Hospitals Agree To Help Fund Governor’s Health Reform Plan
The California Hospital Association's board on Thursday agreed to a provision in Gov. Arnold Schwarzenegger's (R) health care reform plan to require hospitals to contribute 4% of revenue toward expanding health care coverage, the San Diego Union-Tribune reports (Ainsworth, San Diego Union-Tribune, 9/7). Hospital contributions would be capped at 4%.
CHA opposed the governor's proposed mandatory contributions since his plan was unveiled in January, but the board agreed to a deal after the administration made several concessions (Rau, Los Angeles Times, 9/7).
The agreement comes after a consultant commissioned by CHA reported that the reworked agreement would increase revenue for 282 hospitals, while cutting into revenue for 88 facilities (San Diego Union-Tribune, 9/7).
Under the agreement, hospitals' contributions would generate $1.7 billion annually and an additional $1.7 billion in Medi-Cal matching funds from the federal government. California's current Medi-Cal reimbursement rates are the lowest in the nation.
The revenue first would be spent to maximize Medi-Cal reimbursements and managed care payments, and the remaining money would be earmarked to expand coverage to the uninsured. The funds would be placed in a hospital trust account separate from the state's general fund.
The agreement also would:
- Guarantee annual Medi-Cal rate increases; and
- Continue -- and increase annually -- the state's current general fund expenditures to hospitals (Rojas, Sacramento Bee, 9/7).
According to the Los Angeles Times, those provisions in conjunction with the 4% cap on hospital contributions agreement could result in California having to increase health care spending if the federal government were to reduce Medicare physician payments (Los Angeles Times, 9/7).
As part of the deal, hospitals also agreed to no longer practice "balanced billing," in which patients treated out-of-network are directly billed when a dispute arises between insurers and providers.
The agreement would end after five years unless the Legislature and governor reauthorize it (Sacramento Bee, 9/7).
Because Republicans remain opposed to tax or fee increases, the agreement likely would be put to voters in a ballot initiative (Herdt, Ventura County Star, 9/7). The measure would go before voters in November 2008 (Sacramento Bee, 9/7).
The hospital association did not agree to fund the ballot initiative, but CHA President C. Duane Dauner said the group "will be a partner in that coalition" (Los Angeles Times, 9/7).
Terms of the agreement also would be subject to federal approval (Sacramento Bee, 9/7).
The California Medical Association remains opposed to the governor's proposal that doctors pay 2% of revenue as part of the health care reform plan (San Diego Union-Tribune, 9/7).
Schwarzenegger said the endorsement by CHA "helps carry the momentum to achieve meaningful reform this year" (Los Angeles Times, 9/7).
Dauner said, "We should not stop until we achieve universal coverage to the greatest degree possible" (Ventura County Star, 9/7).
Sen. George Runner (R-Lancaster) said Republican lawmakers would support the hospital contributions only if they were "within the context of what the total (health care reform) plan is." He added that Republicans would not support the mandate if some of the revenue paid for health care for undocumented immigrants (Los Angeles Times, 9/7).
CMA President Anmol Mahal said, "Hospitals don't contribute money under the deal -- they get money. It makes sense for them to cut a deal like this."
Assembly Speaker Fabian Núñez (D-Los Angeles) and Senate President Pro Tempore Don Perata (D-Oakland) -- who are carrying their own reform proposal, AB 8 -- declined to comment (Sacramento Bee, 7/9).
Núñez signaled this week that AB 8 also would be contingent on a ballot measure in 2008. Mandatory employer contributions would provide the bulk of funding for the plan, but the remaining 25% could depend on voter approval.
Schwarzenegger has threatened to veto the Democratic proposal as it is currently structured (California Healthline, 9/5).
On Wednesday, the Democrats' proposal underwent several amendments, including the addition of a provision to create a 13-member commission intended to provide greater transparency about the cost and quality of health care services. The commission would, among other tasks, study and reveal the infection rates in hospitals (Myers, "Capital Notes," KQED, 9/6).
Dauner said the amendments are "problematic" for hospitals. He added that the bill "creates a new bureaucracy" by giving "broad powers and authority to a new commission, and they can set fees on the people that they require to provide the data" (Sacramento Bee, 9/7).
The Legislature adjourns Sept. 14, but Schwarzenegger has indicated that he might hold a special session to seek a compromise on health care reform (San Diego Union-Tribune, 9/7).
Capital Public Radio's "KXJZ News" on Thursday reported on the agreement with hospitals. The segment includes comments from CHA spokesperson Jan Emerson (Russ, "KXJZ News," Capital Public Radio, 9/7).
A transcript and audio of the segment are available online.
KPBS' "KPBS News" reported on a push by business groups for a ballot initiative on a sales tax increase to fund health care reform. The segment includes comments from Jot Condie, president of the California Restaurant Association (Russ, "KPBS News," KPBS, 9/4).
A transcript and audio of the segment are available online.