California Legislature Passes Budget Plan; Reaction Mixed

State officials and health care groups had mixed reactions to a budget plan (AB 93) passed by the California Legislature on Monday, Capital Public Radio's "KXJZ News" reports (Orr, "KXJZ News," Capital Public Radio, 6/15).

For more on the Legislature's budget plan, see today's "Capitol Desk" post.

Background

Last month, Gov. Jerry Brown (D) released the revised version of his fiscal year 2015-2016 budget plan, which includes several health care proposals.

Among other things, Brown's revised budget plan would allot:

• $91.8 billion for Medi-Cal, the state's Medicaid program;
• $326.7 million for pay increases over two years for the In-Home Supportive Services program; and
• $228 million to help pay for costly specialty prescription drugs (California Healthline, 6/10).

Details of Lawmakers' Budget Plan

The state Legislature passed their budget plan on Monday, just hours ahead of the deadline to do so.

The $117.5 billion general fund plan assumes that the state will get about $2.3 billion more in revenue than estimated in Brown's revised plan (Siders/White, "Capitol Alert," Sacramento Bee, 6/15). It includes:

• Funding for full-scope Medi-Cal coverage for undocumented children and possibly some undocumented adults;
• Increased reimbursement rates for Medi-Cal providers, including dentists;
• Restoration of adult dental services in Medi-Cal;
• Restoration of acupuncture, audiology, podiatry and speech therapy Medi-Cal benefits;
• Restoration of school-based dental services; and
• Overtime pay for In-Home Supportive Services providers and home health workers (Gorn, California Healthline, 6/16).

The state Legislature also passed four budget trailer bills, including one (AB 119) related to nursing facilities that participate in the Medi-Cal program (Assembly release, 6/15).

Lawmakers' Comments

Following the vote, Assembly Speaker Toni Atkins (D-San Diego) said, "We stand by the budget we've just approved," adding, "We know [Brown's] got some reactions to some of that, but we're doing it in discussion together. Would we like what we just passed? Absolutely, 100%. But we're realistic about it."

However, Senate President Pro Tempore Kevin de León (D-Los Angeles) said it is "[u]nlikely" that the plan passed by state lawmakers will be the final budget.

State Sen. Mark Leno (D-San Francisco) said while Brown may take issues with certain parts of the budget, the administration and state lawmakers "are in agreement about 99.2% of the overall discussion here" ("Capitol Alert," Sacramento Bee, 6/15).

Meanwhile, Republicans criticized the state Legislature's budget plan, calling it unsustainable.

State Sen. John Moorlach (R-Costa Mesa) said the budget plan passed by state lawmakers would "lead to a fiscal implosion" (Megerian, "PolitiCal," Los Angeles Times, 6/15).

Jim Nielsen (R-Gerber), vice chair of the state Senate Committee on Budget and Fiscal Review, said, "We do not have money in the bank to support the budget ... that we will be passing here today."

Melissa Melendez, vice chair of the Assembly Committee on Budget, called the spending plan "a political exercise," noting that state lawmakers would have given up their pay if they had not passed a budget by Monday night. "This is about passing a budget on time. It's not a budget bill -- it's the Legislative Paycheck Protection Act," Melendez said (Adler, "KXJZ News," Capital Public Radio, 6/15).

Brown Administration's Reaction

The Brown administration maintains that the governor's revised budget plan already provides funding to raise Medi-Cal rates.

H.D. Palmer, a spokesperson for the state Department of Finance, said, "The administration has already put more than $150 million into its version [of the] budget to roll back rate reductions that were authorized several years ago by the Legislature," adding that lawmakers' spending plan would cost $90 million more annually (Orr, "KXJZ News," Capital Public Radio, 6/15).

However, Palmer said the administration is "optimistic" that ongoing negotiations "will lead to a fiscally sound budget agreement on revenues and spending that the governor can support."

The final budget will go into effect on July 1 (Young, Sacramento Business Journal, 6/15).

Reaction From Industry Groups

Health care organizations applauded the state Legislature's attempt to increase Medi-Cal reimbursements.

Luther Cobb, president of the California Medical Association, called the spending plan an "important first step toward fully funding Medi-Cal."

Meanwhile, California Hospital Association President and CEO Duane Dauner said the plan would "help ensure that [hospital-based nursing] facilities remain open for the current year and are able to continue to provide care to their communities."

CMA and CHA are part of a coalition of health care groups, called We Care for California, that has pushed for higher Medi-Cal reimbursement rates (We Care for California release, 6/15).

Meanwhile, Jay Lee, president of the California Academy of Family Physicians, expressed concerns about whether Brown's budget plan would increase Medi-Cal rates enough to draw more providers to the program. Lee said, "For those who are continuing to see Medi-Cal patients the question is, 'Is there enough there to keep them continuing to see patients as more and more patients have been added to the rolls?'" (Orr, "KXJZ News," Capital Public Radio, 6/15).