere, including level-1 trauma care for adults and children, comprehensive pediatric emergency services, and regional burn care.”

State law clearly prohibits counties from using financial hardship or budgetary shortfalls as a basis for limiting their provision of indigent medical services. Nonetheless, the lawsuit notes that the county has acknowledged many times over the past several months that it owes UC Davis for outstanding CMISP claims, but has stated that the county does not have the funds to pay these claims and thus will not pay them.

The county’s avoidance of its obligations also is reflected in the repeated closures of its emergency mental health facility, which turns away patients experiencing mental-health crises. With nowhere else to go, these patients go to local emergency rooms, frequently the one at the UC Davis Medical Center (which is across the street from the county treatment center). UC Davis does not have a state license to operate an inpatient mental health facility, and consequently is neither equipped nor staffed to provide care for such patients.

The county’s recent actions have exacerbated a communitywide crisis, as emergency departments already impacted by high-acuity medical patients now must also provide a safe place for mental-health patients awaiting transfer to a mental-health treatment facility. Patients cannot get timely, optimal care and hospitals are forced to absorb the costs of unfunded care which, by law, must be borne by the county.

“We have a duty to our patients, the community, the university and the people of California to operate in a way that assures we’re here when patients need us,” said Rice, the medical center CEO. “We simply cannot continue the present situation, because doing so threatens health care for all.”