Prop 52 aims to extend private hospital fees that help fund Medi-Cal

Share via email

Proposition 52, “State Fees on Hospitals. Federal Medi-Cal Matching Funds. Initiative Statutory and Constitutional Amendment,” is fairly straightforward in its objectives but a bit complicated in its verbiage.

Simply put, it aims to prevent the 2018 expiration of an existing hospital fee that helps fund Medi-Cal health care to low-income Californians, seniors, children and adults with disabilities. The existing hospital fee structure is designed to help defray costs of “uncompensated care provided by hospitals to uninsured patients and to children’s health coverage.”

As background, the federal government established the Medicaid program to help pay for health-care services for the above-referenced groups. In California, the program is called Medi-Cal. In order for any state to receive federal Medicaid funds, the state has to contribute a matching amount of its own money.

In California, a program was created in 2009 (renewed in 2013 as the Medi-Cal Hospital Reimbursement Act) to have California private hospitals, rather than taxpayers, pay a fee to help the state obtain federal matching funds. As a result, California hospitals began to receive more than $2 billion a year in federal matching funds to help pay for uncompensated patient services.

Under existing law, in 2015-16, private hospitals paid $4.6 billion to help the state secure federal government matches of $4.4 billion. That fund, $8.1 billion, consists of $3.7 billion in Medi-Cal payments and grants to hospitals, and $4.4 billion in federal matches. It provides a net benefit to California hospitals, according to the California Legislative Analyst’s Office, of $3.5 billion ($8.1 billion in payments received by hospitals minus the $4.6 billion of fees paid by private hospitals).

The current law authorizing these payments is due to expire on Jan. 1, 2018. The original 2009 act has been renewed three times by the Legislature but each time there were attempts to divert the money to other uses. Prop 52, if passed, would prevent the Legislature from diverting the funds. Any change in how the funds are used would have to be approved by California voters.

A “yes” vote supports requiring voter approval to change the dedicated use of current hospital fees used to draw matching federal money to fund Medi-Cal services. The initiative also would change existing law to require a two-thirds rather than majority vote of the Legislature to end the hospital fee program.

Should the measure not pass, and the Legislature fails to extend it prior to its Jan. 2018 expiration, then federal matching funds (from $3 to $4 billion annually) would no longer be available and could impact quality of medical care for targeted groups.

Proponents contend this federal money helps provide health care through Medi-Cal to more than 13 million Californians, including 6.7 million children, 1.6 million seniors with chronic diseases, 4.5 million low-income working families whose wages can’t sustain them and the disabled.

The measure is supported by a wide coalition of groups, including the California Teachers Association, California Chamber of Commerce, California Professional Firefighters and California Democratic Party.

A “no” vote would allow the Legislature to change, extend or eliminate the hospital fee program with a majority vote.

Prop 52 is opposed primarily by the Service Employees International Union, United Health Care Workers West, who calls it a “no-strings-attached money grab” by hospitals, with no accountability of how the money is to be spent on patient services. They contend the proposition would divert resources from patients and communities to special interests, such as hospital CEOs and lobbyists.

Supporters, including the California Health Foundation and Trust, Dignity Health, Sutter Health, the Children’s Hospital of Los Angeles, Adventist Health and Loma University Medical Center, have raised more than $59 million and spent $47 million.

Opponents SEIU West has raised more than $11 million and spent $3.5 million.

Extension of the hospital fee, under this initiative, also requires federal approval since federal matching funds are involved.

Kevin Riggs, “Yes on 52” spokesman, said, “Hospitals see it as a way to provide long-term protection for this agreement [hospital fee/federal matches] and to remove some of the uncertainty in the political process.”

David Kieffer, SEIU’s director of governmental relations said, “I agree that hospitals have a say in how it [the funds] should be used. The issue is should they have the only voice in the process?”

Share via email

Leave a Reply

Your email address will not be published.

s2Member®