The California Hospital Association is hopeful that Gov. Arnold Schwarzenegger's signature on a bill last week means the state will move forward on a plan to attract a stimulus-sweetened match of federal Medicaid dollars by levying fees on hospitals.
Calif. groups eye federal Medicaid dollars
The money, however, is nowhere near in the bag because the bill's backers were forced to gut key provisions in order to get it through the state's politically rancorous Legislature.
The temporary fee on hospitals was conceived to take advantage of a 62% match rate—up from 50%—in effect for California through the end of 2010 under the American Recovery and Reinvestment Act of 2009. The hospital association estimates the plan would create $2.3 billion in new federal money, mostly to fund supplemental payments to hospitals by Medi-Cal, the state's Medicaid program.
About $320 million would go toward expanding state-funded children's health insurance, the association said. Also sponsoring the bill were the California Children's Hospital Association and six-hospital Daughters of Charity Health System, based in Los Altos Hills.
With Republican senators refusing to act on budget measures, the bill's legislative supporters were forced to pass the bill with a simple majority. In order to do so, they stripped the funds appropriated for implementation, the authority to disperse any of the money raised and a clause that would have made the bill effective immediately. The “urgency clause” would have allowed state officials to start pursuing federal approval of the plan.
Schwarzenegger noted in a signing statement that similar provider fees were part of his failed proposal in 2007 to overhaul healthcare in the state, but that the bill that reached his desk requires subsequent action from the Legislature.
Anne McLeod, the California hospital association's vice president for finance policy, said the governor's signature was an encouraging step. “We think we can see this through,” McLeod said, suggesting that state officials might be able to begin talks with the CMS so the fees can be implemented quickly as soon as lawmakers fill in the holes. “Hopefully the state will decide they have the resources available to address these preliminary negotiations.”
But a spokesman for the California Health Care Services Department said that the bill won't allow that. “It opens the gate, and now we have to pursue the legislation and get the appropriation and implementation authority and go from there,” spokesman Tony Cava said. “At this point, there's really nothing we can do until we get further legislation.”
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