State Budget Stalemate Depletes Medi-Cal Funds for Health Clinics

California health care providers are feeling the pressure of the state budget impasse as more than 1,000 community clinics and health centers stopped receiving Medi-Cal payments last week, the Sacramento Bee reports. Medi-Cal is California's Medicaid program (Yamamura, Sacramento Bee, 8/29).

Nursing homes and hospitals will continue to receive Medi-Cal payments throughout the budget stalemate (Jewett, "California Watch Blog," 8/27).

Background

On July 1, the state suspended Medi-Cal payments for certain health centers because the state lacked a budget plan for the new fiscal year. Clinics also stopped receiving state funds for Healthy Families and the Expanded Access to Primary Care program. Healthy Families is California's Children's Health Insurance Program (Lavelle, San Diego Union-Tribune, 8/29).

To pay the health centers during the budget impasse, the state dipped into a $2 billion emergency pool that has since run out. To date, the state has withheld as much as $449 million in payments to local health care providers.

Possible Effects on Health Care Providers

Although some health centers could borrow funds from other sources, many other clinics might be forced to close if a budget agreement remains stalled, according to the California Primary Care Association (Sacramento Bee, 8/29).

Jamila Edwards, assistant director of policy at CPCA, said the budget strain likely will affect community clinics in rural areas first, as soon as within the next few weeks.

For additional coverage of how the financial strain could affect health clinics, see a recent Capitol Desk post.

"Value of Claims" Letters

State Controller John Chiang (D) said California soon could begin issuing IOUs if the budget deadlock continues. Although community clinics are not eligible to collect IOUs for Medi-Cal payments, they could receive similar "value of claims" letters from the state's Department of Health Care Services.

Norman Williams, a spokesperson for DHCS, said the letters would state the amount of funding a health care provider would receive when the state budget passes. The letters also could be used to open a line of credit at a bank (San Diego Union-Tribune, 8/29).

A list of the types of health centers that would receive the value of claims letters is available from "California Watch Blog" ("California Watch Blog," 8/27).

Broadcast Coverage

On Monday, KPCC's "KPCC News" reported on how the budget stalemate could affect clinics that rely on Medi-Cal funds (Nazario, "KPCC News," KPCC, 8/27).