California Gov. Arnold Schwarzenegger is proposing $1.1 billion in total Medicaid cuts in his May budget revision, including reducing patient rolls and reimbursements to out-of-network and safety net hospitals. The additional cuts come on top of a 10% Medicaid provider rate reduction approved by the state Legislature. Last week, providers, including the California Hospital Association and the California Medical Association, sued the state to halt implementation of those cuts.
In the face of a $17.2 billion deficit, the governor had to slash Medicaid, called Medi-Cal, the second largest general-fund expenditure, said Kim Belshe, secretary of the California Health and Human Services Agency.
The May revision, which must be approved by the Legislature, would reduce rates paid to hospitals not contracting with Medi-Cal, except those in rural areas, for $11.3 million in savings, and make $54 million in cuts to some hospitals through the safety-net care pool. It would make about 400,000 people in two-parent households ineligible for Medi-Cal and eliminate payment of most non-emergency services to new immigrants and all undocumented immigrants. Those cuts, totaling $200 million, come on top of $900 million in Medi-Cal cuts made in January, including the provider rate reduction, elimination of adult dental benefits and other changes, according to the state.
It is short-sighted to sacrifice the health of all Californians and threaten the survival of hospitals in order to balance the states budget, said Duane Dauner, president of the California Hospital Association, in a written statement. -- by Rebecca Vesely