Governor’s Budget Boosts Funding for Medi-Cal/Healthy Families Outreach, But Maintains 5% Provider Rate Cut
[Posted 01/12/06]

The Schwarzenegger administration on Tuesday released its proposed 2006-2007 budget. The $126 billion spending proposal focuses on ambitious statewide infrastructure improvements, with major increases in education, transportation, and corrections spending. Unfortunately, the governor’s budget proposal maintains the 5 percent Medi-Cal provider rate cut that was implemented on January 1, which will reduce the number of physicians able to provide care to Medi-Cal patients.

The governor’s proposal also includes a limited expansion of Medi-Cal managed care and provides $34.2 million in state funds (and matching funds from the federal government) for Medi-Cal and Healthy Families outreach and retention.

Although CMA is pleased to see additional efforts to enroll children in Medi-Cal and Healthy Families, we are disappointed that the budget maintains the 5 percent Medi-Cal payment cut.

“While the budget has many things to like, such as increased funding for disease management, it fails overall to sufficiently invest in health care for all Californians,” says CMA CEO Jack Lewin, M.D. “It’s ironic that the state budget allocates funding for outreach and education efforts to enroll more people in the Medi-Cal and Healthy Families programs while at the same time the state is cutting Medi-Cal rates for those who provide this care. Because of low reimbursement rates, new enrollees may not have a provider to go to.”

Even before the cut, California ranked last in the nation in Medi-Cal payments for patient care. If this cut is not reversed, more primary care physicians will be forced to decrease the number of Medi-Cal patients they accept or to leave the program entirely. This will further reduce access to care and force Medi-Cal beneficiaries to forgo care or increase use of hospital emergency departments, thereby lengthening waits, increasing costs, and decreasing quality of care for everyone.

Despite the governor’s stated commitment to building California’s infrastructure, the budget leaves the state’s crumbling health care infrastructure hanging in the balance. CMA and a coalition of more than 50 patient and physician groups are pursuing legislation to reverse the cuts. The coalition—Californians United for Quality Health—was created several years ago by CMA to preserve access to care for California’s Medi-Cal patients.

For more information on the budget as it relates to health care, read CMA's budget summary.

Contact: Lisa Folberg, 916/444-5532 or lfolberg@cmanet.org.