Calif. contemplates $3.6B in cuts

Wednesday, April 30, 2003

SACRAMENTO, Calif. — In trying to deal with California’s gigantic $26 billion to $35 billion budget deficit, state bureaucrats have laid siege to the Medicaid budget, looking for savings under every rock.

“I feel like a member of the Iraqi army right now,” said Bob Achermann, executive director of California Association of Medical Product Suppliers (CAMPS). “It’s a bad year. The deficit is staggering and it’s is probably going to get worse because the economy is not improving as quickly as people had hoped.”

Of California’s $78 billion budget, Medi-Cal (the state’s Medicaid program) consumes $28.3 billion. In all, Gov. Gray Davis wants to cut Medi-Cal expenditures by $3.6 billion.

In trying to do that, bureaucrats have suggested:

- Reducing reimbursement to all providers by 15%.

- Dropping Medi-Cal eligibility for a family of four from $10,000 to $9,400 a year in annual income.

- Requiring Medi-Cal to verify eligibility quarterly rather than annually.

- Capping reimbursement to 100% of a product’s net cost.

- Eliminating reimbursement for optional items like medical supplies and equipment except were federally mandated.

Thus far, none of the proposal have progressed beyond the discussion stage, and Democratic law makers have rejected many as too severe. Because the deficit is so great, Achermann doesn’t expect lawmakers to hammer out a plan to eliminate it anytime soon, certainly not the June 15 deadline.

“It’s such a tremendous hole that if you shut down state government you couldn’t save enough money,” Achermann said. “Most companies with that kind of balance sheet would be bankrupt.” HME