Self-Imposed Hospital Fee to Benefit Kids, Medi-Cal

Continuing one of the oddest bill signing months ever, Gov. Arnold Schwarzenegger has so far only publicly announced his action on three of some 700 bills sent him by the Legislature before they adjourned for the year September 11.

The GOP governor has until midnight October 11 to act – about 81 hours from 4:00 PM October 8.

Democratic lawmakers have criticized Schwarzenegger for threatening to veto many of the bills on his desk if the Legislature does not send him a deal on improving the state’s system of delivering water.

Schwarzenegger hasn’t been coy about linking the two.

“I made it very clear to the legislators and to the leaders that if this (water package) does not get done then I will veto a lot of their legislation, a lot of their bills,” the GOP governor told the Association of Community College Trustees’ Leadership Congress in San Francisco October 8.

Assemblyman Alberto Torrico, a Fremont Democrat and candidate for Attorney General, says Schwarzenegger’s actions are “perilously close” to the state constitution’s definition of extortion. Torrico cites Article 9, Section 15, which reads:

“A person who seeks to influence the vote or action of a member of the Legislature in the member’s legislative capacity by bribery, promise of reward, intimidation, or other dishonest means, or a member of the Legislature so influenced, is guilty of a felony.”

Child advocacy groups hope the  governor makes an exception for at least one Assembly bill, supported by most hospitals,. that would impose a “quality assurance” fee on them and use some of the proceeds, up to $320 million annually, to provide health care to children.

The bill, AB 1383, by Assemblyman Dave Jones, a Sacramento Democrat running for insurance commissioner, also prohibits reducing the reimbursement rate paid to hospitals for the care of patients on Medi-Cal, the state’s helathc are program for the poor.

Medi-Cal reimbursement rates, already considered low by both doctors and hospitals, are commonly reduced as a budget-balancing strategy. Rates were cut by 10 percent effective July 1, 2008.

The new fee that hospitals are proposing to assess themselves through this bill will also be used to boost those reimbursement rates. Imposition of the fee also allows the state to draw down more federal dollars, which pays a large chunk fo Medi-Cal costs.

Although he rearely publicly inserts himself into the legislative process, peferring to say he has no position on bills, the GOP governor sent a letter to legislative leaders saying:

“California has a great opportunity to bring in additional federal dollars through a hospital provider fee. This opportunity is embodied in this bill. However, I believe that the curent model is fatally flawed and will be rejected by the federal       government.”

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