CA low-income medical providers denied payments

Payments from Medi-Cal's insurance program for the poor will cease today, rattling healthcare facilities across California. Until a budget is approved, Medi-Cal payments for low-income patients will not be paid because lawmakers failed to pass a budget, causing the state to prohibit payments.

CA law requires payment for private doctors and pharmacists treating Medi-Cal patients, but healthcare "institutions," as the state calls them, will no longer be funded. These medical businesses and organizations, including 1,200 homes for the developmentally disabled--which have previously relied on funding from Medi-Cal entirely--will be cut off immediately. While most facilities don't plan on turning Medi-Cal patients away, healthcare institutions are racing to find funding from foundations, banks and their own reserves--the emergency funding that state officials had set aside in case of a budget delay is spent.

In 2007, a similar budget freeze occurred, but this year brings a tighter budget for struggling banks that are less willing to offer bridge loans. Some managers of healthcare institutions that previously received payments from Medi-Cal are paying premiums for their secured loans, and are facing a dwindling amount of cash because of today's news from state officials.

To learn more about the freeze:
- read this LA Times article