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Article published - August 5, 2007

Credit:PRESS DEMOCRAT

Stalled budget freezes Medi-Cal funds to clinics

Loss of more than $400 million in payments threatens viability of health care for poor

By MARY CALLAHAN
THE PRESS DEMOCRAT

State-funded health care for more than 70,000 Sonoma County residents is in jeopardy with the continuing budget impasse in Sacramento that last week froze more than $400 million in scheduled Medi-Cal reimbursements statewide.

Representatives for local health care clinics, all of which receive a substantial portion of their operating revenue from Medi-Cal, said the stalemate, if it persists, threatens to cripple their ability to care for their low-income patients.

"It's pretty huge. It's pretty darn scary," said Naomi Fuchs, chief executive officer for the Southwest Community Health Center in Santa Rosa, which depends on Medi-Cal for about $100,000 weekly, or 70 percent of its revenue.

"How do you exist? It's just by the skin of your chinny chin chin," said Jack Neureuter, chief executive officer of Healdsburg-based Alliance Medical Center.

The Healdsburg center, which serves 12,000 patients and receives about 60,000 visits annually, counts on approximately $60,000 a week through Medi-Cal, equal to about 43 percent of its revenue.

The center has no cash cushion, Neureuter said, and he's been scrambling to secure a line of credit to ensure he can make payroll in three to four weeks.

The state has been operating without an approved budget since the new fiscal year started July 1 -- a common occurrence in a state that requires lawmakers to transcend political divisions and approve a spending plan by a two-thirds majority.

A $145 billion budget approved by the state Assembly last month is one vote shy of adoption by the Senate, rebuffed by 14 Republican senators.

It now appears there is no action likely until at least Aug. 20, when the Assembly returns from summer break.

Once a budget is passed, it likely would be six to eight weeks before Medi-Cal funds begin flowing, Lori Houston, a spokeswoman for the Redwood Community Health Coalition, and others said.

Health care providers began to feel the pinch last week after the loan authority that allowed the state to continue making Medi-Cal payments expired.

Medi-Cal failed to make a $227 million payment scheduled to go out Thursday to various institutional providers such as health care centers, hospitals and nursing homes, H.D. Palmer, a deputy director with the Department of Finance, said in a videotaped statement.

Another $189 million due to managed health and dental plans was withheld Friday, Palmer said.

He acknowledged those suffering most are small, mostly rural providers serving largely immigrant communities.

In addition to health care centers, the Medi-Cal freeze affects some nursing homes, adult day care programs, state-funded child care and medical transportation programs.

"In another couple of days or maybe a week, it's going to be a crisis," said Houston. "I mean, they can't operate like that."

 








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