Brown releases budget that ups Medi-Cal spending but does not restore reimbursement cuts

CAL/AAEM News Service calaaem.news.service1 at gmail.com
Mon May 26 13:32:27 PDT 2014


 
May 19, 2014
 
Brown releases budget that ups Medi-Cal spending but does not restore reimbursement cuts
 
 
CMA ALERT


Governor Jerry Brown released his revised $156.2 billion budget plan last week. And while Gov. Brown’s proposal would take the bulk of an unexpected state tax revenue windfall to cover vastly expanded enrollment in the state's Medi-Cal program, the revised budget does not restore the 10 percent Medi-Cal reimbursement cuts.

“The California Medical Association (CMA) applauds the Governor’s commitment to expanding access to care for millions of Californians. With 11.5 million beneficiaries estimated to be eligible for the Medi-Cal program, we must ensure we can meet the need of Californians who will rely on the Medicaid program,” said CMA President Richard Thorp, M.D. “Despite this commitment, California cannot continue to add millions of people to Medi-Cal and simultaneously cut the resources available to that program.”

If the reimbursement rate cuts are not restored, California will be balancing the budget on the backs of California’s poorest and most vulnerable patients. "We believe that doing so will result in terrible outcomes for the state and for patients,” said Dr. Thorp.

In March of 2011, the California Legislature passed and Governor Jerry Brown signed AB 97, which included a 10 percent reimbursement rate cut for physicians, dentists, pharmacists and other Medi-Cal providers. CMA filed a lawsuit to stop the cuts shortly after the bill’s passage. In 2013, a three judge panel of the 9th Circuit Court of Appeals reversed an earlier favorable decision by a district court that had resulted in an injunction preventing the state from implementing the cuts. The appeals court, however, vacated the preliminary injunction, clearing the way for implementation of the rate reductions. CMA requested a rehearing from the full Court of Appeals, which was denied. The U.S. Supreme Court refused to hear the case.

Brown announced in January of this year that the state would not be moving forward with retroactive collection of the 10 percent cut to the Medi-Cal program. This announcement came as part of the governor's earlier budget proposal.

In January, CMA praised the Governor for not implementing the cuts to Medi-Cal reimbursement rates retroactively – such an action would have crippled the program and severely limited access to care. Unfortunately, his January budget proposal left the cut in place going forward and, regrettably, the May Revise continues the implementation of these painful cuts.

“California has one of the nation’s lowest Medicaid reimbursement rates and arguably some of the highest practice costs across the country. While California should be proud for the initial success of enrolling people into Medi-Cal, that alone will not ensure that patients will have access to care,” Dr. Thorp said.

The new budget plan projects that 1.4 million more people have signed up for Medi-Cal under the Affordable Care Act this year than anticipated. According to the Brown’s budget proposal, higher enrollment will cost California about $1.2 billion more than predicted.

Also of note, the May Revision assumes a net increase of $2.4 billion in expected revenues attributable to higher than expected income tax reporting. Major changes to the budget include additional expenditures for education, responding to drought-related issues, state employee retirement and state trial court funding. In addition, the proposal reflects a recent agreement between the Governor and legislative leaders to create a Rainy Day Fund will help the state minimize future boom-and-bust cycles.

 
 
 
Bryan Sloane
Deputy Editor, CAL/AAEM News Service
 
Brian Potts MD, MBA
Managing Editor, CAL/AAEM News Service

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