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2004-01-01 -- HEALTH ACCESS UPDATE (SB2, Medi-Cal provider cuts, Budget)

HOLIDAY COURT DECISIONS ON HEALTH CARE

 * Hearing Set on SB 2 Referendum; Less Likely for March Ballot;
Planning for November Begins

 * Medi-Cal Rates Reduction Challenged; Prelude to Budget Fight
Starting January 9th

SB 2 REFERENDUM LESS LIKELY TO BE ON MARCH BALLOT

Today, January 2nd, briefs are being filed in the court case to
determine if and when SB 2 will be up on the California ballot in a
referendum to reject the measure. Arguments will be heard on January
15th, with a decision expected soon afterwards.

On the day before Christmas Eve, the 1st District Court of Appeals set
this timetable for hearing the court case on the SB 2 referendum, a
timetable which makes it very unlikely that the referendum will be
placed on the March ballot. Supporters of SB 2 are now planning for a
November ballot fight.


LOWER COURT RULED PETITIONS MISLEADING: A few weeks ago, a lower court
had blocked the referendum from the ballot, citing that the petitions
used were not in compliance with election law, and were misleading.
Those who oppose SB 2 and support the referendum appealed. Yet the
appeals process was delayed by the opponents, since they brought on a
co-council that had recently stepped down from the court to which they
submitted their appeal, forcing the entire court to recuse themselves,
and have the case re-assigned. The new appeals court, of the 1st
District, set January 2nd as the day to receive briefs, and January
15th as a hearing date.

OPTIONS FOR THE FUTURE: By January 15th, absentee ballots will have
already been sent out for the March 2nd election, making it highly
unlikely that the courts will place the referendum on that ballot.

 * At or after that hearing, the appeals court could rule to reverse
the lower court's decision, let the referendum proceed, most likely
for the November ballot. (A decision to place it on the March ballot
at that late date--while still possible--would not only incur great
expense and confusion, but raise serious voting rights issues.)

 * Or the appeals court could uphold the lower court, and declare the
petitions invalid, and to reject the referendum on SB 2, and the law
would stand. In that case, the opponents of SB 2 would still have the
time to seek signatures for an initiative in November (or later) to
repeal the measure, if they chose to do so.

HOLIDAY PICKETS SUCCESSFUL:

Supporters of SB 2 are still preparing for a potential ballot fight to
protect health care coverage and this law, with an eye toward
November. As part of that public campaign, over 75 people from over 20
organizations picketed Macy's department stores in three cities,
protesting the store's $200,000 contributions to the campaign to
repeal SB 2. Singing custom-written holiday carols and getting support
from shoppers and drivers passing by, health advocates in Sacramento,
San Francisco, and Los Angeles made the case why Macy's and other
companies should not attempt to take away health benefits from their
workers and customers. The events were covered by the Sacramento Bee
and several television and radio stations. Participating organizations
included: Health Access, Greenlining Institute, California Labor
Federation, California Nurses Association, ACORN, Latino Issues Forum,
Consumers Union, Health Care for All, PICO California
Project/Sacramento ACT, Senior Action Network, Grey Panthers, SEIU
State Council and Locals 250, 790, and 1000, UFCW, CWA, Older Women's
League, Congress of California Seniors, Sacramento County Labor
Council, and Community Health Councils.

 MEDI-CAL RATE REDUCTIONS STOPPED FOR NOW

Also on the day before Christmas Eve, U.S. District Judge David Levi
granted a preliminary injunction in the lawsuit filed by the
California Medical Association and other providers to stop the 5%
Medi-Cal rate cut included in the 2003-04 budget that was set to go
into effect on January 1.

ACCESS AT ISSUE: In granting the preliminary injunction, Judge Levi
said that "the pending rate reduction is arbitrary and cannot stand."
He stated that the state of California failed to base the rates and
rate reductions on actual costs, and failed to consider how the cuts
would affect access to care for the 6.5 million children, seniors,
people with disabilities, and low-income parents on the Medi-Cal
program.

LONG-TERM IMPACT UNCERTAIN: As of this writing, it is unclear if the
Schwarzenegger Administration will appeal the decision. The
Adminstration had also proposed making additional cuts to Medi-Cal
provider rates on top of the ones blocked by the court. While some say
that this ruling might prevent the Administration from making
additional cuts, other indicate that the Governor could still pursue
such rate reductions, but structure them differently in order to get
court approval.

Either way, the immediate impact is to restore the proposed cuts,
which is good for Medi-Cal providers and the Medi-Cal patients ability
to get a provider. It does also put the Schwarzenegger Administration
in a further hole, since they will not acheive the expected hundreds
of millions of dollars in budget savings from the rate reduction.

BASIS OF CASE: From the CMA press release: "In launching the legal
challenge Nov. 7, CMA and other plaintiffs cited the Social Security
Act, which says that a state plan for medical assistance (Medi-Cal in
California) must assure that payments are "consistent with . economy
and quality of care," and are sufficient to enlist enough providers so
that services are available at a level equal to those available to the
general public. According to the lawsuit, the number of primary care
physicians per capita for Medi-Cal patients was one-third less than
for the general population using 2001 figures from the Medi-Cal Policy
Institute. The figure for specialists is 50 percent less than for the
general population; and for surgeons - it is two thirds less. Further
cuts would have made the disparities larger."

BUDGET UPDATE:

Other cuts to Medi-Cal are very likely to be announced on Friday,
January 9th, when it is expected that Governor Arnold Schwarzenegger
and Director of Finance Donna Arduin will release the Administration's
proposed budget. As always, Health Access will work to provide a quick
analysis of the proposal and its impact on health care. Actions are
already being planned in the week before and after that annoucement.


From all of us at Health Access, have a Happy and Healthy New Year!

Peace, Anthony

Anthony E. Wright
Executive Director Health Access
1127 11th St., #234,
Sacramento, CA 95814
Ph: 916-442-2308, Fx: 916-497-0921
 awright@health-access.org