Budget Crisis Continues- Is a Solution in Sight?
The budget crisis in Sacramento is still in search of a political solution. The budget deficit now estimated at $42 billion over the next 19 months will necessitate some major actions on both the revenue and expense side of the ledger. The leadership of the two parties and the Governor continue negotiations but a deal is not yet up for a vote. There will be disruption in some state payments and you can read below the action with respect to some health care payments to providers.
As requested by the State Controller's Office (SCO), the Department of Health Care Services (DHCS) has begun preparations to implement a four-week payment hold of General Fund payments to providers whose timely payments are not required by the State constitution, federal mandate or court decision. In a press release posted on the SCO website, the State Controller indicated that unless a budgetary solution was implemented by February 1, 2009, to address the state's cash crisis, that he must begin holding certain program payments.
Effective February 5, 2009 (the first warrant release date of February), the weekly provider checkwrite for these programs will be delayed by the SCO for four weeks and released one week at a time until a solution is found to the cash crisis. The affected State Only and Other Public Health programs that SCO will be impacting are:
- State Only California Children's Services (CCS)
- State Only Genetically Handicapped Persons Program (GHPP)
- State Only (and General Fund only) Child Health and Disability Prevention (CHDP) Program
- Children's Treatment Program (CTP)
- Expanded Access to Primary Care (EAPC)
- Cancer Detection Program: Every Woman Counts (CDP: EWC)
The Medi-Cal (includes CCS Medi-Cal and CHDP Medi-Cal), Healthy Families, and Abortion checkwrites will continue to be paid as normal.
The SCO has said that the four-week checkwrite payment hold will remain in place until such time as the State's cash deficit is rectified. As directed, the State will then resume issuance of warrants on a weekly basis. Providers are encouraged to continue to review the Medi-Cal Web site for the most current information and details.
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ER Groups Sue Over Medi-Cal Rates
Five California emergency department physician groups have filed a class-action lawsuit against the state, arguing that Medi-Cal reimbursement rates do not cover the cost of treatment. The suit also alleges that a jump in the number of patients seeking care in hospital EDs is further weakening the ED system in California.
Meanwhile the current law in effect via the budget adopted in September would replace the 10% Medi-Cal provider rate cut with a 1% cut as of March 1, 2009. The 10% cut was stopped in August via an injunction in Federal Court but a new lawsuit needs to be filed to also enjoin the 1% cut. That suit was field earlier this week and most expect a similar result, i.e. the federal court will enjoin the 1% cut for March 1st since there is no evidence that DHCS has done an analysis over the adequacy or impact of the reimbursement reductions.
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Class Action Lawsuit Filed Over Balance Billing
On January 26, 2009, a class action lawsuit was filed in San Diego Superior Court against Scripps Health and their hospital ER group on behalf of HMO patients who were balance billed by both parties. The allegations claim that this practice over the last 4 years was illegal. Though the Prospect Medical Group ruling was issued in January of this year by the California Supreme Court declaring the balance billing of HMO patients by non-contracted HBPs for emergency services to be prohibited the plaintiff's attorneys appear to allege that the decision is retroactive. That among other issues will be a major point of contention.
Go to the CRS website at www.calrad.org for more information on the balance billing issue.
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