California: Deja vu: Different governor, same Medi-Cal cuts

Sunday, February 27, 2011

SACRAMENTO - You'd think a new governor would have new ideas for how to decrease spending. Not when you're talking about Governor Jerry Brown and the state's Medicaid program, Medi-Cal.

Brown, like Arnold Schwarzenegger before him, has released a state budget that proposes shaving $1.7 billion from Medi-Cal's coffers for fiscal year 2011-12 by, among other things, capping spending on DME and supplies (Brown to about $1,600; Schwarzenegger to about $1,800) and eliminating spending completely on some products, like oral enteral nutrition.

"He basically dusted off the same things," said Bob Achermann, executive director of the California Association of Medical Product Suppliers (CAMPS).

Overall, Brown's budget proposes $12.5 billion in spending reductions, $12 billion in revenue extensions and modifications, and $1.9 billion in other savings to plug an about $25 billion budget gap and set aside $1 billion for a rainy-day fund.

Another big part of Brown's Medi-Cal cuts: A 10% rate cut for providers, a tactic Schwarzenegger used from July 2008 to March 2009. A group of providers, including DME providers, is still battling the state in court to get exempted from the cut and get their money back. So far, lower courts have sided with providers, but the U.S. Supreme Court agreed recently to hear the state's appeal.

"What would happen with this latest proposal for a 10% rate cut?" Achermann asked. "It would likely go to court."

At any rate, it's unclear whether Brown will have the support for his budget from the state legislature.

"I think there will be a lot of lawmakers that will not want to do these things, and our mission is to stop them from doing these things," Achermann said.

More than just providers are at stake.

"When you have a cap on DME of about $1,600, that means no one gets a wheelchair," Achermann said. "Anything beyond a manual wheelchair is unobtainable. If the state's mission is to look at a Medi-Cal patient who's a quad and say, 'You will not be moving unless someone's pushing you,' that's what we have here."