Schwarzenegger OKs Medi-Cal Cuts for Health Care Providers
On Saturday, Gov. Arnold Schwarzenegger (R) approved nearly $2.2 billion in budget cuts, including a 10% reduction in state Medi-Cal reimbursement rates to providers, the Sacramento Bee reports (Lin, Sacramento Bee, 2/17). Medi-Cal is California's Medicaid program.
The budget cuts to Medi-Cal will take effect on July 1 in hopes of reinstating the higher reimbursement rates in the fiscal year 2008-2009 budget, according to the San Francisco Chronicle. Schwarzenegger had proposed that the cuts take effect one month earlier (Yi, San Francisco Chronicle, 2/16).
In working to address the state's $14.5 billion budget deficit, lawmakers will consider nearly $1.1 billion in proposed Medi-Cal cuts (Robertson, Sacramento Business Journal, 2/15). The cuts Schwarzenegger signed on Saturday will save about $544 million in Medi-Cal spending in FY 2008-2009 (Sheppard/Geissinger, Oakland Tribune, 2/16).
However, the Los Angeles Times reports that the cuts approved on Saturday will not yield "lasting savings" because many simply defer payments until the next budget year, rather than cancelling the payments altogether (Halper, Los Angeles Times, 2/16).
Moreover, legislators likely will face greater obstacles reaching further agreements on budget cuts, especially after the Legislative Analyst updates a report on the state budget deficit on Wednesday, according to the Bee. The report is expected to find that the state's economic circumstances have grown more serious.
Other proposals to scrap dental services, optical care and other optional services for adult Medi-Cal beneficiaries remain on the table (Lin, Sacramento Bee, 2/16).
Richard Frankenstein, president of the California Medical Association, said the "cuts will not only leave millions of Californians stranded with reduced or no access to their critical health care needs, but could break the back of a health care system that is already under serious strain" (Mendel, San Diego Union-Tribune, 2/16).
The cuts also will strain the pool of specialty physicians available to care for California children, the Business Journal reports.
Anthony Phillips, chair of pediatrics at UC-Davis Medical Center, said that if the cuts remain, it will make physician recruitment even more difficult statewide (Sacramento Business Journal, 2/15).
Democratic legislators said they hope the Medi-Cal cuts can be repealed if budget negotiations can produce an alternative, such as a tax increase, lease of the state lottery or other new sources for revenue.
Assembly member Rick Keene (R-Chico) told the Assembly that the Medi-Cal cuts also could put medical transport firms and rural hospitals out of business (San Diego Union-Tribune, 2/16).
- George Skelton, Los Angeles Times: "This state right now has the lowest Medicaid reimbursement rates in the nation. And the Legislature voted to slash them," Skelton writes in his "Capitol Journal" column in the Times. Skelton also cited the comments of a number of lawmakers who "winced" at the cuts and predicted that it could be the demise of the Medi-Cal program (Skelton, Los Angeles Times, 2/18).
- Leona Butler, San Jose Mercury News: The Medi-Cal reimbursement cuts pose "an enormous threat to our neediest families' medical care," Butler, CEO of Santa Clara Family Health Plan, writes in a Mercury News opinion piece. Butler warns that physicians "who continue treating Medi-Cal patients at lower reimbursement rates would have to charge other patients more to make up for what is lost treating Medi-Cal patients." She adds that California should address both the state budget deficit and the health care crisis, but "we can't fix one by making the other worse" (Butler, San Jose Mercury News, 2/18).
Capital Public Radio's "KXJZ News" reported on the cuts. The segment includes comments from Jean Ross, executive director of the California Budget Project (Weiss, "Capital Public Radio," KXJZ, 2/18).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.