CHA News Article

Governor’s Proposed 2014-15 Budget Does Not Eliminate Retroactive Medi-Cal Cuts to DP/SNFs

Governor Brown has officially released his 2014-15 budget proposal. In Medi-Cal the budget proposes to relieve retroactive rate reductions – referred to as the AB 97 cuts – for some health care providers, but not for hospital-based skilled-nursing facilities. The state will forgive the retroactive recoupments for these providers and services: physicians/clinics, certain drugs, dental, and medical transportation. However, these providers’ Medi-Cal rates going forward will still be reduced by 10 percent, as called for in AB 97 of 2011.

“The state has made great progress over the past year in reversing many of the devastating cuts to the Medi-Cal program, but we are disappointed that the elimination of the retroactive ‘clawback’ does not extend to hospital-based skilled-nursing units,” said C. Duane Dauner, CHA president/CEO. “The retroactive collection of monies dating back to 2011 will place a significant financial burden on hospitals that care for the neediest and sickest patients. We call on the Legislature to extend the elimination of the clawback to all providers.”

Last year, through regulation and SB 239 (Hernandez, D-West Covina), the 10 percent cuts and rate freeze at 2008-09 rates were reversed for hospital-based skilled-nursing units going forward. But these facilities still face having to repay Medi-Cal for the reduction that is retroactive to June 1, 2011, amounting to a rate cut of 22-25 percent or more – a significant amount of money for these facilities.

Also in the Governor’s budget is the allocation of an additional $670 million to expand Medi-Cal by approximately one million people, largely because of the implementation of federal health care reform. The budget also includes $17.5 million to increase dental outreach activities for children ages zero to three years, funding provided by the California Children and Families Commission (Proposition 10).

A copy of the budget proposal is attached.