Legislators OK 10% cut

Monday, March 31, 2008

SACRAMENTO, Calif. – State lawmakers in a special session in February approved Gov. Arnold Schwarzenegger’s proposal to cut Medi-Cal provider rates by 10% beginning July 1, 2008.
“We’re going to fight, but it’s going to be extremely difficult,” said Bob Achermann, executive director of the California Association of Medical Product Suppliers (CAMPS).
Medi-Cal providers hope to convince lawmakers to repeal the cut by increasing taxes, leasing the state lottery or creating other new sources of revenue, according to newspaper reports.
Schwarzenegger proposed the cut as a way to help bridge the state’s $14.5 billion budget gap. Legislators in February revised the gap to about $16 billion.
Achermann and others fear that the state won’t stop at cutting provider rates by 10%.
“They’ve taken care of the spending deficit for the current fiscal year, but now they have to go into the budget for next year and address that deficit, which continues to grow,” Achermann said. “I think most people expect more bad news.”
Additional cuts may mean the state further reduces provider rates or eliminates some optional benefits for Medi-Cal, including HME and supplies,
Achermann said.
“It’s bad,” he said. “Very bad.”
Providers have said that the cut would force them to consider dropping low-margin products like incontinence supplies and high-maintenance products like home oxygen therapy (See HME News, March 2008). HME