Just days after taking office, Governor Jerry Brown issued his 2011-2012 budget proposal, including major cuts to health care, in an attempt to close the projected $25.4 billion shortfall. The Governor's proposal would close the deficit through a mix of spending cuts, revenue increases, and other solutions (such as taking money from special funds). The spending cuts total $12.5 billion, with $1.7 billion slashed from the Medi-Cal program alone.
Of particular interest to physicians are proposals to:
Cut Medi-cal provider rates by 10% ($720 million)
The budget proposes to reduce provider payments by 10% for physicians, pharmacy, clinics, medical transportation, home health, adult day health care, certain hospitals and nursing facilities, as well as long-term care facilities.
Control Medi-Cal utilization ($217 million)
The budget proposal would also limit utilization of important health care services for adults. It would, for example, limit Medi-Cal patients to 10 physician office visits per year, limit enrollees to 6 non-lifesaving prescriptions per month, and set cost caps on hearing aids and other medical devices.
Impose Medi-Cal copayments ($557 million)
Copayments would be set at $5 for physician office visits, including preventive and primary care services, $50 for emergency room visits, and $100 per day (up to $200 maximum) for hospital stays. Provider reimbursement for the visit would then be reduced by a corresponding amount.
Contain costs in the Healthy Families program ($39 million)
Although last year's federal health reform legislation prevents states from reducing Healthy Families eligibility, the governor's budget proposal would contain costs in other ways. The proposal would eliminate the vision benefit, increasing premiums by 75% or more for various income sectors
Medi-Cal currently covers 7.7 million Californians and enrollment is expected to grow by 1.5 - 2 million after the implementation of federal health reform.