| May 15,2003 - Letters to Legislators needed now to preserve Medi-Cal coverage for acupuncture. |
| Governor Proposes Massive Cuts to Health Care |
| January 10, 2003 - Sacramento - Governor Davis proposed new cuts to state spending and tax increases in his budget unveiling today. Health and Human Services would take the largest hit in the cuts with a 34% reduction from the 2002-2003 budget. Total cuts to the Medi-Cal program are $3 billion General Fund or a 28.9% from the 2002-03 budget year. (This means there would be an additional loss of $3 billion in federal matching funds.) |
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Additional 5% reduction to provider reimbursements to total 15% a savings of $720 million in 2003-2004. |
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Eligibility cuts that were proposed in the mid-year cut proposal will remain in effect. 500,000 will become ineligible for Medi-Cal due to rescinding the 1931(b) expansion and reinstatement of the Quarterly Status Reports. Saves $118 million GF and $85 million GF respectively. |
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2003-2004 budget proposes to cut 10 more Medi-Cal optional benefits bringing the total cuts to 18 of the 34 federally optional benefits. These cuts include: adult dental, acupuncture, medical supplies like catheters and diabetic test strips, durable medical equipment, prosthetics, hearing aids, hospice, non-emergency medical transport etc. Saves $362 million |
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| Governor's Budget Will Damage California's Health Care System |
| January 17, 2003 - Sacramento - On January 10, Governor Davis unveiled his proposed budget on January 10 for the 2003-2004 fiscal year. Under the proposal, total spending for health programs administered by the state Department of Health Services would drop to $27.7 billion, down from $32.2 billion in the current fiscal year. Health and Human Services, with a 34 percent reduction, would take the largest hit of any state agency. Medi-Cal would lose $3 billion, down 28.9 percent from last year, and for every Medi-Cal dollar cut, California would also lose $1 in federal matching funds. |
| Of the Medi-Cal "savings," $720 million would come as the result of a 15 percent reduction in provider reimbursement. This cut would essentially rescind the 16.7 percent average rate increase physicians received in 2000, the first across-the-board increase since 1985. |
| The governor’s proposal also includes: reinstatement of the Medi-Cal Quarterly Status Report, which would reduce eligibility for adults adding up to 250,000 people to the uninsured ranks; elimination of optional Medi-Cal benefits, such as adult dental care, acupuncture, and medical supplies; and a rollback of Medi-Cal eligibility to include only those families with income at or below 61 percent of the federal poverty level. Currently all families at or below the federal poverty level—which is $14,600 for a family of four, for example—are eligible. This would leave an additional 150,000 of the working poor without health insurance. |
| CAOMA and many other state health care experts believe that California’s health-care safety net will collapse if all of Gov. Davis’s proposed funding cuts are approved. These cuts will actually cost the state money as more Californians turn to emergency rooms for expensive care that could be delivered more efficiently elsewhere. |
| CAOMA leaders are working with others to explore how best to preserve Medi-Cal optional benefits, including acupuncture. |
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| Senate Rejects Governor's Proposed Medi-Cal Cuts |
| January 23, 2003 - Sacramento - The Senate Budget Committee rejected Governor Davis’s proposed mid-year Medi-Cal cuts, including a 10 percent rollback of physician reimbursement rates and the elimination of coverage for optional benefits such as adult dental care, acupuncture, and medical supplies. The Assembly Budget Committee has not yet made a formal decision, but sources indicate that it is leaning in the same direction. Stay tuned for more information. |
| CAOMA is working with the Californians United for Patient Health, a group of health care professionals and supporters in order to eliminate proposed cuts that affect us all. The proposed Medi-Cal cuts affect everyone, and would reduce physician reimbursement to 1985 levels, and eliminate acupuncture coverage, if enacted. |
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| Budget Update: Medi-Cal Is Safe, for Now |
| February 13, 2003 - Sacramento - The state legislature recently passed $8.3 billion in mid-year budget cuts, in an attempt to alleviate the current budget deficit. The governor’s proposed cuts to Medi-Cal were not included in the mid-year budget cut package. Legislators expressed their unwillingness to make such extreme cuts to health care until they have time to hold informational hearings. The governor has not yet signed the mid-year budget cut bill but is expected to do so in the near future. |
| The California Medical Associaiton has created "Californians United for Quality Health," a coalition of physicians, patients, and consumer and health care advocates that will fight to stop the Medi-Cal cuts in the governor’s 2003-04 budget proposal. The coalition includes more than 65 groups that will work together to stop proposed cuts that would add 500,000 to the rolls of the uninsured, eliminate 18 optional benefits including durable medical equipment, adult dental care, and medical supplies, and cut Medi-Cal reimbursements to physicians by 15 percent. The cuts to Medi-Cal would save the state $1.35 billion in state general fund money, but California would lose $1.35 billion in federal matching dollars. |
| Davis will announce a revision of his 2003-04 budget proposal in May. Since the legislature did not make all of the governor’s suggested mid-year cuts, CMA is anticipating that the governor will propose additional cuts to health care. CMA and its coalition are prepared for such an eventuality and will need to enlist the help of every physician to let legislators know that cutting health care now will only cost the state more in future and devastate California’s already fragile health care system. |
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| Governor Signs $316 Million in Health Care Cuts |
| May 5, 2003 - Sacramento - Governor Gray Davis today signed a bipartisan package of mid-year budget bills that will cut $3.6 billion from the state’s record budget deficit, which has been estimated at as much as $34 billion over the next 18 months. Though $316 million of the cuts will come from health care, Medi-Cal physician reimbursement, optional Medi-Cal benefits (including acupuncture), and Medi-Cal eligibility have been kept off the chopping block. |
| The bills will lower Denti-Cal spending by eliminating the requirement that dentists x-ray children's teeth before filling cavities and by using different, less expensive materials for adult crowns. The bills will reduce the amount of money counties get from the state for Medi-Cal administration. The bills would also limit outreach programs for Medi-Cal and Healthy Families and reduce eligibility by requiring enrollees to submit semi-annual eligibility updates (right now they are only required to submit updates annually). |
| Earlier this year, the governor had proposed a quarterly reporting requirement, which some sources estimate would add 250,000 people to the uninsured ranks. The number of enrollees who will drop out of Medi-cal as a result of the semi-annual reporting requirement proposed by the legislature remains to be seen. It will be less than it would have been had the legislature went with the governor’s proposed quarterly requirement. |
| More than half of the $3.6 billion in savings comes from a plan to use a bond instead of cash to make the state’s annual contribution to employee retirement accounts. The bipartisan deal was spurred on by a May 5th deadline to approve the bond. If lawmakers didn't get these bills to the Governor for his signature by Monday, the state would have had to use cash from the general fund to pay a $650 million pension payment due in October. |
| CAOMA, along with a coalition of more than 70 consumer, patient, and provider advocacy groups will continue to fight to stop the Governor's proposed $2.7 billion in Medi-Cal cuts. Governor Davis will revise his budget proposal on May 15 after the Department of Finance has seen the state’s updated income report. The proposal is expected to contain almost $2 billion in further cuts or tax increases. Stay tuned for more information. |
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| Governor Proposes to Cut Acupuncture from Medi-Cal |
| May 15, 2003 - Sacramento - Governor Gray Davis yesterday unveiled his revised budget proposal, which uses a combination of spending cuts, tax increases, and accounting shifts to close the state’s record budget deficit—now estimated at $38.2 billion, up from $36 billion in January. The proposal would eliminate $18.9 billion in state expenditures in FY 2003-2004. |
| Spending Reductions in Health Care |
| Of the $18.9 billion in spending cuts, approximately $1 billion comes from health care. While the proposal eliminates a few of the health-care cuts the governor proposed in January, the majority of the Medi-Cal cuts—including the governor's recommendation for a 15 percent reduction in provider reimbursement—are again included in the revised budget proposal. |
| PROVIDER RATES: A 15 percent provider rate reduction would go into effect July 1 or upon the passage of the budget for all Medi-Cal providers. Also cut by 15 percent are reimbursements for services provided through the California Children Services Program, the Family PACT (Planning, Access, Care, and Treatment) Program, the State-Only Family Planning Program, the Genetically Handicapped Persons Program, and the Breast and Cervical Cancer Early Detection Program. |
| OPTIONAL BENEFITS: The governor’s proposal would eliminate the following so-called "optional" Medi-Cal benefits for adults over age 21: podiatry, acupuncture, chiropractic, psychology, occupational therapy, optical lab work, durable medical equipment, optometry, hearing aids, speech and audiology services, physical therapy, and medical supplies. |
| ELIGIBILITY: The governor dropped his proposal to reduce eligibility by requiring enrollees to submit quarterly eligibility updates, which could have added 250,000 people to the uninsured ranks. However, the legislature earlier this month passed a bill that would require enrollees to submit semi-annual eligibility updates (right now they are only required to submit updates annually). The number of enrollees who will drop out of Medi-cal as a result of this semi-annual reporting requirement remains to be seen. It will be less than it would have been had the legislature went with the governor’s proposed quarterly requirement. |
| PROTECTED PROGRAMS AND SERVICES: The California Department of Health Services said this week that it expects non-emergency medical transportation, hospice, medical supplies for family planning, prosthetics and orthotics, and adult dental services to be protected. Exactly which programs would be protected was not stated explicitly in the governor's budget proposal. |
| The revised budget proposal also drops a plan to make more of the working poor ineligible for Medi-Cal. The governor had recommended a rollback Medi-Cal eligibility to include only those families with income at or below 61 percent of the federal poverty level. Eligibility would remain at the current level of 100 percent of the federal poverty level ($14,600 for a family of four). |
| The budget proposal also provides $24.8 Million for the Maddy Fund to reimburse ER on-call physicians for uncompensated emergency care. |
| Medi-Cal Accounting Shift |
| The governor’s proposed budget would provide a one-time savings of $939 million through a Medi-Cal reimbursement accounting shift. The accounting shift does not change the actual amount that would be paid to Medi-Cal providers, rather it allows the Department of Health Services to pay for some 2003-04 medical services in 2004-05. By changing from the accounting system from accrual to cash, medical services provided in 03-04, but billed for in 04-05, would be paid out of 04-05 budget. (Under the current accrual system services provided in 2003-04 are applied to the 2003-04 budget, even if they are billed and paid in the following budget year.) U.S. Senate is currently considering a bill (S1054), which would send $20 billion to the states to be used to protect health services. California could use this extra money to offset the effect of this accounting shift on the 2004-05 budget. |
| Unfortunately, only about $300 million of these savings will be funneled back into the Medi-Cal program under the governor’s revised budget proposal. |
| Californians United for Quality Health, a coalition of physicians, patients, and consumer and health care advocates, will fight to make sure that the legislature uses the entire $939 million for Medi-Cal. The governor’s proposal not only takes money from the Medi-Cal program, but it also eliminates federal matching dollars. |
| County Realignment |
| Realignment, the very controversial proposal that would have shifted the financial responsibility for many health programs counties, has now been significantly scaled back from the $8.3 billion the governor proposed in January. The governor’s revised proposal would shift about $1.8 billion in programs to local governments, to be paid for with tax increases. Realignment allows the state to raise taxes while avoiding the "prop 98 guarantee," which dedicates almost half of all new revenue to K-14 education. |
| Tax Increases |
| The revised budget calls for spreading out the remaining $10.7-billion deficit over the next five years, paying for it with revenues from a half-cent sales tax. The proposal would also establish a new 10.3 percent personal income tax bracket for wealthiest Californians an increase in the cigarette tax and the income tax on the weathiest Californians (individuals making more than $150,000/couples making more than $300,000), raise the cigarette tax increase by $0.63 over two years, and triple the Vehicle License Fee. |
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| Acupuncturists - Act Now!! |
| May 15, 2003 - Sacramento - CAOMA is asking acupuncturists to immediately write, fax, or e-mail their local legislators and urge them not to take money away from Medi-Cal optional benefits. Please also copy any communications to the members of the Assembly and Senate budget subcommittees. It is important that contact be made as soon as possible to make sure that when the committees meet to discuss the governor's budget proposal, they understand that cuts to Medi-Cal will not only harm patients, but will also cost the state more money in the long run. |
| For a sample letter, see attached. |
| Assembly Budget Subcommittee on Health |
| Senate Budget Subcommittee on Health & Human Services |
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| Legislature Preserves Medi-Cal Coverage for Acupuncture |
| May 30 - Sacramento - Both sides of the Legislature presrved Medi-Cal optional benefits, including acupuncture, but other differences force the budget to a joint conference committee for resolution. The budget conference committee consists of three Senators and three Assembly Members. Concurrently, the "Big Five" (Governor Davis, the Assembly Speaker and Minority Leader, and the Senate Pro Tem and Minority Leader) will meet to discuss major differences in their proposals. Any agreements reached by the Big Five must be officially adopted by the conference committee. The State Constitution requires that the legislature pass a budget to the Governor by June 15. The Governor then has until July 1 to sign the budget for the new fiscal year. However, given the magnitude of the budget shortfall, it appears unlikely that these deadlines will be met. |
| It's about time to start sending letters to the Governor. |
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| CAOMA Letter to Budget Committees |