The Governor's May Revise proposal issued last week contained no changes as to the claw back of the 10% cut for DME/supplies and other providers back to June 2011 or any restoration of the 10% provider rate reduction going forward. Most did not expect a change of heart from the Governor even in the face of a growing budget surplus of $3-4 billion in the current fiscal year ending June 30th. He chose to allocate additional funds in the Medi-Cal area for increased enrollment and higher costs for some specialized drugs.  DME and medical supply providers along with pharmacies for some drugs, clinical labs, and hospital distinct part SNFs continue to be at risk for the claw back of the 10% reduction.

          The respective budget subcommittees of both the Assembly and Senate will finalize their versions of the budget by early next week. The two versions will then go a joint budget conference committee that will resolve any differences between the two versions prior to June 15th, when the state budget must be adopted by the entire Legislature and be sent to the Governor. CAMPS continues to advocate to eliminate the claw back and raise rates and there is strong support in the Legislature to take these actions. The Governor remains opposed and the outcome will likely be dictated by legislative budget priorities and the impact of Prop 98. Prop 98 dictates that the majority of any new revenues must go directly to education and can't be used for other purposes or programs. That makes the pool of available surplus very small and subject to other changes, like the earned income tax credit to low income families, which is an increasing favorite to some Legislative Democratic leaders.

          At this point our focus is to get these issues into the Conference Committee to have a chance to be part of the final budget package. We will keep you abreast of our progress and the eventual members of the Conference Committee.