THE 9th U.S. CIRCUIT COURT OF APPEALS LAST FRIDAY REJECTED THE ATTEMPT TO RESCIND THE 10% PROVIDER RATE CUT FOR TREATING THE POOR AND IMPOVERISHED. 

The lawsuit in favor of repealing the 10% cut would have undercut Governor Brown's austerity budget. The Brown administration believes that the state will save about $508 million over the next two years based on implementation of the 10% cut.  We are not surprised that the adnimistration is reconsidering the accuracy of this amount.  We are not as surprised as once we would have been that Governor Brown's administration delivered a kick in the butt to California's poor and impoverished and that this position, which would have done honor to Marie Antoinette of "let them eat cake" fame, has now been upheld by the Appeals Court.

SB  640 (Lara) is currently on the legislative docket and could cure the 10% cut. In its original form the bill is unlikely to pass. This bill is stalled in committee. Lara may be obliged to accept amendments that gut his bill or get nothing at all. One possible amendment is allowing the legislation to rescind the 10% cut for skilled nursing facilities while keeping the 10% cut in place for physicians and hospitals.  If the 10% cut is kept in the bill, the likelihood is that even more money will be saved as physicians drop out of the program and hospitals lay off workers. Lives will be lost, morbidity will increase, but the budget will have been balanced.

AB 900 (Alejo) has already been amended to limit the bill to restoration of the 10% to skilled nursing facilities. This ploy splits the opposition by appeasing one faction at the expense of the others.  Proponents of these two bills to date have included the California Medical Association, as sponsor, with support from the Service Employees International Union,  the Union of American Physicians and Dentists, the California Hospital Association, and the California Neurology Society, among others.

Physicians and other providers including hospitals and their Medi-Cal patients stand to lose signficantly if the bills fail because retroactive payments may be sought since the court case has already failed. The cuts are expected to include clawbacks for two years based on the delay in implementation of the cuts since 2011. Part of the current reason for amendments that agree to limit the bill to skilled nursing facilities is to allow the Governor just enough daylight  not to veto the bills should they pass. We'll see. Just don't hold your breath especially if you're a patient dependent on Medi-Cal.

MEDI-CAL PROVIDER CUTS: SB 640 AND AB 900

When does austerity mean tossing sick people under the bus?

Answer: anytime there's a government shortfall.

SB 640 (Lara) and AB 900 (Alejo) are designed to prevent the 10% Medi-Cal provider cuts that are now in the legislative hopper.  California is short of money. Apple's Tim Cook is now under the gun for sequestering money abroad in order to avoid taxes in the USA.  Last we looked, Cook was not only from America, but also from California. Not to worry. There's another way to get some money into California: cut down on the money spent on the sick and poor, especially citizens who are sick and poor at the same time.  That definition is fulfilled by Medicaid patients. In California, that program is called Medi-Cal.  

Medi-Cal has always had a sordid reputation in California. In 1981 Medi-Cal had to be coerced to  get back nearly a million dollars it carelessly overpaid to a single recipient for double-billing  (that was when a million dollars was still thought of as money).  The ante has  gone up since then but the program remains a conduit for channeling less and less money to  Medi-Cal patients. The impetus is to reduce Medi-Cal provider payments by 10% even though it's understood that such a move will drive providers out of the system.  Fewer providers plays into the hands of those who want more than the 10% cut. If enough providers opt out the cut in provider fees will considerably excced 10%.  Doctors will get blamed for not participating in a widespread system of moral bankruptcy and financial irresponsibility.

SB 640 and AB 900 will reverse the 10% cut providers and their patients suffer as a result of the 2011-2012  state budget. The California Medical Association has challenged the cuts in court and gets credit for sponsoring these bills.  We recommend support for SB 640 and AB 900.