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CHA News

Budget Subcommittee Approves Redirecting Hospital Stabilization Funds

Assembly Budget Subcommittee No. 1 on Health and Human Services voted May 31 to approve the Administration’s proposal to redirect $43 million in unpaid private and nondesignated public hospital stabilization funds to the state’s General Fund. As a result, a number of nondesignated private and public disproportionate-share hospitals will not receive $86 million for services provided from 2005 through 2010. The proposal, part of the Governor’s revised fiscal year 2012-13 state budget, has already been approved by the Senate.

In other action, the subcommittee rejected a proposal — estimated to save $75 million General Fund — to establish a process for value-based purchasing in the Medi-Cal fee for service system. However, the subcommittee did approve $30 million in General Fund savings that will be realized as a result of Medi-Cal no longer paying for services directly related to potentially preventable hospital admissions. The subcommittee took these actions during its final hearing for the budget year. Budget items were voted on with no discussion or public comment since they had been discussed at previous hearings. The full Assembly Budget Committee will most likely meet next week and take action on remaining open items, including decreasing hospital reimbursement by a total of $325 million, as proposed in the Governor’s May revision. For a summary of these proposed cuts, see May 25 CHA News article. In addition, CHA  has issued an Advocacy Alert to members. For more information, see