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CAHF Analysis Begins as Governor Releases May 2012-12 Budget Revised


governors browns 2012 budget may revision
Gov. Jerry Brown released a 2012-13 state-budget proposal May “revise” Monday, May 14, including additions and deletions from the governor’s initial January budget in order to bridge a projected deficit that has grown from an estimated $9 billion in January to $16 billion today.

Although the state continues to fund repayment to skilled-nursing facilities of the 10-percent payment reduction by Dec. 31, 2012, the impact of the governor’s proposal on long-term care includes a plan to rescind an estimated 2-percent rate increase for Medi-Cal skilled-nursing facilities in 2012-13 while increasing quality-assurance fees to ensure the maximum revenue benefit.

In addition, the May revision also proposes to delay implementation of the governor’s Coordinated Care Initiative (CCI) from Jan. 1, 2013, until March 1, 2013, while reducing the number of participating counties from 10 to eight. The four pilot counties are Los Angeles, Orange, San Diego and San Mateo. The proposed additional counties would be Alameda, Riverside, San Bernardino and Santa Clara. (Contra Costa and Sacramento counties would be dropped under the governor’s plan.)

The May revision delays payments under the Quality and Accountability Payment Program for one year, until April 2014. In addition, it authorizes the 2012-13 rate for a facility to be up to 1 percent below the rate on file May 31, 2011, and retains the 1-percent set-aside of the weighted average Medi-Cal rate that would otherwise be used for the Quality and Accountability Payment program for General Funds savings in the 2012-13 rate year.

Other changes to the governor’s January budget proposal for Medi-Cal include additional funding to recognize the federal government’s disapproval of co-pays, except for emergency room ($15) and pharmacy services ($1-$3). Additionally, litigation precluded the state from implementing certain provider rate reductions, and the May revision adds back funding to recognize that this savings will not be achieved. Lastly, several technical changes are proposed to reduce hospital supplemental payments and funding.

For developmental-services providers, the governor’s proposal would continue to impose a 1.25-percent payment reduction on services funded through the Department of Developmental Services. No new Medi-Cal rate reductions or payment reductions for developmental-services providers were noted in CAHF’s review of the May Revision summary document.

Among other cuts to social services, the governor is recommending a 7-percent cut in hours for In-Home Supportive Services while also eliminating the use of IHSS hours to perform domestic services.

CAHF staff has already begun analyzing the governor’s proposal and will keep Association members informed as details emerge. View the Governor’s Budget May Revision 2012-13 summary on the website of the state Department of Finance.

Staff contact: 

Nancy Hayward 
(916) 441-6400, ext. 106

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