Schwarzenegger: Delay on Budget Could Hinder Health Care Reform

Gov. Arnold Schwarzenegger (R) is voicing concerns that the gridlock over the state budget will distract lawmakers from taking action on health care reform and other important issues, the Sacramento Bee reports (Hill, Sacramento Bee, 8/3).

The Senate on Wednesday fell one Republican vote short of approving a state budget for fiscal year 2007-2008. All but one Republican lawmaker voted against the budget despite an assurance by Schwarzenegger that he would invoke his line-item veto authority to cut $700 million in spending from the budget.

The Assembly on July 20 approved a spending plan, but Senate Republicans have abstained from passing a plan until more demands are met, including the additional $700 million in cuts to reduce the operating deficit to zero (California Healthline, 8/2).

Senate President Pro Tempore Don Perata (D-Oakland) adjourned the Senate following Wednesday's vote, making it unlikely that there would be more debate on the budget until the Assembly returns Aug. 20, according to the Bee.

Schwarzenegger said, "We are close, so close. And it is a tragedy if we would wait until Aug. 20 when the legislators come back." The governor also argued that the stalemate would distract lawmakers from other important issues, including health care reform.

Senate Minority Leader Dick Ackerman (R-Irvine) said, "Until we get the budget done, I don't think we're going to see any work on any of those other items" (Sacramento Bee, 8/3).

The budget deadlock prompted the State Controller's Office to withhold a $227 million scheduled payment to hospitals, nursing homes and other Medi-Cal providers this week (California Healthline, 8/2). As a result, an estimated 500 hospitals and 11,000 other Medi-Cal providers will not receive Medi-Cal payments (Fernandez, San Francisco Chronicle, 8/3).

The financial strain will be greatest on smaller, community-based providers that serve immigrant and low-income populations, according to the Los Angeles Times (Halper/Rau, Los Angeles Times, 8/3).

However, physicians and nurses who treat Medi-Cal patients will continue to receive state payments because they directly bill hospitals, unlike nursing homes, hospitals and other institutions (Wilson, Ventura County Star, 8/3).

Ackerman on Thursday criticized Democratic colleagues for failing to consider emergency legislation to continue funding Medi-Cal providers and state programs that cannot receive payment until a budget is approved (Sacramento Bee, 8/3).

Ackerman has proposed to continue funding Medi-Cal providers while the budget debate continues, but the proposal would require approval from both chambers. The Assembly has adjourned (California Healthline, 8/2).

KQED's "This Week in Northern California" on Friday is scheduled to include a report on the budget standoff, including the impact on Medi-Cal payments ("This Week in Northern California" Web site, 8/3). Additional details about the segment and a broadcast schedule are available on the program's Web site.