North State Hospital Leaders Urge Lawmakers to Spare Patients from Damaging Medi-Cal Cuts to Hospital

May 17, 2013, 17:31 ET from California Hospital Association

New Study Shows Access to Care, State's Economic Recovery at Risk if Cuts Are Implemented

REDDING, Calif., May 17, 2013 /PRNewswire-USNewswire/ -- Citing the devastating impact that pending Medi-Cal payment cuts would have on the North State's most vulnerable patients, local hospital leaders in Redding today joined with patient families 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 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).                   

"Passed in the midst of difficult economic times, AB 97 contained devastating cuts to Medi-Cal," said Kim Shaw, Chief Nursing Executive of Mercy Medical Center Redding.  "These cuts, if put in effect, will severely reduce access to the necessary services provided to hospital-based SNFs and cause a ripple effect on patients and their families, health care workers, hospitals and the communities they serve."

Hospital leaders, including Shaw, Matt Rees, CEO of Mayers Memorial Hospital, and Randle Hempling, CEO of Shasta Regional Medical Center, spoke at a press conference today at Mercy Medical Center Redding.  Each underscored the importance of AB 900 and SB 640, which would reverse the Medi-Cal cuts and the impact they would have on the region's health care system. 

Hospital-based SNFs provide specialized treatment to medically fragile and disabled seniors, adults and some children with special needs on a 24-hour basis, are most at risk.  These facilities are often the only option for patients with complex medical needs and behavioral challenges, or for individuals living in rural areas.

Unless the Legislature and Governor Brown act before June 30th, hospital-based SNFs, already decimated by the lowest Medi-Cal reimbursement rates in the nation, will lose another 25-40 percent of their funding.  Medi-Cal beneficiaries make up more than 70 percent of the patients receiving hospital-based skilled-nursing care. In just the last five years, approximately 40 hospital-based SNFs in California (about one-third) have closed due to financial issues that further jeopardize California's fragile health care safety net.

"The fact is that Mayers, quite simply, cannot survive with these cuts," said Matt Rees, CEO of Mayers Memorial Hospital.  "Where will our patients go? Access is a challenge in California's rural communities, including ours.  The biggest impact will be on families who will not be able to find a new home for their loved ones within 100 miles." 

"The consequences of these payment cuts go far beyond the direct impact to hospitals," added CHA President/CEO C. Duane Dauner.  "These cuts also will be a massive job killer, with a statewide economic aftershock."

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.

SOURCE California Hospital Association