Healthcare Business News

Calif. budget deal cuts $2 billion from healthcare

By Rebecca Vesely
Posted: July 25, 2009 - 12:00 pm ET

The California Legislature has approved a budget that closes most of the state's $26 billion deficit and includes significant cuts to health services.

The budget includes $15.3 billion in total cuts, including $2 billion in healthcare. Those reductions include $144 million to the State Children's Health Insurance Program and a 10% decrease in payments to disproportionate-share hospitals, a savings of $18.4 million. It reduces a fund for distressed hospitals by nearly $24 million.

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The package also includes a provision instructing state health officials to seek a federal waiver to move certain patients into medical homes and managed-care programs.

Community clinics, mental health and preventive care also saw program cuts.

The budget package, a total of 30 bills, is expected to be signed by the governor soon, at which time the state be able to stop paying vendors and other obligations with IOUs.



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