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1 CRAIG 3. CANNIZZO (State Bar No. 70379) E-Mail: ccannizzo@health-law.com 2 FELICIA V SZE (State Bar No. 233441) E-Mail; fsz(health-law.com 3 GREG B SHERMAN (State Bar No. 253832) E-Mail: gshennanjhealth-law.com 4 HOOPEIt LUNDY& BOOKMAN, P.C. 575 Market Street Suite 2300 5 San Francisco, California 94105 Telephone: (415) 875-8500 6 Facsimile: (415) 875-8519 7 Attorneys for Plaintiffs

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UNITED STATES DISTRICT COURT CENTRAL DISTRICT 011 CALIFORNIA, WESTERN DIVISION

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CASE NO. CV 11-9688 CAS (MANx) DECLARATION OF BRUCE KOVACS, Mi) IN SUPPORT OF PLAINTIFFS MOTION FOR PRELIMINARY INJUNCTION Date: January 30, 2012 Time: 10:00 am.
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2042209.1

DECLARATION OF BRUCE KOVACS MD IN SUPPORT OF PLA MOTION FOR PRELIMINARY INJUNCTION

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DECLARATION OF BRUCE KOVACS. MD I, BRUCE KOVACS, MD, declare as follows: I make this declaration in support of PLAiNTIFFS MOTION FOR

4 PRELIMiNARY INJUNCTION. The facts set forth herein are true of my own

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personal knowledge, and if called upon to testify thereto, I could and would 2. I am a licensed physician practicing in the State of California. My

6 competently do so under oath. S business address is P.O. Box 3389, Seal Beach, CA 90740. 1 have been practicing 9 medicine for the last 25 years as an Obstetrician-Gynecologist and Maternal Fetal 10 Medicine Specialist in Los Angeles County. I also currently hold a position with 11 University of Southern California (USC) Keck School of Medicine and the LAC
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12 -I- USC Medical Center. 13 3. I hold a Bachelors Degree in Microbiology from California State 14 University, which I received in 1974. I received my M.D. from USC Keck School

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15 ofMcdicmem 1979. 1 thd my mternship and residency at LAC USC Medical 16 Centerfrom l979to 1983. 17 4. I am a member of the Los Angeles County Medical Association, the 18 California Medical Association, and the American Congress of Obstetricians and 19 Gynecologists. 20 22 5. 6. 1 am certified in Obstetrics/Gynecology and Maternal Fetal Medicine As part of my practice, I provide medical services to Medi-Cal patients.

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21 (i.e. high risk obstetrics) by the American Board of Obstetrics and Gynecology. 23 My current practice consists of approximately 15% private payor patients, 15% 24 private managed care, and 70% Medi-Cal (60% fee-for-service and 40% managed 25 care). 26 7. Services provided include examinations and diagnoses, performance of

27 certain types of tests, prescription of medications and other treatments, and referrals
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I DECLARATION OF BRUCE KOVACS MI) IN SUPPORT OF PLAINTIFFS MOTION FOR PRELIMINARY INJUNCTION

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1 to specialists for further diagnoses and treatment. The payments we receive for 2 services provided to Medi-Cal patients are well below our cost structure. 3 8. The rates paid for physician services have been inadequate for many 4 years. I have nevertheless provided services to, and currently continue to serve, 5 Medi-Cal patients because of their medical needs and the lack of access to medical 6 services experienced by such patients, I am personally aware of the lack of access 7 for Medi-Cal patients to specialists and even generalists, having been unsuccessful S on many occasions in referring a Medi-Cal patient to such providers for further 9 prenatal care, diagnosis and/or treatment. 10
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I understand that the California Department of Health Care Services is

11 planning to implement a ten percent (10%) rate reduction on adult (over 21 years of 12 age) physicians services, which has been approved by the federal government. This 13 rate cut directly affects the ability of physicians, such as myself, to continue to
14 provide services to adult Medi-Cal patients. I also understand that the rate cut will 15 be implemented retroactively to June 1,2011. The rate cut will reduce the amount

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16 the State will pay a physician for all types of services provided to adults, and will significantly reduce the reimbursement amount payable for such services.
If this ten percent (10%) rate reduction is implemented, I will 19 significantly reduce the number of Medi-Cal patients 1 see. At this time, Medi-Cal 10. 20 rates are so low that they do not even cover the cost of the patients visit. As a 21 result, other patients are in effect subsidizing the services provided to my Medi-Cal 22 patients. This is unfair to other patients and cannot be allowed to continue. The 23 services that other physicians and I offer should be recognized for the value we

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24 provide to California communities, the patients we serve, and the state as a whole.
25 However, the unfortunate result of this decision is that many of my patients will 26 have to find a new physician, rely on emergency room services or forego healthcare 27 services for their pregnancies entirely. 28
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DECLARATION OF BRUCE KOVACS. Ml) IN SUPPORT OF PLAIN1TFFS

MOTION FOR PRELIMINARY INJTJNC11ON

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Due to the nature of obstetrical services, even a small decrease in 2 access to prenatal care services will have a disproportionately adverse effect. 3 Because many of the Medi-Cal beneficiaries I see are low income patients with high 4 risk pregnancies, there will be few if any resources available for their care. Indeed, 5 with respect to pregnant women and their unborn babies, this will be especially 6 dangerous and will place a terrible burden on them to find other obstetrical 7 providers who will be willing to provide them with care. Emergency rooms and 8 their physicians are not equipped or trained to serve these patients as they cannot 9 diagnose or manage complications which occur in the fetus. As a result, lithe cuts 10 are implemented, these most vulnerable of all patients will fall through the cracks. I 11 have spoken with many of my colleagues in the community and academic medical 8 12 centers about this and they concur with my opinion on the likely effect. 1 have personally reviewed the materials submitted by Medi-Cal to 14 OMS in connection with the proposed rate reductions. In its request to CMS, Medi g 15 Cal has not: even provided or proposed any monitoring program for these pregnant 16 patients to evaluate the impact of the cuts on pregnancy outcomes. Thus, in 17 approving these cuts CMS has apparently chosen to ignore the effect the rate 18 reduction will have on this population of patients. 19 13. In the past, Medi-Cal has acknowledged the vital need for wider 20 availability of comprehensive prenatal care services to reduce poor pregnancy 21 outcomes. In fact, in 1984 the Legislature enacted the Comprehensive Periiiatal 22 Services Program (CPSP) in response to findings from the 013 Access Project that 23 a comprehensive approach reduced both low birth weight rates and health care costs 24 in Women and infants. CPSP was established with the goal of providing a wide 25 range of culturally competent services to Medi-Cal pregnant women, from 26 conception through 60 days postpartum. In addition to standard obstetric services, 27 through CPSP, women receive enhanced services in the areas of nutrition,
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2$ psychosocial and health education. CPSP became a Medi-Cal benefit in 1W. This 3 DECLARATION OF BRUCE KOVACS MD IN SUPPORT OF PLAINTIFFS MOTION FOR PRELIMINARY iNJUNCTION
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1 program will be significantly compromised as a result of the proposed retroactive 2 reimbursement reduction. This will only further exacerbate the problems facing 3 pregnant Medi-Cal beneficiaries. For instance, it has been well established and 4 accepted that improved access to obstetrical care for pregnant women reduces the 5 number of preterni births. Conversely, reducing access to care will increase the rate 6 of preterm deliveries. Care for preterm infants is extremely expensive. As a result, in the end, the decreased access to prenatal care will end up costing everyone in S California more. This is a clear example of prevention being less expensive than 9 treatment. This does not even take into account the human cost ofpreterm delivery 10 and the inherent risk of long term physical and intellectual impairment in children 11 who are born prematurely. 8 12 14. Ultimately, I believe that these patients and their unborn babies who 13 depend upon the Medi-Cal program for their medical services will suffer since the

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14 highest risk pregnancies will get the lowest level of care. Other physicians in the 15 State of California, like me, may no longer be able to afford to provide services to 16 such patients. I anticipate that some physicians like me will completely withdraw 17 from the Medi-Cal program, and others may reduce the number of Medi-Cal 18 patients they will treat or will refuse to accept new Moth-Cal patients. Moreover, 19 because many of these patients lack adequate transportation, they likely will not be 20 able to travel to those providers who choose to continue to offer prenatal care 21 services to Medi-Cal beneficiaries. 22 I declare under penalty of perjury under the laws of the United States of Executed on December2L, 2011, at Seal Beach, California. 23 America that the foregoing is true and correct. 24

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4 DECLARATION OF BRUCE KOVACS MD IN SUPPORT OF PLAINTIFFS

MOTION FOR PRELIMINARY 1NJUNCTION