The cutoff in Medi-Cal payments to nursing homes and other health facilities this week resulted from a $1-billion deficit that was caused in part by the Legislature's failure to adopt a spending plan on time or to make cuts when expenses spiraled.
The cost of health programs for the poor, such as Medi-Cal, as well as the number of people enrolled in such programs, has risen nationwide. But Medi-Cal's woes were compounded by miscalculations and inaction, officials and experts say.
For The Record
Los Angeles Times Saturday June 28, 2003 Home Edition Main News Part A Page 2 National Desk 1 inches; 33 words Type of Material: Correction
Medi-Cal -- An article in Thursday's California section incorrectly said that the state Medi-Cal program amassed a $604-million surplus in 1998-99. It had a deficit of $604 million from the state general fund.
Lawmakers, for instance, overestimated by $100 million the amount the state expected to collect from anti-fraud efforts, despite warnings from top state officials and the Legislature's own financial analysts that the figure was unrealistic.
"It wasn't real," said state health official Stan Rosenstein, whose office warned the Legislature last year not to count on the $100 million in savings. "It wasn't achieved."
The state also wasn't able to obtain discounts worth an estimated $106 million on prescription drugs because it was slow to hire pharmacists to negotiate with drug makers.
Since then, as the problems worsened, the Legislature has failed to move on Gov. Gray Davis' request in December to reduce payments by 10% to doctors, nursing homes and pharmacies, limit enrollment in Medi-Cal for some poor Californians, and cut off access to dentists and other optional benefits.
"The Legislature rejected that proposal," Rosenstein said, and the administration could not go forward on its own.
Sen. Wes Chesbro (D-Arcata), chairman of the Senate Budget and Fiscal Review Committee, said it's wrong to point fingers at the Legislature for inaction or miscalculation.
"You can argue all day about when something could have happened or should have happened," he said. "I don't think it does any good at this point in our budget crisis to point fingers."
The budget-busting is starting to take a toll. Without legislative authority to spend more money, the state halted payments this week to hospitals, nursing homes and clinics for services they have already provided to the state's 6.4 million Medi-Cal enrollees. Doctors and pharmacists continue to be paid.
For every $1 the state doesn't pay providers, the federal government's matching funds can't be spent, doubling the impact.
But Davis' budget director, Steve Peace, says eventually the providers will be paid.
