CalOPTIMA Faces Budget Deficit
CalOPTIMA -- the Orange County agency that administers Medi-Cal benefits -- needs to cut $48 million from its $914 million budget or reserves could drop below state-mandated levels and require the state to take over the program, according to state regulators, the Orange County Register reports.
The agency for the past four years has used reserves to offset increasing medical costs, while the state has decreased payments. Under CalOPTIMA's current spending plan, the agency is losing about $4 million monthly. If spending continues at that rate, reserves by 2007 would drop below the $33 million mandated by the state.
Doctors and hospital administrators met with CalOPTIMA officials on Friday to discuss the budget. Some expressed concerns that reimbursement rates would be lowered and lead some doctors and hospitals to drop out of the program.
CalOPTIMA officials said reducing payment rates would be a last resort, the Register reports.
CalOPTIMA Chief Operating Officer Greg Buchert said the agency is waiting to see whether the state will increase funding by 3%, as previously negotiated. The increase would reduce the agency's deficit by half.
Agency officials plan to balance the budget by July 1. The state will review the budget plan and likely will issue a report in March (Perkes, Orange County Register, 1/28).