Assemblymember Perea, Central Valley Hospitals Urge Lawmakers to Reverse Medi-Cal Cuts

New Study Shows Access, State's Economy at Risk if Cuts Are Implemented

May 17, 2013, 16:15 ET from California Hospital Association

FRESNO, Calif., May 17, 2013 /PRNewswire-USNewswire/ -- The following is being released by California Hospital Association:

Citing the devastating impact that pending Medi-Cal payment cuts would have on the Valley's most vulnerable patients, Assemblymember Henry T. Perea (D-Fresno) joined with local hospital leaders today to call on state lawmakers to enact new legislation that would preserve the state's health care safety net. 

Two bills now making their way through the state Legislature - Assembly Bill 900 by Assemblymember Luis Alejo (D-Salinas) and Senate Bill 640 by Senator Ricardo Lara (D-Long Beach) - would reverse Medi-Cal payment cuts that were enacted by the passage of AB 97 in 2011.  Although the payment reductions amount to a 10 percent reduction for doctors and most other health care providers, the cuts are much deeper – averaging 25 percent or greater – for hospital-based skilled-nursing facilities (SNFs).                   

"The proposed budget cuts will have a devastating impact on the Central Valley facilities that care for Medi-Cal patients," said Assemblymember Perea. "As a co-author of AB 900, I want to ensure that we protect these services so that the patients can continue to get the care they need in the community in which they live."

Assemblyman Perea spoke at a press conference outside his district office in Fresno, where he was joined by Sharon Spurgeon, CEO of Coalinga Regional Medical Center, Lindsay Mann, CEO of Kaweah Delta Healthcare District in Visalia, and representatives of Community Regional Hospital in Fresno.  Each of these facilities includes a hospital-based SNF unit which provides treatment to patients with complex medical needs on a 24-hour basis.

"Coalinga Regional Medical Center has served our communities since 1938 but unless these cuts are reversed, we will have to close our facility," Spurgeon said.  "That means local residents will have to travel 62 miles to Fresno or 44 miles to Hanford to obtain medical care.  We would have to relocate our existing Medi-Cal DP/SNF patients to a site that will be a significant distance from their families.  Quite simply, we cannot sustain the devastating impact."

According Mann, Kaweah Delta's SNF units lost $2.7 million last fiscal year, all of which had to be subsidized by the hospital's health care district.

"While we were able to sustain the impact and plan to retain this service in support of patients who require this specialized level of care, there's no guarantee we will be able to continue doing so going forward," Mann said. "Simply cutting the payments to Medi-Cal providers does not mean that the obligation to provide care to Medi-Cal patients will go away.  These patients are among the most vulnerable in our society.  The state has a responsibility to pay for their care." 

According to a newly released economic issue brief prepared by the California Hospital Association (CHA) California's fragile economic recovery could be dealt a severe setback if the Medi-Cal cuts to hospitals are implemented, with the potential loss of up to 36,000 jobs statewide.  These are direct-care, well-paid positions, plus related jobs in the goods and services industries.  In addition, the CHA analysis found, the overall ripple effect stemming from these cuts could result in a $2 billion economic erosion to the state's economy. 

Other health care providers, including physicians, clinics, and emergency medical transport firms, also warn that the cuts jeopardize access to quality care.

Both AB 900 and SB 640 require a two-thirds vote in both the State Assembly and Senate before going to Governor Brown for action.  Both bills have strong bipartisan support and are awaiting action in their respective house's Appropriations Committee. It is likely that the two bills will be combined into one final bill during budget negotiations in June and considered an "urgency" bill, meaning that it will take effect immediately if the Governor signs it into law by July 1st. 

To read the full economic report or learn more about how the proposed Medi-Cal cuts will impact the public, visit, a website sponsored by the California Hospital Association. Visitors can watch a series of videos featuring patients and their families across California who rely on skilled-nursing facilities for their health care needs, and directly connect with their legislator to urge them to protect patients.

SOURCE California Hospital Association