Health Cuts in Budget Package Could Face Legal Challenges
Several cuts to health care spending that were included in California's newly signed budget package could face legal challenges, the Los Angeles Daily Journal reports.
Last week, the state Legislature passed a budget package that includes about $7 billion in spending cuts. When Gov. Arnold Schwarzenegger (R) signed the budget legislation, he used line-item vetoes to further reduce spending by nearly $1 billion.
Medi-Cal Rate Freeze
The budget package included a provision to retroactively freeze Medi-Cal reimbursement rates at hospitals that have fee-for-service contracts with the state. Medi-Cal is California's Medicaid program.
The rate freeze would hold Medi-Cal reimbursement rates at Jan. 1, 2010, levels and apply those rates retroactively from July 1, 2010. The move is expected to reduce state spending by about $84 million.
Lloyd Bookman, a partner at the law firm Hooper, Lundy & Bookman, said the Medi-Cal rate freeze could be considered a breach of contract because it would negate any reimbursement changes scheduled after Jan. 1,Â 2010.
Shifting Mental Health Services
In addition, Schwarzenegger's line-item vetoesÂ eliminated $133 million from mental health services for special education students. The governor cut the spending by shifting responsibility for such programs from counties to school districts.
Some Democrats, state education officials and disability rights advocates have said they might challenge Schwarzenegger's action because a 2004 state proposition protects revenue collected by local governments. They say the governor's line-item vetoesÂ do not suspend a mandate requiring counties to provide mental health services to special education students.
Schwarzenegger's line-item vetoes also targeted funding for community health clinics.
It is unclear whether community clinics will challenge the vetoes. The state Supreme Court recently ruled that the governor has the authority to use line-item vetoes toÂ trim spending (Gallegos, Los Angeles Daily Journal, 8/13).
On Monday, KPCC's "Patt Morrison" reported on Schwarzenegger's line-item vetoes. The segment includes comments from:
- Chantel Johnson, legislative and policy director at California Youth Connection;
- H.D. Palmer, deputy director of external affairs at the California Department of Finance;
- Senate President Pro Tempore Darrell Steinberg (D-Sacramento); and
- Anthony Wright, executive director of Health Access California (Morisson, "Patt Morrison," KPCC, 10/11).