CHA News Article

Budget Subcommittees Leave Issues on Hold

CHA testified in opposition this week to three proposals in the Governor’s revised fiscal year (FY) 2012-13 state budget that would negatively impact hospitals. Both the Assembly and Senate budget subcommittees on health held hearings on most of the May revision proposals released May 14 by the Governor. In an effort to close the state’s $16 billion budget gap, the Governor put forth a number of new proposals that include cuts to health and human services. Combined, the three proposals would provide $325 million to the state General Fund and impact hospitals in different ways.

One proposal would increase payments from the hospital fee program made by private hospitals to the state for children’s health care coverage by $150 million in FY 2012-13 and $75 million in FY 2013-14. In addition, designated public hospitals would give up some of the fee-funded direct grants and managed care payments to generate $41.5 million in state General Fund savings for FY 2013-14. 

Another proposal would decrease waiver funds to designated public hospitals by $100 million in FY 2012-13 and $9 million in FY 2013-14. This funding, under provisions of the FY 2011-12 budget, would have gone to designated public hospitals for expenses they have already incurred for services to low-income Californians, but it is now being redirected to the state. The third proposal would require non-designated public hospitals to implement a new payment methodology for Medi-Cal inpatient fee-for-service effective July 1, 2012. This proposal would generate $75 million in ongoing savings to the state General Fund beginning in FY 2012-13. Both budget subcommittees decided to hold these items open to allow for more discussion. The committees could decide on these issues next week, or delay making a decision for a couple of weeks.

In other budget news, the budget subcommittees rejected the Administration’s proposal to move the entire Healthy Families population of 875,000 children to Medi-Cal at this time. They decided to start by moving the “bright line” children, beneficiaries who are at or below 133 percent of the federal poverty level, approximately 200,000 children. The May budget revision also proposes a $15 co-pay for non-emergency use of emergency departments, and between $3 and $5 for prescription medications. So far, both the Assembly and Senate are holding this item open. 

The Legislature is expected to send the Governor a balanced budget by the June 15 deadline.