Los Angeles Times Considers Reasons for Possible Medi-Cal Payment Cut-Off

The Los Angeles Times today considers reasons for the possible cut-off of Medi-Cal payments to some health care providers (Ornstein et al., Los Angeles Times, 6/26). State officials last week sent letters to nursing homes and clinics statewide warning that the state might not make Medi-Cal payments to certain providers if the Legislature does not approve a budget before July 1 (California Healthline, 6/25). The cut-off payments are partly the result of the Legislature's not having passed a fiscal year 2003-2004 spending plan on time or making cuts to the program when costs rose, the Times reports. In addition, lawmakers overestimated by $100 million the amount the state would collect from its efforts to combat Medi-Cal fraud, and the state was not able to negotiate prescription drug discounts of $106 million with drug makers. Legislators failed to act on Davis' request to reduce by 10% Medi-Cal payments to doctors, nursing homes and pharmacies, limit enrollment and end coverage for some optional services, the Times reports. According to state officials, the situation also is related to higher Medi-Cal enrollment, increased use of medical services by beneficiaries and the rising cost of medicines.

Daniel Zingale, Governor Gray Davis' (D) cabinet secretary and the former director of the Department of Managed Health Care, said that while he did not blame the Legislature specifically for the lack of a budget, "[e]very day that the governor's budget is delayed in the Legislature, the problem gets worse and the threat to health care for seniors and others gets more real." Victoria Wachino, associate director of the Kaiser Commission on Medicaid and the Uninsured, added, "Most states make changes in the middle of the year. California is clearly a unique situation where you look at a state that has a large budget shortfall and really hasn't acted on it. It's not just a Medicaid issue in this case; it's a case of inaction on its overall budget." But Sen. Wes Chesbro (D-Arcata), chair of the Senate Budget and Fiscal Review Committee, said, "You can argue all day about when something could have happened or should have happened. I don't think it does any good at this point in our budget crisis to point fingers" (Ornstein et al., Los Angeles Times, 6/26).