California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

State Resumes Medi-Cal Payments to Community Health Centers, Clinics

California has reinstated Medi-Cal payments for hundreds of community health centers after temporarily suspending the reimbursements during the state's 100-day budget impasse, American Medical News reports. Medi-Cal is California's Medicaid program.


Federal law requires states to reimburse 90% of credible hospital and physician Medicaid claims within 30 days of receiving them, regardless of whether the state has a budget in place. The law does not provide such protection for community health centers.

When California's 2010 fiscal year ended on June 30, the state temporarily suspended Medi-Cal reimbursements for community health centers. Medi-Cal typically accounts for about 50% to 80% of health clinic budgets.

Norman Williams, spokesperson for the California Department of Health Care Services, said some health centers obtained financial assistance from state and federal loan programs until the programs ran out of funding on Aug. 19. After that point, many clinics fell back on their savings or on credit from banks and not-for-profit organizations.

As the budget impasse continued, some health centers froze hiring and raises, delayed equipment purchases and suspended clinic renovations. By the time California adopted its FY 2011 budget on Oct. 8, many clinics were days or weeks away from imposing staff layoffs or reducing their hours.

Health Centers Receiving Funds, Preparing for Next Year

California has started repaying the community health centers about $857 million in Medi-Cal claims withheld since July 1.

Some health centers and clinics are planning to increase their reserve funds or develop other strategies to stay open if California faces major budget problems again next year (Trapp, American Medical News, 10/25).

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