This afternoon the Governor signed a package of bills that cut state spending by an estimated $14 billion. That package includes a bill that makes cuts to Medi-Cal spending by about $1.7B which contains cuts for our members in the following areas:

•  A 10% provider rate cuts for all providers set to take effect in June 1, 2011;
•  Elimination of oral enteral nutrition as a Medi-Cal benefit except in very limited diagnoses, including malabsorption and inborn errors of metabolism;
• Co-pays of $5 on physician office  and clinic visits, co-pays in the ER and in-patient stays, drugs;
• Cap on physician visits of 7 per year ( It is a "soft" cap which can be exceeded by TAR);

All these changes will not be implemented until the State Plan Amendment (SPA) is approved by CMS. That SPA was to be submitted by DHCS after the bill was signed. It is not clear whether CMS will approve any or all of these Medi-Cal changes. CMS did in fact reject, in 2010, the SPA submision on the prior 10% cut in 2008-09. There is an appeal and decision pending in the US Supreme Court on whether that prior 10% reduction was lawfully enjoined.

We will keep you informed of any important developments.

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