4260 Department of Health Care Services
Budget-Balancing Reductions
  • The Budget includes General Fund reductions of $47.6 million in 2007-08 and $1.1 billion in 2008-09.

  • The following programs totaling $2.5 billion General Fund, have been exempted from the budget balancing reductions. The Third Party Recovery and the Audits and Investigations Divisions were exempted since they are revenue producing activities ($5.5 million). The Accelerated Enrollment program and implementation of Chapter 437, Statutes of 2006 (SB 437) were exempted since they are part of the Children's Outreach activities to support enrollment and retention of children in health care programs ($17.8 million). Free standing nursing facilities subject to AB 1629 and Intermediate Care Facilities for the Developmentally Disabled were exempted from the provider rate reduction ($2.446 billion).

  • The major budget balancing reductions include:

    Reductions of $33.4 million in 2007-08 and $602.4 million in 2008-09 by reducing Medi-Cal provider rates for physicians and other medical and service providers.

    Reductions of $10 million in 2007-08 and $134 million in 2008-09 by eliminating certain Medi-Cal optional benefits including incontinence creams and washes, acupuncture, adult dental, audiology, optometry, optical, chiropractic, podiatry, psychology, and speech therapy.

    A reduction of $92.2 million in 2008-09 by eliminating continuous Medi-Cal eligibility for children and restoring quarterly status reports for both children and parents. Currently, children receive continuous eligibility until their annual redetermination. This proposal would reinstate quarterly status reports, which would allow an evaluation of the person's eligibility for Medi-Cal on a quarterly basis instead of annually for children and semi-annually for parents.

    A reduction of $75.8 million in 2008-09 in Medi-Cal payments to counties. Adjustments include: elimination of the California Necessities Index-based cost of living adjustment that would be provided to county eligibility, administrative, and support positions; elimination of caseload growth funding that is used to hire additional county staff to address increased workload due to increases in Medi-Cal eligibles; a reduction of the county administration base, which provides funding for staff, support, and staff development costs associated with the Medi-Cal eligibility process; and reductions in funding for California Children's Services and the Child Health Disability Prevention Program.

    A reduction of $56.8 million in 2008-09 resulting from a reduction in the payments to long-term care facilities, with the exception of freestanding facilities that are subject to AB 1629 and intermediate-care facilities for the developmentally disabled.

    Reductions of $4.2 million in 2007-08 and $50.1 million in 2008-09 by not paying the Medicare Part B premiums for Medi-Cal unmet share-of-cost beneficiaries who can become Medi-Cal certified by meeting their share-of-cost during the month. These individuals are Medi-Cal eligible but have adjusted income that exceeds 129 percent of the Federal Poverty Level and have not spent down their excess income. They will have the option of continuing to pay their own premiums to maintain their Medicare Part B benefits.

    A reduction of $34.4 million in 2008-09 by shifting federal Safety Net Care Pool payments from designated public hospitals to the California Children's Services, the Genetically Handicapped Persons, the Medically Indigent Adult-Long-term Care, and the Breast and Cervical Cancer Treatment Programs, which are eligible for these funds. This shift will allow a corresponding reduction in General Fund for these programs.

    A reduction of $30 million in 2008-09 by reducing the reimbursement rates for hospitals that do not contract with Medi-Cal.

    A reduction of $24 million in 2008-09 from reduced Medi-Cal Disproportionate Share Hospital replacement payments for private hospitals. These payments are made to hospitals based on their uncompensated Medi-Cal and uninsured care costs.

    A reduction of $8.2 million in 2008-09 and 136.8 positions within the department's state operations budget.