News from California Association of Medical Product Suppliers

On Friday the Governor released his budget proposal for the fiscal year 2010-11 beginning July 1, 2010. Indicating that the projected budget deficit is about $19.9 Billion over the next 18 months he called another special session to try to balance the budget deficit of about $6 Billion in the current fiscal year ending June 30, 2010. We are likely to see a replay of the process from last year with suggested mid-year spending cuts and a tug of war in the Legislature. Whether it happens and when will likely be impacted by the state cash flow from tax receipts and the pressure that puts on a "deal".

In terms of the Medi-Cal program most of his proposals would impact eligibility and cost sharing as opposed to specific provider rate cuts. Since the Administration was unsuccessful on that front in the Courts they are not included this time around. The Governor has pointed out that California is not getting its fair share of federal dollars coming back based upon the money sent via federal taxes. Part of his budget solution is to get approximately $6 Billion in additional federal funds to balance the budget. If that money doesn't come he suggests a number of additional cuts to state programs including;

Elimination of Healthy Families and IHSS programs
Of interest to CAMPS would be the elimination of all Medi-Cal optional benefits that would include DME and disposable medical supplies. We have had this fight before and will make it again.

The Governor has called the Legislature into Special Session and under the law they have 45 days to resolve the mid year budget deficit. If their work is not done in 45 days they technically can't do anything else, but that has seldom materialized. The proposal for 2010-11 will begin its journey through budget sub-committees in both the Assembly and Senate over the next 4 months. It is highly likely that there will be no timely budget adopted since the Governors suggestions for state employee pension reform and privatization of state prisons were not met with any enthusiasm by the Democratic majority. We will keep you informed as developments occur.