Gov. Brown's budget includes 10% Medi-Cal provider rate cut

January 14, 2013
Area(s) of Interest: Access to Care Advocacy 

Gov. Jerry Brown last week unveiled his budget proposal for the 2013-2014 fiscal year. The budget includes $97.7 billion in general fund spending, plus an additional $48.1 billion in special funds, for a total of $145.8 billion. For the first time in five years, the state is not facing a deficit, and in fact Gov. Brown's proposal includes a $1 billion reserve.

Despite the state's improved budget outlook, the proposal does include roughly $1 billion per year in Medi-Cal provider rate cuts. Last month, the Ninth Circuit Court of Appeals ruled that the state could move forward with the rate cuts, passed by the Legislature in the spring of 2011, despite an earlier district court ruling that found that the cuts would irreparably harm the millions of patients who rely on Medi-Cal for health care.

If the state moves forward with these cuts, access to care will be devastated, not only for the existing Medi-Cal patients, but also the 900,000 kids moving from the Healthy Families program into Medi-Cal in 2013 and the millions of patients that will be newly eligible for Medi-Cal under the Affordable Care Act in 2014.“It is clear to us in the health care community that California is moving in a better direction than we have in recent years past. In light of that, we have serious concerns that Governor Brown and his administration have not properly addressed the implementation of the ACA," said CMA President Paul R. Phinney, M.D. "We simply cannot continue to cut resources while adding more patients into the mix."

The budget also includes $350 million to implement the Medi-Cal expansion called for under the ACA.

Also in Brown's budget proposal:

MCO Tax: Permanent reauthorization of the Gross Premiums Tax on Medi-Cal managed care plans, retroactive to July 1, 2012. Savings associated with this initiative are estimated at $217.3 million in the current 2013-14 budget year. There is no indication of how the revenue will be spent. CMA is urging that the MCO revenues be used to fund children's health programs.

Coordinated Care Initiative: This project, authorized last year, was set to begin passively enrolling patients dually eligible for Medi-Cal and Medicare into managed care plans this month. Gov. Brown announced, however, that the eight participating counties will not begin enrollment until September 2013. The implementation timelines for each county will vary. The governor’s budget assumes $170.7 million in savings for 2013-14, projected to grow to $523.3 million annually upon full implementation.

For more information, see CMA's budget summary here.


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