Provider Cut Repeal Talk Turns to Veto Override

Two bills repealing the 2011 Medi-Cal provider reimbursement rate reductions have sailed through California legislative committees so far in an unusual way:  They’ve been approved with unanimous votes in both houses from both parties.

But all those Yes votes could fail on a single No vote if Democratic Gov. Jerry Brown vetoes the bills. He has 50 million reasons every month to use his veto stamp. The savings to the state from the 10% across-the-board Medi-Cal provider rate cut amounts to an estimated $600 million a year.

The two similar bills, SB 640 by Sen. Ricardo Lara (D-Bell Gardens) and AB 900 by Assembly member Luis Alejo (D-Salinas), would reverse the Medi-Cal provider rate cuts imposed in 2011. The cuts have been challenged in lawsuits and have not implemented.

If the cuts are approved in federal court, providers may owe the state for two years of reduced payments. Retroactive payments could mean providers would have to pay back 5% a year over four years, making the Medi-Cal provider rates dip by 15% over that time span.

There will be higher demand for Medi-Cal providers starting next year when the Affordable Care Act and Medi-Cal expansion kick in. That’s part of what makes the proposed legislation such an easy sell, along with the perception that the budget crisis in California has eased or even ended.

The Legislature can override a gubernatorial veto with a two-thirds vote.

“There is talk about an override,” said Daniel Zingale, senior vice president for The California Endowment, “and that’s pretty extraordinary.”

The big hurdle to even considering an override has been the nearly one-third bloc of Republican lawmakers. But having Republicans on board the train to repeal Medi-Cal cuts could make all the difference, according to Anthony Wright, executive director of Health Access California.

“Having such unified, bipartisan support,” Wright said, “that certainly increases their negotiating leverage as they go forward.”

Related Topics

Capitol Desk Medi-Cal