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Health Proponents Watching Budget for Medi-Cal Provider Rate Cut

Governor Jerry Brown today will release his plan to fix a projected $1.9 billion deficit in the state’s budget. Despite the recently rosier financial outlook for the state, many in the California health community still hold concerns that those new cuts may come out of the hide of health care.

“It sounds like education is going to be made whole, it sounds like prisons are going to be made whole, so yes, we’re fearing further cuts to health care,” said Francisco Silva, general counsel for the California Medical Association. “There is still a $1.9 billion deficit, after all.”

Silva was discussing the possible inclusion in the budget of a 10% Medi-Cal provider rate reimbursement cut that was approved by the state Legislature but has not gone into effect because it’s being challenged in court.

A three-judge panel in federal Circuit Court last month reversed federal appellate judges’ injunctions of the 10% cut, setting the stage for the cuts rate reduction to go into effect at the end of January unless a request for a re-hearing is filed.

Silva said the rate cuts cannot go into effect if CMA files a re-hearing request by the Jan. 28 deadline and he intends to do just that.

“The injunctions are still in place,” Silva said. “We plan to file the petition seeking a re-hearing by the same panel, as well as a request to have the entire [federal] Ninth Circuit [of Appeals] re-hear it.”

Silva said the Brown administration is aware of CMA’s intent to file for a re-hearing of the injunctions, which will at least delay and possibly negate the rate reductions, so Silva thought it unlikely that the state budget would include it as a budget item.

“I think they can’t,” he said. “We’ve indicated to them we intend to appeal. The state can’t assume they’re going to be able to move forward with this anytime soon.”

Even if it’s not counted as cost savings in the current budget, it can still be mentioned within the budget, Silva said.

“In the past, they’ve included budget assumptions, so they might do that. Other times they haven’t included it,” Silva said. “We’ll be watching carefully for it.”

Governor Brown said he plans to release his budget proposal at 10 a.m. today.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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